TOLEDO, Ohio--(BUSINESS WIRE)--Health Care REIT, Inc. (NYSE:HCN) today announced operating results for the company’s second quarter ended June 30, 2011.
“Health Care REIT’s outstanding earnings growth in the second quarter of 2011 is the result of the successful execution of our relationship investment strategy,” commented George L. Chapman, Health Care REIT’s Chairman, Chief Executive Officer and President. “The 13% FFO and 10% FAD per share earnings increase this quarter demonstrates the momentum created by our growth platform. Our investment growth over the last 15 months is now translating into meaningful earnings growth for our shareholders and we expect this momentum to continue to drive future performance.”
Recent Highlights
- Achieved 2Q11 normalized FFO of $0.90 per share, up 13%
- Achieved 2Q11 normalized FAD of $0.80 per share, up 10%
- Increased second quarter aggregate same-store NOI versus last year by 5.0%
- Completed year-to-date gross new investments totaling $4.2 billion, including $2.8 billion in the second quarter
- Closed year-to-date property sales and loan payoffs of $282 million, generating $56 million of gains
- Increased line of credit to $2 billion with an initial term through July 2015
Dividends for Second Quarter 2011 As previously announced, the Board of Directors declared a cash dividend for the quarter ended June 30, 2011 of $0.715 per share, as compared to $0.69 per share for the same period in 2010. The cash dividend will be paid on August 19, 2011 and will be the company’s 161st consecutive quarterly dividend payment.
Second Quarter Investment Highlights
- On April 1st, the company completed the previously announced acquisition of substantially all of the real estate assets of privately-held Genesis HealthCare for a purchase price of $2.4 billion. The initial 15 year triple-net lease with Genesis will provide for rent in the first year of $198 million representing an initial cash yield of 8.25%. The rent, which includes a combination of fixed and CPI escalators, is expected to increase by 3.5% on the first five anniversary dates of the lease and 3.0% per year thereafter.
- On April 8th, the company completed the previously announced acquisition of four combination senior housing facilities located in the Chicago and New York metro areas totaling 628 units. The company’s $141.5 million investment included the assumption of $48 million in secured debt at an average rate of 6.5%. The investment is structured as a triple-net lease with Capital Senior Living (NYSE:CSU) with an initial term of 15 years and an initial rental yield of 7.25% with annual escalators of 3.0%.
Events Subsequent to Quarter End
- On July 27th, the company entered into an expanded $2.0 billion unsecured revolving credit facility, which replaces the previous $1.15 billion facility. The company has an option to upsize the facility by $500 million through an accordion feature, allowing for aggregate commitments of up to $2.5 billion. The new facility includes 31 lenders and matures in July 2015 with a one-year option to extend at the company’s discretion. The facility is priced at 1.35% over LIBOR, with a 0.25% annual facility fee based on current credit ratings and is subject to other terms and conditions customary for loans of this nature.
Investment Activity The company has completed acquisitions and joint venture investments year-to-date of $4.0 billion, up from the previously announced $3.8 billion, and funded development of $200 million, resulting in gross investments of $4.2 billion. The company continues to expect dispositions of $300 million for the full year, of which $282 million has been completed through June 30, 2011.
Outlook for 2011 The company is narrowing its 2011 earnings guidance solely to reflect year-to-date timing of dispositions. Normalized FFO has been revised to a range of $3.34 to $3.40 per diluted share from the previous $3.32 to $3.42 per diluted share, representing an increase of 8-10% from 2010. Normalized FAD has been revised to a range of $3.02 to $3.08 per diluted share from the previous $3.01 to $3.11 per diluted share, representing an increase of 6-8% from 2010. Net income attributable to common stockholders has been increased to a range of $1.04 to $1.10 per diluted share from $0.97 to $1.07 per diluted share. The company’s guidance does not include any investments beyond what has been closed or identified year-to-date nor any additional transaction costs, capital transactions, impairments, unanticipated additions to the loan loss reserve or other one-time items, including any additional cash payments other than normal monthly rental payments. Please see the exhibits for a reconciliation of the outlook for net income available to common stockholders to normalized FFO and FAD.
