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NHP Reports Second Quarter 2008 Earnings
Date:8/6/2008

Revenue Increases 26.7%

Diluted FFO Per Share Increases 9.8%

Diluted FAD Per Share Increases 5.8%

Second Quarter Investments $250 Million

NEWPORT BEACH, Calif., Aug. 6 /PRNewswire-FirstCall/ -- Nationwide Health Properties, Inc. (NYSE: NHP) today announced results of operations and investment activity for the second quarter and the six months ended June 30, 2008.

"We continue the momentum from the first quarter, reporting strong operating results for the second quarter of 2008. Compared to the second quarter of 2007, revenue is up 26.7%, diluted FFO per share is up 9.8%, and diluted FAD per share is up 5.8%. In addition to acquiring six medical office buildings from Pacific Medical Buildings for $137 million in April, we purchased two additional medical office buildings from PMB for $61 million in May," commented Douglas M. Pasquale, NHP's President and Chief Executive Officer. "Including the PMB purchases, our total investments made in the second quarter totaled $250 million. In April, we completed the sale of 23 facilities to Emeritus Corporation and used a portion of the proceeds to pay off the outstanding balance on our credit facility. Our diluted FAD payout ratio and FAD coverage remain among the strongest in our sector at 80% and 1.25, respectively," Mr. Pasquale added.

SECOND QUARTER 2008 RESULTS OF OPERATIONS

The following table presents selected financial information for the second quarter and the six months ended June 30, 2008 as compared to the same periods of 2007:

SELECTED FINANCIAL DATA

($ in thousands, except per share amounts)

ng operations

excluding gains $0.26 $0.18 $0.49 $0.36

Gain in income from continuing

operations - 0.01 - 0.01

Income from continuing operations 0.26 0.19 0.49 0.37

Discontinued operations 1.43 0.74 1.59 0.81

Income available to common

stockholders $1.69 $0.93 $2.08 $1.18

Weighted average shares outstanding

for EPS:

Basic 96,351 89,761 95,813 88,979

Diluted 98,114 90,222 96,949 89,454

NATIONWIDE HEALTH PROPERTIES, INC.

RECONCILIATIONS OF NET INCOME TO NON-GAAP FINANCIAL MEASURES

(In thousands, except per share data)

Reconciliation of Net Income to Diluted FFO

Three Months Ended Six Months Ended

June 30, June 30,

2008 2007 2008 2007

Net income $168,013 $87,433 $205,469 $113,480

Series B preferred dividends (2,062) (3,791) (4,125) (7,581)

Real estate related depreciation

and amortization 28,888 24,283 57,476 46,576

Depreciation in income from

unconsolidated joint venture 1,131 368 2,246 532

Gains on sale of facilities (140,226) (61,779) (151,092) (61,845)

FFO available to common

stockholders 55,744 46,514 109,974 91,162

Series B preferred dividends 2,062 2,062 4,125 4,125

Diluted FFO $57,806 $48,576 $114,099 $95,287

Weighted average shares outstanding

for diluted FFO:

Diluted weighted average shares

outstanding 98,114 90,222 96,949 89,454

Series B preferred stock

conversion 4,736 4,704 4,732 4,701

Fully diluted weighted average

shares outstanding 102,850 94,926 101,681 94,155

Diluted FFO per share $0.56 $0.51 $1.12 $1.01

Dividends declared per common share $0.44 $0.41 $0.88 $0.82

Diluted FFO payout ratio 79% 80% 79% 81%

Diluted FFO coverage 1.27 1.24 1.27 1.23

NATIONWIDE HEALTH PROPERTIES, INC.

