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FOR IMMEDIATE RELEASE – EXHIBIT 99.1

August 6, 2013

For more information contact:

Scott Estes (419) 247-2800

Jay Morgan (419) 247-2800

 

Health Care REIT, Inc.

Reports Second Quarter Results

 

Completed $1.5 billion of 2Q13 investments and $5 billion year-to-date

Expanded international platform in both Canada and the United Kingdom

2Q13 same store cash NOI increased 3.8%

 

Toledo, Ohio, August 6, 2013…..Health Care REIT, Inc. (NYSE:HCN) today announced operating results for the company’s second quarter ended June 30, 2013.

 

“Health Care REIT’s unique relationships, immersion in health care, and asset allocation position the company to capture above average growth in all economic climates,” commented George L. Chapman, Chairman and CEO of Health Care REIT.  “Our portfolio generated excellent 3.8% same store cash NOI growth during the second quarter, headlined by an 8.4% increase in our seniors housing operating portfolio.  Our relationship investment strategy generated two new portfolio partners, Revera and Avery Healthcare, in the attractive Canadian and U.K. markets.  These investments bring our year-to-date total to $5 billion in high-quality, accretive health care real estate expected to produce attractive cash flow growth and total returns for our shareholders.”

 

Recent Highlights

·         Reported 2Q13 normalized FFO of $0.93 per share, a 4% increase versus 2Q12

·         Reported 2Q13 normalized FAD of $0.82 per share, a 4% increase versus 2Q12

·         Increased 2Q13 same-store cash NOI by 3.8%, including 8.4% growth in the seniors housing operating portfolio

·         Increased private pay mix to 82% in 2Q13 from 74% in 2Q12

·         Issued 23 million shares of common stock, generating $1.7 billion of proceeds in May

·         Received $366 million in proceeds on dispositions in the first half of 2013, generating $52 million in gains

·         Completed gross new investments of $1.5 billion in 2Q13 and $959 million in 3Q13 to-date

·         Expanded international portfolio with $1.3 billion investment in Canada with Revera in May and $213 million investment in the U.K. with Avery Healthcare in July

·         Completed final tranche of $4.3 billion investment with Sunrise Senior Living in July

 

Dividends for Second Quarter 2013  As previously announced, the Board of Directors declared a cash dividend for the quarter ended June 30, 2013 of $0.765 per share, as compared to $0.74 per share for the same period in 2012, representing a 3.4% increase.  On August 20, 2013, the company will pay its 169th consecutive quarterly cash dividend.  The declaration and payment of quarterly dividends remains subject to review by and approval of the Board of Directors.

 

Second Quarter Investment Highlights  During the quarter, the company completed the previously announced $1.3 billion partnership with Revera Inc. to own 47 properties in attractive Canadian markets.   The company owns a 75% interest in the portfolio and Revera owns the remaining 25% interest.  The portfolio was previously owned 100% by Revera and is primarily comprised of independent living communities, with many offering a continuum of care that includes assisted living and/or memory care.  Revera manages the communities under an incentive-based management contract.  The company expects the portfolio to generate an initial unlevered NOI yield of 7%.  Please see the press release announcing the transaction dated May 8, 2013, for additional highlights of the transaction.  The release is available on the Investor Relations tab of the company’s website.

 

Page 1 of 8 

 


 

2Q13 Earnings Release                                                                                                                                                                     August 6, 2013

 

 

 

Investment Subsequent to Quarter End  Subsequent to the end of the second quarter, the company completed a $213 million (£140 million) sale/leaseback transaction with Avery Healthcare. The acquired portfolio includes 14 seniors housing communities with 940 beds in the United Kingdom. The average age of the communities is two years. Avery is one of England’s premier and most active seniors housing developers/operators. The lease is absolute net with capital expenditures funded by Avery. Rent under the lease will generate an initial yield of 7% and increase 3% per year over the initial 20-year lease term. Avery will guarantee the lease. Health Care REIT has an exclusive option to invest in Avery’s future acquisitions and new developments.  The company expects to acquire up to four new seniors housing communities per year upon completion of construction, and will add each community to the master lease. Avery will fund all working capital associated with the lease-up of each community. The Avery portfolio investment is consistent with the company’s strategy to own high-quality, private pay real estate in attractive markets operated by best-in-class providers. Including the 14 Avery communities, the company has investments in 45 seniors housing communities located in attractive U.K. markets with an investment balance of $1.6 billion.

