Exhibit 99.1
F O R I M M E D I A T E R E L E A S E
May 4, 2006
For more information contact:
Scott Estes — (419) 247-2800
Mike Crabtree — (419) 247-2800
Health Care REIT, Inc.
Reports First Quarter Results
Toledo, Ohio, May 4, 2006........Health Care REIT, Inc. (NYSE:HCN)announced today operating results for its first quarter ended March 31, 2006.
“The company’s asset base and tenant credit quality have improved significantly,” commented George L. Chapman, chief executive officer of Health Care REIT, Inc. “Driven by these recent portfolio improvements, our strong acquisition pipeline and new development initiative, we expect continued dividend growth and solid portfolio payment coverages.”
Key Performance Indicators.
| | | | | | | | | | | | | |
| | | Quarter | | Quarter | | |
| | | Ended | | Ended | | Percentage |
| | | 3/31/06 | | 3/31/05 | | Change |
| Net Income Available to Common Stockholders per Diluted Share | | $ | 0.34 | | | $ | 0.33 | | | | 3 | % |
| FFO per Diluted Share | | $ | 0.71 | | | $ | 0.72 | | | | -1 | % |
| FAD per Diluted Share | | $ | 0.84 | | | $ | 0.66 | | | | 27 | % |
| Common Dividends per Share | | $ | 0.62 | | | $ | 0.60 | | | | 3 | % |
| FFO Payout Ratio | | | 87 | % | | | 83 | % | | | | |
| FAD Payout Ratio | | | 74 | % | | | 91 | % | | | | |
1Q06 Earnings Discussion.The first quarter 2006 reported net income available to common stockholders of $0.34 per diluted share includes $1.6 million, or $0.03 per diluted share, of non-cash expenses for required accelerated vesting of options and restricted stock grants pursuant to Statement of Financial Accounting Standards No. 123(R), which was adopted on January 1, 2006. In addition, net income was positively impacted by $1.6 million, or $0.03 per diluted share, of gains on sales of real property. FAD for first quarter 2006 was higher than FFO by $7.9 million ($0.14 per diluted share) due to non-recurring cash rental receipts of $10.3 million ($0.18 per diluted share) offset by gross straight-line rental income of $2.4 million ($0.04 per diluted share). Non-recurring cash receipts are primarily attributable to cash received in connection with prepaid rent receipts and real property sales resulting in the payoff of existing straight-line receivable balances. Please see Exhibits 13 and 14 for reconciliations of net income available to common stockholders to FAD and FFO. The following table summarizes the items impacting FFO and FAD:
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| 1Q06 Earnings Release | | May 4, 2006 |
1Q06 FFO and FAD.
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Quarter | | Quarter | | | | | | Quarter | | Quarter | | |
| | | Ended | | Ended | | | | | | Ended | | Ended | | |
| | | 3/31/06 | | 3/31/05 | | Percentage | | 3/31/06 | | 3/31/05 | | Percentage |
| | | FFO | | FFO | | Change | | FAD | | FAD | | Change |
| Per Diluted Share | | $ | 0.71 | | | $ | 0.72 | | | | -1 | % | | $ | 0.84 | | | $ | 0.66 | | | | 27 | % |
| Included items: | | | | | | | | | | | | | | | | | | | | | | | | |
| Non-recurring cash payments | | | | | | | | | | | | | | $ | 0.18 | | | $ | 0.02 | | | | | |
| SFAS 123(R) accelerated vesting impact | | | ($0.03 | ) | | | | | | | | | | | ($0.03 | ) | | | | | | | | |
Dividends for First Quarter 2006.As previously announced, the Board of Directors declared a dividend for the quarter ended March 31, 2006 of $0.64 per share as compared to $0.62 per share for the same period in 2005. The dividend represents the 140th consecutive dividend payment. The dividend will be payable May 19, 2006 to stockholders of record on April 28, 2006.
Development Initiative.As previously announced, the company has undertaken a new development initiative and expects to fund $150 to $250 million for development during 2006. The company completed a successful start to its development program during the first quarter and has provided details of existing projects in Exhibit 8. The company expects to fund $130.6 million for development during 2006 on projects which are already underway, with an additional $20 to $120 million anticipated from projects which have yet to commence. The $130.6 million of anticipated funding from existing projects is comprised of $32.2 million which was funded during the three months ended March 31, 2006 and $98.4 million projected to be funded over the remainder of 2006. The information contained in Exhibit 8 relates only to development projects for which initial funding has commenced as of March 31, 2006 and does not include any additional development projects which may commence later in 2006.