RECONCILIATIONS OF NET INCOME TO NON-GAAP FINANCIAL MEASURES

(In thousands, except per share data)

Reconciliation of Net Income to Diluted FAD

Three Months Ended Six Months Ended

June 30, June 30,

2008 2007 2008 2007

Net income $168,013 $87,433 $205,469 $113,480

Series B preferred dividends (2,062) (3,791) (4,125) (7,581)

Real estate related depreciation

and amortization 28,888 24,283 57,476 46,576

Gains on sale of facilities (140,226) (61,779) (151,092) (61,845)

Straight-lined rent (2,759) (761) (5,597) (1,698)

Amortization of above and below

market lease intangibles (150) 10 (274) 47

Non-cash stock-based compensation

expense 1,440 1,218 2,771 2,238

Deferred finance cost amortization 777 695 1,524 1,382

Lease commissions and tenant and

capital improvements (1,047) (320) (1,894) (933)

Unconsolidated joint venture:

Real estate related

depreciation and amortization 1,131 368 2,246 532

Deferred finance cost

amortization 23 4 42 4

FAD available to common stockholders 54,028 47,360 106,546 92,202

Series B preferred dividends 2,062 2,062 4,125 4,125

Diluted FAD $56,090 $49,422 $110,671 $96,327

Weighted average shares outstanding

for diluted FAD:

Weighted average shares

outstanding 98,114 90,222 96,949 89,454

Series B preferred stock

conversion 4,736 4,704 4,732 4,701

Fully diluted weighted average

shares outstanding 102,850 94,926 101,681 94,155

Diluted FAD per share $0.55 $0.52 $1.09 $1.02

Dividends declared per common share $0.44 $0.41 $0.88 $0.82

Diluted FAD payout ratio 80% 79% 81% 80%

Diluted FAD coverage 1.25 1.27 1.24 1.24
Reconciliation of 2008 Net Income Guidance to 2008 Diluted FFO and Diluted FAD
Guidance on a Per Share Basis

Low High

Net income $2.53 $2.57

Real estate related depreciation

and amortization 1.24 1.24

Less: gains on sale (1.56) (1.56)

Dilution from convertible

preferred stock (0.02) (0.02)

Diluted FFO guidance 2.19 2.23

Straight-lined rent (0.11) (0.11)

Non-cash stock-based compensation expense 0.05 0.05

Deferred finance cost amortization 0.03 0.03

Lease commissions and tenant and

capital improvements (0.05) (0.05)

Diluted FAD guidance $2.11 $2.15

NATIONWIDE HEALTH PROPERTIES, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands)

June 30, December 31,

2008 2007

Assets

Real estate related investments:

Land $299,080 $301,100

Buildings and improvements 2,930,340 2,896,876

3,229,420 3,197,976

Less accumulated depreciation (436,823) (410,865)

Net real estate 2,792,597 2,787,111

Mortgage loans receivable, net 119,149 121,694

Investment in unconsolidated

joint ventures 51,445 52,637

Net real estate related

investments 2,963,191 2,961,442

Cash and cash equivalents 130,106 19,407

Receivables, net 5,361 3,808

Assets held for sale 2,597 -

Other assets 283,320 159,696

Total assets $3,384,575 $3,144,353

Liabilities and Stockholders' Equity

Unsecured senior credit facility $- $41,000

Senior notes due 2008 - 2038 1,156,500 1,166,500

Notes and bonds payable 386,314 340,150

Accounts payable and accrued

liabilities 133,634 107,844

Total liabilities 1,676,448 1,655,494

Minority interest 52,871 6,166

Stockholders' equity:

Series B convertible preferred stock 106,410 106,445

Common stock 9,660 9,481

Capital in excess of par value 1,621,224 1,565,249

Cumulative net income 1,494,220 1,288,751

Accumulated other comprehensive

income 2,320 2,561

Cumulative dividends (1,578,578) (1,489,794)