Conference Call Information The company has scheduled a conference call on Thursday, August 4, 2011 at 10:00 a.m. Eastern Time to discuss its second quarter 2011 results, industry trends, portfolio performance and outlook for 2011. Telephone access will be available by dialing 888-346-2469 or 706-758-4923 (international). For those unable to listen to the call live, a taped rebroadcast will be available beginning two hours after completion of the call through August 18, 2011. To access the rebroadcast, dial 800-642-1687 or 706-645-9291 (international). The conference ID number is 81661084. To participate in the webcast, log on to www.hcreit.com or www.earnings.com 15 minutes before the call to download the necessary software. Replays will be available for 90 days through the same websites. This earnings release is posted on the company’s website at www.hcreit.com under the heading News.
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Key Performance Indicators |
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| 2Q11 | 2Q10 | Change | |||||||||||||
| Net income attributable to common | |||||||||||||||
| stockholders (NICS) per diluted share | $ | 0.39 | $ | 0.37 | 5% | ||||||||||
| Normalized FFO per diluted share | $ | 0.90 | $ | 0.80 | 13% | ||||||||||
| Normalized FAD per diluted share | $ | 0.80 | $ | 0.73 | 10% | ||||||||||
| Dividends per common share | $ | 0.715 | $ | 0.68 | 5% | ||||||||||
| Normalized FFO Payout Ratio | 79% | 85% | |||||||||||||
| Normalized FAD Payout Ratio | 89% | 93% | |||||||||||||
|
Quarterly Earnings |
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| NICS |
|
FFO |
|
FAD |
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| 2Q11 | 2Q10 | Change | 2Q11 | 2Q10 | Change | 2Q11 | 2Q10 | Change | ||||||||||||||||||||||||
| Per diluted share | $ | 0.39 | $ | 0.37 | 5% | $ | 0.84 | $ | 0.74 | 14% | $ | 0.75 | $ | 0.70 | 7% | |||||||||||||||||
| Includes impact of: | ||||||||||||||||||||||||||||||||
| Gain (loss) on property sales(1) | $ | 0.17 | $ | 0.03 | ||||||||||||||||||||||||||||
| Other items, net(2) | $ | (0.06) | $ | (0.06) | $ | (0.06) | $ | (0.06) | $ | (0.06) | $ | (0.06) | ||||||||||||||||||||
| Prepaid/straight-line rent receipts(3) | $ | 0.02 | $ | 0.02 | ||||||||||||||||||||||||||||
| Per diluted share - normalized(a) | $ | 0.90 | $ | 0.80 | 13% | $ | 0.80 | $ | 0.73 | 10% | ||||||||||||||||||||||
|
(a) Amounts may not sum due to rounding |
||||||||||||||||||||||||||||||||
| (1) $30,224,000 and $3,314,000 of gains in 2Q11 and 2Q10, respectively. | ||||||||||||||||||||||||||||||||
| (2) See Exhibit 1. | ||||||||||||||||||||||||||||||||
| (3) $3,102,000 and $2,330,000 of receipts in 2Q11 and 2Q10, respectively. | ||||||||||||||||||||||||||||||||
Supplemental Reporting Measures The company believes that net income attributable to common stockholders (NICS), as defined by U.S. generally accepted accounting principles (U.S. GAAP), is the most appropriate earnings measurement. However, the company considers funds from operations (FFO) and funds available for distribution (FAD) to be useful supplemental measures of its operating performance. Historical cost accounting for real estate assets in accordance with U.S. GAAP implicitly assumes that the value of real estate assets diminishes predictably over time as evidenced by the provision for depreciation. However, since real estate values have historically risen or fallen with market conditions, many industry investors and analysts have considered presentations of operating results for real estate companies that use historical cost accounting to be insufficient. In response, the National Association of Real Estate Investment Trusts (NAREIT) created FFO as a supplemental measure of operating performance for REITs that excludes historical cost depreciation from net income. FFO, as defined by NAREIT, means net income, computed in accordance with U.S. GAAP, excluding gains (or losses) from sales of real estate, plus real estate depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Normalized FFO represents FFO adjusted for certain items detailed in Exhibit 1. FAD represents FFO excluding net straight-line rental adjustments, amortization related to above/below market leases and amortization of non-cash interest expenses and less cash used to fund capital expenditures, tenant improvements and lease commissions at medical office buildings. Normalized FAD represents FAD excluding prepaid/straight-line rent cash receipts and adjusted for certain items detailed in Exhibit 1. The company believes that normalized FFO and normalized FAD are useful supplemental measures of operating performance because investors and equity analysts may use these measures to compare the operating performance of the company between periods or as compared to other REITs or other companies on a consistent basis without having to account for differences caused by unanticipated and/or incalculable items.
