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Health Care REIT, Inc. Delivers 16% Gain in Quarterly Funds From Operations

By Patrick Morris - Feb 19, 2014 at 10:08AM

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Health Care REIT, Inc. reported its normalized FFO rose 16% in the fourth quarter as a result of heightened revenues and income from acquired properties.

Health Care REIT (WELL -0.49%) announced today that its normalized funds from operations (FFO) rose 16%, to $0.99 per share, in the fourth quarter of 2013, up from $0.85 in the fourth quarter of 2012. For the full year, its funds from operations moved from $3.52 per share to $3.81, an increase of 8%.

"The outstanding 16% increase in FFO and [funds available for distribution] this quarter demonstrates the power of our platform and its earnings potential," noted Chairman and CEO George L. Chapman in a statement. "We generated another quarter of excellent [net operating income] growth and invested a sector-leading $5.7 billion last year in high quality properties occupied by the best systems and operators in health care and seniors housing."

In total, Health Care REIT made 12 acquisitions in the fourth quarter, for a total of approximately $275 million, all with a blended yield between 6.5% and 8%. The company highlighted that these acquisitions were all made through relationships that were already established with the company, and were all high-quality, private-pay property types.

For the full year, net income fell from $222 million in 2012 to $79 million in 2013; yet, this was largely the result of heightened depreciation and amortization costs from discontinued operations, and transactions costs more than doubling from $62 million in 2012 to $133 million in 2013.

The company also gave its outlook for the full year in 2014, noting it expects to have normalized funds from operations rise to $3.93 to $4.03 per share, representing an increase of 3% to 6%. It also expects the same-store cash net operating income to grow between 3% and 3.5%.

Chapman concluded by noting, "Entering 2014, our relationships, immersion in health care, asset quality, mix of short and long-duration leases, and international reach uniquely position us to deliver superior, consistent growth."

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Patrick Morris has no position in any stocks mentioned. The Motley Fool recommends Health Care REIT. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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