Health Care Property Investors, Inc. Reports Results for the Quarter Ended June 30, 2005.LONG BEACH, Calif. -- Health Care Property Investors, Inc. (the "Company") (NYSE NYSE See: New York Stock Exchange :HCP HCP, n healthcare provider, a professional who specializes in treating and managing a person's general or specific health needs. ), a healthcare real estate investment trust ("REIT REIT See: Real Estate Investment Trust REIT See real estate investment trust (REIT). "), today announced operating results for the quarter ended June June: see month. 30, 2005. Net income applicable to common shares for the quarter ended June 30, 2005, was $37.8 million, or $0.28 per 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. share of common stock. This compares with net income applicable to common shares of $36.3 million, or $0.27 per diluted share of common stock for the quarter ended June 30, 2004. Net income applicable to common shares for the six months ended June 30, 2005, was $75.9 million, or $0.56 per diluted share of common stock, compared to $77.9 million, or $0.59 per diluted share of common stock in the year ago period. 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 ") applicable to common shares was $64.3 million, or $0.47 per diluted share of common stock, for the quarter ended June 30, 2005, compared to FFO applicable to common shares of $58.0 million, or $0.44 per diluted share of common stock, for the quarter ended June 30, 2004. FFO applicable to common shares for the six months ended June 30, 2005, was $123.2 million, or $0.91 per diluted share of common stock, compared to $112.0 million, or $0.84 per diluted share of common stock in the year ago period. Prior to impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. charges, FFO applicable to common shares was $0.45 and $0.86 per diluted share of common stock for the three and six months ended June 30, 2004, respectively. No impairment charges were incurred in 2005. FFO is a supplemental non-GAAP financial measure that the Company believes is helpful in evaluating the operating performance of real estate investment trusts. RECENT DEVELOPMENTS
-- Year-to-date, the Company has made secured loans and acquired
interests in properties aggregating $441 million, including
the following:
-- On July 22, 2005, the Company acquired twelve independent
and assisted living facilities for approximately $252
million, including assumed debt valued at approximately
$52 million, through a sale-leaseback transaction. These
facilities have an initial lease term of 15 years, with
three ten-year renewal options. The initial annual lease
rate is approximately 7.1% with annual escalators based on
the Consumer Price Index ("CPI") that have a floor of 3%.
Eleven of the facilities have an average occupancy of 91%.
One facility will be placed into service in August 2005
and is currently 34% pre-leased.
-- On July 1, 2005, the Company acquired an assisted living
facility for approximately $16 million through a
sale-leaseback transaction. The facility has an initial
lease term of 15 years, with two ten-year renewal options.
The initial annual lease rate is approximately 8.75% with
annual CPI-based escalators that have a floor of 2.75%.
The property is currently 96% occupied and a 60-unit
expansion is planned.
-- As previously announced, on April 28, 2005, the Company
acquired five medical office buildings for approximately
$81 million, including assumed debt valued at $29 million.
The initial yield is 7.0% with two properties currently in
lease-up. The yield following lease-up is expected to be
8.2%. The medical office buildings include approximately
537,000 rentable square feet.
-- As previously announced, on April 20, 2005, the Company
acquired five assisted living facilities for $58 million
through a sale-leaseback transaction. These facilities
have an initial lease term of 15 years, with two ten-year
renewal options. The initial annual lease rate is
approximately 9.0% with annual CPI-based escalators that
have a floor of 2.75%. These properties are included in a
new master lease along with five other properties
currently leased to the operator.
-- Year-to-date, the Company sold interests in ten properties for
approximately $48 million and recognized a gain of
approximately $9 million. During the quarter ended June 30,
2005, the Company sold interests in six properties for
approximately $13 million and recognized a gain of
approximately $4 million.
-- On April 27, 2005, the Company issued $250 million of 5 5/8%
senior unsecured notes due 2017. The notes were priced at
99.585% of the principal amount for an effective yield of
5.673%. The Company received proceeds of $247 million, which
were used to repay borrowings under the bank line of credit
and for general corporate purposes.
-- On July 27, 2005, the Company announced that its Board
declared a quarterly cash dividend of $0.42 per share of
common stock. The common stock cash dividend will be paid on
August 19, 2005, to stockholders of record as of the close of
business on August 8, 2005.
