Exhibit 99.1
F O R I M M E D I A T E R E L E A S E
| | | |
| | May 5, 2005 |
| | For more information contact: |
| | Ray Braun - (419) 247-2800 |
| | Mike Crabtree - (419) 247-2800 |
| | Scott Estes - (419) 247-2800 |
Health Care REIT, Inc.
Reports First Quarter Results
Toledo, Ohio, May 5, 2005........Health Care REIT, Inc. (NYSE/HCN) announced today operating results for its first quarter ended March 31, 2005.
“Our investment activity and operating results were substantially as anticipated,” commented George L. Chapman, chief executive officer of Health Care REIT, Inc. “ We had strong recurring FAD growth and significant portfolio payment coverage improvement over the previous year. After three excellent years for investing, we were cautious about investment prospects for 2005 given aggressive valuations, especially in the high end assisted living sector. As we continue to diligently pursue quality investments, we will maintain our underwriting and asset management discipline. The liquidity in the long-term care sector should also permit us to further strengthen our portfolio by repositioning our capital with the best assets and operators.”
As previously announced, the Board of Directors declared a dividend for the quarter ended March 31, 2005 of $0.62 per share as compared to $0.60 per share for the same period in 2004. The dividend represents the 136th consecutive dividend payment. The dividend will be payable May 20, 2005 to stockholders of record on April 29, 2005.
Summary of First Quarter Results
(In thousands, except per share data)
| | | | | | | | | | | | | |
| |
| | | | | Three Months Ended | | | | Three Months Ended | | |
| | | | | March 31, 2005 | | | | March 31, 2004 | | |
| | Revenues | | | $ | 68,379 | | | | $ | 59,645 | | |
| | Net Income Available to Common Stockholders | | | $ | 17,803 | | | | $ | 18,655 | | |
| | Funds From Operations | | | $ | 38,309 | | | | $ | 35,789 | | |
| | Funds Available for Distribution | | | $ | 35,454 | | | | $ | 29,125 | | |
| | Net Income Per Diluted Share | | | $ | 0.33 | | | | $ | 0.36 | | |
| | FFO Per Diluted Share | | | $ | 0.72 | | | | $ | 0.70 | | |
| | FAD Per Diluted Share | | | $ | 0.66 | | | | $ | 0.57 | | |
| | Dividend Per Share | | | $ | 0.60 | | | | $ | 0.585 | | |
| | FFO Payout Ratio | | | | 83 | % | | | | 84 | % | |
| | FAD Payout Ratio | | | | 91 | % | | | | 103 | % | |
| |
The company had a total outstanding debt balance of $1.2 billion at March 31, 2005, as compared with $1.0 billion at March 31, 2004, and stockholders’ equity of $1.3 billion. At March 31, 2005, the company’s debt to total book capitalization ratio was 48 percent and the debt to total market capitalization was 38 percent.
Page 1 of 14
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| IQ05 Earnings Release | | May 5, 2005 |
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For the three months ended March 31, 2005, the company’s coverage ratio of EBITDA to interest was 3.26 to 1.00 and the coverage ratio of EBITDA to fixed charges was 2.56 to 1.00.
Straight-line Rent.The company recorded $2.9 million of straight-line rent for the three months ended March 31, 2005. Straight-line rent is net of $852,000 in cash payments outside normal monthly rental payments for the three month period.
Outlook for 2005.The company affirms its 2005 guidance and expects to report net income available to common stockholders in the range of $1.39 to $1.47 per diluted share and FFO in the range of $2.90 to $2.98 per diluted share. The guidance assumes net new investments of $200 million with leases that will not require rents to be straight-lined. The company continues to anticipate that general and administrative expenses will total between $17.5 million and $18.5 million for the full year 2005. The company now expects to record straight-line rent of approximately $13 million for the full year 2005, before any additional cash payments outside normal monthly rental payments, and expects to report FAD in the range of $2.66 to $2.74 per diluted share.
The company’s guidance does not account for any impairments or unanticipated additions to the loan loss reserve. Additionally, the company plans to manage itself to maintain investment grade status with a capital structure consistent with its current profile. Please see Exhibit 15 for a reconciliation of the outlook for net income to FFO and FAD.
Supplemental Reporting Measures.The company believes that net income, as defined by accounting principles generally accepted in the United States (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 depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. FAD represents FFO excluding the non-cash straight-line rental adjustments.
