Welltower
WELL
#161
Rank
$127.80 B
Marketcap
$186.21
Share price
-0.69%
Change (1 day)
34.45%
Change (1 year)
Welltower Inc. is a real estate investment company that invests primarily in senior housing, assisted living, acute care facilities, medical office buildings, hospitals and other healthcare properties

Welltower - 10-Q quarterly report FY


Text size:
1

FORM 10-Q

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D. C. 20549


(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the quarterly period ended JUNE 30, 1998
-------------------------------------------------

OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the transition period from ______________________ to _______________________



HEALTH CARE REIT, INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)

Delaware 34-1096634
- ----------------------------- -------------------
(State or jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

One SeaGate, Suite 1500, Toledo, Ohio 43604
- ------------------------------------- -------------------
(Address of principal executive office) (Zip Code)

(Registrant's telephone number, including area code) (419) 247-2800
---------------------------

- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No .
--- ---

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. Yes X . No .
--- ---

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of August 1, 1998.

Class: Shares of Common Stock, $1.00 par value
Outstanding 25,456,788 shares
Shares of Preferred Stock, $1.00 par value
Outstanding 3,000,000 shares
2








HEALTH CARE REIT, INC.

INDEX


Page
----

Part I. FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

Consolidated Balance Sheets - June 30, 1998
and December 31, 1997 3

Consolidated Statements of Income - Three
and six months ended June 30, 1998 and 1997 4

Consolidated Statements of Shareholders' Equity-
Six months ended June 30, 1998
and 1997 5

Consolidated Statements of Cash Flows-
Six months ended June 30, 1998 and 1997 6

Notes to Unaudited Consolidated Financial Statements 7

Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 10


Part II. OTHER INFORMATION

Item 4. Submission of Matters to a Vote of Security Holders 13

Item 5. Other Information 13

Item 6. Exhibits and Reports on Form 8-K 14


SIGNATURES 15

EXHIBIT INDEX 16




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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

HEALTH CARE REIT, INC. AND SUBSIDIARIES

<TABLE>
<CAPTION>
JUNE 30 DECEMBER 31
1998 1997
(UNAUDITED) (NOTE)
--------- ---------
(IN THOUSANDS)
<S> <C> <C>
ASSETS
Real estate investments:
Real property owned:
Land $ 39,305 $ 22,445
Buildings & improvements 385,031 239,549
Construction in progress 87,905 47,050
--------- ---------
512,241 309,044
Less accumulated depreciation (15,930) (11,769)
--------- ---------
Total real property owned 496,311 297,275

Loans receivable 390,683 412,734
Direct financing leases 7,722 7,935
--------- ---------
894,716 717,944
Less allowance for losses on loans receivable (4,687) (4,387)
--------- ---------
Net real estate investments 890,029 713,557

Other Assets:
Direct investments 21,790 4,964
Marketable securities 3,832 4,671
Deferred loan expenses 2,582 2,275
Cash and cash equivalents 1,270 1,381
Receivables and other assets 7,484 7,479
--------- ---------
36,958 20,770
--------- ---------
TOTAL ASSETS $ 926,987 $ 734,327
========= =========

LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Borrowings under line of credit obligations $ 89,600 $ 78,400
Senior unsecured notes 240,000 162,000
Mortgages payable 7,467 8,670
Accrued expenses and other liabilities 19,313 15,333
--------- ---------
TOTAL LIABILITIES 356,380 264,403

Shareholders' equity:
Preferred Stock, $1.00 par value:
Authorized - 10,000,000 shares
Issued and outstanding - 3,000,000 75,000
Common Stock, $1.00 par value:
Authorized - 40,000,000 shares
Issued and outstanding - 25,456,788
in 1998 and 24,341,030 in 1997 25,457 24,341
Capital in excess of par value 460,700 435,603
Undistributed net income 9,172 8,841
Accumulated other comprehensive
income 3,644 4,671
Unamortized restricted stock (3,366) (3,532)
--------- ---------
TOTAL SHAREHOLDERS' EQUITY 570,607 469,924
--------- ---------

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 926,987 $ 734,327
========= =========
</TABLE>

NOTE: The balance sheet at December 31, 1997 has been derived from the audited
financial statements at that date but does not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements.

