Exhibit 99.1
[HEALTH CARE REIT LOGO]
FOR IMMEDIATE RELEASE
August 11, 2003
For more information contact:
Ray Braun (419) 247-2800
Mike Crabtree (419) 247-2800
Scott Estes (419) 247-2800
HEALTH CARE REIT, INC. CHANGES NET INCOME GUIDANCE TO
REFLECT EITF TOPIC D-42 CLARIFICATION; FFO IMPACT SUBJECT
TO NAREIT REVIEW
NON-CASH, NON-RECURRING CHARGE RESULTS IN
NET INCOME GUIDANCE RANGE OF $1.63 TO $1.68 PER SHARE
Toledo, Ohio, August 11, 2003...HEALTH CARE REIT, INC. (NYSE/HCN) announced
today that it is reducing its 2003 net income guidance as a result of the recent
Securities and Exchange Commission (SEC) clarification of Emerging Issues Task
Force (EITF) Topic D-42, "The Effect on the Calculation of Earnings per Share
for the Redemption or Induced Conversion of Preferred Stock". The company also
announced that it will follow the National Association of Real Estate Investment
Trusts' (NAREIT) recommendation in determining the impact of the change on FFO.
EITF Topic D-42 provides, among other things, that any excess of (1) the fair
value of the consideration transferred to the holders of preferred stock
redeemed over (2) the carrying amount of the preferred stock should be
subtracted from net earnings to determine net income available to common
stockholders in the calculation of earnings per share. At the July 31, 2003
meeting of the EITF, the SEC Observer clarified that for purposes of applying
EITF Topic D-42, the carrying amount of the preferred stock should be reduced by
the issuance costs of the preferred stock, regardless of where in the
stockholders' equity section those costs were initially classified upon
issuance.
On July 15, 2003, the company redeemed all 3 million shares of its 8.875% Series
B Cumulative Redeemable Preferred Stock. The costs to issue these securities
were recorded as a reduction to paid-in capital and, as was the standard
treatment prior to this clarification, were not anticipated to be considered as
a reduction to the carrying value of the preferred stock at redemption. However,
to implement the clarified accounting pronouncement, the company expects to
reduce net income available to common stockholders through a non-cash,
non-recurring charge of $2.79 million, or $0.06 per share in the third quarter
of 2003. Reflecting this charge, the company is reducing its 2003 net income
guidance from a current range of $1.69 to $1.74 per share to a range of $1.63 to
$1.68 per share. Whether a commensurate reduction in FFO will be required
depends upon a determination by NAREIT, which is expected to be made in early
October 2003. If the NAREIT definition of FFO does not change to include an
add-back to net income for this non-recurring charge, then the company's 2003
FFO guidance would be reduced from a current range of $2.78 to $2.83 per share
to a range of $2.72 to $2.77 per share.
Page 1 of 2
The company issued 3 million shares of Series C Cumulative Convertible Preferred
Stock in 1999. Through June 30, 2003, approximately 1.75 million of these shares
had been converted to common stock. EITF Topic D-42 will not affect the method
by which the company has accounted for these conversions, or any subsequent
conversions.
Health Care REIT, Inc., with headquarters in Toledo, Ohio, is a real estate
investment trust that invests in health care facilities, primarily skilled
nursing and assisted living facilities. At June 30, 2003, we had investments in
270 health care facilities in 33 states with 47 operators and had total assets
of approximately $1.7 billion. For more information on Health Care REIT, Inc.,
via facsimile at no cost, dial 1-800-PRO-INFO and enter the company code - HCN.
More information is available on the Internet at http://www.hcreit.com.
This document may contain "forward-looking" statements as defined in the Private
Securities Litigation Reform Act of 1995. These forward-looking statements
concern the possible expansion of our portfolio; the performance of our
operators and properties; our ability to enter into agreements with new viable
tenants for properties which we take back from financially troubled tenants, if
any; our ability to make distributions; our policies and plans regarding
investments, financings and other matters; our tax status as a real estate
investment trust; our ability to appropriately balance the use of debt and
equity; and our ability to access capital markets or other sources of funds.
When we use words such as "believe," "expect," "anticipate," or similar
expressions, we are making forward-looking statements. Forward-looking
statements are not guarantees of future performance and involve risks and
uncertainties. Our expected results may not be achieved, and actual results may
differ materially from our expectations. This may be a result of various
factors, including, but not limited to: the status of the economy; the status of
capital markets, including prevailing interest rates; compliance with and
changes to regulations and payment policies within the health care industry;
changes in financing terms; competition within the health care and senior
housing industries; and changes in federal, state and local legislation.
Finally, we assume no obligation to update or revise any forward-looking
statements or to update the reasons why actual results could differ from those
projected in any forward-looking statements.
#####
Page 2 of 2