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Previous: HEALTH CARE REIT INC /DE/, 10-Q, EX-99.1, 2000-08-14 |
Next: CVD EQUIPMENT CORP, 10QSB, 2000-08-14 |
<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 26, 2000
For more information contact:
Erin Ibele - (419) 247-2800
Ed Lange - (419) 247-2800
HEALTH CARE REIT, INC. REPORTS FIRST
QUARTER OPERATING RESULTS
First Quarter FFO Reported $0.70 Per Share
Toledo, Ohio, April 26, 2000........Health Care REIT, Inc. (NYSE/HCN) today
announced operating results for the first quarter of 2000. Funds from operations
(FFO), the generally accepted measure of operating performance for the real
estate investment trust industry, totaled $19.9 million, or $0.70 per diluted
share, a 4.5 percent per share increase from $19.0 million, or $0.67 per diluted
share, for the same period in 1999.
Dividend payments to common shareholders for the three months ended March 31,
2000, totaled $16.6 million, or $0.58 per share, as compared with dividend
payments of $15.8 million, or $0.56 per share, for the same period in 1999.
Correspondingly, the FFO payout ratio for the first quarter was 83 percent as
compared with 84 percent for the first three months of 1999.
"The first quarter operating results met management's expectations," commented
George L. Chapman, chairman and chief executive officer. "The modest
year-to-year asset and FFO growth reflects the restrictive capital environment
that has constrained the health care REIT sector for the past 12 to 18 months.
We continue to limit new investment activity to unfunded construction
commitments and remain focused on the execution of the company's $200 million
asset divestiture program, which is proceeding as planned. The limited asset
sales will strengthen our portfolio and generate liquidity, enhancing the
company's balance sheet. This strategy positions us to take advantage of
investment opportunities as the long-term care industry recovers."
Revenues for the quarter increased 21 percent to $35 million from $28.8 million
a year ago. Revenue growth was generated primarily by new investment activity in
1999 of $275 million. Investment activity contributed to a 9 percent increase in
total assets, which at March 31, 2000, totaled $1.3 billion as compared with
total assets of $1.2 billion at March 31, 1999.
Interest expense for the three months ended March 31, 2000, was $9.1 million as
compared with $4.3 million for the same period in 1999. The increase in the 2000
period was primarily due to the issuance of $114 million of long-term debt
during 1999 and higher average borrowings under the company's lines of credit
arrangements. The increase in the 2000 period was offset by the amount of
capitalized interest recorded during the first three months of 2000.
-17-
<PAGE> 2
The company capitalizes certain interest costs associated with funds used to
finance the construction of properties owned directly by the company. The amount
capitalized is based upon the borrowings outstanding during the construction
period using the rate of interest which approximates the company's cost of
financing. The company's interest expense is reduced by the amount capitalized.
Capitalized interest for the first quarter of 2000, totaled $1.2 million as
compared with $3.2 million for the same period in 1999.
Net income available to common shareholders for the first quarter totaled $14.8
million, or $0.52 per diluted share, as compared with net income available to
common shareholders of $16.2 million, or $0.57 per diluted share, for the same
period in 1999. The decline in net income was related primarily to an increase
in the company's provision for depreciation and the level of non-recurring
revenue recognized in the first quarter of 1999. For the three months ended
March 31, 2000, the provision for depreciation totaled $5.3 million as compared
with $3.6 million for the same period in 1999. The increased provision for
depreciation was the result of additional investments in properties owned
directly by the company. Included in net income for the first quarter of 1999
were non-recurring gains and prepayment fees of $811,000, as compared with
$123,000 for the first three months of 2000.
During the first quarter of 2000, investment activity totaled $18 million.
During the same period, the company received principal payments on real estate
mortgages of $630,000, and proceeds of $26.4 million derived from asset sales.
As of March 31, 2000, the company had approximately $26 million in unfunded
commitments.