EBITDA stands for earnings before interest, taxes, depreciation and amortization. Additionally, the company excludes the non-cash provision for loan losses. The company believes 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 its operations. Additionally, restrictive covenants in the company’s long-term debt arrangements contain financial ratios based on EBITDA. The company primarily utilizes EBITDA to measure its interest coverage ratio which represents EBITDA divided by interest expense.
FFO, FAD 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. The company’s management uses these financial measures to facilitate internal and external comparisons to historical operating results, in making operating decisions and for budget planning purposes. Additionally, FFO and FAD are internal evaluation metrics utilized by the Board of Directors to evaluate management. FFO, FAD 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, FAD and EBITDA, 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 Exhibits 13, 14 and 16 for reconciliations of FAD, FFO and EBITDA to net income.
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| IQ05 Earnings Release | | May 5, 2005 |
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Conference Call Information.The company has scheduled a conference call on May 6, 2005, at 9:00 a.m. Eastern time to discuss its first quarter results, industry trends, portfolio performance and outlook for 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 the company’s Web site under the heading Press Releases.
Health Care REIT, Inc., with headquarters in Toledo, Ohio, is a real estate investment trust that invests primarily in skilled nursing and assisted living facilities. At March 31, 2005, the company had investments in 398 facilities in 35 states with 51 operators and had total assets of approximately $2.6 billion. The portfolio included 237 assisted living facilities, 153 skilled nursing facilities and eight specialty care hospitals. 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 and are based upon, among other things, the possible expansion of the company’s portfolio; the performance of its operators and properties; its ability to make distributions; its policies and plans regarding investments, financings and other matters; its ability to appropriately balance the use of debt and equity; its ability to access capital markets or other sources of funds; and its ability to meet its earnings guidance. When the company uses words such as “may,” “will,” “intend,” “should,” “believe,” “expect,” “anticipate,” or similar expressions, it is making forward-looking statements. Forward-looking statements are not guarantees of future performance and involve risks 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 prevailing interest rates; serious issues facing the health care industry, including compliance with, and changes to, regulations and payment policies and operators’ difficulty in obtaining and maintaining adequate liability and other insurance; changes in financing terms; competition within the health care and senior housing industries; changes in federal, state and local legislation; negative developments in the operating results or financial condition of operators, including, but not limited to, their ability to pay rent and repay loans; the company’s ability to transition or sell facilities with a profitable result; inaccuracies in any of the company’s assumptions; and changes in rules or practices governing the company’s financial reporting. 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.
FINANCIAL SCHEDULES FOLLOW
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Page 3 of 14
HEALTH CARE REIT, INC.
Financial Supplement
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| IQ05 Earnings Release | | May 5, 2005 |
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CONSOLIDATED BALANCE SHEETS (unaudited)
(In thousands)
| | | | | | | | | |
| | | March 31 | |
| | | 2005 | | | 2004 | |
Assets | | | | | | | | |
| Real estate investments: | | | | | | | | |
| Real property owned | | | | | | | | |
| Land | | $ | 210,014 | | | $ | 174,888 | |
| Buildings & improvements | | | 2,217,871 | | | | 1,786,296 | |
| Construction in progress | | | 26,699 | | | | 17,924 | |
| | | | | | | |
| | | | 2,454,584 | | | | 1,979,108 | |
| Less accumulated depreciation | | | (236,950 | ) | | | (169,574 | ) |
