-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, PJ7aaWnC3ErkUuUjNfm5ba/TZCZXgqyo2uL/IDDzBf+bLKzw0nGjfvYMcAS/JVZz 6bl3WNWgYLmWcLzSHCDnZg== 0001017062-98-002100.txt : 19981019 0001017062-98-002100.hdr.sgml : 19981019 ACCESSION NUMBER: 0001017062-98-002100 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19981016 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19981016 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: NATIONWIDE HEALTH PROPERTIES INC CENTRAL INDEX KEY: 0000780053 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 953997619 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-09028 FILM NUMBER: 98727018 BUSINESS ADDRESS: STREET 1: 610 NEWPORT CENTER DR STREET 2: STE 1150 CITY: NEWPORT BEACH STATE: CA ZIP: 92660 BUSINESS PHONE: 9497184400 MAIL ADDRESS: STREET 1: 610 NEWPORT CENTER DR STREET 2: STE 1150 CITY: NEWPORT BEACH STATE: CA ZIP: 92660 FORMER COMPANY: FORMER CONFORMED NAME: BEVERLY INVESTMENT PROPERTIES INC DATE OF NAME CHANGE: 19890515 8-K 1 CURRENT REPORT ON FORM 8-K SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ________________ FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) of the SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported) October 16, 1998 (January 30, 1998) ---------------- ------------------ NATIONWIDE HEALTH PROPERTIES, INC. -------------------------------------------------- (Exact name of registrant as specified in charter) Maryland 1-9028 95-3997619 ------------------------------------------------------ (State or other (Commission (IRS employer jurisdiction of file number) identification incorporation) number) 610 Newport Center Drive, Suite 1150, Newport Beach, CA 92660-6429 ------------------------------------------------------------------ (Address of principal executive offices) Registrant's telephone number, including area code: (949) 718-4400 -------------- Not Applicable ------------------------------------------------------------- (Former name or former address, if changed since last report) ITEM 5. OTHER EVENTS. During the period from January 1, 1998 through October 1, 1998, Nationwide Health Properties, Inc. (the "Company") acquired from parties not related to the Company, 14 assisted living facilities ("ALF"), 15 skilled nursing facilities ("SNF"), 2 continuing care retirement communities ("CCRC") and 8 residential care facilities for the elderly ("RCFE") in 23 separate transactions at an aggregate purchase price of approximately $110,905,000. The facilities were, concurrently with their acquisition, leased on a triple net basis to 10 different operators under terms generally similar to the Company's existing leases. The transactions were funded by bank borrowings on the Company's revolving bank line of credit with Wells Fargo Bank, National Association, Sanwa Bank California, The Bank of New York and Nationsbank, N.A., approximately $4,137,000 of debt assumption, the issuance of 201,190 shares of the Company's common stock and by cash on hand. Except as indicated below, the Company purchased the assets of each of the facilities. The Company periodically uses funds raised through the issuance of medium-term notes and equity offerings to repay indebtedness under its revolving bank line of credit.
