Nationwide Health Properties Inc

Nationwide Health Properties — Q1 2011 Earnings Presentation

54 slides from Nationwide Health Properties's earnings presentation, May 5, 2011

  1. Slide 1: Supplemental Information March 31, 2011

    Supplemental Information March 31, 2011

  2. Slide 2: Disclaimer

    Disclaimer Certain information contained in this presentation includes identify and complete favorable transactions, delays or forward-looking statements. Forward-looking statements failures in obtaining third party consents or approvals, the include statements regarding our expectations, beliefs, f

  3. Slide 3: Contents

    Contents COMPANY FACT SHEET 3 FINANCIAL RESULTS 4 Consolidated Income Statements Reconciliation of Net Income to Funds from Operations (FFO) Reconciliation of Net Income to Funds Available for Distribution (FAD) Consolidated Balance Sheets Other Assets Capitalization Debt Maturities and Debt Composi

  4. Slide 4: Company Fact Sheet

    Company Fact Sheet Company Profile Market Facts as of March 31, 2011 Nationwide Health Properties, Inc. (NHP), incorporated in October 1985, is a Closing Price Market Capitalization Enterprise Value publicly traded real estate investment trust (REIT) that invests in senior $42.53 $5.5 billion $7.2 b

  5. Slide 5: Financial Results

    FINANCIAL RESULTS March 31, 2011 : 4

  6. Slide 6: Consolidated Income Statements

    Consolidated Income Statements In thousands, except per share data Three Months Ended March 31, 2011 2010 Revenue: Triple-net lease rent $ 82,271 $ 72,200 Medical office building operating rent 29,515 21,685 111,786 93,885 Interest and other income 10,588 6,963 122,374 100,848 Expenses: Interest exp

  7. Slide 7: Reconciliation of Net Income to Funds From Operations (FFO)

    Reconciliation of Net Income to Funds From Operations (FFO) In thousands, except per share data Three Months Ended March 31, 2011 2010 Net income to FFO: Net income $ 50,314 $ 31,239 Net loss attributable to noncontrolling interests 237 190 Real estate related depreciation and amortization 38,248 31

  8. Slide 8: Reconciliation of Net Income to Funds Available for Distribution (FAD)

    Reconciliation of Net Income to Funds Available for Distribution (FAD) In thousands, except per share data Three Months Ended March 31, 2011 2010 Net income to FAD: Net income $ 50,314 $ 31,239 Net loss attributable to noncontrolling interests 237 190 Real estate related depreciation and amortizatio

  9. Slide 9: Consolidated Balance Sheets

    Consolidated Balance Sheets In thousands March 31, December 31, 2011 2010 Assets Investments in real estate: Land $ 342,161 $ 339,534 Buildings and improvements 3,796,893 3,679,745 Development in progress 21,866 17,827 4,160,920 4,037,106 Less accumulated depreciation (701,717) (670,601) 3,459,203 3

  10. Slide 10: Other Assets

    Other Assets In thousands March 31, December 31, 2011 2010 Other receivables, net $ 66,617 $ 68,200 Straight-line rent receivables, net 41,771 39,331 Prepaid ground leases 12,741 12,804 Investments and restricted funds 12,741 12,567 Interest rate swaps 12,161 11,157 Deferred financing costs 8,138 8,

  11. Slide 11: Capitalization

    Capitalization In thousands, except stock prices and ratios March 31, 2011 December 31, 2010 Debt Unsecured senior credit facility $ 245,000 $ 175,000 Senior notes 991,633 991,633 Notes and bonds payable 365,164 362,624 Consolidated debt 1,601,797 1,529,257 NHP's share of unconsolidated debt 85,173

  12. Slide 12: Debt Composition

    Capitalization (2) Based on total debt including NHP’s share of unconsolidated joint venture Undepreciated Enterprise Book Basis Value 65% Equity 35% Debt 77% Equity 23% Debt Debt Composition 16% 27% 84% 73% Secured Variable Unsecured Fixed See Financial Measures Definitions March 31, 2011 : 11

