Exhibit 99.3
F O R I M M E D I A T E R E L E A S E
OCTOBER 16, 2001
FOR MORE INFORMATION CONTACT:
RAY BRAUN - (419) 247-2800
MIKE CRABTREE - (419) 247-2800
HEALTH CARE REIT, INC. REPORTS
THIRD QUARTER RESULTS; DECLARES REGULAR DIVIDEND
Toledo, Ohio, October 16, 2001........HEALTH CARE REIT, INC. (NYSE/HCN) today
announced operating results for its third quarter of 2001. The company continues
to meet financial and operational expectations.
"Management was pleased with the third quarter results and our ongoing progress
on portfolio seasoning," commented George L. Chapman, chairman and chief
executive officer. "The capital markets continued its strong support for our
company, as evidenced by the successful completion of a $175 million debt
offering in August. The proceeds from the offering, together with the proceeds
from the $75 million equity offering in June, will enable us to capitalize on
accretive investment opportunities. We continue to see attractive investment
opportunities in the long-term care market and are confident that the company
will meet its goal of $100-125 million of new investments in the second half of
2001."
The Board of Directors voted to declare a dividend for the quarter ended
September 30, 2001, of $0.585 per share. The dividend represents the 122nd
consecutive dividend payment. The dividend will be payable November 20, 2001, to
shareholders of record on October 31, 2001.
SUMMARY OF THIRD QUARTER RESULTS
--------------------------------
(In thousands, except per share numbers)
--------------------------------------------------------- ---------------------------- ---------------------------------
THREE MONTHS ENDED THREE MONTHS ENDED
SEPTEMBER 30, 2001 SEPTEMBER 30, 2000
--------------------------------------------------------- ---------------------------- ---------------------------------
Revenues $34,834 $33,906
--------------------------------------------------------- ---------------------------- ---------------------------------
Net Income Available to Common Shareholders $13,591 $13,785
--------------------------------------------------------- ---------------------------- ---------------------------------
Funds From Operations (FFO) $20,091 $19,215
--------------------------------------------------------- ---------------------------- ---------------------------------
Net Income Per Diluted Share $0.41 $0.48
--------------------------------------------------------- ---------------------------- ---------------------------------
FFO Per Diluted Share $0.61 $0.67
--------------------------------------------------------- ---------------------------- ---------------------------------
Dividend Per Share $0.585 $0.585
--------------------------------------------------------- ---------------------------- ---------------------------------
FFO Payout Ratio 95% 87%
--------------------------------------------------------- ---------------------------- ---------------------------------
Funds from operations (FFO), the generally accepted measure of operating
performance for the real estate investment trust industry, totaled $20.1
million, or $0.61 per diluted share, for the third quarter of 2001, compared
with $19.2 million, or $0.67 per diluted share, for the same period in 2000. The
decrease in FFO per share was primarily attributable to the short-term dilutive
effects of the recent 3.45 million share common stock offering and the $175
million senior note issuance.
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SUMMARY OF YEAR TO DATE RESULTS
-------------------------------
(In thousands, except per share numbers)
--------------------------------------------------------- ---------------------------- ---------------------------------
NINE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, 2001 SEPTEMBER 30, 2000
--------------------------------------------------------- ---------------------------- ---------------------------------
Revenues $100,176 $103,178
--------------------------------------------------------- ---------------------------- ---------------------------------
Net Income Available to Common Shareholders $37,163 $43,130
--------------------------------------------------------- ---------------------------- ---------------------------------
Funds From Operations (FFO) $57,285 $58,559
--------------------------------------------------------- ---------------------------- ---------------------------------
Net Income Per Diluted Share $1.22 $1.51
--------------------------------------------------------- ---------------------------- ---------------------------------
FFO Per Diluted Share $1.89 $2.05
--------------------------------------------------------- ---------------------------- ---------------------------------
Dividend Per Share $1.755 $1.75
--------------------------------------------------------- ---------------------------- ---------------------------------
FFO Payout Ratio 93% 85%
--------------------------------------------------------- ---------------------------- ---------------------------------
FFO totaled $57.3 million, or $1.89 per diluted share for the nine months ended
September 30, 2001, compared with $58.6 million, or $2.05 per diluted share, for
the same period in 2000.
