Exhibit 99.1
![(HEALTHCARE LOGO)](https://capedge.com/proxy/8-K/0000950152-07-004020/l26043al2604300.gif)
FOR IMMEDIATE RELEASE
May 7, 2007 | ||
For more information contact: | ||
Scott Estes — (419) 247-2800 | ||
Mike Crabtree — (419) 247-2800 |
Health Care REIT, Inc.
Reports First Quarter Results
Reports First Quarter Results
Toledo, Ohio, May 7, 2007........Health Care REIT, Inc. (NYSE:HCN)announced today operating results for its first quarter ended March 31, 2007.
Recent Highlights.
• | Completed 1Q07 net new investments totaling $219.0 million | ||
• | Reported 1Q07 FFO and normalized FAD growth of 7% and 3%, respectively | ||
• | Reported 1Q07 FFO and normalized FAD payout ratios of 84% and 91%, respectively | ||
• | Issued 6.3 million shares of common stock for $265.3 million in net proceeds in April | ||
• | Received debt upgrade to Baa2 from Moody’s Investors Service |
Key Performance Indicators.
1Q07 | 1Q06 | Change | ||||||||||
Net income available to common stockholders (NICS) per diluted share | $ | 0.32 | $ | 0.34 | -6 | % | ||||||
FFO per diluted share | $ | 0.76 | $ | 0.71 | 7 | % | ||||||
Normalized FAD per diluted share | $ | 0.70 | $ | 0.68 | 3 | % | ||||||
Dividends per common share(1) | $ | 0.64 | $ | 0.62 | 3 | % | ||||||
FFO payout ratio | 84 | % | 87 | % | ||||||||
Normalized FAD payout ratio | 91 | % | 91 | % |
(1) | Includes $0.3409 prorated dividend paid on December 28, 2006 in connection with the Windrose merger. |
1Q07 Earnings.The following table summarizes certain items impacting NICS, FFO and FAD:
NICS | FFO | FAD | ||||||||||||||||||||||||||||||||||
1Q07 | 1Q06 | Change | 1Q07 | 1Q06 | Change | 1Q07 | 1Q06 | Change | ||||||||||||||||||||||||||||
Per diluted share | $ | 0.32 | $ | 0.34 | -6 | % | $ | 0.76 | $ | 0.71 | 7 | % | $ | 0.73 | $ | 0.85 | -14 | % | ||||||||||||||||||
Includes impact of: | ||||||||||||||||||||||||||||||||||||
Gain (loss) on sales of real property(1) | $ | 0.01 | $ | 0.03 | -67 | % | ||||||||||||||||||||||||||||||
Cash receipts — prepaid/straight-line rent(2) | $ | 0.03 | $ | 0.18 | -83 | % | ||||||||||||||||||||||||||||||
Per diluted share — normalized | $ | 0.70 | $ | 0.68 | 3 | % |
(1) | $977,000 and $1,553,000 of gains for 1Q07 and 1Q06, respectively. | |
(2) | $2,078,000 and $10,310,000 of receipts for 1Q07 and 1Q06, respectively. |
Dividends for First Quarter 2007.As previously announced, the Board of Directors declared a dividend for the quarter ended March 31, 2007 of $0.66 per share, as compared to $0.64 per share for the same period in 2006. The dividend represents the company’s 144th consecutive dividend payment. The dividend will be payable May 21, 2007 to stockholders of record on May 4, 2007.
Raymond W. Braun Elected to Board of Directors.The company announced today the election of Raymond Braun to the Board of Directors, effective May 3, 2007. Mr. Braun is President of the company, a position he has held since May 2002, and served as Chief Financial Officer from July 2000 to March 2006. Since 1993, Mr. Braun has served in various capacities with the company, including Chief Operating Officer,
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1Q07 Earnings Release | May 7, 2007 |
Executive Vice President, Assistant Vice President and Assistant General Counsel. Mr. Braun also will serve as a member of the Board’s Investment and Planning Committees.
Outlook for 2007.The company affirms its investment guidance of $1.0 to $1.2 billion for 2007, which is comprised of $700 to $800 million of acquisitions and $300 to $400 million of funded new development. In addition, the company expects $100 to $200 million of dispositions, resulting in net investments of $800 million to $1.1 billion. The company is increasing its 2007 guidance for net income available to common stockholders to a range of $1.18 to $1.26 per diluted share, from $1.17 to $1.25 per diluted share primarily due to gains on sales of real property in the first quarter of $977,000. The company affirms its 2007 FFO guidance in the range of $3.06 to $3.14 per diluted share. The company is increasing its 2007 FAD guidance to a range of $2.82 to $2.90 per diluted share, from $2.80 to $2.88 per diluted share primarily due to cash receipts during the quarter of $2.1 million.