  13. Slide 13: Debt Maturities and Debt Composition

    Debt Maturities and Debt Composition Dollars in thousands Debt Maturities NHP's Share of Credit Facility Senior Notes Notes and Bonds Consolidated Debt Unconsolidated Debt Total Debt Period Principal Rate Principal Rate Principal Rate Principal Rate Principal Rate Principal Rate 2011 $ 245,000 1.0%

  14. Slide 14: Debt Covenants

    Debt Covenants Minimum Maximum Covenant Requirement Requirement Actual Status Credit Facility Covenants Unsecured Debt to Unencumbered Asset Ratio 60% 27.1% In Compliance 45% of the maximum Secured Indebtedness Ratio 30% 9.0% In Compliance 30% of the maximum Fixed Charges Ratio 1.75x 3.53x In Compli

  15. Slide 15: Credit Facility Covenants

    Credit Facility Covenants Unsecured Debt to Unencumbered Secured Indebtedness Ratio Fixed Charges Ratio Asset Ratio 40% 4.00x 70.0% 3.50x Maximum Maximum 60.0% 30% 3.00x 50.0% 2.50x 40.0% 20% 2.00x Minimum 30.0% 1.50x 20.0% 10% 1.00x 10.0% 0.50x 0.0% 0% 0.00x 1Q10 2Q10 3Q10 4Q10 1Q11 1Q10 2Q10 3Q10

  16. Slide 16: Bond Covenants (Bonds Issued Prior to 2006)

    Bond Covenants (Bonds Issued Prior to 2006) Senior and Non-recourse Debt to Senior Debt to Tangible Net Worth Capital Base 250.0% 250.0% Maximum Maximum 200.0% 200.0% 150.0% 150.0% 100.0% 100.0% 50.0% 50.0% 0.0% 0.0% 1Q10 2Q10 3Q10 4Q10 1Q11 1Q10 2Q10 3Q10 4Q10 1Q11 Senior Debt to Capital Base Limit

  17. Slide 17: New Bond Covenants (Bonds Issued After 2006)

    New Bond Covenants (Bonds Issued After 2006) Limitation on Secured Debt EBITDA to Interest Expense 50.0% 4.00 Maximum 3.50 40.0% 3.00 30.0% 2.50 2.00 20.0% 1.50 Minimum 1.00 10.0% 0.50 0.0% 0.00 1Q10 2Q10 3Q10 4Q10 1Q11 1Q10 2Q10 3Q10 4Q10 1Q11 Total Indebtedness Unencumbered Assets to Unsecured Deb

  18. Slide 18: Interest Coverage

    Interest Coverage Dollars in thousands Three Months Ended March 31, 2011 2010 Reconciliation of Net Income to EBITDA: Net income $ 50,314 $ 31,239 Net loss attributable to noncontrolling interests 237 190 Interest expense in continuing operations 22,771 23,590 Depreciation and amortization in contin

  19. Slide 19: Unconsolidated Joint Venture Financial Statements – Balance Sheet

    Unconsolidated Joint Venture Financial Statements – Balance Sheet In thousands March 31, 2011 December 31, 2010 Assets Investments in real estate: Land $ 38,892 $ 38,892 Buildings and improvements 535,528 535,529 574,420 574,421 Less accumulated depreciation (66,507) (61,780) 507,913 512,641 Cash an

  20. Slide 20: Unconsolidated Joint Venture Financial Statements – Income Statements

    Unconsolidated Joint Venture Financial Statements – Income Statements Three Months Ended March 31, 2011 2010 Revenue: Rent $ 12,275 $ 11,899 Interest and other income 68 53 12,343 11,952 Expenses: Interest expense 5,085 5,031 Depreciation and amortization 4,728 4,697 General and administrative* 1,28

  21. Slide 21: Financial Measures Definitions

    Financial Measures Definitions Adjusted Fixed Charge Coverage Ratio: uses EBITDA as a non-GAAP measure of both operating performance We believe that the Adjusted Fixed Charge Coverage Ratio is an and liquidity. We believe it is most useful as a liquidity measure in the important supplemental liquidi

  22. Slide 22: Financial Measures Definitions (2)

    Financial Measures Definitions (2) FAD and FFO Payout Ratio and Coverage: cash stock based compensation, plus deferred financing cost The Payout Ratio is calculated by dividing the common dividend per amortization plus any impairments minus lease commissions, tenant share by diluted FAD or FFO per s

