Exhibit 99.1
FOR IMMEDIATE RELEASE
| July 20, 2004 | ||
| For more information contact: | ||
| Ray Braun — (419) 247-2800 | ||
| Mike Crabtree — (419) 247-2800 | ||
| Scott Estes — (419) 247-2800 |
Health Care REIT, Inc.
Reports Second Quarter Results
Toledo, Ohio, July 20, 2004........Health Care REIT, Inc. (NYSE/HCN)today announced operating results for its second quarter ended June 30, 2004.
“We had a strong quarter of investment activity driving our gross and net new investment total for the first half of 2004 to $161.5 million and 127.7 million, respectively,” commented George L. Chapman, chief executive officer of Health Care REIT, Inc. “This first half activity, together with an additional $148.4 million of net new investments to date in the third quarter, allows us to increase our 2004 projected net new investment guidance to $400 million to $500 million. Many of these investments will incorporate rental escalators that enable us to generate additional organic growth and minimize straight-line rent over time. While this change will impact FFO guidance in the short run, cash flow and our ability to pay dividends are unaffected.”
The Board of Directors declared a dividend for the quarter ended June 30, 2004 of $0.60 per share as compared to $0.585 per share for the same period in 2003. The dividend represents the 133rd consecutive dividend payment. The dividend will be payable August 20, 2004 to stockholders of record on July 30, 2004.
Summary of Second Quarter Results
(In thousands, except per share data)
| Three Months Ended | Three Months Ended | |||||||
| June 30, 2004 | June 30, 2003 | |||||||
| Revenues | $ | 59,334 | $ | 44,822 | ||||
| Net Income Available to Common Stockholders | $ | 19,207 | $ | 16,744 | ||||
| Funds From Operations | $ | 35,760 | $ | 28,600 | ||||
| Net Income Per Diluted Share | $ | 0.37 | $ | 0.41 | ||||
| FFO Per Diluted Share | $ | 0.69 | $ | 0.70 | ||||
| Dividend Per Share | $ | 0.60 | $ | 0.585 | ||||
| FFO Payout Ratio | 87 | % | 84 | % | ||||
Net income available to common stockholders totaled $19.2 million, or $0.37 per diluted share, for the second quarter of 2004, compared with $16.7 million, or $0.41 per diluted share, for the same period in 2003. Funds from operations totaled $35.8 million, or $0.69 per diluted share, for the second quarter of 2004, compared with $28.6 million, or $0.70 per diluted share, for the same period in 2003.
Summary of Year to Date Results
(In thousands, except per share data)
| Six Months Ended | Six Months Ended | |||||||
| June 30, 2004 | June 30, 2003 | |||||||
| Revenues | $ | 119,419 | $ | 88,073 | ||||
| Net Income Available to Common Stockholders | $ | 37,862 | $ | 33,195 | ||||
| Funds From Operations | $ | 71,549 | $ | 56,674 | ||||
| Net Income Per Diluted Share | $ | 0.73 | $ | 0.81 | ||||
| FFO Per Diluted Share | $ | 1.39 | $ | 1.39 | ||||
| Dividend Per Share | $ | 1.185 | $ | 1.17 | ||||
| FFO Payout Ratio | 85 | % | 84 | % | ||||
Net income available to common stockholders totaled $37.9 million, or $0.73 per diluted share, for the six months ended June 30, 2004, compared with $33.2 million, or $0.81 per diluted share, for the same period in 2003. Funds from operations totaled $71.5 million, or $1.39 per diluted share, for the six months ended June 30, 2004, compared with $56.7 million, or $1.39 per diluted share, for the same period in 2003.
We had a total outstanding debt balance of $1.0 billion at June 30, 2004, as compared with $833.5 million at June 30, 2003, and stockholders’ equity of $1.2 billion, which represents a debt to total book capitalization ratio of 47 percent. The debt to total market capitalization at June 30, 2004 was 36 percent. Our coverage ratio of EBITDA to interest was 3.21 to 1.00 for the six months ended June 30, 2004.
