<PAGE> 1
FORM 10-Q/A
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended JUNE 30, 1997
------------------------------------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ______________________________ to
____________________________________
HEALTH CARE REIT, INC.
- ------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 34-1096634
- ------------- --------------
(State or jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One SeaGate, Suite 1500, Toledo, Ohio 43604
- ------------------------------------- ---------
(Address of principal executive office) (Zip Code)
(Registrant's telephone number, including area code) (419) 247-2800
-----------------------
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X . No .
------ -------
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. Yes _____. No _____.
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of July 31, 1997.
Class: Shares of Common Stock, $1.00 par value
Outstanding 22,076,768 shares
<PAGE> 2
HEALTH CARE REIT, INC.
INDEX
Page
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Consolidated Balance Sheets - June 30, 1997
and December 31, 1996 3
Consolidated Statements of Income - Three
and six months ended June 30, 1997 and 1996 4
Consolidated Statements of Shareholders'
Equity - Six months ended June 30, 1997
and 1996 5
Consolidated Statements of Cash Flows-
Six months ended June 30, 1997 and 1996 6
Notes to Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9
Part II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders 11
Item 5. Other Information 12
Item 6. Exhibits and Reports on Form 8-K 13
SIGNATURES 14
EXHIBIT INDEX 15
<PAGE> 3
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
--------------------
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
HEALTH CARE REIT, INC. AND SUBSIDIARIES
<TABLE>
<CAPTION>
JUNE 30 DECEMBER 31
1997 1996
(UNAUDITED) (NOTE)
----------- -----------
(IN THOUSANDS)
<S> <C> <C>
ASSETS
Real estate investments:
Loans receivable:
Mortgage loans $ 375,060 $ 292,442
Construction loans 32,391 61,013
Working capital loans 7,348 4,727
--------- ---------
414,799 358,182
Investment in operating leases 211,638 153,623
Investment in direct financing leases 10,732 10,876
--------- ---------
637,169 522,681
Less allowance for losses 10,087 9,787
--------- ---------
NET REAL ESTATE INVESTMENTS 627,082 512,894
Other Assets:
Investments 1,766 768
Deferred loan expenses 2,568 1,432
Cash and cash equivalents 973 581
Receivables and other assets 5,206 4,156
--------- ---------
10,513 6,937
--------- ---------
TOTAL ASSETS $ 637,595 $ 519,831
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Borrowings under line of credit arrangements $ 44,600 $ 92,125
Senior notes 162,000 82,000
Other long-term obligations 10,073 10,270
Accrued expenses and other liabilities 11,460 9,900
--------- ---------
TOTAL LIABILITIES 228,133 194,295
Shareholders' equity:
Preferred Stock, $1.00 par value:
Authorized - 10,000,000 shares
Issued and outstanding - None
Common Stock, $1.00 par value:
Authorized - 40,000,000 shares
Issued and outstanding - 22,042,468
in 1997 and 18,320,291 in 1996 22,042 18,320
Capital in excess of par value 379,866 298,281
Undistributed net income 8,724 8,167
Unrealized gains on investment securities
available for sale 1,438 768
Unamortized restricted stock (2,608)
--------- ---------
TOTAL SHAREHOLDERS' EQUITY 409,462 325,536
--------- ---------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 637,595 $ 519,831
========= =========
</TABLE>
NOTE: The balance sheet at December 31, 1996 has been derived from the audited
financial statements at that date but does not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements.