The company’s supplemental reporting measures and similarly entitled financial measures are widely used by investors and equity analysts in the valuation, comparison and investment recommendations of companies. The company’s management uses these financial measures to facilitate internal and external comparisons to historical operating results and in making operating decisions. Additionally, they are utilized by the Board of Directors to evaluate management. The supplemental reporting measures do not represent net income or cash flow provided from operating activities as determined in accordance with U.S. GAAP and should not be considered as alternative measures of profitability or liquidity. Finally, the supplemental reporting measures, as defined by the company, may not be comparable to similarly entitled items reported by other real estate investment trusts or other companies. Please see the exhibits for reconciliations of the supplemental reporting measures.
About Health Care REIT, Inc. Health Care REIT, Inc., an S&P 500 company with headquarters in Toledo, Ohio, is a real estate investment trust that invests across the full spectrum of senior housing and health care real estate. The company also provides an extensive array of property management and development services. As of June 30, 2011, the company’s broadly diversified portfolio consisted of 868 properties in 45 states. More information is available on the company’s website at 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 and are based upon, among other things, the possible
expansion of the company’s portfolio; the sale of properties; the
performance of its operators/tenants and properties; its ability to
enter into agreements with viable new tenants for vacant space or for
properties that the company takes back from financially troubled
tenants, if any; its occupancy rates; its ability to acquire, develop
and/or manage properties; its ability to make distributions to
stockholders; its policies and plans regarding investments, financings
and other matters; its tax status as a real estate investment trust; its
critical accounting policies; its ability to appropriately balance the
use of debt and equity; its ability to access capital markets or other
sources of funds; and its ability to meet its earnings guidance. When
the company uses words such as “may,” “will,” “intend,” “should,”
“believe,” “expect,” “anticipate,” “project,” “estimate” or similar
expressions, it is making forward-looking statements. Forward-looking
statements are not guarantees of future performance and involve risks
and uncertainties. The company’s expected results may not be achieved,
and actual results may differ materially from 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 availability
and cost of capital; issues facing the health care industry, including
compliance with, and changes to, regulations and payment policies,
responding to government investigations and punitive settlements and
operators’/tenants’ difficulty in cost-effectively obtaining and
maintaining adequate liability and other insurance; changes in financing
terms; competition within the health care, senior housing and life
science industries; negative developments in the operating results or
financial condition of operators/tenants, including, but not limited to,
their ability to pay rent and repay loans; the company’s ability to
transition or sell facilities with profitable results; the failure to
make new investments as and when anticipated; acts of God affecting the
company’s properties; the company’s ability to re-lease space at similar
rates as vacancies occur; the company’s ability to timely reinvest sale
proceeds at similar rates to assets sold; operator/tenant or joint
venture partner bankruptcies or insolvencies; the cooperation of joint
venture partners; government regulations affecting Medicare and Medicaid
reimbursement rates and operational requirements; regulatory approval
and market acceptance of the products and technologies of life science
tenants; liability or contract claims by or against operators/tenants;
unanticipated difficulties and/or expenditures relating to future
acquisitions; environmental laws affecting the company’s properties;
changes in rules or practices governing the company’s financial
reporting; and legal and operational matters, including real estate
investment trust qualification and key management personnel recruitment
and retention. Finally, the company assumes 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.
HEALTH CARE REIT, INC.
