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Health Care REIT, Inc. : Updates Earnings Guidance For Recent Acquisition and Financing Activity

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03/08/2012 | 10:20pm CEST

Health Care REIT, Inc. (NYSE:HCN) today announced an update to its full-year normalized 2012 FFO and FAD per share guidance to reflect previously announced acquisitions and financing activity.

The company is adjusting normalized FFO guidance by $0.15 per diluted share from a range of $3.68 to $3.78 per diluted share to a range of $3.53 to $3.63 per diluted share. Normalized FAD guidance is also adjusted by $0.15 per diluted share from a range of $3.26 to $3.36 per diluted share to a range of $3.11 to $3.21 per diluted share. The update to guidance includes the following items disclosed subsequent to the company's previous guidance issued on February 16, 2012:

  • $508 million in announced acquisitions closed in the first quarter of 2012 through February 17th
  • $269 million in announced assumed and newly arranged debt closed in the first quarter of 2012 through February 17th
  • $1.1 billion offering of common stock (20.7 million shares) closed on February 27th
  • $287.5 million offering of cumulative redeemable preferred stock closed on March 7th
  • $275 million in redemptions of cumulative redeemable preferred stock expected to close on April 2nd

The company's guidance does not include any additional investments beyond what was announced through February 17, 2012 nor any additional transaction costs, capital transactions, impairments, unanticipated additions to the loan loss reserve, preferred stock redemption charges nor other one-time items, including any additional cash payments (other than normal monthly rental payments) or any special non-cash retention awards. Please see the exhibit for a reconciliation of the outlook for net income available to common stockholders to normalized FFO and FAD.

About Health Care REIT, Inc. Health Care REIT, Inc., an S&P 500 company with headquarters in Toledo, Ohio, is a real estate investment trust that invests across the full spectrum of seniors housing and health care real estate. The company also provides an extensive array of property management and development services. As of December 31, 2011, the company's broadly diversified portfolio consisted of 937 properties in 46 states. More information is available on the company's website at www.hcreit.com.

Forward-Looking Statements and Risk Factors

This document may contain "forward-looking" statements as defined in the Private Securities Litigation Reform Act of 1995. When the company uses words such as "may," "will," "intend," "should," "believe," "expect," "anticipate," "project," "estimate" or similar expressions, it is making forward-looking statements. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties. The company's expected results may not be achieved, and actual results may differ materially from expectations. This may be a result of various factors, including, but not limited to: the status of the economy; the status of capital markets, including availability and cost of capital; issues facing the health care industry, including compliance with, and changes to, regulations and payment policies, responding to government investigations and punitive settlements and operators'/tenants' difficulty in cost-effectively obtaining and maintaining adequate liability and other insurance; changes in financing terms; competition within the health care, seniors housing and life science industries; negative developments in the operating results or financial condition of operators/tenants, including, but not limited to, their ability to pay rent and repay loans; the company's ability to transition or sell facilities with profitable results; the failure to make new investments as and when anticipated; acts of God affecting the company's facilities; the company's ability to re-lease space at similar rates as vacancies occur; the company's ability to timely reinvest sale proceeds at similar rates to assets sold; operator/tenant or joint venture partner bankruptcies or insolvencies; the cooperation of joint venture partners; government regulations affecting Medicare and Medicaid reimbursement rates and operational requirements; regulatory approval and market acceptance of the products and technologies of life science tenants; liability or contract claims by or against operators/tenants; unanticipated difficulties and/or expenditures relating to future acquisitions; environmental laws affecting the company's facilities; changes in rules or practices governing the company's financial reporting; the movement of U.S. and Canadian exchange rates; and legal and operational matters, including real estate investment trust qualification and key management personnel recruitment and retention. Finally, the company assumes no obligation to update or revise any forward-looking statements or to update the reasons why actual results could differ from those projected in any forward-looking statements.


Outlook Reconciliations: Year ended December 31, 2012

(amounts per diluted share)
          Prior Guidance   Current Guidance
Low   High Low   High

FFO Reconciliation:

Net income attributable to common stockholders $ 1.26 $ 1.36 $ 1.26 $ 1.36
Depreciation and amortization(1)   2.42     2.42     2.27     2.27  
Funds from operations - normalized $ 3.68 $ 3.78 $ 3.53 $ 3.63

FAD Reconciliation:

Net income attributable to common stockholders $ 1.26 $ 1.36 $ 1.26 $ 1.36
Depreciation and amortization(1) 2.42 2.42 2.27 2.27
Net straight-line rent and above/below amortization(1) (0.21 ) (0.21 ) (0.20 ) (0.20 )
Non-cash interest expense(1) 0.07 0.07 0.06 0.06
Cap-ex, tenant improvements, lease commissions(1)   (0.28 )   (0.28 )   (0.28 )   (0.28 )
Funds available for distribution - normalized $ 3.26 $ 3.36 $ 3.11 $ 3.21

Notes: (1) Amounts presented net of noncontrolling interests' share and HCN's share of unconsolidated entities.


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 entities. Normalized FFO represents FFO adjusted for certain items as detailed in quarterly earnings releases. Normalized FAD represents normalized 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. The company believes that normalized FFO and FAD are useful supplemental measures of operating performance because investors and equity analysts may use these measures to compare the operating performance of the company between periods or as compared to other REITs or other companies on a consistent basis without having to account for differences caused by unanticipated and/or incalculable items.

The company's supplemental reporting measures and similarly entitled financial measures are widely used by investors and equity analysts in the valuation, comparison and investment recommendations of companies. The company's management uses these financial measures to facilitate internal and external comparisons to historical operating results and in making operating decisions. Additionally, they are utilized by the Board of Directors to evaluate management. The supplemental reporting measures do not represent net income or cash flow provided from operating activities as determined in accordance with U.S. GAAP and should not be considered as alternative measures of profitability or liquidity. Finally, the supplemental reporting measures, as defined by the company, may not be comparable to similarly entitled items reported by other real estate investment trusts or other companies. Please see the exhibit for reconciliations of the supplemental reporting measures.

Health Care REIT, Inc.
Scott Estes, 419-247-2800
Jay Morgan, 419-247-2800

© Business Wire 2012
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Financials ($)
Sales 2018 4 414 M
EBIT 2018 1 190 M
Net income 2018 899 M
Debt 2018 12 241 M
Yield 2018 5,96%
P/E ratio 2018 23,91
P/E ratio 2019 32,92
EV / Sales 2018 7,59x
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Duration : Period :
Health Care REIT, Inc. Technical Analysis Chart | HCN | US42217K1060 | 4-Traders
Income Statement Evolution
Mean consensus HOLD
Number of Analysts 19
Average target price 58,6 $
Spread / Average Target 0,46%
EPS Revisions
Thomas J. DeRosa Chief Executive Officer & Director
Jeffrey H. Donahue Non-Executive Chairman
John Goodey Chief Financial Officer & Executive Vice President
R. Scott Trumbull Independent Director
Sharon M. Oster Independent Director
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