Health Care Property Investors, Inc. Reports Results for the Quarter Ended September 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 September September: see month. 30, 2005. Net income applicable to common shares for the quarter ended September 30, 2005, was $39.8 million, or $0.29 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 $29.2 million, or $0.22 per diluted share of common stock for the quarter ended September 30, 2004. Net income applicable to common shares for the nine months ended September 30, 2005, was $115.7 million, or $0.86 per diluted share of common stock, compared to $107.1 million, or $0.80 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 $68.8 million, or $0.50 per diluted share of common stock, for the quarter ended September 30, 2005, compared to FFO applicable to common shares of $48.9 million, or $0.37 per diluted share of common stock, for the quarter ended September 30, 2004. FFO applicable to common shares for the nine months ended September 30, 2005, was $192.0 million, or $1.41 per diluted share of common stock, compared to $160.9 million, or $1.21 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 $0.46 and $1.33 per diluted share of common stock for the three and nine months ended September 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 acquired interests in properties and made secured loans aggregating $556 million, including the following: --On October October: see month. 19, 2005, the Company acquired seven medical office buildings for approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $52 million, including assumed debt and non-managing member LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control units ("DownREIT units") valued at $25 million and $11 million, respectively. The medical office buildings include approximately 351,000 rentable square feet and have an initial yield of 8.2%. --On August 31, 2005, the Company acquired five 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. facilities for $41 million through a sale-leaseback sale-lease·back n. See 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 8.5% with annual escalators based on the Consumer Price Index ("CPI (1) (Characters Per Inch) The measurement of the density of characters per inch on tape or paper. A printer's CPI button switches character pitch. (2) (Counts Per I ") that have a floor of 2.75%. These properties are included in a new master lease that includes 14 other properties currently leased to the operator. --As previously announced, on July July: see month. 22, 2005, the Company acquired twelve independent and assisted living facilities for approximately $252 million, including assumed debt and DownREIT units valued at approximately $52 million and $19 million, respectively, 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 CPI-based escalators that have a floor of 3%. --As previously announced, 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%. --Year-to-date, the Company sold interests in 14 properties for approximately $53 million and recognized a gain of approximately $9 million. During the quarter ended September 30, 2005, the Company sold interests in four properties for approximately $5 million and recognized a gain of approximately $0.3 million. --On July 28, 2005, in connection with the acquisition of an operator by a third party healthcare services company, the Company sold its securities in the operator and recognized a gain of approximately $2.8 million. --As previously announced, on September 16, 2005, the Company issued $200 million of 4 7/8% senior unsecured Unsecured A loan or equity interest that is given without any guarantee of payment, performance, satisfaction or opportunity for return from the recipient. No property, interest or security is used as collateral in either a guarantee or a pledge. notes due September 15, 2010. The notes were priced at 99.567% of the principal amount with an effective yield of 4.974%. The Company received net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). of $198 million, which were used to repay outstanding indebtedness INDEBTEDNESS. The state, of being in debt, without regard to the ability or inability of the party to pay the same. See 1 Story, Eq. 343; 2 Hill. Ab. 421. 2. and for general corporate purposes. --On October 26, 2005, the Company announced that its Board declared de·clare v. de·clared, de·clar·ing, de·clares v.tr. 1. To make known formally or officially. See Synonyms at announce. 2. To state emphatically or authoritatively; affirm. 3. a quarterly cash dividend of $0.42 per share of common stock. The common stock cash dividend will be paid on November November: see month. 