  23. Slide 23: Financial Measures Definitions (3)

    Financial Measures Definitions (3) FFO in accordance with the National Association of Real Estate Investment Trusts’ definition. FFO is defined as net income (computed in accordance with GAAP) excluding gains and losses from the sale of real estate plus real estate related depreciation and amortizat

  24. Slide 24: Investments & Dispositions

    INVESTMENTS & DISPOSITIONS March 31, 2011 : 23

  25. Slide 25: 1st Quarter 2011 Investments

    1st Quarter 2011 Investments Gross investment in thousands Number of Square Average Gross Initial Facilities Beds/Units Feet Age Investment Yield Consolidated Investments Assisted and independent living facilities 1 38 12 $ 7,000 8.3% Skilled nursing facilities 6 1,126 27 100,000 (1) 9.4% Total seni

  26. Slide 26: ALF Acquisition | Milestone Retirement Communities (March 2011)

    ALF ACQUISITION | Milestone Retirement Communities (March 2011) Location Arizona Key Stats Purchase Price: $7M Age: 12 years Price per Unit: $187K No. of Facilities: 1 Lease: Triple Net Facility Type: ALF No. of Units: 38 Occupancy: 96% March 31, 2011 : 25

  27. Slide 27: SNF Acquisition | The McGuire Group, Inc. (January 2011)

    SNF ACQUISITION | The McGuire Group, Inc. (January 2011) Location New York Key Stats Purchase Price: $100M* Age: 27 years Price per Bed: $89K No. of Facilities: 6 Lease: Triple Net Facility Type: SNF No. of Beds: 1,126 Occupancy: 98% Q-Mix: 39% *Excludes $12 million contingent purchase price expecte

  28. Slide 28: Rent Loss from Dispositions and Lease Restructuring

    Rent Loss from Dispositions and Lease Restructuring Dollars In thousands Investment Number Average Current Year Full Year Gross Required at 9.5% % Financing of Facilities Age Revenue Revenue Proceeds Gain Assumed Yield From Proceeds Actual through March 31,2011 Purchase options SNF 2 29 543 694 8,24

  29. Slide 29: Projected Funding Obligations through 2013

    Projected Funding Obligations through 2013 (as of March 31, 2011) Dollars in thousands Estimated Closing/Completion Initial Cash Required Date Amount Yield 2011 2012 2013 Total Consolidated Acquisition Obligations PMB - Pomona, CA [A] May 2011 $ 36,794 7.1% $ 35,822 $ - $ - $ 35,822 Total consolidat

  30. Slide 30: Development Projects

    Development Projects Dollars in thousands Project Funding Estimated SF / Units / Pre Partner's Construction Completion Date Amount Beds Leasing Cash Equity Financing Total Development Projects ALF - Billings, MT December 2011 $ 6,625 40 units 100% $ 6,625 $ - $ - $ 6,625 SNF - Sonora, CA January 201

  31. Slide 31: Triple-Net Lease Expirations and Mortgage Loans Receivable Principal Payments

    Triple-Net Lease Expirations and Mortgage Loans Receivable Principal Payments Dollars in thousands Consolidated Lease Expirations (1) Assisted and Independent Skilled Nursing Continuing Care Other Triple-Net Consolidated Triple-Net Total Number of Total Number of Total Number of Total Number of Tota

  32. Slide 32: Portfolio Overview

    PORTFOLIO OVERVIEW March 31, 2011 : 31

  33. Slide 33: Portfolio Summary

    Portfolio Summary Gross investment, NOI and security deposits in thousands Building Investment Percentage of Percentage Number of Number of Square Gross Per Bed/Unit/ Investment of NOI by Facilities Beds/Units Feet Investment Square Foot by Category NOI Category Owned Facilities Assisted and indepen

  34. Slide 34: Portfolio Performance Summary

    Portfolio Performance Summary Gross investment and annualized cash rent in thousands Number of Average Gross Annualized Current EBITDARM Facilities Age Investment Cash Rent/NOI Yield Occupancy Coverage Owned Facilities Assisted and independent living facilities 268 15 $ 1,819,375 $ 174,491 9.6% 82.2