Straight-line Rent.We recorded $2.5 million and $9.1 million of straight-line rent for the three and six months ended June 30, 2004, respectively. Straight-line rent is net of $2.4 million and $3.0 million in cash payments outside the normal monthly rental payments for the three and six month periods, respectively. Based upon a review of the existing portfolio, we reduced our recognition of straight-line rent for the second quarter by $2.5 million.
Outlook for 2004 and 2005.Going forward, most of our master leases will incorporate annual rental escalators based on the lesser of a Consumer Price Index factor or a fixed basis point increase. Because the increases are not known at the commencement of the lease, straight-lining the average rental rate over the life of the lease is not required.
Therefore, primarily due to our revised straight-line rent expectations, we are adjusting our 2004 guidance and now expect to report net income available to common stockholders in the range of $1.49 to $1.54 per diluted share, down from $1.68 to $1.73 per diluted share, and FFO in the range of $2.87 to $2.92 per diluted share, down from $2.99 to $3.04 per diluted share. We expect to record straight-line rent of approximately $18 million to $20 million for the full year 2004, down from previous expectations of $24 million to $28 million. These expectations exclude any additional payments outside the normal monthly rental payments. As previously stated, we are also increasing our net new investment guidance for 2004 to a range of $400 million to $500 million.
We are initiating guidance for 2005 and expect to report net income available to common stockholders in the range of $1.47 to $1.55 per diluted share, and FFO in the range of $2.98 to $3.06 per diluted share. The guidance assumes net new investments of $250 million with leases that will not require rents to be straight-lined. We expect to record straight-line rent of approximately $14 million to $16 million for the full year 2005, before any payments outside the normal monthly rental payments.
Our guidance does not account for any impairments or increased quarterly charges to the loan loss reserve. Additionally, we plan to manage the company to maintain investment grade status with a capital structure consistent with our current profile. Please see Exhibit 15 for a reconciliation of the outlooks for net income and FFO.
Portfolio Update.Eight assisted living facilities stabilized during the quarter and one assisted living facility in fill-up was acquired. We ended the quarter with four assisted living facilities remaining in fill-up, representing two percent of revenues. Only one facility, representing one percent of revenues, has occupancy of less than 50 percent. The facility was a new acquisition in the fourth quarter of 2003.
Supplemental Reporting Measures.We believe that net income, as defined by accounting principles generally accepted in the United States (U.S. GAAP), is the most appropriate earnings measurement. However, we consider funds from operations (FFO) to be a useful supplemental measure of our 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 depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures.
EBITDA stands for earnings before interest, taxes, depreciation and amortization. Additionally, we exclude the non-cash provision for loan losses. We believe that EBITDA, along with net income and cash flow provided from operating activities, is an important supplemental measure because it provides additional information to assess and evaluate the performance of our operations. Additionally, restrictive covenants in our long-term debt arrangements contain financial ratios based on EBITDA. We primarily utilize EBITDA to measure our interest coverage ratio which represents EBITDA divided by interest expense.
FFO and EBITDA are financial measures that are widely used by investors, equity and debt analysts and rating agencies in the valuation, comparison, rating and investment recommendations of companies. Management uses these financial measures to facilitate internal and external comparisons to our historical operating results, in making operating decisions and for budget planning purposes. Additionally, FFO is an
internal evaluation metric utilized by the Board of Directors to evaluate management. FFO and EBITDA 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, FFO and EBITDA, as defined by us, may not be comparable to similarly entitled items reported by other real estate investment trusts or other companies. Please see Exhibits 14 and 16 for reconciliations of FFO and EBITDA to net income.
Conference Call Information.We have scheduled a conference call on July 21, 2004, at 9:00 a.m. Eastern to discuss our second quarter results, industry trends, portfolio performance and outlooks for 2004 and 2005. To participate on the webcast, log on to www.hcreit.com or www.fulldisclosure.com 15 minutes before the call to download the necessary software. Replays will be available for 90 days through the same Web sites. This earnings release is posted on our Web site under the heading Press Releases.