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 other than 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.
Conference Call Information.The company has scheduled a conference call on Tuesday, May 8, 2007 at 9:00 a.m. Eastern Time to discuss its first quarter results, industry trends, portfolio performance and outlook for 2007. Telephone access will be available by dialing 888-694-4702 or 973-582-2741 (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 22, 2007. To access the rebroadcast, dial 877-519-4471 or 973-341-3080 (international). The conference ID number is 8675011. 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 News & Events.
Supplemental Reporting Measures.The company believes that net income available to common stockholders (NICS), as defined by U.S. generally accepted accounting principles (U.S. GAAP), is the most appropriate earnings measurement. However, the company considers funds from operations (FFO) and funds available for distribution (FAD) to be useful supplemental measures of its operating performance. Historical cost accounting for real estate assets in accordance with U.S. GAAP implicitly assumes that the value of real estate assets diminishes predictably over time as evidenced by the provision for depreciation. However, since real estate values have historically risen or fallen with market conditions, many industry investors and analysts have considered presentations of operating results for real estate companies that use historical cost accounting to be insufficient. In response, the National Association of Real Estate Investment Trusts (NAREIT) created FFO as a supplemental measure of operating performance for REITs that excludes historical cost depreciation from net income. FFO, as defined by NAREIT, means net income, computed in accordance with U.S. GAAP, excluding gains (or losses) from sales of real estate, plus real estate depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. FAD represents FFO excluding the net straight-line rental adjustments, rental income related to above/below market leases and amortization of deferred loan expenses and less cash used to fund capital expenditures, tenant improvements and lease commissions.
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 total interest, and its fixed charge coverage ratio, which represents EBITDA divided by fixed charges. Fixed charges include total interest, secured debt principal amortization and preferred stock dividends.
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1Q07 Earnings Release | May 7, 2007 |
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.
Net operating income (NOI) is used to evaluate the operating performance of certain real estate properties such as medical office buildings. The company defines NOI as total revenues, including tenant reimbursements and discontinued operations, less property operating expenses, which exclude depreciation and amortization, general and administrative expenses, impairments and interest expense. The company believes NOI provides investors relevant and useful information because it measures the operating performance of our medical office buildings at the property level on an unleveraged basis. The company uses NOI to make decisions about resource allocations and to assess the property level performance of our medical office buildings.
Health Care REIT, Inc., with headquarters in Toledo, Ohio, is a self-administered, equity real estate investment trust that invests across the full spectrum of senior housing and health care real estate, including independent living/continuing care retirement communities, assisted living facilities, skilled nursing facilities, hospitals, long-term acute care hospitals and medical office buildings. Founded in 1970, the company was the first real estate investment trust to invest exclusively in health care facilities. As of March 31, 2007, the company’s broadly diversified portfolio consisted of 597 properties in 37 states. The company also offers a full array of property management and development services. 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 occupancy rates; its ability to acquire or develop properties; its ability to manage properties; its ability to enter into agreements with new viable tenants for vacant space or 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; its critical accounting policies; and its ability to meet its earnings guidance. When the company uses words such as “may,” “will,” “intend,” “should,” “believe,” “expect,” “anticipate,” “project,” “estimate” or similar expressions, it is making forward-looking statements. Forward-looking statements are not guarantees of future performance and involve risks 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; operators’ and tenants’ difficulty in cost-effectively obtaining and maintaining adequate liability and other insurance; changes in financing terms; competition within the health care and senior housing industries; negative developments in the operating results or financial condition of operators or tenants, 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 timely reinvest sale proceeds at similar rates to assets sold; the company’s ability to re-lease space at similar rates as vacancies occur; operator or tenant bankruptcies or insolvencies; government regulations affecting Medicare and Medicaid reimbursement rates; liability or contract claims by or against operators and tenants; unanticipated difficulties
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1Q07 Earnings Release | May 7, 2007 |
and/or expenditures relating to future acquisitions and the integration of multi-property acquisitions; environmental laws affecting the company’s properties; changes in rules or practices governing the company’s financial reporting; and legal and operational matters, including real estate investment trust qualification and key management personnel recruitment and retention. Finally, the company assumes no obligation to update or revise any forward-looking statements or to update the reasons why actual results could differ from those projected in any forward-looking statements.
FINANCIAL SCHEDULES FOLLOW
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1Q07 Earnings Release | May 7, 2007 |
HEALTH CARE REIT, INC.
