NEWPORT BEACH, Calif., Oct. 27 /PRNewswire-FirstCall/ -- Nationwide Health Properties, Inc. announced today results of its operations for the third quarter of 2004 and the nine months ended September 30, 2004.
Revenues for the third quarter of 2004 were $48,805,000 versus $40,458,000 a year ago and income available to common stockholders was $17,966,000 ($0.27 per share) compared to $12,759,000 ($0.22 per share) in the third quarter of 2003. Funds from operations (FFO) was $28,454,000 ($0.43 per diluted share) compared with $23,857,000 ($0.41 per diluted share) for the third quarter of 2003. (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 nine months ended September 30, 2004 were $136,939,000 versus $120,262,000 a year ago and income available to common stockholders was $46,055,000 ($0.70 per share) compared to $35,922,000 ($0.66 per share) for the nine months ended September 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. Included in the second and third quarters of 2004 were charges of $745,000 and $740,000, respectively, included in general and administrative expense, related to the lease-up of a restructured skilled nursing facility. For the nine months ended September 30, 2004 diluted FFO per share was $1.21 versus $1.26 for the nine months ended September 30, 2003. The decrease in FFO per share was primarily due to the common stock issuance in April 2003 and the charges above.
The Company has revised its presentation of FFO for all periods to include the effect of asset impairment charges, consistent with recent clarifications from the National Association of Real Estate Investment Trusts and the Securities and Exchange Commission. For the nine months ended September 30, 2003, asset impairments reduced FFO by $645,000.
“We continue to execute our strategic plan and are pleased with our 2004 third quarter and nine-month performance,” said Douglas M. Pasquale, President & Chief Executive Officer. “In addition to completing several quality investments totaling over $325,000,000 with five 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. Furthermore, we have enhanced our senior management team with the addition of Abdo Khoury who was appointed to the newly created position of Senior Vice President and Chief Portfolio Officer.”
THIRD QUARTER HIGHLIGHTS * During July 2004, the Company issued 1,064,500 shares of 7.75% Series B Cumulative Convertible Preferred Stock at $100 per share, raising $103 million in equity. * On July 1, 2004, the Company completed an acquisition and leaseback of one assisted living facility for $16.5 million having an initial yield of 9.68% and annual increases of 2.2%. * On September 1, 2004, the Company acquired two skilled nursing facilities for a total investment of $14.8 million. The initial yield on this transaction is 10.8% with annual increases of 2.8% * On September 16, 2004, the Company repaid $44.0 million of medium-term notes that bore interest at a fixed rate of 9.89%. * On September 30, 2004, the Company acquired two skilled nursing facilities and one assisted living facility for a total investment of $32.0 million. The initial yield is 9.22%, the yield in the second year is 9.72% and the annual increases are 2.5% in subsequent years. 2004 GUIDANCE
The Company reaffirmed its standing 2004 guidance of $1.66 per share pending the timing of investments and any capital raised in the fourth quarter. Our diluted FFO per share estimate of $1.66 for 2004 is predicated on net income per share of $1.14 less preferred dividends of $0.18 per share and $0.03 of gains on the sale of facilities per share plus depreciation of $0.73 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 September 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 Wednesday, November 10, 2004. Callers can access the replay be dialing (800) 642-1687 or (706) 645-9291 and entering conference ID number 1232644. 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 409 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.
