Second Quarter Highlights - Issued $47 Million of Equity and
Retired $30 Million of Senior Notes - Hearthstone Lease Restructure
Completed - Payout Ratio of 77% Supports $0.44 per Share Cash
Dividend - Balance Sheet and Liquidity Position Strong NEWPORT
BEACH, Calif., Aug. 5 /PRNewswire-FirstCall/ -- Nationwide Health
Properties, Inc. (NYSE:NHP) today announced results of operations
for the second quarter and six months ended June 30, 2009.
Contemporaneously with this press release, the Company filed its
Quarterly Report on Form 10-Q for the quarterly period ended June
30, 2009 with the Securities and Exchange Commission. "NHP's strong
balance sheet is anchored by low leverage, ample liquidity and
modest capital commitments through June 2011. Always looking to
improve our balance sheet in this economic environment, to date we
raised $105 million of equity and retired $30 million of our senior
notes. On an enterprise value basis, our leverage is 35% and after
our recent equity issuances we have about $199 million of cash as
well as the full capacity of our $700 million credit facility,"
commented Douglas M. Pasquale, NHP's Chairman and Chief Executive
Officer. "NHP is well positioned to take advantage of investment
opportunities as they arise. We expect assets will begin to become
available at attractive prices and we are prepared to make
excellent investments as these opportunities present themselves,"
Mr. Pasquale added. SECOND QUARTER 2009 RESULTS OF OPERATIONS The
following table presents selected unaudited financial information
for the second quarter and the six months ended June 30, 2009 as
compared to the same period of 2008: SELECTED FINANCIAL DATA ($ in
thousands, except per share amounts) Three Months Ended June 30,
--------------------------- 2009 2008 $ Change % Change ---- ----
-------- -------- Revenue $97,311 $93,071 $4,240 4.6% Income from
Continuing Operations $34,809 $26,518 $8,291 31.3% Net Income
Attributable to NHP Common Stockholders $33,299 $165,951 $(132,652)
-79.9% Net Income Attributable to NHP Common Stockholders Per
Diluted Share $0.31 $1.69 $(1.38) -81.7% Diluted FFO $66,630
$57,806 $8,824 15.3% Recurring Diluted FFO $62,066 $57,806 $4,260
7.4% Diluted FFO Per Share $0.61 $0.56 $0.05 8.9% Recurring Diluted
FFO Per Share $0.57 $0.56 $0.01 1.8% Diluted FAD $66,242 $56,090
$10,152 18.1% Recurring Diluted FAD $61,678 $56,090 $5,588 10.0%
Diluted FAD Per Share $0.61 $0.55 $0.06 10.9% Recurring Diluted FAD
Per Share $0.57 $0.55 $0.02 3.6% Six Months Ended June 30,
------------------------- 2009 2008 $ Change % Change ---- ----
-------- -------- Revenue $194,562 $178,342 $16,220 9.1% Income
from Continuing Operations $64,209 $49,461 $14,748 29.8% Net Income
Attributable to NHP Common Stockholders $82,453 $201,344 $(118,891)
-59.0% Net Income Attributable to NHP Common Stockholders Per
Diluted Share $0.78 $2.07 $(1.29) -62.3% Diluted FFO $128,197
$114,099 $14,098 12.4% Recurring Diluted FFO $123,633 $114,099
$9,534 8.4% Diluted FFO Per Share $1.18 $1.12 $0.06 5.4% Recurring
Diluted FFO Per Share $1.14 $1.12 $0.02 1.8% Diluted FAD $127,668
$110,661 $17,007 15.4% Recurring Diluted FAD $123,104 $110,661
$12,443 11.2% Diluted FAD Per Share $1.18 $1.09 $0.09 8.3%
Recurring Diluted FAD Per Share $1.14 $1.09 $0.05 4.6% NON-GAAP
FINANCIAL MEASURES Diluted Funds From Operations ("FFO") and
Diluted Funds Available for Distribution ("FAD") are non-GAAP
measures that we believe are important to understanding our
operations. We believe diluted FFO is an important supplemental
measure of operating performance because it excludes the effects of
depreciation and amortization and gains (losses) from sales of
facilities (both of which are based on historical costs and which
may be of limited relevance in evaluating current performance). We
believe diluted FAD is an important supplemental measure of
operating performance because, like diluted FFO, it excludes the
effects of depreciation and amortization and gains (losses) from
sales of facilities (both of which are based on historical costs
and which may be of limited relevance in evaluating current
performance). It also excludes straight-lined rent and other