Total stockholders' equity 1,655,256 1,482,693

Total liabilities and

stockholders' equity $3,384,575 $3,144,353

Three Months Ended June 30,

2008 2007 $Change %Change

Revenue $94,017 $74,181 $19,836 26.7%

Income from Continuing Operations $27,365 $20,865 $6,500 31.2%

Net Income $168,013 $87,433 $80,580 92.2%

Income Available to Common

Stockholders

Per Diluted Share $1.69 $0.93 $0.76 81.7%

Diluted FFO $57,806 $48,576 $9,230 19.0%

Diluted FFO Per Share $0.56 $0.51 $0.05 9.8%

Diluted FAD $56,090 $49,422 $6,668 13.5%

Diluted FAD Per Share $0.55 $0.52 $0.03 5.8%

Six Months Ended June 30,

2008 2007 $Change %Change

Revenue $180,216 $143,761 $36,455 25.4%

Income from Continuing Operations $51,099 $41,178 $9,921 24.1%

Net Income $205,469 $113,480 $91,989 81.1%

Income Available to Common

Stockholders

Per Diluted Share $2.08 $1.18 $0.90 76.3%

Diluted FFO $114,099 $95,287 $18,812 19.7%

Diluted FFO Per Share $1.12 $1.01 $0.11 10.9%

Diluted FAD $110,671 $96,327 $14,344 14.9%

Diluted FAD Per Share $1.09 $1.02 $0.07 6.9%

Diluted Funds From Operations ("FFO") and Diluted Funds Available for Distribution ("FAD") are non-generally accepted accounting principles ("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 FAD per share.

SECOND QUARTER 2008 INVESTMENT ACTIVITY

The following table summarizes our first quarter and year to date investment activity and details the second quarter 2008 investment activity:

INVESTMENT ACTIVITY 2008

($ in thousands, except per S.F.)

Year to

Q1 Q2 Q2 Q2 Date

Investment Total Owned Loans Total Total

Senior Housing

Number of Facilities 14 1 1 15

Purchase Price $52,000 $20,000 $20,000 $72,000

Initial Yield 8.1% 8.4% 8.4% 8.2%

Long-Term Care

Number of Facilities 6 1 7 7

Purchase Price $23,000 $9,000 $32,000 $32,000

Initial Yield 9.2% 11.1% 9.8% 9.8%

Medical Office

Number of Facilities 1 8 8 9

Purchase Price $2,000 $198,000 $198,000 $200,000

Initial Yield 7.4% 6.2% 6.2% 6.2%

Total

Number of Facilities 15 15 1 16 31

Purchase Price $54,000 $241,000 $9,000 $250,000 $304,000

Initial Yield 8.1% 6.6% 11.1% 6.8% 7.1%

Pacific Medical Buildings LLC ("PMB") Update -- In February 2008, we entered into an agreement with PMB and certain of its affiliates to acquire up to 18 multi-tenant medical office buildings, including six that are currently in development, for $747.6 million, including the assumption of approximately $282.6 million of mortgage financing. During the six months ended June 30, 2008, we acquired eight of the 18 multi-tenant medical office buildings located in three states. The purchase price totaled $198.3 million, including the assumption of $96.6 million of mortgage financing and the issuance of 1,470,754 limited partnership units with a value of $47.3 million.

2008 FINANCING TRANSACTIONS

During the second quarter of 2008, we issued 315,000 shares of our common stock through our controlled equity offering program at an average price of $36.38 per share resulting in net proceeds of approximately $11.3 million. Year to date, we have issued 1.2 million shares of our common stock through our controlled equity offering program at an average price of $34.60 per share resulting in net proceeds of approximately $42.6 million.

On April 2, 2008, we closed on the previously announced sale of 23 facilities to Emeritus Corporation for $305 million. We used a portion of the proceeds, net of the retirement of $56 million of secured debt and $30 million of short-term seller financing, to repay the entire outstanding balance on our credit facility.

2008 GUIDANCE

We are increasing by $0.01 per share the low end of our full-year 2008 diluted FFO guidance of $2.18 per share to $2.19 per share and are maintaining the high end of the range at $2.23 per share. We are increasing by $0.01 per share both the low and high end of our full-year 2008 diluted FAD guidance of $2.10 to $2.14 per share to $2.11 to $2.15 per share. Annualizing our year to date results would result in somewhat higher diluted FFO and diluted FAD per share for the year than the high end of our guidance range; however, such an analysis does not reflect certain other factors that we expect will slightly lower our diluted FFO and diluted FAD per share in future quarters. These factors include the slower than expected reinvestment of proceeds from the sale of the Emeritus assets, the issuance of 451,000 shares of common stock during the second quarter and possible increased capital expenditures and tenant improvements for medical office buildings ("MOBs") during the remainder of the year. Our guidance includes the additional acquisitions of MOBs from Pacific Medical Buildings as well as expected mortgage loan receivable prepayments and dispositions during 2008 as described in our supplemental information package available on our website. However, while we expect to continue to make accretive acquisitions during 2008, our dilutive FFO and dilutive FAD guidance ranges do not assume any additional acquisitions or investments, impairments or capital transactions.