18, 2005, to stockholders of record as of the close of business on November 7, 2005. FUTURE OPERATIONS For the full year 2005, the Company presently expects net income applicable to common shares to range between $1.15 and $1.19 per diluted common share, and FFO applicable to common shares to range between $1.85 and $1.89 per diluted common share. COMPANY INFORMATION Health Care Property Investors, Inc. has scheduled a conference call and webcast for Tuesday Tuesday: see week. , November 1, 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 September 30, 2005. The conference call is accessible by dialing 866-800-8649 (U.S.) and 617-614-2703 (International). The participant Participant A party of a funding. It usually refers to the lowest rank or smallest level of funding. pass code is 77324198. 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 November 1, 2005 through November 15, 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 September 30, 2005, the Company's portfolio of properties, excluding assets held for sale but including investments through joint ventures and mortgage loans, included 542 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. , 138 assisted living 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, 184 medical office buildings and 27 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 Nine Months Ended
September 30, September 30,
------------------- -------------------
2005 2004 2005 2004
--------- --------- --------- ---------
Revenues and other income $124,392 $109,131 $351,040 $307,266
Net income applicable
to common shares $39,759 $29,208 $115,698 $107,062
Basic earnings
per common share $0.29 $0.22 $0.86 $0.81
--------- --------- --------- ---------
Diluted earnings
per common share $0.29 $0.22 $0.86 $0.80
--------- --------- --------- ---------
Weighted average shares used to
calculate diluted earnings per
common share 136,135 133,584 135,291 133,047
--------- --------- --------- ---------
Funds from operations
applicable to common
shares (1) $68,767 $48,892 $191,975 $160,867
--------- --------- --------- ---------
Basic funds from operations per
common share (1) $0.51 $0.37 $1.43 $1.22
--------- --------- --------- ---------
Diluted funds from operations
per common share (1) $0.50 $0.37 $1.41 $1.21
--------- --------- --------- ---------
Weighted average shares used to
calculate diluted funds from
operations per common share 141,866 133,584 140,556 134,799
--------- --------- --------- ---------
Impairments $-- $13,180 $-- $16,617
Per common share impact of
impairments on diluted funds
from operations $-- $0.09 $-- $0.12
(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 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.
HEALTH CARE PROPERTY INVESTORS, INC.
Consolidated Statements of Income
In thousands, except per share data
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------- -------------------
2005 2004 2005 2004
--------- --------- --------- ---------
Revenues and other income:
Rental revenues $117,117 $98,110 $332,270 $275,655
Equity income (loss) from
unconsolidated joint ventures (531) (459) (232) 1,627
Interest and other income 7,806 11,480 19,002 29,984
--------- --------- --------- ---------
124,392 109,131 351,040 307,266
--------- --------- --------- ---------
Costs and expenses:
Interest 28,262 23,167 76,872 64,125
Depreciation and amortization 27,631 22,412 78,607 62,574
Operating 13,387 10,866 42,122 30,005
General and administrative 7,301 9,446 23,447 24,849
Impairments -- 1,305 -- 1,305
--------- --------- --------- ---------
76,581 67,196 221,048 182,858
--------- --------- --------- ---------
Income before minority
interests 47,811 41,935 129,992 124,408
Minority interests (3,415) (2,946) (9,593) (9,099)
--------- --------- --------- ---------
Income from continuing
operations 44,396 38,989 120,399 115,309
--------- --------- --------- ---------
Discontinued operations:
Operating income 372 1,537 1,970 6,804
Gain (loss) on sales of real
estate, net of impairments 273 (6,036) 9,177 796
--------- --------- --------- ---------
645 (4,499) 11,147 7,600
--------- --------- --------- ---------
Net income 45,041 34,490 131,546 122,909
Preferred stock dividends (5,282) (5,282) (15,848) (15,847)
--------- --------- --------- ---------
Net income applicable to common
shares $39,759 $29,208 $115,698 $107,062
--------- --------- --------- ---------
Basic earnings per common share:
Continuing operations $0.29 $0.26 $0.78 $0.76
Discontinued operations -- (0.04) 0.08 0.05
--------- --------- --------- ---------
Net income applicable to
common shares $0.29 $0.22 $0.86 $0.81
--------- --------- --------- ---------
Diluted earnings per common share:
Continuing operations $0.29 $0.25 $0.78 $0.75
Discontinued operations -- (0.03) 0.08 0.05
--------- --------- --------- ---------
Net income applicable to
common shares $0.29 $0.22 $0.86 $0.80
--------- --------- --------- ---------
Weighted average shares used to
calculate earnings per common
share:
Basic 135,225 132,182 134,385 131,525
--------- --------- --------- ---------
Diluted 136,135 133,584 135,291 133,047
--------- --------- --------- ---------
HEALTH CARE PROPERTY INVESTORS, INC.