non-cash items that have become more significant for us and our
competitors over the last several years. We believe that net income
is the most directly comparable GAAP measure to diluted FFO and
diluted FAD. Reconciliations between net income and diluted FFO and
net income and diluted FAD are included in the accompanying
financial data. For guidance, we have also included in the
accompanying financial data reconciliations between net income per
share and diluted FFO and diluted FAD per share. We have also
included recurring diluted FFO and recurring diluted FAD amounts
which exclude the recognition of a gain on debt extinguishment in
2009. SECOND QUARTER 2009 INVESTMENT ACTIVITY During the second
quarter of 2009, we invested $6.0 million in revenue producing
capital expenditures at a blended yield of 8.5% on our existing
triple net portfolio. In July 2009, we reached an agreement with
The Broe Group to acquire all of their interests in two of our
medical office building joint ventures for $4.3 million. On July
27, 2009, we amended our leases with Hearthstone Senior Services,
L.P. ("Hearthstone"). Hearthstone's only operations consist of the
management of the 32 facilities under these leases. The lease terms
were modified to (i) convert the annual Base Rent escalator to a
fixed 3%, (ii) defer payment of the Supplemental Rent through
December 31, 2011, (iii) tighten restrictions on distributions
until such time as Hearthstone achieves and sustains defined rent
coverage levels, (iv) provide for transfer of ownership of
Hearthstone to us in the event of certain major events of default
and (v) put in place certain bankruptcy protections and enhanced
oversight rights for us. SECOND QUARTER 2009 FINANCING TRANSACTIONS
On April 1, 2009, we retired $30.0 million of senior notes with an
interest rate of 6.25% due in February 2013 for $25.4 million.
During the second quarter of 2009, we issued 1.8 million shares of
our common stock through our controlled equity offering program at
an average price of $27.14 per share, resulting in net proceeds of
approximately $47.0 million. From July 1, 2009 to August 5, 2009,
we issued 2.1 million shares of our common stock through our
controlled equity offering program at an average price of $27.80
per share, resulting in net proceeds of approximately $58.4
million. 2009 GUIDANCE As a result of the common shares issued to
date in 2009, we are decreasing by $0.01 per share the high end of
our full-year 2009 recurring diluted FFO guidance from $2.26 per
share to $2.25 per share. We are also decreasing by $0.01 per share
the high end of our full-year 2009 recurring diluted FAD guidance
from $2.24 per share to $2.23 per share. Our revised guidance for
recurring diluted FFO of $2.22 per share to $2.25 per share
includes the retirement of $30.0 million of senior notes, the
second quarter and post second quarter end issuances of common
shares that are discussed above and excludes any acquisitions,
investments, impairments or additional capital transactions that
could occur for the remainder of 2009. Current guidance reflects
the recent amendment of the Hearthstone leases and does not include
any Supplemental Rent previously or prospectively deferred.
Beginning in 2009, certain costs associated with acquisitions which
were previously capitalized are now required to be expensed. While
our guidance does not assume any acquisitions for the remainder of
2009, we would incur certain costs that would be expensed for any
acquisitions we may make and those costs could be material.
CONFERENCE CALL INFORMATION We have scheduled a conference call and
webcast on Thursday, August 6, 2009 at 8:30 a.m. Pacific time
(11:30 a.m. Eastern time) to discuss these results. The conference
call is accessible by dialing 866-713-8566 and referencing
conference ID number 76511885 or by logging on to our website at
http://www.nhp-reit.com/. The international dial-in number is
617-597-5325. The earnings release and any additional financial
information that may be discussed on the conference call will also
be available at the same location on our website. A digitized
replay of the conference call will be available from 11:30 a.m.