See notes to consolidated financial statements
-3-
<PAGE> 4
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
HEALTH CARE REIT, INC. AND SUBSIDIARIES
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30 JUNE 30
1997 1996 1997 1996
------------------ -----------------
(IN THOUSANDS EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
REVENUES:
Interest income $11,319 $ 8,996 $21,935 $17,100
Prepayment fees 477 1,541 477 1,541
Operating leases:
Rent 5,461 2,264 10,424 4,225
Gain on exercise of options 0 576 0 576
Direct financing leases:
Lease income 357 366 714 733
Loan and commitment fees 717 845 1,301 1,265
Other income 117 37 166 75
------- ------- ------- -------
Total Revenue $18,448 $14,625 $35,017 $25,515
EXPENSES:
Interest:
Line of credit arrangements $ 724 $ 2,457 $ 2,885 $ 4,753
Senior notes and other long-
term obligations 3,028 1,592 4,878 2,807
Loan expense 161 202 378 389
Provision for depreciation 1,276 555 2,461 1,030
Provision for losses 150 150 300 300
General and administrative expenses 1,181 1,100 2,361 1,990
------- ------- ------- -------
Total expenses $ 6,520 $ 6,056 13,263 11,269
------- ------- ------- -------
Net Income $11,928 $ 8,569 $21,754 $14,246
======= ======= ======= =======
Average number of shares outstanding 21,960 13,058 20,638 12,555
Net income per share $ 0.54 $ 0.66 $ 1.05 $ 1.13
Dividends per share $ 0.525 $ 0.520 $ 1.045 $ 1.040
</TABLE>
See notes to consolidated financial statements
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<PAGE> 5
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (UNAUDITED)
HEALTH CARE REIT, INC. AND SUBSIDIARIES
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30
1997 1996
(IN THOUSANDS)
<S> <C> <C>
Balances at beginning of period $ 325,536 $ 187,598
Net income 21,754 14,246
Proceeds from issuance of shares under the
dividend reinvestment plan - 89,751 in
1997 and 60,690 in 1996 2,102 1,278
Proceeds from issuance of shares under the
employee stock incentive plan - 152,426
in 1997 and 40,000 in 1996 3,459 714
Net proceeds from sale of 3,480,000 shares in 1997
and 2,322,220 in 1996 79,746 48,184
Change in net unrecognized gain on
investment securities available for sale 670 823
Reserved for restricted stock, net of amortization (2,608)
Cash dividends paid (21,197) (12,546)
--------- ---------
Balances at end of period $ 409,462 $ 240,297
========= =========
</TABLE>
See notes to consolidated financial statements
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<PAGE> 6
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
HEALTH CARE REIT, INC. AND SUBSIDIARIES
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30
1997 1996
--------------------------
(IN THOUSANDS)
OPERATING ACTIVITIES
<S> <C> <C>
Net income $ 21,754 $ 14,246
Adjustments to reconcile net income to net cash
Provision for depreciation 2,489 1,030
Provision for losses, net of charge-offs 300 18
Amortization of loan and organization expenses 379 391
Loan and commitment fees earned less than cash received 452 1,023
Direct financing lease income less than cash received 144 65
Interest income in excess of cash received (17) (198)
Increase in accrued expenses and other liabilities 1,108 752
Increase in other receivables and prepaid items (1,057) (863)
--------- ---------
NET CASH PROVIDED FROM OPERATING ACTIVITIES 25,552 16,464
INVESTING ACTIVITIES
Investment in operating-lease properties (60,476) (20,218)
Investment in loans receivable (69,361) (83,349)
Principal collected on loans 12,761 18,365
Proceeds from exercise of lease purchase options 9,508
Other (349) (85)
--------- ---------
NET CASH USED IN INVESTING ACTIVITIES (117,425) (75,779)
FINANCING ACTIVITIES
Net payments under line of credit arrangements (47,525) (7,800)
Principal payments on long-term obligations (197) (289)
Net proceeds from the issuance of Common Stock 82,699 50,263
Proceeds from issuance of Senior Notes 80,000 30,000
Increase in deferred loan expense (1,515) (494)
Cash distributions to shareholders (21,197) (12,546)
--------- ---------
NET CASH PROVIDED FROM FINANCING ACTIVITIES 92,265 59,134
Increase/(decrease) in cash and cash equivalents 392 (181)
--------- ---------
Cash and cash equivalents at beginning of period 581 860
--------- ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 973 $ 679
========= =========
Supplemental Cash Flow Information -- Interest Paid $ 7,487 $ 6,876
========= =========
</TABLE>
See notes to consolidated financial statements
-6-
<PAGE> 7
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HEALTH CARE REIT, INC. AND SUBSIDIARIES
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information and with instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered for a fair presentation have been
included. Operating results for the six months ended June 30, 1997 are not
necessarily an indication of the results that may be expected for the year ended
December 31, 1997. For further information, refer to the financial statements
and footnotes thereto included in the Company's annual report on Form 10-K for
the year ended December 31, 1996.
Net income per share has been computed by dividing net income by the average
number of common shares and common stock equivalents outstanding.
NOTE B - REAL ESTATE INVESTMENTS
During the six months ended June 30, 1997, the Company provided permanent
mortgage financings of $32,421,000, invested $43,391,000 in operating leases and
made construction advances of $51,480,000. During the six months ended June 30,
1997, the Company received principal payments on real estate mortgages of
$12,761,000 and had net advances on working capital loans of $2,621,000.