Facility Acquisition Purchase Facility Name City State Type Beds Units Date Price - ----------------------------------- --------------- ------- -------- ----- ----- ----------- ------------ Monticello Residential Care Jackson MO CCRC 31 1/30/98 $ 2,460,000 Autumn Rose 13 Newport Beach CA RCFE 6 2/19/98 640,000 Autumn Rose 14 Murrieta CA RCFE 6 2/27/98 176,555 Autumn Rose 15 Murrieta CA RCFE 6 2/27/98 189,210 Autumn Rose 16 Murrieta CA RCFE 6 2/27/98 248,470 Autumn Rose 18 Murrieta CA RCFE 6 2/27/98 248,470 Autumn Rose 19 Murrieta CA RCFE 6 2/27/98 155,666 Sterling House of Hickory Hickory NC ALF 42 4/9/98 2,902,000 Sterling House of Richland County Columbia SC ALF 42 4/9/98 2,857,000 Drury Place of Alvamar (1) (2) Lawrence KS ALF 67 4/30/98 4,608,441 Drury Place of Salina (1) (2) (3) Salina KS ALF 61 4/30/98 3,132,968 Drury Place of Topeka (1) (2) Topeka KS ALF 61 4/30/98 3,282,219 Normandy House Nursing Home Melrose MA SNF 82 5/15/98 4,394,037 Countrywood Estates Monticello AR SNF 80 6/1/98 3,497,825 Ashley County Conv. Center Wilmot AR SNF 100 6/1/98 2,424,393 Riverview Manor Morrilton AR SNF 88 6/1/98 3,835,743 Saline Nursing Home Benton AR SNF 119 6/1/98 5,151,650 Wynwood Nursing Center (3) Wynne AR SNF 100 6/1/98 4,287,325 Brookridge Life Care & Rehab Center Morrilton AR SNF 118 6/1/98 5,331,888 Regional Nursing Center of Bryant Bryant AR SNF 116 6/1/98 4,950,885 Lakewood Rehab Center Lake Village AR SNF 102 6/1/98 4,080,000 The Arches Benton AR ALF 28 6/1/98 1,639,425 Sterling House of Chandler Chandler AZ ALF 52 7/17/98 3,240,000 Sterling House of Panama City Panama City FL ALF 42 7/17/98 2,992,000 The Arbor on the Brazos College Station TX CCRC 120 27 8/1/98 6,676,400 Thorton Nursing Home Northborough MA SNF 84 8/20/98 2,733,692 Autumn Rose 24 Laguna Niguel CA RCFE 6 8/31/98 430,000 Upshur Manor Gilmer TX SNF 112 9/1/98 3,208,000 Sterling House of Greenville Greenville SC ALF 42 9/4/98 2,750,000 Sterling House of Lancaster Lancaster OH ALF 42 9/4/98 2,420,000 Sterling House of Youngstown Youngstown OH ALF 42 9/16/98 2,645,000 Sterling House of Deptford Deptford NJ ALF 52 9/18/98 4,064,494 Langston House Clinton SC ALF 39 9/18/98 2,600,000 Ashley House Greenwood SC ALF 39 9/18/98 2,700,000 Autumn Rose 27 Murrieta CA RCFE 6 9/29/98 141,628 Aurora Australis Lodge (2) Columbus MS SNF 120 10/1/98 4,200,000 Imperial Manor Nashville TN SNF 150 10/1/98 7,490,000 Oak Ridge Acres Hiawatha KS SNF 49 10/1/98 910,000 Westwood Manor Topeka KS SNF 53 10/1/98 1,210,000 ------ ---- ------------ Total 1,641 709 $110,905,384 ====== ==== ============
- ---------------------------------------------- (1) Denotes a facility acquired by the issuance of the Company's stock. (2) Denotes a transaction involving the acquisition of the facility's stock. (3) Denotes a transaction involving the assumption of the facility's debt by the Company. 1 The Company believes these acquisitions are consistent with the Company's historical business strategy of acquiring and concurrently net leasing health care facilities to qualified operators. In assessing the facilities, the Company considered the type, location, age, design and physical condition of the facilities acquired, as well as historical, if applicable, and projected operating results of the health care operations conducted at the facilities. Additionally, the Company considers the operating ability, financial condition and reputation of the operator to which the acquired facilities are to be leased. After reasonable inquiry, the Company is not aware of any material factors that would cause the financial information reported not to be necessarily indicative of future operating results. The Company intends to continue the current use of each property. Although no single acquisition is considered a "significant acquisition" pursuant to the rules governing the reporting of transactions on Form 8-K, under Rule 3-14 of Regulation S-X, these acquisitions in the aggregate, may be considered to be material in nature. Certain audited pro forma financial information concerning these properties is provided in Item 7 of this Current Report on Form 8-K. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS Financial information for the health care operations of the acquired facilities is not presented because the related operating information for such facilities, after exclusion of items not comparable to the proposed net leased real estate operations by the Company pursuant to Rule 3-14 of Regulation S-X, would not be meaningful. Alternatively, the Company has presented audited pro forma operating information for each of the acquired properties as if the acquired properties had been owned and net leased by the Company since January 1, 1997. (a) (3) -Audited pro forma statements of income for the acquired facilities for the year ended December 31, 1997. (b) (1) -Unaudited pro forma balance sheet as of September 30, 1998 for the Company after giving effect to the acquisition of the facilities. -Pro forma statement of operations for the Company after giving effect to the acquisition of the facilities for the nine-month period ended September 30, 1998. -Pro forma statement of operations for the Company after giving effect to the acquisition of the facilities for the year ended December 31, 1997. (c) Consent of Arthur Andersen LLP. 2 REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS TO THE STOCKHOLDERS AND DIRECTORS, NATIONWIDE HEALTH PROPERTIES, INC.: We have examined the pro forma adjustments reflecting the transactions described in Note 1 and the application of those adjustments to the assembly of the accompanying pro forma statements of income of the properties acquired by Nationwide Health Properties, Inc. during the period January 1, 1998 to October 1, 1998 as indicated in Item 5 of this Form 8-K (collectively "the Acquired Properties") for the year ended December 31, 1997. The historical statements of income are omitted since substantially all historical amounts are not relevant on a pro forma basis and in some cases, the facilities were opened in 1998. The pro forma adjustments are based upon management's assumptions described in Note 2. Our examination was made in accordance with standards established by the American Institute of Certified Public Accountants and, accordingly, included such procedures as we considered necessary in the circumstances. The objective of this pro forma financial information is to show what the significant effects on the historical financial information might have been had the transactions occurred at an earlier date. However, the pro forma statements of income are not necessarily indicative of the results of operations that would have been attained had the above-mentioned transactions actually occurred earlier. In our opinion, management's assumptions provide a reasonable basis for presenting the significant effects directly attributable to the above-mentioned transactions described in Note 1, the related pro forma adjustments give appropriate effect to those assumptions, and the pro forma statements of income for the year ended December 31, 1997 reflect the proper application of those adjustments to the historical statement of income amounts. ARTHUR ANDERSEN LLP Orange County, California October 15, 1998 3 Pro Forma Statements of Income For the Year Ended December 31, 1997 (in thousands)
Monticello Residential Autumn Autumn Autumn Autumn Autumn Autumn Care Rose 13 Rose 14 Rose 15 Rose 16 Rose 18 Rose 19 ----------------------------------------------------------------------------------------------- Revenues: Minimum Rent $222,581 $70,400 $19,421 $20,813 $27,332 $27,332 $17,123 ----------------------------------------------------------------------------------------------- 222,581 70,400 19,421 20,813 27,332 27,332 17,123 Expenses: Depreciation 60,427 17,286 4,119 4,408 5,763 5,763 3,642 Interest 130,072 33,255 9,231 9,882 12,930 12,930 8,157 ----------------------------------------------------------------------------------------------- 190,499 50,541 13,350 14,290 18,693 18,693 11,799 ----------------------------------------------------------------------------------------------- Net Income $ 32,082 $19,859 $ 6,071 $ 6,523 $ 8,639 $ 8,639 $ 5,324 ===============================================================================================
See accompanying notes. 4 Pro Forma Statements of Income For the Year Ended December 31, 1997 (in thousands)
Sterling Normandy Sterling House of Drury Drury Drury House Country- House of Richland Place of Place of Place of Nursing wood Hickory County Alvamar Salina Topeka Home Estates ---------------------------------------------------------------------------------------------- Revenues: Minimum Rent $256,827 $252,845 $416,216 $277,477 $297,297 $399,744 $305,024 ---------------------------------------------------------------------------------------------- 256,827 252,845 416,216 277,477 297,297 399,744 305,024 Expenses: Depreciation 63,269 66,585 95,534 82,475 98,423 134,112 81,043 Interest 149,967 147,789 141,635 163,046 86,703 229,155 182,162 ---------------------------------------------------------------------------------------------- 213,236 214,374 237,169 245,521 185,126 363,267 263,205 ---------------------------------------------------------------------------------------------- Net Income $ 43,591 $ 38,471 $179,047 $ 31,956 $112,171 $ 36,477 $ 41,819 ==============================================================================================
