EXHIBIT 99.1
(HEALTH CARE REIT, INC. LOGO)
FOR IMMEDIATE RELEASE
OCTOBER 22, 2003
FOR MORE INFORMATION CONTACT:
RAY BRAUN - (419) 247-2800
MIKE CRABTREE - (419) 247-2800
SCOTT ESTES - (419) 247-2800
HEALTH CARE REIT, INC.
REPORTS THIRD QUARTER RESULTS
THIRD QUARTER FFO OF $0.72 PER DILUTED SHARE EXCLUDING PREFERRED STOCK
REDEMPTION CHARGE
Toledo, Ohio, October 22, 2003........HEALTH CARE REIT, INC. (NYSE/HCN) today
announced operating results for its third quarter ended September 30, 2003. We
continue to meet our financial and operational expectations.
"Fueled by the significant investments totaling $340 million during the quarter,
we are pleased to report that we have reached $2 billion in total assets while
continuing to drive FFO growth," commented George L. Chapman, chief executive
officer of Health Care REIT, Inc. "We have benefited from attractive acquisition
opportunities, the continued confidence of the capital markets and our recent
upgrade to investment grade status by Moody's. Excluding the impact of a
non-cash, non-recurring charge from our recent preferred stock redemption, we
continue to demonstrate positive FFO growth and payout ratio trends."
The Board of Directors declared a dividend for the quarter ended September 30,
2003 of $0.585 per share. The dividend represents the 130th consecutive dividend
payment. The dividend will be payable November 20, 2003 to stockholders of
record on November 3, 2003.
SUMMARY OF THIRD QUARTER RESULTS
(In thousands, except per share data)
THREE MONTHS ENDED THREE MONTHS ENDED
SEPTEMBER 30, 2003 SEPTEMBER 30, 2002
------------------ ------------------
Revenues $49,975 $40,148
Net Income Available to Common Stockholders $20,601 $16,885
Funds From Operations $29,581 $26,662
Funds From Operations - Adjusted $32,371 $26,662
Net Income Per Diluted Share $ 0.46 $ 0.43
FFO Per Diluted Share $ 0.66 $ 0.68
FFO Per Diluted Share - Adjusted $ 0.72 $ 0.68
Dividend Per Share $ 0.585 $ 0.585
FFO Payout Ratio 89% 86%
FFO Payout Ratio - Adjusted 81% 86%
PAGE 1 OF 13
3Q03 EARNINGS RELEASE OCTOBER 22, 2003
Net income available to common stockholders totaled $20.6 million, or $0.46 per
diluted share, for the third quarter of 2003, compared with $16.9 million, or
$0.43 per diluted share, for the same period in 2002. Funds from operations
totaled $29.6 million, or $0.66 per diluted share, for the third quarter of
2003, compared with $26.7 million, or $0.68 per diluted share, for the same
period in 2002. Adjusted funds from operations, which excludes the preferred
stock redemption charge, totaled $32.4 million, or $0.72 per diluted share, for
the third quarter of 2003.
SUMMARY OF YEAR TO DATE RESULTS
(In thousands, except per share data)
NINE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, 2003 SEPTEMBER 30, 2002
------------------ ------------------
Revenues $139,833 $111,589
Net Income Available to Common Stockholders $ 53,796 $ 42,888
Funds From Operations $ 86,256 $ 70,842
Funds From Operations - Adjusted $ 89,046 $ 70,842
Net Income Per Diluted Share $ 1.28 $ 1.18
FFO Per Diluted Share $ 2.05 $ 1.94
FFO Per Diluted Share - Adjusted $ 2.11 $ 1.94
Dividend Per Share $ 1.755 $ 1.755
FFO Payout Ratio 86% 90%
FFO Payout Ratio - Adjusted 83% 90%
Net income available to common stockholders totaled $53.8 million, or $1.28 per
diluted share, for the nine months ended September 30, 2003, compared with $42.9
million, or $1.18 per diluted share, for the same period in 2002. Funds from
operations totaled $86.3 million, or $2.05 per diluted share, for the nine
months ended September 30, 2003, compared with $70.8 million, or $1.94 per
diluted share, for the same period in 2002. Adjusted funds from operations,
which excludes the preferred stock redemption charge, totaled $89.0 million, or
$2.11 per diluted share, for the nine months ended September 30, 2003.
