Exhibit 99.1
| FOR IMMEDIATE RELEASE | November 3, 2010 For more information contact: | |
| Scott Estes (419) 247-2800 Mike Crabtree (419) 247-2800 |
Health Care REIT, Inc.
Reports Third Quarter 2010 Results
Reports Third Quarter 2010 Results
Toledo, Ohio, November 3, 2010....Health Care REIT, Inc. (NYSE:HCN) today announced operating results for the company’s third quarter ended September 30, 2010.
“Our long-standing commitment to a relationship-based investment strategy has positioned the company for a record-breaking year of investments,” said George L. Chapman, chief executive officer at Health Care REIT, Inc. “At a time when access to capital for health care operators is limited, we have remained disciplined in our approach to developing partnerships with market-leading senior housing operators and health systems. Today our investment pipeline includes over $5 billion of potential transactions, approximately 94% of which are off-market, non-brokered opportunities derived primarily from our existing industry relationships. Our experienced team will leverage our full service growth platform to capitalize on this pipeline to create shareholder value and position the company as a market leader for years to come.”
Recent Highlights
Increased third quarter normalized FFO and FAD per share, raising 2010 investment guidance:
| • | Improved normalized FFO and FAD per share results by 3% year-over-year |
| • | Announced year-to-date gross investments totaling $1.6 billion, including $702.5 million for the third quarter |
| • | Closed $817 million partnership with Merrill Gardens LLC |
| • | Increasing 2010 gross investment guidance by $500 million to a range of $2.3 billion to $2.7 billion |
| • | Adjusting 2010 normalized FFO per share outlook to a range of $3.13-$3.16, solely reflecting capital markets activity |
Managed our portfolio to maintain its strength and diversity:
| • | Reported trailing twelve month payment coverage before management fees of 2.11x, highest in company history |
| • | Achieved solid medical office occupancy of 93% and trailing twelve month retention of 84% |
| • | Continued improvement in entrance fee campus occupancy, which increased 3% from the prior quarter to 64% |
| • | Received $82.2 million in proceeds on property sales and loan payoffs, generating $10.5 million of gains |
Raised nearly $900 million of cost-effective capital during the quarter and maintained appropriate liquidity:
| • | Issued $450 million of 7-year senior unsecured notes priced to yield 4.75% |
| • | Raised $449 million of equity through our September offering, equity shelf program and dividend reinvestment program |
| • | Prepaid $159 million of secured debt in September with a blended rate of 5.9% |
| • | Extended average debt maturity from 4.4 years at December 31, 2009 to 6.5 years at September 30, 2010 |
| • | Ended the quarter with cash and line of credit availability of $1.3 billion |
Key Performance Indicators
| 3Q10 | 3Q09 | Change | 2010 | 2009 | Change | |||||||||||||||||||
| Net income attributable to common stockholders (NICS) per diluted share | $ | 0.01 | $ | 0.17 | -94 | % | $ | 0.58 | $ | 1.25 | -54 | % | ||||||||||||
| Normalized FFO per diluted share | $ | 0.79 | $ | 0.77 | 3 | % | $ | 2.33 | $ | 2.38 | -2 | % | ||||||||||||
| Normalized FAD per diluted share | $ | 0.74 | $ | 0.72 | 3 | % | $ | 2.17 | $ | 2.24 | -3 | % | ||||||||||||
| Dividends per common share | $ | 0.69 | $ | 0.68 | 1 | % | $ | 2.05 | $ | 2.04 | 0 | % | ||||||||||||
| Normalized FFO Payout Ratio | 87 | % | 88 | % | 88 | % | 86 | % | ||||||||||||||||
| Normalized FAD Payout Ratio | 93 | % | 94 | % | 94 | % | 91 | % | ||||||||||||||||
Page 1 of 10
| 3Q10 Earnings Release | November 3, 2010 |
Quarterly Earnings
| NICS | FFO | FAD | ||||||||||||||||||||||||||||||||||
| 3Q10 | 3Q09 | Change | 3Q10 | 3Q09 | Change | 3Q10 | 3Q09 | Change | ||||||||||||||||||||||||||||