CONTACT: Douglas M. Pasquale Mark L. Desmond President & CEO Senior Vice President & CFO (949) 718-4400 (949) 718-4400 NATIONWIDE HEALTH PROPERTIES, INC. STATEMENTS OF OPERATIONS SEPTEMBER 30, 2004 (IN THOUSANDS EXCEPT PER SHARE AMOUNTS) Three Months Ended Nine Months Ended September 30, September 30, 2004 2003 2004 2003 Revenues: Rental income $45,772 $37,127 $127,498 $110,372 Interest and other income 3,033 3,331 9,441 9,890 48,805 40,458 136,939 120,262 Expenses: Interest & amortization of deferred financing costs 14,239 13,690 41,507 43,328 Depreciation and amortization 12,508 10,716 35,053 31,749 General and administrative 2,825 2,044 10,040 5,934 29,572 26,450 86,600 81,011 Income before unconsolidated entity 19,233 14,008 50,339 39,251 Income from unconsolidated joint venture 538 473 1,468 1,455 Income from continuing operations 19,771 14,481 51,807 40,706 Discontinued operations Gain on sale of facilities 2,208 -- 2,004 444 Income/(loss) from discontinued operations (32) 197 64 530 2,176 197 2,068 974 Net income 21,947 14,678 53,875 41,680 Preferred stock dividends (3,981) (1,919) (7,820) (5,758) Income available to common stockholders $17,966 $12,759 $46,055 $35,922 Reconciliation between funds from operations and net income: Net income $21,947 $14,678 $53,875 $41,680 Preferred stock dividends (3,981) (1,919) (7,820) (5,758) Depreciation and amortization 12,508 10,716 35,053 31,749 Depreciation in income from joint venture 188 187 560 561 Depreciation in discontinued operations -- 195 67 729 Gain on sale of facilities (2,208) -- (2,004) (444) Loss on sale of facility from joint venture -- -- 77 -- Funds From Operations (“FFO”) available to common stockholders (1) $28,454 $23,857 $79,808 $68,517 Per share amounts available to common stockholders: to common stockholders: Income from continuing operations $0.24 $0.21 $0.67 $0.64 Discontinued operations $0.03 $0.01 $0.03 $0.02 Net income $0.27 $0.22 $0.70 $0.66 Funds from operations (1) $0.43 $0.41 $1.21 $1.26 Weighted average shares outstanding 66,628 58,822 65,997 54,539 (1) We believe that funds from operations is an important supplemental measure of operating performance because it excludes the effect of depreciation and gains (losses) from sales of facilities (both 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, 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. 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 SEPTEMBER 30, 2004 (IN THOUSANDS) September 30, December 31, ASSETS 2004 2003 Investments in real estate: Real estate properties Land $183,316 $153,002 Buildings and improvements 1,614,013 1,316,163 1,797,329 1,469,165 Less accumulated depreciation (291,632) (259,406) 1,505,697 1,209,759 Mortgage loans receivable, net 91,939 93,386 Investment in unconsolidated joint venture 13,527 14,824 1,611,163 1,317,969 Cash and cash equivalents 7,421 10,726 Receivables 7,600 5,661 Assets held for sale 3,161 3,511 Other assets 51,368 46,688 $1,680,713 $1,384,555 LIABILITIES AND STOCKHOLDERS’ EQUITY Bank borrowings $171,000 $63,000 Senior notes due 2005 - 2038 470,000 540,750 Notes and bonds payable 167,587 133,775 Accounts payable and accrued liabilities 52,599 44,623 Stockholders’ equity: Series A Preferred Stock 100,000 100,000 Series B Preferred Stock 106,450 -- Common stock 6,662 5,897 Capital in excess of par value 863,982 725,260 Cumulative net income 787,828 733,953 Cumulative dividends (1,045,395) (962,703) Total stockholders’ equity 819,527 602,407 $1,680,713 $1,384,555 NATIONWIDE HEALTH PROPERTIES, INC. SUPPLEMENTAL ANALYST INFORMATION SEPTEMBER 30, 2004 PORTFOLIO COMPOSITION EQUITY OWNERSHIP 95% MORTGAGE LOANS RECEIVABLE 5% 100% ASSISTED AND INDEPENDENT LIVING FACILITIES 51% SKILLED NURSING FACILITIES 34% CONTINUING CARE RETIREMENT COMMUNITIES 11% OTHER 4% 100% OWNED FACILITIES FACILITIES INVESTMENT ASSISTED & IND LIVING FACILITIES 154 $952,848,000 $78,722 PER UNIT SKILLED NURSING FACILITIES 163 583,346,000 $30,965 PER BED CONTINUING CARE RETIREMENT COM. 12 193,997,000 $68,526 PER BED/UNIT SPECIALTY HOSPITALS 7 67,138,000 $221,578 PER BED 336 $1,797,329,000 MORTGAGE LOANS RECEIVABLE FACILITIES INVESTMENT SKILLED NURSING FACILITIES 19 $62,033,000 $24,279 PER BED ASSISTED & IND LIVING FACILITIES 1 8,500,000 $67,460 PER UNIT CONTINUING CARE RETIREMENT COM. 1 21,406,000 $50,014 PER BED/UNIT 21 $91,939,000 2004 2003 2002 TOTAL RENT COVERAGE - MATURE FACILITIES ASSISTED AND INDEPENDENT LIVING FACILITIES 1.3x 1.3x 1.4x SKILLED NURSING FACILITIES 1.8x 1.7x 1.7x CONTINUING CARE RETIREMENT COMMUNITIES 1.7x 1.6x 1.5x OCCUPANCY - MATURE FACILITIES ASSISTED AND INDEPENDENT LIVING FACILITIES 88% 88% 88% SKILLED NURSING FACILITIES 81% 82% 84% CONTINUING CARE RETIREMENT COMMUNITIES 87% 89% 90% PERCENT PRIVATE PAY AND MEDICARE ASSISTED AND INDEPENDENT LIVING FACILITIES 100% 100% 100% SKILLED NURSING FACILITIES 32% 31% 29% NATIONWIDE HEALTH PROPERTIES, INC. SUPPLEMENTAL ANALYST INFORMATION SEPTEMBER 30, 2004 INVESTMENT BY OPERATOR (excluding assets held for NUMBER PERCENT sale) OF INVESTMENT PERCENT OF OF FACILITIES AMOUNT INVESTMENT REVENUES ALTERRA HEALTHCARE CORPORATION 54 $194,046,000 10% 10% AMERICAN RETIREMENT CORPORATION* 16 186,523,000 10% 10% EMERITUS CORPORATION* 18 139,060,000 7% 6% ATRIA SENIOR LIVING GROUP 17 124,583,000 7% 9% BEVERLY ENTERPRISES, INC.