NHPI Form 8-K

-----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, KljLdXSB+rFOKRTbj1o+judv030H6UvoZNLwgjcnyRUxHXZU7+X8BtiZlVsQsTBC 7adl/rVcoc2oKBqXArKh6A== 0001193125-08-037601.txt : 20080225 0001193125-08-037601.hdr.sgml : 20080225 20080225172716 ACCESSION NUMBER: 0001193125-08-037601 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 127 CONFORMED PERIOD OF REPORT: 20080225 ITEM INFORMATION: Entry into a Material Definitive Agreement ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Regulation FD Disclosure ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20080225 DATE AS OF CHANGE: 20080225 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: 1934 Act SEC FILE NUMBER: 001-09028 FILM NUMBER: 08640424 BUSINESS ADDRESS: STREET 1: 610 NEWPORT CENTER DR STREET 2: STE 1150 CITY: NEWPORT BEACH STATE: CA ZIP: 92660-6429 BUSINESS PHONE: 9497184400 MAIL ADDRESS: STREET 1: 610 NEWPORT CENTER DR STREET 2: STE 1150 CITY: NEWPORT BEACH STATE: CA ZIP: 92660-6429 FORMER COMPANY: FORMER CONFORMED NAME: BEVERLY INVESTMENT PROPERTIES INC DATE OF NAME CHANGE: 19890515 8-K 1 d8k.htm NHPI FORM 8-K NHPI Form 8-K

UNITED STATES

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): February 25, 2008

NATIONWIDE HEALTH PROPERTIES, INC.

(Exact Name of Registrant as Specified in its Charter)


Maryland	1-9028	95-3997619
(State or Other Jurisdiction of Incorporation or Organization)	(Commission File Number)	(I.R.S. Employer Identification No.)

610 Newport Center Drive, Suite 1150

Newport Beach, California

92660-6429

(Address of Principal Executive Offices)

(Zip Code)

(949) 718-4400

(Registrant’s Telephone Number, Including Area Code)

Not applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 240.425)

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEM 1.01

ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT

On February 25, 2008, Nationwide Health Properties, Inc., a Maryland corporation (together with its subsidiaries, the “Company”), entered into a Formation and Contribution Agreement and Joint Escrow Instructions (the “Contribution Agreement”) with Pacific Medical Buildings LLC, a California limited liability company (“PMB”), and certain of its affiliates. Formed in 1988 and based in San Diego, California, PMB specializes in developing and operating medical office buildings (“MOBs”), outpatient facilities and parking structures for medical groups and hospitals. The Contribution Agreement provides for the Company to acquire up to 18 MOBs for $747.6 million, including the assumption of approximately $282.6 million of indebtedness.

The 18 MOBs, which comprise approximately 1.6 million square feet and include six that are currently in development, are located in California (12), Nevada (3), Hawaii (1), Oregon (1) and Arizona (1). The acquisition of each of the MOBs is subject to the satisfaction of customary closing conditions. Fourteen of the MOBs are expected to be acquired in 2008, two in 2009 and two in 2010.

A significant portion of the consideration for the MOBs is expected be paid in the form of interests in a newly formed limited partnership in which the Company will be the general partner. After a one year holding period, units of limited partnership interest in this partnership will be exchangeable for cash or, at the Company’s option, shares of the Company’s common stock, initially on a one-for-one basis. The number of partnership units issued at each closing will be determined based on the average closing price of the Company’s common stock during the 20 consecutive trading days ending on the fifth trading day prior to the applicable closing, subject to a floor of $29 and a cap of $33 for closings occurring in 2008. At closing, the Company will enter into a registration rights agreement whereby the Company will agree to register the shares of Company common stock that may be issued in the future in exchange for the partnership units.

The Contribution Agreement provides that, after the first closing, the Company’s Board of Directors will be expanded, and a person designated by PMB who has been determined by the Company’s Board of Directors (or its corporate governance and nominating committee) to be qualified to serve will be appointed to fill the resulting vacancy. It is expected that Dr. Jeffrey Rush, PMB’s Chairman, will be designated by PMB to join the Company’s Board of Directors.

At the first closing under the Contribution Agreement, the Company will enter into an agreement with PMB in which the Company will obtain the right, but not the obligation, to acquire up to $1 billion of MOBs developed by PMB over the following seven years.

The Company has also entered into a purchase agreement with PMB to acquire a 50% interest in PMB Real Estate Services LLC (“PMBRES”), a full service property management company. In consideration for the 50% interest, the Company will pay $1 million at closing, plus additional payments on or before March 31, 2010 and 2011 equal to 6x the normalized net operating profit of PMBRES for 2009 and 2010, respectively (in each case, less the amount of all prior payments). PMBRES will be operated as a joint venture between the Company and PMB, with each having the right to appoint two persons to PMBRES’s board of managers. The Company will enter into an agreement with PMBRES under which PMBRES will provide property and asset management services for the MOBs acquired from PMB for a term of ten years. The agreement will provide for an annual asset management fee of 0.65% of revenues, an annual property management fee of 4.0% of revenues, and standard leasing and construction management fees.

In addition to the MOBs to be acquired under the Contribution Agreement, in the fourth quarter of 2007, in association with PMB, the Company acquired seven MOBs in the State of Washington for approximately $120 million, and the Company is also negotiating with PMB to acquire three more MOBs for approximately $60 million. When these ten MOBs are added to the 18 to be acquired under the Contribution Agreement, the total acquisition portfolio consists of 28 properties with approximately two million rentable square feet.

ITEM 2.02

RESULTS OF OPERATIONS AND FINANCIAL CONDITION

On February 25, 2008, the Company issued a press release, which sets forth its results of operations for the quarter and year ended December 31, 2007. The press release refers to a supplemental information package that is available on our website, free of charge, at www.nhp-reit.com. A copy of the press release and supplemental information package are attached hereto as Exhibits 99.1 and 99.2, respectively, and are incorporated herein by this reference.

Such information shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and is not incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filing.

ITEM 7.01

REGULATION FD DISCLOSURE

On February 25, 2008, the Company issued a press release relating to the PMB transaction. The press release refers to a supplemental information package that is available on our website, free of charge, at www.nhp-reit.com. A copy of the press release and supplemental information package are attached hereto as Exhibits 99.3 and 99.4, respectively, and are incorporated herein by this reference.

The Company has provided to analysts a brochure and a DVD entitled “Realizing the Rewards of Vision,” which describes the PMB transaction. The brochure is available on our website, and the DVD may be viewed on our website, free of charge, at www.nhp-reit.com. The brochure and a transcript of the DVD are also attached hereto as Exhibits 99.5 and 99.6, respectively, and are incorporated herein by this reference.

Such information shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, and is not incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filing.

ITEM 9.01

FINANCIAL STATEMENTS AND EXHIBITS

(d) Exhibits.


Exhibit Number		Description

99.1		Press Release, dated February 25, 2008, announcing the Company’s results of operations.

99.2		Supplemental information package for the year ended December 31, 2007.

99.3		Press Release, dated February 25, 2008, announcing the PMB transaction.

99.4		Supplemental information package for the PMB transaction.

99.5		Brochure entitled “Realizing the Rewards of Vision.”

99.6		Transcript of DVD entitled “Realizing the Rewards of Vision.”

SIGNATURE

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. (Registrant)

Date: February 25, 2008	By:	/s/Abdo H. Khoury
		Abdo H. Khoury Senior Vice President and Chief Financial and Portfolio Officer

Exhibit Index


Exhibit Number		Description
99.1		Press Release, dated February 25, 2008, announcing the Company’s results of operations.

99.2		Supplemental information package for the year ended December 31, 2007.

99.3		Press Release, dated February 25, 2008, announcing the PMB transaction.

99.4		Supplemental information package for the PMB transaction.

99.5		Brochure entitled “Realizing the Rewards of Vision.”

99.6		Transcript of DVD entitled “Realizing the Rewards of Vision.”

EX-99.1 2 dex991.htm PRESS RELEASE DATED 02/25/2008 ANNOUNCING COMPANY'S RESULTS OF OPERATIONS Press Release dated 02/25/2008 announcing Company's results of operations

Exhibit 99.1

FOR IMMEDIATE RELEASE

CONTACT:

Abdo H. Khoury

Chief Financial and Portfolio Officer

(949) 718-4400

NHP REPORTS FOURTH QUARTER AND FULL YEAR 2007 EARNINGS

•

2007 INVESTMENTS TOTAL $1.1 BILLION

•

2008 DIVIDEND INCREASED 7.3%

•

ANNUAL REVENUES INCREASED 34.5%

•

NORMALIZED ANNUAL FFO PER SHARE UP 7.8%

(NEWPORT BEACH, California, February 25, 2008)… Nationwide Health Properties, Inc. (NYSE:NHP) today announced its fourth quarter and full year 2007 operating results and investment activity.

“We ended 2007 on a strong note with fourth quarter revenues up 29.1% and normalized FFO per share up 12.5% over fourth quarter 2006 which enabled us to increase our quarterly per share dividend in January 2008 by $0.03, or $0.12 on an annual basis,” commented Douglas M. Pasquale, NHP’s President and Chief Executive Officer. “This has been a successful year for NHP, and the numbers clearly tell the tale. With $376 million of closed investments during the quarter bringing our total for the year to $1.1 billion, an increase in revenues for the year of 34.5%, an increase in normalized FFO per share of 7.8% and a $0.10 increase in the dividend over 2006, this was clearly a year of growth,” Mr. Pasquale added.

2007 FOURTH QUARTER RESULTS

The following table presents selected financial results for the fourth quarter and full year 2007 as compared to the fourth quarter and full year 2006:

SELECTED FINANCIAL RESULTS

($ in thousands, except per share amounts)


Three Months Ended December 31,
Item	2007		2006		Change
Revenues	$	89,457	$	69,291	$	20,166		29.1	%
Income from Continuing Operations	$	41,935	$	18,739	$	23,196		123.8	%
Net Income	$	53,236	$	102,757	$	(49,521	)	(48.2	)%
Diluted Income from Continuing Operations Available to Common Stockholders Per Share	$	0.42	$	0.18	$	0.24		133.3	%
Diluted Income Available to Common Stockholders Per Share	$	0.54	$	1.16	$	(0.62	)	(53.4	)%
Diluted FFO	$	54,989	$	43,590	$	11,399		26.2	%
Diluted FFO Per Share	$	0.56	$	0.48	$	0.08		16.7	%
Normalized Diluted FFO	$	53,322	$	43,590	$	9,732		22.3	%
Normalized Diluted FFO Per Share	$	0.54	$	0.48	$	0.06		12.5	%

Twelve Months Ended December 31,
Revenues	$	329,238	$	244,856	$	84,382		34.5	%
Income from Continuing Operations	$	145,969	$	65,016	$	80,953		124.5	%
Net Income	$	224,458	$	185,577	$	38,881		21.0	%
Diluted Income from Continuing Operations Available to Common Stockholders Per Share	$	1.45	$	0.64	$	0.81		126.6	%
Diluted Income Available to Common Stockholders Per Share	$	2.32	$	2.19	$	0.13		5.9	%
Diluted FFO	$	203,203	$	159,587	$	43,616		27.3	%
Diluted FFO Per Share	$	2.12	$	1.93	$	0.19		9.8	%
Normalized Diluted FFO	$	199,571	$	159,670	$	39,901		25.0	%
Normalized Diluted FFO Per Share	$	2.08	$	1.93	$	0.15		7.8	%

Funds From Operations (FFO)

FFO is a non-GAAP measure that NHP believes is important to an understanding of its operations. A reconciliation between net income, the most directly comparable GAAP financial measure, and FFO is included in the accompanying financial data. We believe FFO is an important supplemental measure of operating performance because it excludes the effects of depreciation 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).

The fourth quarter normalized FFO amounts above exclude approximately $1.7 million ($0.02 per share) of previously reserved rent, interest and late charges recognized when paid during the fourth quarter of 2007 on a portfolio that was restructured during the quarter and the full year 2007 normalized FFO amounts include a total of

approximately $3.6 million ($0.04 per share) of previously reserved rent, interest and late charges recognized when paid during the third and fourth quarters related to the above mentioned restructuring and one other in the third quarter.

These results also include gains on the sale of certain assets shown in the accompanying income statement that caused the income from continuing operations and net income results in 2007 to be significantly higher than in 2006. These gains totaled $16.1 million ($0.17 per share) in the fourth quarter of 2007 and $46.0 million ($0.50 per share) for the full year 2007. Income from continuing operations does not include the gains on sale or the operations of facilities sold that qualified as discontinued operations for any period presented in the accompanying income statement, however it does include the gains on sale and historical operations of facilities we sold to our unconsolidated joint venture.