Per diluted share | $ | 0.01 | $ | 0.17 | -94 | % | $ | 0.33 | $ | 0.53 | -38 | % | $ | 0.29 | $ | 0.55 | -47 | % | ||||||||||||||||||
Includes impact of: | ||||||||||||||||||||||||||||||||||||
Gain (loss) on property sales(1) | $ | 0.08 | $ | (0.01 | ) | |||||||||||||||||||||||||||||||
Other items, net(2) | $ | (0.46 | ) | $ | (0.25 | ) | $ | (0.46 | ) | $ | (0.25 | ) | $ | (0.46 | ) | $ | (0.25 | ) | ||||||||||||||||||
Prepaid/straight-line rent receipts(3) | $ | 0.02 | $ | 0.07 | ||||||||||||||||||||||||||||||||
Per diluted share — normalized(a) | $ | 0.79 | $ | 0.77 | 3 | % | $ | 0.74 | $ | 0.72 | 3 | % | ||||||||||||||||||||||||
| (a) | Amounts may not sum due to rounding | |
| (1) | $10,526,000 of gains and $806,000 of losses in 3Q10 and 3Q09, respectively. | |
| (2) | See Exhibit 1. | |
| (3) | $2,146,000 and $8,319,000 of receipts in 3Q10 and 3Q09, respectively. |
Year-To-Date Earnings
| NICS | FFO | FAD | ||||||||||||||||||||||||||||||||||
| 2010 | 2009 | Change | 2010 | 2009 | Change | 2010 | 2009 | Change | ||||||||||||||||||||||||||||
Per diluted share | $ | 0.58 | $ | 1.25 | -54 | % | $ | 1.58 | $ | 2.11 | -25 | % | $ | 1.46 | $ | 2.17 | -33 | % | ||||||||||||||||||
Includes impact of: | ||||||||||||||||||||||||||||||||||||
Gain (loss) on property sales(1) | $ | 0.16 | $ | 0.24 | ||||||||||||||||||||||||||||||||
Other items, net(2) | $ | (0.76 | ) | $ | (0.27 | ) | $ | (0.76 | ) | $ | (0.27 | ) | $ | (0.76 | ) | $ | (0.27 | ) | ||||||||||||||||||
Prepaid/straight-line rent receipts(3) | $ | 0.05 | $ | 0.21 | ||||||||||||||||||||||||||||||||
Per diluted share — normalized(a) | $ | 2.33 | $ | 2.38 | -2 | % | $ | 2.17 | $ | 2.24 | -3 | % | ||||||||||||||||||||||||
| (a) | Amounts may not sum due to rounding | |
| (1) | $20,559,000 and $26,907,000 of gains in 2010 and 2009, respectively. | |
| (2) | See Exhibit 1. | |
| (3) | $6,214,000 and $23,463,000 of receipts in 2010 and 2009, respectively. |
Dividends for Third Quarter 2010 As previously announced, the Board of Directors declared a cash dividend for the quarter ended September 30, 2010 of $0.69 per share, as compared to $0.68 per share for the same period in 2009. The cash dividend will be paid on November 19, 2010 and will be the company’s 158th consecutive quarterly dividend payment.
Outlook for 2010 The company is increasing its investment guidance for 2010. It now expects to complete acquisitions and joint venture investments of $2.0 to $2.3 billion, up from $1.5 to $1.8 billion, and dispositions of $200 million, down from $300 million. The company continues to expect funded new development of $300 to $400 million, resulting in net new investments of $2.1 to $2.5 billion.
The company is revising the midpoints of its 2010 normalized FFO and FAD guidance solely as a result of the capital transactions completed during the third quarter which were not in the previous guidance. Normalized FFO has been revised to a range of $3.13 to $3.16 per diluted share from $3.13 to $3.20 per diluted share. Normalized FAD has been revised to a range of $2.89 to $2.92 per diluted share from $2.89 to $2.96 per diluted share.
Net income attributable to common stockholders has been reduced to a range of $0.98 to $1.01 per diluted share from $1.33 to $1.40 per diluted share. The decrease in net income guidance is primarily due to the capital transactions noted above, $28.9 million of loan losses, $9.1 million of debt extinguishment losses and $18.8 million of transaction costs offset by $10.5 million of gains on sales of real property recognized in the third quarter.
The company’s guidance excludes any additional capital transactions, impairments, unanticipated additions to the loan loss reserve or other additional one-time items, including any additional cash payments other than normal monthly rental payments. Please see the exhibits for a reconciliation of the outlook for net income available to common stockholders to normalized FFO and FAD.