With respect to the above-mentioned construction advances, funding associated
with 21 construction loans represented $34,319,000, and funding for construction
in progress in connection with 12 properties owned directly by the Company
totaled $17,085,000. During the six months ended June 30, 1997, eight of the
construction loans completed the construction phase of the Company's investment
process and were converted to investments in permanent mortgage loans, with an
aggregate investment of $62,940,000. Also during the six months ended June 30,
1997, one of the construction properties in progress completed the construction
phase of the Company's investment process and was converted to a permanent
operating lease, with an investment balance of $1,588,000.
At June 30, 1997, the Company had $238,819,000 in unfunded commitments.
NOTE C - INDEBTEDNESS AND SHAREHOLDERS' EQUITY
In January 1997, in connection with the underwriters' exercise of an over
allotment option associated with the Company's December 18, 1996 offering of
2,200,000 shares of common stock, the Company issued 330,000 shares of Common
Stock, $1.00 par value per share, at the price of $23.875 per share, which
generated net proceeds of $7,485,000 to the Company.
During the six month period ended June 30, 1997, the Company issued 3,150,000
shares of Common Stock, $1.00 par value per share, at the price of $24.375 per
share, which generated net proceeds to the Company of $72,261,000.
In March 1997, the Company closed a $175 million unsecured credit facility which
replaced the Company's then
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<PAGE> 8
existing secured credit facility. Simultaneous with the closing of the new
credit facility, all senior noteholders released collateral which had served as
security for the Company's then outstanding $82 million of senior indebtedness.
In April 1997, the Company completed the sale of $80 million of Senior Unsecured
Notes. The Company priced $20 million of notes due 2000, $20 million of notes
due 2002 and $40 million of notes due 2004. The notes have a weighted average
interest rate of 7.91%.
The Company has a total of $185,000,000 in unsecured credit facilities bearing
interest at the lenders' prime rate or LIBOR plus 1.125%, of which $140,400,000
was available at June 30, 1997.
NOTE D - INVESTMENT SECURITIES AVAILABLE FOR SALE
Investment securities available for sale are stated at fair value with
unrealized gains and losses reported in a separate component of shareholders'
equity. At June 30, 1997, available-for-sale securities are the common stock of
one corporation.
NOTE E - CONTINGENT LIABILITIES
As disclosed in the financial statements for the year ended December 31, 1996,
the Company was contingently liable for certain obligations amounting to
$18,815,000. No significant change in these contingencies had occurred as of
June 30, 1997.
NOTE F - DISTRIBUTIONS PAID TO SHAREHOLDERS
On May 20, 1997, the Company paid a dividend of $0.525 per share to shareholders
of record on May 5, 1997. This dividend related to the period from January 1,
1997 through March 31, 1997.
NOTE G - EARNINGS PER SHARE
In February 1997, the Financial Accounting Standards Board issued Statement No.
128, Earnings per Share, which is required to be adopted on December 31, 1997.
At that time, the Company will be required to change the method currently used
to compute earnings per share. The impact on primary earnings per share and
fully diluted earnings per share is not expected to be material.
NOTE H - SUBSEQUENT EVENTS
In July 1997, Moody's Investor Service assigned a `Ba1' rating to the Company's
Senior Unsecured Notes. In addition to the Moody's rating, the Company's Senior
Unsecured Notes are rated `BBB-' by Duff & Phelps Credit Rating Co.
On July 22, 1997, the Company declared a dividend of $0.53 per share payable on
August 20, 1997 to shareholders of record on August 4, 1997. The dividend
relates to the period from April 1, 1997 through June 30, 1997.
-8-
<PAGE> 9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
-------------------------------------------------
CONDITION AND RESULTS OF OPERATIONS
-----------------------------------
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
At June 30, 1997, the Company's net real estate investments totaled
approximately $627,082,000, which included 56 skilled nursing facilities, 82
assisted living facilities, 12 retirement centers, six specialty care facilities
and two behavioral care facilities. The Company funds its investments through a
combination of long-term and short-term financing, utilizing both debt and
equity.
As of June 30, 1997, the Company had shareholders' equity of $409,462,000 and a
total outstanding debt balance of $216,673,000, which represents a debt to
equity ratio of 0.53 to 1.0.
In January 1997, in connection with the underwriters' exercise of an over
allotment option associated with the Company's December 18, 1996 offering of
2,200,000 shares of common stock, the Company issued 330,000 shares of Common
Stock, $1.00 par value per share, at the price of $23.875 per share, which
generated net proceeds of $7,485,000 to the Company.