Pacific time (2:30 p.m. Eastern time) that day until 9:00 p.m.
Pacific time (Midnight Eastern time) on September 6, 2009. Callers
can access the replay by dialing 888-286-8010 or 617-801-6888 and
entering conference ID number 32754392. Webcast replays will also
be available on our website for at least 12 months following the
conference call. Our supplemental information package for the
quarter and six months ended June 30, 2009 is available on our
website, free of charge, at http://www.nhp-reit.com/ by selecting
"Investor Relations" followed by "Financial Information" and is
included in our Current Report on Form 8-K filed August 5, 2009
with the SEC also containing this release. Shareholders may receive
free of charge a complete set of our audited financial statements
upon request. ABOUT NATIONWIDE HEALTH PROPERTIES, INC. Nationwide
Health Properties, Inc. is a real estate investment trust (REIT)
that invests primarily in healthcare real estate in the United
States. As of June 30, 2009, the Company's portfolio of properties,
including mortgage loans and properties owned by unconsolidated
joint ventures, totaled 579 properties among the following
segments: 279 senior housing facilities, 200 skilled nursing
facilities, 82 medical office buildings, 11 continuing care
retirement communities and 7 specialty hospitals. For more
information on Nationwide Health Properties, Inc., visit our
website at http://www.nhp-reit.com/. FORWARD LOOKING STATEMENTS
Certain information contained in this release includes
forward-looking statements. Forward-looking statements include
statements regarding our expectations, beliefs, intentions, plans,
objectives, goals, strategies, future events or performance and
underlying assumptions and other statements which are not
statements of historical facts. These statements may be identified,
without limitation, by the use of forward-looking terminology such
as "may," "will," "anticipates," "expects," "believes," "intends,"
"should" or comparable terms or the negative thereof. These
forward-looking statements involve risks and uncertainties that
could cause actual results to differ materially from those
described in the statements. Risks and uncertainties associated
with our business include (without limitation) the following:
deterioration in the operating results or financial condition,
including bankruptcies, of our tenants; non-payment or late payment
of rent, interest or loan principal amounts by our tenants; our
reliance on two tenants for a significant percentage of our
revenue; occupancy levels at certain facilities; our level of
indebtedness; changes in the ratings of our debt securities;
maintaining compliance with our debt covenants; access to the
capital markets and the cost and availability of capital;
government regulations, including changes in the reimbursement
levels under the Medicare and Medicaid programs; the general
distress of the healthcare industry; increasing competition in our
business sector; the effect of economic and market conditions and
changes in interest rates; the amount and yield of any additional
investments; risks associated with acquisitions, including our
ability to identify and complete favorable transactions, delays or
failures in obtaining third party consents or approvals, the
failure to achieve perceived benefits, unexpected costs or
liabilities and potential litigation; the ability of our tenants to
pay contractual rent and/or interest escalations in future periods;
the ability of our tenants to obtain and maintain adequate
liability and other insurance; our ability to attract new tenants
for certain facilities; our ability to sell certain facilities for
their book value; our ability to retain key personnel; potential
liability under environmental laws; the possibility that we could
be required to repurchase some of our senior notes; the rights and
influence of holders of our outstanding preferred stock; changes in
or inadvertent violations of tax laws and regulations and other
factors that can affect our status as a real estate investment
trust; and other factors discussed from time to time in our news
releases, public statements and/or filings with the Securities and
Exchange Commission, especially the "Risk Factors" sections of our
Annual and Quarterly Reports on Forms 10-K and 10-Q.
