-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Jmp6MQnhQQumB/2j6rt0P/41GyUCCgvYGnJ3eZldUa3EVQYEOYSi7wcLfXzJ4lHe AJyxPkkVJ1I3K6cynx5BvQ== 0000950152-97-005583.txt : 19970806 0000950152-97-005583.hdr.sgml : 19970806 ACCESSION NUMBER: 0000950152-97-005583 CONFORMED SUBMISSION TYPE: 10-Q/A PUBLIC DOCUMENT COUNT: 7 CONFORMED PERIOD OF REPORT: 19970630 FILED AS OF DATE: 19970805 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: HEALTH CARE REIT INC /DE/ CENTRAL INDEX KEY: 0000766704 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 341096634 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-08923 FILM NUMBER: 97651456 BUSINESS ADDRESS: STREET 1: ONE SEAGATE STE 1950 STREET 2: P O BOX 1475 CITY: TOLEDO STATE: OH ZIP: 43604 BUSINESS PHONE: 4192472800 10-Q/A 1 HEALTH CARE REIT, INC. AMENDED 10-Q 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 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 3 PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS -------------------- CONSOLIDATED BALANCE SHEETS (UNAUDITED) HEALTH CARE REIT, INC. AND SUBSIDIARIES
JUNE 30 DECEMBER 31 1997 1996 (UNAUDITED) (NOTE) ----------- ----------- (IN THOUSANDS) 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 ========= =========
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- 4 CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) HEALTH CARE REIT, INC. AND SUBSIDIARIES
THREE MONTHS ENDED SIX MONTHS ENDED JUNE 30 JUNE 30 1997 1996 1997 1996 ------------------ ----------------- (IN THOUSANDS EXCEPT PER SHARE DATA) 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
See notes to consolidated financial statements -4- 5 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (UNAUDITED) HEALTH CARE REIT, INC. AND SUBSIDIARIES
SIX MONTHS ENDED JUNE 30 1997 1996 (IN THOUSANDS) 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 ========= =========
See notes to consolidated financial statements -5- 6 CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) HEALTH CARE REIT, INC. AND SUBSIDIARIES
SIX MONTHS ENDED JUNE 30 1997 1996 -------------------------- (IN THOUSANDS) OPERATING ACTIVITIES 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 ========= =========
See notes to consolidated financial statements -6- 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 -7- 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- 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 -9- 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. -10- 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:
Nominee For Against - ---------------------------------- ----------------------------- --------------------------- 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:
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
-11- 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- 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 -13- 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 -14- 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- EX-27 2 EXHIBIT 27
5 0000766704 Health Care Reit, Inc. 1,000 6-MOS DEC-31-1997 JAN-01-1997 JUN-30-1997 973 1,766 5,206 10,087 0 0 220,581 8,943 637,595 0 216,673 22,042 0 0 387,420 637,595 0 35,017 0 0 2,839 300 7,763 21,754 0 21,754 0 0 0 21,754 0.54 0.54
EX-99.1 3 EXHIBIT 99.1 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. ##### EX-99.2 4 EXHIBIT 99.2 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. ##### EX-99.3 5 EXHIBIT 99.3 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. ##### EX-99.4 6 EXHIBIT 99.4 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. ##### EX-99.5 7 EXHIBIT 99.5 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. 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 3
HEALTH CARE REIT, INC. FINANCIAL SUPPLEMENT CONSOLIDATED BALANCE SHEETS (UNAUDITED) (AMOUNTS IN THOUSANDS) MARCH 31 ------------------------ 1997 1996 --------- --------- 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 ========= =========
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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 ------- ------- 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
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