We had a total outstanding debt balance of $903.2 million at September 30, 2003,
as compared with $639.5 million at September 30, 2002, and stockholders' equity
of $1.1 billion, which represents a debt to total book capitalization ratio of
45 percent. The debt to total market capitalization at September 30, 2003 was 36
percent. Our coverage ratio of EBITDA to interest was 3.64 to 1.00 for the nine
months ended September 30, 2003.
PORTFOLIO UPDATE. Two assisted living facilities stabilized during the quarter
and one assisted living facility in fill-up was opened after completion of
construction. We ended the quarter with 17 assisted living facilities remaining
in fill-up, representing nine percent of revenues. Only the facility that
recently opened, representing one percent of revenues, has occupancy of less
than 50 percent.
As previously announced, Alterra Healthcare Corporation (Alterra) filed for
Chapter 11 bankruptcy protection on January 22, 2003. A joint venture between
Fortress Investment Group LLC and Emeritus Corporation was the winning bidder at
an auction held on July 17, 2003. The $76 million acquisition was approved by
the bankruptcy court on July 23, 2003. Subject to confirmation of Alterra's plan
of reorganization, our master lease should be assumed by the reorganized Alterra
at current rental levels. A hearing on confirmation of Alterra's plan of
reorganization is scheduled for October 24, 2003. Alterra has remained current
on rental payments throughout the bankruptcy process.
PAGE 2 OF 13
3Q03 EARNINGS RELEASE OCTOBER 22, 2003
Also, as previously announced, Doctors Community Health Care Corporation
(Doctors) filed for Chapter 11 bankruptcy protection on November 20, 2002. The
assets of the Doctors debtors are currently out for bid under bankruptcy court
supervision. Doctors anticipates a confirmation hearing on its plan of
reorganization to be held on December 10, 2003. Doctors did not make an interest
payment for the nine months ended September 30, 2003. We believe we are entitled
to all accrued but unrecognized interest, however, as previously stated, we do
not currently intend to recognize any interest on the loan if payment is not
received.
SUPPLEMENTAL REPORTING MEASURES. FFO stands for funds from operations, the
generally accepted measure of operating performance for the real estate
investment trust industry. EBITDA stands for earnings before interest, taxes,
depreciation and amortization. We believe that FFO and EBITDA, along with net
income and cash flow provided from operating activities, are important
supplemental measures because they provide investors an indication of our
ability to service debt, to make dividend payments and to fund other cash needs.
We primarily utilize FFO to measure our payout ratio which represents dividends
paid per share divided by FFO per diluted share. We primarily utilize EBITDA to
measure our interest coverage ratio which represents EBITDA divided by interest
expense.
FFO and EBITDA do not represent net income or cash flow provided from operating
activities as determined in accordance with generally accepted accounting
principles and should not be considered as alternative measures of profitability
or liquidity. Additionally, FFO and EBITDA, as defined by us, may not be
comparable to similarly entitled items reported by other real estate investment
trusts or other companies. Please see Exhibits 14 and 16 for reconciliations of
FFO and EBITDA to net income.
RECENT ACCOUNTING PRONOUNCEMENTS. In August, we lowered net income guidance as a
result of the Securities and Exchange Commission (SEC) clarification of Emerging
Issues Task Force (EITF) Topic D-42. To implement the clarified accounting
pronouncement, our third quarter results reflect a reduction in net income
available to common stockholders resulting from a non-cash, non-recurring charge
of $2.79 million, or $0.06 per diluted share, due to the redemption of our
8.875% Series B Cumulative Redeemable Preferred Stock. At that time, the
National Association of Real Estate Investment Trusts (NAREIT) had not
definitively pronounced the impact of this accounting clarification on its
definition of FFO. Subsequently, NAREIT has issued its recommendation that
preferred stock redemption charges should not be added back to net income in the
calculation of FFO. We have adopted this recommendation; however, we have also
disclosed FFO adjusted for the preferred stock redemption charge for enhanced
clarity.