Forward-looking information is provided by us pursuant to the safe
harbor established under the Private Securities Litigation Reform
Act of 1995 and should be evaluated in the context of these
factors. We disclaim any intent or obligation to update these
forward-looking statements. *** Financial Tables to Follow ***
NATIONWIDE HEALTH PROPERTIES, INC. CONSOLIDATED INCOME STATEMENTS
(In thousands, except per share data) (Unaudited) Three Months
Ended Six Months Ended June 30, June 30, ----------------
---------------- 2009 2008 2009 2008 ---- ---- ---- ---- Revenue:
Triple-net lease rent $73,650 $70,583 $147,913 $139,656 Medical
office building operating rent 17,003 15,939 33,656 26,870 ------
------ ------ ------ 90,653 86,522 181,569 166,526 Interest and
other income 6,658 6,549 12,993 11,816 ----- ----- ------ ------
97,311 93,071 194,562 178,342 Expenses: Interest and amortization
of deferred financing costs 23,247 25,507 47,319 50,246
Depreciation and amortization 30,892 28,788 61,919 56,070 General
and administrative 6,973 6,407 13,904 12,904 Medical office
building operating expenses 7,128 6,699 13,962 11,562 ----- -----
------ ------ 68,240 67,401 137,104 130,782 ------ ------ -------
------- Operating income 29,071 25,670 57,458 47,560 Income from
unconsolidated joint ventures 1,174 848 2,187 1,901 Gain on debt
extinguishment, net 4,564 - 4,564 - ----- --- ----- --- Income from
continuing operations 34,809 26,518 64,209 49,461 Discontinued
operations Gains on sale of facilities, net - 140,226 21,152
151,092 Income from discontinued operations 17 1,223 98 4,861 ---
----- --- ----- 17 141,449 21,250 155,953 --- ------- ------
------- Net income 34,826 167,967 85,459 205,414 Net (income) loss
attributable to noncontrolling interests (75) 46 (102) 55 --- ---
---- --- Net income attributable to NHP 34,751 168,013 85,357
205,469 Preferred stock dividends (1,452) (2,062) (2,904) (4,125)
------ ------ ------ ------ Income available to NHP common
stockholders $33,299 $165,951 $82,453 $201,344 ======= ========
======= ======== Basic earnings per share (EPS): Income from
continuing operations attributable to NHP common stockholders $0.32
$0.25 $0.59 $0.46 Discontinued operations attributable to NHP
common stockholders - 1.47 0.21 1.63 --- ---- ---- ---- Net income
attributable to NHP common stockholders $0.32 $1.72 $0.80 $2.09
===== ===== ===== ===== Diluted EPS: Income from continuing
operations attributable to NHP common stockholders $0.31 $0.25
$0.58 $0.46 Discontinued operations attributable to NHP common
stockholders - 1.44 0.20 1.61 --- ---- ---- ---- Net income
attributable to NHP common stockholders $0.31 $1.69 $0.78 $2.07
===== ===== ===== ===== Weighted average shares outstanding for
EPS: Basic 103,089 96,351 102,724 95,813 ======= ====== =======
====== Diluted 105,182 98,013 104,797 96,823 ======= ====== =======
====== NATIONWIDE HEALTH PROPERTIES, INC. RECONCILIATIONS OF NET
INCOME TO NON-GAAP FINANCIAL MEASURES (In thousands, except per
share data) (Unaudited) Reconciliation of Net Income to Diluted FFO
Three Months Ended Six Months Ended June 30, June 30,
---------------- ---------------- 2009 2008 2009 2008 ---- ----
---- ---- Net income $34,826 $167,967 $85,459 $205,414 Preferred
stock dividends (1,452) (2,062) (2,904) (4,125) Net (income) loss
attributable to noncontrolling interests (75) 46 (102) 55 Real
estate related depreciation and amortization 30,567 28,888 61,374
57,476 Depreciation in income from unconsolidated joint ventures
1,312 1,131 2,618 2,246 Gains on sale of facilities, net -
(140,226) (21,152) (151,092) --- -------- ------- -------- FFO
available to NHP common stockholders 65,178 55,744 125,293 109,974
Series B preferred dividend add-back 1,452 2,062 2,904 4,125 -----
----- ----- ----- Diluted FFO 66,630 57,806 128,197 114,099 Gain on
extinguishment of debt, net (4,564) - (4,564) - ------ --- ------
--- Recurring diluted FFO $62,066 $57,806 $123,633 $114,099 =======