Outlook for 2006.The company affirms its investment guidance of $450 to $550 million for 2006, which is comprised of $300 million of acquisitions and $150 to $250 million of funded new development. In addition, the company expects $100 to $150 million of dispositions, resulting in net investments of $300 to $450 million. Due in part to the first quarter gains on sales of properties of $1.6 million, the company is increasing its 2006 guidance for net income available to common stockholders from a range of $1.28 to $1.36 per diluted share to $1.33 to $1.41 per diluted share. The company is reaffirming its 2006 FFO guidance in the range of $2.88 to $2.96 per diluted share. The company is increasing its 2006 FAD guidance from a range of $2.77 to $2.85 per diluted share to $2.91 to $2.99 per diluted share primarily due to the non-recurring cash receipts of $10.3 million offset by a $1.3 million increase in our gross straight-line rental income estimate and a 1.0 million share increase in our estimate of average diluted common shares outstanding.
The company’s guidance excludes any impairments, unanticipated additions to the loan loss reserve or other additional one-time items, including any additional cash payments outside the normal monthly rental payments. Please see Exhibit 15 for a reconciliation of the outlook for net income available to common stockholders to FFO and FAD.
Supplemental Reporting Measures.The company believes that net income, 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 depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. FAD represents FFO excluding the non-cash straight-line rental adjustments.
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EBITDA stands for earnings before interest, taxes, depreciation and amortization. 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 and its fixed charge coverage ratio, which represents EBITDA divided by fixed charges. Fixed charges include interest expense and preferred stock dividends.
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 and in making operating decisions. Additionally, FFO and FAD are 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 12, 13 and 14 for reconciliations of EBITDA, FAD and FFO to net income.
Conference Call Information.The company has scheduled a conference call on May 5, 2006 at 9:00 a.m. Eastern time to discuss its first quarter results, industry trends, portfolio performance and outlook for 2006. Telephone access will be available by dialing 800-811-0667 or 913-981-4901 (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 May 12, 2006. To access the rebroadcast, dial 888-203-1112 or 719-457-0820 (international). The conference ID number is 3585420. 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 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 in health care and senior housing properties. At March 31, 2006, the company had investments in 457 facilities in 37 states with 55 operators and had total assets of approximately $3.0 billion. The portfolio included 32 independent living/continuing care retirement communities, 201 assisted living facilities, 211 skilled nursing facilities and 13 specialty care facilities. 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 sale of properties; the performance of its operators and properties; its ability to enter into agreements with new viable tenants for properties that the company takes back from financially troubled tenants, if any; its ability to make distributions; 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; 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 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; 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; negative developments in
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| 1Q06 Earnings Release | | May 4, 2006 |
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; the failure of closings to occur as and when anticipated; acts of God affecting the company’s properties; the company’s ability to reinvest sale proceeds at similar rates to assets sold; operator bankruptcies or insolvencies; government regulations affecting Medicare and Medicaid reimbursement rates; liability claims and insurance costs for operators; unanticipated difficulties and/or expenditures relating to future acquisitions; environmental laws affecting the company’s properties; delays in reinvestment of sale proceeds; changes in rules or practices governing the company’s financial reporting; and structure related factors, including real estate investment trust qualification, anti-takeover provisions and key management personnel. 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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| 1Q06 Earnings Release | | May 4, 2006 |