Financial Supplement
Financial Supplement
CONSOLIDATED BALANCE SHEETS (unaudited)
(In thousands)
(In thousands)
March 31, | ||||||||
2007 | 2006 | |||||||
Assets | ||||||||
Real estate investments: | ||||||||
Real property owned | ||||||||
Land and land improvements | $ | 394,002 | $ | 267,824 | ||||
Buildings & building improvements | 3,783,163 | 2,712,511 | ||||||
Acquired lease intangibles | 85,110 | 0 | ||||||
Real property held for sale, net of accumulated depreciation | 4,236 | 15,898 | ||||||
Construction in progress | 169,782 | 36,115 | ||||||
4,436,293 | 3,032,348 | |||||||
Less accumulated depreciation and intangible amortization | (381,448 | ) | (293,738 | ) | ||||
Total real property owned | 4,054,845 | 2,738,610 | ||||||
Loans receivable | 256,945 | 177,704 | ||||||
Less allowance for losses on loans receivable | (7,406 | ) | (6,711 | ) | ||||
249,539 | 170,993 | |||||||
Net real estate investments | 4,304,384 | 2,909,603 | ||||||
Other assets: | ||||||||
Equity investments | 4,700 | 2,970 | ||||||
Deferred loan expenses | 19,767 | 12,042 | ||||||
Cash and cash equivalents | 31,293 | 25,758 | ||||||
Receivables and other assets | 98,510 | 62,267 | ||||||
154,270 | 103,037 | |||||||
Total assets | $ | 4,458,654 | $ | 3,012,640 | ||||
Liabilities and stockholders’ equity | ||||||||
Liabilities: | ||||||||
Borrowings under unsecured lines of credit arrangements | $ | 381,000 | $ | 201,000 | ||||
Senior unsecured notes | 1,542,103 | 1,195,378 | ||||||
Secured debt | 377,013 | 131,946 | ||||||
Liability to subsidiary trust issuing preferred securities | 52,205 | 0 | ||||||
Accrued expenses and other liabilities | 95,595 | 49,399 | ||||||
Total liabilities | 2,447,916 | 1,577,723 | ||||||
Minority interests | 2,354 | 0 | ||||||
Stockholders’ equity: | ||||||||
Preferred stock | 338,993 | 276,875 | ||||||
Common stock | 73,931 | 58,685 | ||||||
Capital in excess of par value | 1,902,186 | 1,326,341 | ||||||
Treasury stock | (3,941 | ) | (2,714 | ) | ||||
Cumulative net income | 962,526 | 855,081 | ||||||
Cumulative dividends | (1,267,462 | ) | (1,080,688 | ) | ||||
Accumulated other comprehensive income | (135 | ) | 0 | |||||
Other equity | 2,286 | 1,337 | ||||||
Total stockholders’ equity | 2,008,384 | 1,434,917 | ||||||
Total liabilities and stockholders’ equity | $ | 4,458,654 | $ | 3,012,640 | ||||
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1Q07 Earnings Release | May 7, 2007 |
CONSOLIDATED STATEMENTS OF INCOME (unaudited)
(In thousands, except per share data)
Three Months Ended | ||||||||
March 31, | ||||||||
2007 | 2006 | |||||||
Revenues: | ||||||||
Rental income | $ | 105,904 | $ | 71,380 | ||||
Interest income | 5,149 | 4,262 | ||||||
Other income | 1,592 | 366 | ||||||
Gross revenues | 112,645 | 76,008 | ||||||
Expenses: | ||||||||
Interest expense | 31,922 | 23,523 | ||||||
Property operating expenses | 7,168 | 0 | ||||||
Depreciation and amortization | 33,860 | 21,825 | ||||||
General and administrative expenses | 9,793 | 5,976 | ||||||
Loan expense | 1,267 | 711 | ||||||
Provision for loan losses | 0 | 250 | ||||||
Total expenses | 84,010 | 52,285 | ||||||
Income before minority interests | 28,635 | 23,723 | ||||||
Minority interests | (126 | ) | 0 | |||||
Income from continuing operations | 28,509 | 23,723 | ||||||
Discontinued operations: | ||||||||
Gain (loss) on sales of properties | 977 | 1,553 | ||||||
Income (loss) from discontinued operations, net | 187 | (298 | ) | |||||
1,164 | 1,255 | |||||||
Net income | 29,673 | 24,978 | ||||||
Preferred dividends | 6,317 | 5,333 | ||||||
Net income available to common stockholders | $ | 23,356 | $ | 19,645 | ||||
Average number of common shares outstanding: | ||||||||
Basic | 73,224 | 58,178 | ||||||
Diluted | 73,791 | 58,535 | ||||||
Net income available to common stockholders per share: | ||||||||
Basic | $ | 0.32 | $ | 0.34 | ||||
Diluted | 0.32 | 0.34 | ||||||
Common dividends per share | $ | 0.2991 | $ | 0.6200 |
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1Q07 Earnings Release | May 7, 2007 |
HEALTH CARE REIT, INC.