Financial Exhibits
| Consolidated Balance Sheets (unaudited) | |||||||||||||||
| (in thousands) | |||||||||||||||
| June 30, | |||||||||||||||
| 2011 | 2010 | ||||||||||||||
| Assets | |||||||||||||||
| Real estate investments: | |||||||||||||||
| Real property owned: | |||||||||||||||
| Land and land improvements | $ | 983,746 | $ | 571,501 | |||||||||||
| Buildings and improvements | 11,497,863 | 5,854,675 | |||||||||||||
| Acquired lease intangibles | 347,662 | 147,861 | |||||||||||||
| Real property held for sale, net of accumulated depreciation | 18,202 | 13,020 | |||||||||||||
| Construction in progress | 212,161 | 255,883 | |||||||||||||
| 13,059,634 | 6,842,940 | ||||||||||||||
| Less accumulated depreciation and intangible amortization | (968,289 | ) | (766,630 | ) | |||||||||||
| Net real property owned | 12,091,345 | 6,076,310 | |||||||||||||
| Real estate loans receivable: | |||||||||||||||
| Loans receivable | 326,651 | 471,805 | |||||||||||||
| Less allowance for losses on loans receivable | (1,692 | ) | (5,025 | ) | |||||||||||
| Net real estate loans receivable | 324,959 | 466,780 | |||||||||||||
| Net real estate investments | 12,416,304 | 6,543,090 | |||||||||||||
| Other assets: | |||||||||||||||
| Equity investments | 250,933 | 181,527 | |||||||||||||
| Goodwill | 51,207 | - | |||||||||||||
| Deferred loan expenses | 48,808 | 31,568 | |||||||||||||
| Cash and cash equivalents | 328,758 | 55,423 | |||||||||||||
| Restricted cash | 42,497 | 59,656 | |||||||||||||
| Receivables and other assets | 342,154 | 208,067 | |||||||||||||
| 1,064,357 | 536,241 | ||||||||||||||
| Total assets | $ | 13,480,661 | $ | 7,079,331 | |||||||||||
| Liabilities and equity | |||||||||||||||
| Liabilities: | |||||||||||||||
| Borrowings under unsecured lines of credit arrangements | $ | - | $ | 206,000 | |||||||||||
| Senior unsecured notes | 4,429,992 | 2,135,422 | |||||||||||||
| Secured debt | 1,889,873 | 813,341 | |||||||||||||
| Capital lease obligations | 83,794 | - | |||||||||||||
| Accrued expenses and other liabilities | 325,550 | 187,443 | |||||||||||||
| Total liabilities | 6,729,209 | 3,342,206 | |||||||||||||
| Redeemable noncontrolling interests | 18,410 | - | |||||||||||||
| Equity: | |||||||||||||||
| Preferred stock | 1,010,417 | 286,410 | |||||||||||||
| Common stock | 177,290 | 124,520 | |||||||||||||
| Capital in excess of par value | 6,314,692 | 3,937,485 | |||||||||||||
| Treasury stock | (13,493 | ) | (11,315 | ) | |||||||||||
| Cumulative net income | 1,795,448 | 1,630,120 | |||||||||||||
| Cumulative dividends | (2,682,479 | ) | (2,237,720 | ) | |||||||||||
| Accumulated other comprehensive income | (10,145 | ) | (8,526 | ) | |||||||||||
| Other equity | 6,460 | 5,755 | |||||||||||||
| Total Health Care REIT, Inc. stockholders’ equity | 6,598,190 | 3,726,729 | |||||||||||||
| Noncontrolling interests | 134,852 | 10,396 | |||||||||||||
| Total equity | 6,733,042 | 3,737,125 | |||||||||||||
| Total liabilities and equity | $ | 13,480,661 | $ | 7,079,331 | |||||||||||
| Consolidated Statements of Income (unaudited) | |||||||||||||||||||||||
| (in thousands, except per share data) | |||||||||||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| June 30, | June 30, | ||||||||||||||||||||||
| 2011 | 2010 | 2011 | 2010 | ||||||||||||||||||||
| Revenues: | |||||||||||||||||||||||
| Rental income | $ | 239,703 | $ | 141,764 | $ | 406,848 | $ | 274,761 | |||||||||||||||
| Resident fees and service | 123,149 | - | 194,435 | - | |||||||||||||||||||
| Interest income | 12,866 | 9,335 | 24,575 | 18,383 | |||||||||||||||||||