In October, NAREIT informed its member companies that the SEC is likely to
change its position on certain aspects of the NAREIT FFO definition, including
impairment charges. Previously, the SEC accepted NAREIT's view that impairment
charges are effectively an early recognition of an expected loss on an impending
sale of property and thus should be excluded from FFO similar to other gains and
losses on sales. However, the SEC's clarified interpretation is that recurring
impairments taken on real property may not be added back to net income in the
calculation of FFO. Based on the SEC's interpretation, we have restated our
prior year FFO amounts to exclude impairment charges. This modification of FFO
does not impact our net income.
OUTLOOK FOR 2003. We are revising our guidance to reflect the significant
investment activity closed during the third quarter and the impact of recent
accounting pronouncements. We expect to report net income available to common
stockholders in the range of $1.69 to $1.72 per diluted share, and FFO in the
range of $2.77 to $2.80 per diluted share for the year 2003. Excluding the
impact of the preferred stock redemption charge, we expect to report adjusted
FFO in the range of $2.83 to $2.86 per diluted share for the year 2003. The
guidance assumes gross investments of $575-625 million, net investments of $500
million and non-recognition of interest income on the mortgage loan with Doctors
Community Health Care Corporation. Please see Exhibit 15 for a reconciliation of
the outlook for net income and FFO.
OUTLOOK FOR 2004. We are introducing guidance for the year 2004. We expect to
report net income available to common stockholders in the range of $1.71 to
$1.76 per diluted share, and FFO in the range of $3.01 to $3.06 per diluted
share for the year 2004. The guidance assumes net investments of $200 million.
PAGE 3 OF 13
3Q03 EARNINGS RELEASE OCTOBER 22, 2003
Additionally, we plan to manage the company to maintain investment grade status
with a capital structure consistent with our current profile. Please see Exhibit
15 for a reconciliation of the outlook for net income and FFO.
CONFERENCE CALL INFORMATION. We have scheduled a conference call on October 23,
2003, at 11:00 A.M. EDST to discuss our third quarter 2003 results, industry
trends, portfolio performance and outlook for the remainder of 2003 and for
2004. To participate on the webcast, log on to www.hcreit.com or www.ccbn.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 our 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 facilities, primarily skilled
nursing and assisted living facilities. At September 30, 2003, we had
investments in 321 health care facilities in 33 states with 47 operators and had
total assets of approximately $2.0 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.
FINANCIAL SCHEDULES FOLLOW
#####
PAGE 4 OF 13
3Q03 EARNINGS RELEASE OCTOBER 22, 2003
HEALTH CARE REIT, INC.