| | | | | | | |
| Total real property owned | | | 2,217,634 | | | | 1,809,534 | |
| | | | | | | | | |
| Loans receivable | | | | | | | | |
| Real property loans | | | 218,202 | | | | 218,434 | |
| Subdebt investments | | | 23,308 | | | | 45,173 | |
| | | | | | | |
| | | | 241,510 | | | | 263,607 | |
| Less allowance for losses on loans receivable | | | (5,561 | ) | | | (8,125 | ) |
| | | | | | | |
| | | | 235,949 | | | | 255,482 | |
| | | | | | | |
| Net real estate investments | | | 2,453,583 | | | | 2,065,016 | |
| | | | | | | | | |
| Other assets: | | | | | | | | |
| Equity investments | | | 3,298 | | | | 3,298 | |
| Deferred loan expenses | | | 6,419 | | | | 9,554 | |
| Cash and cash equivalents | | | 17,429 | | | | 47,063 | |
| Receivables and other assets | | | 79,633 | | | | 61,390 | |
| | | | | | | |
| | | | 106,779 | | | | 121,305 | |
| | | | | | | |
| | | | | | | | | |
Total assets | | $ | 2,560,362 | | | $ | 2,186,321 | |
| | | | | | | |
| | | | | | | | | |
Liabilities and stockholders’ equity | | | | | | | | |
| Liabilities: | | | | | | | | |
| Borrowings under unsecured lines of credit arrangements | | $ | 163,500 | | | $ | 0 | |
| Senior unsecured notes | | | 875,000 | | | | 865,000 | |
| Secured debt | | | 169,506 | | | | 147,616 | |
| Accrued expenses and other liabilities | | | 17,951 | | | | 13,342 | |
| | | | | | | |
| Total liabilities | | | 1,225,957 | | | | 1,025,958 | |
| | | | | | | | | |
| Stockholders’ equity: | | | | | | | | |
| Preferred stock | | | 283,751 | | | | 119,631 | |
| Common stock | | | 53,314 | | | | 51,051 | |
| Capital in excess of par value | | | 1,152,670 | | | | 1,091,896 | |
| Treasury stock | | | (1,766 | ) | | | (850 | ) |
| Cumulative net income | | | 769,056 | | | | 681,371 | |
| Cumulative dividends | | | (922,241 | ) | | | (781,046 | ) |
| Accumulated other comprehensive income | | | 1 | | | | 1 | |
| Other equity | | | (380 | ) | | | (1,691 | ) |
| | | | | | | |
Total stockholders’ equity | | | 1,334,405 | | | | 1,160,363 | |
| | | | | | | |
| | | | | | | | | |
Total liabilities and stockholders’ equity | | $ | 2,560,362 | | | $ | 2,186,321 | |
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Page 4 of 14
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| IQ05 Earnings Release | | May 5, 2005 |
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CONSOLIDATED STATEMENTS OF INCOME (unaudited)
(In thousands, except per share data)
| | | | | | | | | |
| | | Three Months Ended | |
| | | March 31 | |
| | | 2005 | | | 2004 | |
| Revenues: | | | | | | | | |
| Rental income | | $ | 61,974 | | | $ | 53,219 | |
| Interest income | | | 4,983 | | | | 5,713 | |
| Transaction fees and other income | | | 1,422 | | | | 713 | |
| | | | | | | |
| Gross revenues | | | 68,379 | | | | 59,645 | |
| | | | | | | | | |
| Expenses: | | | | | | | | |
| Interest expense | | | 19,601 | | | | 18,148 | |
| Provision for depreciation | | | 20,298 | | | | 16,534 | |
| General and administrative | | | 4,017 | | | | 3,159 | |
| Loan expense | | | 863 | | | | 891 | |
| Provision for loan losses | | | 300 | | | | 300 | |
| | | | | | | |
| Total expenses | | | 45,079 | | | | 39,032 | |
| | | | | | | |
| Income from continuing operations | | | 23,300 | | | | 20,613 | |
| | | | | | | | | |
| Discontinued operations: | | | | | | | | |
| Gain (loss) on sales of properties | | | (110 | ) | | | 0 | |
| Income (loss) from discontinued operations, net | | | 49 | | | | 312 | |
| | | | | | | |
| | | | (61 | ) | | | 312 | |
| | | | | | | |
| Net income | | | 23,239 | | | | 20,925 | |
| | | | | | | | | |
| Preferred dividends | | | 5,436 | | | | 2,270 | |
| | | | | | | |
| | | | | | | | | |
| Net income available to common stockholders | | $ | 17,803 | | | $ | 18,655 | |
| | | | | | | |
| | | | | | | | | |
| Average number of common shares outstanding: | | | | | | | | |
| Basic | | | 52,963 | | | | 50,580 | |
| Diluted | | | 53,454 | | | | 51,358 | |
| | | | | | | | | |
| Net income available to common stockholders per share: | | | | | | | | |
| Basic | | $ | 0.34 | | | $ | 0.37 | |
| Diluted | | | 0.33 | | | | 0.36 | |
| | | | | | | | | |
| Dividends per share | | $ | 0.60 | | | $ | 0.585 | |
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| IQ05 Earnings Release | | May 5, 2005 |
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HEALTH CARE REIT, INC.
