Core Group - AHE - of American Health Properties, Inc. Reports 6% Increase in FFO Per Share in 1998; $.08 Per Share Annualized Dividend Increase;.DENVER--(BUSINESS WIRE)--Jan. 25, 1999-- Operator Exercises Option to Acquire Kendall Ken·dall , Edward Calvin 1886-1972. American biochemist. He shared a 1950 Nobel Prize for discoveries concerning the hormones of the adrenal cortex. Regional Medical Center for $105 Million in March 1999; Record $150 Million of New Investments in 1998 The Board of Directors of American Health American Health Inc. is a company that manufactures health supplements. It is located in Holbrook, New York. One of its products is labeled the "Chewable Original Papaya Enzyme" with the attached registered trademark, "The 'After Meal Supplement'". Properties, Inc. announced that for 1998, Core Group funds from operations Funds From Operations (FFO) Used by real estate and other investment trusts to define the cash flow from trust operations; earnings with depreciation and amortization added back. (FFO FFO See: Funds from operations ) available to common shareholders increased 6% to $63,485,000 ($2.58 per share) compared to $57,596,000 ($2.43 per share) for 1997. For the fourth quarter of 1998, Core Group FFO available to common shareholders increased 8% to $16,641,000 ($.66 per share) compared to $14,470,000 ($.61 per share) for the fourth quarter of 1997. The Board of Directors declared a fourth quarter dividend of $.5650 per share on the Company's Core Group Common Stock (NYSE NYSE See: New York Stock Exchange :AHE) payable February February: see month. 24, 1999 to shareholders of record February 10, 1999. The annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. dividend rate on the Company's Core Group Common Stock was increased by $0.08 per year to $2.26 per share. The Board of Directors also declared a dividend of $.5375 per share for the regular quarterly period ending February 28, 1999 on its 8.60% Series B Cumulative Redeemable Redeemable Eligible for redemption under the terms of an indenture. Preferred Stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. Depositary DEPOSITARY, contracts. He with whom a deposit is confided or made. 2. It is, the essence of the contract of deposits that it should be gratuitous on the part 'of the depositary. 9 M. R. 470. Shares (NYSE:AHE PrB), payable March 1, 1999 to shareholders of record February 15, 1999. The Core Group announced that the operator of its Kendall Regional Medical Center in Miami, Florida “Miami” redirects here. For the Native American tribe, see Miami tribe. Miami is a major city in southeastern Florida, in the United States. It is the county seat of Miami-Dade County. Miami is a gamma world city with an estimated population of 404,048. has exercised its purchase option under the lease. The purchase price of $105 million results in a potential gain to the Core Group of approximately $50 million. Assuming the transaction closes in March 1999, as currently scheduled, the Core Group will have realized a compound annual return of approximately 14.5% on its investment in this facility since its acquisition in February 1987. The parties to the Kendall facility lease have agreed to cooperate in effecting the transaction as a "like-kind" 1031 exchange for tax purposes. It is the Core Group's intention to complete such an exchange by acquiring new investment properties, if possible. The Core Group cannot be assured that total revenues generated by new investments acquired in exchange for the Kendall facility will equal the approximately $10.3 million of annual revenues currently generated by the Kendall investment. If the Core Group is successful in identifying and closing on a sufficient portfolio of new investments within the time limits imposed by federal tax law, the Core Group may be able to recognize the gain of approximately $50 million for book purposes without paying current tax on the gain. Under these circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or , the resulting approximately $50 million increase in the Core Group's equity, achieved without issuing new shares, would provide the Core Group with additional borrowing capacity of approximately $55 million. As previously announced, during 1998, the Core Group solidified so·lid·i·fy v. so·lid·i·fied, so·lid·i·fy·ing, so·lid·i·fies v.tr. 1. To make solid, compact, or hard. 2. To make strong or united. v.intr. the strength of its portfolio through the renewal of four existing leases of acute care hospitals operated by Tenet Healthcare Tenet Healthcare Corporation (THC) is an operating company that owns and operates 57 hospitals in the United States [1]. It is based in Dallas, Texas. Its stock ticker symbol on the New York Stock Exchange is NYSE: THC. Corporation. Those leases, representing a significant portion of the FFO of the Core Group, were renewed on substantially the same terms through February 2004. During 1998, the Core Group funded over $150 million of new investments, including investments in skilled nursing, assisted living as·sist·ed living n. A living arrangement in which people with special needs, especially older people with disabilities, reside in a facility that provides help with everyday tasks such as bathing, dressing, and taking medication. , Alzheimer's Noun 1. Alzheimer's - a progressive form of presenile dementia that is