Financial Supplement – March 31, 2007
Financial Supplement – March 31, 2007
Exhibit 1 | ||
Portfolio Composition | ||
($000’s except Investment per Bed/Unit/Sq. Ft.) |
# Properties | Balance | % Balance | ||||||||||
Balance Sheet Data | ||||||||||||
Real Property | 564 | $ | 4,054,845 | 94 | % | |||||||
Loans Receivable (1) | 33 | 256,945 | 6 | % | ||||||||
Totals | 597 | $ | 4,311,790 | 100 | % |
# Properties | Investment (2) | % Investment | ||||||||||
Investment Balances | ||||||||||||
Independent/CCRCs | 48 | $ | 550,462 | 13 | % | |||||||
Assisted Living Facilities | 208 | 1,045,546 | 24 | % | ||||||||
Skilled Nursing Facilities | 233 | 1,547,904 | 36 | % | ||||||||
Medical Office Buildings | 90 | 899,599 | 21 | % | ||||||||
Specialty Care Facilities | 18 | 270,729 | 6 | % | ||||||||
Totals | 597 | $ | 4,314,240 | 100 | % |
# Beds/Units | Committed | Investment | ||||||||||||||
# Properties | or Sq. Ft. | Balance (3) | per metric | |||||||||||||
Committed Investments | ||||||||||||||||
Independent/CCRCs | 48 | 5,685 units | $ | 738,921 | $129,977 unit | |||||||||||
Assisted Living Facilities | 208 | 12,590 units | 1,153,214 | 91,598 unit | ||||||||||||
Skilled Nursing Facilities | 233 | 31,668 beds | 1,559,100 | 49,233 bed | ||||||||||||
Medical Office Buildings | 90 | 3,317,476 sq. ft. | 899,599 | 271 sq. ft. | ||||||||||||
Specialty Care Facilities | 18 | 1,391 beds | 303,299 | 218,044 bed | ||||||||||||
Totals | 597 | -na- | $ | 4,654,133 | -na- |
Notes: (1) | Includes $799,000 of loans on non-accrual. | |
(2) | Real Estate Investments include gross real estate investments and credit enhancements which amounted to $4,311,790,000 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. |
Exhibit 2 | ||
Selected Facility Data |
Coverage Data | ||||||||||||||||||||||||
% Payor Mix | Before | After | ||||||||||||||||||||||
Census | Private | Medicare | Medicaid | Mgt. Fees | Mgt. Fees | |||||||||||||||||||
Independent/CCRCs | 92 | % | 98 | % | 1 | % | 1 | % | 1.39x | 1.19x | ||||||||||||||
Assisted Living Facilities | 89 | % | 81 | % | 0 | % | 19 | % | 1.56x | 1.35x | ||||||||||||||
Skilled Nursing Facilities | 86 | % | 18 | % | 15 | % | 67 | % | 2.19x | 1.57x | ||||||||||||||
Medical Office Buildings | 92 | % | 100 | % | 0 | % | 0 | % | -na- | -na- | ||||||||||||||
Specialty Care Facilities | 58 | % | 22 | % | 57 | % | 21 | % | 2.77x | 2.21x | ||||||||||||||
Weighted Averages | 1.94x | 1.51x |
Notes: (1) Data as of December 31, 2006.