At March 31, 2000, the company had a total outstanding debt balance of $534
million, and shareholders' equity of $706 million, which represents a debt to
total capitalization ratio of 0.43 to 1.0.
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 March 31, 2000, the company had investments
in 235 health care facilities in 33 states and had total assets of approximately
$1.3 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.
FINANCIAL SCHEDULES FOLLOW
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.
#####
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<PAGE> 3
HEALTH CARE REIT, INC.
FINANCIAL SUPPLEMENT
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
MARCH 31
-----------------------------------------
2000 1999
------------------ -----------------
<S> <C> <C>
ASSETS
Real estate investments:
Real property owned:
Land $ 72,373 $ 57,763
Buildings & improvements 720,601 588,713
Construction in progress 52,975 80,285
------------------ -----------------
845,949 726,761
Less accumulated depreciation (40,494) (23,179)
------------------ ------------------
Total real property owned 805,455 703,582
Loans receivable 404,189 413,507
------------------ -----------------
1,209,644 1,117,089
Less allowance for losses on loans receivable (5,837) (5,137)
------------------ ------------------
Net real estate investments 1,203,807 1,111,952
Other assets:
Direct investments 31,164 25,888
Marketable securities 545 2,233
Deferred loan expenses 3,461 3,440
Cash and cash equivalents 1,380 1,231
Receivables and other assets 21,509 15,301
------------------ -----------------
58,059 48,093
------------------ -----------------
TOTAL ASSETS $ 1,261,866 $ 1,160,045
================== =================
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Borrowings under line of credit obligations $ 172,900 $ 89,200
Senior unsecured notes 290,000 290,000
Secured debt 71,318 51,408
Accrued expenses and other liabilities 21,739 22,743
------------------ -----------------
Total liabilities $ 555,957 $ 453,351
Shareholders' equity:
Preferred Stock 150,000 150,000
Common Stock 28,577 28,317
Capital in excess of par value 524,778 519,982
Undistributed net income 7,087 10,834
Accumulated other
comprehensive income 248 2,109
Unamortized restricted stock (4,781) (4,548)
------------------ ------------------
TOTAL SHAREHOLDERS' EQUITY $ 705,909 $ 706,694
------------------ -----------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 1,261,866 $ 1,160,045
================== =================
</TABLE>
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<PAGE> 4
HEALTH CARE REIT, INC.
FINANCIAL SUPPLEMENT
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(AMOUNTS IN THOUSANDS EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31
----------------------------------------------
2000 1999
----------------------------------------------
<S> <C> <C>
Revenues:
Operating lease rents $ 21,630 $ 14,140
Interest income 11,521 11,895
Commitment fees and other income 1,676 1,946
Prepayment fees 0 183
Gain on sale of properties 123 628
-------------- -----------
$ 34,950 $ 28,792
Expenses:
Interest expense $ 9,101 $ 4,269
Provision for depreciation 5,263 3,555
General and administrative 1,900 1,674
Loan expense 317 166
Provision for losses 250 150
-------------- -----------
16,831 9,814
-------------- -----------
Net Income 18,119 18,978
Preferred stock dividends 3,362 2,759
-------------- -----------
Net Income Available to
Common Shareholders $ 14,757 $ 16,219
============== ===========
Average number of common shares outstanding:
Basic 28,315 28,077
Diluted 28,546 28,393
Net income per share:
Basic $ 0.52 $ 0.58
Diluted 0.52 0.57
Funds from operations $ 19,897 $ 18,963
Funds from operations per share:
Basic $ 0.70 $ 0.68
Diluted 0.70 0.67
Dividends per share $ 0.580 $ 0.560
</TABLE>
-20-
<PAGE> 5
<TABLE>
<CAPTION>
HEALTH CARE REIT, INC.