 

Sunrise Acquisition Update  As previously announced, the company completed the $745.2 million final phase of the Sunrise Senior Living property portfolio acquisition on July 1, 2013.  The aggregate $4.3 billion investment includes 120 wholly-owned properties and five properties owned in joint ventures with third parties.  The company expects the portfolio to generate an unlevered NOI yield exceeding 6.5% in the second half of 2013.

 

Sunrise Property Count Reconciliation

 

 

 

 

 

 

 

Announced 8/22/12

 

Completed 5/7/13

 

Completed 7/1/13

Wholly Owned

 20 

 

 71 

 

 120 

Joint Venture

 105 

 

 54 

 

 5 

Total

 125 

 

 125 

 

 125 

 

 

 

 

 

 

Sunrise Investments Reconciliation ($ millions)

 

 

 

 

 

 

 

Announced 8/22/12

 

Completed 5/7/13

 

Completed 7/1/13

Debt Assumed(1)

$970.0

 

$444.6

 

$389.5

Cash Required

$950.0

 

$3,084.4

 

$3,884.7

Acquisition Amount

$1,920.0

 

$3,529.0

 

$4,274.2

 

 

 

 

 

 

(1) Debt assumed is net of payoffs that occurred as of closing or shortly thereafter.

 

Outlook for 2013  The company affirms its 2013 guidance and assumptions as previously announced and continues to expect to generate normalized FFO in a range of $3.70 to $3.80 per diluted share and normalized FAD in a range of $3.25 to $3.35 per diluted share, both representing a 5%-8% increase. The company is revising its 2013 net income guidance primarily to reflect the net impact of the Revera and Avery acquisitions, the May common stock issuance, depreciation and amortization adjustments, normalizing items and gains/losses on property sales. The company now expects to report net income attributable to common stockholders in a range of $0.58 to $0.68 per diluted share.  The company’s guidance does not include any additional 2013 investments beyond what it has announced, nor any transaction costs, capital transactions, impairments, unanticipated additions to the loan loss reserve or other additional 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.  The company will provide additional detail regarding its 2013 outlook and assumptions on the second quarter 2013 conference call.

 

Conference Call Information  The company has scheduled a conference call on Tuesday, August 6, 2013 at 10:00 a.m. Eastern Time to discuss its second quarter 2013 results, industry trends, portfolio performance and outlook for 2013. 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 20, 2013. To access the rebroadcast, dial 855-859-2056 or 404-537-3406 (international).  The conference ID number is 17358998. To participate in the webcast, log on to www.hcreit.com  15 minutes before the call to download the necessary software.  Replays will be available for 90 days.

Page 2 of 8 

 


 

2Q13 Earnings Release                                                                                                                                                                     August 6, 2013

 

 

 

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 and impairments of depreciable assets, plus real estate depreciation and amortization, and after adjustments for unconsolidated entities.   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.  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 supplemental reporting measures and the supplemental information package for the quarter ended June 30, 2013, which is available on the company’s website (www.hcreit.com), for information and reconciliations of additional 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 seniors housing and health care real estate.  The company also provides an extensive array of property management and development services.  As of June 30, 2013, the company’s broadly diversified portfolio consisted of 1,183 properties in 46 states, the United Kingdom, and Canada.  More information is available on the company’s website at www.hcreit.com

 

Forward-Looking Statements and Risk Factors  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 facilities; the performance of its operators/tenants and facilities; its ability to enter into agreements with viable new tenants for vacant space or for facilities that the company takes back from financially troubled tenants, if any; its occupancy rates; its ability to acquire, develop and/or manage facilities; its ability to make distributions to stockholders; its policies and plans regarding investments, financings and other matters; its ability to successfully manage the risks associated with international expansion and operations; 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, seniors 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 facilities; 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

Page 3 of 8 

 


 

2Q13 Earnings Release                                                                                                                                                                     August 6, 2013

 

 

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 facilities; changes in rules or practices governing the company’s financial reporting; the movement of U.S. and foreign currency exchange rates; 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.