Health Care REIT, Inc., with headquarters in Toledo, Ohio, is a real estate investment trust that invests in health care facilities, primarily skilled nursing and assisted living facilities. At June 30, 2004, we had investments in 346 health care facilities in 33 states with 49 operators and had total assets of approximately $2.2 billion. For more information on Health Care REIT, Inc., via facsimile at no cost, dial 1-800-PRO-INFO and enter the company code – HCN. More information is available on the Internet 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 the possible expansion of our portfolio; the performance of our operators and properties; our ability to enter into agreements with new viable tenants for properties which we take back from financially troubled tenants, if any; our ability to make distributions; our policies and plans regarding investments, financings and other matters; our tax status as a real estate investment trust; our ability to appropriately balance the use of debt and equity; and our ability to access capital markets or other sources of funds. When we use words such as “believe,” “expect,” “anticipate,” or similar expressions, we are making forward-looking statements. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties. Our expected results may not be achieved, and actual results may differ materially from our 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 prevailing interest rates; compliance with and changes to regulations and payment policies within the health care industry; changes in financing terms; competition within the health care and senior housing industries; and changes in federal, state and local legislation. Finally, we assume 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.
FINANCIAL SCHEDULES FOLLOW
#####
HEALTH CARE REIT, INC.
Financial Supplement
CONSOLIDATED BALANCE SHEETS (unaudited)
(In thousands)
| June 30 | ||||||||
| 2004 | 2003 | |||||||
Assets | ||||||||
| Real estate investments: | ||||||||
| Real property owned | ||||||||
| Land | $ | 176,862 | $ | 131,905 | ||||
| Buildings & improvements | 1,812,116 | 1,431,662 | ||||||
| Construction in progress | 20,899 | 35,151 | ||||||
| 2,009,877 | 1,598,718 | |||||||
| Less accumulated depreciation | (182,034 | ) | (137,029 | ) | ||||
| Total real property owned | 1,827,843 | 1,461,689 | ||||||
| Loans receivable | ||||||||
| Real property loans | 216,003 | 202,287 | ||||||
| Subdebt investments | 45,023 | 15,965 | ||||||
| 261,026 | 218,252 | |||||||
| Less allowance for losses on loans receivable | (8,425 | ) | (5,455 | ) | ||||
| 252,601 | 212,797 | |||||||
| Net real estate investments | 2,080,444 | 1,674,486 | ||||||
| Other assets: | ||||||||
| Equity investments | 3,298 | 7,492 | ||||||
| Deferred loan expenses | 8,955 | 6,187 | ||||||
| Cash and cash equivalents | 33,990 | 7,953 | ||||||
| Receivables and other assets | 64,894 | 49,982 | ||||||
| 111,137 | 71,614 | |||||||
Total assets | $ | 2,191,581 | $ | 1,746,100 | ||||
Liabilities and stockholders’ equity | ||||||||
| Liabilities: | ||||||||
| Borrowings under unsecured lines of credit arrangements | $ | 41,000 | $ | 156,900 | ||||
| Senior unsecured notes | 825,000 | 615,000 | ||||||
| Secured debt | 146,936 | 61,608 | ||||||
| Accrued expenses and other liabilities | 17,560 | 17,282 | ||||||
| Total liabilities | 1,030,496 | 850,790 | ||||||
| Stockholders’ equity: | ||||||||