FUTURE OPERATIONS For the full year 2005, the Company presently expects net income applicable to common shares to range between $1.04 and $1.08 per diluted common share, and FFO applicable to common shares to range between $1.82 and $1.86 per diluted common share. COMPANY INFORMATION Health Care Property Investors, Inc. has scheduled a conference call and webcast for Tuesday Tuesday: see week. , August 2, 2005 at 9:00 a.m. Pacific Time (12:00 p.m. Eastern Time) in order to present the Company's performance and operating results for the quarter ended June 30, 2005. The conference call is accessible by dialing 800-901-5241 (U.S.) and 617-786-2963 (International). The participant Participant A party of a funding. It usually refers to the lowest rank or smallest level of funding. pass code is 65700216. The webcast is accessible via the Company's Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the web site at www.hcpi.com. A webcast replay of the conference call will be available after 2:00 p.m. Eastern Time on August 2, 2005 through August 16, 2005 on the Company's web site. The Company's supplemental information package for the current period will also be available on the Company's web site in the "Presentations" section of the "Investor Relations Investor relations The process by which the corporation communicates with its investors. " tab. Health Care Property Investors, Inc. (NYSE:HCP) is a self-administered REIT that invests directly or through joint ventures in healthcare facilities. As of June 30, 2005, the Company's portfolio of properties, excluding assets held for sale but including investments through joint ventures and mortgage loans, included 529 properties in 42 states and consisted of 28 hospitals, 165 skilled nursing facilities 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. , 121 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. and continuing care continuing care a professional convention that a veterinarian who is treating an animal is obliged to continue treating that case unless an arrangement is made with its custodian to transfer the care to another practitioner or to a specialist. retirement communities, 191 medical office buildings and 24 other healthcare facilities. For more information on Health Care Property Investors, Inc., visit the Company's web site at www.hcpi.com. "Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. " Statement under the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995: The statements contained in this release which are not historical facts 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 and Section 21E of the Securities Exchange Act of 1934. These statements include the Company's estimate of net income per diluted common share and FFO per diluted common share for the full year 2005. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those set forth in or implied Inferred from circumstances; known indirectly. In its legal application, the term implied is used in contrast with express, where the intention regarding the subject matter is explicitly and directly indicated. by forward-looking statements. These risks and uncertainties include competition for the acquisition and financing of healthcare facilities, competition for lessees and mortgagors (including new leases and mortgages and the renewal or rollover A graphic element in an application or on a Web page that changes its color or shape when the pointer is moved (rolled) over it. See JavaScript rollover. See also n-key rollover. of existing leases); continuing operational difficulties in the skilled nursing and assisted living sectors; the Company's ability to acquire, sell or lease facilities and the timing of acquisitions, sales and leasings; changes in healthcare laws and regulations and other changes in the healthcare industry which affect the operations of the Company's lessees or mortgagors; changes in management; costs of compliance with building regulations; changes in tax laws and regulations; changes in the financial position of the Company's lessees and mortgagors; changes in rules governing gov·ern v. gov·erned, gov·ern·ing, gov·erns v.tr. 1. To make and administer the public policy and affairs of; exercise sovereign authority in. 2. financial reporting, including new accounting pronouncements; and changes in economic conditions, including changes in interest rates and the availability and cost of capital, which affect opportunities for profitable investments. Some of these risks, and other risks, are described from time to time in Health Care Property Investors, Inc.'s Securities and Exchange Commission filings.
HEALTH CARE PROPERTY INVESTORS, INC.
