NEWPORT BEACH, Calif., July 27 /PRNewswire-FirstCall/ -- Nationwide Health Properties, Inc. announced today results of its operations for the second quarter of 2004 and the six months ended June 30, 2004.
Revenues for the second quarter of 2004 were $47,204,000 versus $40,180,000 a year ago and income available to common stockholders was $15,453,000 ($0.23 per share) compared to $12,173,000 ($0.22 per share) in the second quarter of 2003. Funds from operations (FFO) was $27,957,000 ($0.42 per diluted share) compared with $22,809,000 ($0.41 per diluted share) for the second quarter of 2003. The results for the second quarter of 2004 include an unexpected charge of $745,000, included in general and administrative expense, related to the lease-up of a restructured skilled nursing facility. (FFO is a non-GAAP measure that the Company believes is important to an understanding of its operations; a reconciliation between FFO and net income, the most directly comparable GAAP financial measure, is included in the accompanying financial data.)
Revenues for the six months ended June 30, 2004 were $88,396,000 versus $80,060,000 a year ago and income available to common stockholders was $28,089,000 ($0.43 per share) compared to $23,163,000 ($0.44 per share) for the six months ended June 30, 2003. Included in the first quarter of 2004 was a one-time charge of $1,402,000 ($0.02 per share) for accrued benefits related to the former President and CEO's retirement. For the six months ended June 30, 2004 diluted FFO per share was $0.78 versus $0.87 for the six months ended June 30, 2003. The decrease in FFO per share was primarily due to the common stock issuance in April 2003.
"We are pleased with our 2004 second quarter and six-month performance," said Douglas M. Pasquale, President & Chief Executive Officer. "In addition to completing several quality investments totaling almost $265,000,000 with three existing and five new customers, we have de-levered our balance sheet through two equity offerings totaling nearly $250,000,000 and have substantially improved our financial flexibility through the $250,000,000 expansion of our credit facility."
SECOND QUARTER HIGHLIGHTS
* On April 1, 2004, the Company acquired and triple-net master leased to
Emeritus Corporation seventeen (17) assisted living facilities for
$136 million. An additional ALF was added to the portfolio in June
bringing the total investment to $139.1 million.
* The Company increased its bank line of credit from $150 million to
$400 million in April 2004.
* On May 5, 2004, the Company completed an acquisition and leaseback of
two ILFs for $31.2 million with Hearth Management, LLC, and acquired a
skilled nursing facility for $2.8 million that it leased to Southwest
LTC.
* On June 1, 2004, the Company added two more SNFs to its Life Care
Centers of America portfolio for an investment totaling $11.9 million.
* On June 29, 2004, the Company priced one million shares of 7.75%
Series B Cumulative Convertible Preferred Stock at $100 per share that
were issued on July 2, 2004, raising $97 million in equity.
2004 GUIDANCE
The Company reaffirmed its standing 2004 guidance of $1.66 per share, but noted the additional dilution from the convertible preferred stock offering coupled with the unexpected lease-up charges leaves little margin for error. Our diluted FFO per share estimate of $1.66 for 2004 is predicated on net income per share of $1.07 less preferred dividends of $0.12 per share plus depreciation of $0.71 per share.
CONFERENCE CALL INFORMATION
The Company has scheduled a conference call and webcast later today at 1:30 p.m. Pacific time in order to present the Company's performance and operating results for the quarter ended June 30, 2004. The conference call is accessible by dialing 877-356-5705 or by logging on to our website at http://www.nhp-reit.com/. 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 4:30 p.m. PDT that day until midnight Tuesday, August 10, 2004. Callers can access the replay be dialing (800) 642-1687 or (706) 645-9291 and entering conference ID number 8601120. Webcast replays will also be available on our website for at least 12 months following the conference call.
Nationwide Health Properties, Inc. is a real estate investment trust that invests in senior housing and long-term care facilities. The Company and its joint venture have investments in 401 facilities in 38 states. For more information on Nationwide Health Properties, Inc., visit our website at http://www.nhp-reit.com/.
Certain information contained in this news 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. All forward-looking statements included in this news release are based on information available to us on the date hereof. These statements speak only as of the date hereof, and we assume no obligation to update such forward-looking statements for any reason or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future. These statements involve risks and uncertainties that could cause actual results to differ materially from those described in the statements. These risks and uncertainties include (without limitation) the following: deterioration in the operating results or financial condition, including bankruptcies, of our tenants; occupancy levels at certain facilities; 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; the effect of economic and market conditions and changes in interest rates; the amount and yield of any additional investments; our ability to meet acquisition goals; the ability of our operators to repay deferred rent or loans in future periods; the ability of our operators to obtain and maintain adequate liability and other insurance; our ability to attract new operators for certain facilities; our ability to sell certain facilities for their book value; 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 the risk factors described in our annual report on Form 10-K filed with the SEC on March 9, 2004.