HEALTH CARE REIT, INC.
Financial Supplement
CONSOLIDATED BALANCE SHEETS (unaudited)
(In thousands)
| | | | | | | | | |
| | | March 31 | |
| | | 2006 | | | 2005 | |
Assets | | | | | | | | |
| Real estate investments: | | | | | | | | |
| Real property owned | | | | | | | | |
| Land | | $ | 267,824 | | | $ | 210,014 | |
| Buildings & improvements | | | 2,712,511 | | | | 2,217,871 | |
| Real property held for sale, net of accumulated depreciation | | | 15,898 | | | | 0 | |
| Construction in progress | | | 36,115 | | | | 26,699 | |
| | | | | | | |
| | | | 3,032,348 | | | | 2,454,584 | |
| Less accumulated depreciation | | | (293,738 | ) | | | (236,950 | ) |
| | | | | | | |
| Total real property owned | | | 2,738,610 | | | | 2,217,634 | |
| |
| Loans receivable | | | 177,704 | | | | 241,510 | |
| Less allowance for losses on loans receivable | | | (6,711 | ) | | | (5,561 | ) |
| | | | | | | |
| | | | 170,993 | | | | 235,949 | |
| | | | | | | |
| Net real estate investments | | | 2,909,603 | | | | 2,453,583 | |
| | | | | | | | | |
| Other assets: | | | | | | | | |
| Equity investments | | | 2,970 | | | | 3,298 | |
| Deferred loan expenses | | | 12,042 | | | | 6,419 | |
| Cash and cash equivalents | | | 25,758 | | | | 17,429 | |
| Receivables and other assets | | | 62,267 | | | | 79,633 | |
| | | | | | | |
| | | | 103,037 | | | | 106,779 | |
| | | | | | | |
| | | | | | | | | |
Total assets | | $ | 3,012,640 | | | $ | 2,560,362 | |
| | | | | | | |
| | | | | | | | | |
Liabilities and stockholders’ equity | | | | | | | | |
| Liabilities: | | | | | | | | |
| Borrowings under unsecured lines of credit arrangements | | $ | 201,000 | | | $ | 163,500 | |
| Senior unsecured notes | | | 1,195,378 | | | | 875,000 | |
| Secured debt | | | 131,946 | | | | 169,506 | |
| Accrued expenses and other liabilities | | | 49,399 | | | | 17,951 | |
| | | | | | | |
Total liabilities | | | 1,577,723 | | | | 1,225,957 | |
| | | | | | | | | |
| Stockholders’ equity: | | | | | | | | |
| Preferred stock | | | 276,875 | | | | 283,751 | |
| Common stock | | | 58,685 | | | | 53,314 | |
| Capital in excess of par value | | | 1,326,341 | | | | 1,152,670 | |
| Treasury stock | | | (2,714 | ) | | | (1,766 | ) |
| Cumulative net income | | | 855,081 | | | | 769,056 | |
| Cumulative dividends | | | (1,080,688 | ) | | | (922,241 | ) |
| Accumulated other comprehensive income | | | 0 | | | | 1 | |
| Other equity | | | 1,337 | | | | (380 | ) |
| | | | | | | |
Total stockholders’ equity | | | 1,434,917 | | | | 1,334,405 | |
| | | | | | | |
| | | | | | | | | |
Total liabilities and stockholders’ equity | | $ | 3,012,640 | | | $ | 2,560,362 | |
| | | | | | | |
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| 1Q06 Earnings Release | | May 4, 2006 |
CONSOLIDATED STATEMENTS OF INCOME (unaudited)
(In thousands, except per share data)
| | | | | | | | | |
| | | Three Months Ended | |
| | | March 31 | |
| | | 2006 | | | 2005 | |
| Revenues: | | | | | | | | |
| Rental income | | $ | 72,785 | | | $ | 58,793 | |
| Interest income | | | 4,262 | | | | 4,983 | |
| Transaction fees and other income | | | 366 | | | | 1,422 | |
| | | | | | | |
| Gross revenues | | | 77,413 | | | | 65,198 | |
| | | | | | | | | |
| Expenses: | | | | | | | | |
| Interest expense | | | 24,043 | | | | 18,697 | |
| Provision for depreciation | | | 23,053 | | | | 18,580 | |
| General and administrative | | | 6,201 | | | | 4,017 | |
| Loan expense | | | 711 | | | | 863 | |
| Provision for loan losses | | | 250 | | | | 300 | |
| | | | | | | |
| Total expenses | | | 54,258 | | | | 42,457 | |
| | | | | | | |
| | | | | | | | | |
| Income from continuing operations | | | 23,155 | | | | 22,741 | |
| | | | | | | | | |
| Discontinued operations: | | | | | | | | |
| Gain (loss) on sales of properties | | | 1,553 | | | | (110 | ) |
| Income from discontinued operations, net | | | 270 | | | | 608 | |
| | | | | | | |
| | | | 1,823 | | | | 498 | |
| | | | | | | |
| Net income | | | 24,978 | | | | 23,239 | |
| | | | | | | | | |
| Preferred dividends | | | 5,333 | | | | 5,436 | |
| | | | | | | | | |
| | | | | | | |
| Net income available to common stockholders | | $ | 19,645 | | | $ | 17,803 | |
| | | | | | | |
| | | | | | | | | |
| Average number of common shares outstanding: | | | | | | | | |
| Basic | | | 58,178 | | | | 52,963 | |
| Diluted | | | 58,535 | | | | 53,454 | |
| | | | | | | | | |
| Net income available to common stockholders per share: | | | | | | | | |
| Basic | | $ | 0.34 | | | $ | 0.34 | |
| Diluted | | | 0.34 | | | | 0.33 | |
| | | | | | | | | |
| Common dividends per share | | $ | 0.62 | | | $ | 0.60 | |
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| 1Q06 Earnings Release | | May 4, 2006 |
HEALTH CARE REIT, INC.