During the six months ended June 30, 1997, the Company issued 3,150,000 shares
of Common Stock, $1.00 par value per share, at the price of $24.375 per share,
which generated net proceeds to the Company of $72,261,000.
In April 1997, the Company completed the sale of $80 million of Senior Unsecured
Notes. The Company priced $20 million of notes due 2000, $20 million of notes
due 2002 and $40 million of notes due 2004. The notes have a weighted average
interest rate of 7.91%.
During the six months ended June 30, 1997, the proceeds derived from the
Company's capital raising activities were used to reduce bank debt under the
Company's revolving lines of credit arrangements.
In March 1997, the Company closed a $175 million unsecured credit facility which
replaced the Company's then existing secured credit facility. Simultaneous with
the closing of the new credit facility, all senior noteholders released
collateral which had served as security for the Company's then outstanding $82
million of senior indebtedness.
As of June 30, 1997, the Company had approximately $238,819,000 in unfunded
commitments. Under the Company's line of credit arrangements, available funding
totaled $140,400,000. The Company believes its liquidity and various sources of
available capital are sufficient to fund operations, finance future investments,
and meet debt service and dividend requirements.
RESULTS OF OPERATIONS
- ---------------------
Revenues for the three months ended June 30, 1997 were $18,448,000 as compared
with $14,625,000 for the three months ended June 30, 1996. Revenue growth
resulted primarily from increased interest income of $2,323,000 and increased
operating lease income of $3,197,000 as a result of additional real estate
investments made during the past twelve months.
Revenues for the six months ended June 30, 1997 were $35,017,000 as compared
with $25,515,000 for the six months ended June 30, 1996, an increase of
$9,502,000 or 37%. Revenue growth resulted primarily from increased interest
income of $4,835,000 and increased operating lease income of $6,199,000 as a
result of additional real estate investments made during the past twelve months.
The growth in interest and rental income for the three and six month periods
ended June 30, 1997 was offset
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<PAGE> 10
by a high incidence of prepayment fees and gains on the exercise of purchase
options earned during the second quarter of 1996, which totaled $2,117,000 as
compared to $477,000 for the same period in 1997.
Expenses for the three months ended June 30, 1997 totaled $6,520,000, an
increase of $464,000 from expenses of $6,056,000 for the same period in 1996.
The increase in total expenses was primarily related to additional expense
associated with the provision for depreciation, which was offset by a decrease
in interest expense.
Expenses for the six months ended June 30, 1997 totaled $13,263,000, an increase
of $1,994,000 from expenses of $11,269,000 for the same period in 1996. The
increase in total expenses was primarily related to an increase in interest
expense, additional expense associated with the provision for depreciation and
an increase in general and administrative expenses.
Interest expense for the three months ended June 30, 1997 was $3,752,000 as
compared with $4,049,000 for the same period in 1996. The decrease in the 1997
period was primarily due to lower average borrowings under the Company's lines
of credit arrangements, which was offset by the issuance of $80,000,000 Senior
Unsecured Notes in April 1997.
Interest expense for the six months ended June 30, 1997 was $7,763,000 as
compared with $7,560,000 for the same period in 1996. The increase in the 1997
period was primarily due to the issuance of $80,000,000 Senior Unsecured Notes
in April 1997.
The provision for depreciation for the three and six month periods ended June
30, 1997 totaled $1,276,000 and $2,461,000 respectively, an increase of $721,000
and $1,431,000 over the comparable periods in 1996 as a result of additional
investments in properties owned directly by the Company.
General and administrative expense for the three and six month periods ended
June 30, 1997 totaled $1,181,000 and $2,361,000 respectively, as compared with
$1,100,000 and $1,990,000 for the same periods in 1996. The expenses for the
three and six month periods in 1997 were 6.40% and 6.74% of revenues as compared
with 7.52% and 7.80% for the same periods in 1996.
As a result of the various factors mentioned above, net income for the three and
six month periods ended June 30, 1997 was $11,928,000, or $0.54 per share, and
$21,754,000, or $1.05 per share, respectively, as compared with $8,569,000, or
$0.66 per share, and $14,246,000, or $1.13 per share, for the comparable periods
in 1996. Net income for the three months ended June 30, 1996 included
$2,117,000, or $0.16 per share, of prepayment fees and gains on the exercise of
purchase options, as compared with $477,000, or $0.02 per share, for the same
period in 1997.