NEW INVESTMENTS

The following tables summarize our fourth quarter and full year investment activity:


FOURTH QUARTER 2007 CLOSED INVESTMENTS
Type	Amount (millions)		Unit Price (thousands)			Cap Rate		Initial Yield		CPI Ups		DARM Cover
Senior Housing	$	50	$	207		9.8	%	7.6	%	3.0	%	1.6x
Long-Term Care	$	78	$	128		10.8	%	8.6	%	3.0	%	1.5x
Medical Office	$	248	$	215	/sf	6.5	%	6.5	%

Total	$	376


2007 CLOSED INVESTMENTS
Type	Amount (millions)		Unit Price (thousands)			Cap Rate		Initial Yield		CPI Ups		DARM Cover
Senior Housing	$	286	$	105		8.9	%	8.2	%	2.8	%	1.3x
CCRC	$	39	$	74		11.1	%	8.8	%	2.5	%	1.6x
Long-Term Care	$	362	$	88		11.4	%	8.5	%	2.4	%	1.8x
Medical Office	$	327	$	204	/sf	6.7	%	6.7	%

Subtotal	$	1,014

Loans	$	47						11.0	%

Total	$	1,061

Included in these numbers are acquisitions from third parties financed through our unconsolidated joint venture which are broken out in our supplemental information package (but excluded are the 19 facilities acquired by the joint venture from us for $227 million during 2007). Approximately 75% of the acquired loans shown above had maturity dates in 2007 and 2008.

2007 FINANCING TRANSACTIONS

During 2007, we issued approximately 7.8 million common shares through our controlled equity offering program at an average price of $31.52 per share resulting in net proceeds of approximately $242.9 million.

On October 1, 2007, we redeemed all 900,485 shares of our Series A Cumulative Preferred Step-Up REIT Securities at their $100 per share redemption value for a total of $90,048,500. The final dividend on these shares was paid concurrently.

On October 19, 2007, we issued $300 million of 6.25% senior unsecured notes maturing on February 1, 2013, resulting in net proceeds of approximately $297 million after deducting underwriting discounts and other expenses. During the months of August and September, we hedged the treasury rate on $250 million of the notes resulting in a cash payment to us of $1.6 million that will reduce our interest expense over the life of the notes.

2008 GUIDANCE

We are initiating our full-year 2008 guidance at this time. For 2008 we will be providing guidance for both FFO and Funds Available for Distribution (FAD). Our diluted FFO per share range is from $2.17 to $2.22. Our diluted FAD per share range is from $2.08 to $2.12. This range includes the effects of the Pacific Medical Buildings

transaction announced via a separate press release dated February 25, 2008 and the sale of the Emeritus portfolio mentioned therein. While we expect to continue to make accretive acquisitions during 2008, both our FFO and FAD guidance ranges are before any additional acquisitions, impairments or capital transactions. However, this guidance assumes mortgage loan receivable prepayments and expected dispositions during 2008 as described in our supplemental information package available on our website.

FAD is a non-GAAP measure that we believe is important to an understanding of our operations. We believe FAD is an important supplemental measure of operating performance because it excludes the effects of depreciation 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) like FFO and it also excludes straight-lined rent and other non-cash items that have become more significant for NHP and our competitors over the last several years. A reconciliation between net income per share and FFO per share and a reconciliation between net income per share and FAD per share for the guidance range is included in the accompanying financial data as we believe net income per share is the most directly comparable GAAP measure.

CONFERENCE CALL INFORMATION

The Company has scheduled a conference call and webcast on Tuesday, February 26, 2008 at 8:30 a.m. Pacific time in order to present the Company’s performance and operating results for the quarter and year ended December 31, 2007. The conference call is accessible by dialing (877) 356-5705 and referencing conference ID number 34719103 or by logging on to our website at

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 11:00 a.m. Pacific time that day until 9:00 p.m. Pacific time on Wednesday, March 12, 2008. Callers can access the replay by dialing (800) 642-1687 or (706) 645-9291 and entering conference ID number 34719103. Webcast replays will also be available on our website for at least 12 months following the conference call. The Company’s supplemental information package for the fourth quarter and year ended December 31, 2007 is available on our website, free of charge, at www.nhp-reit.com by selecting financial information followed by analyst information and will also be included in our Current Report on Form 8-K filed February 25, 2008 with the SEC containing this release.

Nationwide Health Properties, Inc. is a real estate investment trust that invests in senior housing facilities, long-term care facilities and medical office buildings. The Company has investments in 567 facilities in 43 states. For more information on Nationwide Health Properties, Inc., visit our website at www.nhp-reit.com.

###

Certain information contained in this 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, including statements regarding the proposed transaction between NHP and Pacific Medical Buildings (“PMB”) and the benefits of the proposed transaction. 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. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those described in the statements. Risks and uncertainties associated with the PMB transaction include (without limitation) the following: delay or failure to obtain third party consents; the exclusion of certain properties (which may include properties described herein) from the transaction; uncertainty as to whether the transaction will be completed; the failure to achieve the perceived advantages from the transaction; larger than expected or unexpected costs associated with the transaction; unexpected liabilities resulting from the transaction; potential litigation associated with the transaction; and the retention of key personnel

after the transaction. Other risks and uncertainties associated with our business, many of which will apply to the assets acquired in the PMB transaction, include (without limitation) the following: deterioration in the operating results or financial condition, including bankruptcies, of our tenants; non-payment or late payment of rent by our tenants; our reliance on two operators for a significant percentage of our revenues; occupancy levels at certain facilities; our level of indebtedness; 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; increasing competition in our business sector; 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; our ability to retain key personnel; potential liability under environmental laws; the possibility that we could be required to repurchase some of our medium-term notes; the rights and influence of holders of our outstanding preferred stock; 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 other factors discussed from time to time in our news releases, public statements and/or filings with the Securities and Exchange Commission, especially the “Risk Factors” sections of our Annual and Quarterly Reports on Forms 10-K and 10-Q. Forward-looking information is provided by NHP pursuant to the safe harbor established under the Private Securities Litigation Reform Act of 1995 and should be evaluated in the context of these factors. We disclaim any intent or obligation to update these forward-looking statements.

Consolidated Statements of Operations

In thousands, except per share data


	Three Months Ended December 31,						Twelve Months Ended December 31,
	2007			2006			2007			2006
Revenues:
Triple net lease rent	$	76,492		$	62,971		$	291,315		$	221,797
Medical office building operating rent		6,928			2,798			16,061			9,700

		83,420			65,769			307,376			231,497
Interest and other income		6,037			3,522			21,862			13,359

		89,457			69,291			329,238			244,856
Expenses:
Interest and amortization of deferred financing costs		26,448			24,416			101,703			89,692
Depreciation and amortization		27,505			20,186			96,730			68,771
General and administrative		6,937			3,838			24,429			15,656
Medical office building operating expenses		3,519			2,247			8,622			6,142

		64,409			50,687			231,484			180,261

Income before minority interest and unconsolidated joint venture		25,048			18,604			97,754			64,595
Minority interest in net loss of consolidated joint ventures		73			135			212			421
Income from unconsolidated joint venture		717			—			1,958			—
Gain on sale of facilities to joint venture		16,097			—			46,045			—

Income from continuing operations		41,935			18,739			145,969			65,016
Discontinued operations
Gain on sale of facilities, net		10,783			79,283			72,069			96,791
Income (loss) from discontinued operations		518			4,735			6,420			23,770

		11,301			84,018			78,489			120,561

Net income		53,236			102,757			224,458			185,577
Preferred stock dividends		(2,062	)		(3,791	)		(13,434	)		(15,163	)

Income available to common stockholders	$	51,174		$	98,966		$	211,024		$	170,414

Basic earnings per share (EPS):
Income from continuing operations excluding gains	$	0.26		$	0.18		$	0.95		$	0.64
Gains in income from continuing operations		0.17			—			0.51			—

Income from continuing operations		0.43			0.18			1.46			0.64
Discontinued operations		0.12			0.98			0.87			1.56

Income available to common stockholders	$	0.55		$	1.16		$	2.33		$	2.20

Diluted EPS:
Income from continuing operations excluding gains	$	0.25		$	0.18		$	0.95		$	0.64
Gains in income from continuing operations		0.17			—			0.50			—

Income from continuing operations		0.42			0.18			1.45			0.64
Discontinued operations		0.12			0.98			0.87			1.55

Income	$	0.54		$	1.16		$	2.32		$	2.19

Weighted average shares outstanding for EPS:
Basic		93,399			84,995			90,625			77,489

Diluted		93,990			85,392			91,129			77,879

Reconciliation of Net Income to Funds From Operations (FFO)

In thousands, except per share data


	Three Months Ended December 31,						Twelve Months Ended December 31,
	2007			2006			2007			2006
Net income to FFO
Net income	$	53,236		$	102,757		$	224,458		$	185,577
Preferred stock dividends		(2,062	)		(3,791	)		(13,434	)		(15,163	)
Real estate related depreciation and amortization		27,965			21,845			100,340			77,714
Depreciation in income from unconsolidated joint venture		668			—			1,703			—
Gains on sale of facilities		(26,880	)		(79,283	)		(118,114	)		(96,791	)

FFO available to common stockholders		52,927			41,528			194,953			151,337
Series B preferred dividend add-back		2,062			2,062			8,250			8,250

Diluted FFO		54,989			43,590			203,203			159,587
Impairments		—			—			—			83
Non-recurring settlement of delinquent tenant obligations		(1,667	)		—			(3,632	)		—

Recurring diluted FFO	$	53,322		$	43,590		$	199,571		$	159,670

Weighted average shares outstanding for FFO
Diluted weighted average shares outstanding		93,990			85,392			91,129			77,879
Series B preferred stock add-back		4,717			4,693			4,707			4,688

Fully diluted weighted average shares outstanding		98,707			90,085			95,836			82,567

Diluted per share amounts:
FFO	$	0.56		$	0.48		$	2.12		$	1.93

Recurring FFO	$	0.54		$	0.48		$	2.08		$	1.93

Dividends declared per common share	$	0.41		$	0.39		$	1.64		$	1.54

Recurring FFO payout ratio		76	%		81	%		79	%		80	%

Recurring FFO Coverage		1.32			1.23			1.27			1.25

Reconciliation of 2008 Net Income Guidance to 2008 Diluted FFO and Diluted FAD Guidance


	Low			High
Net income	$	1.21		$	1.26
Real estate related depreciation and amortization		1.21			1.21
Less: gains on sale		(0.23	)		(0.23	)
Dilution from convertible preferred stock		(0.02	)		(0.02	)

Diluted FFO guidance	$	2.17		$	2.22

Straight-lined rent		(0.11	)		(0.11	)
Non-cash stock-based compensation expense		0.05			0.05
Deferred finance cost amortization		0.03			0.03
Lease commissions and tenant and capital improvements		(0.06	)		(0.07	)

Diluted FAD guidance	$	2.08		$	2.12

Consolidated Balance Sheets

In thousands


	December 31, 2007			December 31, 2006
Assets
Real estate related investments:
Land	$	301,100		$	267,303
Buildings and improvements		2,896,876			2,581,484

		3,197,976			2,848,787
Less accumulated depreciation		(410,865	)		(372,201	)

Net real estate		2,787,111			2,476,586
Mortgage loans receivable, net		121,694			106,929
Investment in unconsolidated joint venture		52,637			— —

Net real estate related investments		2,961,442			2,583,515
Cash and cash equivalents		19,407			14,695
Receivables, net		3,808			7,787
Assets held for sale		— —			9,484
Other assets		159,696			89,333

Total assets	$	3,144,353		$	2,704,814


Liabilities and Stockholders’ Equity
Credit facility	$	41,000		$	139,000
Senior notes due 2008—2038		1,166,500			887,500
Notes and bonds payable		340,150			355,411
Accounts payable and accrued liabilities		107,844			77,829

Total liabilities		1,655,494			1,459,740
Minority interest		6,166			1,265
Stockholders’ equity:
Series A preferred stock		— —			90,049
Series B convertible preferred stock		106,445			106,450
Common stock		9,481			8,624
Capital in excess of par value		1,565,249			1,298,703
Cumulative net income		1,288,751			1,064,293
Accumulated other comprehensive income		2,561			1,231
Cumulative dividends		(1,489,794	)		(1,325,541	)

Total stockholders’ equity		1,482,693			1,243,809

Total liabilities and stockholders’ equity	$	3,144,353		$	2,704,814

EX-99.2 3 dex992.htm SUPPLEMENTAL INFORMATION PACKAGE FOR YEAR ENDED 12/31/2007 Supplemental information package for year ended 12/31/2007

December 31, 2007

Supplemental Information

EXHIBIT 99.2

December 31, 2007—

Disclaimer

Certain information contained in this presentation 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, including statements regarding the proposed

transaction between NHP and PMB and the benefits of the proposed

transaction. 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.