FINANCIAL SUPPLEMENT
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(IN THOUSANDS)
SEPTEMBER 30
-----------------------------
2003 2002
----------- -----------
ASSETS
Real estate investments:
Real property owned
Land $ 157,608 $ 105,480
Buildings & improvements 1,656,499 1,187,408
Construction in progress 35,335 12,791
----------- -----------
1,849,442 1,305,679
Less accumulated depreciation (136,432) (102,286)
----------- -----------
Total real property owned 1,713,010 1,203,393
Loans receivable
Real property loans 200,292 236,046
Subdebt investments 45,028 23,057
----------- -----------
245,320 259,103
Less allowance for losses on loans receivable (5,705) (7,611)
----------- -----------
239,615 251,492
----------- -----------
Net real estate investments 1,952,625 1,454,885
Other assets:
Equity investments 7,649 7,215
Deferred loan expenses 8,098 9,708
Cash and cash equivalents 8,172 21,440
Receivables and other assets 55,067 39,619
----------- -----------
78,986 77,982
----------- -----------
TOTAL ASSETS $ 2,031,611 $ 1,532,867
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Borrowings under unsecured lines of credit obligations $ 143,000 $ 72,600
Senior unsecured notes 615,000 515,000
Secured debt 145,164 51,937
Accrued expenses and other liabilities 7,323 13,688
----------- -----------
Total liabilities 910,487 653,225
Stockholders' equity:
Preferred stock 145,150 127,500
Common stock 48,016 39,057
Capital in excess of par value 1,006,983 764,261
Cumulative net income 641,366 565,321
Cumulative dividends (718,174) (612,365)
Accumulated other
comprehensive income 128 (370)
Other equity (2,345) (3,762)
----------- -----------
TOTAL STOCKHOLDERS' EQUITY 1,121,124 879,642
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 2,031,611 $ 1,532,867
=========== ===========
PAGE 5 OF 13
3Q03 EARNINGS RELEASE OCTOBER 22, 2003
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30 SEPTEMBER 30
---------------------- ----------------------
2003 2002 2003 2002
-------- -------- -------- --------
Revenues:
Rental income $ 43,306 $ 32,182 $121,798 $ 88,423
Interest income 5,797 7,127 15,927 21,022
Commitment fees and other income 872 839 2,108 2,144
Prepayment fees 0 0 0 0
-------- -------- -------- --------
Gross revenues 49,975 40,148 139,833 111,589
Expenses:
Interest expense 13,093 9,556 37,093 28,234
Provision for depreciation 12,945 9,222 35,004 25,328
General and administrative 2,995 2,496 8,452 7,040
Loan expense 717 599 2,032 1,756
Impairment of assets 0 0 0 550
Loss on extinguishment of debt 0 0 0 403
Provision for loan losses 250 250 750 750
-------- -------- -------- --------
Total expenses 30,000 22,123 83,331 64,061
-------- -------- -------- --------
Income from continuing operations 19,975 18,025 56,502 47,528
Discontinued operations:
Gain (loss) on sales of properties 4,278 439 4,312 584
Income (loss) from discontinued
operations, net 1,048 1,299 2,846 4,372
-------- -------- -------- --------
5,326 1,738 7,158 4,956
-------- -------- -------- --------
Net income 25,301 19,763 63,660 52,484
Preferred dividends 1,910 2,878 7,074 9,596
Preferred stock redemption charge 2,790 0 2,790 0
-------- -------- -------- --------
Net income available to
common stockholders $ 20,601 $ 16,885 $ 53,796 $ 42,888
======== ======== ======== ========
Average number of common shares outstanding:
Basic 44,181 38,628 41,602 35,695
Diluted 44,833 39,324 42,165 36,451
Net income available to common stockholders per share:
Basic $ 0.47 $ 0.44 $ 1.29 $ 1.20
Diluted 0.46 0.43 1.28 1.18
Funds from operations $ 29,581 $ 26,662 $ 86,256 $ 70,842
Funds from operations - adjusted 32,371 26,662 89,046 70,842
Funds from operations per share:
Basic $ 0.67 $ 0.69 $ 2.07 $ 1.98
Diluted 0.66 0.68 2.05 1.94
Funds from operations per share - adjusted:
Basic $ 0.73 $ 0.69 $ 2.14 $ 1.98
Diluted 0.72 0.68 2.11 1.94
Dividends per share $ 0.585 $ 0.585 $ 1.755 $ 1.755
PAGE 6 OF 13
3Q03 EARNINGS RELEASE OCTOBER 22, 2003
HEALTH CARE REIT, INC.