CONFERENCE CALL INFORMATION

We have scheduled a conference call and webcast on Thursday, August 7, 2008 at 8:30 a.m. Pacific time in order to present our performance and operating results for the quarter and six months ended June 30, 2008. The conference call is accessible by dialing 877-356-5705 and referencing conference ID number 55064086 or by logging on to our website at http://www.nhp-reit.com. The international dial-in number is 706-643-7409. 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 10:30 a.m. Pacific time (1:30 p.m. Eastern time) that day until 9:00 p.m. Pacific time (Midnight Eastern time) on Friday, September 5, 2008. Callers can access the replay by dialing 800-642-1687 or 706-645-9291 and entering conference ID number 55064086. 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 ended June 30, 2008 is available on our website, free of charge, at http://www.nhp-reit.com by selecting "Investor Relations" followed by "Financial Information" and will be included in our Current Report on Form 8-K filed August 6, 2008 with the SEC also containing this release.

ABOUT NATIONWIDE HEALTH PROPERTIES, INC.

Nationwide Health Properties, Inc. is a real estate investment trust that invests in senior housing facilities, long-term care facilities and medical office buildings. We have investments in 562 facilities in 43 states. 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 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; access to the capital markets and the cost 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 repay straight-line rent or loans 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 real estate investment trusts and 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.

Contact:

Abdo H. Khoury

Chief Financial and Portfolio Officer

(949) 718-4400

***Financial Tables to Follow***

NATIONWIDE HEALTH PROPERTIES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

Three Months Ended Six Months Ended

June 30, June 30,

2008 2007 2008 2007

Revenue:

Triple net lease rent $71,529 $66,377 $141,530 $128,923

Medical office building operating

rent 15,939 2,810 26,870 5,573

87,468 69,187 168,400 134,496

Interest and other income 6,549 4,994 11,816 9,265

94,017 74,181 180,216 143,761

Expenses:

Interest and amortization of

deferred financing costs 25,507 25,165 50,246 47,908

Depreciation and amortization 28,933 21,733 56,360 41,426

General and administrative 6,407 5,796 12,905 11,413

Medical office building operating

expenses 6,699 1,779 11,562 3,193

67,546 54,473 131,073 103,940

Income before minority interests,

unconsolidated joint ventures and

discontinued operations 26,471 19,708 49,143 39,821

Minority interests 46 81 55 63

Income from unconsolidated joint

ventures 848 477 1,901 695

Gain on sale of facilities to

unconsolidated joint venture - 599 - 599

Income from continuing operations 27,365 20,865 51,099 41,178

Discontinued operations

Gain on sale of facilities, net 140,226 61,180 151,092 61,246

Income from discontinued

operations 422 5,388 3,278 11,056

140,648 66,568 154,370 72,302

Net income 168,013 87,433 205,469 113,480

Preferred stock dividends (2,062) (3,791) (4,125) (7,581)

Income available to common

stockholders $165,951 $83,642 $201,344 $105,899

Basic earnings per share (EPS):

Income from continuing operations

excluding gains $0.26 $0.18 $0.49 $0.37

Gains in income from continuing

operations - 0.01 - 0.01

Income from continuing operations 0.26 0.19 0.49 0.38

Discontinued operations 1.46 0.74 1.61 0.81

Income available to common

stockholders $1.72 $0.93 $2.10 $1.19

Diluted EPS:

Income from continui
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SOURCE Nationwide Health Properties, Inc.
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