======= ======== ======== Weighted average shares outstanding for
diluted FFO: Diluted weighted average shares outstanding (1)
105,241 98,114 104,848 96,949 Series B preferred stock conversion
add-back if not already converted 3,368 4,736 3,363 4,732 -----
----- ----- ----- Fully diluted weighted average shares outstanding
108,609 102,850 108,211 101,681 ======= ======= ======= =======
Diluted FFO per share $0.61 $0.56 $1.18 $1.12 ===== ===== =====
===== Recurring diluted FFO per share $0.57 $0.56 $1.14 $1.12 =====
===== ===== ===== Dividends declared per common share $0.44 $0.44
$0.88 $0.88 ===== ===== ===== ===== Recurring diluted FFO payout
ratio 77% 79% 77% 79% === === === === Recurring diluted FFO
coverage 1.30 1.27 1.30 1.27 ==== ==== ==== ==== (1) Diluted
weighted average shares outstanding includes the effect of all
participating and non-participating share-based payment awards
which for us consists of stock options and other share-based
payment awards if the effect is dilutive. The dilutive effect of
all share-based payment awards is calculated using the treasury
stock method. Additionally, our redeemable OP units are included as
if converted to common stock on a one-for-one basis. NATIONWIDE
HEALTH PROPERTIES, INC. RECONCILIATIONS OF NET INCOME TO NON-GAAP
FINANCIAL MEASURES (In thousands, except per share data)
(Unaudited) Reconciliation of Net Income to Diluted FAD Three
Months Ended Six Months Ended June 30, June 30, ----------------
---------------- 2009 2008 2009 2008 ---- ---- ---- ---- Net income
$34,826 $167,967 $85,459 $205,414 Preferred stock dividends (1,452)
(2,062) (2,904) (4,125) Net (income) loss attributable to
noncontrolling interests (75) 46 (102) 55 Real estate related
depreciation and amortization 30,567 28,888 61,374 57,476 Gains on
sale of facilities, net - (140,226) (21,152) (151,092)
Straight-lined rent (1,599) (2,759) (3,188) (5,597) Amortization of
intangible assets and liabilities (48) (150) (271) (274) Non-cash
stock-based compensation expense 1,837 1,440 3,410 2,771 Deferred
finance cost amortization 756 777 1,570 1,524 Lease commissions and
tenant and capital improvements (1,343) (1,047) (2,069) (1,894)
Unconsolidated joint ventures: Real estate related depreciation and
amortization 1,312 1,131 2,618 2,246 Straight-lined rent (12) -
(23) (10) Deferred finance cost amortization 21 23 42 42 --- ---
--- --- FAD available to NHP common stockholders 64,790 54,028
124,764 106,536 Series B preferred dividends 1,452 2,062 2,904
4,125 ----- ----- ----- ----- Diluted FAD 66,242 56,090 127,668
110,661 Gain on extinguishment of debt, net (4,564) - (4,564) -
------ --- ------ --- Recurring diluted FAD $61,678 $56,090
$123,104 $110,661 ======= ======= ======== ======== Weighted
average shares outstanding for diluted FAD: Diluted weighted
average shares outstanding (1) 105,241 98,114 104,848 96,949 Series
B preferred stock add- back if not already converted 3,368 4,736
3,363 4,732 ----- ----- ----- ----- Fully diluted weighted average
shares outstanding 108,609 102,850 108,211 101,681 ======= =======
======= ======= Diluted FAD per share $0.61 $0.55 $1.18 $1.09 =====
===== ===== ===== Recurring diluted FAD per share $0.57 $0.55 $1.14
$1.09 ===== ===== ===== ===== Dividends declared per common share
$0.44 $0.44 $0.88 $0.88 ===== ===== ===== ===== Diluted FAD payout
ratio 77% 80% 77% 81% === === === === Diluted FAD coverage 1.30
1.25 1.30 1.24 ==== ==== ==== ==== (1) Diluted weighted average
shares outstanding includes the effect of all participating and
non-participating share-based payment awards which for us consists
of stock options and other share-based payment awards if the effect
is dilutive. The dilutive effect of all share-based payment awards
is calculated using the treasury stock method. Additionally, our
redeemable OP units are included as if converted to common stock on
a one-for-one basis. NATIONWIDE HEALTH PROPERTIES, INC.