Financial Supplement – March 31, 2005
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| Portfolio Composition ($000’s) | | Exhibit 1 |
| | | | | | | | | | | | | | | | | |
| | | # Properties | | | # Beds/Units | | | Balance | | | % Balance | |
| | | |
Balance Sheet Data | | | | | | | | | | | | | | | | |
| Real Property | | | 376 | | | | 35,322 | | | $ | 2,217,634 | | | | 90 | % |
| Loans Receivable (1) | | | 22 | | | | 2,651 | | | | 218,202 | | | | 9 | % |
| Subdebt Investments | | | 0 | | | | 0 | | | | 23,308 | | | | 1 | % |
| | | |
| Total Investments | | | 398 | | | | 37,973 | | | $ | 2,459,144 | | | | 100 | % |
| | | | | | | | | | | | | | | | | |
| | | # Properties | | | # Beds/Units | | | Investment (2) | | | % Investment | |
| | | |
Investment Data | | | | | | | | | | | | | | | | |
| Assisted Living Facilities | | | 237 | | | | 15,936 | | | $ | 1,346,442 | | | | 55 | % |
| Skilled Nursing Facilities | | | 153 | | | | 20,926 | | | | 961,013 | | | | 39 | % |
| Specialty Care Facilities | | | 8 | | | | 1,111 | | | | 157,334 | | | | 6 | % |
| | | |
| Real Estate Investments | | | 398 | | | | 37,973 | | | $ | 2,464,789 | | | | 100 | % |
| Notes: | | (1) Includes $35,862,000 of loans on non-accrual.
|
| |
| | | (2) Real Estate Investments include gross real estate investments and credit enhancements which amounted to $2,459,144,000 and $5,645,000, respectively. |
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| Revenue Composition ($000’s) | | Exhibit 2 |
| | | | | | | | | |
| | | Three Months Ended | |
| | | March 31, 2005 | |
Revenue by Investment Type (1) | | | | | | | | |
| Real Property | | $ | 63,431 | | | | 93 | % |
| Loans Receivable | | | 4,220 | | | | 6 | % |
| Subdebt Investments | | | 919 | | | | 1 | % |
| | | |
| Total | | $ | 68,570 | | | | 100 | % |
| | | | | | | | | |
Revenue by Facility Type (1) | | | | | | | | |
| Assisted Living Facilities | | $ | 36,130 | | | | 53 | % |
| Skilled Nursing Facilities | | | 27,953 | | | | 41 | % |
| Specialty Care Facilities | | | 4,487 | | | | 6 | % |
| | | |
| Total | | $ | 68,570 | | | | 100 | % |
| Notes: | | (1) Revenues include gross revenues and revenues from discontinued operations. |
Page 6 of 14
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| IQ05 Earnings Release | | May 5, 2005 |
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| Operator Concentration ($000’s) | | Exhibit 3 |
| | | | | | | | | | | | | |
| | | # Properties | | | Investment | | | % Investment | |
| | | |
Concentration by Investment | | | | | | | | | | | | |
| Emeritus Corporation | | | 49 | | | $ | 360,610 | | | | 15 | % |
| Southern Assisted Living, Inc. | | | 43 | | | | 199,764 | | | | 8 | % |
| Commonwealth Communities Management LLC | | | 13 | | | | 196,496 | | | | 8 | % |
| Delta Health Group, Inc. | | | 25 | | | | 176,930 | | | | 7 | % |
| Home Quality Management, Inc. | | | 32 | | | | 175,328 | | | | 7 | % |
| Remaining operators (46) | | | 236 | | | | 1,355,661 | | | | 55 | % |
| | | |
| Total | | | 398 | | | $ | 2,464,789 | | | | 100 | % |
| | |
| Geographic Concentration ($000’s) | | Exhibit 4 |
| | | | | | | | | | | | | |
| | | # Properties | | | Investment | | | % Investment | |
Concentration by Region | | | | | | | | | | | | |
| South | | | 244 | | | $ | 1,294,862 | | | | 53 | % |
| Northeast | | | 60 | | | | 520,670 | | | | 21 | % |
| West | | | 49 | | | | 306,018 | | | | 12 | % |
| Midwest | | | 45 | | | | 343,239 | | | | 14 | % |
| | | | | | | | | | |
| Total | | | 398 | | | $ | 2,464,789 | | | | 100 | % |
| | | | | | | | | | | | | |
| | | # Properties | | | Investment | | | % Investment | |