| Preferred stock | 116,859 | 106,150 | ||||||
| Common stock | 51,546 | 41,360 | ||||||
| Capital in excess of par value | 1,106,155 | 821,897 | ||||||
| Treasury stock | (850 | ) | 0 | |||||
| Cumulative net income | 702,800 | 618,855 | ||||||
| Cumulative dividends | (814,068 | ) | (690,366 | ) | ||||
| Accumulated other comprehensive income | 1 | 79 | ||||||
| Other equity | (1,358 | ) | (2,665 | ) | ||||
Total stockholders’ equity | 1,161,085 | 895,310 | ||||||
Total liabilities and stockholders’ equity | $ | 2,191,581 | $ | 1,746,100 | ||||
CONSOLIDATED STATEMENTS OF INCOME (unaudited)
(In thousands, except per share data)
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30 | June 30 | |||||||||||||||
| 2004 | 2003 | 2004 | 2003 | |||||||||||||
| Revenues: | ||||||||||||||||
| Rental income | $ | 52,846 | $ | 38,989 | $ | 106,504 | $ | 76,708 | ||||||||
| Interest income | 5,923 | 5,190 | 11,636 | 10,130 | ||||||||||||
| Transaction fees and other income | 565 | 643 | 1,279 | 1,235 | ||||||||||||
| Gross revenues | 59,334 | 44,822 | 119,419 | 88,073 | ||||||||||||
| Expenses: | ||||||||||||||||
| Interest expense | 17,216 | 12,292 | 35,475 | 23,397 | ||||||||||||
| Provision for depreciation | 17,452 | 10,784 | 34,244 | 21,365 | ||||||||||||
| General and administrative | 3,560 | 2,847 | 6,719 | 5,457 | ||||||||||||
| Loan expense | 872 | 680 | 1,763 | 1,315 | ||||||||||||
| Provision for loan losses | 300 | 250 | 600 | 500 | ||||||||||||
| Total expenses | 39,400 | 26,853 | 78,801 | 52,034 | ||||||||||||
| Income from continuing operations | 19,934 | 17,969 | 40,618 | 36,039 | ||||||||||||
| Discontinued operations: | ||||||||||||||||
| Gain (loss) on sales of properties | 1,129 | 0 | 1,129 | 34 | ||||||||||||
| Income (loss) from discontinued operations, net | 366 | 1,093 | 607 | 2,286 | ||||||||||||
| 1,495 | 1,093 | 1,736 | 2,320 | |||||||||||||
| Net income | 21,429 | 19,062 | 42,354 | 38,359 | ||||||||||||
| Preferred dividends | 2,222 | 2,318 | 4,492 | 5,164 | ||||||||||||
| Net income available to common stockholders | $ | 19,207 | $ | 16,744 | $ | 37,862 | $ | 33,195 | ||||||||
| Average number of common shares outstanding: | ||||||||||||||||
| Basic | 51,232 | 40,546 | 50,919 | 40,269 | ||||||||||||
| Diluted | 51,828 | 41,136 | 51,577 | 40,822 | ||||||||||||
| Net income available to common stockholders per share: | ||||||||||||||||
| Basic | $ | 0.37 | $ | 0.41 | $ | 0.74 | $ | 0.82 | ||||||||
| Diluted | 0.37 | 0.41 | 0.73 | 0.81 | ||||||||||||
| Funds from operations | $ | 35,760 | $ | 28,600 | $ | 71,549 | $ | 56,674 | ||||||||
| Funds from operations per share: | ||||||||||||||||
| Basic | $ | 0.70 | $ | 0.71 | $ | 1.41 | $ | 1.41 | ||||||||
| Diluted | 0.69 | 0.70 | 1.39 | 1.39 | ||||||||||||
| Dividends per share | $ | 0.60 | $ | 0.585 | $ | 1.185 | $ | 1.17 | ||||||||
HEALTH CARE REIT, INC.
Financial Supplement – June 30, 2004
Portfolio Composition ($000’s) | Exhibit 1 |
| # Properties | # Beds/Units | Balance | % Balance | |||||||||||||
Balance Sheet Data | ||||||||||||||||
| Real Property | 322 | 29,202 | $ | 1,827,843 | 88 | % | ||||||||||
| Loans Receivable | 24 | 2,821 | 216,003 | 10 | % | |||||||||||
| Subdebt Investments | 0 | 0 | 45,023 | 2 | % | |||||||||||
| Total Investments | 346 | 32,023 | $ | 2,088,869 | 100 | % | ||||||||||
| # Properties | # Beds/Units | Investment (1) | % Investment | |||||||||||||