| Other income | 5,341 | 2,650 | 8,165 | 3,646 | |||||||||||||||||||
| Gross revenues | 381,059 | 153,749 | 634,023 | 296,790 | |||||||||||||||||||
| Expenses: | |||||||||||||||||||||||
| Interest expense | 83,961 | 35,478 | 142,347 | 63,403 | |||||||||||||||||||
| Property operating expenses | 100,197 | 11,970 | 164,126 | 23,761 | |||||||||||||||||||
| Depreciation and amortization | 110,382 | 44,037 | 183,186 | 84,042 | |||||||||||||||||||
| General and administrative expenses | 19,562 | 11,878 | 37,276 | 28,700 | |||||||||||||||||||
| Transaction costs | 13,738 | 752 | 49,803 | 8,466 | |||||||||||||||||||
| Loss (gain) on extinguishment of debt | - | 7,035 | - | 25,072 | |||||||||||||||||||
| Provision for loan losses | 168 | - | 416 | - | |||||||||||||||||||
| Total expenses | 328,008 | 111,150 | 577,154 | 233,444 | |||||||||||||||||||
| Income from continuing operations before income taxes | |||||||||||||||||||||||
| and income from unconsolidated joint ventures | 53,051 | 42,599 | 56,869 | 63,346 | |||||||||||||||||||
| Income tax (expense) benefit | (211 | ) | (188 | ) | (340 | ) | (273 | ) | |||||||||||||||
| Income (loss) from unconsolidated joint ventures | 971 | 1,828 | 2,514 | 2,596 | |||||||||||||||||||
| Income from continuing operations | 53,811 | 44,239 | 59,043 | 65,669 | |||||||||||||||||||
| Discontinued operations: | |||||||||||||||||||||||
| Gain (loss) on sales of properties | 30,224 | 3,314 | 56,380 | 10,033 | |||||||||||||||||||
| Impairment of assets | - | - | (202 | ) | - | ||||||||||||||||||
| Income (loss) from discontinued operations, net | 2,173 | 3,511 | 2,797 | 7,056 | |||||||||||||||||||
| 32,397 | 6,825 | 58,975 | 17,089 | ||||||||||||||||||||
| Net income | 86,208 | 51,064 | 118,018 | 82,758 | |||||||||||||||||||
| Less: | Preferred dividends | 17,353 | 5,484 | 26,033 | 10,993 | ||||||||||||||||||
| Net income (loss) attributable to noncontrolling interests | (992 | ) | (66 | ) | (1,234 | ) | 307 | ||||||||||||||||
| Net income attributable to common stockholders | $ | 69,847 | $ | 45,646 | $ | 93,219 | $ | 71,458 | |||||||||||||||
| Average number of common shares outstanding: | |||||||||||||||||||||||
| Basic | 176,445 | 123,808 | 165,755 | 123,541 | |||||||||||||||||||
| Diluted | 177,487 | 124,324 | 166,458 | 124,059 | |||||||||||||||||||
| Net income attributable to common stockholders per share: | |||||||||||||||||||||||
| Basic | $ | 0.40 | $ | 0.37 | $ | 0.56 | $ | 0.58 | |||||||||||||||
| Diluted | 0.39 | 0.37 | 0.56 | 0.58 | |||||||||||||||||||
| Common dividends per share | $ | 0.715 | $ | 0.68 | $ | 1.405 | $ | 1.36 | |||||||||||||||
|
Normalizing Items |
Exhibit 1 | |||||||||||||||
| (in thousands, except per share data) | ||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| Impairment of assets | $ | - | $ | - | $ | 202 | $ | - | ||||||||
| Transaction costs |
13,738(1) |
752 | 49,803 | 8,466 | ||||||||||||
| Special stock compensation grants/payments | - | - | - | 2,853 | ||||||||||||
| Loss (gain) on extinguishment of debt | - | 7,035 | - | 25,072 | ||||||||||||
| Provision for loan losses | 168 | - | 416 | - | ||||||||||||
| Held for sale hospital operating expenses(2) | 264 | 150 | 1,093 | 878 | ||||||||||||
| Non-recurring other income |
(3,774)(3) |
(1,000) | (3,774) | (1,000) | ||||||||||||
| Total | $ | 10,396 | $ | 6,937 | $ | 47,740 | $ | 36,269 | ||||||||
| Average diluted common shares outstanding | 177,487 | 124,324 | 166,458 | 124,059 | ||||||||||||
| Net amount per diluted share | $ | 0.06 | $ | 0.06 | $ | 0.29 | $ | 0.29 | ||||||||
| Notes: | (1) Represents primarily costs incurred with the Genesis acquisition and other transactions during the quarter. | ||
| (2) Represents expenses incurred in connection with a hospital classified as held for sale. | |||
| (3) Represents non-recurring income earned in connection with dispositions. | |||
|
Funds Available for Distribution Reconciliation |
Exhibit 2 | |||||||||||||||||||||
| (in thousands, except per share data) | ||||||||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||||||||
| June 30, | June 30, | |||||||||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||||||||
| Net income attributable to common stockholders | $ | 69,847 | $ | 45,646 | $ | 93,219 | $ | 71,458 | ||||||||||||||
| Depreciation and amortization(1) | 111,053 | 47,451 | 185,821 | 91,032 | ||||||||||||||||||
| Loss (gain) on sales of properties | (30,224 | ) | (3,314 | ) | (56,380 | ) | (10,033 | ) | ||||||||||||||
| Noncontrolling interests(2) | (3,975 | ) | 50 | (7,812 | ) | (290 | ) | |||||||||||||||
| Unconsolidated joint ventures(3) | 1,653 | 915 | 2,845 | 1,214 | ||||||||||||||||||
| Gross straight-line rental income | (10,988 | ) | (4,145 | ) | (16,018 | ) | (8,598 | ) | ||||||||||||||
| Prepaid/straight-line rent receipts | 3,102 | 2,330 | 6,713 | 4,068 | ||||||||||||||||||
| Amortization related to above (below) market leases, net | (398 | ) | (809 | ) | (1,056 | ) | (1,296 | ) | ||||||||||||||
| Non-cash interest expense | 2,698 | 3,659 | 6,415 | 6,500 | ||||||||||||||||||
| Cap-ex, tenant improvements, lease commissions | (8,924 | ) | (5,060 | ) | (17,065 | ) | (8,831 | ) | ||||||||||||||
| Funds available for distribution | 133,844 | 86,723 | 196,682 | 145,224 | ||||||||||||||||||
| Normalizing items, net(4) | 10,396 | 6,937 | 47,740 | 36,269 | ||||||||||||||||||
| Prepaid/straight-line rent receipts | (3,102 | ) | (2,330 | ) | (6,713 | ) | (4,068 | ) | ||||||||||||||
| Funds available for distribution - normalized | $ | 141,138 | $ | 91,330 | $ | 237,709 | $ | 177,425 | ||||||||||||||
| Average diluted common shares outstanding | 177,487 | 124,324 | 166,458 | 124,059 | ||||||||||||||||||
| Per diluted share data: | ||||||||||||||||||||||
| Net income attributable to common stockholders | $ | 0.39 | $ | 0.37 | $ | 0.56 | $ | 0.58 | ||||||||||||||
| Funds available for distribution | 0.75 | 0.70 | 1.18 | 1.17 | ||||||||||||||||||
| Funds available for distribution - normalized | 0.80 | 0.73 | 1.43 | 1.43 | ||||||||||||||||||
| Normalized FAD Payout Ratio: | ||||||||||||||||||||||
| Dividends per common share | $ | 0.72 | $ | 0.68 | $ | 1.41 | $ | 1.36 | ||||||||||||||
| FAD per diluted share - normalized | $ | 0.80 | $ | 0.73 | $ | 1.43 | $ | 1.43 | ||||||||||||||
| Normalized FAD payout ratio | 89 | % | 93 | % | 98 | % | 95 | % | ||||||||||||||
| Notes: | (1) Depreciation and amortization includes depreciation and amortization from discontinued operations. | ||
| (2) Represents noncontrolling interests' share of net FAD adjustments. | |||
| (3) Represents HCN's share of net FAD adjustments from unconsolidated joint ventures. | |||
| (4) See Exhibit 1. | |||
|
Funds From Operations Reconciliation |
Exhibit 3 | ||||||||||||||||||||
| (in thousands, except per share data) | |||||||||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||||||||
| June 30, | June 30, | ||||||||||||||||||||
| 2011 | 2010 | 2011 | 2010 | ||||||||||||||||||
| Net income attributable to common stockholders | $ | 69,847 | $ | 45,646 | $ | 93,219 | $ | 71,458 | |||||||||||||
| Depreciation and amortization(1) | 111,053 | 47,451 | 185,821 | 91,032 | |||||||||||||||||