FINANCIAL SUPPLEMENT - SEPTEMBER 30, 2003
PORTFOLIO COMPOSITION ($000'S) EXHIBIT 1
BALANCE SHEET DATA # Properties # Beds/Units Balance % Balance
------------ ------------ ------- ---------
Real Property 298 26,122 $1,713,010 88%
Loans Receivable 23 2,689 200,292 10%
Subdebt Investments 0 0 45,028 2%
---------- ---------- ---------- ----------
Total Investments 321 28,811 $1,958,330 100%
INVESTMENT DATA # Properties # Beds/Units Investment (1) % Investment
------------ ------------ -------------- ------------
Assisted Living Facilities 217 14,017 $1,186,796 61%
Skilled Nursing Facilities 96 13,490 632,303 32%
Specialty Care Facilities 8 1,304 145,926 7%
---------- ---------- ---------- ----------
Real Estate Investments 321 28,811 $1,965,025 100%
NOTES: (1) REAL ESTATE INVESTMENTS INCLUDE GROSS REAL ESTATE INVESTMENTS AND
CREDIT ENHANCEMENTS WHICH AMOUNTED TO $1,958,330,000 AND
$6,695,000, RESPECTIVELY.
REVENUE COMPOSITION ($000'S) EXHIBIT 2
Three Months Ended Nine Months Ended
September 30, 2003 September 30, 2003
------------------ ------------------
REVENUE BY INVESTMENT TYPE (1)
Real Property $ 45,570 88% $129,289 89%
Loans Receivable 5,455 11% 15,217 10%
Subdebt Investments 491 1% 1,160 1%
-------- -------- -------- --------
Total $ 51,516 100% $145,666 100%
REVENUE BY FACILITY TYPE (1)
Assisted Living Facilities $ 27,107 53% $ 80,499 55%
Skilled Nursing Facilities 21,385 42% 56,513 39%
Specialty Care Facilities 3,024 5% 8,654 6%
-------- -------- -------- --------
Total $ 51,516 100% $145,666 100%
NOTES: (1) REVENUES INCLUDE GROSS REVENUES AND REVENUES FROM DISCONTINUED
OPERATIONS.
PAGE 7 OF 13
3Q03 EARNINGS RELEASE OCTOBER 22, 2003
OPERATOR CONCENTRATION ($000'S) EXHIBIT 3
CONCENTRATION BY INVESTMENT # Properties Investment % Investment
------------ ---------- ------------
Emeritus Corporation 30 $ 233,320 12%
Southern Assisted Living, Inc. 46 212,746 11%
Commonwealth Communities L.L.C. 14 201,100 10%
Life Care Centers of America, Inc. 17 118,591 6%
Home Quality Management, Inc. 19 113,631 6%
Remaining Operators (42) 195 1,085,637 55%
---------- ---------- ----------
Total 321 $1,965,025 100%
CONCENTRATION BY REVENUE # Properties Revenue (1) % Revenue
------------ ----------- ---------
Commonwealth Communities L.L.C. 14 $ 20,837 14%
Alterra Healthcare Corporation 45 11,220 8%
Home Quality Management, Inc. 19 10,830 7%
Life Care Centers of America, Inc. 17 10,732 7%
Merrill Gardens L.L.C. 11 10,599 7%
Remaining Operators (42) 215 81,448 57%
---------- ---------- ----------
Total 321 $ 145,666 100%
NOTES: (1) NINE MONTHS ENDED SEPTEMBER 30, 2003.
GEOGRAPHIC CONCENTRATION ($000'S) EXHIBIT 4
CONCENTRATION BY REGION # Properties Investment % Investment
------------ ---------- ------------
South 197 $ 985,957 50%
Northeast 44 408,727 21%
Midwest 43 305,216 16%
West 37 265,125 13%
---------- ---------- ----------
Total 321 $1,965,025 100%
CONCENTRATION BY STATE # Properties Investment % Investment
------------ ---------- ------------
Massachusetts 24 $ 271,097 14%
North Carolina 45 206,992 11%
Florida 33 176,838 9%
Ohio 13 118,886 6%
Texas 29 117,046 6%
Remaining States (28) 177 1,074,166 54%
---------- ---------- ----------
Total 321 $1,965,025 100%
REVENUE BY STATE # Properties Revenue (1) % Revenue
------------ ----------- ---------
Massachusetts 24 $ 24,665 17%
Florida 33 14,976 10%
Texas 29 12,209 8%
Ohio 13 9,006 6%
Tennessee 18 7,824 5%
Remaining States (28) 204 76,986 54%
---------- ---------- ----------
Total 321 $ 145,666 100%
NOTES: (1) NINE MONTHS ENDED SEPTEMBER 30, 2003.