See accompanying notes. 5 Pro Forma Statements of Income For the Year Ended December 31, 1997 (in thousands)
Brookridge Regional Ashley County Saline Wynwood Life Care & Nursing Convalescent Riverview Nursing Nursing Rehabilitation Center of Center Manor Center Center Center Bryant ------------------------------------------------------------------------------------------- Revenues: Minimum Rent $217,874 $335,526 $449,605 $374,744 $464,944 $431,914 ------------------------------------------------------------------------------------------- 217,874 335,526 449,605 374,744 464,944 431,914 Expenses: Depreciation 73,902 103,853 129,466 114,708 127,302 134,088 Interest 126,376 199,812 268,293 345,713 277,746 257,841 ------------------------------------------------------------------------------------------- 200,278 303,665 397,759 460,421 405,048 391,929 ------------------------------------------------------------------------------------------- Net Income $ 17,596 $ 31,861 $ 51,846 $(85,677) $ 59,896 $ 39,985 ===========================================================================================
See accompanying notes. 6 Pro Forma Statements of Income For the Year Ended December 31, 1997 (in thousands)
Sterling Lakewood Sterling House of The Arbor Thorton Rehabilitation The House of Panama on the Nursing Autumn Center Arches Chandler City Brazos Home Rose 24 ---------------------------------------------------------------------------------------------- Revenues: Minimum Rent $355,571 $143,797 $281,588 $260,035 $612,420 $241,658 $47,300 ---------------------------------------------------------------------------------------------- 355,571 143,797 281,588 260,035 612,420 241,658 47,300 Expenses: Depreciation 96,805 42,230 68,818 66,427 149,855 82,533 11,597 Interest 212,585 85,382 167,556 154,820 351,148 142,778 22,318 ---------------------------------------------------------------------------------------------- 309,390 127,612 236,374 221,247 501,003 225,311 33,915 ---------------------------------------------------------------------------------------------- Net Income $ 46,181 $ 16,185 $ 45,214 $ 38,788 $111,417 $ 16,347 $13,385 ==============================================================================================
See accompanying notes. 7 Pro Forma Statements of Income For the Year Ended December 31, 1997 (in thousands)
Sterling Sterling Sterling Sterling Upshur House of House of House of House of Langston Manor Greenville Lancaster Youngstown Deptford House -------------------------------------------------------------------------------- Revenues: Minimum Rent $255,000 $238,893 $210,225 $229,771 $353,091 $221,260 -------------------------------------------------------------------------------- 255,000 238,893 210,225 229,771 353,091 221,260 Expenses: Depreciation 86,456 59,693 52,059 54,713 85,689 63,673 Interest 168,391 142,096 125,105 136,738 209,981 135,471 -------------------------------------------------------------------------------- 254,847 201,789 177,164 191,451 295,670 199,144 -------------------------------------------------------------------------------- Net Income $ 153 $ 37,104 $ 33,061 $ 38,320 $ 57,421 $ 22,116 ================================================================================
See accompanying notes. 8 Pro Forma Statements of Income For the Year Ended December 31, 1997 (in thousands)
Aurora Oak Ashley Autumn Australis Imperial Ridge Westwood House Rose 27 Lodge Manor Acres Manor ------------------------------------------------------------------------------ Revenues: Minimum Rent $229,770 $15,579 $388,500 $664,363 $85,690 $113,590 ------------------------------------------------------------------------------ 229,770 15,579 388,500 664,363 85,690 113,590 Expenses: Depreciation 65,687 3,224 100,000 183,329 22,386 29,671 Interest 140,643 7,295 218,592 387,809 47,319 62,749 ------------------------------------------------------------------------------ 206,330 10,519 318,592 571,138 69,705 92,420 ------------------------------------------------------------------------------ Net Income $ 23,440 $ 5,060 $ 69,908 $ 93,225 $15,985 $ 21,170 ==============================================================================