The company had a total outstanding debt balance of $416 million at September
30, 2001, down from $439 million in third quarter 2000, and shareholders' equity
of $763 million, which represents a debt to total capitalization ratio of 35
percent. The company's coverage ratio of EBITDA to interest was 3.66 to 1.0 for
the twelve months ended September 30, 2001.
NEW FACILITY INVESTMENTS. The company's investment activity for the quarter
totaled $39.3 million, including the acquisition of seven assisted living
facilities, with a total of 390 beds, located in three states and leased to two
operators.
PORTFOLIO UPDATE. The portfolio results met the company's expectations. The
seasoning of the assisted living portfolio is on target. The company ended the
second quarter with 24 assisted living facilities remaining in fill-up
representing less than 19 percent of revenues. Only three assisted living
facilities have occupancy less than 50 percent.
OUTLOOK FOR 2001 AND 2002. The company previously announced FFO guidance of
$0.64 to $0.65 per diluted share per quarter for 2001. With the recent debt
offering and the previous equity offering, the company believes FFO will be
$0.62 to $0.63 in fourth quarter 2001 and $0.64 to $0.65 in first quarter 2002.
CONFERENCE CALL INFORMATION. Health Care REIT has scheduled a conference call on
October 17, 2001, at 11:00 A.M. EST to discuss its third quarter 2001
performance, industry trends, portfolio performance, and its outlook for the
remainder of 2001 and for 2002. To participate on the webcast, log on to
www.hcreit.com or www.streetfusion.com 15 minutes before the call to download
the necessary software. Replays will be available for 90 days through the same
websites.
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3Q01 EARNINGS RELEASE OCTOBER 16, 2001
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Health Care REIT, Inc., with headquarters in Toledo, Ohio, is a real estate
investment trust that invests in health care facilities, primarily nursing homes
and assisted living facilities. At September 30, 2001, the company had
investments in 202 health care facilities in 32 states and had total assets of
approximately $1.2 billion. For more information on Health Care REIT, Inc., via
facsimile at no cost, dial 1-800-PRO-INFO and enter the company code - HCN. More
information is available on the Internet at http://www.hcreit.com.
This document and supporting schedules may contain "forward-looking" statements
as defined in the Private Securities Litigation Reform Act of 1995.
Forward-looking statements involve known and unknown risks and uncertainties,
which may cause the company's actual results in the future to differ materially
from expected results. These risks and uncertainties include, among others,
general economic conditions, the availability of capital, competition within the
financial services and real estate markets, the performance of operators within
Health Care REIT's portfolio, and regulatory and other changes in the health
care sector, as described in the company's filings with the Securities and
Exchange Commission.
FINANCIAL SCHEDULES FOLLOW
#####
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HEALTH CARE REIT, INC.