PAGE 8 OF 13
3Q03 EARNINGS RELEASE OCTOBER 22, 2003
COMMITTED INVESTMENT BALANCES EXHIBIT 5
($000's except Investment per Bed/Unit)
Committed Investment
# Properties # Beds/Units Balance (1) per Bed/Unit
------------ ------------ ----------- ------------
Assisted Living Facilities 217 14,017 $1,205,456 $ 86,000
Skilled Nursing Facilities 96 13,490 632,303 46,872
Specialty Care Facilities 8 1,304 152,143 116,674
---------- ---------- ---------- ----------
Total 321 28,811 $1,989,902 -na-
NOTES: (1) COMMITTED BALANCE INCLUDES GROSS REAL ESTATE INVESTMENTS, CREDIT
ENHANCEMENTS AND UNFUNDED COMMITMENTS FOR WHICH INITIAL FUNDING HAD
COMMENCED.
LEASE UP STATISTICS ON ASSISTED LIVING FACILITIES ($000'S) EXHIBIT 6
Average Months
OCCUPANCY # Properties in Operation Revenue (1) % of Revenue
- --------- ------------ ------------ ----------- ------------
0% - 50% 1 1 $ 822 1%
50% - 70% 5 34 6,097 4%
70% + 11 31 5,594 4%
------- ------- ------- -------
17 -na- $12,513 9%
NOTES: (1) INTEREST AND RENTAL INCOME FOR THE NINE MONTHS ENDED SEPTEMBER 30,
2003.
SELECTED FACILITY DATA EXHIBIT 7
Coverage Data
% Payor Mix --------------------
------------------- Before After
Census Private Medicare Mgt. Fees Mgt. Fees
------ ------- -------- --------- ---------
Assisted Living Facilities 84% 97% 0% 1.30x 1.10x
Skilled Nursing Facilities 86% 18% 16% 1.72x 1.31x
Specialty Care Facilities 69% 14% 38% 2.00x 1.52x
---- ----
Weighted Averages 1.51x 1.22x
NOTES: DATA AS OF JUNE 30, 2003.
PAGE 9 OF 13
3Q03 EARNINGS RELEASE OCTOBER 22, 2003
CREDIT SUPPORT ($000'S) EXHIBIT 8
Balance % Investment
------- ------------
Cross Defaulted $1,860,454 95% of gross real estate investments
Cross Collateralized 160,889 80% of real property loans receivable
Master Leases 1,372,198 80% of real property owned
CURRENT CAPITALIZATION ($000'S)
Balance % Balance
------- ---------
Borrowings Under Bank Lines $ 143,000 7%
Long-Term Debt Obligations 760,164 38%
Stockholders' Equity 1,121,124 55%
---------- ----------
Total Book Capitalization $2,024,288 100%
LEVERAGE & PERFORMANCE RATIOS
Debt/Total Book Cap 45%
Debt/Total Market Cap 36%
Interest Coverage 3.94x 3rd Qtr.
3.64x YTD
FFO Payout Ratio 89% 3rd Qtr.
86% YTD
FFO Payout Ratio 81% 3rd Qtr.
- Adjusted 83% YTD
REVENUE MATURITIES ($000'S) EXHIBIT 9
OPERATING LEASE EXPIRATIONS & LOAN MATURITIES
Current Lease Current Interest Interest and
Year Revenue (1) Revenue (1) Lease Revenue % of Total
---- ----------- ----------- ------------- ----------
2003 $ 886 $ 1,832 $ 2,718 1%
2004 859 658 1,517 1%
2005 0 1,392 1,392 1%
2006 0 4,237 4,237 2%
2007 0 2,716 2,716 1%
Thereafter 202,715 17,344 220,059 94%
-------- -------- -------- --------
Total $204,460 $ 28,179 $232,639 100%
NOTES: (1) REVENUE IMPACT BY YEAR, ANNUALIZED.