Page 2 of 10
| 3Q10 Earnings Release | November 3, 2010 |
Conference Call Information The company has scheduled a conference call on Thursday, November 4, 2010 at 10:00 a.m. Eastern Time to discuss its third quarter 2010 results, industry trends, portfolio performance and outlook for 2010. Telephone access will be available by dialing 888-346-2469 or 706-758-4923 (international). For those unable to listen to the call live, a taped rebroadcast will be available beginning two hours after completion of the call through November 18, 2010. To access the rebroadcast, dial 800-642-1687 or 706-645-9291 (international). The conference ID number is 16264752. To participate in the webcast, log on to www.hcreit.com or www.earnings.com 15 minutes before the call to download the necessary software. Replays will be available for 90 days through the same websites. This earnings release is posted on the company’s website at www.hcreit.com under the heading News.
Supplemental Reporting Measures The company believes that net income attributable to common stockholders (NICS), as defined by U.S. generally accepted accounting principles (U.S. GAAP), is the most appropriate earnings measurement. However, the company considers funds from operations (FFO) and funds available for distribution (FAD) to be useful supplemental measures of its operating performance. Historical cost accounting for real estate assets in accordance with U.S. GAAP implicitly assumes that the value of real estate assets diminishes predictably over time as evidenced by the provision for depreciation. However, since real estate values have historically risen or fallen with market conditions, many industry investors and analysts have considered presentations of operating results for real estate companies that use historical cost accounting to be insufficient. In response, the National Association of Real Estate Investment Trusts (NAREIT) created FFO as a supplemental measure of operating performance for REITs that excludes historical cost depreciation from net income. FFO, as defined by NAREIT, means net income, computed in accordance with U.S. GAAP, excluding gains (or losses) from sales of real estate, plus real estate depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Normalized FFO represents FFO adjusted for certain items detailed in Exhibit 1. FAD represents FFO excluding net straight-line rental adjustments, amortization related to above/below market leases and amortization of non-cash interest expenses and less cash used to fund capital expenditures, tenant improvements and lease commissions at medical office buildings. Normalized FAD represents FAD excluding prepaid/straight-line rent cash receipts and adjusted for certain items detailed in Exhibit 1. The company believes that normalized FFO and normalized FAD are useful supplemental measures of operating performance because investors and equity analysts may use these measures to compare the operating performance of the company between periods or as compared to other REITs or other companies on a consistent basis without having to account for differences caused by unanticipated and/or incalculable items.
The company’s supplemental reporting measures and similarly entitled financial measures are widely used by investors and equity analysts in the valuation, comparison and investment recommendations of companies. The company’s management uses these financial measures to facilitate internal and external comparisons to historical operating results and in making operating decisions. Additionally, they are utilized by the Board of Directors to evaluate management. The supplemental reporting measures do not represent net income or cash flow provided from operating activities as determined in accordance with U.S. GAAP and should not be considered as alternative measures of profitability or liquidity. Finally, the supplemental reporting measures, as defined by the company, may not be comparable to similarly entitled items reported by other real estate investment trusts or other companies. Please see the exhibits for reconciliations of the supplemental reporting measures.
About Health Care REIT, Inc. Health Care REIT, Inc., an S&P 500 company with headquarters in Toledo, Ohio, is a real estate investment trust that invests across the full spectrum of senior housing and health care real estate. The company also provides an extensive array of property management and development services. As of September 30, 2010, the company’s broadly diversified portfolio consisted of 641 properties in 39 states. More information is available on the company’s website at www.hcreit.com.