See notes to unaudited consolidated financial statements



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CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

HEALTH CARE REIT, INC. AND SUBSIDIARIES



<TABLE>
<CAPTION>


THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30 JUNE 30
1998 1997 1998 1997
---------------------- ----------------------
(IN THOUSANDS EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
REVENUES:
Interest on loans receivable $11,442 $11,319 $23,364 $21,935
Prepayment fees 477 477
Operating lease rent 9,625 5,461 17,269 10,424
Direct financing lease income 214 357 428 714
Loan and commitment fees 1,286 717 2,512 1,301
Other income 592 117 812 166
------- ------- ------- -------
Total Revenue $23,159 $18,448 $44,385 $35,017

EXPENSES:
Interest expense $ 4,461 $ 3,752 $ 8,701 $ 7,763
Provision for depreciation 2,292 1,276 4,162 2,461
General and administrative expenses 1,336 1,181 2,717 2,361
Loan expense 181 161 357 378
Provision for losses 150 150 300 300
------- ------- ------- -------
Total expenses $ 8,420 $ 6,520 $16,237 13,263
------- ------- ------- -------

Net Income $14,739 $11,928 $28,148 $21,754

Preferred stock dividends 832 832
------- ------- ------- -------

Net Income Available to
Common Shareholders $13,907 $11,928 $27,316 $21,754
======= ======= ======= =======

Average number of common shares outstanding:
Basic 25,272 21,845 24,768 20,523
Diluted 25,612 22,101 25,130 20,779

Net income available to Common Shareholders per share:
Basic $ 0.55 $ 0.55 $ 1.10 $ 1.06
Diluted 0.54 0.54 1.09 1.05
</TABLE>


See notes to unaudited consolidated financial statements



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CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (UNAUDITED)


HEALTH CARE REIT, INC. AND SUBSIDIARIES

<TABLE>
<CAPTION>

Six months ended June 30, 1998
------------------------------------------------------------------------------------------------
Capital In Unamortized Accum. Other
Preferred Common Excess of Restricted Undistributed Comprehensive
In thousands Stock Stock Par Value Stock Net Income Income Total
-----------------------------------------------------------------------------------------------

<S> <C> <C> <C> <C> <C> <C> <C>
Balance at beginning of period $ $24,341 $435,603 $(3,532) $ 8,841 $ 4,671 $469,924

Comprehensive income:
Net income 28,148 28,148
Unrealized gains (losses)
on securities (838) (838)
Foreign currency translation
adjustment (189) (189)
--------
Comprehensive income 27,121
--------

Proceeds from issuance of shares
from dividend reinvestment
plan 147 3,758 3,905

Proceeds from issuance of shares
from stock incentive plan 56 1,008 1,064

Proceeds from sale of shares 913 22,808 23,721

Proceeds from sale of Preferred
Stock 75,000 (2,477) 72,523

Reserved for restricted stock
net of amortization 166 166

Cash dividends paid (27,817) (27,817)
------- ------- -------- ------- --------- -------- --------

Balance at end of period $75,000 $25,457 $460,700 $(3,366) $ 9,172 $ 3,644 $570,607
======= ======= ======== ======= ========= ======== ========
<CAPTION>


Six months ended June 30, 1997
------------------------------------------------------------------------------------------------
Capital In Unamortized Accum. Other
Preferred Common Excess of Restricted Undistributed Comprehensive
Stock Stock Par Value Stock Net Income Income Total
-----------------------------------------------------------------------------------------------

<S> <C> <C> <C> <C> <C> <C> <C>
Balance at beginning of period $ $18,320 $ 298,281 $ 0 $ 8,167 $ 768 $325,536

Comprehensive income:
Net income 21,754 21,754
Unrealized gains on securities 670 670
--------
Comprehensive income 22,424
--------

Proceeds from issuance of shares
from dividend reinvestment plan 90 2,012 2,102

Proceeds from issuance of shares
from stock incentive plan 152 3,307 3,459

Reserved for restricted stock,
Net of amortization (2,608) (2,608)

Proceeds from sale of shares 3,480 76,266 79,746

Cash dividends paid (21,197) (21,197)
------- ------- --------- -------- ---------- --------- --------

Balance at end of period $ 0 $22,042 $ 379,866 $(2,608) $ 8,724 $ 1,438 $409,462
======= ======= ========= ======== ========== ========= ========
</TABLE>


See notes to unaudited consolidated financial statements




-5-
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CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