Financial Supplement — March 31, 2006
| | |
| | | |
| Portfolio Composition | | Exhibit 1
|
| ($000’s except Investment per Bed/Unit) | | |
| | | | | | | | | | | | | | | | | |
| | | # Properties | | # Beds/Units | | Balance | | % Balance |
| | | |
Balance Sheet Data | | | | | | | | | | | | | | | | |
| Real Property | | | 440 | | | | 44,573 | | | $ | 2,738,610 | | | | 94 | % |
| Loans Receivable (1) | | | 17 | | | | 2,208 | | | | 177,704 | | | | 6 | % |
| | | |
| Totals | | | 457 | | | | 46,781 | | | $ | 2,916,314 | | | | 100 | % |
| | | | | | | | | | | | | | | | | |
| | | # Properties | | # Beds/Units | | Investment (2) | | % Investment |
| | | |
Investment Balances | | | | | | | | | | | | | | | | |
| Independent/CCRCs | | | 32 | | | | 4,494 | | | $ | 426,653 | | | | 15 | % |
| Assisted Living Facilities | | | 201 | | | | 12,343 | | | | 974,154 | | | | 33 | % |
| Skilled Nursing Facilities | | | 211 | | | | 28,632 | | | | 1,323,447 | | | | 45 | % |
| Specialty Care Facilities | | | 13 | | | | 1,312 | | | | 194,510 | | | | 7 | % |
| | | |
| Totals | | | 457 | | | | 46,781 | | | $ | 2,918,764 | | | | 100 | % |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | Committed | | Investment |
| | | # Properties | | # Beds/Units | | Balance (3) | | per Bed/Unit |
| | | |
Committed Investments | | | | | | | | | | | | | | | | |
| Independent/CCRCs | | | 32 | | | | 4,494 | | | $ | 471,220 | | | $ | 104,855 | |
| Assisted Living Facilities | | | 201 | | | | 12,343 | | | | 1,088,434 | | | | 88,182 | |
| Skilled Nursing Facilities | | | 211 | | | | 28,632 | | | | 1,332,054 | | | | 46,523 | |
| Specialty Care Facilities | | | 13 | | | | 1,312 | | | | 194,510 | | | | 148,255 | |
| | | |
| Totals | | | 457 | | | | 46,781 | | | $ | 3,086,218 | | | -na- | |
| | |
| Notes: (1) | | Includes $15,659,000 of loans on non-accrual. |
| |
| (2) | | Real Estate Investments include gross real estate investments and credit enhancements which amounted to $2,916,314,000 and $2,450,000, respectively. |
| |
| (3) | | Committed Balance includes gross real estate investments, credit enhancements and unfunded construction commitments
for which initial funding had commenced. |
| | |
| | | |
| Selected Facility Data | | Exhibit 2 |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | Coverage Data |
| | | | | | | % Payor Mix | | Before | | After |
| | | Census | | Private | | Medicare | | Medicaid | | Mgt. Fees | | Mgt. Fees |
| | | |
| Independent/CCRCs | | | 92 | % | | | 97 | % | | | 1 | % | | | 2 | % | | | 1.45x | | | | 1.23x | |
| Assisted Living Facilities | | | 88 | % | | | 83 | % | | | 0 | % | | | 17 | % | | | 1.52x | | | | 1.30x | |
| Skilled Nursing Facilities | | | 86 | % | | | 17 | % | | | 15 | % | | | 68 | % | | | 2.21x | | | | 1.63x | |
| Specialty Care Facilities | | | 67 | % | | | 19 | % | | | 60 | % | | | 21 | % | | | 3.19x | | | | 2.60x | |
| | | | | | | | | | | | | | | | | | | |
| Weighted Averages | | | | | | | | | | | | | | | | | | | 1.94x | | | | 1.54x | |
Notes: Data as of December 31, 2005.
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| 1Q06 Earnings Release | | May 4, 2006 |
| Investment Concentrations ($000’s) | Exhibit 3 |
| | | | | | | | | | | | | |
| | | # Properties | | | Investment | | | % Investment | |
Concentration by Operator | | | | | | | | | | | | |
| Emeritus Corporation | | | 50 | | | $ | 360,717 | | | | 12 | % |
| Brookdale Living Communities, Inc. | | | 88 | | | | 291,266 | | | | 10 | % |
| Merrill Gardens L.L.C. | | | 13 | | | | 203,670 | | | | 7 | % |