| Loss (gain) on sales of properties | (30,224 | ) | (3,314 | ) | (56,380 | ) | (10,033 | ) | |||||||||||||
| Noncontrolling interests(2) | (4,487 | ) | 108 | (8,647 | ) | (255 | ) | ||||||||||||||
| Unconsolidated joint ventures(3) | 3,364 | 2,323 | 6,391 | 3,098 | |||||||||||||||||
| Funds from operations | 149,553 | 92,214 | 220,404 | 155,300 | |||||||||||||||||
| Normalizing items, net(4) | 10,396 | 6,937 | 47,740 | 36,269 | |||||||||||||||||
| Funds from operations - normalized | $ | 159,949 | $ | 99,151 | $ | 268,144 | $ | 191,569 | |||||||||||||
| Average diluted common shares outstanding | 177,487 | 124,324 | 166,458 | 124,059 | |||||||||||||||||
| Per diluted share data: | |||||||||||||||||||||
| Net income attributable to common stockholders | $ | 0.39 | $ | 0.37 | $ | 0.56 | $ | 0.58 | |||||||||||||
| Funds from operations | 0.84 | 0.74 | 1.32 | 1.25 | |||||||||||||||||
| Funds from operations - normalized | 0.90 | 0.80 | 1.61 | 1.54 | |||||||||||||||||
| Normalized FFO Payout Ratio: | |||||||||||||||||||||
| Dividends per common share | $ | 0.72 | $ | 0.68 | $ | 1.41 | $ | 1.36 | |||||||||||||
| FFO per diluted share - normalized | $ | 0.90 | $ | 0.80 | $ | 1.61 | $ | 1.54 | |||||||||||||
| Normalized FFO payout ratio | 79 | % | 85 | % | 87 | % | 88 | % | |||||||||||||
| Notes: | (1) Depreciation and amortization includes depreciation and amortization from discontinued operations. | ||
| (2) Represents noncontrolling interests' share of net FFO adjustments. | |||
| (3) Represents HCN's share of net FFO adjustments from unconsolidated joint ventures. | |||
| (4) See Exhibit 1. | |||
|
Outlook Reconciliations: Year Ended December 31, 2011 |
Exhibit 4 | |||||||||||||||||||
| (in thousands, except per share data) | ||||||||||||||||||||
| Prior Outlook | Current Outlook | |||||||||||||||||||
| Low | High | Low | High | |||||||||||||||||
|
FFO Reconciliation: |
||||||||||||||||||||
| Net income attributable to common stockholders | $ | 0.97 | $ | 1.07 | $ | 1.04 | $ | 1.10 | ||||||||||||
| Loss (gain) on sale of properties | (0.15 | ) | (0.15 | ) | (0.33 | ) | (0.33 | ) | ||||||||||||
| Depreciation and amortization(1) | 2.28 | 2.28 | 2.35 | 2.35 | ||||||||||||||||
| Funds from operations | $ | 3.10 | $ | 3.20 | $ | 3.06 | $ | 3.12 | ||||||||||||
| Normalizing items, net(2) | 0.22 | 0.22 | 0.28 | 0.28 | ||||||||||||||||
| Funds from operations - normalized | $ | 3.32 | $ | 3.42 | $ | 3.34 | $ | 3.40 | ||||||||||||
|
FAD Reconciliation: |
||||||||||||||||||||
| Net income attributable to common stockholders | $ | 0.97 | $ | 1.07 | $ | 1.04 | $ | 1.10 | ||||||||||||
| Loss (gain) on sale of properties | (0.15 | ) | (0.15 | ) | (0.33 | ) | (0.33 | ) | ||||||||||||
| Depreciation and amortization(1) | 2.28 | 2.28 | 2.35 | 2.35 | ||||||||||||||||
| Net straight-line rent and above/below amortization(1) | (0.22 | ) | (0.22 | ) | (0.19 | ) | (0.19 | ) | ||||||||||||
| Non-cash interest expense | 0.10 | 0.10 | 0.09 | 0.09 | ||||||||||||||||
| Cap-ex, tenant improvements, lease commissions | (0.17 | ) | (0.17 | ) | (0.18 | ) | (0.18 | ) | ||||||||||||
| Funds available for distribution | $ | 2.81 | $ | 2.91 | $ | 2.78 | $ | 2.84 | ||||||||||||
| Normalizing items, net(2) | 0.22 | 0.22 | 0.28 | 0.28 | ||||||||||||||||
| Prepaid/straight-line rent receipts | (0.02 | ) | (0.02 | ) | (0.04 | ) | (0.04 | ) | ||||||||||||
| Funds available for distribution - normalized | $ | 3.01 | $ | 3.11 | $ | 3.02 | $ | 3.08 | ||||||||||||
| Notes: | (1) Amounts presented net of noncontrolling interests' share and HCN's share of unconsolidated joint ventures. | ||
| (2) See Exhibit 1. | |||