HEALTH CARE REIT, INC. AND SUBSIDIARIES

<TABLE>
<CAPTION>

SIX MONTHS ENDED
JUNE 30
1998 1997
---------------------------
(IN THOUSANDS)
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 28,148 $ 21,754
Adjustments to reconcile net income to net cash
Provision for depreciation 4,198 2,489
Provision for losses 300 300
Amortization 588 379
Loan and commitment fees earned less than cash received 523 452
Direct financing lease income less than cash received 213 144
Rental income in excess of cash received (569) (706)
Interest and other income in excess of cash received (164) (17)
Increase in accrued expenses and other liabilities 3,459 1,108
(Increase)/decrease in receivables and other assets 695 (351)
--------- ---------
NET CASH PROVIDED FROM OPERATING ACTIVITIES 37,391 25,552

INVESTING ACTIVITIES
Investment in real properties (129,768) (60,476)
Investment in loans receivable (62,980) (69,361)
Investment in equity related investments (16,856) 0
Principal collected on loans 11,606 12,761
Other (169) (349)
--------- ---------
NET CASH USED IN INVESTING ACTIVITIES (198,167) (117,425)

FINANCING ACTIVITIES
Net (payments)/advances under line of credit arrangements 11,200 (47,525)
Principal payments on long-term obligations (23,203) (197)
Net proceeds from the issuance of Common Stock 28,625 82,699
Net proceeds from the issuance of Preferred Stock 72,523
Proceeds from issuance of Senior Notes 100,000 80,000
Increase in deferred loan expense (663) (1,515)
Cash distributions to shareholders (27,817) (21,197)
--------- ---------
NET CASH PROVIDED FROM FINANCING ACTIVITIES 160,665 92,265

Increase/(decrease) in cash and cash equivalents (111) 392
--------- ---------

Cash and cash equivalents at beginning of period 1,381 581
--------- ---------

CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 1,270 $ 973
========= =========

Supplemental Cash Flow Information -- Interest Paid $ 10,155 $ 7,487
========= =========
</TABLE>

See notes to unaudited consolidated financial statements



-6-
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NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

HEALTH CARE REIT, INC. AND SUBSIDIARIES



NOTE A - BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information and with instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered for a fair presentation have been
included. Operating results for the six months ended June 30, 1998 are not
necessarily an indication of the results that may be expected for the year
ending December 31, 1998. For further information, refer to the financial
statements and footnotes thereto included in the Company's annual report on Form
10-K/A for the year ended December 31, 1997.


NOTE B - REAL ESTATE INVESTMENTS

During the six months ended June 30, 1998, the Company provided permanent
mortgage financings of $36,384,000, invested $57,187,000 in real property, made
construction advances of $99,177,000, and funded $16,856,000 of equity related
investments. During the six months ended June 30, 1998, the Company received
principal payments on real estate mortgages of $11,172,000 and had net payments
on working capital loans of $434,000.

With respect to the above-mentioned construction advances, funding associated
with 19 construction loans represented $26,595,000, and funding for construction
in progress in connection with 34 properties owned directly by the Company
totaled $72,582,000. During the six months ended June 30, 1998, six of the
construction loans completed the construction phase of the Company's investment
process and were converted to investments in permanent mortgage loans, with an
aggregate investment of $22,448,000. Also during the six months ended June 30,
1998, six of the construction properties in progress completed the construction
phase of the Company's investment process and were converted to permanent
operating leases, with an aggregate investment balance of $31,726,000.


NOTE C - INDEBTEDNESS AND SHAREHOLDERS' EQUITY

In March 1998, the Company completed the sale of $100 million of 7.625% Senior
Unsecured Notes due March 15, 2008.

In March 1998, the Company issued 913,242 shares of Common Stock, $1.00 par
value per share, at the price of $27.375 per share, which generated net proceeds
to the Company of $23,721,000.

In May 1998, the Company issued 3,000,000 shares of 8.875% Cumulative Redeemable
Preferred Stock at the price of $25.00 per share, which generated net proceeds
to the Company of $72,523,000.

The Company has a total of $185,000,000 in unsecured credit facilities bearing
interest at the lenders' prime rate or LIBOR plus 1.125%. A total of
approximately $95,400,000 was available at June 30, 1998, subject to compliance
with the terms and conditions of the unsecured credit facilities.