Page 4 of 8 

 


 

2Q13 Earnings Release                                                                                                                                                                     August 6, 2013

 

 

HEALTH CARE REIT, INC.

Financial Exhibits

Consolidated Balance Sheets (unaudited)

(in thousands)

 

 

 

 

 

June 30,

 

 

 

 

 

2013 

 

2012 

Assets

 

 

 

 

 

 

Real estate investments:

 

 

 

 

 

 

 

 

Land and land improvements

 

$

 1,710,084 

 

$

 1,189,280 

 

 

Buildings and improvements

 

 

 18,776,842 

 

 

 14,057,887 

 

 

Acquired lease intangibles

 

 

 928,910 

 

 

 524,145 

 

 

Real property held for sale, net of accumulated depreciation

 

 

 31,882 

 

 

 193,307 

 

 

Construction in progress

 

 

 137,481 

 

 

 170,785 

 

 

 

 

 

 21,585,199 

 

 

 16,135,404 

 

 

Less accumulated depreciation and intangible amortization

 

 

 (1,933,439) 

 

 

 (1,369,449) 

 

 

 

Net real property owned

 

 

 19,651,760 

 

 

 14,765,955 

 

 

Real estate loans receivable(1)

 

 

 312,356 

 

 

 300,000 

 

 

Net real estate investments

 

 

 19,964,116 

 

 

 15,065,955 

Other assets:

 

 

 

 

 

 

 

 

Investments in unconsolidated entities

 

 

 768,737 

 

 

 460,962 

 

 

Goodwill

 

 

 68,321 

 

 

 68,321 

 

 

Deferred loan expenses

 

 

 71,218 

 

 

 60,597 

 

 

Cash and cash equivalents

 

 

 512,472 

 

 

 204,895 

 

 

Restricted cash

 

 

 212,812 

 

 

 79,619 

 

 

Receivables and other assets(2)

 

 

 598,717 

 

 

 407,077 

 

 

 

 

 

 2,232,277 

 

 

 1,281,471 

Total assets

 

$

 22,196,393 

 

$

 16,347,426 

 

 

 

 

 

 

 

Liabilities and equity

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

Borrowings under unsecured lines of credit arrangements

 

$

 

$

 393,000 

 

 

Senior unsecured notes

 

 

 6,604,979 

 

 

 4,910,871 

 

 

Secured debt

 

 

 2,875,606 

 

 

 2,299,674 

 

 

Capital lease obligations

 

 

 79,481 

 

 

 81,955 

 

 

Accrued expenses and other liabilities

 

 

 539,361 

 

 

 400,065 

Total liabilities

 

 

 10,099,427 

 

 

 8,085,565 

Redeemable noncontrolling interests

 

 

 32,810 

 

 

 34,068 

Equity:

 

 

 

 

 

 

 

 

Preferred stock

 

 

 1,022,917 

 

 

 1,022,917 

 

 

Common stock

 

 

 285,085 

 

 

 214,592 

 

 

Capital in excess of par value

 

 

 12,263,927 

 

 

 8,129,913 

 

 

Treasury stock

 

 

 (21,248) 

 

 

 (17,272) 

 

 

Cumulative net income

 

 

 2,264,573 

 

 

 2,023,769 

 

 

Cumulative dividends

 

 

 (4,127,597) 

 

 

 (3,309,558) 

 

 

Accumulated other comprehensive income

 

 

 (49,174) 

 

 

 (13,590) 

 

 

Other equity

 

 

 5,678 

 

 

 7,302 

 

 

 

Total Health Care REIT, Inc. stockholders’ equity

 

 

 11,644,161 

 

 

 8,058,073 

 

 

Noncontrolling interests

 

 

 419,995 

 

 

 169,720 

Total equity

 

 

 12,064,156 

 

 

 8,227,793 

Total liabilities and equity

 

$

 22,196,393 

 

$

 16,347,426 

 

 

 

 

 

 

 

 

 

 

(1) Includes non-accrual loan balances of $4,230,000 and $12,956,000 at June 30, 2013 and 2012, respectively.

(2) Includes net straight-line receivable balances of $174,138,000 and $144,612,000 at June 30, 2013 and 2012, respectively.

Page 5 of 8 

 


 

2Q13 Earnings Release                                                                                                                                                                     August 6, 2013

 

 

 

Consolidated Statements of Income (unaudited)

(in thousands, except per share data)

 

 

 

 

 

Three Months Ended

 

Six Months Ended

 

 

 

 

 

June 30,

 

June 30,

 

 

 

 

 

2013 

 

2012 

 

2013 

 

2012 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rental income

 

$

 302,465 

 

$

 263,704 

 

$

 598,753 

 

$

 512,662 

 

 

Resident fees and service

 

 

 370,995 

 

 

 165,654 

 

 

 698,319 

 

 

 323,828 

 

 

Interest income

 

 

 7,640 

 

 

 7,879 

 

 

 16,696 

 

 

 16,020 

 

 

Other income

 

 

 1,025 

 

 

 1,482 

 

 

 1,725 

 

 

 3,166 

Gross revenues

 

 

 682,125 

 

 

 438,719 

 

 

 1,315,493 

 

 

 855,676 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

 110,629 

 

 

 91,299 

 

 

 220,585 

 

 

 179,780 

 

 

Property operating expenses

 

 

 278,587 

 

 

 135,839 

 

 

 531,941 

 

 

 264,641 

 

 

Depreciation and amortization

 

 

 200,108 

 

 

 127,599 

 

 

 386,837 

 

 

 248,136 

 

 

General and administrative expenses

 

 

 23,902 

 

 

 25,870 

 

 

 51,081 

 

 

 53,621 

 

 

Transaction costs

 

 

 28,136 

 

 

 28,691 

 

 

 94,116 

 

 

 34,270 

 

 

Loss (gain) on derivatives, net

 

 

 (2,716) 

 

 

 (2,676) 

 

 

 (407) 

 

 

 (2,121) 

 

 

Loss (gain) on extinguishment of debt, net

 

 

 

 

 576 

 

 

 (308) 

 

 

 576 

Total expenses

 

 

 638,646 

 

 

 407,198 

 

 

 1,283,845 

 

 

 778,903 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from continuing operations before income taxes

 

 

 

 

 

 

 

 

 

 

 

 

 

and income from unconsolidated entities

 

 

 43,479 

 

 

 31,521 

 

 

 31,648 

 

 

 76,773 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax (expense) benefit

 

 

 (1,215) 

 

 

 (1,447) 

 

 

 (3,978) 

 

 

 (2,918) 

Income (loss) from unconsolidated entities

 

 

 (5,461) 

 

 

 1,456 

 

 

 (3,198) 

 

 

 2,989 

Income (loss) from continuing operations

 

 

 36,803 

 

 

 31,530 

 

 

 24,472 

 

 

 76,844 

 

 

 

 

 

 

 

 

 

 

 

 

 

Discontinued operations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gain (loss) on sales of properties, net

 

 

 (29,997) 

 

 

 32,450 

 

 

 52,495 

 

 

 33,219 

 

 

Income (loss) from discontinued operations, net

 

 

 375 

 

 

 12,895 

 

 

 2,013 

 

 

 24,266 

 

 

 

 

 

 

 (29,622) 

 

 

 45,345 

 

 

 54,508 

 

 

 57,485 

Net income (loss)

 

 

 7,181 

 

 

 76,875 

 

 

 78,980 

 

 

 134,329 

Less:

Preferred dividends

 

 

 16,602 

 

 

 16,719 

 

 

 33,203 

 

 

 35,926 

 

 

 

Preferred stock redemption charge

 

 

 

 

 6,242 

 

 

 

 

 6,242 

 

 

 

Net income (loss) attributable to noncontrolling interests

 

 

 (913) 

 

 

 (821) 

 

 

 (774) 

 

 

 (1,876) 

Net income (loss) attributable to common stockholders

 

$

 (8,508) 

 

$

 54,735 

 

$

 46,551 

 

$

 94,037 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average number of common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

 273,091 

 

 

 213,498 

 

 

 266,602 

 

 

 206,612 

 

 

Diluted

 

 

 276,481 

 

 

 215,138 

 

 

 266,602 

 

 

 208,237 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) attributable to common stockholders per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

 (0.03) 

 

$

 0.26 

 

$

 0.17 

 

$

 0.46 

 

 

Diluted

 

$

 (0.03) 

 

$

 0.25 

 

$

 0.17 

 

$

 0.45 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common dividends per share

 

$

 0.765 

 

$

 0.74 

 

$

 1.53 

 

$

 1.48 

Page 6 of 8 

 


 

2Q13 Earnings Release                                                                                                                                                                     August 6, 2013

 

 

 

 

Normalizing Items

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit 1

 

 

(in thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

 

 

 

 

June 30,

 

  

June 30,

 

 

 

 

 

 

 

2013 

 

2012 

 

  

2013 

 

2012 

 

 

Transaction costs

 

$

 28,136 (1)

 

$

 28,691 

 

 

$

 94,116 

 

$

 34,270 

 

 

Special stock compensation grants

 

 

 

 

 

 

 

 

 

 4,316 

 

 

Loss (gain) on derivatives, net

 

 

 (2,716)(2)

 

 

 (2,676) 

 

 

 

 (407) 

 

 

 (2,121) 

 

 

Loss (gain) on extinguishment of debt, net

 

 

 

 

 576 

 

  

 

 (308) 

 

 

 576 

 

 

Held for sale hospital operating expenses

 

 

 

 

 

  

 

 

 

 215 

 

 

Preferred stock redemption charge

 

 

 

 

 6,242 

 

 

 

 

 

 6,242 

 

 

Less: Normalizing items attributable to noncontrolling interests and unconsolidated entities, net

 

 

 (11) 

 

 

 

 

 

 (11) 

 

 

 

 

Total

 

$

 25,409 

 

$

 32,833 

 

 

$

 93,390 

 

$

 43,498 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average diluted common shares outstanding

 

 

 276,481 

 

 

 215,138 

 

 

 

 269,580 

 

 

 208,237 

 

 

Net amount per diluted share

 

$

 0.09 

 

$

 0.15 

 

 

$

 0.35 

 

$

 0.21 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Notes:

(1) Primarily costs incurred with seniors housing acquisitions.

 

 

 

 

 

(2) Related to currency hedges executed to lock the exchange rates on international transactions.

 

 

 

Funds Available for Distribution Reconciliation

 

 

 

 

 

 

 

 

 

 

 

Exhibit 2

 

 

(in thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

 

 

 

June 30,

 

 

June 30,

 

 

 

 

 

 

2013 

 

2012 

 

 

2013 

 

2012 

 

 

Net income (loss) attributable to common stockholders

$

 (8,508) 

 

$

 54,735 

 

 

$

 46,551 

 

$

 94,037 

 

 

Depreciation and amortization(1)

 

 200,477 

 

 

 132,963 

 

 

 

 387,599 

 

 

 260,385 

 

 

Losses/impairments (gains) on properties, net

 

 29,997 

 

 

 (32,450) 

 

 

 

 (52,495) 

 

 

 (33,219) 

 

 

Noncontrolling interests(2)

 

 (6,831) 

 

 

 (4,569) 

 

 

 

 (11,911) 

 

 

 (9,059) 

 

 

Unconsolidated entities(3)

 

 11,348 

 

 

 6,641 

 

 

 

 25,269 

 

 

 7,478 

 

 

Gross straight-line rental income

 

 (13,683) 

 

 

 (12,792) 

 

 

 

 (28,329) 

 

 

 (23,931) 

 

 

Prepaid/straight-line rent receipts

 

 184 

 

 

 2,123 

 

 

 

 4,441 

 

 

 3,138 

 

 

Amortization related to above (below) market leases, net

 

 40 

 

 

 47 

 

 

 

 195 

 

 

 (205) 

 

 

Non-cash interest expense

 

 1,237 

 

 

 2,849 

 

 

 

 4,731 

 

 

 6,542 

 

 

Cap-ex, tenant improvements, lease commissions

 

 (12,174) 

 

 

 (10,647) 

 

 

 

 (24,059) 

 

 

 (19,233) 

 

 

Funds available for distribution

 

 202,087 

 

 

 138,900 

 

 

 

 351,992 

 

 

 285,933 

 

 

Normalizing items, net(4)

 

 25,409 

 

 

 32,833 

 

 

 

 93,390 

 

 

 43,498 

 

 

Prepaid/straight-line rent receipts

 

 (184) 

 

 

 (2,123) 

 

 

 

 (4,441) 

 

 

 (3,138) 

 

 

Funds available for distribution - normalized

$

 227,312 

 

$

 169,610 

 

 

$

 440,941 

 

$

 326,293 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average diluted common shares outstanding

 

 276,481 

 

 

 215,138 

 

 

 

 269,580 

 

 

 208,237 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Per share data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) attributable to common stockholders

$

 (0.03) 

 

$

 0.25 

 

 

$

 0.17 

 

$

 0.45 

 

 

 

Funds available for distribution

$

 0.73 

 

$

 0.65 

 

 

$

 1.31 

 

$

 1.37 

 

 

 

Funds available for distribution - normalized

$

 0.82 

 

$

 0.79 

 

 

$

 1.64 

 

$

 1.57 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Normalized FAD Payout Ratio:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends per common share

$

 0.765 

 

$

 0.74 

 

 

$

 1.53 

 

$

 1.48 

 

 

 

FAD per diluted share - normalized

$

 0.82 

 

$

 0.79 

 

 

$

 1.64 

 

$

 1.57 

 

 

 

 

Normalized FAD payout ratio

 

93%

 

 

94%

 

 

 

93%

 

 

94%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 entities.

 

 

 

 

 

(4) See Exhibit 1.

 

Page 7 of 8 

 


 

2Q13 Earnings Release                                                                                                                                                                     August 6, 2013

 

 

 

 

Funds From Operations Reconciliation

 

 

 

 

 

 

 

 

 

 

Exhibit 3

 

 

(in thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

 

 

 

 

 

 

June 30,

 

June 30,

 

 

 

 

 

 

2013 

 

2012 

 

2013 

 

2012 

 

 

Net income (loss) attributable to common stockholders

$

 (8,508) 

 

$

 54,735 

 

$

 46,551 

 

$

 94,037 

 

 

Depreciation and amortization(1)

 

 200,477 

 

 

 132,963 

 

 

 387,599 

 

 

 260,385 

 

 

Losses/impairments (gains) on properties, net

 

 29,997 

 

 

 (32,450) 

 

 

 (52,495) 

 

 

 (33,219) 

 

 

Noncontrolling interests(2)

 

 (7,821) 

 

 

 (5,190) 

 

 

 (13,614) 

 

 

 (10,179) 

 

 

Unconsolidated entities(3)

 

 16,521 

 

 

 7,873 

 

 

 33,504 

 

 

 10,759 

 

 

Funds from operations

 

 230,666 

 

 

 157,931 

 

 

 401,545 

 

 

 321,783 

 

 

Normalizing items, net(4)

 

 25,409 

 

 

 32,833 

 

 

 93,390 

 

 

 43,498 

 

 

Funds from operations - normalized

$

 256,075 

 

$

 190,764 

 

$

 494,935 

 

$

 365,281 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average diluted common shares outstanding

 

 276,481 

 

 

 215,138 

 

 

 269,580 

 

 

 208,237 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Per share data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) attributable to common stockholders

$

 (0.03) 

 

$

 0.25 

 

$

 0.17 

 

$

 0.45 

 

 

 

Funds from operations

$

 0.83 

 

$

 0.73 

 

$

 1.49 

 

$

 1.55 

 

 

 

Funds from operations - normalized

$

 0.93 

 

$

 0.89 

 

$

 1.84 

 

$

 1.75 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Normalized FFO Payout Ratio:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends per common share

$

 0.765 

 

$

 0.74 

 

$

 1.53 

 

$

 1.48 

 

 

 

FFO per diluted share - normalized

$

 0.93 

 

$

 0.89 

 

$

 1.84 

 

$

 1.75 

 

 

 

 

Normalized FFO payout ratio

 

82%

 

 

83%

 

 

83%

 

 

85%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 entities.

 

 

 

 

 

(4) See Exhibit 1.

 

 

 

Outlook Reconciliations: Year Ended December 31, 2013

 

 

 

 

 

 

 

Exhibit 4

 

 

(in thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Prior Outlook

 

Current Outlook

 

 

 

 

 

 

Low

 

High

 

Low

 

High

 

 

FFO Reconciliation:

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to common stockholders

$

 0.70 

 

$

 0.80 

 

$

 0.58 

 

$

 0.68 

 

 

Losses/impairments (gains) on sale of properties, net

 

 (0.31) 

 

 

 (0.31) 

 

 

 (0.19) 

 

 

 (0.19) 

 

 

Depreciation and amortization(1)

 

 3.06 

 

 

 3.06 

 

 

 2.97 

 

 

 2.97 

 

 

Funds from operations

 

 3.45 

 

 

 3.55 

 

 

 3.36 

 

 

 3.46 

 

 

Normalizing items, net(2)

 

 0.25 

 

 

 0.25 

 

 

 0.34 

 

 

 0.34 

 

 

Funds from operations - normalized

$

 3.70 

 

$

 3.80 

 

$

 3.70 

 

$

 3.80 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FAD Reconciliation:

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to common stockholders

$

 0.70 

 

$

 0.80 

 

$

 0.58 

 

$

 0.68 

 

 

Losses/impairments (gains) on sale of properties, net

 

 (0.31) 

 

 

 (0.31) 

 

 

 (0.19) 

 

 

 (0.19) 

 

 

Depreciation and amortization(1)

 

 3.06 

 

 

 3.06 

 

 

 2.97 

 

 

 2.97 

 

 

Net straight-line rent and above/below amortization(1)

 

 (0.18) 

 

 

 (0.18) 

 

 

 (0.18) 

 

 

 (0.18) 

 

 

Non-cash interest expense(1)

 

 0.04 

 

 

 0.04 

 

 

 - 

 

 

 - 

 

 

Cap-ex, tenant improvements, lease commissions(1)

 

 (0.29) 

 

 

 (0.29) 

 

 

 (0.25) 

 

 

 (0.25) 

 

 

Funds available for distribution

 

 3.02 

 

 

 3.12 

 

 

 2.93 

 

 

 3.03 

 

 

Normalizing items, net(2)

 

 0.25 

 

 

 0.25 

 

 

 0.34 

 

 

 0.34 

 

 

Prepaid/straight-line rent receipts

 

 (0.02) 

 

 

 (0.02) 

 

 

 (0.02) 

 

 

 (0.02) 

 

 

Funds available for distribution - normalized

$

 3.25 

 

$

 3.35 

 

$

 3.25 

 

$

 3.35 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Notes:

(1) Amounts presented net of noncontrolling interests' share and HCN's share of unconsolidated entities.

 

 

  

(2) See Exhibit 1.

 

 

Page 8 of 8