These forward-looking statements involve risks and uncertainties that

could cause actual results to differ materially from those described in

the statements. Risks and uncertainties associated with the PMB

transaction include

(without

limitation)

the

following:

delay

failure

obtain third party consents; the exclusion of certain properties

(which

may include properties described herein) from the transaction;

uncertainty as

whether

the

transaction

will

completed;

the

failure

to achieve

the

perceived

advantages

from

the

transaction;

larger

than

expected or unexpected costs associated with the transaction;

unexpected liabilities

resulting

from

the

transaction;

potential

litigation

associated with the transaction; and the retention of key personnel

after the transaction.

Other risks and uncertainties associated with our business, many

which will apply to the assets acquired in the PMB transaction,

include (without limitation) the following: deterioration in the operating

results or financial condition, including bankruptcies, of our tenants;

non-payment or late payment of rent by our tenants; our reliance on

two operators for a significant percentage of our revenues; occupancy

levels at

certain

facilities;

our

level

indebtedness;

changes

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; increasing competition

in our business sector; 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; our ability to retain

key personnel; potential liability under environmental laws; the

possibility that we could be required to repurchase some of our

medium-term notes; the rights and influence of holders of our

outstanding preferred stock; 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

other factors discussed from time to time in our news releases, public

statements and/or filings with the Securities and Exchange

Commission, especially

the

"Risk

Factors"

sections

our

Annual

and

Quarterly Reports on Forms 10-K and 10-Q.

Forward-looking information is provided by NHP pursuant to the safe

harbor established under the Private Securities Litigation Reform Act

of 1995 and should be evaluated in the context of these factors.

disclaim any intent or obligation to update these forward-looking

statements.

December 31, 2007—

Contents

Portfolio Performance Measures Definitions

Medical Office Building Portfolio Performance Metrics

Unconsolidated JV Portfolio Performance Metrics

Geographic Benchmarks

Tenant Benchmarks

Consolidated Portfolio Performance Metrics—Same Store and Total

Portfolio Summary

Financial Measures Definitions

PORTFOLIO OVERVIEW_____________________________________________________________________

4 Quarter 2007 Investments

INVESTMENTS & DISPOSITIONS________________________________________________________________

Lease Expirations and Mortgage Loans Receivable Principal Payments

Expected Dispositions

2007 Investments

Unconsolidated Joint Venture Financial Statements

Interest and Fixed Charge Coverage

Debt Maturities and Debt Composition

Capitalization

Consolidated Balance Sheets

Reconciliation of Net Income to Funds Available for Distribution (FAD)

Reconciliation of Net Income to Funds From Operations (FFO)

Consolidated Statement of Operations

FINANCIAL RESULTS_________________________________________________________________________

COMPANY FACT SHEET______________________________________________________________________

December 31, 2007—

Company Fact Sheet

REIT structure provides opportunity to invest directly in real estate and

indirectly in healthcare industry

Quality healthcare real estate portfolio

Long-term triple-net master leases with quality operators

Strong affiliations with premiere hospital systems in growing medical office

building markets

Senior housing care a vital component of U.S. economy

High dividend yield and high dividend coverage

Financial stability

Well positioned to take advantage of investment opportunities and to

conservatively grow earnings and dividends

NHP is one of the few healthcare REITs with investment grade ratings by

Moody’s, Standard & Poors

and Fitch.

Nationwide Health Properties, Inc. (NHP), incorporated October 1985, is a

publicly traded

real

estate

investment

trust

(REIT)

that

invests

senior

housing

facilities, long-term care facilities and medical office buildings throughout the

United States. NHP generally acquires real estate and then leases the assets

under long-term triple-net master leases to senior housing and long-term care

operators and

various

types

leases

multiple

tenants

the

case

medical

office buildings.

As a

REIT

specializing

healthcare

real

estate,

NHP

provides

focused

investment strategy with a well diversified portfolio. NHP employs a conservative,

long-term approach to real estate investments with an experienced professional

management team having extensive operating, real estate and finance

backgrounds.

$3.9 billion in healthcare real estate

560 properties in 43 states

271

Assisted and Independent Living

181

Skilled Nursing

57 Medical Office Buildings

Other

34 Unconsolidated JV Facilities

Over 80 multi-facility operators

Market Facts

Enterprise Value

$4.7 billion

Closing Price

$31.37

Market Capitalization

$3.0 billion

Dividend & Yield

$1.64 (5.2%)

52 week range

$22.63 –

$35.01

Shares Outstanding

94.8 million

Company Profile

Investor Highlights

Our Portfolio

(6%)

(4%)

(10%)

(15%)

Credit Ratings

S&P BBB-

Moody’s Baa3

Fitch BBB-

as of December 31, 2007

December 31, 2007—

FINANCIAL RESULTS

December 31, 2007—

Consolidated Statement of Operations

In thousands, except per share data

2007

2006

2007

2006

Revenues:

Triple net lease rent

$ 76,492

$ 62,971

$ 291,315

$ 221,797

Medical office building operating rent

6,928

2,798

16,061

9,700

83,420

65,769

307,376

231,497

Interest and other income

6,037

3,522

21,862

13,359

89,457

69,291

329,238

244,856

Expenses:

Interest and amortization of deferred financing costs

26,448

24,416

101,703

89,692

Depreciation and amortization

27,505

20,186

96,730

68,771

General and administrative

6,937

3,838

24,429

15,656

Medical office building operating expenses

3,519

2,247

8,622

6,142

64,409

50,687

231,484

180,261

Income before minority interest and unconsolidated joint venture

25,048

18,604

97,754

64,595

Minority interest in net loss of consolidated joint ventures

135

212

421

Income from unconsolidated joint venture

717

---

1,958

---

Gain on sale of facilities to joint venture

16,097

---

46,045

---

Income from continuing operations

41,935

18,739

145,969

65,016

Discontinued operations

Gain on sale of facilities, net

10,783

79,283

72,069

96,791

Income (loss) from discontinued operations

518

4,735

6,420

23,770

11,301

84,018

78,489

120,561

Net income

53,236

102,757

224,458

185,577

Preferred stock dividends

(2,062)

(3,791)

(13,434)

(15,163)

Income available to common stockholders

51,174

98,966

211,024

170,414

Basic earnings per share (EPS):

Income from continuing operations excluding gains

$ 0.26

$ 0.18

$ 0.95

$ 0.64

Gains in income from continuing operations

0.17

0.51

Income from continuing operations

0.43

0.18

1.46

0.64

Discontinued operations

0.12

0.98

0.87

1.56

Income available to common stockholders

$ 0.55

$ 1.16

$ 2.33

$ 2.20

Diluted EPS:

Income from continuing operations excluding gains

$ 0.25

$ 0.18

$ 0.95

$ 0.64

Gains in income from continuing operations

0.17

0.50

Income from continuing operations

0.42

0.18

1.45

0.64

Discontinued operations

0.12

0.98

0.87

1.55

Income

$ 0.54

$ 1.16

$ 2.32

$ 2.19

Weighted average shares outstanding for EPS:

Basic

93,399

84,995

90,625

77,489

Diluted

93,990

85,392

91,129

77,879

Three Months Ended December 31,

Twelve Months Ended December 31,

December 31, 2007—

Reconciliation of Net Income to Funds From Operations (FFO)

See Financial Measures Definitions

2007

2006

2007

2006

Net income to FFO

Net income

53,236

102,757

224,458

185,577

Preferred stock dividends

(2,062)

(3,791)

(13,434)

(15,163)

Real estate related depreciation and amortization

27,965

21,845

100,340

77,714

Depreciation in income from unconsolidated joint venture

668

---

1,703

---

Gains on sale of facilities

(26,880)

(79,283)

(118,114)

(96,791)

FFO available to common stockholders

52,927

41,528

194,953

151,337

Series B preferred dividend add-back

2,062

8,250

Diluted FFO

54,989

43,590

203,203

159,587

Impairments

---

Non-recurring settlement of delinquent tenant obligations

(1,667)

---

(3,632)

---

Normalized diluted FFO

53,322

43,590

199,571

159,670

Weighted average shares outstanding for FFO

Diluted weighted average shares outstanding

93,990

85,392

91,129

77,879

Series B preferred stock add-back

4,717

4,693

4,707

4,688

Fully diluted weighted average shares outstanding

98,707

90,085

95,836

82,567

Diluted per share amounts:

FFO

0.56

0.48

2.12

1.93

Normalized FFO

0.54

0.48

2.08

1.93

Dividends declared per common share

0.41

0.39

1.64

1.54

Normalized FFO payout ratio

76%

81%

79%

80%

Normalized FFO Coverage

1.32

1.23

1.27

1.25

In thousands, except per share data

Three Months Ended December 31,

Twelve Months Ended December 31,

December 31, 2007—

Reconciliation of Net Income to Funds Available for Distribution

(FAD)

See Financial Measures Definitions

2007

2006

2007

2006

Net income to FAD:

Net income

53,236

102,757

224,458

185,577

Preferred stock dividends

(2,062)

(3,791)

(13,434)

(15,163)

Real estate related depreciation and amortization

27,965

21,845

100,340

77,714

Gains on sale of facilities

(26,880)

(79,283)

(118,114)

(96,791)

Straight-lined rent

(1,735)

(395)

(2,886)

(786)

Amortization of above and below market lease intangibles

289

Non-cash stock-based compensation expense

1,247

4,733

1,863

Deferred finance cost amortization

737

726

2,803

2,673

Lease commissions and tenant and capital improvements

(1,260)

(467)

(2,758)

(1,260)

Impairments

---

NHP's share of FAD reconciling items from unconsolidated joint venture

Real estate related depreciation and amortization

668

---

1,703

---

Deferred finance cost amortization

---

FAD available to common stockholders

51,954

41,474

196,931

154,199

Series B preferred dividend add-back

2,062

8,250

Diluted FAD

54,016

43,536

205,181

162,449

Non-recurring settlement of delinquent tenant obligations

(1,667)

---

(3,632)

---

Normalized diluted FAD

52,349

43,536

201,549

162,449

Weighted average shares outstanding for FAD

Weighted average shares outstanding

93,990

85,392

91,129

77,879

Series B preferred stock add-back

4,717

4,693

4,707

4,688

Fully diluted weighted average shares outstanding

98,707

90,085

95,836

82,567

Diluted per share amounts:

FAD

0.55

0.48

2.14

1.97

Normalized FAD

0.53

0.48

2.10

1.97

Dividends declared per common share

0.41

0.39

1.64

1.54

Normalized FAD payout ratio

77%

81%

78%

Normalized FAD Coverage

1.29

1.23

1.28

In thousands, except per share data

Three Months Ended December 31,

Twelve Months Ended December 31,

December 31, 2007—

Reconciliation of 2008 Net Income Guidance to Diluted FFO and Diluted FAD Guidance

See Financial Measures Definitions

Low

High

Net Income Guidance

$ 1.21

$ 1.26

Real estate related depreciation and amortization

1.21

Less: gains on sale

(0.23)

Dilution from convertible preferred stock

(0.02)

Diluted FFO Guidance

2.17

2.22

Straight-lined rent

(0.11)

Non-cash stock-based compensation expense

0.05

Deferred finance cost amortization

0.03

Lease commissions and tenant and capital improvements

(0.06)

(0.07)

Diluted FAD Guidance

$ 2.08

$ 2.12

All amounts on a per share basis

December 31, 2007—

Consolidated Balance Sheets

December 31,

2007

2006

Assets

Real estate related investments:

Land

301,100

267,303

Buildings and improvements

2,896,876

2,581,484

3,197,976

2,848,787

Less accumulated depreciation

(410,865)

(372,201)

Net real estate

2,787,111

2,476,586

Mortgage loans receivable, net

121,694

106,929

Investment in unconsolidated joint venture

52,637

---

Net real estate related investments

2,961,442

2,583,515

Cash and cash equivalents

19,407

14,695

Receivables, net

3,808

7,787

Assets held for sale

---

9,484

Other assets

159,696

89,333

Total assets

3,144,353

2,704,814

Liabilities and Stockholders' Equity

Credit facility

41,000

139,000

Senior notes due 2008 - 2038

1,166,500

887,500

Notes and bonds payable

340,150

355,411

Accounts payable and accrued liabilities

107,844

77,829

Total liabilities

1,655,494

1,459,740

Minority interest

6,166

1,265

Stockholders' equity:

Series A preferred stock

---

90,049

Series B convertible preferred stock

106,445

106,450

Common stock

9,481

8,624

Capital in excess of par value

1,565,249

1,298,703

Cumulative net income

1,288,751

1,064,293

Accumulated other comprehensive income

2,561

1,231

Cumulative dividends

(1,489,794)

(1,325,541)