Funds From Operations Information
In thousands, except per share data
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------- -------------------
2005 2004 2005 2004
--------- --------- --------- ---------
Net income applicable to common
shares $39,759 $29,208 $115,698 $107,062
Real estate depreciation and
amortization:
Continuing operations 27,631 22,412 78,607 62,574
Discontinued operations 98 732 500 3,046
Gain on sales of real estate (273) (5,839) (9,177) (16,108)
Equity (income) loss from
unconsolidated joint ventures 531 459 232 (1,627)
FFO from unconsolidated joint
ventures 1,339 2,220 7,069 6,711
Minority interests 3,415 2,946 9,593 9,099
Minority interests in FFO (3,733) (3,246) (10,547) (9,890)
--------- --------- --------- ---------
Funds from operations
applicable to common
shares (1) $68,767 $48,892 $191,975 $160,867
--------- --------- --------- ---------
Distributions on convertible
units $2,407 $-- $6,640 $2,195
--------- --------- --------- ---------
Diluted funds from operations
applicable to common
shares (1) $71,174 $48,892 $198,615 $163,062
--------- --------- --------- ---------
Basic funds from operations per
common share (1) $0.51 $0.37 $1.43 $1.22
--------- --------- --------- ---------
Diluted funds from operations
per common share (1) $0.50 $0.37 $1.41 $1.21
--------- --------- --------- ---------
Weighted average shares used to
calculate diluted funds from
operations per common share 141,866 133,584 140,556 134,799
--------- --------- --------- ---------
Impairments $-- $13,180 $-- $16,617
Per common share impact of
impairments on diluted funds
from operations $-- $0.09 $-- $0.12
(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
Sept. 30, Dec. 31,
2005 2004
------------ ------------
Assets (Unaudited)
Real estate:
Buildings and improvements $3,418,604 $3,025,707
Developments in process 13,532 25,777
Land 347,164 299,461
Less accumulated depreciation and
amortization 590,284 533,764
------------ ------------
Net real estate 3,189,016 2,817,181
------------ ------------
Loans receivable, net:
Joint venture partners 7,006 6,473
Others 142,868 139,919
Investments in and advances to unconsolidated
joint ventures 49,750 60,506
Accounts receivable, net of allowance of $933
and $1,070, respectively 13,507 14,834
Cash and cash equivalents 38,174 16,962
Restricted cash 2,390 4,678
Intangibles, net 23,236 18,872
Other assets, net 28,997 24,294
------------ ------------
Total assets $3,494,944 $3,103,719
------------ ------------
Liabilities and Stockholders' Equity
Bank line of credit $170,000 $300,100
Senior unsecured notes 1,470,386 1,046,690
Mortgage debt 213,726 140,501
Accounts payable and accrued liabilities 70,527 59,905
Deferred revenue 19,018 15,300
------------ ------------
Total liabilities 1,943,657 1,562,496
------------ ------------
Minority interests 140,903 121,781
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; 135,858,452 and
133,658,318 shares issued and outstanding,
respectively 135,858 133,658
Additional paid-in capital 1,446,496 1,403,335
Cumulative net income 1,479,635 1,348,089
Cumulative dividends (1,925,725) (1,739,859)
Other equity (11,053) (10,954)
------------ ------------
Total stockholders' equity 1,410,384 1,419,442
------------ ------------
Total liabilities and stockholders' equity $3,494,944 $3,103,719
------------ ------------
HEALTH CARE PROPERTY INVESTORS, INC.
Projected Funds From Operations (1)
(Unaudited)
PROJECTED FUTURE OPERATIONS (Full Year 2005):
Low High
------- -------
Diluted earnings per common share $1.15 $1.19
Gain on real estate dispositions (0.08) (0.08)
Real estate depreciation and amortization 0.77 0.77
Joint venture adjustments 0.01 0.01
------- -------
Diluted funds from operations per common share (2) $1.85 $1.89
------- -------
(1) The foregoing projections involve numerous assumptions
including rental rates, occupancy levels and selling prices of
properties, as well as real estate acquisition and disposition
related volume, yields and timing. The projection 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
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