Investment Data | ||||||||||||||||
| Assisted Living Facilities | 218 | 14,139 | $ | 1,193,242 | 57 | % | ||||||||||
| Skilled Nursing Facilities | 120 | 16,616 | 748,544 | 36 | % | |||||||||||
| Specialty Care Facilities | 8 | 1,268 | 150,278 | 7 | % | |||||||||||
| Real Estate Investments | 346 | 32,023 | $ | 2,092,064 | 100 | % | ||||||||||
| Notes: (1) | Real Estate Investments include gross real estate investments and credit enhancements which amounted to $2,088,869,000 and $3,195,000, respectively. |
Revenue Composition ($000’s) | Exhibit 2 |
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, 2004 | June 30, 2004 | |||||||||||||||
Revenue by Investment Type (1) | ||||||||||||||||
| Real Property | $ | 54,057 | 90 | % | $ | 109,198 | 90 | % | ||||||||
| Loans Receivable | 4,915 | 8 | % | 9,620 | 8 | % | ||||||||||
| Subdebt Investments | 1,108 | 2 | % | 2,223 | 2 | % | ||||||||||
| Total | $ | 60,080 | 100 | % | $ | 121,041 | 100 | % | ||||||||
Revenue by Facility Type (1) | ||||||||||||||||
| Assisted Living Facilities | $ | 33,319 | 55 | % | $ | 68,952 | 57 | % | ||||||||
| Skilled Nursing Facilities | 22,369 | 37 | % | 43,842 | 36 | % | ||||||||||
| Specialty Care Facilities | 4,392 | 8 | % | 8,247 | 7 | % | ||||||||||
| Total | $ | 60,080 | 100 | % | $ | 121,041 | 100 | % | ||||||||
| Notes: (1) Revenues include gross revenues and revenues from discontinued operations. |
Operator Concentration ($000’s) | Exhibit 3 |
| # Properties | Investment | % Investment | ||||||||||
Concentration by Investment | ||||||||||||
| Emeritus Corporation | 30 | $ | 229,415 | 11 | % | |||||||
| Southern Assisted Living, Inc. | 46 | 209,905 | 10 | % | ||||||||
| Commonwealth Communities L.L.C. | 14 | 200,810 | 10 | % | ||||||||
| Home Quality Management, Inc. | 32 | 180,443 | 9 | % | ||||||||
| Life Care Centers of America, Inc. | 17 | 125,159 | 6 | % | ||||||||
| Remaining Operators (44) | 207 | 1,146,332 | 54 | % | ||||||||
| Total | 346 | $ | 2,092,064 | 100 | % | |||||||
Geographic Concentration ($000’s) | Exhibit 4 |
| # Properties | Investment | % Investment | ||||||||||
Concentration by Region | ||||||||||||
| South | 217 | $ | 1,085,110 | 52 | % | |||||||
| Northeast | 45 | 415,325 | 20 | % | ||||||||
| West | 45 | 305,349 | 15 | % | ||||||||
| Midwest | 39 | 286,280 | 13 | % | ||||||||
| Total | 346 | $ | 2,092,064 | 100 | % | |||||||
| # Properties | Investment | % Investment | ||||||||||
Concentration by State | ||||||||||||
| Massachusetts | 27 | $ | 286,437 | 14 | % | |||||||
| Florida | 42 | 236,201 | 11 | % | ||||||||
| North Carolina | 44 | 203,768 | 10 | % | ||||||||
| Tennessee | 27 | 146,859 | 7 | % | ||||||||
| Ohio | 14 | 125,818 | 6 | % | ||||||||
| Remaining States (28) | 192 | 1,092,981 | 52 | % | ||||||||
| Total | 346 | $ | 2,092,064 | 100 | % | |||||||
Committed Investment Balances ($000’s except Investment per Bed/Unit) | Exhibit 5 |
| Committed | Investment | |||||||||||||||
| # Properties | # Beds/Units | Balance (1) | per Bed/Unit | |||||||||||||
| Assisted Living Facilities | 218 | 14,139 | $ | 1,202,109 | $ | 85,021 | ||||||||||
| Skilled Nursing Facilities | 120 | 16,616 | 748,544 | 45,050 | ||||||||||||
| Specialty Care Facilities | 8 | 1,268 | 150,278 | 118,516 | ||||||||||||
| Total | 346 | 32,023 | $ | 2,100,931 | -na- | |||||||||||