DEBT MATURITIES AND PRINCIPAL PAYMENTS ($000'S) EXHIBIT 10
Year Lines of Credit (1) Senior Notes Secured Debt (1) Total
---- ------------------- ------------ ---------------- -----
2003 $ 0 $ 0 $ 520 $ 520
2004 30,000 40,000 62,328 132,328
2005 0 0 2,522 2,522
2006 225,000 50,000 2,703 277,703
2007 0 175,000 14,709 189,709
2008 0 100,000 9,879 109,879
2009 0 0 12,938 12,938
Thereafter 0 250,000 99,565 349,565
---------- ---------- ---------- ----------
Total $ 255,000 $ 615,000 $ 205,164 $1,075,164
NOTES: (1) REFLECTED AT 100% CAPACITY.
PAGE 10 OF 13
3Q03 EARNINGS RELEASE OCTOBER 22, 2003
INVESTMENT ACTIVITY ($000'S) EXHIBIT 11
Three Months Ended Nine Months Ended
September 30, 2003 September 30, 2003
------------------ ------------------
FUNDING BY INVESTMENT TYPE
Real Property $310,828 91% $477,044 91%
Loans Receivable 6,753 2% 20,136 4%
Subdebt Investments 22,588 7% 26,721 5%
-------- -------- -------- --------
Total $340,169 100% $523,901 100%
FUNDING BY FACILITY TYPE
Assisted Living Facilities $321,595 95% $384,550 73%
Skilled Nursing Facilities 10,741 3% 114,850 22%
Specialty Care Facilities 7,833 2% 24,501 5%
-------- -------- -------- --------
Total $340,169 100% $523,901 100%
DISPOSITION ACTIVITY ($000'S)
EXHIBIT 12
Three Months Ended Nine Months Ended
September 30, 2003 September 30, 2003
------------------ ------------------
DISPOSITIONS BY INVESTMENT TYPE
Real Property $44,494 82% $44,749 59%
Loans Receivable 10,073 18% 30,631 41%
------- ------- ------- -------
Total $54,567 100% $75,380 100%
DISPOSITIONS BY FACILITY TYPE
Assisted Living Facilities $45,297 83% $66,110 88%
Skilled Nursing Facilities 9,270 17% 9,270 12%
------- ------- ------- -------
Total $54,567 100% $75,380 100%
DISCONTINUED OPERATIONS ($000'S) EXHIBIT 13
Three Months Ended Nine Months Ended
September 30, 2003 September 30, 2003
------------------ ------------------
REVENUES
Rental income $1,541 $5,833
EXPENSES
Interest expense 180 1,219
Provision for depreciation 313 1,768
------ ------
Income (loss) from discontinued
operations, net $1,048 $2,846
PAGE 11 OF 13
3Q03 EARNINGS RELEASE OCTOBER 22, 2003
FUNDS FROM OPERATIONS RECONCILIATION EXHIBIT 14
(Amounts in 000's except per share data)
Three Months Ended Nine Months Ended
September 30 September 30
------------------------------ ------------------------------
2003 2002 2003 2002
----------- ----------- ----------- -----------
Net income available to common stockholders $ 20,601 $ 16,885 $ 53,796 $ 42,888
Provision for depreciation (1) 13,258 10,216 36,772 28,538
Loss (gain) on sales of properties (4,278) (439) (4,312) (584)
----------- ----------- ----------- -----------
Funds from operations 29,581 26,662 86,256 70,842
Preferred stock redemption charge 2,790 0 2,790 0
----------- ----------- ----------- -----------
Funds from operations - adjusted $ 32,371 $ 26,662 $ 89,046 $ 70,842
Average common shares outstanding:
Basic 44,181 38,628 41,602 35,695
Diluted 44,833 39,324 42,165 36,451
Per share data:
Net income available to common stockholders
Basic $ 0.47 $ 0.44 $ 1.29 $ 1.20
Diluted 0.46 0.43 1.28 1.18
Funds from operations
Basic $ 0.67 $ 0.69 $ 2.07 $ 1.98
Diluted 0.66 0.68 2.05 1.94
Funds from operations - adjusted
Basic $ 0.73 $ 0.69 $ 2.14 $ 1.98
Diluted 0.72 0.68 2.11 1.94
FFO PAYOUT RATIO
Dividends per share $ 0.585 $ 0.585 $ 1.755 $ 1.755
FFO per diluted share $ 0.66 $ 0.68 $ 2.05 $ 1.94
----------- ----------- ----------- -----------
FFO payout ratio 89% 86% 86% 90%
FFO PAYOUT RATIO - ADJUSTED
Dividends per share $ 0.585 $ 0.585 $ 1.755 $ 1.755
FFO per diluted share - adjusted $ 0.72 $ 0.68 $ 2.11 $ 1.94
----------- ----------- ----------- -----------
FFO payout ratio - adjusted 81% 86% 83% 90%
NOTES: (1) PROVISION FOR DEPRECIATION INCLUDES PROVISION FOR DEPRECIATION FROM
DISCONTINUED OPERATIONS.