| Life Care Centers of America, Inc. | | | 24 | | | | 197,960 | | | | 7 | % |
| Delta Health Group, Inc. | | | 25 | | | | 171,764 | | | | 6 | % |
| Remaining operators (50) | | | 257 | | | | 1,693,387 | | | | 58 | % |
| | | | | | | | | | |
| Totals | | | 457 | | | $ | 2,918,764 | | | | 100 | % |
| | | | | | | | | | | | | |
| | | # Properties | | | Investment | | | % Investment | |
Concentration by Region | | | | | | | | | | | | |
| South | | | 274 | | | $ | 1,479,265 | | | | 51 | % |
| Northeast | | | 62 | | | | 497,585 | | | | 17 | % |
| West | | | 64 | | | | 494,902 | | | | 17 | % |
| Midwest | | | 57 | | | | 447,012 | | | | 15 | % |
| | | | | | | | | | |
| Totals | | | 457 | | | $ | 2,918,764 | | | | 100 | % |
| | | | | | | | | | | | | |
| | | # Properties | | | Investment | | | % Investment | |
Concentration by State | | | | | | | | | | | | |
| Florida | | | 62 | | | $ | 405,992 | | | | 14 | % |
| Massachusetts | | | 36 | | | | 336,547 | | | | 12 | % |
| Ohio | | | 29 | | | | 251,053 | | | | 9 | % |
| Texas | | | 52 | | | | 222,462 | | | | 8 | % |
| North Carolina | | | 43 | | | | 202,088 | | | | 7 | % |
| Remaining States (32) | | | 235 | | | | 1,500,622 | | | | 50 | % |
| | | | | | | | | | |
| Totals | | | 457 | | | $ | 2,918,764 | | | | 100 | % |
| | |
| | | |
| Revenue Composition ($000’s) | | Exhibit 4 |
| | | | | | | | | |
| | | Three Months Ended | |
| | | March 31, 2006 | |
Revenue by Investment Type (1) | | | | | | | | |
| Real Property | | $ | 73,759 | | | | 94 | % |
| Loans Receivable | | | 4,328 | | | | 6 | % |
| | | |
| Totals | | $ | 78,087 | | | | 100 | % |
| | | | | | | | | |
Revenue by Facility Type (1) | | | | | | | | |
| Independent/CCRCs | | $ | 9,300 | | | | 12 | % |
| Assisted Living Facilities | | | 28,483 | | | | 36 | % |
| Skilled Nursing Facilities | | | 35,613 | | | | 46 | % |
| Specialty Care Facilities | | | 4,691 | | | | 6 | % |
| | | |
| Totals | | $ | 78,087 | | | | 100 | % |
| | |
| Notes: | | (1) Revenues include gross revenues and revenues from discontinued operations. |
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| 1Q06 Earnings Release | | May 4, 2006 |
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| Revenue Maturities ($000’s) | | Exhibit 5 |
Operating Lease Expirations & Loan Maturities
| | | | | | | | | | | | | | | | | |
| | | Current Lease | | Current Interest | | Lease and | | |
| Year | | Revenue (1) | | Revenue (1) | | Interest Revenue | | % of Total |
| |
| 2006 | | $ | 1,843 | | | $ | 1,380 | | | $ | 3,223 | | | | 1 | % |
| 2007 | | | 0 | | | | 336 | | | | 336 | | | | 0 | % |
| 2008 | | | 0 | | | | 2,890 | | | | 2,890 | | | | 1 | % |
| 2009 | | | 906 | | | | 2,009 | | | | 2,915 | | | | 1 | % |
| 2010 | | | 1,726 | | | | 2,263 | | | | 3,989 | | | | 1 | % |
| Thereafter | | | 287,366 | | | | 5,763 | | | | 293,129 | | | | 96 | % |
| | | |
| Totals | | $ | 291,841 | | | $ | 14,641 | | | $ | 306,482 | | | | 100 | % |
| | |
| Notes: (1) | | Revenue impact by year, annualized. |
| Debt Maturities and Principal Payments ($000’s) | Exhibit 6 |
| | | | | | | | | | | | | | | | | |
| Year | | Lines of Credit (1) | | Senior Notes (2) | | Secured Debt | | Total |
| |
| 2006 | | $ | 40,000 | | | $ | 0 | | | $ | 2,329 | | | $ | 42,329 | |
| 2007 | | | 0 | | | | 52,500 | | | | 15,074 | | | | 67,574 | |
| 2008 | | | 500,000 | | | | 42,330 | | | | 10,289 | | | | 552,619 | |
| 2009 | | | 0 | | | | 0 | | | | 33,807 | | | | 33,807 | |
| 2010 | | | 0 | | | | 0 | | | | 8,733 | | | | 8,733 | |
| 2011 | | | 0 | | | | 0 | | | | 20,472 | | | | 20,472 | |