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1Q07 Earnings Release | May 7, 2007 |
Exhibit 3 | ||
Investment Concentrations ($000’s) |
# Properties | Investment | % Investment | ||||||||||
Concentration by Customer | ||||||||||||
Emeritus Corporation | 50 | $ | 352,344 | 8 | % | |||||||
Brookdale Senior Living Inc. | 87 | 281,930 | 7 | % | ||||||||
Life Care Centers of America, Inc. | 26 | 245,476 | 6 | % | ||||||||
Home Quality Management, Inc. | 37 | 241,911 | 6 | % | ||||||||
Merrill Gardens L.L.C. | 13 | 182,112 | 4 | % | ||||||||
Remaining portfolio | 384 | 3,010,467 | 69 | % | ||||||||
Totals | 597 | $ | 4,314,240 | 100 | % |
# Properties | Investment | % Investment | ||||||||||
Concentration by Region | ||||||||||||
South | 370 | $ | 2,339,300 | 54 | % | |||||||
West | 79 | 764,272 | 18 | % | ||||||||
Midwest | 78 | 647,322 | 15 | % | ||||||||
Northeast | 70 | 563,346 | 13 | % | ||||||||
Totals | 597 | $ | 4,314,240 | 100 | % |
# Properties | Investment | % Investment | ||||||||||
Concentration by State | ||||||||||||
Florida | 86 | $ | 686,378 | 16 | % | |||||||
Texas | 75 | 544,023 | 13 | % | ||||||||
Massachusetts | 36 | 327,153 | 8 | % | ||||||||
California | 22 | 302,577 | 7 | % | ||||||||
Ohio | 31 | 265,264 | 6 | % | ||||||||
Remaining portfolio | 347 | 2,188,845 | 50 | % | ||||||||
Totals | 597 | $ | 4,314,240 | 100 | % |
Exhibit 4 | ||
Revenue Concentrations ($000’s) |
Three Months Ended | ||||||||
March 31, 2007 | ||||||||
Revenue by Facility Type (1) | ||||||||
Independent/CCRCs | $ | 10,223 | 9 | % | ||||
Assisted Living Facilities | 26,528 | 23 | % | |||||
Skilled Nursing Facilities | 43,494 | 39 | % | |||||
Medical Office Buildings (2) | 23,788 | 21 | % | |||||
Specialty Care Facilities | 7,284 | 7 | % | |||||
Other income | 1,592 | 1 | % | |||||
Totals | $ | 112,909 | 100 | % |
Notes: (1) | Revenues include gross revenues and revenues from discontinued operations. | |
(2) | NOI for this period was $16.6 million, which represents $23.8 million of rental income less $7.2 million of property operating expenses. |
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1Q07 Earnings Release | May 7, 2007 |
Exhibit 5
Revenue Maturities ($000’s)
Investment Properties | Operating Properties | Interest | Total | |||||||||||||||||
Year | Rental Income (1) | Rental Income (1) | Income (1) | Revenues | % of Total | |||||||||||||||
2007 | $ | 495 | $ | 7,431 | $ | 3,108 | $ | 11,034 | 3 | % | ||||||||||
2008 | 0 | 11,228 | 2,689 | 13,917 | 3 | % | ||||||||||||||
2009 | 930 | 5,927 | 1,871 | 8,728 | 2 | % | ||||||||||||||
2010 | 578 | 7,442 | 3,387 | 11,407 | 3 | % | ||||||||||||||
2011 | 6,921 | 5,877 | 263 | 13,061 | 3 | % | ||||||||||||||
Thereafter | 294,271 | 39,287 | 12,716 | 346,274 | 86 | % | ||||||||||||||
Totals | $ | 303,195 | $ | 77,192 | $ | 24,034 | $ | 404,421 | 100 | % |
Notes: | (1) Revenue impact by year, annualized. |
Exhibit 6
Debt Maturities and Principal Payments ($000’s)
Trust | ||||||||||||||||||||
Preferred | ||||||||||||||||||||
Year | Lines of Credit (1) | Senior Notes (2) | Secured Debt (2) | Liability (2) | Total | |||||||||||||||
2007 | $ | 40,000 | $ | 52,500 | $ | 17,449 | $ | 0 | $ | 109,949 | ||||||||||
2008 | 0 | 42,330 | 26,363 | 0 | 68,693 | |||||||||||||||
2009 | 700,000 | 0 | 59,167 | 0 | 759,167 | |||||||||||||||
2010 | 0 | 0 | 12,651 | 0 | 12,651 | |||||||||||||||
2011 | 0 | 0 | 49,638 | 0 | 49,638 | |||||||||||||||
2012 | 0 | 250,000 | 20,927 | 0 | 270,927 | |||||||||||||||
2013 | 0 | 300,000 | 52,295 | 0 | 352,295 | |||||||||||||||
Thereafter | 0 | 895,000 | 138,016 | 51,000 | 1,084,016 | |||||||||||||||
Totals | $ | 740,000 | $ | 1,539,830 | $ | 376,506 | $ | 51,000 | $ | 2,707,336 |
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. |