| Notes: (1) | Committed Balance includes gross real estate investments, credit enhancements and unfunded construction commitments for which initial funding had commenced. |
Lease Up Statistics on Assisted Living Facilities ($000’s) | Exhibit 6 |
| Average Months | ||||||||||||||||
| # Properties | in Operation | Revenue (1) | % Revenue | |||||||||||||
Occupancy | ||||||||||||||||
| 0% - 50% | 1 | 6 | $ | 773 | 1 | % | ||||||||||
| 50% - 70% | 1 | 10 | 471 | 0 | % | |||||||||||
| 70% + | 2 | 18 | 827 | 1 | % | |||||||||||
| 4 | -na- | $ | 2,071 | 2 | % | |||||||||||
| Notes: (1) | Interest and rental income for the six months ended June 30, 2004. |
Selected Facility Data | Exhibit 7 |
| Coverage Data | ||||||||||||||||||||
| % Payor Mix | ||||||||||||||||||||
| Before | After | |||||||||||||||||||
| Census | Private | Medicare | Mgt. Fees | Mgt. Fees | ||||||||||||||||
| Assisted Living Facilities | 85 | % | 85 | % | 0 | % | 1.40x | 1.18x | ||||||||||||
| Skilled Nursing Facilities | 85 | % | 16 | % | 20 | % | 1.97x | 1.51x | ||||||||||||
| Specialty Care Facilities | 70 | % | 14 | % | 40 | % | 1.91x | 1.44x | ||||||||||||
| Weighted Averages | 1.64x | 1.32x | ||||||||||||||||||
| Notes: | Data as of March 31, 2004. |
Exhibit 8
Credit Support ($000’s)
| Balance | % Investment | |||||
| Cross Defaulted | $ | 1,976,145 | 95% of gross real estate investments | |||
| Cross Collateralized | 168,768 | 78% of real property loans receivable | ||||
| Master Leases | 1,484,561 | 81% of real property owned | ||||
| Current Capitalization ($000's) | Leverage & Performance Ratios | |||||||||||||||||||
| Balance | % Balance | |||||||||||||||||||
| Borrowings Under Bank Lines | $ | 41,000 | 2 | % | Debt/Total Book Cap | 47 | % | |||||||||||||
| Long-Term Debt Obligations | 971,936 | 45 | % | Debt/Total Market Cap | 36 | % | ||||||||||||||
| Stockholders’ Equity | 1,161,085 | 53 | % | Interest Coverage | 3.31x 2nd Qtr. | |||||||||||||||
| Total Book Capitalization | $ | 2,174,021 | 100 | % | 3.21x YTD | |||||||||||||||
| FFO Payout Ratio | 87% 2nd Qtr. | |||||||||||||||||||
| 85% YTD | ||||||||||||||||||||
Exhibit 9
Revenue Maturities ($000’s)
Operating Lease Expirations & Loan Maturities
| Current Lease | Current Interest | Lease and | ||||||||||||||
| Year | Revenue (1) | Revenue (1) | Interest Revenue | % of Total | ||||||||||||
| 2004 | $ | 0 | $ | 141 | $ | 141 | 0 | % | ||||||||
| 2005 | 0 | 1,391 | 1,391 | 1 | % | |||||||||||
| 2006 | 0 | 5,616 | 5,616 | 2 | % | |||||||||||
| 2007 | 0 | 4,806 | 4,806 | 2 | % | |||||||||||
| 2008 | 0 | 3,928 | 3,928 | 2 | % | |||||||||||
| Thereafter | 218,930 | 6,971 | 225,901 | 93 | % | |||||||||||
| Total | $ | 218,930 | $ | 22,853 | $ | 241,783 | 100 | % | ||||||||
Notes: (1) Revenue impact by year, annualized.
Exhibit 10
Debt Maturities and Principal Payments ($000’s)
| Year | Lines of Credit (1) | Senior Notes | Secured Debt | Total | ||||||||||||
| 2004 | $ | 0 | $ | 0 | $ | 1,228 | $ | 1,228 | ||||||||
| 2005 | 30,000 | 0 | 6,021 | 36,021 | ||||||||||||
| 2006 | 310,000 | 50,000 | 2,702 | 362,702 | ||||||||||||
| 2007 | 0 | 175,000 | 14,709 | 189,709 | ||||||||||||
| 2008 | 0 | 100,000 | 9,879 | 109,879 | ||||||||||||
| 2009 | 0 | 0 | 12,938 | 12,938 | ||||||||||||
| 2010 | 0 | 0 | 8,948 | 8,948 | ||||||||||||
| Thereafter | 0 | 500,000 | 90,511 | 590,511 | ||||||||||||
| Total | $ | 340,000 | $ | 825,000 | $ | 146,936 | $ | 1,311,936 | ||||||||
Notes: (1) Reflected at 100% capacity.