| 2012 | | | 0 | | | | 250,000 | | | | 14,851 | | | | 264,851 | |
| Thereafter | | | 0 | | | | 850,000 | | | | 26,391 | | | | 876,391 | |
| | | |
| Totals | | $ | 540,000 | | | $ | 1,194,830 | | | $ | 131,946 | | | $ | 1,866,776 | |
| | |
| Notes: (1) | | Reflected at 100% capacity. |
| |
| (2) | | Amounts above represent principal amounts due and do not reflect unamortized premiums/discounts or the fair value of interest-rate swap agreements as reflected on the balance sheet. |
Page 9 of 15
| | |
| | | |
| 1Q06 Earnings Release | | May 4, 2006 |
| | |
| | | |
| Investment Activity ($000’s) | | Exhibit 7 |
| | | | | | | | | |
| | | Three Months Ended | |
| | | March 31, 2006 | |
Funding by Investment Type | | | | | | | | |
| Real Property | | $ | 115,340 | | | | 94 | % |
| Loans Receivable | | | 7,743 | | | | 6 | % |
| | | |
| Total | | $ | 123,083 | | | | 100 | % |
| | | | | | | | | |
Funding by Facility Type | | | | | | | | |
| Independent/CCRCs | | $ | 4,788 | | | | 4 | % |
| Assisted Living Facilities | | | 33,564 | | | | 27 | % |
| Skilled Nursing Facilities | | | 84,303 | | | | 68 | % |
| Specialty Care Facilities | | | 428 | | | | 1 | % |
| | | |
| Total | | $ | 123,083 | | | | 100 | % |
| | |
| | | |
| Development Activity ($000’s) | | Exhibit 8 |
| �� | | | | | | | | | | | | | | | | | | | | |
| | | Balance at | | | 2006 YTD | | | Balance at | | | Committed | | | Unfunded | |
| Facility Type | | December 31, 2005 | | | Fundings | | | March 31, 2006 | | | Balances | | | Commitments | |
| Independent/CCRCs | | $ | 0 | | | $ | 3,018 | | | $ | 3,018 | | | $ | 29,621 | | | $ | 26,603 | |
| Assisted Living Facilities | | | 2,995 | | | | 24,292 | | | | 27,287 | | | | 159,531 | | | | 132,244 | |
| Skilled Nursing Facilities | | | 911 | | | | 4,899 | | | | 5,810 | | | | 14,417 | | | | 8,607 | |
| | | | | | | | | | | | | | | | |
| Totals | | $ | 3,906 | | | $ | 32,209 | | | $ | 36,115 | | | $ | 203,569 | | | $ | 167,454 | |
Development Funding Projections ($000’s)
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | Projected Future Fundings | | | | |
| | | | | | | | | | | 2006 | | | Fundings | | | Unfunded | |
| Facility Type | | Projects | | | # Beds/Units | | | Fundings | | | Thereafter | | | Commitments | |
| Independent/CCRCs | | | 1 | | | | 178 | | | $ | 19,782 | | | $ | 6,821 | | | $ | 26,603 | |
| Assisted Living Facilities | | | 15 | | | | 1,043 | | | | 72,460 | | | | 59,784 | | | | 132,244 | |
| Skilled Nursing Facilities | | | 2 | | | | 163 | | | | 6,153 | | | | 2,454 | | | | 8,607 | |
| | | | | | | | | | | | | | | | |
| Totals | | | 18 | | | | 1,384 | | | $ | 98,395 | | | $ | 69,059 | | | $ | 167,454 | |
Project Conversion Projections ($000’s)
| | | | | | | | | | | | | | | | | | | |
| 2006 Quarterly Projections | | | Annual Projections | |
| | | | | | | Projected Average | | | | | | | | | Projected Average | |
| Quarter | | Amount | | | Initial Yields (1) | | | Year | | Amount | | | Initial Yields (1) | |
| 1Q06 actual | | $ | 0 | | | | n/a | | | 2006 projected | | $ | 9,231 | | | | 9.00 | % |
| 2Q06 projected | | | 0 | | | | n/a | | | 2007 projected | | | 75,350 | | | | 8.92 | % |
| 3Q06 projected | | | 6,363 | | | | 9.00 | % | | 2008 projected | | | 40,020 | | | | 8.50 | % |
| 4Q06 projected | | | 2,868 | | | | 9.00 | % | | Thereafter | | | 78,968 | | | | 8.86 | % |
| | | | | | | | | | | | | | |
| Totals | | $ | 9,231 | | | | 9.00 | % | | Totals | | $ | 203,569 | | | | 8.82 | % |
| | |
| Notes: | | All amounts include both cash advances and non-cash additions such as capitalized interest.