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1Q07 Earnings Release | May 7, 2007 |
Exhibit 7
Investment Activity ($000’s)
Three Months Ended | ||||||||
March 31, 2007 | ||||||||
Funding by Investment Type | ||||||||
Real Property | $ | 163,230 | 67 | % | ||||
Loans Receivable | 80,427 | 33 | % | |||||
Totals | $ | 243,657 | 100 | % | ||||
Funding by Facility Type | ||||||||
Independent/CCRCs | $ | 32,805 | 13 | % | ||||
Assisted Living Facilities | 42,351 | 17 | % | |||||
Skilled Nursing Facilities | 146,169 | 60 | % | |||||
Medical Office Buildings | 7,999 | 3 | % | |||||
Specialty Care Facilities | 14,333 | 7 | % | |||||
Totals | $ | 243,657 | 100 | % |
Exhibit 8
Development Activity ($000’s)
Balance at | 2007 YTD | 2007 YTD | Balance at | Committed | ||||||||||||||||
Facility Type | December 31, 2006 | Fundings | Conversions | March 31, 2007 | Balances | |||||||||||||||
Independent/CCRCs | $ | 61,709 | $ | 16,724 | $ | (398 | ) | $ | 78,035 | $ | 266,494 | |||||||||
Assisted Living Facilities | 55,197 | 13,888 | (6,523 | ) | 62,562 | 170,229 | ||||||||||||||
Skilled Nursing Facilities | 14,852 | 3,354 | 0 | 18,206 | 29,402 | |||||||||||||||
Specialty Care Facilities | 6,464 | 4,515 | 0 | 10,979 | 43,550 | |||||||||||||||
Totals | $ | 138,222 | $ | 38,481 | $ | (6,921 | ) | $ | 169,782 | $ | 509,675 |
Development Funding Projections ($000’s)
Projected Future Fundings | ||||||||||||||||||||
2007 | Fundings | Unfunded | ||||||||||||||||||
Facility Type | Projects | # Beds/Units | Fundings | Thereafter | Commitments | |||||||||||||||
Independent/CCRCs | 9 | 1,093 | $ | 53,712 | $ | 134,747 | $ | 188,459 | ||||||||||||
Assisted Living Facilities | 15 | 1,173 | 32,790 | 74,877 | 107,667 | |||||||||||||||
Skilled Nursing Facilities | 3 | 247 | 8,450 | 2,746 | 11,196 | |||||||||||||||
Specialty Care Facilities | 3 | 150 | 21,912 | 10,659 | 32,571 | |||||||||||||||
Totals | 30 | 2,663 | $ | 116,864 | $ | 223,029 | $ | 339,893 |
Project Conversion Projections ($000’s)
2007 Quarterly Conversions | Annual Projections | |||||||||||||||||
Projected Average | Projected Average | |||||||||||||||||
Quarter | Amount | Initial Yields (1) | Year | Amount | Initial Yields (1) | |||||||||||||
1Q07 actual | $ | 6,921 | 9.06 | % | 2007 projected | $ | 138,892 | 9.13 | % | |||||||||
2Q07 projected | 55,048 | 9.14 | % | 2008 projected | 206,144 | 9.46 | % | |||||||||||
3Q07 projected | 29,030 | 9.43 | % | 2009 projected | 111,787 | 10.00 | % | |||||||||||
4Q07 projected | 47,893 | 8.94 | % | 2010 projected | 59,774 | 8.54 | % | |||||||||||
Totals | $ | 138,892 | 9.13 | % | Totals | $ | 516,597 | 9.38 | % |
Notes: | All amounts include both cash advances and non-cash additions such as capitalized interest. | |
(1) Actual initial yields may be higher if the underlying market rates increase. |
Page 10 of 15
1Q07 Earnings Release | May 7, 2007 |
Exhibit 9
Disposition Activity ($000’s)
Three Months Ended | ||||||||
March 31, 2007 | ||||||||
Dispositions by Investment Type | ||||||||
Real Property | $ | 10,560 | 43 | % | ||||
Loans Receivable | 14,182 | 57 | % | |||||
Totals | $ | 24,742 | 100 | % | ||||
Dispositions by Facility Type | ||||||||
Assisted Living Facilities | $ | 22,335 | 90 | % | ||||
Independent/CCRCs | 2,407 | 10 | % | |||||
Totals | $ | 24,742 | 100 | % |
Exhibit 10
Discontinued Operations ($000’s)
Three Months Ended | ||||||||
March 31, | ||||||||
2007 | 2006 | |||||||
Revenues | ||||||||
Rental income | $ | 264 | $ | 2,079 | ||||
Expenses | ||||||||
Interest expense | 77 | 715 | ||||||
Depreciation and amortization | 0 | 1,437 | ||||||
General and administrative | 0 | 225 | ||||||
Income (loss) from discontinued operations, net | $ | 187 | $ | (298 | ) |
Exhibit 11
Current Capitalization ($000’s except share price) | Leverage & Performance Ratios | |||||||||||||