FINANCIAL SUPPLEMENT
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(AMOUNTS IN THOUSANDS)
SEPTEMBER 30
-----------------------------------------
2001 2000
-----------------------------------------
ASSETS
Real estate investments:
Real property owned
Land $ 79,861 $ 71,289
Buildings & improvements 836,867 739,437
Construction in progress 8,995 23,744
----------- -----------
925,723 834,470
Less accumulated depreciation (71,564) (46,820)
----------- -----------
Total real property owned 854,159 787,650
Loans receivable
Real property loans 234,886 314,570
Subdebt investments 23,426 27,551
----------- -----------
258,312 342,121
Less allowance for losses on loans receivable (6,611) (6,337)
----------- -----------
251,701 335,784
----------- -----------
Net real estate investments 1,105,860 1,123,434
Other assets:
Equity investments 6,585 5,556
Deferred loan expenses 7,266 3,065
Cash and cash equivalents 43,564 3,516
Receivables and other assets 32,012 26,712
----------- -----------
89,427 38,849
----------- -----------
TOTAL ASSETS $ 1,195,287 $ 1,162,283
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Borrowings under line of credit obligations $ 0 $ 118,850
Senior unsecured notes 412,250 255,000
Secured debt 3,801 64,867
Accrued expenses and other liabilities 16,250 20,554
----------- -----------
Total liabilities $ 432,301 $ 459,271
Shareholders' equity:
Preferred Stock 150,000 150,000
Common Stock 32,490 28,691
Capital in excess of par value 603,705 526,307
Undistributed (overdistributed) net income (18,922) 2,001
Accumulated other
comprehensive income (873) (715)
Unamortized restricted stock (3,414) (3,272)
----------- -----------
TOTAL SHAREHOLDERS' EQUITY $ 762,986 $ 703,012
----------- -----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 1,195,287 $ 1,162,283
=========== ===========
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3Q01 EARNINGS RELEASE OCTOBER 16, 2001
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HEALTH CARE REIT, INC.
FINANCIAL SUPPLEMENT
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(AMOUNTS IN THOUSANDS EXCEPT PER SHARE DATA)
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30 SEPTEMBER 30
------------------------- -------------------------
2001 2000 2001 2000
---------- ---------- ---------- ----------
Revenues:
Operating lease rents $ 25,756 $ 22,266 $ 72,227 $ 65,984
Interest income 7,187 9,695 23,974 31,408
Commitment fees and other income 934 1,390 2,861 4,657
Prepayment fees 856 0 990 57
Gain on sale of properties 101 555 124 1,072
---------- ---------- ---------- ----------
Gross Revenues 34,834 33,906 100,176 103,178
Expenses:
Interest expense $ 7,643 $ 8,411 $ 23,731 $ 26,093
Provision for depreciation 7,244 5,985 21,023 16,558
General and administrative 2,070 1,823 5,956 5,654
Loan expense 447 276 1,212 879
Provision for losses 250 250 750 750
---------- ---------- ---------- ----------
Total Expenses 17,654 16,745 52,672 49,934
---------- ---------- ---------- ----------
Net Income before extraordinary item 17,180 17,161 47,504 53,244
Loss on extinguishment of debt 213 0 213 0
---------- ---------- ---------- ----------
Net Income 16,967 17,161 47,291 53,244
Preferred stock dividends 3,376 3,376 10,128 10,114
---------- ---------- ---------- ----------
Net Income available to
Common Shareholders $ 13,591 $ 13,785 $ 37,163 $ 43,130
========== ========== ========== ==========
Average number of common shares outstanding:
Basic 32,205 28,507 29,946 28,460
Diluted 32,762 28,650 30,358 28,603
Net income per share:
Basic $ 0.42 $ 0.48 $ 1.24 $ 1.52
Diluted 0.41 0.48 1.22 1.51
Funds from operations: $ 20,091 $ 19,215 $ 57,285 $ 58,559
Funds from operations per share:
Basic $ 0.62 $ 0.67 $ 1.91 $ 2.06
Diluted 0.61 0.67 1.89 2.05
Dividends per share $ 0.585 $ 0.585 $ 1.755 $ 1.750
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HEALTH CARE REIT, INC.