This document may contain “forward-looking” statements as defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements concern and are based upon, among other things, the possible expansion of the company’s portfolio; the sale of properties; the performance of its operators/tenants and properties; its occupancy rates; its ability to acquire, develop and/or manage properties; its ability to enter into agreements with viable new tenants for vacant space or for properties that the company takes back from financially troubled tenants, if any; its ability to make distributions to stockholders; its policies and plans regarding investments, financings and other matters; its tax status as a real estate investment trust; its ability to appropriately balance the use of debt and equity; its ability to access capital markets or other sources of funds; its critical accounting policies; and its ability to meet its earnings guidance. When the company uses words such as “may,” “will,” “intend,” “should,” “believe,” “expect,” “anticipate,” “project,” “estimate” or similar expressions, it is making forward-looking statements. Forward-looking statements are not guarantees of future performance and involve risks
Page 3 of 10
| 3Q10 Earnings Release | November 3, 2010 |
and uncertainties. The company’s expected results may not be achieved, and actual results may differ materially from expectations. This may be a result of various factors, including, but not limited to: the status of the economy; the status of capital markets, including availability and cost of capital; issues facing the health care industry, including compliance with, and changes to, regulations and payment policies, responding to government investigations and punitive settlements and operators’/tenants’ difficulty in cost-effectively obtaining and maintaining adequate liability and other insurance; changes in financing terms; competition within the health care, senior housing and life science industries; negative developments in the operating results or financial condition of operators/tenants, including, but not limited to, their ability to pay rent and repay loans; the company’s ability to transition or sell facilities with profitable results; the failure to make new investments as and when anticipated; acts of God affecting the company’s properties; the company’s ability to re-lease space at similar rates as vacancies occur; the company’s ability to timely reinvest sale proceeds at similar rates to assets sold; operator/tenant or joint venture partner bankruptcies or insolvencies; the cooperation of joint venture partners; government regulations affecting Medicare and Medicaid reimbursement rates and operational requirements; regulatory approval and market acceptance of the products and technologies of life science tenants; liability or contract claims by or against operators/tenants; unanticipated difficulties and/or expenditures relating to future acquisitions; environmental laws affecting the company’s properties; changes in rules or practices governing the company’s financial reporting; and legal and operational matters, including real estate investment trust qualification and key management personnel recruitment and retention. Finally, the company assumes no obligation to update or revise any forward-looking statements or to update the reasons why actual results could differ from those projected in any forward-looking statements.
Page 4 of 10
| 3Q10 Earnings Release | November 3, 2010 |
HEALTH CARE REIT, INC.
Financial Exhibits
Financial Exhibits
Consolidated Balance Sheets (unaudited)
(in thousands)
(in thousands)
| September 30, | ||||||||
| 2010 | 2009 | |||||||
Assets | ||||||||
| Real estate investments: | ||||||||
| Real property owned: | ||||||||
| Land and land improvements | $ | 668,135 | $ | 523,107 | ||||
| Buildings and improvements | 6,350,167 | 4,933,561 | ||||||
| Acquired lease intangibles | 223,349 | 121,059 | ||||||