  35. Slide 35: Portfolio Overview

    Portfolio Overview Asset Type Pay Source (based on investment) Other 5% Independent and Medicaid Assisted Living MOBs 26% 18% Private Pay 41% 71% Medicare Skilled Nursing 11% 28% Locations Tenant/Operator (based on investment*) (based on revenue) Top 5 = 32% Top 10 = 44% WA WI Top 15 = 52% (6%) (5%)

  36. Slide 36: Consolidated Portfolio Performance by Asset Type

    Consolidated Portfolio Performance by Asset Type SAME PROPERTY (PERFORMANCE) TOTAL MAR 2011 DEC 2010 Q/Q Chg MAR 2010 Y/Y Chg MAR 2011 DEC 2010 MAR 2010 Assisted and independent living* Number of Facilities 245 245 245 269 273 254 Annualized Facility Revenue ($000s) $ 584,641 $ 581,930 0.5% $ 573,08

  37. Slide 37: Consolidated Portfolio Performance

    Consolidated Portfolio Performance SAME PROPERTY (PERFORMANCE) TOTAL MAR 2011 DEC 2010 Q/Q Chg MAR 2010 Y/Y Chg MAR 2011 DEC 2010 MAR 2010 NHP Consolidated Portfolio (excluding MOBs)* Number of Facilities 433 433 433 490 489 454 Annualized Facility Revenue ($000s) $ 2,061,674 $ 2,040,815 1.0% $ 2,00

  38. Slide 38: Consolidated Non-Stabilized Portfolio Performance by Asset Type

    Consolidated Non-Stabilized Portfolio Performance by Asset Type TOTAL MAR 2011 DEC 2010 MAR 2010 Assisted and Independent Living Number of Facilities 6 6 6 Annualized Facility Revenue ($000s) $ 14,206 $ 13,069 $ 9,641 Occupancy 70.2% 68.5% 48.9% Monthly revenue per occupied bed/unit $ 3,652 $ 3,633

  39. Slide 39: Tenant Concentration

    Tenant Concentration Gross investment and annualized cash rent in thousands Number of Number of Beds/Units Gross Percent by Annualized Percent by Average Remaining EBITDARM Tenant Concentration Facilities In Service Investment Investment Cash Rent/NOI Cash Rent Age Term Coverage 1 Brookdale Senior L

  40. Slide 40: Geographic Performance Metrics

    Geographic Performance Metrics Gross investment and annualized cash rent in thousands Number of Revenue Medicaid as Number of Beds/Units Gross Percent by Annualized Percent by EBITDARM per Occupied Average Remaining % SNF by Percent of Facilities In Service Investment Investment Cash Rent Rent Cover

  41. Slide 41: Geographic Performance Metrics - ALF

    Geographic Performance Metrics - ALF Gross investment and annualized cash rent in thousands Number of Revenue Number of Beds/Units Gross Percent by Annualized Percent by EBITDARM per Occupied Average Remaining Facilities In Service Investment Investment Cash Rent Rent Coverage Beds/Unit Age Term 1 T

  42. Slide 42: Geographic Performance Metrics - SNF

    Geographic Performance Metrics - SNF Gross investment and annualized cash rent in thousands Number of Revenue Number of Beds Gross Percent by Annualized Percent by EBITDARM per Occupied Average Remaining Facilities In Service Investment Investment Cash Rent Rent Coverage Bed Age Term Q-Mix* 1 Texas

  43. Slide 43: SNF Performance Metrics

    SNF Performance Metrics Gross investment and cash rent in thousands Number of Gross Number of Beds Gross Percent by Investment SQFT Average Annualized Percent by Q-Mix Facilities* In Service Investment Investment per Bed per Bed Age Cash Rent Cash Rent DARMx DARM % Occupancy > 65% 12 1,329 $ 101,825

  44. Slide 44: Portfolio Performance Summary | Asset Class Composition Trends

    Portfolio Performance Summary | Asset Class Composition Trends (by Investment) 6% 6% 6% 5% 5% 5% 5% 5% 20% 20% 20% 27% 27% 26% 26% 26% 26% 26% 26% 24% 26% 26% 27% 28% 48% 48% 48% 44% 42% 43% 42% 41% 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 ALF SNF MOB Other March 31, 2011 : 43