RECONCILIATION OF NET INCOME TO NON-GAAP FINANCIAL MEASURES (In
thousands, except per share data) 2009 Guidance Reconciliation of
Net Income to Recurring Diluted FFO and FAD Per Share Year Ended
December 31, 2009 ------------------ Guidance -------- Low High ---
---- Net income $156,213 $159,767 Preferred stock dividends (5,810)
(5,810) Real estate related depreciation and amortization 119,517
119,517 Depreciation in income from unconsolidated joint ventures
5,155 5,155 Minority interest - NHP/PMB 165 165 Gains on sale of
facilities, net (31,499) (31,499) ------- ------- FFO available to
common stockholders 243,741 247,295 Series B preferred dividends
5,810 5,810 ----- ----- Diluted FFO 249,551 253,105 Gain on
extinguishment of debt, net (4,564) (4,564) ------ ------ Recurring
diluted FFO 244,987 248,541 Straight-lined rent (6,272) (6,272)
Amortization of intangible assets and liabilities (535) (535)
Non-cash stock-based compensation expense 7,092 7,092 Deferred
finance cost amortization 3,120 3,120 Lease commissions and tenant
and capital improvements (5,608) (5,608) Unconsolidated Joint
Ventures: Straight-lined rent (27) (27) Deferred finance cost
amortization 84 84 --- --- Recurring diluted FAD $242,841 $246,395
======== ======== Diluted FFO per share $2.26 $2.29 ===== =====
Recurring diluted FFO per share $2.22 $2.25 ===== ===== Recurring
diluted FAD per share $2.20 $2.23 ===== ===== Weighted average
shares outstanding: Diluted weighted average shares outstanding
105,354 105,354 NHP/PMB OP units 1,830 1,830 Series B preferred
stock conversion 3,375 3,375 ----- ----- Total 110,559 110,559
======= ======= NATIONWIDE HEALTH PROPERTIES, INC. CONSOLIDATED
BALANCE SHEETS (In thousands) June 30, December 31, 2009 2008 ----
---- (Unaudited) Assets Investments in real estate: Land $318,852
$320,394 Buildings and improvements 3,078,118 3,079,819 ---------
--------- 3,396,970 3,400,213 Less accumulated depreciation
(538,705) (490,112) -------- -------- 2,858,265 2,910,101 Mortgage
loans receivable, net 110,902 112,399 Mortgage loan receivable from
related party 47,500 47,500 Investments in unconsolidated joint
ventures 50,765 54,299 ------ ------ Net real estate related
investments 3,067,432 3,124,299 Cash and cash equivalents 121,729
82,250 Receivables, net 7,858 6,066 Asset held for sale - 4,542
Intangible assets 103,666 109,434 Other assets 131,531 131,534
------- ------- Total assets $3,432,216 $3,458,125 ==========
========== Liabilities and Equity Unsecured senior credit facility
$- $- Senior notes 994,233 1,056,233 Notes and bonds payable
438,612 435,199 Accounts payable and accrued liabilities 130,339
144,566 ------- ------- Total liabilities 1,563,184 1,635,998
Redeemable OP unitholder interests 55,070 56,778 Equity: NHP
stockholders' equity Series B convertible preferred stock 74,918
74,918 Common stock 10,449 10,228 Capital in excess of par value
1,845,817 1,786,193 Cumulative net income 1,642,246 1,556,889
Accumulated other comprehensive (loss) income (608) 1,846
Cumulative dividends (1,763,129) (1,669,407) ---------- ----------
Total NHP stockholders' equity 1,809,693 1,760,667 Noncontrolling
interests 4,269 4,682 ----- ----- Total equity 1,813,962 1,765,349
--------- --------- Total liabilities and equity $3,432,216
$3,458,125 ========== ========== Contact: Abdo H. Khoury Chief
Financial and Portfolio Officer (949) 718-4400 DATASOURCE:
Nationwide Health Properties, Inc. CONTACT: Abdo H. Khoury, Chief
Financial and Portfolio Officer of Nationwide Health Properties,
Inc., +1-949-718-4400 Web Site: http://www.nhp-reit.com/
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