| Real property held for sale, net of accumulated depreciation | 16,928 | 37,118 | ||||||
| Construction in progress | 286,366 | 638,507 | ||||||
| 7,544,945 | 6,253,352 | |||||||
| Less accumulated depreciation and intangible amortization | (804,651 | ) | (664,415 | ) | ||||
| Net real property owned | 6,740,294 | 5,588,937 | ||||||
| Real estate loans receivable: | ||||||||
| Loans receivable | 416,570 | 494,877 | ||||||
| Less allowance for losses on loans receivable | (1,190 | ) | (7,640 | ) | ||||
| Net real estate loans receivable | 415,380 | 487,237 | ||||||
| Net real estate investments | 7,155,674 | 6,076,174 | ||||||
| Other assets: | ||||||||
| Equity investments | 213,163 | 3,020 | ||||||
| Deferred loan expenses | 29,529 | 24,755 | ||||||
| Cash and cash equivalents | 181,147 | 102,353 | ||||||
| Restricted cash | 61,224 | 17,493 | ||||||
| Receivables and other assets | 252,330 | 179,523 | ||||||
| 737,393 | 327,144 | |||||||
Total assets | $ | 7,893,067 | $ | 6,403,318 | ||||
Liabilities and equity | ||||||||
| Liabilities: | ||||||||
| Borrowings under unsecured lines of credit arrangements | $ | — | $ | 143,000 | ||||
| Senior unsecured notes | 2,585,961 | 1,651,916 | ||||||
| Secured debt | 885,494 | 625,571 | ||||||
| Accrued expenses and other liabilities | 201,529 | 146,681 | ||||||
| Total liabilities | 3,672,984 | 2,567,168 | ||||||
| Equity: | ||||||||
| Preferred stock | 275,000 | 288,683 | ||||||
| Common stock | 135,046 | 122,870 | ||||||
| Capital in excess of par value | 4,429,425 | 3,878,872 | ||||||
| Treasury stock | (11,352 | ) | (7,619 | ) | ||||
| Cumulative net income | 1,636,589 | 1,510,449 | ||||||
| Cumulative dividends | (2,329,215 | ) | (1,968,336 | ) | ||||
| Accumulated other comprehensive income | (11,459 | ) | (4,942 | ) | ||||
| Other equity | 5,972 | 5,551 | ||||||
| Total Health Care REIT, Inc. stockholders’ equity | 4,130,006 | 3,825,528 | ||||||
| Noncontrolling interests | 90,077 | 10,622 | ||||||
Total equity | 4,220,083 | 3,836,150 | ||||||
Total liabilities and equity | $ | 7,893,067 | $ | 6,403,318 | ||||
Page 5 of 10
| 3Q10 Earnings Release | November 3, 2010 |
Consolidated Statements of Income (unaudited)
(in thousands, except per share data)
(in thousands, except per share data)
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||||||
| Revenues: | ||||||||||||||||
| Rental income | $ | 152,127 | $ | 128,527 | $ | 441,337 | $ | 379,326 | ||||||||
| Resident fees and service | 12,809 | — | 12,809 | — | ||||||||||||
| Interest income | 10,054 | 10,528 | 28,437 | 30,639 | ||||||||||||
| Other income | 1,156 | 1,089 | 4,802 | 3,810 | ||||||||||||
| Gross revenues | 176,146 | 140,144 | 487,385 | 413,775 | ||||||||||||
| Expenses: | ||||||||||||||||
| Interest expense | 44,408 | 27,595 | 110,703 | 79,428 | ||||||||||||
| Property operating expenses | 20,849 | 12,153 | 45,859 | 34,441 | ||||||||||||
| Depreciation and amortization | 48,565 | 39,187 | 138,321 | 114,446 | ||||||||||||
| General and administrative expenses | 11,628 | 10,363 | 40,331 | 38,784 | ||||||||||||
| Transaction costs | 18,835 | — | 27,301 | — | ||||||||||||
| Loss (gain) on extinguishment of debt | 9,099 | 26,374 | 34,171 | 24,697 | ||||||||||||
| Provision for loan losses | 28,918 | — | 28,918 | 140 | ||||||||||||
| Total expenses | 182,302 | 115,672 | 425,604 | 291,936 | ||||||||||||
| Income from continuing operations before income taxes and income from unconsolidated joint ventures | ||||||||||||||||
| (6,156 | ) | 24,472 | 61,781 | 121,839 | ||||||||||||
| Income tax (expense) benefit | (52 | ) | 55 | (325 | ) | (17 | ) | |||||||||
| Income (loss) from unconsolidated joint ventures | 1,899 | — | 4,496 | — | ||||||||||||
| Income from continuing operations | (4,309 | ) | 24,527 | 65,952 | 121,822 | |||||||||||
| Discontinued operations: | ||||||||||||||||
| Gain (loss) on sales of properties | 10,526 | (806 | ) | 20,559 | 26,907 | |||||||||||
| Impairment of assets | (947 | ) | (1,873 | ) | (947 | ) | (1,873 | ) | ||||||||