Concentration by State | | | | | | | | | | | | |
| Florida | | | 59 | | | $ | 371,570 | | | | 15 | % |
| Massachusetts | | | 36 | | | | 359,116 | | | | 15 | % |
| North Carolina | | | 42 | | | | 196,018 | | | | 8 | % |
| Ohio | | | 17 | | | | 157,748 | | | | 6 | % |
| Tennessee | | | 27 | | | | 141,403 | | | | 6 | % |
| Remaining States (30) | | | 217 | | | | 1,238,934 | | | | 50 | % |
| | | | | | | | | | |
| Total | | | 398 | | | $ | 2,464,789 | | | | 100 | % |
Page 7 of 14
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| 1Q05 Earnings Release | | May 5, 2005 |
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Committed Investment Balances | | Exhibit 5 |
($000’s except Investment per Bed/Unit) | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | Committed | | | Investment | |
| | | # Properties | | | # Beds/Units | | | Balance (1) | | | per Bed/Unit | |
| | | |
| Assisted Living Facilities | | | 237 | | | | 15,936 | | | $ | 1,351,469 | | | $ | 84,806 | |
| Skilled Nursing Facilities | | | 153 | | | | 20,926 | | | | 961,013 | | | | 45,924 | |
| Specialty Care Facilities | | | 8 | | | | 1,111 | | | | 157,334 | | | | 141,615 | |
| | | |
| Total | | | 398 | | | | 37,973 | | | $ | 2,469,816 | | | -na- |
| Notes: | | (1) Committed Balance includes gross real estate investments, credit enhancements and unfunded construction commitments for which initial funding had commenced. |
| | | |
Selected Facility Data | | Exhibit 6 |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | Coverage Data | |
| | | | | | | % Payor Mix | | | Before | | | After | |
| | | Census | | | Private | | | Medicare | | | Medicaid | | | Mgt. Fees | | | Mgt. Fees | |
| | | |
| Assisted Living Facilities | | | 88 | % | | | 85 | % | | | 0 | % | | | 15 | % | | | 1.47x | | | | 1.25x | |
| Skilled Nursing Facilities | | | 87 | % | | | 16 | % | | | 14 | % | | | 70 | % | | | 2.15x | | | | 1.64x | |
| Specialty Care Facilities | | | 61 | % | | | 23 | % | | | 42 | % | | | 35 | % | | | 3.00x | | | | 2.37x | |
| |
| | | | | | | | | | | | | | | | | | | |
Weighted Averages
| | | 1.84x | | | | 1.48x | |
Notes: Data as of December 31, 2004.
| | | |
Credit Support ($000’s) | | Exhibit 7 |
| | | | | | | |
| | | Balance | | | % Investment |
| | | |
| Cross Defaulted | | $ | 2,373,797 | | | 97% of gross real estate investments |
| Cross Collateralized | | | 187,332 | | | 86% of real property loans receivable |
| Master Leases | | | 1,867,554 | | | 84% of real property owned |
| | | | | | | | | | | | | | | | | |
| Current Capitalization ($000’s except share price) | | | | |
| | | Balance | | | % Balance | | | Leverage & Performance Ratios | |
| | | | | | | | | | | |
| Borrowings Under Bank Lines | | $ | 163,500 | | | | 7 | % | | Debt/Total Book Cap
| | | 48 | % |
| Long-Term Debt Obligations | | | 1,044,506 | | | | 41 | % | | | | | | | | |
| Stockholders’ Equity | | | 1,334,405 | | | | 52 | % | | Debt/Total Market Cap
| | | 38 | % |
| | | | | | | | | | | |
| Total Book Capitalization | | $ | 2,542,411 | | | | 100 | % | | | | | | | | |
| | | | | | | | | | | Interest Coverage
| | 3.26x 1st Qtr. |
| Common Shares Outstanding (000’s) | | | 53,434 | | | | | | | | | | | | | |
| Period-End Share Price | | $ | 32.00 | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| Common Stock Market Value | | $ | 1,709,888 | | | | 53 | % | | Fixed Charge Coverage
| | 2.56x 1st Qtr. |
| Preferred Stock | | | 283,751 | | | | 9 | % | | | | | | | | |
| Borrowings Under Bank Lines | | | 163,500 | | | | 5 | % | | | | | | | | |
| Long-Term Debt Obligations | | | 1,044,506 | | | | 33 | % | | | | | | | | |
| | | | | | | | | | | |