FINANCIAL SUPPLEMENT - MARCH 31, 2000
PORTFOLIO COMPOSITION ($000'S) EXHIBIT 1
------------------------------
BALANCE SHEET DATA # Properties # Beds/Units Balance (1) % Balance
-------------------- ------------------- -------------------- -----------------
<S> <C> <C> <C> <C>
Real Property 161 12,306 $ 805,455 65%
Loans Receivable 74 7,282 404,189 33%
Direct Investments -na- -na- 31,164 2%
-------------------- ------------------- -------------------- -----------------
Total Investments 235 19,588 $ 1,240,808 100%
INVESTMENT DATA # Properties # Beds/Units Investment (2) % Investment
-------------------- ------------------- -------------------- -----------------
Assisted Living Facilities 179 11,857 $ 847,941 69%
Nursing Homes 48 6,729 281,351 23%
Specialty Care Facilities 6 708 83,590 7%
Behavioral Care 2 294 9,187 1%
-------------------- ------------------- -------------------- -----------------
Real Estate Investments 235 19,588 $ 1,222,069 100%
INVESTMENT BY OWNER TYPE # Properties # Beds/Units Investment (2) % Investment
-------------------- ------------------- -------------------- -----------------
Publicly Traded 74 4,518 $ 272,508 22%
Key Private 113 10,791 767,451 63%
Privately Held 48 4,279 182,110 15%
-------------------- ------------------- -------------------- -----------------
Real Estate Investments 235 19,588 $ 1,222,069 100%
</TABLE>
NOTES: (1) TOTAL INVESTMENTS INCLUDE GROSS REAL ESTATE INVESTMENTS AND DIRECT
INVESTMENTS WHICH AMOUNTED TO $1,209,644,000 AND $31,164,000,
RESPECTIVELY.
(2) REAL ESTATE INVESTMENTS INCLUDE GROSS REAL ESTATE INVESTMENTS AND
CREDIT ENHANCEMENTS WHICH AMOUNTED TO $1,209,644,000 AND
$12,425,000, RESPECTIVELY.
<TABLE>
<CAPTION>
REVENUE COMPOSITION ($000'S) EXHIBIT 2
----------------------------
Three Months Ended
March 31, 2000 Year-to-Date
---------------------------------- ------------------------------
REVENUE BY INVESTMENT TYPE
<S> <C> <C> <C>
Real Property $ 22,903 66%
Loans Receivable & Other 11,523 33% (Not Applicable)
Direct Investments 524 1%
------------------ --------------- ----------------- -------------
Total $ 34,950 100%
REVENUE BY FACILITY TYPE
Assisted Living Facilities $ 23,811 68%
Nursing Homes 8,353 24%
Specialty Care Facilities 2,786 8%
Behavioral Care 0 0%
------------------ --------------- ----------------- -------------
Total $ 34,950 100%
REVENUE BY OWNER TYPE
Publicly Traded $ 9,220 26%
Key Private 21,116 61%
Privately Held 4,614 13%
------------------ --------------- ----------------- -------------
Total $ 34,950 100%
</TABLE>
-21-
<PAGE> 6
<TABLE>
<CAPTION>
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
------------------- ------------------------ ------------------------ ----------------------- -------------------
<S> <C> <C> <C> <C> <C>
2000 $ 1,417 $ 1,267 $ 2,684 2%
2001 0 997 997 1%
2002 1,241 1,297 2,538 2%
2003 3,677 7,377 11,054 8%
2004 0 7,137 7,137 5%
Thereafter 85,401 25,080 110,481 82%
------------------------ ------------------------ ----------------------- -------------------
Total $ 91,736 $ 43,155 $ 134,891 100%
NOTES: (1) REVENUE IMPACT BY YEAR, ANNUALIZED
<CAPTION>
COMMITTED INVESTMENT BALANCES EXHIBIT 4
------------------------------
($000'S EXCEPT INVESTMENT PER BED/UNIT)
Committed Balance Investment per
# Properties # Beds/Units (1) Bed/Unit
-------------------- ------------------- -------------------- ------------------
<S> <C> <C> <C> <C>
Assisted Living Facilities 179 11,857 $ 873,388 $ 73,660
Nursing Homes 48 6,729 289,525 43,026
Specialty Care Facilities 6 708 83,590 118,065
Behavioral Care 2 294 9,187 31,250
-------------------- ------------------- -------------------- ------------------
Total 235 19,588 $ 1,255,690 n/a
</TABLE>
NOTES: (1) COMMITTED BALANCE INCLUDES REAL ESTATE INVESTMENTS, CREDIT
ENHANCEMENTS AND UNFUNDED COMMITMENTS FOR WHICH INITIAL FUNDING
HAD COMMENCED.
<TABLE>
<CAPTION>
OPERATOR CONCENTRATION ($000'S) EXHIBIT 5
-------------------------------
CONCENTRATION BY INVESTMENT # Properties Investment % Investment
----------------------- ---------------------- -----------------------
<S> <C> <C> <C>
Summerville Healthcare 14 $ 156,108 13%
Atria Senior Quarters 11 92,722 8%
Life Care Centers of America, Inc. 13 87,881 7%
Alterra Healthcare 38 87,701 7%
Olympus Healthcare Group, Inc. 11 80,421 7%
Remaining Operators 148 717,236 58%
----------------------- ---------------------- -----------------------
Total 235 $ 1,222,069 100%
CONCENTRATION BY REVENUE # Properties Revenue (1) % Revenue
----------------------- ---------------------- -----------------------
Summerville Healthcare 14 $ 3,944 11%
Atria Senior Quarters 11 2,697 8%
Alterra Healthcare 38 2,490 7%
Olympus Healthcare Group, Inc. 11 2,457 7%
Life Care Centers of America, Inc. 13 2,004 6%
Remaining Operators 148 21,358 61%
----------------------- ---------------------- -----------------------
Total 235 $ 34,950 100%
</TABLE>
NOTES: (1) THREE MONTHS ENDED MARCH 31, 2000
-22-
<PAGE> 7
<TABLE>
<CAPTION>
SELECTED FACILITY DATA EXHIBIT 6
----------------------
Coverage Data
% Payor Mix ----------------------------------
------------------------------------ Before After
Census Private Medicare Mgt. Fees Mgt. Fees
------------------ ------------------------------------ ------------------ ---------------
<S> <C> <C> <C> <C> <C>
Nursing Homes 83% 24% 13% 1.79x 1.30x
Assisted Living Facilities 91% 100% 0% 1.33x 1.15x
Specialty Care Facilities 56% 22% 29% 3.97x 3.38x
Behavioral Care 46% 16% 84% 3.12x 1.89x
------------------ ---------------
Weighted Averages 1.87x 1.50x
<CAPTION>
NOTES: DATA AS OF DECEMBER 31, 1999
SECURITY DEPOSITS & OTHER CREDIT SUPPORT ($000'S) EXHIBIT 7
-------------------------------------------------
Balance % Investment
--------------- -----------------
<S> <C> <C>
Cross Defaulted $ 1,125,791 92% of gross real estate investments
Cross Collateralized 387,285 96% of mortgage loans
Bank Letters of Credit & Cash 45,138 4% of investment balance
<CAPTION>
CURRENT CAPITALIZATION ($000'S) Balance % Balance LEVERAGE & PERFORMANCE RATIOS
--------------- ----------------- ----------------------------------------
<S> <C> <C> <C> <C>
Borrowings Under Bank Lines $ 172,900 14% Debt/Total Book Cap 43%
Long-Term Debt Obligations 361,318 29% Debt/Equity 76%
Shareholders' Equity 705,909 57% Interest Coverage 3.32x 1st Qtr.
--------------- -----------------
Total Book Capitalization $ 1,240,127 100% 3.51x L12M
FFO Payout Ratio 83% 1st Qtr.
83% L12M
<CAPTION>
DEBT MATURITIES AND PRINCIPAL PAYMENTS ($000'S) EXHIBIT 8
-----------------------------------------------
Year Lines of Credit (1) Senior Notes Secured Debt Total
------------------- ------------------------ ------------------------ ----------------------- -------------------
<S> <C> <C> <C> <C>
2000 $ 0 $ 35,000 (2) $ 99 $ 35,099
2001 195,000 10,000 109 205,109
2002 0 20,000 121 20,121
2003 0 35,000 133 35,133
2004 0 40,000 64,186 104,186
2005 0 0 549 549
2006 0 0 62 62
Thereafter 0 150,000 6,059 156,059
------------------------ ------------------------ ----------------------- -------------------
Total $ 195,000 $ 290,000 $ 71,318 $ 556,318
</TABLE>
NOTES: (1) LINES OF CREDIT REFLECT 100% CAPACITY
(2) PAID AS OF APRIL 17, 2000
-23-
<PAGE> 8
<TABLE>
<CAPTION>
INVESTMENT ACTIVITY ($000'S)
EXHIBIT 9
Three Months Ended
March 31, 2000 Year-to-Date
--------------------------------- ---------------------------------
<S> <C> <C> <C>
FUNDING BY INVESTMENT TYPE
Real Property $ 183 1%
Mortgage & Other Loans 0 0% (Not Applicable)
Construction Advances 12,083 67%
Direct Investments 5,867 32%
----------------- --------------- ---------------- ----------------
Total $ 18,133 100%
REAL ESTATE INVESTMENTS
Assisted Living Facilities $ 17,094 94%
Nursing Homes 1,039 6%
Behavioral Care 0 0%
Specialty Care Facilities 0 0%
----------------- --------------- ---------------- ----------------
Total $ 18,133 100%
<CAPTION>
GEOGRAPHIC CONCENTRATION ($000'S) EXHIBIT 10
---------------------------------
CONCENTRATION BY REGION # Properties Investment % Investment
----------------------- ---------------------- -----------------------
<S> <C> <C> <C>
South 139 $ 626,643 51%
Northeast 38 286,057 23%
West 31 177,593 15%
Midwest 27 131,776 11%
----------------------- ---------------------- -----------------------
Total 235 $ 1,222,069 100%
CONCENTRATION BY STATE # Properties Investment % Investment
----------------------- ---------------------- -----------------------
Texas 47 $ 188,306 15%
Florida 29 143,214 12%
Massachusetts 14 98,859 8%
North Carolina 18 87,440 7%
Pennsylvania 14 82,554 7%
Remaining States 113 621,696 51%
----------------------- ---------------------- -----------------------
Total 235 $ 1,222,069 100%
REVENUE BY STATE # Properties Revenue (1) % Revenue
----------------------- ---------------------- -----------------------
Texas 47 $ 5,479 16%
Florida 29 3,497 10%
Massachusetts 14 3,245 9%
Pennsylvania 14 2,756 8%
North Carolina 18 2,316 7%
Remaining States 113 17,657 50%
----------------------- ---------------------- -----------------------
Total 235 $ 34,950 100%
</TABLE>
NOTES: (1) THREE MONTHS ENDED MARCH 31, 2000
-24-
<PAGE> 9
<TABLE>
<CAPTION>
FUNDS FROM OPERATIONS COMPUTATION ($000'S) EXHIBIT 11
------------------------------------------
Three Months Ended
March 31, 2000 Year-to-Date
------------------------------- --------------------------
<S> <C> <C>
Net Income Available to Common Shareholders $ 14,757
Add: Depreciation Expense 5,263 (Not Applicable)
Loss on Sale of Assets 0
Asset Impairment Charges 0
Deduct: Gain on Sale of Assets 123
Prepayment Fees 0
---------------------------- -- --------------------------
Funds From Operations (FFO) $ 19,897
Average Common Shares Outstanding:
Basic 28,315
Diluted 28,546
FFO Per Common Share:
Basic $ 0.70
Diluted $ 0.70
</TABLE>
-25-
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