Balance | % Balance | |||||||||||||
Borrowings Under Bank Lines | $ | 381,000 | 9 | % | Debt/Total Book Cap | 54% | ||||||||
Long-Term Debt Obligations | 1,919,116 | 44 | % | |||||||||||
Trust Preferred Liability | 52,205 | 1 | % | Debt/Undepreciated Book Cap | 50% | |||||||||
Stockholders’ Equity | 2,008,384 | 46 | % | |||||||||||
Total Book Capitalization | $ | 4,360,705 | 100 | % | Debt/Total Market Cap | 40% | ||||||||
Common Shares Outstanding (000’s) | 74,091 | Interest Coverage | 2.82x 1st Qtr. | |||||||||||
Period-End Share Price | $ | 43.90 | ||||||||||||
Common Stock Market Value | $ | 3,252,595 | 55 | % | Interest Coverage | 2.91x 1st Qtr. | ||||||||
Preferred Stock | 338,993 | 5 | % | - adjusted | ||||||||||
Borrowings Under Bank Lines | 381,000 | 7 | % | Fixed Charge Coverage | 2.28x 1st Qtr. | |||||||||
Trust Preferred Liability | 52,205 | 1 | % | |||||||||||
Long-Term Debt Obligations | 1,919,116 | 32 | % | Fixed Charge Coverage | 2.35x 1st Qtr. | |||||||||
Total Market Capitalization | $ | 5,943,909 | 100 | % | - adjusted |
Page 11 of 15
1Q07 Earnings Release | May 7, 2007 |
Exhibit 12
EBITDA Reconciliation ($000’s)
Three Months Ended | ||||||||
March 31, | ||||||||
2007 | 2006 | |||||||
Net income | $ | 29,673 | $ | 24,978 | ||||
Interest expense (1) | 31,999 | 24,238 | ||||||
Tax expense (benefit) | 11 | 0 | ||||||
Depreciation and amortization (1) | 33,860 | 23,262 | ||||||
Amortization of deferred loan expenses | 1,267 | 711 | ||||||
EBITDA | 96,810 | 73,189 | ||||||
Stock-based compensation expense | 3,177 | 2,514 | ||||||
Provision for loan losses | 0 | 250 | ||||||
EBITDA — adjusted | $ | 99,987 | $ | 75,953 | ||||
Interest Coverage Ratio | ||||||||
Interest expense (1) | $ | 31,999 | $ | 24,238 | ||||
Capitalized interest | 2,327 | 202 | ||||||
Total interest | 34,326 | 24,440 | ||||||
EBITDA | $ | 96,810 | $ | 73,189 | ||||
Interest coverage ratio | 2.82 | x | 2.99 | x | ||||
EBITDA — adjusted | $ | 99,987 | $ | 75,953 | ||||
Interest coverage ratio — adjusted | 2.91 | x | 3.11 | x | ||||
Fixed Charge Coverage Ratio | ||||||||
Total interest (1) | $ | 34,326 | $ | 24,440 | ||||
Secured debt principal amortization | 1,894 | 643 | ||||||
Preferred dividends | 6,317 | 5,333 | ||||||
Total fixed charges | 42,537 | 30,416 | ||||||
EBITDA | $ | 96,810 | $ | 73,189 | ||||
Fixed charge coverage ratio | 2.28 | x | 2.41 | x | ||||
EBITDA — adjusted | $ | 99,987 | $ | 75,953 | ||||
Fixed charge coverage ratio — adjusted | 2.35 | x | 2.50 | x |
Notes: | (1) Depreciation and amortization and interest expense include depreciation and amortization and interest expense from discontinued operations. |
Page 12 of 15
1Q07 Earnings Release | May 7, 2007 |
Exhibit 13
Funds Available For Distribution Reconciliation
(Amounts in 000’s except per share data)
(Amounts in 000’s except per share data)
Three Months Ended | ||||||||
March 31, | ||||||||
2007 | 2006 | |||||||
Net income available to common stockholders | $ | 23,356 | $ | 19,645 | ||||
Depreciation and amortization (1) | 33,860 | 23,262 | ||||||
Loss (gain) on sales of properties | (977 | ) | (1,553 | ) | ||||
Minority interests | (5 | ) | 0 | |||||
Gross straight-line rental income | (4,231 | ) | (2,400 | ) | ||||
Prepaid/straight-line rent receipts | 2,078 | 10,310 | ||||||
Rental income related to above/(below) market leases, net | (460 | ) | 0 | |||||
Amortization of deferred loan expenses | 1,267 | 711 | ||||||
Cap Ex, tenant improvements, lease commissions | (1,063 | ) | 0 | |||||
Funds available for distribution | 53,825 | 49,975 | ||||||
Prepaid/straight-line rent receipts | (2,078 | ) | (10,310 | ) | ||||
Funds available for distribution — normalized | $ | 51,747 | $ | 39,665 | ||||
