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Press release from Business Wire

Health Care REIT, Inc. Reports Third Quarter Results

<p class='bwalignc'> <b>Completed approximately $1.0 billion of 3Q12 investments </b><br/><b>Announced Sunrise Senior Living acquisition </b><br/><b>3Q12 same store cash NOI increased 3.6%</b> </p>

Tuesday, November 06, 2012

Health Care REIT, Inc. Reports Third Quarter Results07:30 EST Tuesday, November 06, 2012 TOLEDO, Ohio (Business Wire) -- Health Care REIT, Inc. (NYSE:HCN) today announced operating results for the company's third quarter ended September 30, 2012. “Our business model continued to hit on all cylinders during the third quarter,” commented George L. Chapman, Chairman and CEO of Health Care REIT, Inc. “Our relationship program has produced $1.0 billion of investments in the quarter and $2.9 billion year-to-date. Our high-quality, diverse portfolio generated another quarter of strong 3.6% same-store NOI growth. We sit in an excellent liquidity position having successfully raised $2.4 billion of equity during the quarter and our operations team continues to effectively manage our growth. The completion of the Sunrise Senior Living acquisition coupled with disposition of noncore properties will further strengthen and diversify the quality of our portfolio. We believe the attributes of our business model position us to continue to deliver consistent and resilient cash flow growth, predictable deal flow, and attractive risk adjusted returns to our shareholders.” Recent Highlights Announced 125 property acquisition with Sunrise Senior Living Completed approximately $1.0 billion of gross new investments in 3Q12, including $243.5 million with Sunrise Increased 3Q12 same-store cash NOI by 3.6%, including 7.0% growth in our seniors housing operating portfolio Reported 3Q12 normalized FFO of $0.91 per share and normalized FAD of $0.82 per share Completed $133 million in dispositions, generating $13 million in gains for 3Q12 Reduced debt to undepreciated book capitalization to 38% at end of 3Q12 from 45% at end of 2Q12 Funded $250 million Canadian denominated unsecured term loan (approximately $249 million USD) in July Completed redemptions/conversions of $168 million 4.75% convertible senior unsecured notes due 2027 in August Extinguished $77 million of 8% senior unsecured notes upon maturity in September Issued 43.7 million shares of common stock during 3Q12, generating approximately $2.4 billion of proceeds Increased quarterly cash dividend to $0.765 per share, or $3.06 annually beginning with the February 2013 dividend, up 3.4% versus $2.96 per share to be paid in 2012 Dividends for Third Quarter 2012  As previously announced, the Board of Directors declared a cash dividend for the quarter ended September 30, 2012 of $0.74 per share, as compared to $0.715 per share for the same period in 2011, representing a 3.5% increase. The cash dividend will be paid on November 20, 2012 and will be the company's 166th consecutive quarterly dividend payment. The declaration and payment of quarterly dividends remains subject to review by and approval of the Board of Directors. Dividends for 2013  The Board of Directors approved a quarterly cash dividend rate of $0.765 per share ($3.06 per share annually), which represents a 3.4% increase, commencing with the February 2013 dividend payment. The company's dividend policy was reviewed during the Board's October meeting. The declaration and payment of quarterly dividends remains subject to review by and approval of the Board of Directors. Third Quarter Investment Highlights  As previously announced, during the quarter the company completed the acquisition of five Sunrise Senior Living properties located in the United Kingdom for $243.5 million at a blended NOI yield of 7.2%. The five properties were purchased from a partnership between Sunrise and an institutional investor and are included in the previously announced 125 property Sunrise acquisition. The communities are 100% private pay, include 437 units and are located in attractive metropolitan markets. Consistent with our seniors housing operating portfolio, we expect annual NOI growth of