Total stockholders' equity

1,482,693

1,243,809

Total liabilities and stockholders' equity

3,144,353

2,704,814

In thousands

December 31, 2007—

Capitalization

Debt

Credit facility

41,000

$ 139,000

Senior notes

1,166,500

887,500

Notes and bonds

340,150

355,411

Consolidated debt

1,547,650

1,381,911

NHP's share of unconsolidated debt

79,234

Total debt

1,626,884

1,381,911

Book Capitalization

Consolidated debt

1,547,650

1,381,911

Minority interest

6,166

1,265

Total stockholders' equity

1,482,693

1,243,809

Consolidated book capitalization

3,036,509

2,626,985

Accumulated depreciation and amortization

410,865

372,201

Consolidated undepreciated book capitalization

3,447,374

2,999,186

NHP's share of unconsolidated debt

79,234

NHP's share of unconsolidated depreciation and amortization

1,703

Total undepreciated book capitalization

3,528,311

2,999,186

Market capitalization

Price

Common stock

94,806

31.37

2,974,057

86,238

30.22

2,606,127

Series B preferred stock

1,064

140.00

149,023

1,064

134.00

142,636

Consolidated market equity capitalization

3,123,080

2,748,763

Consolidated debt

1,547,650

1,381,911

Consolidated market capitalization

4,670,730

4,130,674

NHP's share of unconsolidated debt

79,234

Total market capitalization

4,749,964

4,130,674

Leverage Ratios

Consolidated debt to consolidated undepreciated book capitalization

44.9%

46.1%

Total debt to total undepreciated book capitalization

46.1%

Consolidated debt to consolidated market capitalization

33.1%

33.5%

Total debt to total market capitalization

34.3%

33.5%

December 31, 2006

In thousands, except stock prices and ratios

December 31, 2007

December 31, 2007—

Capitalization (2)

Undepreciated

Book Basis

Enterprise

Value

54% Equity

46% Debt

66% Equity

34% Debt

74%

Unsecured

26%

Secured

94%

Fixed

Variable

Debt Composition

December 31, 2007—

77,867

5.2%

77,867

5.2%

7,590

6.9%

85,457

5.4%

Total

41,000

5.5%

1,166,500

6.6%

340,149

6.2%

1,547,649

6.5%

79,234

6.0%

1,626,883

6.5%

Weighted average

maturity in years

3.0

4.5

8.3

5.3

7.9

5.4

Principal

Rate

% of Total

Principal

Rate

% of Total

Fixed rate debt

Senior notes

1,166,500

6.6%

71.7%

$ 887,500

6.7%

64.2%

Notes and bonds

277,929

6.3%

17.1%

295,045

6.4%

21.4%

NHP's

share of unconsolidated debt

79,234

6.0%

4.9%

0.0%

Total fixed rate debt

1,523,663

6.5%

93.7%

1,182,545

6.6%

85.6%

Variable rate debt

Credit facility

41,000

5.5%

2.5%

139,000

6.2%

10.0%

Notes and bonds

62,220

5.7%

3.8%

60,366

5.4%

4.4%

Total variable rate debt

103,220

5.6%

6.3%

199,366

6.0%

14.4%

Total debt

1,626,883

6.5%

1,381,911

6.5%

(1) Notes putable

July of 2008, 2013, 2018, 2023 and 2028 with a final maturity in 2038

(2) Notes putable

November of 2008, 2013, 2018 and 2023 with a final maturity in 2028

(3) Includes $55 million of notes putable

in October of 2009, 2012, 2017 and 2027 with a final maturity in 2037

NHP's

Share of

Unconsolidated Debt

Consolidated Debt

In thousands

Debt Maturities

Total Debt

Senior Notes

Notes and Bonds

Credit Facility

Period

December 31, 2007

December 31, 2006

Debt Composition

Debt Maturities and Debt Composition

Principal

Rate

Principal

Rate

Principal

Rate

Principal

Rate

Principal

Rate

Principal

Rate

Q1 2008

10,000

6.7%

10,000

6.7%

212

6.4%

10,212

6.7%

Q2 2008

288

6.4%

288

6.4%

Q3 2008

40,000

(1)

6.6%

40,000

6.6%

40,000

6.6%

Q4 2008

33,500

(2)

7.6%

33,500

7.6%

33,500

7.6%

2009

87,000

(3)

7.8%

39,043

6.6%

126,043

7.4%

126,043

7.4%

2010

41,000

5.5%

73,730

6.0%

114,730

5.8%

114,730

5.8%

2011

350,000

6.5%

5,343

7.7%

355,343

6.5%

355,343

6.5%

2012

96,000

8.3%

41,901

7.5%

137,901

8.1%

14,000

6.0%

151,901

7.9%

2013

300,000

6.3%

74,777

6.3%

374,777

6.3%

374,777

6.3%

2014

8,376

5.9%

8,376

5.9%

25,616

5.8%

33,992

5.8%

2015

250,000

6.0%

19,003

6.0%

269,003

6.0%

31,528

5.9%

300,531

6.0%

2016

2017

109

5.0%

109

5.0%

109

5.0%

Thereafter

December 31, 2007—

2007

2006

2007

2006

Reconciliation of Net Income to EBITDA:

Net income

53,236

102,757

224,458

185,577

Interest and amortization of deferred financing costs

26,448

24,416

101,703

89,692

Depreciation and amortization in continuing operations

27,505

20,186

96,730

68,771

Depreciation and amortization in discontinued operations

582

1,802

4,064

9,490

Consolidated EBITDA

107,771

149,161

426,955

353,530

NHP's

share of EBITDA reconciling items from unconsolidated joint venture

Interest and amortization of deferred financing costs

746

---

1,595

---

Depreciation and amortization

668

---

1,703

---

Total EBITDA

109,185

149,161

430,253

353,530

Gains on sale of facilities

(26,880)

(79,283)

(118,114)

(96,791)

Adjusted Total EBITDA

82,305

69,878

312,139

256,739

Adjusted Consolidated EBITDA

80,891

69,878

308,841

256,739

Interest Expense

Consolidated interest expense

25,711

23,690

98,900

87,019

NHP's

share of interest expense from unconsolidated joint venture

736

---

1,575

---

Total interest expense

26,447

23,690

100,475

87,019

Fixed Charges:

Consolidated Interest expense

25,711

23,690

98,900

87,019

Preferred stock dividends

2,062

3,791

Interest and Fixed Charge Coverage

See Financial Measures Definitions

13,434

15,163

Consolidated fixed charges

27,773

27,481

112,334

102,182

NHP's

share of interest expense from unconsolidated joint venture

736

---

1,575

---

Total fixed charges

28,509

27,481

113,909

102,182

Consolidated Adjusted Interest Coverage Ratio

3.15

2.95

3.12

2.95

Total Adjusted Interest Coverage Ratio

3.11

2.95

3.11

2.95

Consolidated Adjusted Fixed Charge Coverage Ratio

2.91

2.54

2.75

2.51

Total Adjusted Fixed Charge Coverage Ratio

2.89

2.54

2.74

2.51

In thousands

Three Months Ended December 31,

Twelve Months Ended December 31,

December 31, 2007—

Unconsolidated Joint Venture Financial Statements

In thousands

Three Months Ended

Twelve Months Ended

December 31, 2007

Assets

Revenues

Land

35,042

Rent

6,703

16,560

Buildings and improvements

496,188

Interest and other income

110

Gross real estate

531,230

Total revenues

6,720

16,670

Accumulated depreciation

(6,811)

Net real estate

524,419

Expenses

Cash

3,689

Interest and amortization of deferred finance costs

2,982

6,379

Receivables

Depreciation and amortization

2,674

6,811

Other assets

2,825

General and administrative*

613

1,719

Total assets

530,933

Total expenses

6,269

14,909

Liabilities and equity

Net income

451

1,761

Notes payable

316,935

Accounts payable and accrued liabilities

3,461

NHP Income and FFO from Joint Venture

Total liabilities

320,396

Share of net income -

25%

112

440

Management fee*

604

1,518

Equity contributions

216,078

Income from joint venture

716

1,958

Retained earnings

1,761

Share of depreciation -

25%

668

1,703

Distributions

(7,302)

FFO from joint venture

1,384

3,661

Total equity

210,537

* NHP's

management fee is included in the joint venture's general and administrative expense

Total liabilities and equity

530,933

NHP's

investment in joint venture

52,637

Balance Sheet

Income Statement

December 31, 2007—

Financial Measures Definitions

Adjusted EBITDA:

We believe that adjusted EBITDA is an important supplemental operating and

liquidity measure primarily because it is used in the calculation of the Adjusted

Interest Coverage Ratio and the Adjusted Fixed Charge Coverage Ratio and

we present it solely for the purpose of being used in those calculations.

Adjusted EBITDA is calculated by adding back any gains and losses on the

sale of real estate and any impairments to EBITDA for a given period. We

believe

adjusted

EBITDA

most

useful

liquidity

measure

the

ratio

calculations noted above to enable investors to determine and compare a

company’s ability to meet its interest and Fixed Charges obligations.

However,

the

methodology

for

calculating

makes

net

income

the

most

directly

comparable

GAAP

measure.

such,

believe

investors

should

consider adjusted EBITDA, cash flows from operating activities and net

income when evaluating our ability to meet our interest and Fixed Charges

obligations. The usefulness of adjusted EBITDA is limited because it doesn’t

reflect, among other things, required principal payments, cash expenditures,

capital expenditures or capital commitments. Adjusted EBITDA does not

represent

net

income

cash

flows

from

operations

defined

GAAP

and

should not considered as an alternative to either of those measures. Our

calculation of Adjusted EBITDA may not be comparable to similar measures

reported by other companies.

Adjusted Fixed Charge Coverage Ratio:

We believe that the adjusted fixed charge coverage ratio is an important

supplemental liquidity measure that reflects a company’s ability to meet its

interest and preferred dividend payment obligations and allows investors to

compare interest and dividend paying capabilities among different companies.

We calculate the adjusted fixed charge coverage ratio by dividing Adjusted

EBITDA by Fixed Charges. In addition, credit rating agencies utilize similar

ratios

evaluating

the

credit

ratings

our

debt

instruments.

This

ratio’s

usefulness is limited by the same factors that limit the usefulness of the

components Adjusted EBITDA and Fixed Charges. Our calculation of the

adjusted

fixed

charge

coverage

ratio

should

not

considered

alternative

to the ratio of earnings to fixed charges as defined by Item 503(d) of

Regulation S-K and it may not be comparable to similar ratios reported by

other companies.

Adjusted Interest Coverage Ratio:

We believe that the adjusted interest coverage ratio is an important

supplemental liquidity measure that reflects a company’s ability to meet its

interest payment obligations and allows investors to compare interest paying

capabilities among different companies. We calculate the adjusted interest

coverage ratio by dividing Adjusted EBITDA by interest expense (including

capitalized interest, if any). In addition, credit rating agencies utilize similar

ratios

evaluating

the

credit

ratings

our

debt

instruments.

This

ratio’s

usefulness is limited by the same factors that limit the usefulness of the

component Adjusted EBITDA. Our calculations of the adjusted interest

coverage ratio may not be comparable to similar ratios reported by other

companies.

EBITDA:

We believe that EBITDA is an important supplemental operating and liquidity

measure primarily because it is used in the calculation of Adjusted EBITDA

which is in turn used in the calculation of the Adjusted Interest Coverage

Ratio and the Adjusted Fixed Charge Coverage Ratio and we present it solely

for the purpose of being used in those calculations. EBITDA is calculated by

adding interest, taxes, depreciation and amortization to net income. The real

estate industry uses EBITDA as a non-GAAP measure of both operating

performance and liquidity. We believe it is most useful as a liquidity measure

in the ratio calculations noted above to enable investors to determine and

compare a company’s ability to meet its interest and Fixed Charges

obligations. However, the methodology for calculating it makes net income

the most directly comparable GAAP measure. As such, we believe investors

should

consider

EBITDA,

cash

flows

from

operating

activities

and

net

income

when evaluating our ability to meet our interest and Fixed Charges

obligations. The usefulness of EBITDA is limited because it doesn’t reflect,

among other things, required principal payments, cash expenditures, capital

expenditures or capital commitments. EBITDA does not represent net

income or cash flows from operations as defined by GAAP and should not

considered as an alternative to either of those measures. Our calculation of

EBITDA may not be comparable to similar measures reported by other

companies.

December 31, 2007—

Financial Measures Definitions (2)

FAD Payout Ratio and FFO Coverage:

The FAD payout ratio is calculated by dividing the common dividend per

share by diluted FAD per share for any given period. FAD coverage is

calculated by dividing diluted FAD per share by the common dividend per

share for any given period. We believe that both of these amounts are

important supplemental liquidity measures that enable investors to compare

dividend security among REITs.

Fixed Charges:

Fixed charges is a measure of the total interest and preferred stock dividend

obligations of a company. It is calculated by adding interest expense

(including capitalized interest, if any) and preferred stock dividends for any

given period and is utilized in calculating the Adjusted Fixed Charge

Coverage Ratio. It’s usefulness is limited as, among other things, it does not

include required principal payments or any other contractual obligations a

company may have. Our calculation of fixed charges should not be

considered an alternative to fixed charges as defined by Item 503(d) of

Regulation S-K and it may not be comparable to fixed charges reported by

other companies.

Funds Available for Distribution (“FAD”):

While

net

income

and

its

per

amounts

defined

generally

accepted

accounting

principles

("GAAP")

are

the

most

appropriate

earnings

measures, we believe that FAD and its related per share amounts are

important

supplemental

measures

operating

performance.

GAAP

requires

the use of straight-line depreciation of historical costs and implies that real

estate values diminish predictably and ratably over time. However, real

estate values have historically risen and fallen based on various market

conditions and other factors. FFO was developed as a supplemental

measure of operating performance primarily in order to exclude historical cost

based depreciation and amortization and its effects as it does not generally

reflect the actual change in value of real estate over time. FAD was

developed as a supplemental measure of operating performance primarily to

exclude non-cash revenues and expenses that are included in FFO. FAD is

defined as net income (computed in accordance with GAAP) excluding gains

and

losses

from

the

sale

real

estate

plus

real

estate

depreciation

and amortization, plus or minus straight-lined rent (plus cash in excess of rent

or minus rent in excess of cash), plus or minus amortization of above or

below market lease intangibles, plus non-cash stock based compensation,

plus deferred finance cost amortization plus any impairments minus lease

commissions,

tenant

improvements

and

capital

improvements

paid.

The

same adjustments are made to reflect our share of these same items from

unconsolidated joint ventures. We believe that the use of FAD and its related

per share amounts and FFO and its related per share amounts in conjunction

with the required GAAP disclosures provides investors with a more

comprehensive understanding of the operating results of a real estate

investment trust ("REIT") and enables investors to compare the operating

results

between

REITs

without

having

account

for

differences

caused

different depreciation assumptions and different non-cash revenues and

expenses. Additionally, FAD is widely used by industry analysts as a

measure of operating performance for equity REITs. FAD does not represent

cash flow from operating activities or net income as defined by GAAP and,

therefore should not be considered as an alternative to cash flow as a

measure of liquidity or net income as the primary indicator of operating

performance. Our calculations of FAD may not be comparable to FAD

reported by other REITs

or analysts that define it differently than we do.

Funds from Operations (“FFO”):

While

net

income

and

its

per

amounts

defined

generally

accepted

accounting

principles

("GAAP")

are

the

most

appropriate

earnings

measures, we believe that FFO and its related per share amounts are

important

supplemental

measures

operating

performance.

GAAP

requires

the use of straight-line depreciation of historical costs and implies that real

estate values diminish predictably and ratably over time. However, real

estate values have historically risen and fallen based on various market

conditions and other factors. FFO was developed as a supplemental

measure of operating performance primarily in order to exclude historical cost

based depreciation and amortization and its effects as it does not generally

reflect

the

actual

change

value

real

estate

over

time.

calculate

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 amortization. The same adjustments are

made to reflect our share of gains and losses from the sale of real estate and

real estate related depreciation and amortization from unconsolidated joint

ventures. We believe that the use of FFO and its related per share amounts

in conjunction with the required GAAP disclosures provides investors with a

December 31, 2007—

Financial Measures Definitions (3)

more comprehensive understanding of the operating results of a real estate

investment trust ("REIT") and enables investors to compare the operating

results

between

REITs

without

having

account

for

differences

caused

different depreciation assumptions. Additionally, FFO is widely used by

industry analysts as a measure of operating performance for equity REITs.

FFO does not represent cash flow from operating activities or net income as

defined by GAAP and, therefore should not be considered as an alternative to

cash

flow

measure

liquidity

net

income

the

primary

indicator

operating performance. Our calculations of FFO may not be comparable to

FFO

reported

other

REITs

that

not

define

the

term

accordance

with

the NAREIT definition or that interpret that definition differently than we do.

Gross Investment:

define

Gross

Investment

our

total

investment

property

which

includes land, building, improvements, equipment as well as any other

identifiable assets included in the caption Other Assets on our balance

sheets. Items classified in Other Assets generally pertain to our medical office

buildings and may include such things as tenant improvements, leasing

commissions, above/(below) market lease value, lease in place value and

other items.

Normalized FAD:

Normalized FAD excludes from FAD any material one-time items reflected in

the financial statements for a given period.

Normalized FFO:

The NAREIT definition of FFO doesn’t exclude impairments of assets. We

believe that impairments are equivalent to losses on sale that are taken early

due to the current requirements of GAAP, therefore we generally present

Normalized

FFO,

which

excludes

impairments,

for

any

period

where

our

net

income includes an impairment. We also exclude any material one-time

items reflected in the financial statements for a given period.

December 31, 2007—

INVESTMENTS & DISPOSITIONS

December 31, 2007—

Quarter 2007 Investments

Gross investment in thousands

Investment

Number of

Square

Average

Gross

Per Bed/Unit

Initial

Facilities

Beds/Units/

Feet

Age

Investment

Square Foot

Yield

Owned Facilities

Skilled nursing facilities

170

11,000

65,000

9.5%

Total senior housing and long-term care

170

11,000

65,000

9.5%

Medical office buildings

1,151,297

248,000

215

6.5%

Total acquisitions

170

1,151,297

259,000

6.6%

Capital expenditures

6,000

Total investments

170

1,151,297

265,000

Unconsolidated Joint Venture

Assisted and independent living facilities

241

50,000

207,000

7.6%

Skilled nursing facilities

439

67,000

153,000

8.5%

Total acquisitions

680

117,000

172,000

8.1%

Capital expenditures

Total investments

680

117,000

Total Investments

Assisted and independent living facilities

241

50,000

207,000

7.6%

Skilled nursing facilities

609

78,000

128,000

8.6%

Total senior housing and long-term care

850

128,000

151,000

8.2%

Medical office buildings

1,151,297

248,000

215

6.5%

Total real estate acquisitions

850

1,151,297

376,000

7.1%

Total loans

0.0%

Total acquisitions

850

1,151,297

376,000

7.1%

Capital expenditures

6,000

Total investments

850

1,151,297

382,000

NHP Contributions to Unconsolidated Joint Venture

4th Quarter 2007

Assisted and independent living facilities

166

23,000

139,000

7.6%

Skilled nursing facilities

417

41,000

98,000

8.5%

Continuing care retirement communities

148

20,000

135,000

7.3%

Total senior housing and long-term care

731

84,000

115,000

8.0%

Year to Date 2007

Assisted and independent living facilities

1,353

166,000

123,000

7.8%

Skilled nursing facilities

417

41,000

98,000

8.5%

Continuing care retirement communities

148

20,000

135,000

7.3%

Total senior housing and long-term care

1,918

227,000

118,000

7.9%

December 31, 2007—

MOB ACQUISITION | Indiana Portfolio (October 2007)

Purchase Price: $16M

Initial Yield:

7.3%

Rent Escalator:

3.0%

Lease: Triple Net

Ownership:

100% NHP

Average Age: 12 years

No. of Facilities: 3

Facility Type: MOB

Rentable square feet: 55,814

Occupancy: 100%

Key Stats

Indiana

Portfolio Location

December 31, 2007—

MOB ACQUISITION | Washington Portfolio (November 2007)

Purchase Price: $118M

Price per SQFT: $322

Lease: Multi-Tenant, NHP

Ownership: 100% NHP

Average Age: 17 years

No. of Facilities: 7

Facility Type: MOB

Rentable Square Fee: 366,483

Occupancy: 97%

Key Stats

Washington

Portfolio Location

December 31, 2007—

MOB ACQUISITION | Illinois Portfolio (December 2007)

Purchase Price: $67M

Price per SQFT: $176

Lease: Multi-Tenant

Ownership: JV 95% NHP

Average Age: 15 years

No. of Facilities: 12

Facility Type: MOB

Rentable Square Fee: 381,366

Occupancy: 93%

Key Stats

Illinois

Portfolio Location

December 31, 2007—

MOB ACQUISITION | Missouri Portfolio (December 2007)

Purchase Price: $46M

Price per SQFT: $122

Lease: Multi-Tenant

Lease: JV 95% NHP

Average Age: 17 years

No. of Facilities: 7

Facility Type: MOB

Rentable Square Fee: 376,447

Occupancy: 90%

Key Stats

Missouri

Portfolio Location

December 31, 2007—

JV PORTFOLIO ACQUISITION (December 2007)

Recap Price: $201M

Initial Yield:

8.0%

Rent Escalator:

3.0%

Lease: Triple Net, JV

Ownership: JV 25% NHP

Average Age: 23 years

No. of Facilities: 13

Facility Type: ALF/SNF/CCR

No. of beds/units: 1,419

Occupancy: 93%

EBITDARM Coverage: 1.5x

Key Stats

MA, RI

Portfolio Location

December 31, 2007—

2007 Investments

Gross investment in thousands

Building

Investment

Number of

Square

Average

Gross

Per Bed/Unit

Initial

Facilities

Beds/Units

Feet

Age

Investment

Square Foot

Yield

Owned Facilities

Assisted and independent living facilities

2,276

199,000

87,000

8.4%

Skilled nursing facilities

2,629

144,000

55,000

8.7%

Continuing care retirement communities

527

39,000

74,000

8.8%

Total senior housing and long-term care

5,432

382,000

70,000

8.6%

Medical office buildings

1,605,962

327,000

204

6.7%

Total acquisitions

108

5,432

1,605,962

709,000

7.7%

Capital expenditures

23,000

Total investments

108

5,432

1,605,962

732,000

Loans

Assisted and independent living facilities

406

14,000

34,000

11.8%

Skilled nursing facilities

582

5,000

9,000

14.3%

Total senior housing and long-term care

988

19,000

12.5%

Other loans

28,000

10.0%

Total loans

47,000

11.0%

Total Consolidated

Assisted and independent living facilities

2,682

213,000

79,000

8.6%

Skilled nursing facilities

3,211

149,000

46,000

8.9%

Continuing care retirement communities

527

39,000

74,000

8.8%

Total senior housing and long-term care

6,420

401,000

62,000

8.7%

Other loans

28,000

10.0%

Medical office buildings

1,605,962

327,000

204

6.7%

Total acquisitions

118

6,420

1,605,962

756,000

7.9%

Capital expenditures

23,000

Total investments

118

6,420

1,605,962

779,000

Unconsolidated Joint Venture

Assisted and independent living facilities

453

87,000

192,000

7.8%

Skilled nursing facilities

1,467

218,000

149,000

8.4%

Total acquisitions

1,920

305,000

159,000

8.2%

Capital expenditures

Total investments

1,920

305,000

Total Investments

Assisted and independent living facilities

2,729

286,000

105,000

8.2%

Skilled nursing facilities

4,096

362,000

88,000

8.4%

Continuing care retirement communities

527

39,000

74,000

8.5%

Total senior housing and long-term care

7,352

687,000

93,000

8.3%

Medical office buildings

1,605,962

327,000

204

6.7%

Total real estate acquisitions

133

7,352

1,605,962

1,014,000

7.8%

Total loans

988

47,000

11.0%

Total acquisitions

143

8,340

1,605,962

1,061,000

7.9%

Capital expenditures

23,000

Total investments

143

8,340

1,605,962

1,084,000

December 31, 2007—

Expected Dispositions

Investment

Actual

Full Year

Gross

Required at 8.5%

% Financing

Revenue

Proceeds

Gain

Assumed Yield

From Proceeds

For the Year Ended 2007

Purchase options

723,000

5,291,000

47,776,000

12,581,000

62,247,000

77%

Loan payoffs

201,000

967,000

15,965,000

11,376,000

140%

Lease restructuring

290,000

524,000

6,165,000

Strategic asset sales

5,469,000

10,937,000

128,000,000

60,132,000

128,671,000

99%

6,683,000

17,719,000

191,741,000

72,713,000

208,459,000

92%

Projected 2008

Certain

[A]

Purchase options

1,940,000

2,257,000

23,300,000

13,355,000

26,553,000

88%

Loan payoffs

1,779,000

2,143,000

21,426,000

25,212,000

85%

Strategic asset sales

13,601,000

18,134,000

305,000,000

134,583,000

213,341,000

143%

Total certain

17,320,000

22,534,000

349,726,000

147,938,000

265,106,000

132%

High

[B]

Purchase options

1,359,000

2,252,000

23,032,000

7,770,000

26,494,000

87%

Loan payoffs*

3,617,000

4,394,000

38,287,000

10,015,000

51,694,000

74%

Asset recycling

240,000

2,114,000

2,824,000

75%

Lease restructuring

125,000

300,000

3,529,000

Total high

5,341,000

7,186,000

63,433,000

17,785,000

84,541,000

75%

Total Projected 2008

Total certain

17,320,000

22,534,000

349,726,000

147,938,000

265,106,000

132%

Total high

5,341,000

7,186,000

63,433,000

17,785,000

84,541,000

75%

22,661,000

29,720,000

413,159,000

165,723,000

349,647,000

118%

*The gain

the

loan

payoff

represents

the

gain

deferred

the

time

financed

the

sale

the

facilities

[A] Projected dispositions

categorized

"Certain"

represent

items

where

NHP

received

written

notice

from

the

tenant

entered

into

agreements

the

facilities

[B] Projected dispositions

categorized

"High"

represent

items

where

NHP

estimates

high

probability

disposition

based

analysis

facility

performance,

the tenant's financial condition and current financing options available

December 31, 2007—

Lease Expirations and Mortgage Loans Receivable Principal Payments

Dollars in thousands

Minimum

Number of

Minimum

Number of

Minimum

Number of

Minimum

Number of

Minimum

Percent

Number of

Year

Rent

Facilities

Rent

Facilities

Rent

Facilities

Rent

Facilities

Rent

of Total

Facilities

2008

5,202

1,666

6,868

2009

315

4,091

4,406

2010

4,575

7,759

590

12,924

2011

8,579

2012

7,586

3,272

1,466

1,562

13,886

2013

12,739

3,137

363

16,239

2014

8,162

1,077

4,807

14,046

2015

1,756

3,622

3,075

8,453

2016

10,314

15,723

2,505

28,542

10%

2017

1,270

4,269

1,863

7,402

Thereafter

117,797

188

28,852

4,103

2,221

152,973

56%

243

169,716

260

82,047

162

11,329

11,226

274,318

100%

445

Minimum

Number of

Minimum

Number of

Minimum

Number of

Minimum

Percent

Number of

Principal

Percent

Number of

Year

Rent

Facilities

Rent

Facilities

Rent

Facilities

Rent

of Total

Facilities

Payments

of Total

Facilities

2008

39,240

27%

2009

38,449

27%

2010

14,744

10%

2011

658

2012

5,643

13%

714

2013

9,408

2014

720

2015

3,043

2016

1,262

9,766

2017

578

Thereafter

12,078

20,358

2,637

35,073

84%

27,599

19%

18,983

20,358

2,637

41,978

100%

144,919

100%

Skilled Nursing

Continuing Care

Consolidated Triple-Net

Other Triple Net

Mortgage Loans Receivable

Consolidated Lease Expirations

Assisted and Independent

Unconsolidated JV Lease Expirations

Assisted and Independent

Consolidated

Skilled Nursing

Total JV

Continuing Care

December 31, 2007—

PORTFOLIO OVERVIEW

December 31, 2007—

Portfolio Summary

Gross investment, NOI and security deposits in thousands

Building

Investment

Percentage of

Percentage

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 independent living facilities

260

19,337

1,852,064

96,000

55%

177,264

55%

Skilled nursing facilities

162

18,190

845,124

46,000

25%

79,542

25%

Continuing care retirement communities

1,952

124,101

64,000

10,773

Specialty hospitals

303

69,408

229,000

7,989

Total senior housing and long-term care

439

39,782

2,890,697

73,000

86%

275,568

85%

Triple-net medical office buildings

265,784

55,387

208

1,610

Total triple-net

445

39,782

265,784

2,946,084

88%

277,178

86%

Multi-tenant medical office buildings

2,161,964

328,540

152

10%

7,439

Total owned

496

39,782

2,427,748

3,274,624

98%

284,617

88%

Mortgage Loans Receivable

Assisted and independent living facilities

797

56,470

71,000

5,836

Skilled nursing facilities

2,675

56,082

21,000

9,482

Continuing care retirement communities

180

9,142

51,000

1,714

Total mortgage loans receivable

3,652

121,694

33,000

17,032

2007 NOI from Facilities Sold to Unconsolidated JV

14,137

Other Income

4,830

Total Consolidated Portfolio

526

43,434

2,427,748

3,396,318

102%

320,616

100%

Consolidated Portfolio by Type

Assisted and independent living facilities

271

20,134

1,908,534

95,000

56%

183,100

61%

Skilled nursing facilities

181

20,865

901,206

43,000

27%

89,024

29%

Continuing care retirement communities

2,132

133,243

62,000

12,487

Specialty hospitals

303

69,408

229,000

7,989

Total senior housing and long-term care

469

43,434

3,012,391

69,000

89%

292,600

97%

Medical office buildings

2,427,748

383,927

168

11%

9,049

Total consolidated

526

43,434

2,427,748

3,396,318

100%

301,649

100%

2007 NOI from Facilities Sold to Unconsolidated JV

14,137

Other Income

4,830

Unconsolidated JV Ownership

Assisted and independent living facilities

1,806

250,664

139,000

47%

6,174

37%

Skilled nursing facilities

1,884

250,932

133,000

47%

10,392

63%

Continuing care retirement communities

148

29,634

200,000

Total JV owned

3,838

531,230

138,000

100%

16,570

100%

Total Portfolio

560

47,272

2,427,748

3,927,548

337,186

* Multi-tenant medical office building gross investment includes $76,648

of amounts classified as other assets

Triple-Net Leased Security Information

Owned

Mortgages

Total

Owned

Mortgages

Total

Owned

Bank letters of credit

52,513

3,091

55,604

5,215

Master Leases

85%

100%

Cash deposits

19,734

1,212

20,946

Property Tax

69%

43%

68%

74%

72,247

4,303

76,550

5,296

Cap Ex

46%

13%

45%

59%

Consolidated

Percentage with Impounds

Security Deposits

Consolidated

December 31, 2007—

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

260

1,852,064

177,098

9.6%

86.5%

1.31x

Skilled nursing facilities

162

845,124

86,549

10.2%

83.8%

2.02x

Continuing care retirement communities

124,101

12,046

9.7%

85.1%

1.56x

Specialty hospitals

69,409

7,606

11.0%

73.4%

2.36x

Total senior housing and long-term care

439

2,890,697

283,299

9.8%

85.1%

1.57x

Triple-net medical office buildings

55,387

4,150

7.5%

91.1%

Total triple-net

445

2,946,084

287,448

9.8%

Multi-tenant medical office buildings

328,540

22,880

7.0%

90.8%

Total owned

496

3,274,624

310,328

9.5%

Mortgage Loans Receivable

Assisted and independent living facilities

56,470

6,384

11.3%

91.1%

1.59x

Skilled nursing facilities

56,082

7,332

13.1%

80.2%

2.56x

Continuing care retirement communities

9,142

656

7.2%

92.9%

3.28x

Total mortgage loans receivable

121,694

14,373

11.8%

83.6%

2.16x

Assets Held for Sale

Total NHP Consolidated Portfolio

526

3,396,318

324,701

9.6%

84.9%

1.59x

Consolidated Portfolio by Type

Assisted and independent living facilities

271

1,908,534

183,482

9.6%

86.7%

1.33x

Skilled nursing facilities

181

901,206

93,881

10.4%

83.4%

2.06x

Continuing care retirement communities

133,243

12,702

9.5%

85.8%

1.65x

Specialty hospitals

69,409

7,606

11.0%

73.4%

2.36x

Total senior housing and long-term care

469

3,012,391

297,671

9.9%

85.1%

1.59x

Medical Office Buildings

383,927

27,030

7.0%

90.5%

Assets held for sale

Total consolidated

526

3,396,318

324,701

9.6%

Unconsolidated JV Ownership

Assisted and independent living facilities

250,664

21,091

8.4%

89.7%

1.22x

Skilled nursing facilities

250,932

20,927

8.3%

93.5%

1.80x

Continuing care retirement communities

29,634

2,480

8.4%

93.5%

1.53x

Total JV owned

531,230

44,498

8.4%

91.7%

1.51x

Total Portfolio

560

3,927,548

369,199

9.4%

85.4%

1.59x

* Medical office building cost per square foot and gross investment reflects total purchase price including amounts classified as other assets

December 31, 2007—

Portfolio Performance Summary (2)

Independent

and

Assisted Living

Private Pay

71%

Medicaid

19%

Medicare

10%

Top 5 = 46%

Top 10 = 61%

Top 15 = 69%

Asset Type

Pay Source

Locations

Tenant/Operator

56%

Skilled Nursing

27%

Other

MOBs

11%

(6%)

(4%)

(10%)

(15%)

December 31, 2007—

Consolidated Portfolio Performance by Asset Type (excluding MOBs)

DEC 2007

SEP 2007

Q/Q Chg

DEC 2006

Y/Y Chg

DEC 2007

SEP 2007

DEC 2006

Assisted and independent living

Annualized Facility Revenue ($000s)

543,133

534,792

1.6%

504,022

7.8%

667,216

684,271

616,633

Occupancy

88.2%

87.9%

0.4%

86.5%

1.7%

86.7%

86.5%

87.5%

Monthly revenue per occupied bed/unit

3,216

3,082

4.3%

3,048

5.5%

3,100

3,003

2,963

Annualized Facility EBITDARM ($000s)

201,304

200,622

0.3%

189,259

6.4%

243,704

253,015

228,679

Facility EBITDARM %

37.1%

37.5%

-0.5%

37.5%

-0.5%

36.5%

37.0%

37.1%

NHP Annualized Cash Rent ($000s)

147,963

147,349

0.4%

142,845

3.6%

183,482

190,646

166,915

Facility EBITDARM coverage

1.36x

-0.1%

1.32x

2.7%

1.33x

1.37x

Facility EBITDAR coverage

1.18x

-0.3%

1.15x

2.5%

1.15x

1.19x

Facility EBITDAR - Capex coverage

1.12x

-0.3%

1.09x

2.4%

1.08x

1.09x

1.13x

Skilled nursing facilities

Annualized Facility Revenues ($000s)

989,530

979,489

1.0%

945,424

4.7%

1,184,122

1,162,401

1,163,145

Occupancy

82.9%

83.1%

-0.1%

82.6%

0.3%

83.4%

83.3%

81.6%

Monthly revenue per occupied bed/unit

5,914

5,665

4.4%

5,658

4.5%

5,831

5,591

6,788

Q-Mix (Private + Medicare)

44.0%

43.8%

0.2%

40.4%

3.5%

44.1%

43.5%

41.3%

Annualized Facility EBITDARM ($000s)

161,352

158,418

1.9%

154,830

4.2%

193,593

186,617

193,614

16.3%

16.2%

0.1%

16.4%

-0.1%

16.3%

16.1%

16.6%

NHP Annualized Cash Rent ($000s)

77,186

77,640

-0.6%

74,805

3.2%

93,881

88,615

89,422

Facility EBITDARM coverage

2.09x

2.04x

2.5%

2.07x

1.0%

2.06x

2.11x

2.17x

Facility EBITDAR coverage

1.45x

1.41x

2.8%

1.44x

0.8%

1.43x

1.45x

1.51x

Facility EBITDAR - Capex coverage

1.36x

1.32x

3.0%

1.34x

1.0%

1.33x

1.35x

1.43x

SAME PROPERTY (PERFORMANCE)

TOTAL

December 31, 2007—

Consolidated Portfolio Performance (excluding MOBs )

DEC 2007

SEP 2007

Q/Q Chg

DEC 2006

Y/Y Chg

DEC 2007

SEP 2007

DEC 2006

NHP Consolidated Portfolio

(excluding MOBs)

Annualized Facility Revenue ($000s)

1,673,560

1,655,339

1.1%

1,584,487

5.6%

2,026,934

2,022,194

1,919,863

Occupancy

85.5%

85.4%

0.1%

84.6%

0.9%

85.0%

84.8%

75.5%

Monthly revenue per occupied bed/unit

4,741

4,553

4.1%

4,534

4.6%

4,577

4,386

4,820

Annualized Facility EBITDARM ($000s)

395,766

392,770

0.8%

375,713

5.3%

476,235

478,852

454,003

Facility EBITDARM %

23.6%

23.7%

-0.1%

23.7%

-0.1%

23.5%

23.7%

23.6%

Total NHP Annualized Cash Rent ($000s)

241,333

241,218

0.0%

233,382

3.4%

297,671

300,062

273,266

NHP Rent (Payor

Mix)

Private

70.5%

70.2%

0.3%

69.0%

1.5%

70.8%

72.3%

68.7%

Medicare

10.3%

10.6%

-0.3%

10.8%

-0.4%

10.2%

9.9%

10.8%

Medicaid

19.0%

-0.1%

20.1%

-1.1%

18.7%

17.6%

20.4%

Other

0.2%

0.0%

0.1%

0.2%

0.1%

Total NHP Annualized Cash Rent

100.0%

99.9%

100.0%

Facility EBITDARM coverage

1.64x

1.63x

0.6%

1.61x

1.8%

1.59x

1.60x

1.66x

Facility EBITDAR coverage

1.29x

0.6%

1.27x

1.7%

1.26x

1.31x

Facility EBITDAR -

Capex

coverage

1.22x

0.6%

1.20x

1.8%

1.19x

1.25x

Total Portfolio | Facility Payor

Mix

DEC 2007

SEP 2007

DEC 2006

DEC 2007

SEP 2007

DEC 2006

DEC 2007

SEP 2007

DEC 2006

Private

99.0%

98.8%

99.1%

17.1%

14.7%

49.1%

33.0%

30.0%

Medicare

0.1%

0.3%

0.1%

27.0%

27.2%

27.3%

17.7%

12.0%

12.6%

Medicaid

0.8%

0.9%

0.8%

55.3%

55.1%

57.6%

32.8%

22.2%

24.4%

Other

0.0%

0.5%

0.4%

0.2%

0.1%

Total Tenant Revenue

100.00%

100.0%

67.4%

67.1%

Q-Mix (Private + Medicare)

99.1%

99.2%

44.1%

44.4%

42.0%

66.8%

45.0%

42.5%

Excludes

assets

held

for

sale,

medical

office

buildings

and

assets

ALF/ILF

SNF

Total

SAME PROPERTY (PERFORMANCE)

TOTAL

December 31, 2007—

Tenant Concentration

Gross investment and annualized cash rent in thousands

Number of

Beds/Units

Gross

Percent by

Annualized

Percent by

Average

Remaining

EBITDARM

Tenant Concentration

Facilities

Inservice

Investment

Cash Rent/NOI

Cash Rent

Age

Term

Coverage

Brookdale Senior Living

[A]

7,421

464,195

13.7%

50,714

15.6%

15.3

1.51x

Hearthstone Senior Services

3,122

431,297

12.7%

35,774

11.0%

13.5

1.21x

Emeritus Corporation

[A]

2,166

252,368

7.4%

23,671

7.3%

10.8

1.46x

Wingate Healthcare

2,516

238,475

7.0%

19,143

5.9%

12.0

1.79x

Atria Senior Living

2,343

124,583

3.7%

19,901

6.1%

10.3

1.16x

Top 5

193

17,568

1,510,918

44.5%

149,203

46.0%

13.5

1.41x

Laureate Group

1,526

118,946

3.5%

10,658

3.3%

5.1

1.47x

Senior Services of America

1,092

107,534

3.2%

8,642

2.7%

13.5

1.41x

Carillon Assisted Living

928

105,847

3.1%

8,549

2.6%

14.0

1.28x

Beverly Enterprises

3,112

103,410

3.0%

14,162

4.4%

6.5

2.21x

Magnolia Health Systems

1,505

76,769

2.3%

6,441

2.0%

19.1

1.52x

Top 10

272

25,731

2,023,423

59.6%

197,654

60.9%

12.9

1.47x

Nexion Health Management

2,019

56,220

1.7%

7,421

2.3%

4.9

1.94x

Primrose Retirement Associates

429

55,016

1.6%

4,317

1.3%

14.1

1.21x

Epic Group

892

52,364

1.5%

4,358

1.3%

8.3

2.16x

Trans Healthcare

1,062

46,676

1.4%

5,450

1.7%

2.3

0.64x

HEALTHSOUTH

[A]

120

45,645

1.3%

4,785

1.5%

6.2

1.05x

Top 15

314

30,253

2,279,344

67.1%

223,985

69.0%

12.1

1.46x

Other - Senior Housing and

Long-Term Care Tenants

155

13,997

733,047

21.6%

73,686

22.7%

10.4

2.03x

Medical Office Buildings

383,927

11.3%

27,030

8.3%

Total NHP Consolidated Portfolio

526

44,250

3,396,318

100.0%

324,701

100.0%

11.5

1.59x

* Performance metrics exclude assets held for sale and JV assets

[A] Public company tenant

December 31, 2007—

Geographic Performance Metrics

Gross investment and annualized cash rent in thousands

Number of

Medicaid as

Number of

Beds/Units

Gross

Percent by

Annualized

Percent by

Percent of

Facilities

Inservice

Investment

Cash Rent

[A]

Texas

15,339

480,935

16.0%

44,736

15.0%

3.5%

Massachusetts

2,971

227,560

7.6%

18,740

6.3%

2.6%

Washington

2,073

210,995

7.0%

12,042

4.1%

0.9%

California

3,691

210,012

7.0%

29,112

9.8%

1.2%

Wisconsin

2,718

188,329

6.3%

17,380

5.8%

1.3%

Top 5

175

26,792

1,317,831

43.8%

122,010

41.0%

9.5%

Florida

3,452

180,884

6.0%

16,816

5.7%

1.5%

Tennessee

2,280

155,384

5.2%

12,821

4.3%

1.1%

North Carolina

1,226

119,460

4.0%

10,051

3.4%

0.6%

Ohio

2,049

117,740

3.9%

12,071

4.1%

1.1%

Indiana

2,080

110,274

3.7%

8,557

2.9%

0.5%

Top 10

282

37,879

2,001,573

66.4%

182,326

61.3%

14.3%

Michigan

1,454

106,080

3.5%

9,741

3.3%

0.0%

New York

846

101,437

3.4%

9,675

3.3%

0.9%

Missouri

1,469

99,338

3.3%

5,684

1.9%

0.6%

Arizona

855

65,196

2.2%

7,768

2.6%

0.3%

Minnesota

896

63,935

2.1%

5,433

1.8%

0.9%

Top 15

389

43,399

2,437,560

80.9%

220,627

74.1%

16.9%

Other States

851

574,831

19.1%

77,044

25.9%

1.8%

Total

469

44,250

3,012,391

100.0%

297,671

100.0%

18.7%

Medical Office Buildings

383,927

27,030

Total NHP Consolidated Portfolio

526

3,396,318

324,701

* Performance metrics exclude assets held for sale, medical office buildings and JV assets

[A]

Medicaid as a percent of cash rent represents an estimate of the portion of NHP's total senior housing and long-term care portfolio total

rental income derived from the underlying Medicaid reimbursement of our tenants and borrowers (Medicaid income of our tenant divided by

total income of our tenant multiplied by the rent or interest paid to NHP)

December 31, 2007—

Geographic Performance Metrics

Gross investment and annualized cash rent in thousands

Number of

Revenue

Number of

Beds/Units

Gross

Annualized

EBITDARM

per occupied

Average

Remaining

% SNF by

Facilities

Inservice

Investment

Cash Rent

Coverage

bed/unit

Age

Term

Cash Rent

Texas

15,339

480,935

44,736

1.68x

2,458

9.0

23.7%

Massachusetts

2,971

227,560

18,740

1.89x

6,737

11.5

73.9%

Washington

2,073

210,995

12,042

1.90x

4,349

11.2

34.2%

California

3,691

210,012

29,112

1.31x

5,178

9.7

14.4%

Wisconsin

2,718

188,329

17,380

1.60x

3,118

9.5

17.7%

Top 5

175

26,792

1,317,831

122,010

1.63x

3,697

10.2

29.4%

Florida

3,452

180,884

16,816

1.86x

3,159

10.4

16.2%

Tennessee

2,280

155,384

12,821

1.38x

4,262

9.5

23.9%

North Carolina

1,226

119,460

10,051

1.49x

3,889

13.3

3.5%

Ohio

2,049

117,740

12,071

1.10x

3,978

8.1

24.8%

Indiana

2,080

110,274

8,557

1.45x

6,524

17.0

74.2%

Top 10

282

37,879

2,001,573

182,326

1.58x

3,789

10.9

28.1%

Michigan

1,454

106,080

9,741

1.52x

4,140

10.6

4.6%

New York

846

101,437

9,675

1.37x

2,512

10.4

50.9%

Missouri

1,469

99,338

5,684

1.83x

5,378

7.1

92.9%

Arizona

855

65,196

7,768

1.18x

3,058

7.9

6.5%

Minnesota

896

63,935

5,433

1.48x

6,233

11.1

39.8%

Top 15

350

43,399

2,437,560

220,627

1.56x

3,961

10.4

29.3%

Other States

119

851

574,831

77,044

1.74x

4,557

8.9

22.9%

Total

469

44,250

3,012,391

297,671

1.59x

4,125

11.5

28.6%

Medical Office Buildings

383,927

27,030

Total NHP Consolidated Portfolio

526

3,396,318

324,701

* Performance metrics exclude assets held for sale, medical office buildings and JV assets

Note: Lease terms for NHP facilties generally are between ten and fifteen years with renewal options, if exercised, that add ten to fifteen additional years.

In general, NHP receives contractual rent escalators in the range of 1.5% to 2.5% for skilled nursing assets and 2.0% to 3.0% for assisted living assets

December 31, 2007—

Unconsolidated JV Portfolio Performance Metrics

Assisted and

Skilled

Independent Living

Nursing

Portfolio

DEC 2007

Unconsolidated JV Portfolio

Annualized Facility Revenue ($000s)

72,528

150,026

235,582

Occupancy

89.7%

93.5%

91.7%

Monthly revenue per occupied bed/unit

4,682

6,220

5,500

Q-Mix (Private + Medicare)

98.7%

59.4%

74.8%

Annualized Facility EBITDARM ($000s)

25,989

37,686

67,461

Facility EBITDARM %

35.8%

25.1%

28.6%

Total JV Annualized Cash Rent ($000s)

21,091

20,927

44,498

JV Rent (Payor Mix)

Private

96.8%

31.7%

60.8%

Medicare

2.0%

27.7%

14.0%

Medicaid

1.3%

40.6%

19.7%

Other

0.0%

Total JV Annualized Cash Rent

100.0%

94.4%

Facility EBITDARM coverage

1.23x

1.80x

1.52x

Facility EBITDAR coverage

1.06x

1.44x

1.25x

Facility EBITDAR - Capex coverage

1.02x

1.41x

1.22x

Total

December 31, 2007—

Medical Office Building Portfolio Performance Metrics

Gross investment dollars in thousands

Gross

Number of

Gross

Investment

Percent

Average

Rentable

Ownership

Facilities

Investment

per SQFT

On Campus

Age

SQFT

Current Year

Prior Year

Change

BROE I - 90%

55,947

57.1%

748,249

85.2%

81.3%

3.9%

BROE II - 95%

94,070

168

100.0%

559,811

93.1%

McShane - 95%

46,479

123

66.7%

376,447

88.8%

NHP Multi-Tenant - 100%

132,045

309

50.0%

426,966

97.7%

NHP Triple-Net - 100%

55,387

208

16.7%

265,784

91.1%

Total MOB Portfolio

383,927

161

64.9%

2,377,257

90.5%

80.1%

10.4%

Current Year

Prior Year

% Change

Current Year

Prior Year

% Change

Current Year

Prior Year

Change

BROE I - 90%

10,635

9,700

9.6%

4,558

4,275

6.6%

42.9%

44.1%

-1.2%

BROE II - 95%

12,769

6,642

52.0%

McShane - 95%

6,147

3,386

55.1%

NHP Multi-Tenant - 100%

12,439

8,294

66.7%

NHP Triple-Net - 100%

4,150

Total MOB Portfolio

46,140

9,700

375.7%

27,030

4,275

532.3%

54.5%

44.1%

10.4%

Gross

Building

Number of

Gross

Percent by

Investment

Square

Percent by

MOBs by state

Facilities

Investment

per SQFT

Feet

Square Feet

Washington

118,364

30.8%

323

366,483

15.4%

Illinois

64,597

16.8%

168

384,419

16.2%

Missouri

46,479

12.1%

123

376,447

15.8%

Louisiana

36,627

9.5%

381,138

16.0%

Texas

31,320

8.2%

107

291,837

12.3%

Top 5

297,386

77.5%

165

1,800,324

75.7%

Alabama

16,706

4.4%

273

61,219

2.6%

Indiana

15,718

4.1%

282

55,814

2.4%

South Carolina

17,593

4.6%

160

109,704

4.6%

Ohio

11,376

3.0%

168

67,702

2.9%

Georgia

9,311

2.4%

123,519

5.2%

Top 10

368,090

95.9%

166

2,218,282

93.3%

Tennessee

4,528

1.2%

56,973

2.4%

Florida

6,076

1.6%

168

36,158

1.5%

Virginia

5,233

1.4%

65,844

2.8%

Medical Office Buildings

383,927

100.0%

161

2,377,257

100.0%

Annualized Revenue

Annualized Cash Rent/NOI

Operating Margin

Occupancy

December 31, 2007—

Portfolio Performance Measures Definitions

Annualized Cash Rent/NOI:

The most recent monthly total cash rent due from our tenants as of the end of

the current reporting period multiplied by twelve. For our multi-tenant medical

office building portfolio, NOI rather than cash rent is annualized. We use

Annualized Cash Rent to calculate our EBITDARM, EBITDAR and EBITDAR –

Capex

coverages.

Facility EBITDAR:

Earnings before interest, taxes, depreciation, amortization and rent on an

annualized basis. We believe EBITDAR is a good estimate of facility cash

flows after payment of management fees. We use a standardized imputed

management fee equal to 5% of the revenues our tenants or borrowers

generate at each individual facility (Facility Revenues) which we believe

represents typical management fees for our senior housing and long-term care

portfolios. We receive periodic facility financial information from our tenants

that we utilize to calculate EBITDAR. All facility financial information was

derived solely from information provided by our tenants and borrowers and we

have

not

verified

such

information.

use

EBITDAR

calculate

the

EBITDAR (cash flow) coverage for our portfolio.