PAGE 12 OF 13
3Q03 EARNINGS RELEASE OCTOBER 22, 2003
FFO OUTLOOK RECONCILIATION EXHIBIT 15
(Amounts in 000's except per share data)
Year Ended Year Ended
December 31, 2003 December 31, 2004
------------------------- ------------------------
Low High Low High
--------- --------- --------- ---------
Net income available to common stockholders $ 74,212 $ 75,512 $ 85,500 $ 88,000
Loss (gain) on sales of properties (4,312) (4,312)
Provision for depreciation (1) 52,000 52,000 65,000 65,000
--------- --------- --------- ---------
Funds from operations 121,900 123,200 $ 150,500 $ 153,000
Preferred stock redemption charge 2,790 2,790
--------- ---------
Funds from operations - adjusted $ 124,690 $ 125,990
Average common shares outstanding (diluted) 44,000 44,000 50,000 50,000
Per share data (diluted):
Net income available to common stockholders $ 1.69 $ 1.72 $ 1.71 $ 1.76
Funds from operations 2.77 2.80 3.01 3.06
Funds from operations - adjusted 2.83 2.86
NOTES: (1) PROVISION FOR DEPRECIATION INCLUDES PROVISION FOR DEPRECIATION FROM
DISCONTINUED OPERATIONS.
EBITDA RECONCILIATION ($000'S) EXHIBIT 16
Three Months Ended Nine Months Ended
September 30 September 30
------------ ------------
2003 2002 2003 2002
-------- -------- -------- --------
Net income $ 25,301 $ 19,763 $ 63,660 $ 52,484
Provision for depreciation (1) 13,258 10,216 36,772 28,538
Interest expense (1) 13,273 10,450 38,312 30,480
Capitalized interest 490 0 1,128 0
Amortization (2) 1,667 1,037 2,855 2,961
Provision for loan losses 250 250 750 750
-------- -------- -------- --------
EBITDA $ 54,239 $ 41,716 $143,477 $115,213
INTEREST COVERAGE RATIO
Interest expense (1) $ 13,273 $ 10,450 $ 38,312 $ 30,480
Capitalized interest 490 0 1,128 0
-------- -------- -------- --------
Total interest 13,763 10,450 39,440 30,480
EBITDA 54,239 41,716 143,477 115,213
-------- -------- -------- --------
Interest coverage ratio 3.94x 3.99x 3.64x 3.78x
NOTES: (1) PROVISION FOR DEPRECIATION AND INTEREST EXPENSE INCLUDE PROVISION
FOR DEPRECIATION AND INTEREST EXPENSE FROM DISCONTINUED OPERATIONS.
(2) AMORTIZATION INCLUDES AMORTIZATION OF DEFERRED LOAN EXPENSES,
RESTRICTED STOCK AND STOCK OPTIONS.
PAGE 13 OF 13