approximately 4% to 5%. Sunrise will continue to manage the communities under an incentive-based management contract. During the quarter the company completed $611 million in seniors housing triple-net lease investments at a blended yield of 7.1%. The investments include acquisitions totaling $586 million at a blended yield of 7.0%, consisting of 19 facilities operated by Senior Lifestyle for $459 million and five facilities with other operators for $127 million. In addition, two development projects totaling $25 million at a blended yield of 8.5% were completed during the quarter. During the quarter the company completed $56 million in medical office building investments at a blended yield of 7.1%. The investments include the acquisition of three medical office buildings for $50 million and one development completion. The three buildings acquired total 220,000 rentable square feet, with a yield of 7.0%. Each building is affiliated with a health system and average occupancy is 98%. The development completion represents a 13,400 rentable square foot building that is affiliated with a health system and 100% leased with a yield of 8.5%. Sunrise Acquisition Update  The 125 property acquisition of Sunrise Senior Living, Inc. (NYSE:SRZ) remains on track to close in early 2013. The company successfully reached agreement to sell the Sunrise management company as announced on September 14, 2012 and continues to work with Sunrise to accelerate the buyout of its partners in certain of the 105 joint venture properties. The company acquired five of the 105 joint venture properties located in the United Kingdom in the third quarter for approximately $243.5 million. During the fourth quarter 2012, the company funded its previously announced $467 million loan to Sunrise. The final amount drawn was $462.5 million. The proceeds of the loan were used by Sunrise to acquire its partners' interests in 33 of the 105 joint venture properties. As a result of the accelerated joint venture buyouts, the company expects the Sunrise acquisition to include 58 wholly owned properties and 67 joint venture properties at closing. The accelerated joint venture partner buyouts increases the expected real estate value of the 125 properties from approximately $1.9 billion to approximately $3.2 billion. Of the 67 joint venture properties, 50 properties remain subject to purchase options that the company may exercise to acquire the partners' interests. $925 Million Acquisition Pipeline Update  On August 6, 2012, Health Care REIT announced anticipated third quarter 2012 acquisitions of $925 million. During the third quarter, $634 million of those acquisitions have closed and $291 million are now expected to close in the fourth quarter of 2012. The aggregate acquisition amount includes approximately $134 million of debt that the company expects to assume at an average interest rate of 5.6%. Approximately $27 million of the aggregate debt is associated with the third quarter acquisitions and $107 million is associated with the fourth quarter acquisitions. Previously Announced Investments Reconciliation($ millions)         3Q12A     4Q12E     1Q13E     Total Announced     Remaining asof 9/30/12Sunrise Acquisition $243.5 $462.5 $2,464.2 $3,170.2 $2,926.7 Debt Assumed $1,556.1 $1,556.1 $1,556.1 Cash Required $462.5 $908.1 $1,370.6   $925 Million Announced August 6, 2012 $634.2 $291.2 $925.4 $291.2 Debt Assumed $26.7 $107.5 $134.2 $107.5 Cash Required $183.7 $183.7   Total Acquisitions$877.7$753.7$2,464.2$4,095.6 $3,217.9 Debt Assumed $26.7 $107.5 $1,556.1 $1,690.3 $1,663.6 Cash Required $646.2 $908.1 $1,554.3   All amounts included in this announcement relating to acquisitions or investments that have not yet closed are preliminary estimates, are subject to downward or upward adjustment, and are subject to change. Furthermore, certain of the estimated investment amounts with respect to the incremental Sunrise investments, including the acquisition of five properties in the United Kingdom, are based on exchange rates in effect as of the time of the estimate. Our anticipated acquisitions and investments are in various stages of closing and some or all of the transactions