See accompanying notes. 9 FOOTNOTES TO PRO FORMA STATEMENTS OF INCOME NOTE 1: Nationwide Health Properties, Inc. (the "Company") acquired 14 assisted living facilities, 15 skilled nursing facilities, 2 continuing care retirement communities and 8 residential care facilities for the elderly in 23 separate transactions at an aggregate purchase price of approximately $110,905,000. The facilities were leased to 10 different operators under terms generally similar to the Company's existing leases. The facilities are leased under "net" leases which are accounted for as operating leases. The leases have initial terms of 9 to 15 years. The Company earns fixed monthly minimum rent and may earn periodic additional rents. The additional payments are generally computed as a percentage of facility net patient revenues in excess of base amounts or as a percentage of the increase in the Consumer Price Index. Additional rents are generally calculated and payable monthly or quarterly and generally commence in the second year of the leases. Under terms of the leases, the lessees are responsible for all maintenance, repairs, taxes and insurance on the leased properties. The pro forma statements of income reflect the acquisitions of the properties as if they had been owned since January 1, 1997. NOTE 2: Pro forma minimum rents are based upon the monthly minimum rents specified in the leases. No additional rent amounts are assumed for purposes of the pro forma statements of income based upon the terms of the leases. Pro forma depreciation is based upon the purchase prices of the facilities being allocated to building and depreciated over 30 to 40 year lives. Pro forma interest expense is based upon allocating the Company's 1998 debt and equity financing to the acquisitions on a proportional basis, except in the case of facilities which were directly financed by the assumption of debt or the issuance of the Company's common stock. For such facilities, interest expense is based upon applying the actual interest rate to the debt assumed and allocating the Company's 1998 debt and equity financing to the acquisitions on a proportional basis for any balance remaining after deducting the debt assumed and the common stock issued. The weighted average borrowing rate applied to the general debt financing is based upon the Company's 1998 medium term note issuances and its September 30, 1998 weighted average rate on its unsecured revolving line of credit. Such weighted average rate was 6.84%. The Company's unsecured line of credit matures on March 31, 2001. The Company anticipates repaying such line of credit borrowings at some time in the future prior to its current maturity with proceeds from public offerings or private placements of long-term unsecured debt or equity. Accordingly, the actual interest expense resulting from the acquisitions of the facilities may vary. No pro forma general and administrative costs are included because: (1) such amounts are expected to be immaterial, and (2) the Company does not expect to add additional staff as a result of the transactions described in Note 1 above. NOTE 3: The preparation of financial statements requires management to make estimates and assumptions that affect the revenues and expenses during the reporting period. Actual results could differ from those estimates. 10 PRO FORMA FINANCIAL INFORMATION The following unaudited Pro Forma Balance Sheet as of September 30, 1998 and unaudited Pro Forma Statements of Operations for the nine months ended September 30, 1998 and for the year ended December 31, 1997 have been prepared to reflect the acquisition of 14 assisted living facilities, 15 skilled nursing facilities, 2 continuing care retirement communities and 8 residential care facilities for the elderly in 23 separate transactions at an aggregate purchase price of approximately $110,905,000 during the period from January 1, 1998 through October 1, 1998 (the "Acquired Facilities") and the adjustments described in the accompanying notes. The pro forma financial information is based on the historical financial statements of Nationwide Health Properties, Inc. (the "Company") as reported in the Company's Quarterly Report on Form 10-Q for the period ended September 30, 1998 and the Company's Annual Report to Shareholders on Form 10-K for the year ended December 31, 1997, and should be read in conjunction with those financial statements and the notes thereto. The Pro Forma Balance Sheet was prepared as if the Acquired Facilities were owned on September 30, 1998. The Pro Forma Statements of Operations were prepared as if the Acquired Facilities were purchased as of the beginning of the period presented. The combined pro forma financial information is not necessarily indicative of the financial position or results of operations which actually would have occurred if such transactions had been consummated on the dates described, nor does it purport to represent the Company's future financial position or results of operations. 11 NATIONWIDE HEALTH PROPERTIES, INC. UNAUDITED PRO FORMA CONDENSED BALANCE SHEETS SEPTEMBER 30, 1998 (IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