-7-
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NOTE D - DIRECT INVESTMENTS

Management determines the appropriate classification of a direct investment at
the time of acquisition and reevaluates such designation as of each balance
sheet date. Debt securities which are classified as held to maturity are stated
at historical cost. Equity investments are stated at historical cost. At June
30, 1998, direct investments included the preferred stock of one private
corporation, subordinated debt in eight private corporations, and ownership
representing a 31% interest in Atlantic Healthcare Finance L.P., a property
investment group that specializes in the financing, through sale and leaseback
transactions, of nursing homes located in the United Kingdom and continental
Europe.


NOTE E - MARKETABLE SECURITIES

Marketable securities are stated at market value with unrealized gains and
losses reported in a separate component of shareholders' equity. At June 30,
1998, marketable securities reflected the market value of the common stock of
two publicly owned corporations, which were obtained by the Company at no cost,
and the fair value of the common stock related to warrants in one publicly owned
corporation in excess of the exercise price.


NOTE F - CONTINGENT LIABILITIES

As disclosed in the financial statements for the year ended December 31, 1997,
the Company was contingently liable for certain obligations amounting to
$15,054,000. No significant change in these contingencies had occurred as of
June 30, 1998.


NOTE G - DISTRIBUTIONS PAID TO SHAREHOLDERS

On May 20, 1998, the Company paid a dividend of $0.545 per share to shareholders
of record on May 5, 1998. This dividend related to the period from January 1,
1998 through March 31, 1998.


NOTE H - EARNINGS PER SHARE

The following table sets forth the computation of basic and diluted earnings per
share (in thousands, except per share data):

<TABLE>
<CAPTION>

Six months ended June 30
--------------------------
1998 1997
------- -------
<S> <C> <C>
Numerator for basic and diluted earnings per
share-income available to common shareholders $27,316 $21,754
======= =======

Denominator for basic earnings per share -
weighted average shares 24,768 20,523

Effect of dilutive securities:
Employee stock options 219 141
Nonvested restricted shares 143 115
------- -------

Dilutive potential common shares 362 256
------- -------

Denominator for diluted earnings per share -
adjusted weighted average shares 25,130 20,779
======= =======

Basic earnings per share $ 1.10 $ 1.06

Diluted earnings per share $ 1.09 $ 1.05
</TABLE>




-8-
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NOTE I - COMPREHENSIVE INCOME

As of January 1, 1998, the Company adopted Statement 130, Reporting
Comprehensive Income. Statement 130 establishes new rules for the reporting and
display of comprehensive income and its components. The adoption of this
Statement had no impact on the Company's net income or shareholders' equity.
Statement 130 requires unrealized gains or losses on the Company's marketable
securities and foreign currency translation adjustments to be included in other
comprehensive income. Prior to adoption of Statement 130, unrealized gains and
losses were reported separately in shareholders' equity. Prior year financial
statements have been reclassified to conform to the requirements of Statement
130.

During the first six months of 1998 and 1997, total comprehensive income
amounted to $27,121,000 and $22,424,000, respectively.


NOTE J - SUBSEQUENT EVENTS

On July 21, 1998, the Company declared a dividend of $0.55 per share payable on
August 20, 1998 to shareholders of record on August 4, 1998. The dividend
relates to the period from April 1, 1998 through June 30, 1998.




-9-
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

LIQUIDITY AND CAPITAL RESOURCES

At June 30, 1998, the Company's net real estate investments totaled
approximately $890,029,000, which included 56 skilled nursing facilities, 130
assisted living facilities, 15 retirement centers, six specialty care facilities
and two behavioral care facilities. The Company funds its investments through a
combination of long-term and short-term financing, utilizing both debt and
equity.

As of June 30, 1998, the Company had shareholders' equity of $570,607,000 and a
total outstanding debt balance of $337,067,000, which represents a debt to
equity ratio of 0.59 to 1.0.

In March 1998, the Company completed the sale of $100 million of 7.625% Senior
Unsecured Notes due March 15, 2008.

In March 1998, the Company issued 913,242 shares of Common Stock, $1.00 par
value per share, at the price of $27.375 per share, which generated net proceeds
to the Company of $23,721,000.

In May 1998, the Company issued 3,000,000 shares of 8.875% Cumulative Redeemable
Preferred Stock at the price of $25.00 per share, which generated net proceeds
to the Company of $72,523,000.

During the six months ended June 30, 1998, the proceeds derived from the
Company's capital raising activities were used to invest in additional health
care properties and reduce bank debt under the Company's revolving line of
credit arrangements.