FINANCIAL SUPPLEMENT - SEPTEMBER 30, 2001
PORTFOLIO COMPOSITION ($000'S) EXHIBIT 1
------------------------------
BALANCE SHEET DATA # Properties # Beds/Units Balance % Balance
-------------------- ------------------- -------------------- -----------------
Real Property 164 12,965 $ 854,159 77%
Loans Receivable 38 4,528 234,886 21%
Subdebt Investments -na- -na- 23,426 2%
-------------------- ------------------- -------------------- -----------------
Total Investments 202 17,493 $ 1,112,471 100%
INVESTMENT DATA # Properties # Beds/Units Investment (1) % Investment
-------------------- ------------------- -------------------- -----------------
Assisted Living Facilities 147 9,711 $ 764,881 68%
Nursing Homes 48 6,477 273,472 24%
Specialty Care Facilities 7 1,305 85,543 8%
-------------------- ------------------- -------------------- -----------------
Real Estate Investments 202 17,493 $ 1,123,896 100%
INVESTMENT BY OWNER TYPE # Properties # Beds/Units Investment (1) % Investment
-------------------- ------------------- -------------------- -----------------
Publicly Traded 69 3,872 $ 253,303 22%
Key Private 77 7,686 537,946 48%
Privately Held 56 5,935 332,647 30%
-------------------- ------------------- -------------------- -----------------
Real Estate Investments 202 17,493 $ 1,123,896 100%
NOTES: (1) REAL ESTATE INVESTMENTS INCLUDE GROSS REAL ESTATE INVESTMENTS AND
CREDIT ENHANCEMENTS WHICH AMOUNTED TO $1,112,471,000 AND
$11,425,000, RESPECTIVELY.
REVENUE COMPOSITION ($000'S) EXHIBIT 2
----------------------------
Three Months Ended Nine Months Ended
September 30, 2001 September 30, 2001
---------------------------------- ------------------------------
REVENUE BY INVESTMENT TYPE
Real Property $ 26,301 75% $ 73,822 74%
Loans Receivable & Other 8,082 23% 24,943 25%
Subdebt Investments 451 2% 1,411 1%
------------------ --------------- ----------------- -------------
Total $ 34,834 100% $ 100,176 100%
REVENUE BY FACILITY TYPE
Assisted Living Facilities $ 22,942 66% $ 66,098 66%
Nursing Homes 8,694 25% 23,946 24%
Specialty Care Facilities 3,198 9% 10,132 10%
------------------ --------------- ----------------- -------------
Total $ 34,834 100% $ 100,176 100%
REVENUE BY OWNER TYPE
Publicly Traded $ 9,097 26% $ 25,052 25%
Key Private 17,248 50% 52,226 52%
Privately Held 8,489 24% 22,898 23%
------------------ --------------- ----------------- -------------
Total $ 34,834 100% $ 100,176 100%
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3Q01 EARNINGS RELEASE OCTOBER 16, 2001
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REVENUE COMPOSITION (CONTINUED) ($000'S) EXHIBIT 3
----------------------------------------
OPERATING LEASE EXPIRATIONS & LOAN MATURITIES
Current Lease Current Interest Interest and
Year Revenue (1) Revenue (1) Lease Revenue % of Total
------------------- ------------------------ ------------------------ ----------------------- -------------------
2001 $ 1,993 $ 0 $ 1,993 2%
2002 1,738 7,530 9,268 7%
2003 2,770 0 2,770 2%
2004 410 1,433 1,843 1%
2005 0 2,507 2,507 2%
Thereafter 93,443 16,878 110,321 86%
------------------------ ------------------------ ----------------------- -------------------
Total $ 100,354 $ 28,348 $ 128,702 100%
NOTES: (1) REVENUE IMPACT BY YEAR, ANNUALIZED
COMMITTED INVESTMENT BALANCES EXHIBIT 4
------------------------------
($000'S EXCEPT INVESTMENT PER BED/UNIT)
Committed Balance Investment per
# Properties # Beds/Units (1) Bed/Unit
-------------------- ------------------- -------------------- ------------------
Assisted Living Facilities 147 9,711 $ 768,979 $ 79,186
Nursing Homes 48 6,477 273,472 42,222
Specialty Care Facilities 7 1,305 85,543 65,551
-------------------- ------------------- -------------------- ------------------
Total 202 17,493 $ 1,127,994 -na-
NOTES: (1) COMMITTED BALANCE INCLUDES GROSS REAL ESTATE INVESTMENTS, CREDIT
ENHANCEMENTS AND UNFUNDED COMMITMENTS FOR WHICH INITIAL FUNDING
HAD COMMENCED.