Average common shares outstanding: | ||||||||
Basic | 73,224 | 58,178 | ||||||
Diluted | 73,791 | 58,535 | ||||||
Per share data: | ||||||||
Net income available to common stockholders | ||||||||
Basic | $ | 0.32 | $ | 0.34 | ||||
Diluted | 0.32 | 0.34 | ||||||
Funds available for distribution | ||||||||
Basic | $ | 0.74 | $ | 0.86 | ||||
Diluted | 0.73 | 0.85 | ||||||
Funds available for distribution — normalized | ||||||||
Basic | $ | 0.71 | $ | 0.68 | ||||
Diluted | 0.70 | 0.68 | ||||||
FAD Payout Ratio | ||||||||
Dividends per common share (2) | $ | 0.64 | $ | 0.62 | ||||
FAD per diluted share | $ | 0.73 | $ | 0.85 | ||||
FAD payout ratio | 88 | % | 73 | % | ||||
FAD Payout Ratio — Normalized | ||||||||
Dividends per common share (2) | $ | 0.64 | $ | 0.62 | ||||
FAD per diluted share — normalized | $ | 0.70 | $ | 0.68 | ||||
FAD payout ratio — normalized | 91 | % | 91 | % |
Notes: | (1) Depreciation and amortization includes depreciation and amortization from discontinued operations. | |
(2) Includes $0.3409 prorated dividend paid on December 28, 2006 in connection with the Windrose merger. |
Page 13 of 15
1Q07 Earnings Release | May 7, 2007 |
Exhibit 14
Funds From Operations Reconciliation
(Amounts in 000’s except per share data)
(Amounts in 000’s except per share data)
Three Months Ended | ||||||||
March 31, | ||||||||
2007 | 2006 | |||||||
Net income available to common stockholders | $ | 23,356 | $ | 19,645 | ||||
Depreciation and amortization (1) | 33,860 | 23,262 | ||||||
Loss (gain) on sales of properties | (977 | ) | (1,553 | ) | ||||
Minority interests | (32 | ) | 0 | |||||
Funds from operations | $ | 56,207 | $ | 41,354 | ||||
Average common shares outstanding: | ||||||||
Basic | 73,224 | 58,178 | ||||||
Diluted | 73,791 | 58,535 | ||||||
Per share data: | ||||||||
Net income available to common stockholders | ||||||||
Basic | $ | 0.32 | $ | 0.34 | ||||
Diluted | 0.32 | 0.34 | ||||||
Funds from operations | ||||||||
Basic | $ | 0.77 | $ | 0.71 | ||||
Diluted | 0.76 | 0.71 | ||||||
FFO Payout Ratio | ||||||||
Dividends per common share (2) | $ | 0.64 | $ | 0.62 | ||||
FFO per diluted share | $ | 0.76 | $ | 0.71 | ||||
FFO payout ratio | 84 | % | 87 | % |
Notes: | (1) Depreciation and amortization includes depreciation and amortization from discontinued operations. | |
(2) Includes $0.3409 prorated dividend paid on December 28, 2006 in connection with the Windrose merger. |
Page 14 of 15
1Q07 Earnings Release | May 7, 2007 |
Exhibit 15
Outlook Reconciliation
(Amounts in 000’s except per share data)
(Amounts in 000’s except per share data)
Current Outlook | ||||||||
Year Ended | ||||||||
December 31, 2007 | ||||||||
Low | High | |||||||
Net income available to common stockholders | $ | 94,777 | $ | 101,177 | ||||
Loss (gain) on sales of properties | (977 | ) | (977 | ) | ||||
Depreciation and amortization (1) | 151,000 | 151,000 | ||||||
Funds from operations | 244,800 | 251,200 | ||||||
Gross straight-line rental income | (16,000 | ) | (16,000 | ) | ||||
Prepaid/straight-line rent receipts | 2,078 | 2,078 | ||||||
Rental income related to above/below market leases | (2,000 | ) | (2,000 | ) | ||||
Amortization of deferred loan expenses | 4,000 | 4,000 | ||||||
Cap Ex, tenant improvements, lease commissions | (7,000 | ) | (7,000 | ) | ||||
Funds available for distribution | $ | 225,878 | $ | 232,278 | ||||
Average common shares outstanding (diluted) | 80,000 | 80,000 | ||||||
Per share data (diluted): | ||||||||
Net income available to common stockholders | $ | 1.18 | $ | 1.26 | ||||
Funds from operations | 3.06 | 3.14 | ||||||
Funds available for distribution | 2.82 | 2.90 |
Notes: | (1) Depreciation and amortization includes depreciation and amortization from discontinued operations. |
Page 15 of 15