Summary of Information
In thousands, except per share data
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
------------------- -------------------
2005 2004 2005 2004
--------- --------- --------- ---------
Revenues and other income $118,542 $103,926 $226,763 $198,729
Net income applicable to
common shares $ 37,764 $ 36,302 $ 75,939 $ 77,854
Basic earnings per common
share $ 0.28 $ 0.28 $ 0.57 $ 0.59
--------- --------- --------- ---------
Diluted earnings per common
share $ 0.28 $ 0.27 $ 0.56 $ 0.59
--------- --------- --------- ---------
Weighted average shares used to
calculate diluted earnings per
common share 135,214 132,856 134,871 132,778
--------- --------- --------- ---------
Funds from operations
applicable to common
shares (1) $ 64,294 $ 57,998 $123,208 $111,975
Basic funds from operations
per common share (1) $ 0.48 $ 0.44 $ 0.92 $ 0.85
--------- --------- --------- ---------
Diluted funds from operations
per common share (1) $ 0.47 $ 0.44 $ 0.91 $ 0.84
--------- --------- --------- ---------
Weighted average shares used to
calculate diluted funds from
operations per common share 140,246 138,115 139,903 135,407
--------- --------- --------- ---------
Impairments $ -- $ 2,462 $ -- $ 3,437
Per common share impact of
impairments on diluted funds
from operations $ -- $ 0.01 $ -- $ 0.02
(1) The Company believes that Funds From Operations ("FFO") applicable to common shares and Basic and Diluted Funds From Operations per common share are important supplemental measures of operating performance for a real estate investment trust. Because the historical cost accounting convention Historical Cost Accounting Convention An accounting technique that values an asset for balance sheet purposes at the price paid for the asset at the time of its acquisition. used for real estate assets requires straight-line depreciation A method employed to calculate the decline in the value of income-producing property for the purposes of federal taxation. Under this method, the annual depreciation deduction that is used to offset the annual income generated by the property is determined by dividing the (except on land), such accounting presentation implies (logic) implies - (=> or a thin right arrow) A binary Boolean function and logical connective. A => B is true unless A is true and B is false. The truth table is A B | A => B ----+------- F F | T F T | T T F | F T T | T It is surprising at first that A => that the value of real estate assets diminishes predictably over time. Since real estate values instead have historically risen and fallen with market conditions, presentations of operating results for a real estate investment trust that use historical cost accounting for depreciation could be less informative. The term FFO was designed by the real estate investment trust industry to address this issue. FFO is defined as net income (computed in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with U.S. generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting ), excluding gains or losses from real estate dispositions, plus real estate depreciation and amortization, with adjustments for joint ventures. Adjustments for joint ventures are calculated to reflect FFO on the same basis. FFO does not represent cash generated from operating activities in accordance with U.S. generally accepted accounting principles, is not necessarily indicative indicative: see mood. of cash available to fund cash needs and should not be considered an alternative to net income. A reconciliation of net income applicable to common shares to FFO applicable to common shares is provided herein.
HEALTH CARE PROPERTY INVESTORS, INC.
Consolidated Statements of Income
In thousands, except per share data
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
------------------- -------------------
2005 2004 2005 2004
--------- --------- --------- ---------
Revenues and other income:
Rental revenues $112,465 $ 93,097 $215,268 $178,140
Equity income from
unconsolidated joint ventures 88 849 299 2,086
Interest and other income 5,989 9,980 11,196 18,503
--------- --------- --------- ---------
118,542 103,926 226,763 198,729
--------- --------- --------- ---------
Costs and expenses:
Interest 25,372 19,743 48,610 40,957
Depreciation and amortization 27,253 20,457 50,997 40,318
Operating 15,419 9,894 28,742 19,139
General and administrative 8,827 8,554 16,146 15,405
Impairments -- 1,216 -- 1,216
--------- --------- --------- ---------
76,871 59,864 144,495 117,035
--------- --------- --------- ---------
Income before minority
interests 41,671 44,062 82,268 81,694
Minority interests (3,031) (3,289) (6,178) (6,153)
--------- --------- --------- ---------
Income from continuing
operations 38,640 40,773 76,090 75,541
--------- --------- --------- ---------
Discontinued operations:
Operating income 241 1,771 1,511 4,830
Gain (loss) on sales of real
estate, net of impairments 4,166 (960) 8,904 8,048
--------- --------- --------- ---------
4,407 811 10,415 12,878
--------- --------- --------- ---------
Net income 43,047 41,584 86,505 88,419
Preferred stock dividends (5,283) (5,282) (10,566) (10,565)
--------- --------- --------- ---------
Net income applicable to
common shares $ 37,764 $ 36,302 $ 75,939 $ 77,854
--------- --------- --------- ---------
Basic earnings per common
share:
Continuing operations $ 0.25 $ 0.27 $ 0.49 $ 0.50
Discontinued operations 0.03 0.01 0.08 0.09
--------- --------- --------- ---------
Net income applicable to
common shares $ 0.28 $ 0.28 $ 0.57 $ 0.59
--------- --------- --------- ---------
Diluted earnings per common
share:
Continuing operations $ 0.25 $ 0.27 $ 0.49 $ 0.49
Discontinued operations 0.03 -- 0.07 0.10
--------- --------- --------- ---------
Net income applicable to
common shares $ 0.28 $ 0.27 $ 0.56 $ 0.59
--------- --------- --------- ---------
Weighted average shares used to
calculate earnings per common
share:
Basic 134,445 131,653 133,968 131,196
--------- --------- --------- ---------
Diluted 135,214 132,856 134,871 132,778
--------- --------- --------- ---------
HEALTH CARE PROPERTY INVESTORS, INC.