| Total Market Capitalization | | $ | 3,201,645 | | | | 100 | % | | | | | | | | |
Page 8 of 14
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| 1Q05 Earnings Release | | May 5, 2005 |
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Revenue Maturities ($000’s) | | Exhibit 8 |
Operating Lease Expirations & Loan Maturities
| | | | | | | | | | | | | | | | | |
| | | Current Lease | | | Current Interest | | | Lease and | | | | |
| Year | | Revenue (1) | | | Revenue (1) | | | Interest Revenue | | | % of Total | |
| |
| 2005 | | $ | 0 | | | $ | 345 | | | $ | 345 | | | | 0 | % |
| 2006 | | | 0 | | | | 1,928 | | | | 1,928 | | | | 1 | % |
| 2007 | | | 0 | | | | 1,452 | | | | 1,452 | | | | 1 | % |
| 2008 | | | 0 | | | | 3,463 | | | | 3,463 | | | | 1 | % |
| 2009 | | | 6,355 | | | | 2,033 | | | | 8,388 | | | | 3 | % |
| Thereafter | | | 245,380 | | | | 9,644 | | | | 255,024 | | | | 94 | % |
| | | |
| Total | | $ | 251,735 | | | $ | 18,865 | | | $ | 270,600 | | | | 100 | % |
| Notes: | | (1) Revenue impact by year, annualized. |
| | | |
Debt Maturities and Principal Payments ($000’s) | | Exhibit 9 |
| | | | | | | | | | | | | | | | | |
| Year | | Lines of Credit (1) | | | Senior Notes (2) | | | Secured Debt | | | Total | |
| |
| 2005 | | $ | 30,000 | | | $ | 0 | | | $ | 2,370 | | | $ | 32,370 | |
| 2006 | | | 310,000 | | | | 50,000 | | | | 3,292 | | | | 363,292 | |
| 2007 | | | 0 | | | | 175,000 | | | | 15,283 | | | | 190,283 | |
| 2008 | | | 0 | | | | 100,000 | | | | 10,527 | | | | 110,527 | |
| 2009 | | | 0 | | | | 0 | | | | 34,067 | | | | 34,067 | |
| 2010 | | | 0 | | | | 0 | | | | 8,900 | | | | 8,900 | |
| 2011 | | | 0 | | | | 0 | | | | 20,666 | | | | 20,666 | |
| Thereafter | | | 0 | | | | 550,000 | | | | 74,401 | | | | 624,401 | |
| | | |
| Total | | $ | 340,000 | | | $ | 875,000 | | | $ | 169,506 | | | $ | 1,384,506 | |
| Notes: | | (1) Reflected at 100% capacity. |
| |
| | | (2) Amounts above do not reflect issuances, redemptions and tender offers completed in the second quarter of 2005. |
Page 9 of 14
| | |
| 1Q05 Earnings Release | | May 5, 2005 |
| | | |
Investment Activity ($000’s) | | Exhibit 10 |
| | | | | | | | | |
| | | Three Months Ended | |
| | | March 31, 2005 | |
Funding by Investment Type | | | | | | | | |
| Real Property | | $ | 50,986 | | | | 80 | % |
| Loans Receivable | | | 12,520 | | | | 20 | % |
| Subdebt Investments | | | | | | | | |
| | | |
| Total | | $ | 63,506 | | | | 100 | % |
| | | | | | | | | |
Funding by Facility Type | | | | | | | | |
| Assisted Living Facilities | | $ | 49,841 | | | | 78 | % |
| Skilled Nursing Facilities | | | 5,132 | | | | 8 | % |
| Specialty Care Facilities | | | 8,533 | | | | 14 | % |
| | | |
| Total | | $ | 63,506 | | | | 100 | % |
| | | |
Disposition Activity ($000’s) | | Exhibit 11 |
| | | | | | | | | |
| | | Three Months Ended | |
| | | March 31, 2005 | |
Dispositions by Investment Type | | | | | | | | |
| Real Property | | $ | 9,298 | | | | 32 | % |
| Loans Receivable | | | | | | | 0 | % |
| Subdebt Investments | | | 19,467 | | | | 68 | % |
| | | | | | | |
| Total | | $ | 28,765 | | | | 100 | % |
| | | | | | | | | |
Dispositions by Facility Type | | | | | | | | |
| Assisted Living Facilities | | $ | 27,786 | | | | 97 | % |
| Skilled Nursing Facilities | | | | | | | 0 | % |
| Specialty Care Facilities | | | 979 | | | | 3 | % |
| | | | | | | |
| Total | | $ | 28,765 | | | | 100 | % |
| | | |
Discontinued Operations ($000’s) | | Exhibit 12 |
| | | | | | | | | |
| | | Three Months Ended | |
| | | March 31 | |
| | | 2005 | | | 2004 | |
Revenues | | | | | | | | |
| Rental income | | $ | 191 | | | $ | 1,316 | |
| | | | | | | | | |
Expenses | | | | | | | | |
| Interest expense | | | 44 | | | | 404 | |
| Provision for depreciation | | | 98 | | | | 600 | |
| | | | | | | |
| | | | | | | | | |
| Income (loss) from discontinued operations, net | | $ | 49 | | | $ | 312 | |
Page 10 of 14
| | |
| 1Q05 Earnings Release | | May 5, 2005 |
| | | |
Funds Available For Distribution Reconciliation | | Exhibit 13 |
(Amounts in 000’s except per share data) | | |
| | | | | | | | | |
| | | Three Months Ended | |
| | | March 31 | |
| | | 2005 | | | 2004 | |
| Net income available to common stockholders | | $ | 17,803 | | | $ | 18,655 | |
| Provision for depreciation (1) | | | 20,396 | | | | 17,134 | |
| Loss (gain) on sales of properties | | | 110 | | | | 0 | |
| Rental income in excess of cash received | | | (2,855 | ) | | | (6,664 | ) |
| | | | | | | |
| Funds available for distribution | | | 35,454 | | | | 29,125 | |
| Non-recurring rental cash payments | | | (852 | ) | | | (601 | ) |
| | | | | | | |
| Funds available for distribution - recurring | | $ | 34,602 | | | $ | 28,524 | |
| |
| Average common shares outstanding: | | | | | | | | |
| Basic | | | 52,963 | | | | 50,580 | |
| Diluted | | | 53,454 | | | | 51,358 | |
| | | | | | | | | |
| Per share data: | | | | | | | | |
| Net income available to common stockholders | | | | | | | | |
| Basic | | $ | 0.34 | | | $ | 0.37 | |
| Diluted | | | 0.33 | | | | 0.36 | |
| | | | | | | | | |
| Funds available for distribution | | | | | | | | |
| Basic | | $ | 0.67 | | | $ | 0.58 | |
| Diluted | | | 0.66 | | | | 0.57 | |
| | | | | | | | | |
| Funds available for distribution - recurring | | | | | | | | |
| Basic | | $ | 0.65 | | | $ | 0.56 | |
| Diluted | | | 0.65 | | | | 0.56 | |
| | | | | | | | | |
FAD Payout Ratio | | | | | | | | |
| Dividends per share | | $ | 0.60 | | | $ | 0.585 | |
| FAD per diluted share | | $ | 0.66 | | | $ | 0.57 | |
| | | | | | | |
| FAD payout ratio | | | 91 | % | | | 103 | % |
| | | | | | | | | |
FAD Payout Ratio - Recurring | | | | | | | | |
| Dividends per share | | $ | 0.60 | | | $ | 0.585 | |
| FAD per diluted share - recurring | | $ | 0.65 | | | $ | 0.56 | |
| | | | | | | |
| FAD payout ratio - recurring | | | 92 | % | | | 104 | % |
| Notes: | | (1) Provision for depreciation includes provision for depreciation from discontinued operations. |
Page 11 of 14
| | | | | |
1Q05 Earnings Release | | | | May 5, 2005 |
Exhibit 14
Funds From Operations Reconciliation
(Amounts in 000’s except per share data)
| | | | | | | | | |
| | | Three Months Ended | |
| | | March 31 | |
| | | 2005 | | | 2004 | |
| Net income available to common stockholders | | $ | 17,803 | | | $ | 18,655 | |
| Provision for depreciation (1) | | | 20,396 | | | | 17,134 | |
| Loss (gain) on sales of properties | | | 110 | | | | 0 | |
| | | | | | | |
| Funds from operations | | $ | 38,309 | | | $ | 35,789 | |
| | | | | | | | | |
| Average common shares outstanding: | | | | | | | | |
| Basic | | | 52,963 | | | | 50,580 | |
| Diluted | | | 53,454 | | | | 51,358 | |
| | | | | | | | | |
| Per share data: | | | | | | | | |
| Net income available to common stockholders | | | | | | | | |
| Basic | | $ | 0.34 | | | $ | 0.37 | |
| Diluted | | | 0.33 | | | | 0.36 | |
| | | | | | | | | |
| Funds from operations | | | | | | | | |
| Basic | | $ | 0.72 | | | $ | 0.71 | |
| Diluted | | | 0.72 | | | | 0.70 | |
| | | | | | | | | |
FFO Payout Ratio | | | | | | | | |
| Dividends per share | | $ | 0.60 | | | $ | 0.585 | |
| FFO per diluted share | | $ | 0.72 | | | $ | 0.70 | |
| | | | | | | |
| FFO payout ratio | | | 83 | % | | | 84 | % |
Notes: (1) Provision for depreciation includes provision for depreciation from discontinued operations.
Page 12 of 14
| | | | | |
1Q05 Earnings Release | | | | May 5, 2005 |
Exhibit 15
Outlook Reconciliations
(Amounts in 000’s except per share data)
| | | | | | | | | |
| | | Year Ended | |
| | | December 31, 2005 | |
| | | Low | | | High | |
| Net income available to common stockholders | | $ | 76,390 | | | $ | 80,790 | |
| Loss (gain) on sales of properties | | | 110 | | | | 110 | |
| Provision for depreciation (1) | | | 83,000 | | | | 83,000 | |
| | | |
| Funds from operations | | | 159,500 | | | | 163,900 | |
| Rental income in excess of cash received | | | (13,000 | ) | | | (13,000 | ) |
| | | |
| Funds available for distribution | | $ | 146,500 | | | $ | 150,900 | |
| | | | | | | | | |
| Average common shares outstanding (diluted) | | | 55,000 | | | | 55,000 | |
| | | | | | | | | |
| Per share data (diluted): | | | | | | | | |
| Net income available to common stockholders | | $ | 1.39 | | | $ | 1.47 | |
| Funds from operations | | | 2.90 | | | | 2.98 | |
| Funds available for distribution | | | 2.66 | | | | 2.74 | |
Notes: (1) Provision for depreciation includes provision for depreciation from discontinued operations.
Page 13 of 14
| | | | | |
1Q05 Earnings Release | | | | May 5, 2005 |
Exhibit 16
EBITDA Reconciliation ($000’s)
| | | | | | | | | |
| | | Three Months Ended | |
| | | March 31 | |
| | | 2005 | | | 2004 | |
| Net income | | $ | 23,239 | | | $ | 20,925 | |
| Provision for depreciation (1) | | | 20,396 | | | | 17,134 | |
| Interest expense (1) | | | 19,645 | | | | 18,552 | |
| Capitalized interest | | | 265 | | | | 137 | |
| Amortization (2) | | | 1,042 | | | | 1,118 | |
| Provision for loan losses | | | 300 | | | | 300 | |
| | | | | | | |
| EBITDA | | $ | 64,887 | | | $ | 58,166 | |
| | | | | | | | | |
Interest Coverage Ratio | | | | | | | | |
| Interest expense (1) | | $ | 19,645 | | | $ | 18,552 | |
| Capitalized interest | | | 265 | | | | 137 | |
| | | | | | | |
| Total interest | | | 19,910 | | | | 18,689 | |
| EBITDA | | $ | 64,887 | | | $ | 58,166 | |
| | | | | | | |
| Interest coverage ratio | | | 3.26x | | | | 3.11x | |
| | | | | | | | | |
Fixed Charge Coverage Ratio | | | | | | | | |
| Total interest (1) | | $ | 19,910 | | | $ | 18,689 | |
| Preferred dividends | | | 5,436 | | | | 2,270 | |
| | | | | | | |
| Total fixed charges | | | 25,346 | | | | 20,959 | |
| EBITDA | | $ | 64,887 | | | $ | 58,166 | |
| | | | | | | |
| Fixed charge coverage ratio | | | 2.56x | | | | 2.78x | |
| | | | | | | |
|
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. |
Page 14 of 14