OPERATOR CONCENTRATION ($000'S) EXHIBIT 5
-------------------------------
CONCENTRATION BY INVESTMENT # Properties Investment % Investment
----------------------- ---------------------- -----------------------
Merrill Gardens 19 $ 128,023 11%
Alterra Healthcare 42 92,016 8%
Life Care Centers of America, Inc. 13 84,969 8%
Atria Senior Quarters 9 78,875 7%
Commonwealth Communities 6 69,980 6%
Remaining Operators 113 670,033 60%
----------------------- ---------------------- -----------------------
Total 202 $ 1,123,896 100%
CONCENTRATION BY REVENUE # Properties Revenue (1) % Revenue
----------------------- ---------------------- -----------------------
Merrill Gardens 19 $ 10,451 10%
Alterra Healthcare 42 8,606 9%
Life Care Centers of America, Inc. 13 7,202 7%
Atria Senior Quarters 9 7,087 7%
Commonwealth Communities 6 5,509 6%
Remaining Operators 113 61,321 61%
----------------------- ---------------------- -----------------------
Total 202 $ 100,176 100%
NOTES: (1) NINE MONTHS ENDED SEPTEMBER 30, 2001
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SELECTED FACILITY DATA EXHIBIT 6
----------------------
Coverage Data
% Payor Mix ----------------------------------
------------------------------------- Before After
Census Private Medicare Mgt. Fees Mgt. Fees
------------------------------------------------------- ------------------ ---------------
Nursing Homes 83% 12% 21% 1.71x 1.24x
Assisted Living Facilities 88% 100% 0% 1.30x 1.12x
Specialty Care Facilities 50% 31% 15% 1.76x 1.37x
------------------ ---------------
Weighted Averages 1.48x 1.19x
NOTES: DATA AS OF JUNE 30, 2001
SECURITY DEPOSITS & OTHER CREDIT SUPPORT ($000'S) EXHIBIT 7
-------------------------------------------------
Balance % Investment
--------------------------------
Cross Defaulted $ 1,019,770 91% of gross real estate investments
Cross Collateralized 198,095 84% of mortgage loans
Bank Letters of Credit & Cash 21,590 2% of investment balance
CURRENT CAPITALIZATION ($000'S)
------------------------------- Balance % Balance LEVERAGE & PERFORMANCE RATIOS
--------------- ----------------- ----------------------------------------
Borrowings Under Bank Lines $ 0 0% Debt/Total Book Cap 35%
Long-Term Debt Obligations 416 35% Debt/Total Mkt. Cap 30%
Shareholders' Equity 763 65% Interest Coverage 3.77x 3rd Qtr.
--------------- -----------------
Total Book Capitalization $ 1,179 100% 3.66x L12M
FFO Payout Ratio 95% 3rd Qtr.
92% L12M
DEBT MATURITIES AND PRINCIPAL PAYMENTS ($000'S) EXHIBIT 8
-----------------------------------------------
Year Lines of Credit (1) Senior Notes Secured Debt (1) Total
------------------- ------------------------ ------------------------ ----------------------- -------------------
2001 $ 0 $ 0 $ 16 $ 16
2002 25,000 12,250 75 37,325
2003 150,000 35,000 84 185,084
2004 0 40,000 64,133 104,133
2005 0 0 493 493
2006 0 50,000 0 50,000
2007 0 175,000 0 175,000
Thereafter 0 100,000 0 100,000
------------------------ ------------------------ ----------------------- -------------------
Total $ 175,000 $ 412,250 $ 64,801 $ 652,051
NOTES: (1) LINES OF CREDIT REFLECT 100% CAPACITY
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INVESTMENT ACTIVITY ($000'S) EXHIBIT 9
----------------------------
Three Months Ended Nine Months Ended
September 30, 2001 September 30, 2001
--------------------------------- ---------------------------------
FUNDING BY INVESTMENT TYPE
Real Property $ 34,806 88% $ 69,605 81%
Mortgage & Other Loans 0 0% 0 0%