| Income (loss) from discontinued operations, net | 511 | 2,837 | 2,973 | 9,233 | ||||||||||||
| 10,090 | 158 | 22,585 | 34,267 | |||||||||||||
| Net income | 5,781 | 24,685 | 88,537 | 156,089 | ||||||||||||
| Less: Preferred dividends | 5,347 | 5,520 | 16,340 | 16,560 | ||||||||||||
| Net income (loss) attributable to noncontrolling interests | (690 | ) | 35 | (383 | ) | 40 | ||||||||||
| Net income attributable to common stockholders | $ | 1,124 | $ | 19,130 | $ | 72,580 | $ | 139,489 | ||||||||
| Average number of common shares outstanding: | ||||||||||||||||
| Basic | 125,298 | 114,874 | 124,132 | 111,345 | ||||||||||||
| Diluted | 125,842 | 115,289 | 124,660 | 111,749 | ||||||||||||
| Net income attributable to common stockholders per share: | ||||||||||||||||
| Basic | $ | 0.01 | $ | 0.17 | $ | 0.58 | $ | 1.25 | ||||||||
| Diluted | 0.01 | 0.17 | 0.58 | 1.25 | ||||||||||||
| Common dividends per share | $ | 0.69 | $ | 0.68 | $ | 2.05 | $ | 2.04 | ||||||||
Page 6 of 10
| 3Q10 Earnings Release | November 3, 2010 | |
| Normalizing Items | Exhibit 1 |
(in thousands, except per share data)
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||||||
| Impairment of assets | $ | 947 | (1) | $ | 1,873 | $ | 947 | $ | 1,873 | |||||||
| Transaction costs | 18,835 | (2) | — | 27,301 | — | |||||||||||
| Non-recurring G&A expenses | — | — | 2,853 | 3,909 | ||||||||||||
| Loss (gain) on extinguishment of debt | 9,099 | (3) | 26,374 | 34,171 | 24,697 | |||||||||||
| Provision for loan losses | 28,918 | (4) | — | 28,918 | 140 | |||||||||||
| Held for sale hospital operating expenses | 522 | (5) | — | 1,400 | — | |||||||||||
| Non-recurring other income | — | — | (1,000 | ) | — | |||||||||||
| Total | $ | 58,321 | $ | 28,247 | $ | 94,590 | $ | 30,619 | ||||||||
| Average diluted shares outstanding | 125,842 | 115,289 | 124,660 | 111,749 | ||||||||||||
| Net amount per diluted share | $ | 0.46 | $ | 0.25 | $ | 0.76 | $ | 0.27 | ||||||||
| Notes: | (1) Represents impairments on two medical office buildings classified as held for sale to adjust for current sales price expectations. | |
| (2) Represents costs incurred with Merrill Gardens partnership and other transactions completed during the quarter. | ||
| (3) Represents extinguishment charges in connection with the early repayment of $159 million of secured debt with a blended rate of 5.9%. | ||
| (4) Represents loan write-offs relating primarily to early stage senior housing and CCRC development projects no longer being actively pursued. Real estate loan non-accrual balance reduced to $10.9 million. | ||
| (5) Represents expenses incurred in connection with a hospital classified as held for sale. |
Page 7 of 10
| 3Q10 Earnings Release | November 3, 2010 | |
| Funds From Operations Reconciliation | Exhibit 2 |
(in thousands, except per share data)
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||||||
| Net income attributable to common stockholders | $ | 1,124 | $ | 19,130 | $ | 72,580 | $ | 139,489 | ||||||||
Depreciation and amortization(1) | 49,106 | 41,085 | 140,137 | 123,143 | ||||||||||||
| Loss (gain) on sales of properties | (10,526 | ) | 806 | (20,559 | ) | (26,907 | ) | |||||||||
Noncontrolling interests(2) | (1,292 | ) | (88 | ) | (1,547 | ) | (262 | ) | ||||||||
Unconsolidated joint ventures(3) | 2,696 | — | 5,794 | — | ||||||||||||
| Funds from operations | 41,108 | 60,933 | 196,405 | 235,463 | ||||||||||||
Normalizing items, net(4) | 58,321 | 28,247 | 94,590 | 30,619 | ||||||||||||
| Funds from operations — normalized | $ | 99,429 | $ | 89,180 | $ | 290,995 | $ | 266,082 | ||||||||
| Average common shares outstanding: | ||||||||||||||||
| Basic | 125,298 | 114,874 | 124,132 | 111,345 | ||||||||||||
| Diluted | 125,842 | 115,289 | 124,660 | 111,749 | ||||||||||||
| Per share data: | ||||||||||||||||
| Net income attributable to common stockholders | ||||||||||||||||
| Basic | $ | 0.01 | $ | 0.17 | $ | 0.58 | $ | 1.25 | ||||||||
| Diluted | 0.01 | 0.17 | 0.58 | 1.25 | ||||||||||||
Funds from operations | ||||||||||||||||
| Basic | $ | 0.33 | $ | 0.53 | $ | 1.58 | $ | 2.11 | ||||||||
| Diluted | 0.33 | 0.53 | 1.58 | 2.11 | ||||||||||||
| Funds from operations — normalized | ||||||||||||||||
| Basic | $ | 0.79 | $ | 0.78 | $ | 2.34 | $ | 2.39 | ||||||||
| Diluted | 0.79 | 0.77 | 2.33 | 2.38 | ||||||||||||
| FFO Payout Ratio: | ||||||||||||||||
| Dividends per common share | $ | 0.69 | $ | 0.68 | $ | 2.05 | $ | 2.04 | ||||||||
| FFO per diluted share | $ | 0.33 | $ | 0.53 | $ | 1.58 | $ | 2.11 | ||||||||
| FFO payout ratio | 209 | % | 128 | % | 130 | % | 97 | % | ||||||||
| FFO Payout Ratio — Normalized: | ||||||||||||||||
| Dividends per common share | $ | 0.69 | $ | 0.68 | $ | 2.05 | $ | 2.04 | ||||||||
| FFO per diluted share — normalized | $ | 0.79 | $ | 0.77 | $ | 2.33 | $ | 2.38 | ||||||||
| FFO payout ratio — normalized | 87 | % | 88 | % | 88 | % | 86 | % | ||||||||
| Notes: | (1) Depreciation and amortization includes depreciation and amortization from discontinued operations. | |
| (2) Represents noncontrolling interests’ share of depreciation and amortization. | ||
| (3) Represents HCN’s share of depreciation and amortization from unconsolidated joint ventures. | ||
| (4) See Exhibit 1. |
Page 8 of 10
| 3Q10 Earnings Release | November 3, 2010 | |
| Funds Available for Distribution Reconciliation | Exhibit 3 | |
| (in thousands, except per share data) |
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||||||
Net income attributable to common stockholders | $ | 1,124 | $ | 19,130 | $ | 72,580 | $ | 139,489 | ||||||||
Depreciation and amortization(1) | 49,106 | 41,085 | 140,137 | 123,143 | ||||||||||||
Loss (gain) on sales of properties | (10,526 | ) | 806 | (20,559 | ) | (26,907 | ) | |||||||||
Noncontrolling interests(2) | (1,343 | ) | (99 | ) | (1,633 | ) | (311 | ) | ||||||||
Unconsolidated joint ventures(3) | 1,120 | — | 2,335 | — | ||||||||||||
Gross straight-line rental income | (3,816 | ) | (4,571 | ) | (12,414 | ) | (14,499 | ) | ||||||||
Prepaid/straight-line rent receipts | 2,146 | 8,319 | 6,214 | 23,463 | ||||||||||||
Amortization related to above (below) market leases, net | (816 | ) | (620 | ) | (2,112 | ) | (1,344 | ) | ||||||||
Non-cash interest expense | 4,258 | 2,895 | 10,759 | 8,511 | ||||||||||||
Cap-ex, tenant improvements, lease commissions | (4,840 | ) | (3,637 | ) | (13,671 | ) | (8,795 | ) | ||||||||
Funds available for distribution | 36,413 | 63,308 | 181,636 | 242,750 | ||||||||||||
Normalizing items, net(4) | 58,321 | 28,247 | 94,590 | 30,619 | ||||||||||||
Prepaid/straight-line rent receipts | (2,146 | ) | (8,319 | ) | (6,214 | ) | (23,463 | ) | ||||||||
Funds available for distribution — normalized | $ | 92,588 | $ | 83,236 | $ | 270,012 | $ | 249,906 | ||||||||
Average common shares outstanding: | ||||||||||||||||
Basic | 125,298 | 114,874 | 124,132 | 111,345 | ||||||||||||
Diluted | 125,842 | 115,289 | 124,660 | 111,749 | ||||||||||||
Per share data: | ||||||||||||||||
Net income attributable to common stockholders | ||||||||||||||||
Basic | $ | 0.01 | $ | 0.17 | $ | 0.58 | $ | 1.25 | ||||||||
Diluted | 0.01 | 0.17 | 0.58 | 1.25 | ||||||||||||
Funds available for distribution | ||||||||||||||||
Basic | $ | 0.29 | $ | 0.55 | $ | 1.46 | $ | 2.18 | ||||||||
Diluted | 0.29 | 0.55 | 1.46 | 2.17 | ||||||||||||
Funds available for distribution — normalized | ||||||||||||||||
Basic | $ | 0.74 | $ | 0.72 | $ | 2.18 | $ | 2.24 | ||||||||
Diluted | 0.74 | 0.72 | 2.17 | 2.24 | ||||||||||||
FAD Payout Ratio: | ||||||||||||||||
Dividends per common share | $ | 0.69 | $ | 0.68 | $ | 2.05 | $ | 2.04 | ||||||||
FAD per diluted share | $ | 0.29 | $ | 0.55 | $ | 1.46 | $ | 2.17 | ||||||||
FAD payout ratio | 238 | % | 124 | % | 140 | % | 94 | % | ||||||||
FAD Payout Ratio — Normalized: | ||||||||||||||||
Dividends per common share | $ | 0.69 | $ | 0.68 | $ | 2.05 | $ | 2.04 | ||||||||
FAD per diluted share — normalized | $ | 0.74 | $ | 0.72 | $ | 2.17 | $ | 2.24 | ||||||||
FAD payout ratio — normalized | 93 | % | 94 | % | 94 | % | 91 | % | ||||||||
| Notes: | (1) Depreciation and amortization includes depreciation and amortization from discontinued operations. | |
| (2) Represents noncontrolling interests’ share of net FAD adjustments. | ||
| (3) Represents HCN’s share of net FAD adjustments from unconsolidated joint ventures. | ||
| (4) See Exhibit 1. |
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| 3Q10 Earnings Release | November 3, 2010 | |
| Outlook Reconciliations | Exhibit 4 | |
| (in thousands, except per share data) |
| Prior Outlook | Current Outlook | |||||||||||||||
| Year Ended | Year Ended | |||||||||||||||
| December 31, 2010 | December 31, 2010 | |||||||||||||||
| Low | High | Low | High | |||||||||||||
FFO Reconciliation: | ||||||||||||||||
Net income attributable to common stockholders | $ | 165,699 | $ | 174,449 | $ | 124,304 | $ | 128,054 | ||||||||
Loss (gain) on sales of properties | (10,033 | ) | (10,033 | ) | (20,559 | ) | (20,559 | ) | ||||||||
Depreciation and amortization(1) | 193,500 | 193,500 | 194,400 | 194,400 | ||||||||||||
Noncontrolling interests(2) | (2,185 | ) | (2,185 | ) | (3,235 | ) | (3,235 | ) | ||||||||
Unconsolidated joint ventures(3) | 8,500 | 8,500 | 8,500 | 8,500 | ||||||||||||
Funds from operations | 355,481 | 364,231 | 303,410 | 307,160 | ||||||||||||
Normalizing items, net(4) | 36,269 | 36,269 | 94,590 | 94,590 | ||||||||||||
Funds from operations — normalized | $ | 391,750 | $ | 400,500 | $ | 398,000 | $ | 401,750 | ||||||||
Per share data (diluted): | ||||||||||||||||
Net income attributable to common stockholders | $ | 1.33 | $ | 1.40 | $ | 0.98 | $ | 1.01 | ||||||||
Funds from operations | 2.84 | 2.91 | 2.38 | 2.41 | ||||||||||||
Funds from operations — normalized | 3.13 | 3.20 | 3.13 | 3.16 | ||||||||||||
FAD Reconciliation: | ||||||||||||||||
Net income attributable to common stockholders | $ | 165,699 | $ | 174,449 | $ | 124,304 | $ | 128,054 | ||||||||
Loss (gain) on sales of properties | (10,033 | ) | (10,033 | ) | (20,559 | ) | (20,559 | ) | ||||||||
Depreciation and amortization(1) | 193,500 | 193,500 | 194,400 | 194,400 | ||||||||||||
Noncontrolling interests(2) | (2,225 | ) | (2,225 | ) | (3,275 | ) | (3,275 | ) | ||||||||
Unconsolidated joint ventures(3) | 3,500 | 3,500 | 3,500 | 3,500 | ||||||||||||
Gross straight-line rental income | (16,500 | ) | (16,500 | ) | (16,000 | ) | (16,000 | ) | ||||||||
Prepaid/straight-line rent receipts | 4,068 | 4,068 | 6,214 | 6,214 | ||||||||||||
Amortization related to above (below) market leases, net | (3,300 | ) | (3,300 | ) | (3,200 | ) | (3,200 | ) | ||||||||
Non-cash interest expense | 14,000 | 14,000 | 14,750 | 14,750 | ||||||||||||
Cap-ex, tenant improvements, lease commissions | (20,000 | ) | (20,000 | ) | (20,000 | ) | (20,000 | ) | ||||||||
Funds available for distribution | 328,709 | 337,459 | 280,134 | 283,884 | ||||||||||||
Normalizing items, net(4) | 36,269 | 36,269 | 94,590 | 94,590 | ||||||||||||
Prepaid/straight-line rent receipts | (4,068 | ) | (4,068 | ) | (6,214 | ) | (6,214 | ) | ||||||||
Funds available for distribution — normalized | $ | 360,910 | $ | 369,660 | $ | 368,510 | $ | 372,260 | ||||||||
Per share data (diluted): | ||||||||||||||||
Net income attributable to common stockholders | $ | 1.33 | $ | 1.40 | $ | 0.98 | $ | 1.01 | ||||||||
Funds available for distribution | 2.63 | 2.70 | 2.20 | 2.23 | ||||||||||||
Funds available for distribution — normalized | 2.89 | 2.96 | 2.89 | 2.92 | ||||||||||||
| Notes: | (1) Depreciation and amortization includes depreciation and amortization from discontinued operations. | |
| (2) Represents noncontrolling interests’ share of FFO/FAD adjustments. | ||
| (3) Represents HCN’s share of FFO/FAD adjustments from unconsolidated joint ventures. | ||
| (4) See Exhibit 1. |
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