Pro Forma September 30, September 30, ASSETS 1998 Adjustments 1998 ----------------- ------------------ ------------------ Investments in real estate: Real estate properties Land $ 143,792 $ 2,191 $ 145,983 Buildings and improvements 982,299 11,739 994,038 Construction in progress 53,798 - 53,798 ---------- ------- ---------- 1,179,889 13,930 1,193,819 Less accumulated depreciation (125,559) - (125,559) ---------- ------- ---------- 1,054,330 13,930 1,068,260 Mortgage loans receivable, net 208,094 - 208,094 ---------- ------- ---------- 1,262,424 13,930 1,276,354 Cash and cash equivalents 13,153 (430) 12,723 Receivables 5,945 - 5,945 Other assets 14,036 - 14,036 ---------- ------- ---------- $1,295,558 $13,500 $1,309,058 ========== ======= ========== LIABILITIES AND STOCKHOLDERS' EQUITY Bank borrowings $ 30,400 $13,500 $ 43,900 Senior notes due 2000-2038 480,150 - 480,150 Convertible debentures 57,456 - 57,456 Notes and bonds payable 66,584 - 66,584 Accounts payable and accrued liabilities 47,589 - 47,589 Stockholders' equity: Preferred stock 100,000 - 100,000 Common stock 4,621 - 4,621 Capital in excess of par value 555,879 - 555,879 Cumulative net income 420,258 - 420,258 Cumulative dividends (467,379) - (467,379) ---------- ------- ---------- Total stockholders' equity 613,379 - 613,379 ---------- ------- ---------- $1,295,558 $13,500 $1,309,058 ========== ======= ==========
See accompanying notes. 12 NATIONWIDE HEALTH PROPERTIES, INC. UNAUDITED PRO FORMA CONDENSED STATEMENTS OF OPERATIONS (IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
Pro Forma Nine Months Nine Months Ended Ended September 30, 1998 Adjustments September 30, 1998 ------------------ ---------------- ------------------- Revenues: Minimum rent $ 75,536 $4,941 $ 80,477 Interest and other income 17,009 - 17,009 Additional rent and additional interest 11,729 - 11,729 -------- ------ -------- 104,274 4,941 109,215 Expenses: Interest and amort. of deferred financing 26,745 2,897 29,642 costs Depreciation and non-cash charges 20,035 1,374 21,409 General and administrative 3,453 - 3,453 -------- ------ -------- 50,233 4,271 54,504 -------- ------ -------- Net income before gain on sale of facilities 54,041 670 54,711 Gain on sale of facilities 2,321 - 2,321 -------- ------ -------- Net income 56,362 670 57,032 Preferred stock dividends (5,758) - (5,758) -------- ------ -------- Net income available to common stockholders $ 50,604 $ 670 $ 51,274 ======== ====== ======== Basic/diluted earnings from continuing operations available to common stockholders $1.09 $1.09 ======== ======== Basic/diluted net income available to common stockholders $1.15 $1.14 ======== ======== Weighted average shares outstanding 44,108 1,009 45,117 ======== ====== ========
See accompanying notes. 13 NATIONWIDE HEALTH PROPERTIES, INC. UNAUDITED PRO FORMA CONDENSED STATEMENTS OF OPERATIONS (IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
Pro Forma Year Ended Year Ended December 31, 1997 Adjustments December 31, 1997 ----------------- --------------- ----------------- Revenues: Minimum rent $ 79,587 $9,833 $ 89,420 Interest and other income 22,454 - 22,454 Additional rent and additional interest 13,664 - 13,664 -------- ------ -------- 115,705 9,833 125,538 Expenses: Interest and amort. of deferred financing costs 28,899 5,711 34,610 Depreciation and non-cash charges 19,825 2,731 22,556 General and administrative 3,993 - 3,993 -------- ------ -------- 52,717 8,442 61,159 -------- ------ -------- Net income before gain on sale of facilities 62,988 1,391 64,379 Gain on sale of facilities 829 - 829 -------- ------ -------- Net income 63,817 1,391 65,208 Preferred stock dividends (1,962) - (1,962) -------- ------ -------- Net income available to common stockholders $ 61,855 $1,391 $ 63,246 ======== ====== ======== Basic/diluted earnings from continuing operations available to common stockholders $ 1.45 $ 1.43 ======== ======== Basic/diluted net income available to common stockholders $ 1.47 $ 1.45 ======== ======== Weighted average shares outstanding 42,164 1,333 43,497 ======== ====== ========