Construction Advances 3,558 9% 13,884 16%
Subdebt Investments 992 3% 2,665 3%
----------------- --------------- ---------------- ----------------
Total $ 39,356 100% $ 86,154 100%
REAL ESTATE INVESTMENTS
Assisted Living Facilities $ 38,736 94% $ 49,218 57%
Nursing Homes 620 6% 36,936 43%
Specialty Care Facilities 0 0% 0 0%
----------------- --------------- ---------------- ----------------
Total $ 39,356 100% $ 86,154 100%
GEOGRAPHIC CONCENTRATION ($000'S) EXHIBIT 10
---------------------------------
CONCENTRATION BY REGION # Properties Investment % Investment
----------------------- ---------------------- -----------------------
South 115 $ 524,483 47%
Northeast 31 262,571 23%
West 29 199,654 18%
Midwest 27 137,188 12%
----------------------- ---------------------- -----------------------
Total 202 $ 1,123,896 100%
CONCENTRATION BY STATE # Properties Investment % Investment
----------------------- ---------------------- -----------------------
Florida 29 $ 148,930 13%
Massachusetts 14 123,526 11%
Texas 29 101,657 9%
California 8 61,400 5%
New York 6 58,665 5%
Remaining States 116 629,718 57%
----------------------- ---------------------- -----------------------
Total 202 $ 1,123,896 100%
REVENUE BY STATE (1) # Properties Revenue (1) % Revenue
----------------------- ---------------------- -----------------------
Florida 29 $ 11,638 12%
Texas 29 11,560 11%
Massachusetts 14 9,880 10%
California 8 6,198 6%
New York 6 5,106 5%
Remaining States 116 55,794 56%
----------------------- ---------------------- -----------------------
Total 202 $ 100,176 100%
NOTES: (1) NINE MONTHS ENDED SEPTEMBER 30, 2001
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FUNDS FROM OPERATIONS COMPUTATION ($000'S) EXHIBIT 11
------------------------------------------
Three Months Ended Nine Months Ended
September 30, 2001 September 30, 2001
------------------------------- --------------------------
Net Income Available to Common Shareholders $ 13,591 $ 37,163
Add: Depreciation Expense 7,244 21,023
Loss on Extinguishment 213 213
Deduct: Gain on Sale of Assets (101) (124)
Prepayment Fees (856) (990)
---------------------------- -- --------------------------
Funds From Operations (FFO) $ 20,091 $ 57,285
Average Common Shares Outstanding:
Basic 32,205 29,946
Diluted 32,762 30,358
FFO Per Common Share:
Basic $ 0.62 $ 1.91
Diluted $ 0.61 $ 1.89
DISPOSITION ACTIVITY EXHIBIT 12
--------------------
Three Months Ended Nine Months Ended
September 30, 2001 September 30, 2001
--------------------------------- ---------------------------------
DISPOSITIONS BY INVESTMENT TYPE
Real Property $ 10,429 27% $ 22,018 25%
Mortgage & Other Loans 28,535 73% 65,040 75%
----------- -------- ----------- ------
Total $ 38,964 100% $ 87,058 100%
=========== ======== =========== ======
REAL ESTATE INVESTMENTS
Assisted Living Facilities $ 10,429 27% $ 26,420 30%
Nursing Homes 0 0% 0 0%
Specialty Care Facilities 28,535 73% 60,638 70%
----------- -------- ----------- ------
Total $ 38,964 100% $ 87,058 100%
=========== ======== =========== ------
LEASE UP STATISTICS ON ASSISTED LIVING FACILITIES EXHIBIT 13
-------------------------------------------------
OCCUPANCY FACILITIES MONTHS IN OPERATION REVENUE (1) % OF REVENUE
------------------- ----------------------- ----------------- -----------------
00% - 50% 3 10 $5,741 6%
50% - 70% 15 20 $8,634 8%
70% + 6 17 $3,914 4%
NOTES: (1) INTEREST AND RENTAL INCOME FOR NINE MONTHS ENDED SEPTEMBER 30, 2001.
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