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<PAGE> 11
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
---------------------------------------------------
The annual meeting of shareholders of Health Care REIT, Inc. was duly called and
held on April 22, 1997 in Toledo, Ohio. Proxies for the meeting were solicited
on behalf of the Company's management and Board of Directors pursuant to
Regulation 14A of the General Rules and Regulations of the Commission. There was
no solicitation in opposition to the management's nominees for election as
directors as listed in the Proxy Statement, and all such nominees were elected.
Votes were cast at the meeting upon the proposals described in the Proxy
Statement for the meeting (filed with the Commission pursuant to Regulation 14A
and incorporated herein by reference) as follows:
Proposal #1 - The election of three directors:
<TABLE>
<CAPTION>
Nominee For Against
- ---------------------------------- ----------------------------- ---------------------------
<S> <C> <C>
Pier C. Borra 20,160,025 190,946
George L. Chapman 20,180,539 170,432
Sharon M. Oster 20,136,588 214,383
Proposal #2 - The approval of an amendment to the Company's 1995 Stock
Incentive Plan:
</TABLE>
<TABLE>
<S> <C>
For 10,782,112
Against 1,698,646
Abstain 500,699
Proposal #3 - The approval of the Company's Stock Plan for
Non-Employee Directors:
For 11,083,659
Against 1,414,139
Abstain 483,659
Proposal #4 - The approval of an amendment to the Company's By-Laws:
For 19,887,943
Against 141,289
Abstain 321,739
Proposal #5 - The ratification of the appointment of Ernst &
Young LLP as independent auditors for the fiscal year 1997:
For 20,104,502
Against 90,124
Abstain 156,345
</TABLE>
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<PAGE> 12
ITEM 5. OTHER INFORMATION
-----------------
On April 2, 1997, the Company issued a press release in which it announced that
during the first quarter of 1997 it had funded $89.4 million of new investments.
On April 8, 1997, the Company filed a report on Form 8-K that included the
documentation relating to the $175 million unsecured credit facility.
On April 9, 1997, the Company issued a press release in which it announced that
the underwriters for the Company's March 11, 1997 offering of 3,000,000 common
shares exercised an over allotment option to purchase 150,000 additional shares
at a purchase price of $24.375 per share.
On April 18, 1997, the Company issued a press release in which it announced the
sale of $80 million of unsecured notes.
On April 22, 1997, the Company issued a press release in which it announced that
the Board of Directors voted to pay a quarterly cash dividend of $.525 per share
on May 20, 1997 payable to shareholders of record as of May 5, 1997. Also on
April 22, 1997, the Company filed a report on Form 8-K that included the
documentation relating to the $80 million unsecured senior notes.
On April 23, 1997, the Company issued a press release in which it announced
financial results for the first quarter 1997.
-12-
<PAGE> 13
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
--------------------------------
(a) Reports
27 Financial Data Schedule
99.1 Press release dated April 2, 1997
99.2 Press release dated April 9, 1997
99.3 Press release dated April 18, 1997
99.4 Press release dated April 22, 1997
99.5 Press release dated April 23, 1997
(b) Reports on Form 8-K
Form 8-K filed on April 8, 1997
Form 8-K filed on April 22, 1997
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<PAGE> 14
Pursuant to the requirement of the Securities and Exchange Act of 1934, the
Registrant had duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
HEALTH CARE REIT, INC.
Date: August 5, 1997 By: GEORGE L. CHAPMAN
-------------------------- -----------------------------------
George L. Chapman,
Chairman, Chief Executive Officer,
and President
Date: August 5, 1997 By: EDWARD F. LANGE, JR.
------------------------- -----------------------------------
Edward F. Lange, Jr.,
Chief Financial Officer
Date: August 5, 1997 By: MICHAEL A. CRABTREE
------------------------- -----------------------------------
Michael A. Crabtree,
Chief Accounting Officer
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<PAGE> 15
EXHIBIT INDEX
The following documents are included in this Form 10-Q as Exhibits:
DESIGNATION
NUMBER UNDER
ITEM 601 OF PAGE
REGULATION S-K EXHIBIT DESCRIPTION NUMBER
-------------- ------------------------------------ -------
27 Financial Data Schedule
99.1 Press release dated April 2, 1997
99.2 Press release dated April 9, 1997
99.3 Press release dated April 18, 1997
99.4 Press release dated April 22, 1997
99.5 Press release dated April 23, 1997
-15-
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000766704
<NAME> Health Care Reit, Inc.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 973
<SECURITIES> 1,766
<RECEIVABLES> 5,206
<ALLOWANCES> 10,087
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 220,581
<DEPRECIATION> 8,943
<TOTAL-ASSETS> 637,595
<CURRENT-LIABILITIES> 0
<BONDS> 216,673
<COMMON> 22,042
0
0
<OTHER-SE> 387,420
<TOTAL-LIABILITY-AND-EQUITY> 637,595
<SALES> 0
<TOTAL-REVENUES> 35,017
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 2,839
<LOSS-PROVISION> 300
<INTEREST-EXPENSE> 7,763
<INCOME-PRETAX> 21,754
<INCOME-TAX> 0
<INCOME-CONTINUING> 21,754
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 21,754
<EPS-PRIMARY> 0.54
<EPS-DILUTED> 0.54
</TABLE>
<PAGE> 1
EXHIBIT 99.1
F O R I M M E D I A T E R E L E A S E
April 2, 1997
For more information contact:
Erin Ibele - (419) 247-2800
Ed Lange - (419) 247-2800
HEALTH CARE REIT, INC. ANNOUNCES RECORD
NEW INVESTMENTS OF $89.4 MILLION FOR FIRST QUARTER
Toledo, Ohio, April 2, 1997..... HEALTH CARE REIT, INC. (NYSE/HCN) announced
record quarterly investment activity for the first quarter of 1997 totaling
$89,378,000.
First quarter investment activity, inclusive of recurring construction activity
of $26,183,000, included $44,215,000 of operating leases and $45,163,000 of
mortgage loans. These investments were comprised of $47,554,000 for 30 assisted
living facilities, $15,068,000 for six nursing homes, $24,940,000 for two
specialty care facilities and $1,816,000 for one retirement center. Funding was
provided to 17 operators in 14 states.
Health Care REIT, Inc., with headquarters in Toledo, Ohio, is a real estate
investment trust, which invests in health care facilities, primarily nursing
homes, assisted living facilities and retirement centers. At December 31, 1996
the company had investments in 137 health care facilities in 28 states and had
total assets of approximately $520 million.
#####
<PAGE> 1
EXHIBIT 99.2
F O R I M M E D I A T E R E L E A S E
April 9, 1997
For more information contact:
Erin Ibele - (419) 247-2800
Ed Lange - (419) 247-2800
HEALTH CARE REIT, INC. ANNOUNCES
EXERCISE OF OVER ALLOTMENT OPTION
Toledo, Ohio, April 9, 1997..... HEALTH CARE REIT, INC. (NYSE/HCN) announced
today that the underwriters for the company's March 11, 1997 offering of
3,000,000 common shares have exercised an over allotment option to purchase
150,000 additional common shares at a purchase price of $24.375 per share. As a
result of this exercise, the offering has been increased to 3,150,000 shares at
a total purchase price of $76,781,250.
Alex. Brown & Sons Incorporated acted as the Manager of the underwriting group,
and NatWest Securities Limited, Smith Barney Inc. and EVEREN Securities, Inc.
acted as Co-Managers. The net proceeds will be used to invest in additional
health care properties.
Health Care REIT, Inc., with headquarters in Toledo, Ohio, is a real estate
investment trust which invests in health care facilities, primarily nursing
homes, assisted living facilities and retirement centers. At December 31, 1996,
the company had investments in 137 health care facilities in 28 states and had
total assets of approximately $520 million.
#####
<PAGE> 1
EXHIBIT 99.3
F O R I M M E D I A T E R E L E A S E
April 18, 1997
For more information contact:
Erin Ibele - (419) 247-2800
Ed Lange - (419) 247-2800
HEALTH CARE REIT, INC. ANNOUNCES
SALE OF $80 MILLION OF SENIOR UNSECURED NOTES
Toledo, Ohio, April 18, 1997..... HEALTH CARE REIT, INC. (NYSE/HCN) announced
today the sale of $80 million of senior unsecured notes. The company priced $20
million of notes due 2000, $20 million of notes due 2002 and $40 million of
notes due 2004. The notes have a weighted average interest rate of 7.91 percent
and are rated `BBB-' (triple-B-minus) by Duff & Phelps Credit Rating Co. The
transaction is expected to close on April 22, 1997.
Alex. Brown & Sons Incorporated is the underwriter for the offering. The net
proceeds will be used to invest in additional health care properties.
Health Care REIT, Inc., with headquarters in Toledo, Ohio, is a real estate
investment trust which invests in health care facilities, primarily nursing
homes, assisted living facilities and retirement centers. At December 31, 1996,
the company had investments in 137 health care facilities in 28 states and had
total assets of approximately $520 million.
#####
<PAGE> 1
EXHIBIT 99.4
F O R I M M E D I A T E R E L E A S E
April 22, 1997
For more information contact:
Erin Ibele - (419) 247-2800
Ed Lange - (419) 247-2800
HEALTH CARE REIT, INC. ANNOUNCES
INCREASE IN QUARTERLY DIVIDEND
Toledo, Ohio, April 22, 1997....HEALTH CARE REIT, INC. (NYSE/HCN) announced
today that upon a review of the company's operating results and financial
condition, the Board of Directors voted to declare a dividend for the quarter
ended March 31, 1997 of $0.525 cents per share as compared to $0.52 per share
for the same period in 1996.
The dividend is a one-half cent increase from the dividend paid for the
preceding seven quarters and represents the 104th consecutive dividend payment.
The dividend will be payable May 20, 1997 to shareholders of record on May 5,
1997.
In declaring the dividend, the company has adopted a dividend policy directed at
increasing the dividend payment by one-half cent each quarter, subject to an
annual review of the company's financial performance.
"Today we are reinstating the quarterly increase to dividend payments," stated
George L. Chapman, chairman and chief executive officer. "During the past twelve
months we have stated our intention to increase dividend payments once certain
objectives were met, including asset and FFO growth, reduced leverage and an
improved FFO payout ratio. We have met our strategic objectives and believe the
new dividend policy is appropriate and consistent with our goal of maximizing
shareholder value."
Health Care REIT, Inc., with headquarters in Toledo, Ohio, is a real estate
investment trust which invests in health care facilities, primarily nursing
homes, assisted living facilities and retirement centers. At March 31, 1997, the
company had investments in 151 health care facilities in 29 states and had total
assets of approximately $608 million.
#####
<PAGE> 1
EXHIBIT 99.5
F O R I M M E D I A T E R E L E A S E
APRIL 23, 1997
FOR MORE INFORMATION CONTACT:
ERIN IBELE - (419) 247-2800
ED LANGE - (419) 247-2800
HEALTH CARE REIT, INC. ANNOUNCES
RECORD FIRST QUARTER RESULTS
FIRST QUARTER RESULTS FIRST QUARTER HIGHLIGHTS
- --------------------- ------------------------
- - $608,432,000 Total Assets - 12% FFO growth
- - $16,569,000 Gross Income - 53% asset growth
- - $0.57 per share FFO - $89.4 million new investments
- - $0.62 per share CAD - $516.3 million market capitalization
- - $0.52 per share dividends paid - New unsecured capital structure
- - 91% FFO payout ratio
Toledo, Ohio, April 23, 1997 ........HEALTH CARE REIT, INC. (NYSE/HCN) announced
today record funds from operations (FFO) of $0.57 per share for the first
quarter of 1997. Total revenues increased 52 percent for the first three months
of 1997 as compared with the same period in 1996.
"The success of our investment strategy of targeting emerging growth companies
and the continued execution of our capital plan are evidenced by the first
quarter results," stated George L. Chapman, chairman and chief executive
officer. "During the first quarter every aspect of our business recorded
significant achievements. We funded a record level of investments; accessed the
capital markets through the sale of common stock, which increased the level of
domestic and international institutional shareholders in our stock; and closed a
new revolving credit facility, creating a new unsecured capital structure. Based
upon these events and the company's financial performance, we have reinstated
the quarterly increase to dividend payments."
For the three months ended March 31, 1997, net income totaled $9,826,000, or
$0.51 per share, on revenue of $16,569,000 as compared with net income of
$5,677,000, or $0.47 per share, on revenue of $10,890,000 for the three months
ended March 31, 1996. FFO for the first quarter of 1997 totaled $11,011,000, or
$0.57 per share, as compared with FFO of $6,152,000, or $0.51 per share, for the
same period in 1996, an increase of 12 percent.
<PAGE> 2
For the first quarter of 1997, cash flows from operating activities available
for distribution (CAD) totaled $11,908,000, or $0.62 per share, as compared with
CAD of $7,362,000, or $0.61 per share, for the comparable period in 1996.
Investment activity for the three months ended March 31, 1997 totaled
$89,378,000. Management noted that the first quarter investment activity
contributed to an increase in total assets, which at March 31, 1997 totaled
$608,432,000 as compared with total assets of $397,412,000 at March 31, 1996, an
increase of 53 percent.
During the first quarter of 1997, the company completed a secondary sale of
3,000,000 shares of common stock at a price of $24.375 per share, which
generated net proceeds of $69,315,000. Subsequent to the first quarter, the
underwriters for the offering exercised an over allotment option to purchase
150,000 additional common shares at $24.375 per share, which generated
additional net proceeds of $3,465,750. The net proceeds derived from the
offering were used to invest in additional health care properties.
During the first three months of 1997, the company closed a $175 million
unsecured credit facility which replaced the company's secured line.
Simultaneous with the closing of the new credit facility, all senior noteholders
released collateral which had served as security for the company's $82 million
of senior indebtedness. Effective with both closings, the company's balance
sheet became unsecured. The company's senior unsecured notes are rated `BBB-'
(triple-B-minus) by Duff & Phelps Credit Rating Co.
As reported in a press release dated April 22, 1997, the company announced that
the Board of Directors voted to increase the quarterly dividend payable May 20,
1997 to $0.525 per share, as compared with $0.52 per share for the same period
in 1996.
Health Care REIT, Inc., with headquarters in Toledo, Ohio, is a real estate
investment trust, which invests in health care facilities, primarily nursing
homes, assisted living facilities and retirement centers. The company has
investments in 151 health care facilities in 29 states and has total assets of
approximately $608 million.
This document contains "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, competition in the financing of health
care facilities, the availability of capital, 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
<PAGE> 3
<TABLE>
<CAPTION>
HEALTH CARE REIT, INC.
FINANCIAL SUPPLEMENT
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(AMOUNTS IN THOUSANDS)
MARCH 31
------------------------
1997 1996
--------- ---------
<S> <C> <C>
ASSETS
Real estate related investments:
Loans receivable:
Mortgage loans $ 367,327 $ 283,033
Construction and short-term loans 27,303 26,247
Working capital loans 7,425 5,852
--------- ---------
402,055 315,132
Investment in operating leases 196,653 74,219
Investment in direct financing leases 10,804 10,913
--------- ---------
609,512 400,264
Less allowance for losses (9,937) (10,100)
--------- ---------
Net real estate related investments 599,575 390,164
Other Assets:
Investments 966 1,570
Deferred loan expenses 2,002 1,573
Cash and cash equivalents 121 998
Receivables and other assets 5,768 3,107
--------- ---------
8,857 7,248
--------- ---------
Total assets $ 608,432 $ 397,412
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Borrowings under line of credit obligations $ 100,500 $ 142,600
Other long-term obligations 92,097 56,010
Accrued expenses and other liabilities 11,401 10,109
--------- ---------
Total liabilities $ 203,998 $ 208,719
Shareholders' equity:
Preferred Stock, $1.00 par value:
Authorized - 10,000,000 shares
Issued and outstanding - None
Common Stock, $1.00 par value:
Authorized - 40,000,000 shares
Issued and outstanding - 21,737,294
in 1997 and 12,082,519 in 1996 21,737 12,083
Capital in excess of par value 373,443 169,704
Undistributed net income 8,288 5,336
Unrealized gains on investment securities
available for sale 966 1,570
--------- ---------
Total shareholders' equity 404,434 188,693
--------- ---------
Total liabilities and shareholders' equity $ 608,432 $ 397,412
========= =========
</TABLE>
<PAGE> 4
<TABLE>
<CAPTION>
HEALTH CARE REIT, INC.
FINANCIAL SUPPLEMENT
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(AMOUNTS IN THOUSANDS EXCEPT PER SHARE DATA)
THREE MONTHS ENDED
MARCH 31
---------------------
1997 1996
------- -------
<S> <C> <C>
Gross Income:
Interest and other income $10,665 $ 8,142
Prepayment fees 0 0
Operating leases:
Rent 4,963 1,960
Gain on exercise of options 0 0
Direct financing leases:
Lease income 357 368
Gain on exercise of options 0 0
Loan and commitment fees 584 420
------- -------
Gross Income $16,569 $10,890
Expenses:
Interest:
Line of credit arrangements $ 2,161 $ 2,296
Senior notes and other long-
term obligations 1,850 1,215
Loan expense 217 187
Provision for depreciation 1,185 475
Provision for losses 150 150
General and administrative expenses 1,180 890
------- -------
Total expenses 6,743 5,213
------- -------
Net Income $ 9,826 $ 5,677
======= =======
Average number of shares outstanding 19,301 12,052
Net income per share $ 0.51 $ 0.47
Funds From Operations $11,011 $ 6,152
Funds From Operations per share $ 0.57 $ 0.51
</TABLE>