For further information, please contact: Douglas M. Pasquale, President & CEO, +1-949-718-4400, or Mark L. Desmond, Senior Vice President & CFO, +1-949-718-4400, both of Nationwide Health Properties, Inc.
NATIONWIDE HEALTH PROPERTIES, INC. STATEMENTS OF OPERATIONS JUNE 30, 2004 (IN THOUSANDS EXCEPT PER SHARE AMOUNTS) Three Months Ended Six Months Ended June 30, June 30, 2004 2003 2004 2003 Revenues: Rental income $43,973 $36,882 $81,988 $73,501 Interest and other income 3,231 3,298 6,408 6,559 47,204 40,180 88,396 80,060 Expenses: Interest & amortization of deferred financing costs 14,646 14,508 27,268 29,638 Depreciation and amortization 12,115 10,691 22,602 21,090 General and administrative 3,348 2,040 7,215 3,891 30,109 27,239 57,085 54,619 Income before unconsolidated entity 17,095 12,941 31,311 25,441 Income from unconsolidated joint venture 518 489 930 982 Income from continuing operations 17,613 13,430 32,241 26,423 Discontinued operations Gain/(loss) on sale of facilities (204) 444 (204) 444 Income/(loss) from discontinued operations (37) 218 (109) 135 (241) 662 (313) 579 Net income 17,372 14,092 31,928 27,002 Preferred stock dividends (1,919) (1,919) (3,839) (3,839) Income available to common stockholders $15,453 $12,173 $28,089 $23,163 Reconciliation between funds from operations and net income: Net income $17,372 $14,092 $31,928 $27,002 Preferred stock dividends (1,919) (1,919) (3,839) (3,839) Depreciation and amortization 12,115 10,691 22,602 21,090 Depreciation in income from joint venture 185 187 372 374 Depreciation in discontinued operations -- 202 -- 477 (Gain)/loss on sale of facilities 204 (444) 204 (444) Impairment of assets in discontinued operations -- -- -- 645 Loss on sale of facility from joint venture -- -- 77 -- Funds From Operations ("FFO") available to common stockholders (1) $27,957 $22,809 $51,344 $45,305 Basic/diluted per share amounts available to common stockholders: Income from continuing operations $0.24 $0.21 $0.43 $0.43 Discontinued operations $(0.01) $0.01 $-- $0.01 Net income $0.23 $0.22 $0.43 $0.44 Funds from operations (1) $0.42 $0.41 $0.78 $0.87 Weighted average shares outstanding 66,561 55,451 65,679 52,362 (1) We believe that funds from operations is an important supplemental measure of operating performance because it excludes the effect of depreciation, impairment of assets and gains (losses) from sales of facilities (all of which are based on historical costs which may be of limited relevance in evaluating current performance). Additionally, funds from operations is widely used by industry analysts as a measure of operating performance for equity REITs. We therefore disclose funds from operations, although it is a measurement that is not defined by accounting principles generally accepted in the United States. We define funds from operations as income before extraordinary items adjusted for certain non-cash items, primarily real estate depreciation and impairment of assets, less gains/losses on sales of facilities. Our measure may not be comparable to similarly titled measures used by other REITs or as defined by the National Association of Real Estate Investment Trusts. The Securities and Exchange Commission may not allow the Company to add back impairment of assets charges in the calculation of funds from operations in the future and for all comparable periods. Consequently, our funds from operations may not provide a meaningful measure of our performance as compared to that of other REITs. Funds from operations does not represent cash generated from operating activities as defined by accounting principles generally accepted in the United States (funds from operations does not include changes