  45. Slide 45: Portfolio Performance Summary | Private Pay Composition Trends

    Portfolio Performance Summary | Private Pay Composition Trends (by Revenue) 9% 10% 10% 10% 10% 10% 10% 11% 16% 17% 17% 16% 17% 17% 18% 18% 75% 73% 73% 74% 73% 73% 72% 71% 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 Private Medicaid Medicare March 31, 2011 : 44

  46. Slide 46: Portfolio Performance Summary | Top Tenant Concentration Trends

    Portfolio Performance Summary | Top Tenant Concentration Trends (by Revenue) 62% 63% 62% 58% 56% 55% 53% 52% 55% 55% 55% 52% 49% 48% 46% 44% 40% 40% 40% 38% 36% 35% 34% 32% 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 Top 5 Top 10 Top 15 March 31, 2011 : 45

  47. Slide 47: Unconsolidated JV Portfolio Performance Metrics

    Unconsolidated JV Portfolio Performance Metrics Assisted and Skilled Total Independent Living Nursing CCRC Portfolio MAR 2011 MAR 2011 MAR 2011 MAR 2011 Unconsolidated JV Portfolio Annualized Facility Revenue ($000s) $ 75,070 $ 171,042 $ 13,160 $ 259,272 Occupancy 82.8% 89.6% 84.1% 86.1% Monthly rev

  48. Slide 48: Medical Office Building Portfolio Performance Metrics

    Medical Office Building Portfolio Performance Metrics Gross investment dollars in thousands Gross MOB Same Property Number of Gross Investment Percent Average Rentable Occupancy Facilities Investment per SQFT On Campus Age SQFT Mar 2011 Mar 2010 Change West 24 $ 692,417 $ 379 88.6% 9 1,827,198 90.4%

  49. Slide 49: Medical Office Building Portfolio – Geographic Performance Metrics

    Medical Office Building Portfolio – Geographic Performance Metrics Gross investment dollars in thousands Gross Number of Gross Percent by Investment Rentable Revenue* NOI* MOBs by State Region Facilities Investment Investment per SQFT SQFT Occupancy per SQFT per SQFT 1 California [A] West 13 $ 481,8

  50. Slide 50: Medical Office Building Lease Expirations and Mortgage Loan Receivable Principal Payments

    Medical Office Building Lease Expirations and Mortgage Loan Receivable Principal Payments Dollars in thousands, except per square foot data Consolidated Medical Office Building Lease Expirations Consolidated Multi-Tenant Consolidated Triple-Net (1) Consolidated Medical Office Building Square % of An

  51. Slide 51: Medical Office Building Leasing Activity

    Medical Office Building Leasing Activity Q1 2011 Total SQFT As of 12/31/10 Leased (as of 3/31/11) Leased SQFT As of 12/31/10 Q1 Acquisitions Leased % Leased SQFT Acquisitions Expirations Renewals New Leases Vacated Dispositions SQFT % Retention Absorption West 1,850,164 93.0% 1,720,672 - 27,535 11,2

  52. Slide 52: Portfolio Performance Measures Definitions

    Portfolio Performance Measures Definitions Annualized Cash Rent/NOI: our tenants and borrowers, and we have not verified such information. We For our triple-net lease portfolio, Annualized Cash Rent is equal to the total use EBITDARM to calculate the EBITDARM (cash flow before management cash rent d

  53. Slide 53: Portfolio Performance Measures Definitions (2)

    Portfolio Performance Measures Definitions (2) All facility financial information was derived solely from information provided NOI: by our tenants and borrowers, and we have not verified such information. Net operating income (“NOI”) is a non-GAAP supplemental financial measure used to evaluate the

  54. Slide 54: Portfolio Performance Measures Definitions (3)

    Portfolio Performance Measures Definitions (3) Same Property (Performance): Results shown under the Same Property caption present the financial or other performance measures for only those facilities that were in our portfolio for more than twelve months at the end of all periods presented. March 31

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