may not be completed on currently anticipated terms, or within currently anticipated timeframes, or at all. The completion of the anticipated acquisitions and investments is subject to the satisfaction of various conditions. Outlook for 2012  The company is updating its normalized 2012 FFO and FAD guidance to reflect recently announced investment and capital activity. Relative to prior FFO and FAD guidance, the midpoint of our guidance ranges would be increasing by $0.04 per share but for the decision to pre-emptively raise capital to fund the Sunrise acquisition, which negatively impacts expectations by $0.11 per share. As a result, normalized FFO has been updated to a range of $3.49 to $3.53 per diluted share from $3.53 to $3.63 per diluted share and normalized FAD has been updated to a range of $3.07 to $3.11 per diluted share from $3.11 to $3.21 per diluted share. Net income attributable to common stockholders has been revised to a range of $0.91 to $0.95 per diluted share from $1.07 to $1.17 per diluted share. The company now expects up to $700 million of dispositions in 2012, up from the previous expectation of $300 million, which consist primarily of non-strategic skilled nursing facilities. The company's guidance does not include any additional 2012 investments beyond what has been announced, nor any additional transaction costs, capital transactions, impairments, unanticipated additions to the loan loss reserve or other additional one-time items, including any additional cash payments other than normal monthly rental payments. Please see the exhibits for a reconciliation of the outlook for net income available to common stockholders to normalized FFO and FAD. Conference Call Information  The company has scheduled a conference call on Tuesday, November 6, 2012 at 10:00 a.m. Eastern Time to discuss its third quarter 2012 results, industry trends, portfolio performance and outlook for 2012. Telephone access will be available by dialing 888-346-2469 or 706-758-4923 (international). For those unable to listen to the call live, a taped rebroadcast will be available beginning two hours after completion of the call through November 20, 2012. To access the rebroadcast, dial 855-859-2056 or 404-537-3406 (international). The conference ID number is 40018571. To participate in the webcast, log on to www.hcreit.com 15 minutes before the call to download the necessary software. Replays will be available for 90 days. Key Performance Indicators                     3Q12     3Q11     Change Net income (loss) attributable to common           stockholders (NICS) per diluted share         $ 0.16     $ 0.21     -24% Normalized FFO per diluted share         $ 0.91     $ 0.89     2% Normalized FAD per diluted share         $ 0.82     $ 0.79     4% Dividends per common share         $ 0.74     $ 0.715     3% Normalized FFO Payout Ratio           81%       80%       Normalized FAD Payout Ratio           90%       91%         Quarterly Earnings                                   NICS     FFO     FAD               3Q12   3Q11   Change     3Q12   3Q11   Change     3Q12   3Q11   Change Per diluted share         $ 0.16   $ 0.21   -24%     $ 0.75   $ 0.85   -12%     $ 0.67   $ 0.75   -11%   Includes impact of:                                                               Gains (losses/impairments)(1)         $ 0.03   $ -                                             Other items, net(2)         $ (0.16)   $ (0.04)         $ (0.16)   $ (0.04)         $ (0.16)   $ (0.04)         Prepaid/straight-line rent receipts(3)                                             $ 0.01   $ 0.01     Per diluted share - normalized(a)                           $ 0.91   $ 0.89   2%     $ 0.82   $ 0.79   4% (a)   Amounts may not sum due to rounding (1)   $5,875,000 and $185,000 of net gains in 3Q12 and 3Q11, respectively. (2) See Exhibit 1. (3) $1,956,000 and $1,599,000 of receipts in 3Q12 and 3Q11, respectively.   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 and impairments of depreciable assets, plus real estate depreciation and amortization, and after adjustments for unconsolidated entities. Normalized FFO represents FFO adjusted for certain items detailed in Exhibit 1. 