similar to senile dementia except that it usually starts in the 40s or 50s; first symptoms are impaired memory which is followed by impaired thought and speech and finally complete helplessness care and medical office/clinic facilities. In the fourth quarter of 1998, the Core Group completed the funding of a $7.4 million newly constructed skilled nursing facility skilled nursing facility n. Abbr. SNF An establishment that houses chronically ill, usually elderly patients, and provides long-term nursing care, rehabilitation, and other services. in Las Vegas Las Vegas (läs vā`gəs), city (1990 pop. 258,295), seat of Clark co., S Nev.; inc. 1911. It is the largest city in Nevada and the center of one of the fastest-growing urban areas in the United States. , Nevada Nevada (nəvăd`ə, –vä–), far western state of the United States. It is bordered by Utah (E), Arizona (SE), California (SW, W), and Oregon and Idaho (N). and commenced the lease of the facility to Covenant Care, Inc. The Core Group also started or continued funding the development of five separate projects during the fourth quarter of 1998 that will total approximately $31 million upon completion, including three assisted living facilities, a skilled nursing facility and an Alzheimer's care facility. "1998 was a very successful year for American Health Properties," according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. the Company's Chairman, President and Chief Executive Officer, Joseph P. Sullivan. "The Company completed a record level of investments. These should provide significant FFO growth while enhancing the diversification Diversification A risk management technique that mixes a wide variety of investments within a portfolio. It is designed to minimize the impact of any one security on overall portfolio performance. Notes: Diversification is possibly the greatest way to reduce the risk. of our investment portfolio by both property type and operator. Our objectives for 1999 include increasing the cash flow of our investment portfolio through internally generated growth and by continuing to make selective investments in quality properties that yield profitable returns. The Company's selective approach to investments has allowed it to retain excellent liquidity. Including the potential $105 million of proceeds from the Kendall transaction, the Company will have approximately $200 million available for new investments without issuing new equity." Summary Background Information American Health Properties, Inc. is a real estate investment trust (REIT REIT See: Real Estate Investment Trust REIT See real estate investment trust (REIT). ) specializing in health care facilities. The Core Group Common Stock (NYSE:AHE) represents the Company's approximately $850 million of gross investments in acute care hospitals, rehabilitation hospitals Hospital devoted to the rehabilitation of patients with various neurologic, musculoskeletal, orthopedic and other medical conditions following stabilization of their acute medical issues. , long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. acute care hospitals, assisted living facilities, skilled nursing facilities, Alzheimer's care facilities and medical office/clinic facilities (the "Core Group") located in 21 states. Cautionary Statement Regarding Future Results and Forward-Looking Statements This press release includes statements that are not purely historical and are "forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. " within the meaning of Section 27A of the Securities Act of 1933, as amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. , and Section 21E of the Securities Exchange Act of 1934, as amended, including statements regarding the Company's expectations, beliefs, intentions or strategies regarding the future. All statements other than historical fact contained in this press release, including without limitation statements regarding rent or interest to be received from the Company's operators and tenants, plans with respect to individual facilities, expectations with respect to the specific terms and renewals of leases or sales of the Company's facilities, the Company's anticipated dividends, the Company's liquidity position, projected expenses associated with operating or maintaining individual properties, the Company's ability to realize the recorded amounts of its investments and the potential effect of new or existing regulations on the operations conducted at the Company's facilities, are forward-looking statements. All forward-looking statements included in this press release are based on information available to the Company on the date hereof here·of adv. Of this. hereof Adverb Formal or law of or concerning this Adv. 1. hereof - of or concerning this; "the twigs hereof are physic" , and the Company assumes no obligation to update such forward-looking statements. Although the Company believes that the assumptions and expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct or that the Company will take any actions that may presently be planned. Certain factors that could cause actual results to differ materially from those expected include, among others: the financial success of the operations conducted at the Company's facilities and the financial strength of the operators and tenants of such facilities, the continuing ability of operators and tenants to meet their obligations to the Company under existing or restructured agreements, changes in operators or ownership of operators, the viability of alternative uses for the Company's properties when necessary, changes in government policy relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the health care industry including reductions in reimbursement Reimbursement Payment made to someone for out-of-pocket expenses has incurred. levels under the Medicare and Medicaid Medicare and Medicaid U.S. government programs in effect since 1966. Medicare covers most people 65 or older and those with long-term disabilities. Part A, a hospital insurance plan, also pays for home health visits and hospice care. programs, operators' and tenants' continued eligibility to participate in the Medicare Medicare, national health insurance program in the United States for persons aged 65 and over and the disabled. It was established in 1965 with passage of the Social Security Amendments and is now run by the Centers for Medicare and Medicaid Services. or Medicaid Medicaid, national health insurance program in the United States for low-income persons; established in 1965 with passage of the Social Security Amendments and now run by the Centers for Medicare and Medicaid Services. programs, reductions in reimbursement by other third-party payors, the impact of managed care pricing pressures, the requirement to provide care on a fixed-price basis, lower occupancy levels at the Company's facilities, the Company's ability to complete the proposed disposition of the Kendall facility as a successful 1031 exchange in which the Company acquires investments providing a comparable rate of return, a downturn Downturn The transition point between a rising, expanding economy to a falling, contracting one. downturn A decline in security prices or economic activity following a period of rising or stable prices or activity. in market lease rates for medical office space, disruptions caused by the failure of the Company or its vendors, operators, lessees and borrowers to resolve Year 2000 issues affecting their respective operations, higher than expected costs associated with the maintenance and operation of the Company's medical office/clinic facilities, higher than expected turnover at the Company's medical office/clinic facilities, a reduction in demand for the services provided at the Company's facilities, the strength and financial resources of the Company's competitors, the availability and cost of capital, the Company's ability to make additional real estate investments at attractive yields, the adoption of new accounting standards and changes in tax laws and regulations affecting real estate investment trusts. Readers are encouraged to review the Company's Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended December 31, 1997 and Quarterly Report on Form 10-Q Form 10-Q See 10-Q. for the quarter ended September 30, 1998 for a fuller discussion of such factors. Note to Editors: All income and FFO per share amounts in this narrative are on a diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. basis. -0-
AMERICAN HEALTH PROPERTIES, INC.
FINANCIAL HIGHLIGHTS - FOURTH QUARTER
(In thousands except per share amounts)
(Unaudited)
Consolidated Core Group Psychiatric Group
Three Months Ended December 31,
1998 1997 1998 1997 1998 1997
Revenues
Rental income 24,085 18,665 23,738 18,310 347 355
Mortgage interest
income 118 1,628 118 105 0 1,523
Additional rental
and interest
income 3,764 3,251 3,729 3,142 35 109
Other property
income 733 80 733 80 0 0
Other interest
income 163 787 127 707 36 80
Interest on loan
to Core Group 0 0 0 0 21 0
Interest on loans to
Psychiatric Group 0 0 0 377 0 0
------ ------ ------ ------ --- -----
28,863 24,411 28,445 22,721 439 2,067
Expenses
Depreciation and
amortization 5,696 4,277 5,508 4,088 188 189
Property operating 1,606 232 1,531 142 75 90
Interest expense 5,706 4,541 5,706 4,541 0 0
Interest on loans
from Core Group 0 0 0 0 0 377
Interest on loan
from Psychiatric
Group 0 0 21 0 0 0
General and
administrative 2,428 2,185 2,288 1,942 140 243
Impairment loss on
real estate and
notes receivable 5,600 0 0 0 5,600 0
------ ------ ------ ------ --- -----
21,036 11,235 15,054 10,713 6,003 899
Minority Interest 48 47 48 47 0 0
Net Income (Loss) 7,779 13,129 13,343 11,961 (5,564) 1,168
Funds From
Operations 19,015 17,380 18,791 16,023 224 1,357
Basic Per Share Amounts
Net Income (Loss) $0.45(1) $0.44(1) $(2.67) $0.56
Funds From Operations $0.67(1) $0.61(1) $ 0.11 $0.65
Weighted Average Shares 24,987 23,560 2,084 2,084
Diluted Per Share Amounts
Net Income (Loss) $0.44(1) $0.44(1) $(2.67)(2) $0.56
Funds From Operations $0.66(1) $0.61(1) $ 0.10 $0.65
Weighted Average Shares and
Dilutive Potential Shares 25,163 23,778 2,139 2,100
Dividends Declared Per Share $0.565 $0.545 $0.095 $0.620
Balance Sheet As of December 31,
Information 1998 1997 1998 1997 1998 1997
Total Assets $753,842 $690,572 $746,995 $652,132 $ 7,027 $ 50,994
Total Debt $308,936 $243,813 $309,116 $243,813 $ 0 $ 12,554
Total Share-
holders' Equity $410,865 $414,961 $404,480 $378,268 $ 6,385 $ 36,693
(1) Per share amount is based on amount attributable to Core Group
common shareholders which represents amount after deduction of
preferred dividends of $2,150 and $1,553 for the three months
ended December 31, 1998 and 1997, respectively.
(2) Per share amount is based on Weighted Average Shares used for
Basic Per Share Amounts.
AMERICAN HEALTH PROPERTIES, INC.
FINANCIAL HIGHLIGHTS - YEAR TO DATE
(In thousands except per share amounts)
(Unaudited)
Consolidated Core Group Psychiatric Group
Twelve Months Ended December 31,
1998 1997 1998 1997 1998 1997
Revenues
Rental income 92,110 72,237 90,338 70,604 1,772 1,633
Mortgage interest
income 3,542 6,289 464 217 3,078 6,072
Additional rental
and interest
income 14,098 12,498 13,362 11,833 736 665
Other property
income 2,099 187 2,099 187 0 0
Other interest
income 873 2,254 574 1,908 299 346
Interest on loan
to Core Group 0 0 0 0 117 0
Interest on loans
to Psychiatric
Group 0 0 712 1,553 0 0
------- ------ ------- ------ ----- -----
112,722 93,465 107,549 86,302 6,002 8,716
Expenses
Depreciation
and amortization 21,354 15,904 20,601 15,153 753 751
Property operating 5,769 524 5,319 334 450 190
Interest expense 21,609 19,659 21,609 19,659 0 0
Interest on loans
from Core Group 0 0 0 0 712 1,553
Interest on loan
from Psychiatric
Group 0 0 117 0 0 0
General and
administrative 9,006 8,000 8,069 6,860 937 1,140
Impairment loss on
real estate and
notes receivable 8,330 11,000 0 0 8,330 11,000
------ ------ ------ ------ ------ -----
66,068 55,087 55,715 42,006 11,182 14,634
Minority Interest 189 189 189 189 0 0
Income (Loss)
Before Extra-
ordinary Item 46,465 38,189 51,645 44,107 (5,180) (5,918)
Extraordinary
Loss On Debt
Prepayment 0 (11,427) 0 (11,427) 0 0
Net Income (Loss) 46,465 26,762 51,645 32,680 (5,180) (5,918)
Funds From
Operations 75,988 64,982 72,085 59,149 3,903 5,833
Basic Per Share Amounts
Income (Loss)
Before Extra-
ordinary Item $1.77(1)$ 1.81(1) $(2.49) $(2.84)
Extraordinary
Loss On Debt
Prepayment $ 0 $(0.49) $ 0 $ 0
Net Income (Loss) $1.77(1)$ 1.32(1) $(2.49) $(2.84)
Funds From Operations $2.60(1)$ 2.45(1) $ 1.87 $ 2.80
Weighted Average Shares 24,379 23,505 2,084 2,084
Diluted Per Share Amounts
Income (Loss)
Before Extra-
ordinary Item $1.75(1)$ 1.80(1) $(2.49)(2)$(2.84)(2)
Extraordinary Loss
On Debt Prepayment $ 0 $(0.49) $ 0 $ 0
Net Income (Loss) $1.75(1)$ 1.31(1) $(2.49)(2)$(2.84)(2)
Funds From Operations $2.58(1)$ 2.43(1) $ 1.84 $ 2.78
Weighted Average Shares and
Dilutive Potential Shares 24,605 23,703 2,119 2,098
Dividends Declared Per Share $2.200 $2.120 $1.725 $2.620
(1) Per share amount is based on amount attributable to Core Group
common shareholders which represents amount after deduction of
preferred dividends of $8,600 and $1,553 for the twelve months
ended December 31, 1998 and 1997, respectively.
(2) Per share amount is based on Weighted Average Shares used for
Basic Per Share Amounts.
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