As of June 30, 1998, the Company had effective shelf registrations on file with
the Securities and Exchange Commission under which the Company may issue up to
$441,269,000 of securities including debt, convertible debt, common and
preferred stock. The Company anticipates issuing securities under such shelf
registrations to invest in additional health care facilities and to repay
borrowings under the Company's line of credit arrangements.

As of June 30, 1998, the Company had approximately $239,345,000 in unfunded
commitments. Under the Company's line of credit arrangements, available funding
totaled $95,400,000, subject to compliance with the terms and conditions of the
line of credit arrangements. The Company believes its liquidity and various
sources of available capital are sufficient to fund operations, finance future
investments, and meet debt service and dividend requirements.

RESULTS OF OPERATIONS

Revenues for the three months ended June 30, 1998 were $23,159,000 as compared
with $18,448,000 for the three months ended June 30, 1997. Revenue growth
resulted primarily from increased operating lease income of $4,164,000,
increased interest income of $123,000 and increased loan and commitment fees of
$569,000 as a result of additional real estate investments made during the past
twelve months.

Revenues for the six months ended June 30, 1998 were $44,385,000 as compared
with $35,017,000 for the six months ended June 30, 1997, an increase of
$9,368,000 or 27%. Revenue growth resulted primarily from increased operating
lease income of $6,845,000, increased interest income of $1,429,000, and
increased loan and commitment fees of $1,211,000 as a result of additional real
estate investments made during the past twelve months.



-10-
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The growth in income for the three and six month periods ended June 30, 1998 was
offset by prepayment fees during the second quarter of 1997 of $477,000. There
were no such prepayment fees during the first six months of 1998.

Expenses for the three months ended June 30, 1998 totaled $8,420,000, an
increase of $1,900,000 from expenses of $6,520,000 for the same period in 1997.
Expenses for the six months ended June 30, 1998 totaled $16,237,000, an increase
of $2,974,000 from expenses of $13,263,000 for the same period in 1997. The
increases in total expenses for the three and six month periods ended June 30,
1998 were related to an increase in interest expense, an additional expense
associated with the provision for depreciation and an increase in general and
administrative expenses.

Interest expense for the three months ended June 30, 1998 was $4,461,000 as
compared to $3,752,000 for the same period in 1997. For the six month period
ended June 30, 1998, interest expense totaled $8,701,000 as compared to
$7,763,000 for the same period in 1997. The increase in the 1998 period was
primarily due to the issuance of $80,000,000 Senior Notes in April 1997 and the
issuance of $100,000,000 Senior Notes in March 1998. The increases in the 1998
periods were offset by the amount of capitalized interest recorded during the
first six months of 1998.

The Company capitalizes certain interest costs associated with funds used to
finance the construction of properties owned directly by the Company. The amount
capitalized is based upon the borrowings outstanding during the construction
period using the rate of interest which approximates the Company's cost of
financing. The Company's interest expense is reduced by the amount capitalized.
Capitalized interest for the three and six month periods in 1998 totaled
$1,617,000, and $2,843,000, respectively, as compared with $381,000 and $628,000
for the same periods in 1997.

The provision for depreciation for the three and six month periods ended June
30, 1998 totaled $2,292,000 and $4,162,000, respectively, increases of
$1,016,000 and $1,701,000 over the comparable periods in 1997 as a result of
additional investments in properties owned directly by the Company.

General and administrative expenses for the three and six month periods ended
June 30, 1998 totaled $1,336,000 and $2,717,000, respectively, as compared with
$1,181,000 and $2,361,000 for the same periods in 1997. The expenses for the
three and six month periods in 1998 were 5.77% and 6.12% of revenues as compared
with 6.40% and 6.74% for the same periods in 1997.

Dividend expense, associated with the Company's outstanding preferred stock, for
the three and six month periods ended June 30, 1998 totaled $832,000 and
$832,000 respectively. There were no such dividend payments in the same periods
in 1997.

As a result of the various factors mentioned above, net income available to
common shareholders for the three and six month periods ended June 30, 1998 was
$13,907,000, or $0.54 per diluted share, and $27,316,000, or $1.09 per diluted
share, respectively, as compared with $11,928,000, or $0.54 per diluted share,
and $21,754,000, or $1.05 per diluted share for the comparable periods in 1997.
Net income for the three and six month periods ended June 30, 1997 included
$477,000, or $0.02 per share, of prepayment fees. There were no such prepayment
fees in the same period in 1998.