(1) Represent minimum projected average initial yields. Actual initial yields may be higher if the underlying market rates increase. |
Page 10 of 15
| | |
| | | |
| 1Q06 Earnings Release | | May 4, 2006 |
| | | |
| Disposition Activity ($000’s) | | Exhibit 9 |
| | | | | | | | | |
| | | Three Months Ended | |
| | | March 31, 2006 | |
Dispositions by Investment Type | | | | | | | | |
| Real Property | | $ | 15,393 | | | | 42 | % |
| Loans Receivable | | | 21,240 | | | | 58 | % |
| | | | | | | |
| Totals | | $ | 36,633 | | | | 100 | % |
| |
Dispositions by Facility Type | | | | | | | | |
| Assisted Living Facilities | | $ | 12,162 | | | | 33 | % |
| Skilled Nursing Facilities | | | 17,513 | | | | 48 | % |
| Specialty Care Facilities | | | 6,958 | | | | 19 | % |
| | | | | | | |
| Totals | | $ | 36,633 | | | | 100 | % |
| | |
| | | |
| Discontinued Operations ($000’s) | | Exhibit 10 |
| | | | | | | | | |
| | | Three Months Ended | |
| | | March 31 | |
| | | 2006 | | | 2005 | |
Revenues | | | | | | | | |
| Rental income | | $ | 674 | | | $ | 3,372 | |
| | | | | | | | | |
Expenses | | | | | | | | |
| Interest expense | | | 195 | | | | 948 | |
| Provision for depreciation | | | 209 | | | | 1,816 | |
| | | | | | | |
| Income (loss) from discontinued operations, net | | $ | 270 | | | $ | 608 | |
Exhibit 11
| | | | | | | | | | | | | |
| Current Capitalization ($000’s except share price) | | | Leverage & Performance Ratios |
| | | Balance | | | % Balance | | | | | |
| | | | | | | |
| Borrowings Under Bank Lines | | $ | 201,000 | | | | 7 | % | | Debt/Total Book Cap | | 52% |
| Long-Term Debt Obligations | | | 1,327,324 | | | | 45 | % | | Debt/Undepreciated Book Cap | | 47% |
| Stockholders’ Equity | | | 1,434,917 | | | | 48 | % | | Debt/Total Market Cap | | 38% |
| | | | | | | |
| Total Book Capitalization | | $ | 2,963,241 | | | | 100 | % | | | | |
| | | | | | | | | | | Interest Coverage | | 3.10x 1st Qtr. |
| Common Shares Outstanding (000’s) | | | 58,780 | | | | | | | | | |
| Period-End Share Price | | $ | 38.10 | | | | | | | | | |
| | | | | | | | | | | | |
| Common Stock Market Value | | $ | 2,239,518 | | | | 55 | % | | | | |
| Preferred Stock | | | 276,875 | | | | 7 | % | | Fixed Charge Coverage | | 2.54x 1st Qtr. |
| Borrowings Under Bank Lines | | | 201,000 | | | | 5 | % | | | | |
| Long-Term Debt Obligations | | | 1,327,324 | | | | 33 | % | | | | |
| | | | | | | |
| Total Market Capitalization | | $ | 4,044,717 | | | | 100 | % | | | | |
Page 11 of 15
| | |
| | | |
| 1Q06 Earnings Release | | May 4, 2006 |
| | |
| | | |
| EBITDA Reconciliation ($000’s) | | Exhibit 12 |
| | | | | | | | | |
| | | Three Months Ended | |
| | | March 31 | |
| | | 2006 | | | 2005 | |
| Net income | | $ | 24,978 | | | $ | 23,239 | |
| Provision for depreciation (1) | | | 23,262 | | | | 20,396 | |
| Interest expense (1) | | | 24,238 | | | | 19,645 | |
| Amortization (2) | | | 3,207 | | | | 1,042 | |
| | | | | | | |
| EBITDA | | $ | 75,685 | | | $ | 64,322 | |
| | | | | | | | | |
Interest Coverage Ratio | | | | | | | | |
| Interest expense (1) | | $ | 24,238 | | | $ | 19,645 | |
| Capitalized interest | | | 202 | | | | 265 | |
| | | | | | | |
| Total interest | | | 24,440 | | | | 19,910 | |
| EBITDA | | $ | 75,685 | | | $ | 64,322 | |
| | | | | | | |
| Interest coverage ratio | | | 3.10x | | | | 3.23x | |
| | | | | | | | | |
Fixed Charge Coverage Ratio | | | | | | | | |
| Total interest (1) | | $ | 24,440 | | | $ | 19,910 | |
| Preferred dividends | | | 5,333 | | | | 5,436 | |
| | | | | | | |
| Total fixed charges | | | 29,773 | | | | 25,346 | |
| EBITDA | | $ | 75,685 | | | $ | 64,322 | |
| | | | | | | |
| Fixed charge coverage ratio | | | 2.54x | | | | 2.54x | |
| | |
| Notes: (1) | | Provision for depreciation and interest expense include provision for depreciation and interest expense from discontinued operations. |
| |
| (2) | | Amortization includes amortization of stock-based compensation, deferred loan expenses and other items. |
Page 12 of 15
| | |
| | | |
| 1Q06 Earnings Release | | May 4, 2006 |
| | |
| | | |
| Funds Available For Distribution Reconciliation | | Exhibit 13 |
| (Amounts in 000’s except per share data) | | |
| | | | | | | | | |
| | | Three Months Ended | |
| | | March 31 | |
| | | 2006 | | | 2005 | |