in operating assets and liabilities) and, therefore, should not be considered as an alternative to net income as the primary indicator of operating performance or to cash flow as a measure of liquidity. NATIONWIDE HEALTH PROPERTIES, INC. BALANCE SHEETS JUNE 30, 2004 (IN THOUSANDS) June 30, December 31, ASSETS 2004 2003 Investments in real estate: Real estate properties Land $177,910 $153,002 Buildings and improvements 1,556,850 1,316,163 1,734,760 1,469,165 Less accumulated depreciation (280,604) (259,406) 1,454,156 1,209,759 Mortgage loans receivable, net 92,171 93,386 Investment in unconsolidated joint venture 13,773 14,824 1,560,100 1,317,969 Cash and cash equivalents 9,683 10,726 Receivables 7,750 5,661 Assets held for sale 3,161 3,511 Other assets 52,010 46,688 $1,632,704 $1,384,555 LIABILITIES AND STOCKHOLDERS' EQUITY Bank borrowings $176,000 $63,000 Senior notes due 2004 - 2038 514,000 540,750 Notes and bonds payable 176,050 133,775 Accounts payable and accrued liabilities 45,907 44,623 Stockholders' equity: Preferred stock 100,000 100,000 Common stock 6,649 5,897 Capital in excess of par value 864,884 725,260 Cumulative net income 765,881 733,953 Cumulative dividends (1,016,667) (962,703) Total stockholders' equity 720,747 602,407 $1,632,704 $1,384,555 NATIONWIDE HEALTH PROPERTIES, INC. SUPPLEMENTAL ANALYST INFORMATION JUNE 30, 2004 PORTFOLIO COMPOSITION EQUITY OWNERSHIP 95% MORTGAGE LOANS RECEIVABLE 5% 100% ASSISTED AND INDEPENDENT LIVING FACILITIES 51% SKILLED NURSING FACILITIES 33% CONTINUING CARE RETIREMENT COMMUNITIES 12% OTHER 4% 100% OWNED FACILITIES FACILITIES INVESTMENT ASSISTED & IND LIVING FACILITIES 52 $925,569,000 $77,616 PER UNIT SKILLED NURSING FACILITIES 160 547,983,000 $29,613 PER BED CONTINUING CARE RETIREMENT COM. 12 194,070,000 $68,552 PER BED/UNIT SPECIALTY HOSPITALS 7 67,138,000 $221,578 PER BED 331 $1,734,760,000 MORTGAGE LOANS RECEIVABLE FACILITIES INVESTMENT SKILLED NURSING FACILITIES 19 $62,235,000 $24,358 PER BED ASSISTED & IND LIVING FACILITIES 1 8,500,000 $67,460 PER UNIT CONTINUING CARE RETIREMENT COM. 1 21,436,000 $50,084 PER BED/UNIT 21 $92,171,000 2004 2003 2002 TOTAL RENT COVERAGE - MATURE FACILITIES ASSISTED AND INDEPENDENT LIVING FACILITIES 1.3 1.3 1.4 SKILLED NURSING FACILITIES 1.8 1.7 1.7 CONTINUING CARE RETIREMENT COMMUNITIES 1.6 1.6 1.5 OCCUPANCY - MATURE FACILITIES ASSISTED AND INDEPENDENT LIVING FACILITIES 88% 88% 88% SKILLED NURSING FACILITIES 82% 82% 84% CONTINUING CARE RETIREMENT COMMUNITIES 88% 89% 90% PERCENT PRIVATE PAY AND MEDICARE ASSISTED AND INDEPENDENT LIVING FACILITIES 100% 100% 100% SKILLED NURSING FACILITIES 32% 31% 29% INVESTMENT BY OPERATOR (excluding assets held for sale NUMBER PERCENT PERCENT OF INVESTMENT OF OF FACILITIES AMOUNT INVESTMENT REVENUES ALTERRA HEALTHCARE CORPORATION 54 $194,046,000 11% 11% AMERICAN RETIREMENT CORPORATION* 16 186,523,000 10% 10% EMERITUS CORPORATION* 18 139,060,000 8% 7% ATRIA SENIOR LIVING GROUP 17 124,583,000 7% 10% BEVERLY ENTERPRISES, INC.* 26 95,594,000 5% 7% LAUREATE GROUP 6 83,881,000 5% 4% COMPLETE CARE SERVICES 34 68,231,000 4% 5% SENIOR SERVICES OF AMERICA 9 60,429,000 3% 1% AMERICAN SENIOR LIVING 10 58,888,000 3% 3% LIFE CARE CENTERS OF AMERICA, INC. 8 58,653,000 3% 3% NEXION HEALTH MANAGEMENT, INC. 19 50,931,000 3% 3% LIBERTY HEALTHCARE 12 47,788,000 3% 2% HEALTHSOUTH CORPORATION* 2 45,645,000 2% 3% EPOCH SENIOR LIVING, INC. 5 44,854,000 2% 2% THE NEWTON GROUP, LLC 4 42,400,000 2% 1% OTHER - PUBLIC COMPANIES 24 85,891,000 5% 5% OTHER 88 439,534,000 24% 23% 352 $1,826,931,000 100% 100% * PUBLIC COMPANY SECURITY DEPOSITS BANK LETTERS OF CREDIT $39,091,000 CASH DEPOSITS 16,383,000 $55,474,000 CURRENT CAPITALIZATION REVOLVING BANK