Funds From Operations Information
In thousands, except per share data
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
------------------- -------------------
2005 2004 2005 2004
--------- --------- --------- ---------
Net income applicable to
common shares $ 37,764 $ 36,302 $ 75,939 $ 77,854
Real estate depreciation and
amortization:
Continuing operations 27,253 20,457 50,997 40,318
Discontinued operations 141 720 381 2,158
Gain on real estate
dispositions (4,166) (286) (8,904) (10,269)
Equity income from
unconsolidated joint ventures (88) (849) (299) (2,086)
FFO from unconsolidated joint
ventures 3,708 1,954 5,730 4,491
Minority interests 3,031 3,289 6,178 6,153
Minority interests in FFO (3,349) (3,589) (6,814) (6,644)
--------- --------- --------- ---------
Funds from operations
applicable to common
shares (1) $ 64,294 $ 57,998 $123,208 $111,975
--------- --------- --------- ---------
Distributions on convertible
units $ 2,113 $ 2,195 $ 4,233 $ 2,195
--------- --------- --------- ---------
Diluted funds from
operations applicable to
common shares (1) $ 66,407 $ 60,193 $127,441 $114,170
--------- --------- --------- ---------
Basic funds from operations
per common share (1) $ 0.48 $ 0.44 $ 0.92 $ 0.85
--------- --------- --------- ---------
Diluted funds from operations
per common share (1) $ 0.47 $ 0.44 $ 0.91 $ 0.84
--------- --------- --------- ---------
Weighted average shares used to
calculate diluted funds from
operations per common share 140,246 138,115 139,903 135,407
--------- --------- --------- ---------
Impairments $ -- $ 2,462 $ -- $ 3,437
Per common share impact of
impairments on diluted funds
from operations $ -- $ 0.01 $ -- $ 0.02
(1) The Company believes that Funds From Operations ("FFO") applicable to common shares, Diluted Funds From Operations applicable to common shares and Basic and Diluted Funds From Operations per common share are important supplemental measures of operating performance for a real estate investment trust. Because the historical cost accounting convention used for real estate assets requires straight-line depreciation (except on land), such accounting presentation implies that the value of real estate assets diminishes predictably over time. Since real estate values instead have historically risen and fallen with market conditions, presentations of operating results for a real estate investment trust that use historical cost accounting for depreciation could be less informative. The term FFO was designed by the real estate investment trust industry to address this issue. FFO is defined as net income (computed in accordance with U.S. generally accepted accounting principles), excluding gains or losses from real estate dispositions, plus real estate depreciation and amortization, with adjustments for joint ventures. Adjustments for joint ventures are calculated to reflect FFO on the same basis. FFO does not represent cash generated from operating activities in accordance with U.S. generally accepted accounting principles, is not necessarily indicative of cash available to fund cash needs and should not be considered an alternative to net income.
HEALTH CARE PROPERTY INVESTORS, INC.