Exhibit 11
Investment Activity ($000’s)
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, 2004 | June 30, 2004 | |||||||||||||||
Funding by Investment Type | ||||||||||||||||
| Real Property | $ | 70,017 | 94 | % | $ | 155,407 | 96 | % | ||||||||
| Loans Receivable | 4,008 | 5 | % | 5,618 | 3 | % | ||||||||||
| Subdebt Investments | 223 | 1 | % | 512 | 1 | % | ||||||||||
| Total | $ | 74,248 | 100 | % | $ | 161,537 | 100 | % | ||||||||
Funding by Facility Type | ||||||||||||||||
| Assisted Living Facilities | $ | 15,684 | 21 | % | $ | 39,611 | 25 | % | ||||||||
| Skilled Nursing Facilities | 54,215 | 73 | % | 116,725 | 72 | % | ||||||||||
| Specialty Care Facilities | 4,349 | 6 | % | 5,201 | 3 | % | ||||||||||
| Total | $ | 74,248 | 100 | % | $ | 161,537 | 100 | % | ||||||||
Exhibit 12
Disposition Activity ($000’s)
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, 2004 | June 30, 2004 | |||||||||||||||
Dispositions by Investment Type | ||||||||||||||||
| Real Property | $ | 33,808 | 100 | % | $ | 33,808 | 100 | % | ||||||||
| Loans Receivable | ||||||||||||||||
| Total | $ | 33,808 | 100 | % | $ | 33,808 | 100 | % | ||||||||
Dispositions by Facility Type | ||||||||||||||||
| Assisted Living Facilities | $ | 20,006 | 59 | % | $ | 20,006 | 59 | % | ||||||||
| Skilled Nursing Facilities | 3,447 | 10 | % | 3,447 | 10 | % | ||||||||||
| Specialty Care Facilities | 10,355 | 31 | % | 10,355 | 31 | % | ||||||||||
| Total | $ | 33,808 | 100 | % | $ | 33,808 | 100 | % | ||||||||
Exhibit 13
Discontinued Operations ($000’s)
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30 | June 30 | |||||||||||||||
| 2004 | 2003 | 2004 | 2003 | |||||||||||||
Revenues | ||||||||||||||||
| Rental income | $ | 746 | $ | 3,034 | $ | 1,622 | $ | 6,075 | ||||||||
Expenses | ||||||||||||||||
| Interest expense | 150 | 869 | 443 | 1,641 | ||||||||||||
| Provision for depreciation | 230 | 1,072 | 572 | 2,148 | ||||||||||||
| Income (loss) from discontinued operations, net | $ | 366 | $ | 1,093 | $ | 607 | $ | 2,286 | ||||||||
Exhibit 14
Funds From Operations Reconciliation
(Amounts in 000’s except per share data)
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30 | June 30 | |||||||||||||||
| 2004 | 2003 | 2004 | 2003 | |||||||||||||
| Net income available to common stockholders | $ | 19,207 | $ | 16,744 | $ | 37,862 | $ | 33,195 | ||||||||
| Provision for depreciation (1) | 17,682 | 11,856 | 34,816 | 23,513 | ||||||||||||
| Loss (gain) on sales of properties | (1,129 | ) | 0 | (1,129 | ) | (34 | ) | |||||||||
| Funds from operations | $ | 35,760 | $ | 28,600 | $ | 71,549 | $ | 56,674 | ||||||||
| Average common shares outstanding: | ||||||||||||||||
| Basic | 51,232 | 40,546 | 50,919 | 40,269 | ||||||||||||
| Diluted | 51,828 | 41,136 | 51,577 | 40,822 | ||||||||||||
| Per share data: | ||||||||||||||||
| Net income available to common stockholders | ||||||||||||||||
| Basic | $ | 0.37 | $ | 0.41 | $ | 0.74 | $ | 0.82 | ||||||||
| Diluted | 0.37 | 0.41 | 0.73 | 0.81 | ||||||||||||
| Funds from operations | ||||||||||||||||
| Basic | $ | 0.70 | $ | 0.71 | $ | 1.41 | $ | 1.41 | ||||||||
| Diluted | 0.69 | 0.70 | 1.39 | 1.39 | ||||||||||||
FFO Payout Ratio | ||||||||||||||||
| Dividends per share | $ | 0.60 | $ | 0.585 | $ | 1.185 | $ | 1.17 | ||||||||
| FFO per diluted share | $ | 0.69 | $ | 0.70 | $ | 1.39 | $ | 1.39 | ||||||||
| FFO payout ratio | 87 | % | 84 | % | 85 | % | 84 | % | ||||||||
Notes: (1) Provision for depreciation includes provision for depreciation from discontinued operations.