LINE OF CREDIT (MATURES 4/07) $176,000,000 9% SENIOR DEBT 690,050,000 37% EQUITY (UNDEPRECIATED BOOK BASIS) 1,001,351,000 54% $1,867,401,000 DEBT COMPOSITION WEIGHTED AMOUNT RATE FIXED RATE $672,592,000 7.6% FLOATING RATE $17,458,000 1.3% FLOATING RATE REVOLVING BANK LINE OF CREDIT $176,000,000 4.25% Prime/2.5% LIBOR FACILITIES INVESTMENT CURRENT QUARTER ACQUISITIONS SKILLED NURSING FACILITIES 3 $14,773,000 $40,035 PER BED ASSISTED & IND LIVING FACILITIES 20 170,216,000 $114,162 PER UNIT 23 $184,989,000 CURRENT YEAR ACQUISITIONS SKILLED NURSING FACILITIES 7 $29,917,000 $43,046 PER BED ASSISTED & IND LIVING FACILITIES 22 184,395,000 $110,748 PER UNIT SPECIALTY HOSPITALS 5 50,066,000 $267,733 PER BED/UNIT 34 $264,378,000 MEDIUM TERM NOTE MATURITIES WEIGHTED YEAR AMOUNT RATE Q3 2004 $44,000,000 9.9% Q4 2004 55,000,000 (1) 6.9% Q1 2005 18,000,000 8.7% Q4 2006 63,500,000 7.4% Q1 2007 25,000,000 7.4% Q2 2007 60,000,000 7.4% Q1 2008 25,000,000 8.5% Q3 2008 40,000,000 (2) 6.6% Q4 2008 33,500,000 (3) 7.6% 2009 50,000,000 7.8% 2010 -- -- 2011 -- -- 2012 100,000,000 8.3% 2013 -- -- THEREAFTER -- -- $514,000,000 7.8% (1) Includes $55,000,000 of 6.9% MTNs putable October of 2004, '07, '09, '12, '17, '27 with a final maturity in 2037. (2) Includes $40,000,000 of 6.59% MTNs putable July of 2008, '13, '18, '23, '28 with a final maturity in 2038. (3) Includes $33,500,000 of 7.6% MTNs putable November of 2008, '13, '18, '23 with a final maturity in 2028. NOTES AND BONDS PAYABLE MATURITIES WEIGHTED YEAR AMOUNT RATE Q3 2005 $1,530,000 7.6% Q4 2005 13,440,000 7.6% 2011 6,072,000 7.7% 2012 28,948,000 7.7% 2013 36,391,000 5.9% THEREAFTER 89,669,000 5.7% $176,050,000 6.3% LEASE EXPIRATIONS NUMBER MINIMUM OF YEAR RENT FACILITIES 2004 $911,000 2 2005 2,752,000 5 2006 17,169,000 40 2007 5,851,000 13 2008 2,967,000 7 2009 3,148,000 7 2010 14,298,000 26 2011 4,836,000 15 2012 18,401,000 22 2013 15,144,000 26 THEREAFTER 86,656,000 168 $172,133,000 331 MORTGAGE LOAN RECEIVABLE PRINCIPAL PAYMENTS PRINCIPAL NUMBER YEAR PAYMENTS OF FACILITIES 2004 $6,670,000 2 2005 1,231,000 1 2006 10,043,000 4 2007 16,134,000 2 2008 5,557,000 1 2009 859,000 -- 2010 1,005,000 -- 2011 4,993,000 2 2012 1,222,000 -- 2013 9,850,000 -- THEREAFTER 36,445,000 9 $94,009,000 21 JOINT VENTURE INFORMATION FOR THE PERIOD ENDED JUNE 30, 2004 (dollars in thousands) NHP has a 25% interest in a joint venture that owns 48 assisted living facilities operated by Alterra. In addition to its share of the income, NHP receives a management fee of 2.5% of the joint venture revenues. This fee is included in general and administrative expense below. INCOME STATEMENT Three Months Six Months Ended Ended June 30, 2004 June 30, 2004 Rental income $3,726 $7,453 Expenses: Interest and amortization of deferred financing costs 1,094 2,299 Depreciation and amortization 739 1,478 General and administrative 193 426 2,026 4,203 Income from continuing operations 1,700 3,250 Discontinued operations Loss on sale -- (307) Income from discontinued operations -- 29 -- (278) Net income $1,700 $2,972 BALANCE SHEET ASSETS LIABILITIES AND EQUITY Real estate: Notes and bonds payable $60,768 Land $12,876 Accounts payable and accr. liab. 3,791 Buildings and improvements 106,259 119,135 Equity: Less accumulated depreciation (6,314) Capital Contributions 65,501 112,821 Distributions (23,476) Cash and cash equivalents 5,742 Cumulative net income 13,066 Other assets 1,087 Total equity 55,091 $119,650 $119,650
Nationwide Health Properties, Inc.CONTACT: Douglas M. Pasquale, President & CEO, +1-949-718-4400, or MarkL. Desmond, Senior Vice President & CFO, +1-949-718-4400, both of NationwideHealth Properties, Inc.
Web site: http://www.nhp-reit.com/