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. Normalized FAD represents FAD excluding prepaid/straight-line rent cash receipts and adjusted for certain items detailed in Exhibit 1. The company believes that normalized FFO and normalized 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 exhibits for reconciliations of supplemental reporting measures and the supplemental information package for the quarter ended September 30, 2012, which is available on the company's website (www.hcreit.com), for information and reconciliations of additional supplemental reporting measures. 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, 2012, the company's broadly diversified portfolio consisted of 1,030 properties in 46 states, the United Kingdom, and Canada. 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. These forward-looking statements concern and are based upon, among other things, the possible expansion of the company's portfolio; the sale of facilities; the performance of its operators/tenants and facilities; its ability to enter into agreements with viable new tenants for vacant space or for facilities that the company takes back from financially troubled tenants, if any; its occupancy rates; its ability to acquire, develop and/or manage facilities; its ability to make distributions to stockholders; its policies and plans regarding investments, financings and other matters; its ability to successfully manage the risks associated with international expansion and operations; its tax status as a real estate investment trust; its critical accounting policies; its ability to appropriately balance the use of debt and equity; its ability to access capital markets or other sources of funds; and its ability to meet its earnings guidance. 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 foreign currency 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.     HEALTH CARE REIT, INC.Financial Exhibits   Consolidated Balance Sheets (unaudited)(in thousands)                 September 30, 2012     2011 Assets Real estate investments: Land and land improvements $ 1,268,757 $ 1,039,079 Buildings and improvements 14,766,557 12,114,068 Acquired lease intangibles 572,765 361,832 Real property held for sale, net of accumulated depreciation 153,458 5,550 Construction in progress   219,705     208,257   16,981,242 13,728,786 Less accumulated depreciation and intangible amortization   (1,480,293 )   (1,084,746 ) Net real property owned 15,500,949 12,644,040 Real estate loans receivable(1) 284,908 320,611 Less allowance for losses on loans receivable   -     (1,823 ) Net real estate loans receivable   284,908     318,788   Net real estate investments 15,785,857 12,962,828 Other assets: Investments in unconsolidated entities 456,552 239,984 Goodwill 68,321 68,321 Deferred loan expenses 57,539 59,446 Cash and cash equivalents 1,382,252 136,676 Restricted cash 140,404 56,675 Receivables and other assets(2)   391,350     337,159     2,496,418     898,261   Total assets $ 18,282,275   $ 13,861,089     Liabilities and equity Liabilities: Borrowings under unsecured lines of credit arrangements $ - $ 390,000 Senior unsecured notes 4,921,712 4,432,092 Secured debt 2,314,717 1,888,083 Capital lease obligations 82,596 82,872 Accrued expenses and other liabilities   405,798     342,013   Total liabilities 7,724,823 7,135,060 Redeemable noncontrolling interests 35,047 32,863 Equity: Preferred stock 1,022,917 1,010,417 Common stock 259,522 178,772 Capital in excess of par value 10,502,057 6,384,711 Treasury stock (17,531 ) (13,535 ) Cumulative net income 2,077,641 1,849,290 Cumulative dividends (3,485,592 ) (2,826,800 ) Accumulated other comprehensive income (10,432 ) (10,354 ) Other equity   7,445     6,292   Total Health Care REIT, Inc. stockholders' equity 10,356,027 6,578,793 Noncontrolling interests   166,378     114,373   Total equity   10,522,405     6,693,166   Total liabilities and equity $ 18,282,275   $ 13,861,089     (1)   Includes non-accrual loan balances of $13,035,000 and $9,287,000 at September 30, 2012 and 2011, respectively. (2) Includes net straight-line receivable balances of $155,495,000 and $107,871,000 at September 30, 2012 and 2011, respectively.       Consolidated Statements of Income (unaudited)(in thousands, except per share data)               Three Months Ended     Nine Months Ended September 30, September 30, 2012   2011 2012   2011 Revenues: Rental income $ 290,225 $ 235,938 $ 826,627 $ 615,219 Resident fees and service 174,464 125,125 498,295 319,559 Interest income 8,111 7,858 24,131 32,433 Other income   1,339     1,809     4,505     9,974   Gross revenues 474,139 370,730 1,353,558 977,185   Expenses: Interest expense 94,580 84,429 280,058 220,527 Property operating expenses 144,479 103,127 409,606 266,081 Depreciation and amortization 132,150 111,582 387,053 286,623 General and administrative expenses 23,679 19,735 77,302 57,009 Transaction costs 8,264 6,739 42,535 56,542 Loss (gain) on derivatives, net 409 - (1,712 ) - Loss (gain) on extinguishment of debt, net 215 - 791 - Provision for loan losses   27,008     132     27,008     547   Total expenses 430,784 325,744 1,222,641 887,329   Income (loss) from continuing operations before income taxes                 and income from unconsolidated entities 43,355 44,986 130,917 89,856   Income tax (expense) benefit (836 ) (223 ) (3,754 ) (563 ) Income (loss) from unconsolidated entities   (739 )   1,642     2,250     4,156   Income (loss) from continuing operations 41,780 46,405 129,413 93,449   Discontinued operations: Gain (loss) on sales of properties, net 12,827 185 46,046 56,565 Impairment of assets (6,952 ) - (6,952 ) (202 ) Income (loss) from discontinued operations, net   5,851     5,763     19,329     20,561     11,726     5,948     58,423     76,924   Net income (loss) 53,506 52,353 187,836 170,373 Less: Preferred dividends 16,602 17,234 52,527 43,268 Preferred stock redemption charge - - 6,242 - Net income (loss) attributable to noncontrolling interests   (365 )   (1,488 )   (2,241 )   (2,721 ) Net income (loss) attributable to common stockholders $ 37,269   $ 36,607   $ 131,308   $ 129,826     Average number of common shares outstanding: Basic 224,391 177,272 212,592 169,636 Diluted 226,258 177,849 214,075 170,301   Net income (loss) attributable to common stockholders per share: Basic $ 0.17 $ 0.21 $ 0.62 $ 0.77 Diluted $ 0.16 $ 0.21 $ 0.61 $ 0.76   Common dividends per share $ 0.74 $ 0.715 $ 2.22 $ 2.12                     Normalizing ItemsExhibit 1(in thousands, except per share data)   Three Months Ended Nine Months Ended September 30, September 30, 2012 2011 2012 2011 Transaction costs $ 8,264 (1) $ 6,739 $ 42,535 $ 56,542 Special stock compensation grants - - 4,316 - Loss (gain) on derivatives, net 409 (2) - (1,712 ) - Loss (gain) on extinguishment of debt, net 215 (3) - 791 - Provision for loan losses 27,008 (4) 132 27,008 547 Held for sale hospital operating expenses - 212 215 1,306 Non-recurring other income - - - (3,774 ) Preferred stock redemption charge   -     -   6,242     -   Total $ 35,896 $ 7,083 $ 79,395 $ 54,621   Average diluted common shares outstanding 226,258 177,849 214,075 170,301 Net amount per diluted share $ 0.16 $ 0.04 $ 0.37 $ 0.32     Notes:   (1)   Primarily costs incurred with seniors housing acquisitions. (2) Related to currency hedges executed to lock the exchange rates on international transactions. (3) Related to secured debt extinguishments during the quarter. (4) Primarily related to one seniors housing loan.                     Funds Available for Distribution ReconciliationExhibit 2(in thousands, except per share data) Three Months Ended Nine Months Ended September 30, September 30, 2012 2011 2012 2011 Net income (loss) attributable to common stockholders $ 37,269 $ 36,607 $ 131,308 $ 129,826 Depreciation and amortization(1) 132,858 115,640 393,243 301,461 Losses/impairments (gains) on properties, net (5,875 ) (185 ) (39,094 ) (56,363 ) Noncontrolling interests(2) (4,631 ) (2,330 ) (13,689 ) (11,802 ) Unconsolidated entities(3) 8,518 1,631 15,996 4,476 Gross straight-line rental income (13,231 ) (11,891 ) (37,162 ) (27,909 ) Prepaid/straight-line rent receipts 1,956 1,599 5,093 8,312 Amortization related to above (below) market leases, net 972 (532 ) 767 (1,588 ) Non-cash interest expense 2,241 3,714 8,782 10,129 Cap-ex, tenant improvements, lease commissions   (9,345 )   (9,992 )   (28,578 )   (26,873 ) Funds available for distribution 150,732 134,261 436,666 329,669 Normalizing items, net(4) 35,896 7,083 79,395 54,621 Prepaid/straight-line rent receipts   (1,956 )   (1,599 )   (5,093 )   (8,312 ) Funds available for distribution - normalized $ 184,672 $ 139,745 $ 510,968 $ 375,978   Average diluted common shares outstanding 226,258 177,849 214,075 170,301   Per diluted share data: Net income (loss) attributable to common stockholders $ 0.16 $ 0.21 $ 0.61 $ 0.76 Funds available for distribution $ 0.67 $ 0.75 $ 2.04 $ 1.94 Funds available for distribution - normalized $ 0.82 $ 0.79 $ 2.39 $ 2.21   Normalized FAD Payout Ratio: Dividends per common share $ 0.74 $ 0.715 $ 2.22 $ 2.12 FAD per diluted share - normalized $ 0.82   $ 0.79   $ 2.39   $ 2.21   Normalized FAD payout ratio 90 % 91 % 93 % 96 %     Notes:   (1)   Depreciation and amortization includes depreciation and amortization from discontinued operations. (2) Represents noncontrolling interests' share of net FAD adjustments. (3) Represents HCN's share of net FAD adjustments from unconsolidated entities. (4) See Exhibit 1.                     Funds From Operations ReconciliationExhibit 3(in thousands, except per share data) Three Months Ended Nine Months Ended September 30, September 30, 2012 2011 2012 2011 Net income (loss) attributable to common stockholders $ 37,269 $ 36,607 $ 131,308 $ 129,826 Depreciation and amortization(1) 132,858 115,640 393,243 301,461 Losses/impairments (gains) on properties, net (5,875 ) (185 ) (39,094 ) (56,363 ) Noncontrolling interests(2) (5,440 ) (4,706 ) (15,619 ) (13,353 ) Unconsolidated entities(3)   11,913     3,020     22,673     9,411   Funds from operations 170,725 150,376 492,511 370,982 Normalizing items, net(4)   35,896     7,083     79,395     54,621   Funds from operations - normalized $ 206,621 $ 157,459 $ 571,906 $ 425,603   Average diluted common shares outstanding 226,258 177,849 214,075 170,301   Per diluted share data: Net income (loss) attributable to common stockholders $ 0.16 $ 0.21 $ 0.61 $ 0.76 Funds from operations $ 0.75 $ 0.85 $ 2.30 $ 2.18 Funds from operations - normalized $ 0.91 $ 0.89 $ 2.67 $ 2.50   Normalized FFO Payout Ratio: Dividends per common share $ 0.74 $ 0.715 $ 2.22 $ 2.12 FFO per diluted share - normalized $ 0.91   $ 0.89   $ 2.67   $ 2.50   Normalized FFO payout ratio 81 % 80 % 83 % 85 %     Notes:   (1)   Depreciation and amortization includes depreciation and amortization from discontinued operations. (2) Represents noncontrolling interests' share of net FFO adjustments. (3) Represents HCN's share of net FFO adjustments from unconsolidated entities. (4) See Exhibit 1.                   Outlook Reconciliations: Year Ended December 31, 2012Exhibit 4(in thousands, except per share data)   Prior Outlook Current Outlook Low High Low High FFO Reconciliation: Net income attributable to common stockholders $ 1.07 $ 1.17 $ 0.91 $ 0.95 Losses/impairments (gains) on properties, net (0.16) (0.16) (0.17) (0.17) Depreciation and amortization(1)   2.42     2.42     2.40     2.40 Funds from operations 3.33 3.43 3.14 3.18 Normalizing items, net(2)   0.20   0.20 0.35   0.35 Funds from operations - normalized $ 3.53 $ 3.63 $ 3.49 $ 3.53   FAD Reconciliation: Net income attributable to common stockholders $ 1.07 $ 1.17 $ 0.91 $ 0.95 Losses/impairments (gains) on properties, net (0.16) (0.16) (0.17) (0.17) Depreciation and amortization(1) 2.42 2.42 2.40 2.40 Net straight-line rent and above/below amortization(1) (0.22) (0.22) (0.22) (0.22) Non-cash interest expense(1) 0.06 0.06 0.06 0.06 Cap-ex, tenant improvements, lease commissions(1)   (0.25)   (0.25)   (0.24)   (0.24) Funds available for distribution 2.92 3.02 2.74 2.78 Normalizing items, net(2) 0.20 0.20 0.35 0.35 Prepaid/straight-line rent receipts   (0.01) (0.01) (0.02) (0.02) Funds available for distribution - normalized $ 3.11 $ 3.21 $ 3.07 $ 3.11     Notes:   (1)   Amounts presented net of noncontrolling interests' share and HCN's share of unconsolidated entities. (2) See Exhibit 1.   Health Care REIT, Inc.Scott Estes, 419-247-2800Jay Morgan, 419-247-2800