See accompanying notes. 14 FOOTNOTES TO PRO FORMA STATEMENTS OF INCOME NOTE 1: The Company acquired 14 assisted living facilities, 15 skilled nursing facilities, 2 continuing care retirement communities and 8 residential care facilities for the elderly in 23 separate transactions at an aggregate purchase price of approximately $110,905,000. The facilities were leased to 10 different operators under terms generally similar to the Company's existing leases. The facilities are leased under "net" leases which are accounted for as operating leases. The leases have initial terms of 9 to 15 years. The Company earns fixed monthly minimum rent and may earn periodic additional rents. The additional payments are generally computed as a percentage of facility net patient revenues in excess of base amounts or as a percentage of the increase in the Consumer Price Index. Additional rents are generally calculated and payable monthly or quarterly and generally commence in the second year of the leases. Under terms of the leases, the lessees are responsible for all maintenance, repairs, taxes and insurance on the leased properties. The pro forma statements of income reflect the acquisitions of the properties as if they had been owned since the beginning of the period presented, and the pro forma balance sheet reflects the acquisition of the properties as if they had been owned on September 30, 1998. NOTE 2: The pro forma balance sheet adjustments reflect the allocation between land and building and improvements of the $13,930,000 of acquired properties purchased after September 30, 1998, the increase in bank borrowings related to the acquisitions and a reduction in cash to reflect the payment of a portion of the purchase price and miscellaneous closing costs. No adjustment has been made to reflect accumulated depreciation for those properties acquired prior to September 30, 1998. NOTE 3: The pro forma minimum rent adjustment is based upon the monthly minimum rents specified in the leases. No additional rent amounts are assumed for purposes of the pro forma statements of income based upon the terms of the leases. The pro forma depreciation adjustment is based upon the purchase prices of the facilities being allocated to building and depreciated over 30 to 40 year lives. Pro forma interest expense is based upon allocating the Company's 1998 debt and equity financing to the acquisitions on a proportional basis, except in the case of facilities which were directly financed by the issuance of the Company's common stock or the assumption of debt. For such facilities, interest expense is based upon applying the actual interest rate to the debt assumed and allocating the Company's 1998 debt and equity financing to the acquisitions on a proportional basis for any balance remaining after deducting the debt assumed and the common stock issued. The weighted average borrowing rate applied to the debt financing is based upon the Company's 1998 medium term note issuances and its September 30, 1998 weighted average rate on its unsecured revolving line of credit. Such weighted average rate was 6.84%. The Company's unsecured line of credit matures on March 31, 2001. The Company anticipates repaying such line of credit borrowings at some time in the future prior to its current maturity with proceeds from public offerings or private placements of long-term unsecured debt or equity. Accordingly, the actual interest expense resulting from the acquisitions of the facilities may vary. No pro forma general and administrative costs are included because: (1) such amounts are expected to be immaterial, and (2) the Company does not expect to add additional staff as a result of the transactions described in Note 1 above. The pro forma weighted average shares adjustment reflects the weighted average impact of considering the portion of the 1998 stock issuances allocated to the funding of acquisitions outstanding for the entire periods presented. NOTE 4: The preparation of financial statements requires management to make estimates and assumptions that affect the revenues and expenses during the reporting period. Actual results could differ from those estimates. 15 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. NATIONWIDE HEALTH PROPERTIES, INC. Date: October 16, 1998 By: /s/ MARK L. DESMOND ----------------------------------- Name: Mark L. Desmond Title: Senior Vice President and Chief Financial Officer 16 EX-23.1 2 CONSENT OF ARTHUR ANDERSEN LLP EXHIBIT 23.1 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation by reference in the previously filed Registration Statements (No. 33-35276, No. 33-64798, No. 333-32135, No. 333-17061, and No. 333-20589) of Nationwide Health Properties, Inc. of our report dated October 15, 1998, with respect to the Pro Forma Statements of Income of the Acquired Properties (as listed in Item 5 of the Current Report on Form 8-K) included in the Current Report on Form 8-K dated October 16, 1998, filed with the Securities and Exchange Commission. ARTHUR ANDERSEN LLP Orange County, California October 16, 1998 -----END PRIVACY-ENHANCED MESSAGE-----