-11-
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IMPACT OF INFLATION

During the past three years, inflation has not significantly affected the
earnings of the Company because of the moderate inflation rate. Additionally,
earnings of the Company are primarily long-term investments with fixed interest
rates. These investments are mainly financed with a combination of equity,
senior notes and borrowings under the revolving lines of credit. During
inflationary periods, which generally are accompanied by rising interest rates,
the Company's ability to grow may be adversely affected because the yield on new
investments may increase at a slower rate than new borrowing costs. Presuming
the current inflation rate remains moderate and long-term interest rates do not
increase significantly, the Company believes that equity and debt financing will
continue to be available.

OTHER INFORMATION

This document and supporting schedules may contain "forward-looking" statements
as defined in the Private Securities Litigation Reform Act of 1995.
Forward-looking statements involve known and unknown risks and uncertainties,
which may cause the Company's actual results in the future to differ materially
from expected results. These risks and uncertainties include, among others,
competition in the financing of health care facilities, the availability of
capital, and regulatory and other changes in the health care sector, as
described in the Company's filings with the Securities and Exchange Commission.

The Company has assessed its current computer software for proper functioning
with respect to dates in the year 2000 and thereafter. The year 2000 issue and
related costs are not expected to have a material impact on the operations of
the Company.



-12-
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PART II. OTHER INFORMATION


ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

The annual meeting of shareholders of Health Care REIT, Inc. was duly called and
held on April 21, 1998 in Toledo, Ohio. Proxies for the meeting were solicited
on behalf of the Company's management and Board of Directors pursuant to
Regulation 14A of the General Rules and Regulations of the Commission. There was
no solicitation in opposition to the management's nominees for election as
directors as listed in the Proxy Statement, and all such nominees were elected.

Votes were cast at the meeting upon the proposals described in the Proxy
Statement for the meeting (filed with the Commission pursuant to Regulation 14A
and incorporated herein by reference) as follows:

Proposal #1 - The election of three directors:

Nominee For Withheld
------------------------ ---------------- -----------------
Jeffrey H. Donahue 22,249,048 193,127
Bruce G. Thompson 22,258,434 183,741
Richard A. Unverferth 22,216,385 225,790

Proposal #2 - The approval of an amendment to the Company's
Stock Plan for Non-Employee Directors:

For 19,957,231
Against 2,032,249
Abstain 452,695

Proposal #3 - The ratification of the appointment of Ernst &
Young LLP as independent auditors for the fiscal
year 1998:

For 22,171,313
Against 92,894
Abstain 177,968



ITEM 5. OTHER INFORMATION

On April 14, 1998, the Company issued a press release in which it announced
record new investments of $110 million for first quarter of 1998.

On April 21, 1998, the Company issued a press release in which it announced
record first quarter 1998 results and an increase in quarterly dividend.

On May 8, 1998, the Company issued a press release in which it announced the
sale of $75 million of cumulative redeemable preferred stock.




-13-
14




ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) Reports

27 Financial Data Schedule
99.1 Press release dated April 14, 1998
99.2 Press release dated April 21, 1998
99.3 Press release dated May 8, 1998




(b) Reports on Form 8-K

Form 8-K filed on May 8, 1998






-14-
15





Pursuant to the requirement of the Securities and Exchange Act of 1934, the
Registrant had duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.



HEALTH CARE REIT, INC.



Date: August 11, 1998 By: /s/ GEORGE L. CHAPMAN
---------------------- -------------------------------------------
George L. Chapman,
Chairman, Chief Executive Officer and
President



Date: August 11, 1998 By: /s/ EDWARD F. LANGE, JR.
---------------------- -------------------------------------------
Edward F. Lange, Jr.,
Chief Financial Officer




Date: August 11, 1998 By: /s/ MICHAEL A. CRABTREE
---------------------- -------------------------------------------
Michael A. Crabtree,
Chief Accounting Officer














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16








EXHIBIT INDEX
-------------


The following documents are included in this Form 10-Q as Exhibits:


DESIGNATION
NUMBER UNDER
ITEM 601 OF
REGULATION S-K EXHIBIT DESCRIPTION
-------------- -------------------

27 Financial Data Schedule

99.1 Press release dated April 14, 1998

99.2 Press release dated April 21, 1998

99.3 Press release dated May 8, 1998






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