| Net income available to common stockholders | | $ | 19,645 | | | $ | 17,803 | |
| Provision for depreciation (1) | | | 23,262 | | | | 20,396 | |
| Loss (gain) on sales of properties | | | (1,553 | ) | | | 110 | |
| Gross straight-line rental income | | | (2,400 | ) | | | (3,708 | ) |
| Prepaid/straight-line rent receipts | | | 10,310 | | | | 853 | |
| | | | | | | |
| Funds available for distribution | | $ | 49,264 | | | $ | 35,454 | |
| | | | | | | | | |
| Average common shares outstanding: | | | | | | | | |
| Basic | | | 58,178 | | | | 52,963 | |
| Diluted | | | 58,535 | | | | 53,454 | |
| | | | | | | | | |
| Per share data: | | | | | | | | |
| | | | | | | | | |
| Net income available to common stockholders | | | | | | | | |
| Basic | | $ | 0.34 | | | $ | 0.34 | |
| Diluted | | | 0.34 | | | | 0.33 | |
| | | | | | | | | |
| Funds available for distribution | | | | | | | | |
| Basic | | $ | 0.85 | | | $ | 0.67 | |
| Diluted | | | 0.84 | | | | 0.66 | |
| | | | | | | | | |
FAD Payout Ratio | | | | | | | | |
| Dividends per share | | $ | 0.62 | | | $ | 0.60 | |
| FAD per diluted share | | $ | 0.84 | | | $ | 0.66 | |
| | | | | | | |
| FAD payout ratio | | | 74 | % | | | 91 | % |
| | |
| Notes: | | (1) Provision for depreciation includes provision for depreciation from discontinued operations. |
Page 13 of 15
| | |
| | | |
| 1Q06 Earnings Release | | May 4, 2006 |
| | |
| | | |
| Funds From Operations Reconciliation | | Exhibit 14 |
| (Amounts in 000’s except per share data) | | |
| | | | | | | | | |
| | | Three Months Ended | |
| | | March 31 | |
| | | 2006 | | | 2005 | |
| Net income available to common stockholders | | $ | 19,645 | | | $ | 17,803 | |
| Provision for depreciation (1) | | | 23,262 | | | | 20,396 | |
| Loss (gain) on sales of properties | | | (1,553 | ) | | | 110 | |
| | | | | | | |
| Funds from operations | | $ | 41,354 | | | $ | 38,309 | |
| |
| Average common shares outstanding: | | | | | | | | |
| Basic | | | 58,178 | | | | 52,963 | |
| Diluted | | | 58,535 | | | | 53,454 | |
| |
| Per share data: | | | | | | | | |
| Net income available to common stockholders | | | | | | | | |
| Basic | | $ | 0.34 | | | $ | 0.34 | |
| Diluted | | | 0.34 | | | | 0.33 | |
| |
| Funds from operations | | | | | | | | |
| Basic | | $ | 0.71 | | | $ | 0.72 | |
| Diluted | | | 0.71 | | | | 0.72 | |
| |
FFO Payout Ratio | | | | | | | | |
| Dividends per share | | $ | 0.62 | | | $ | 0.60 | |
| FFO per diluted share | | $ | 0.71 | | | $ | 0.72 | |
| | | | | | | |
| FFO payout ratio | | | 87 | % | | | 83 | % |
| | |
| Notes: | | (1) Provision for depreciation includes provision for depreciation from discontinued operations. |
Page 14 of 15
| | |
| | | |
| 1Q06 Earnings Release | | May 4, 2006 |
| | |
| | | |
| Outlook Reconciliation | | Exhibit 15 |
| (Amounts in 000’s except per share data) | | |
| | | | | | | | | | | | | | | | | |
| | | Current Outlook | | | Prior Outlook | |
| | | Year Ended | | | Year Ended | |
| | | December 31, 2006 | | | December 31, 2006 | |
| | | Low | | | High | | | Low | | | High | |
| Net income available to common stockholders | | $ | 82,363 | | | $ | 87,263 | | | $ | 78,200 | | | $ | 83,100 | |
| Loss (gain) on sales of properties | | | (1,553 | ) | | | (1,553 | ) | | | | | | | | |
| Provision for depreciation (1) | | | 97,500 | | | | 97,500 | | | | 97,500 | | | | 97,500 | |
| | | | | | | | | | | | | |
| Funds from operations | | | 178,310 | | | | 183,210 | | | | 175,700 | | | | 180,600 | |
| Rental income less than (in excess of ) cash received | | | 2,000 | | | | 2,000 | | | | (7,000 | ) | | | (7,000 | ) |
| | | | | | | | | | | | | |
| Funds available for distribution | | $ | 180,310 | | | $ | 185,210 | | | $ | 168,700 | | | $ | 173,600 | |
| |
| Average common shares outstanding (diluted) | | | 62,000 | | | | 62,000 | | | | 61,000 | | | | 61,000 | |
| |
| Per share data (diluted): | | | | | | | | | | | | | | | | |
| Net income available to common stockholders | | $ | 1.33 | | | $ | 1.41 | | | $ | 1.28 | | | $ | 1.36 | |
| Funds from operations | | | 2.88 | | | | 2.96 | | | | 2.88 | | | | 2.96 | |
| Funds available for distribution | | | 2.91 | | | | 2.99 | | | | 2.77 | | | | 2.85 | |
| | |
| Notes: | | (1) Provision for depreciation includes provision for depreciation from discontinued operations. |
Page 15 of 15