Exhibit 15
FFO Outlook Reconciliation
(Amounts in 000’s except per share data)
| Previous Outlook | Current Outlook | |||||||||||||||||||||||
| Year Ended | Year Ended | Year Ended | ||||||||||||||||||||||
| December 31, 2004 | December 31, 2004 | December 31, 2005 | ||||||||||||||||||||||
| Low | High | Low | High | Low | High | |||||||||||||||||||
| Net income available to common stockholders | $ | 86,700 | $ | 89,300 | $ | 77,479 | $ | 80,079 | $ | 80,900 | $ | 85,300 | ||||||||||||
| Loss (gain) on sales of properties | (1,129 | ) | (1,129 | ) | ||||||||||||||||||||
| Provision for depreciation (1) | 68,000 | 68,000 | 72,850 | 72,850 | 83,000 | 83,000 | ||||||||||||||||||
| Funds from operations | $ | 154,700 | $ | 157,300 | $ | 149,200 | $ | 151,800 | $ | 163,900 | $ | 168,300 | ||||||||||||
| Average common shares outstanding (diluted) | 51,750 | 51,750 | 52,000 | 52,000 | 55,000 | 55,000 | ||||||||||||||||||
| Per share data (diluted): | ||||||||||||||||||||||||
| Net income available to common stockholders | $ | 1.68 | $ | 1.73 | $ | 1.49 | $ | 1.54 | $ | 1.47 | $ | 1.55 | ||||||||||||
| Funds from operations | 2.99 | 3.04 | 2.87 | 2.92 | 2.98 | 3.06 | ||||||||||||||||||
Notes: (1) Provision for depreciation includes provision for depreciation from discontinued operations.
Exhibit 16
EBITDA Reconciliation ($000’s)
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30 | June 30 | |||||||||||||||
| 2004 | 2003 | 2004 | 2003 | |||||||||||||
| Net income | $ | 21,429 | $ | 19,062 | $ | 42,354 | $ | 38,359 | ||||||||
| Provision for depreciation (1) | 17,682 | 11,856 | 34,816 | 23,513 | ||||||||||||
| Interest expense (1) | 17,366 | 13,161 | 35,918 | 25,038 | ||||||||||||
| Capitalized interest | 199 | 380 | 336 | 638 | ||||||||||||
| Amortization (2) | 1,092 | 736 | 2,210 | 1,924 | ||||||||||||
| Provision for loan losses | 300 | 250 | 600 | 500 | ||||||||||||
| EBITDA | $ | 58,068 | $ | 45,445 | $ | 116,234 | $ | 89,972 | ||||||||
Interest Coverage Ratio | ||||||||||||||||
| Interest expense (1) | $ | 17,366 | $ | 13,161 | $ | 35,918 | $ | 25,038 | ||||||||
| Capitalized interest | 199 | 380 | 336 | 638 | ||||||||||||
| Total interest | 17,565 | 13,541 | 36,254 | 25,676 | ||||||||||||
| EBITDA | 58,068 | 45,445 | 116,234 | 89,972 | ||||||||||||
| Interest coverage ratio | 3.31 | x | 3.36 | x | 3.21 | x | 3.50 | x | ||||||||
Notes: | (1) Provision for depreciation and interest expense include provision for depreciation | |
| and interest expense from discontinued operations. | ||
| (2) Amortization includes amortization of deferred loan expenses, restricted stock | ||
| and stock options. |