* 26 95,594,000 5% 7% EPOCH SENIOR LIVING, INC. 9 93,369,000 5% 5% LAUREATE GROUP 6 83,881,000 5% 4% COMPLETE CARE SERVICES 34 68,231,000 4% 5% LIFE CARE CENTERS OF AMERICA, INC. 8 61,353,000 3% 3% SENIOR SERVICES OF AMERICA 9 60,479,000 3% 2% AMERICAN SENIOR LIVING 10 58,888,000 3% 3% NEXION HEALTH MANAGEMENT, INC. 19 51,079,000 3% 3% HEALTHSOUTH CORPORATION* 2 45,645,000 2% 3% LIBERTY HEALTHCARE 11 43,558,000 2% 2% THE NEWTON GROUP, LLC 4 42,422,000 2% 1% OTHER - PUBLIC COMPANIES 25 93,758,000 5% 5% OTHER 89 446,799,000 24% 22% 357 $1,889,268,000 100% 100% * PUBLIC COMPANY SECURITY DEPOSITS BANK LETTERS OF CREDIT $40,063,000 CASH DEPOSITS 16,670,000 $56,733,000 CURRENT CAPITALIZATION REVOLVING BANK LINE OF CREDIT (MATURES 4/07) $171,000,000 9% SENIOR DEBT 637,587,000 33% EQUITY (UNDEPRECIATED BOOK BASIS) 1,111,159,000 58% $1,919,746,000 DEBT COMPOSITION WEIGHTED AMOUNT RATE FIXED RATE $620,239,000 7.4% FLOATING RATE $17,348,000 1.3% FLOATING RATE REVOLVING BANK LINE OF CREDIT $171,000,000 4.75% PRIME/2.95% LIBOR FACILITIES INVESTMENT CURRENT QUARTER ACQUISITIONS SKILLED NURSING FACILITIES 4 $36,760,000 $80,262 PER BED ASSISTED & IND LIVING FACILITIES 2 26,548,000 $150,841 PER UNIT 6 $63,308,000 CURRENT YEAR ACQUISITIONS SKILLED NURSING FACILITIES 11 $66,677,000 $57,829 PER BED ASSISTED & IND LIVING FACILITIES 24 210,943,000 $114,581 PER UNIT SPECIALTY HOSPITALS 5 50,066,000 $267,733 PER BED/ UNIT 40 $327,686,000 NATIONWIDE HEALTH PROPERTIES, INC. SUPPLEMENTAL ANALYST INFORMATION SEPTEMBER 30, 2004 MEDIUM TERM NOTE MATURITIES WEIGHTED YEAR AMOUNT RATE Q4 2004 -- -- 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% Q4 2007 55,000,000 (1) 6.9% 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 -- -- $470,000,000 7.6% (1) Includes $55,000,000 of 6.9% MTNs putable October of 2007, ’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 $1,498,000 7.6% Q4 2005 13,337,000 7.6% 2011 6,026,000 7.7% 2012 28,828,000 7.7% 2013 36,221,000 5.9% THEREAFTER 81,677,000 5.5% $167,587,000 6.2% LEASE EXPIRATIONS MINIMUM NUMBER OF YEAR RENT FACILITIES 2004 $498,000 1 2005 3,650,000 6 2006 17,169,000 40 2007 6,361,000 14 2008 3,014,000 7 2009 3,148,000 7 2010 10,719,000 21 2011 4,836,000 15 2012 18,447,000 22 2013 14,466,000 25 THEREAFTER 95,708,000 178 $178,016,000 336 NATIONWIDE HEALTH PROPERTIES, INC. SUPPLEMENTAL ANALYST INFORMATION SEPTEMBER 30, 2004 MORTGAGE LOAN RECEIVABLE PRINCIPAL PAYMENTS PRINCIPAL NUMBER YEAR PAYMENTS OF FACILITIES 2004 $6,529,000 2 2005 1,119,000 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 $93,756,000 21 JOINT VENTURE INFORMATION FOR THE PERIOD ENDED SEPTEMBER 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 Nine Months Ended Ended September 30, 2004 September 30, 2004 Rental income $3,726 $11,179 Expenses: Interest and amortization of deferred financing costs 1,022 3,321 Depreciation and amortization 750 2,228 General and administrative 175 601 1,947 6,150 Income from continuing operations 1,779 5,029 Discontinued operations Loss on sale -- (307) Income from discontinued operations -- 29 -- (278) Net income $1,779 $4,751 BALANCE SHEET ASSETS LIABILITIES AND EQUITY Real estate: Notes and bonds payable $60,758 Land $12,876 Accounts payable and Buildings and accr. liab. 3,688 improvements 106,629 119,505 Less accumulated Equity: depreciation (7,063) Capital Contributions 65,501 112,442 Distributions (26,236) Cash and cash Cumulative net income 14,845 equivalents 5,126 Total equity 54,110 Other assets 988 $118,556 $118,556
Nationwide Health Properties, Inc.
CONTACT: Douglas M. Pasquale, President & CEO, or Mark L. Desmond,Senior Vice President & CFO, both of Nationwide Health Properties, Inc.,+1-949-718-4400
Web site: http://www.nhp-reit.com/