Consolidated Balance Sheet
In thousands, except share and per share data
June 30, December 31,
2005 2004
------------ ------------
Assets (Unaudited)
Real estate:
Buildings and improvements $ 3,141,240 $ 3,025,707
Developments in process 13,590 25,777
Land 306,761 299,461
Less accumulated depreciation and
amortization 565,559 533,764
------------ ------------
Net real estate 2,896,032 2,817,181
------------ ------------
Loans receivable, net:
Joint venture partners 7,006 6,473
Others 140,643 139,919
Investments in and advances to unconsolidated
joint ventures 48,694 60,506
Accounts receivable, net of allowance of
$1,174 and $1,070, respectively 13,629 14,834
Cash and cash equivalents 18,890 16,962
Restricted cash 16,904 3,593
Intangibles, net 19,725 18,872
Other assets, net 26,237 24,294
------------ ------------
Total assets $ 3,187,760 $ 3,102,634
------------ ------------
Liabilities and Stockholders' Equity
Bank line of credit $ 115,300 $ 300,100
Senior unsecured notes 1,284,476 1,046,690
Mortgage debt 165,933 139,416
Accounts payable and accrued liabilities 62,764 59,905
Deferred revenue 18,430 15,300
------------ ------------
Total liabilities 1,646,903 1,561,411
------------ ------------
Minority interests 120,436 121,781
Stockholders' equity:
Preferred stock, $1.00 par value:
50,000,000 shares authorized; 11,820,000
shares issued and outstanding, liquidation
preference of $25 per share 285,173 285,173
Common stock, $1.00 par value: 750,000,000
shares authorized; 135,629,718 and
133,658,318 shares issued and outstanding,
respectively 135,630 133,658
Additional paid-in capital 1,440,380 1,403,335
Cumulative net income 1,434,594 1,348,089
Cumulative dividends (1,863,313) (1,739,859)
Other equity (12,043) (10,954)
------------ -
Total stockholders' equity 1,420,421 1,419,442
------------ ------------
Total liabilities and stockholders' equity $ 3,187,760 $ 3,102,634
------------ ------------
HEALTH CARE PROPERTY INVESTORS, INC.
Projected Funds From Operations (1)
(Unaudited)
PROJECTED FUTURE OPERATIONS (Full Year 2005):
Low High
------- -------
Diluted earnings per common share $ 1.04 $ 1.08
Gain on real estate dispositions (0.11) (0.11)
Real estate depreciation and amortization 0.83 0.83
Joint venture adjustments 0.06 0.06
------- -------
Diluted funds from operations per common share (2) $ 1.82 $ 1.86
------- -------
(1) The foregoing projections involve numerous assumptions including rental RENTAL. A roll or list of the rents of an estate containing the description of the lands let, the names of the tenants, and other particulars connected with such estate. This is the same as rent roll, from which it is said to be corrupted. rates, occupancy Gaining or having physical possession of real property subject to, or in the absence of, legal right or title. In a fire insurance policy, for example, the term occupancy levels and selling prices of properties, the sale of certain securities in an operator in our existing portfolio, as well as real estate acquisition and disposition Act of disposing; transferring to the care or possession of another. The parting with, alienation of, or giving up of property. The final settlement of a matter and, with reference to decisions announced by a court, a judge's ruling is commonly referred to as disposition, regardless of related volume, yields and timing. The projection projection, in psychology: see defense mechanism. See rear-projection TV, front-projection TV and LCD panel. (theory) projection - In domain theory, a function, f, which is (a) idempotent, i.e. ranges do not include the effects of any future impairments. By definition, FFO does not include real estate-related depreciation and amortization or gains and losses associated with real estate disposition activities, but does include impairment charges. There can be no assurance that the Company's actual results will not differ materially from the estimates set forth above. The aforementioned a·fore·men·tioned adj. Mentioned previously. n. The one or ones mentioned previously. aforementioned Adjective mentioned before Adj. 1. ranges represent management's best estimate of results based upon the underlying assumptions as of the date of this press release. (2) The Company believes that Diluted Funds From Operations per common share is an important supplemental measure of operating performance for a real estate investment trust. Because the historical cost accounting convention used for real estate assets requires straight-line depreciation (except on land), such accounting presentation implies that the value of real estate assets diminishes predictably over time. Since real estate values instead have historically risen and fallen with market conditions, presentations of operating results for a real estate investment trust that use historical cost accounting for depreciation could be less informative. The term FFO was designed by the real estate investment trust industry to address this issue. FFO is defined as net income (computed in accordance with U.S. generally accepted accounting principles), excluding gains or losses from real estate dispositions, plus real estate depreciation and amortization, with adjustments for joint ventures. Adjustments for joint ventures are calculated to reflect FFO on the same basis. FFO does not represent cash generated from operating activities in accordance with U.S. generally accepted accounting principles, is not necessarily indicative of cash available to fund cash needs and should not be considered an alternative to net income. A reconciliation of net income applicable to common shares to FFO applicable to common shares is provided herein. |
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion