Nov. 9, 2009 (PR Newswire) --

NEWPORT BEACH, Calif., Nov. 9 /PRNewswire-FirstCall/ -- Nationwide Health Properties, Inc. (NYSE: NHP) today announced results of operations for the third quarter and nine months ended September 30, 2009. Contemporaneously with this press release, the Company filed its Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2009 with the Securities and Exchange Commission.

"NHP began 2009 with the objective of preparing itself for capital markets under duress while simultaneously positioning itself for growth as investment opportunities arose. Since our last quarter end, we continued to enhance our already strong financial position by issuing $190 million of equity. On an enterprise value basis, our leverage is about 30% and we have about $300 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. "As we direct our attention more towards growth, NHP has agreed in principle with PMB to a multi-faceted transaction involving, among other things, the acquisition of all or a majority interest in up to seven medical office buildings with approximately 800,000 square feet for between $275 million and $300 million," Mr. Pasquale added.

THIRD QUARTER 2009 RESULTS OF OPERATIONS

The following table presents selected unaudited financial information for the third quarter and the nine months ended September 30, 2009 as compared to the same period of 2008:

SELECTED FINANCIAL DATA
($ in thousands, except per share amounts)

Three Months Ended September 30,
--------------------------------
2009     2008   $ Change    % Change
----     ----    --------   --------

Revenue                          $97,824  $94,581    $3,243       3.4%
Income from Continuing
Operations                      $31,225  $26,072    $5,153      19.8%
Net Income Attributable to NHP
Common Stockholders             $29,692  $27,192    $2,500       9.2%
Net Income Attributable to NHP
Common Stockholders Per
Diluted Share                     $0.27    $0.27        $-       0.0%
Diluted FFO                      $63,337  $58,413    $4,924       8.4%
Recurring Diluted FFO            $63,005  $58,413    $4,592       7.9%
Diluted FFO Per Share              $0.56    $0.56        $-       0.0%
Recurring Diluted FFO Per Share    $0.56    $0.56        $-       0.0%
Diluted FAD                      $62,802  $57,109    $5,693      10.0%
Recurring Diluted FAD            $62,470  $57,109    $5,361       9.4%
Diluted FAD Per Share              $0.56    $0.55     $0.01       1.8%
Recurring Diluted FAD Per Share    $0.55    $0.55        $-       0.0%

Nine Months Ended September 30,
-------------------------------
2009     2008    $ Change  % Change
----     ----    --------  --------

Revenue                         $292,386 $272,923   $19,463       7.1%
Income from Continuing
Operations                      $95,434  $75,531   $19,903      26.4%
Net Income Attributable to NHP
Common Stockholders            $112,145 $228,537 $(116,392)    -50.9%
Net Income Attributable to NHP
Common Stockholders Per
Diluted Share                     $1.05    $2.34    $(1.29)    -55.1%
Diluted FFO                     $191,833 $172,511   $19,322      11.2%
Recurring Diluted FFO           $186,937 $172,511   $14,426       8.4%
Diluted FFO Per Share              $1.75    $1.68     $0.07       4.2%
Recurring Diluted FFO Per Share    $1.70    $1.68     $0.02       1.2%
Diluted FAD                     $190,770 $167,769   $23,001      13.7%
Recurring Diluted FAD           $185,874 $167,769   $18,105      10.8%
Diluted FAD Per Share              $1.74    $1.64     $0.10       6.1%
Recurring Diluted FAD Per Share    $1.69    $1.64     $0.05       3.0%

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 gains on debt extinguishments in 2009.

THIRD QUARTER 2009 INVESTMENT ACTIVITY

During the third quarter of 2009, we invested $4.0 million in revenue producing capital expenditures at a blended yield of 8.9% on our existing triple net portfolio.

Pacific Medical Buildings Update

We have reached an agreement in principle with Pacific Medical Buildings, LLC to acquire three medical office buildings, the remaining 55% interest in two medical office buildings, in which we currently have a minority ownership interest, and majority ownership interests in two joint ventures that will each own one medical office building. The acquisitions are subject to customary due diligence and the negotiation and implementation of definitive agreements, as well as the receipt of a variety of third party approvals. The parties are targeting a year end closing.

If all of the assets are acquired, we estimate that our aggregate investment would be approximately $275 million to $300 million, and that the properties would initially contribute annual net operating income of approximately $21 million to $23 million. However, these estimates are subject to a number of assumptions and uncertainties that could cause actual outcomes to differ materially. In particular, we have assumed that the percentage ownership interest that we would acquire in each of the joint ventures will be approximately 60% to 70%, and we have assumed that no amendment will be made to the terms of the existing mortgage debt.

A majority of our investment is expected to consist of the assumption of existing mortgage debt of approximately $160 million to $170 million with a weighted average interest rate of less than 6%. The balance of the investment is expected to be paid in cash and possibly DownREIT partnership units issued at a price between $29 and $33 per unit.

We have also agreed in principle to modifications to our development agreement, which would allow PMB to leverage NHP's financial position at a time when construction financing is very difficult to find on acceptable terms. The modifications to the development agreement would provide NHP with improved terms, including preferred returns, a reduced promote interest to PMB and pricing determined at the time of acquisition rather than at the pre-development stage.

THIRD QUARTER 2009 FINANCING TRANSACTIONS

During the third quarter of 2009, we issued 5.5 million shares of our common stock through our controlled equity offering program at an average price of $30.12 per share, resulting in net proceeds of approximately $163.0 million.

On August 12, 2009, we retired three mortgage notes in our unconsolidated joint venture with a state pension fund investor totaling $8.8 million with a blended interest rate of 6.37% due in 2036 and 2037 for $7.5 million resulting in a $1.3 million gain.

On September 8, 2009, we retired a $2.7 million mortgage note with a rate of 8.75% due in 2023.

On October 1, 2009, we retired $2.6 million of senior notes with an interest rate of 6.90% that were put to us.

On October 9, 2009, shareholders of our Series B convertible preferred stock converted 168,105 preferred shares into 757,376 shares of our common stock.

From October 1, 2009 to November 6, 2009, we issued 897,500 shares of our common stock through our controlled equity offering program at an average price of $32.30 per share, resulting in net proceeds of approximately $28.7 million.

2009 GUIDANCE

As a result of the common shares issued through November 6, 2009, we are decreasing by $0.02 per share the high end of the range from $2.25 per share to $2.23 per share for our full-year 2009 recurring diluted FFO guidance. We are also decreasing by $0.02 per share the high end of the range from $2.23 per share to $2.21 per share for our full-year 2009 recurring diluted FAD guidance. Our revised guidance for recurring diluted FFO and FAD includes the retirement of $2.6 million of senior notes, the third quarter and post third quarter end issuances of common shares that are discussed above, the conversion of 168,105 shares of our Series B preferred stock 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 Monday, November 9, 2009 at 1:30 p.m. Pacific time (4:30 p.m. Eastern time) to discuss these results.