Health Care REIT Reports Lower Net Income, Invests in New Venture

Health Care REIT, Inc. (NYSE:HCN) announced a second quarter 2010 net profit of $51.1 million versus $64.8 million during Q2 2009.  HCN attributed the lower profits to expenses associated with the extinguishment of debt and costs for acquisitions.  The company also announced that it will form an $817 million partnership with Merrill Gardens, LLC to own and operate a portfolio of 38 combination senior housing and care communities located primarily in West Coast markets. Health Care REIT will own an 80% partnership interest and Merrill Gardens will own the remaining 20% interest and continue to manage the communities.

Other highlight include:

  • Increased midpoints of normalized FFO guidance to a range of $3.13 to $3.20 from $3.10 to $3.20 per diluted share
    and normalized FAD guidance to a range of $2.89 to $2.96 from $2.87 to $2.97 per diluted share
  • Increased quarterly cash dividend to $0.69 from $0.68 per common share
  • Reported trailing twelve month payment coverage before management fees of 2.03x, highest in company history
  • Completed year-to-date gross new investments totaling $878 million, including $293 million for second quarter
  • Increased 2010 gross investment guidance to a range of $1.8 billion to $2.2 billion from $1.0 billion to $1.4 billion
  • Received $57 million in proceeds on property sales and loan payoffs year-to-date, generating $10 million of gains

“We are on track to record the highest annual investment volume in our history,” commented George L. Chapman, chief
executive officer of Health Care REIT. “We have raised our investment guidance an additional $800 million, which has put
us on pace to complete gross investments in excess of $2 billion this year. These high-quality investments have positioned the company to generate more significant earnings growth in 2011 and are the impetus for the recent resumption of dividend increases.”

HCN Q2 2010 8-K