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Health Care REIT, Inc. Updates Earnings Guidance Upon Completion of Common Stock Offering

^{Published on 2011-11-10 14:17:39 - Market Wire}
 

TOLEDO, Ohio--([ BUSINESS WIRE ])--Health Care REIT, Inc. (NYSE:HCN) today updated its full-year normalized 2011 FFO and FAD per share guidance to reflect the impact on guidance of the successful offering of 12,650,000 shares of common stock completed on November 9, 2011.

The company is adjusting normalized FFO guidance by $0.03 per diluted share from a range of $3.38 to $3.43 per diluted share to a range of $3.35 to $3.40 per diluted share, which represents an increase of 9-10% from 2010. Normalized FAD guidance is also adjusted by $0.03 per diluted share from a range of $3.03 to $3.08 per diluted share to a range of $3.00 to $3.05 per diluted share, which represents an increase of 6-7% from 2010.

The companyas guidance does not include any additional investments beyond what have been completed through September 30, 2011, nor any additional transaction costs, capital transactions, impairments, unanticipated additions to the loan loss reserve or other one-time items, including any additional cash payments other than normal monthly rental payments. 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 September 30, 2011, the companyas broadly diversified portfolio consisted of 898 properties in 45 states. More information is available on the companyas website at [ www.hcreit.com ].

This document may contain aforward-lookinga statements as defined in the Private Securities Litigation Reform Act of 1995. When the company uses words such as amay,a awill,a aintend,a ashould,a abelieve,a aexpect,a aanticipate,a aproject,a aestimatea or similar expressions, it is making forward-looking statements. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties. The companyas 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 operatorsa/tenantsa 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 companyas ability to transition or sell facilities with profitable results; the failure to make new investments as and when anticipated; acts of God affecting the companyas properties; the companyas ability to re-lease space at similar rates as vacancies occur; the companyas 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 companyas properties; changes in rules or practices governing the companyas financial reporting; and legal and operational matters, including real estate investment trust qualification and key management personnel recruitment and retention. 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.

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. 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. The company believes that 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 companyas 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 companyas 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.