Health Care REIT, Inc. Reports First Quarter 2009 Results

Business Wire, May 04, 2009

TOLEDO, Ohio -- Health Care REIT, Inc. (NYSE:HCN) today announced operating results for the company’s first quarter ended March 31, 2009.

“We are off to a solid start this year as our portfolio performance and financial results were in line with our expectations,” commented George L. Chapman, chairman, chief executive officer and president of Health Care REIT, Inc. “Thus far in 2009, we have raised over $400 million in capital through a combination of equity, secured debt and selective asset sales. This capital, combined with proceeds from asset sales and additional secured debt, should provide adequate liquidity to meet all of our debt maturities and unfunded development through mid-2012.”

Recent Highlights.

• Achieved 1Q09 normalized FFO of $0.81 per share, up 3%
• Achieved 1Q09 normalized FAD of $0.76 per share, up 1%
• Completed 1Q09 net new investments totaling $129.5 million
• Generated $63.0 million in net proceeds on property sales, recognizing $17.0 million of gains in 1Q09
• Raised $210.9 million in net proceeds from S&P 500 inclusion offering in February
• Raised $133.0 million Freddie Mac mortgage loan in April
• Retired $21.7 million of future unsecured senior note and convertible debt maturities for $19.8 million

Key Performance Indicators.

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1Q09 Earnings. The following table summarizes certain items impacting NICS, FFO and FAD:

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Dividends for First Quarter 2009. As previously announced, the Board of Directors declared a cash dividend for the quarter ended March 31, 2009 of $0.68 per share, as compared to $0.68 per share for the same period in 2008. The cash dividend will be paid on May 20, 2009 and will be the company’s 152nd consecutive quarterly dividend payment.

Outlook for 2009. The company is revising its 2009 normalized FFO and FAD guidance primarily due to the additional secured debt capital transactions now included in the forecast. In addition to the $133 million, 10-year, 6.10% Freddie Mac mortgage loan completed in April, the company expects to raise an additional $200 to $300 million of secured debt at approximately 6.0% to 6.5% during the second half of 2009.

Normalized FFO has been revised to a range of $3.10 to $3.20 per diluted share from $3.20 to $3.30 per diluted share. Normalized FAD has been revised to a range of $2.96 to $3.06 per diluted share from $3.08 to $3.18 per diluted share. FFO guidance should be compared to the $3.33 per diluted share actual 2008 results as restated for the convertible debt accounting change.

Net income attributable to common stockholders has been increased to a range of $1.70 to $1.80 per diluted share from $1.59 to $1.69 per diluted share. The increase in net income guidance is primarily due to the $17.0 million of gains on sales of real estate, lower projected depreciation expense and $1.7 million of debt extinguishment gains partially offset by the incremental secured debt assumptions.

The company’s guidance excludes any 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.

Conference Call Information. The company has scheduled a conference call on Tuesday, May 5, 2009 at 10:00 a.m. Eastern Time to discuss its first quarter 2009 results, industry trends, portfolio performance and outlook for 2009. 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 May 19, 2009. To access the rebroadcast, dial 800-642-1687 or 706-645-9291 (international). The conference ID number is 92034109. 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 under the heading News & Events.

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 unusual and non-recurring items. 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 unusual and non-recurring items.