Facility EBITDAR Coverage:

Annualized EBITDAR divided by Annualized Cash Rent. This ratio is a

measure of a facility’s ability to cover its cash rent obligations. EBITDAR

Coverage of 1.0X would indicate the EBITDAR is just sufficient to pay the cash

rent.

The

higher

the

coverage,

the

better

able

facility

meet

its

rent

obligations. This is the mid-range coverage calculation we utilize.

Facility EBITDARM:

Earnings before interest, taxes, depreciation, amortization, rent and

management fees on an annualized basis. We believe EBITDARM is a good

estimate of facility cash flows before payment of management fees. We use a

standardized imputed management fee equal to 5% of the revenues our

tenants or borrowers generate at each individual facility (Facility Revenues)

which we believe represents typical management fees for our senior housing

and long-term care portfolios. We receive periodic facility financial information

from our tenants that we utilize to calculate EBITDARM. All facility financial

information was derived solely from information provided by our tenants and

borrowers and we have not verified such information. We use EBITDARM to

calculate the EBITDARM (cash flow before management fee) coverage for our

portfolio.

Facility EBITDARM Coverage:

Annualized

EBITDARM

divided

Annualized

Cash

Rent.

This

ratio

measure of a facility’s ability to cover its cash rent obligations assuming it

doesn’t have to pay its management fee. EBITDARM Coverage of 1.0X

would indicate the EBITDARM is just sufficient to pay the cash rent. The

higher the coverage, the better able a facility is to meet its rent obligations.

This is the least restrictive coverage measure we utilize.

Facility EBITDAR -

Capex:

Earnings before interest, taxes, depreciation, amortization and rent less

minimum capital expenditures (capex) calculated on an annualized basis.

We believe EBITDAR is a good estimate of facility cash flows after a reserve

for minimum capital expenditures required to maintain a facility. We use a

standardized imputed capital expenditure schedule in our calculations based

on the type, size and age of each facility which we believe represents typical

minimum capital expenditures for our senior housing and long-term care

portfolios. We receive periodic facility financial information from our tenants

that

utilize

calculate

EBITDAR

Capex.

All

facility

financial

information

was derived solely from information provided by our tenants and borrowers

and

have

not

verified

such

information.

use

EBITDAR

Capex

calculate the EBITDAR –

Capex

(cash flow after reserves for minimum capex

requirements) coverage for our portfolio.

Facility EBITDAR -

Capex

Coverage:

Annualized EBITDAR -

Capex

divided by Annualized Cash Rent. This ratio is

a measure of a facility’s ability to cover its cash rent obligations after it makes

the minimum capital expenditures required to maintain the facility. EBITDAR

Capex

Coverage

1.0X

would

indicate

the

EBITDAR

Capex

just

sufficient to pay the cash rent. The higher the coverage, the better able a

facility is to meet its rent obligations. This is the most restrictive coverage

measure we utilize.

Facility Revenues:

The revenues generated by each individual facility on an annualized basis.

We receive periodic facility financial information from our tenants that we

utilize to calculate Facility Revenues. All facility financial information was

derived solely from information provided by our tenants and borrowers and

we have not verified such information.

December 31, 2007—

Portfolio Performance Measures Definitions (2)

Gross Investment:

define

Gross

Investment

our

total

investment

property

which

includes land, building, improvements, equipment as well as any other

identifiable assets included in the caption Other Assets on our balance sheets.

Items classified in Other Assets generally pertain to our medical office

buildings and may include such things as tenant improvements, leasing

commissions, above/(below) market lease value, lease in place value and

other items.

Monthly Revenue per Occupied Bed/Unit:

For our senior housing and long-term care portfolio, monthly revenue per

occupied bed or unit is derived by determining the monthly revenue generated

by each individual facility divided by the total number of actual resident days

for a 30-day month. All facility performance data were derived solely from

information provided by our tenants and borrowers and we have not verified

such information.

Occupancy:

For our senior housing and long-term care portfolio, occupancy represents a

facility’s actual resident days (total number of beds or units occupied multiplied

by the number of days in the period) divided by the total resident capacity

(total number of beds or units in service for the period multiplied by the number

of days in the period). For medical office buildings, facility occupancy

represents the leased square feet divided by the total rentable square feet. In

all cases (senior housing, long-term care and medical office buildings), the

reporting period represents the month prior to quarter end. All facility

performance data were derived solely from information provided by our

tenants and borrowers and we have not verified such information.

NOI:

We define net operating income (NOI) for our senior housing and long-term

care portfolio as rent revenues since our leases are triple-net. For our medical

office building portfolio, we define NOI as revenues minus medical office

building operating expenses. In some cases, revenue for medical office

buildings include expense reimbursements to common area maintenance

(CAM) charges. Our senior housing and long-term care portfolio generates

“triple-net”

rent for us, which means we receive the rent and the tenant pays all

operating expenses, property taxes and other expenses of each facility as well

as required capital expenditures and maintenance costs. We present NOI as it

effectively

presents

our

entire

portfolio

“net”

rent

basis.

NOI

may

then

used to calculate effective yields and to evaluate facility performance.

Q-Mix:

For our long-term care portfolio, Q-Mix (abbreviation for Quality-Mix) refers to

the

combination

Tenant’s

private

and

medicare

revenues

percentage

total

revenues.

private

and

medicare

rates

are

generally

higher at long-term care facilities, Tenants can oftentimes improve margins

selectively

targeting

medicare

and

private-pay

residents.

such,

increase in the Q-Mix generally results in a corresponding increase in a

Tenant’s total revenues.

Rentable Square Feet:

For our medical office building portfolio, rentable square feet represents the

area measured to the inside finished surface of the dominant portion of the

permanent outer building walls, excluding any major vertical penetrations of

the floor. An add-on or load factor is used to charge the tenant for a

percentage of the common areas, so that the total rentable square footage for

the building is equal to sum of each floor’s rentable area.

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 month at the end of all periods presented.

EX-99.3 4 dex993.htm PRESS RELEASE DATED 02/25/2008 ANNOUNCING PMB TRANSACTION Press Release dated 02/25/2008 announcing PMB transaction

EXHIBIT 99.3

NATIONWIDE HEALTH PROPERTIES AND PACIFIC MEDICAL BUILDINGS

JOIN FORCES IN UP TO $2 BILLION, MULTI-YEAR TRANSACTION

Transaction Highlights:

•

$915 million portfolio acquisition consisting of:

—

7 properties acquired in Q4 2007 for $120 million

—

16 properties in 2008 for $485 million

—

3 properties in 2009 for $180 million

—

2 properties in 2010 for $130 million

•

$485 million in financing for the 16 properties closing in 2008 already identified

•

Adds two million square feet of medical office space to NHP portfolio

•

Provides tenant and asset diversification to growing portfolio of over 500 assets

•

Exclusive right to acquire up to an additional $1 billion of medical office buildings over seven years at a discount through a development agreement

•

Equal ownership of a full service property management service provider

(NEWPORT BEACH, CA), February 25, 2008—Nationwide Health Properties, Inc., (NYSE: NHP) announced today that it has signed definitive agreements with Pacific Medical Buildings (PMB) to acquire a sizeable portfolio of high quality medical office buildings (MOBs), a 50% interest in a full-service property management company, and an opportunity to participate with PMB in future MOB development.

“This series of transactions with PMB, the largest and most highly regarded medical office building developer on the West Coast, is truly a transformational event for NHP. PMB provides NHP with an exceptional medical office building platform, comprising an outstanding portfolio of Class A assets, a robust development pipeline with an experienced development team and a well-regarded, full-service property management company. These transactions complement our leadership position in senior housing and long-term care by providing us a major presence in the medical office sector. The multi-year structure greatly facilitates our near and long-term earnings and dividend growth goals and diversification strategy,” said Douglas M. Pasquale, NHP’s President and Chief Executive Officer.

Mr. Pasquale stated he is very pleased to announce that Dr. Jeffrey Rush, PMB’s Chairman and largest shareholder, is expected to join NHP’s board of directors after the closing of the first tranche of this transaction in 2008.

“These transactions are accretive to NHP and should initially add approximately $0.01 to $0.02 to FFO per share in 2008 and are included in our 2008 guidance. The addition of these high quality MOBs provide great strategic value and diversification with our investment mix moving toward 50% senior housing, 30% medical office buildings and 20% long-term care facilities,” noted Abdo Khoury, NHP’s Chief Financial and Portfolio officer.

Acquisition Portfolio: In the fourth quarter of 2007, NHP, in association with PMB, acquired a portfolio comprising seven medical office buildings located in the state of Washington for $120 million. Subsequently, NHP has entered into agreements with PMB to acquire 18 buildings, and is finalizing negotiations to acquire three more. Altogether, NHP expects to acquire 21 additional Class A medical office buildings, including 16 in 2008 for a purchase price of $485 million, three in 2009 for $180 million (each of which is currently 90% or greater pre-leased) and two in 2010 for $130 million, subject to occupancy being stabilized at 95%. Upon completion, this multi-staged transaction will add over two million square feet of medical office space to NHP’s portfolio, approximately 90% of which is situated on hospital campuses and 55% is located in California. In addition, approximately 70% of the portfolio’s expected stabilized NOI will be derived from properties situated in high barrier-to-entry markets. Overall, this $915 million Class A portfolio provides NHP with access to more than a dozen premier hospital systems. The average age of the portfolio is seven years with occupancy of approximately 94%. After giving effect to all these staged acquisitions, the portfolio is expected to generate approximately $55.5 million in NOI, representing an approximate cap rate of 6.1% based on a total purchase price of $915 million.

Financing of 2008 Acquisitions: NHP expects to finance the $485 million acquisition of the 16 properties closing in 2008 with a combination of (i) $201 million in assumed debt bearing an average interest rate of 5.9% (ii) at least $100 million in partnership units (each convertible into a share of common stock), and (iii) the remaining balance from proceeds derived from the $305 million sale of NHP’s Emeritus portfolio (representing an approximate 6.1% cap rate based on 2008 in-place Emeritus rents as further described in an 8-K filed on February 11, 2008).

“As PMB’s largest shareholder and having been in the MOB business for over thirty years, I am impressed by NHP’s track record of growth and stability. NHP has a strong history of delivering year-over-year growth, driven by their strong customer orientation. The fact that we are receiving a significant portion of our consideration in NHP partnership units evidences our confidence in NHP,” Dr. Jeffrey Rush noted.

Development Pipeline Agreement: NHP will have the exclusive right, but not the obligation, to acquire up to an additional $1 billion of MOBs from PMB over seven years at a discount to fair market value. PMB already has one million square feet in their development pipeline as a result of existing hospital relationships, representing future potential asset values of over $475 million.

The development pipeline represents a unique opportunity for NHP not only to substantially grow and enhance its portfolio with brand new buildings, but also to expand its relationships with current and future healthcare providers.

Assuming development costs of $1.0 billion, NHP would anticipate generating up to $160 million pursuant to the discount component of the arrangement over the next 7 years. The assumptions and calculations outlining the potential value in this development

agreement are provided in the supplemental information presentation attached as an exhibit to this announcement and on NHP’s website (www.nhp-reit.com).

“MOBs represent one of the largest segments of healthcare real estate, and owning them enables NHP to catch the front of the baby boomer wave. As with long-term care and senior housing, we view the services provided in MOBs as primarily need driven and, therefore, recession resistant. With the PMB transaction, NHP will realize enhanced value resulting from our unique arrangement on future developments,” commented Don Bradley, NHP’s Chief Investment Officer.

“This is a true partnership that will promote our growth and enhance our relationship with our hospital clients. Our relationship with NHP provides us with ready capital that will help us expand our development and property management activities and help our hospital clients monetize their real estate assets,” stated Mark Toothacre, PMB’s President.

Bob Rosenthal, PMB’s Executive Chairman and Company founder said, “We spent almost a year conducting a national search and selected Nationwide Health Properties. We chose NHP because its commitment to quality coincides with PMB’s philosophy. As a long-term holder of healthcare real estate, NHP’s strategic focus is on tenant retention and property improvement.”

Management Company Agreement: NHP will add property management to its MOB platform through joint-ownership and joint-control of PMB Real Estate Services LLC (PMBRES), PMB’s well-regarded property management service provider. NHP will acquire a 50% stake in PMBRES for a base purchase price of $1 million plus possible additional payments based on PMBRES’s actual performance in 2009 and 2010. NHP believes that its joint-ownership of the property management company will play a critical role in overseeing and managing the ongoing success of the PMB medical office portfolio.

Important Website Information: Supplemental information for the PMB multi-year transaction, as well as video segments from our DVD entitled, “Realizing the Rewards of Vision” and a brochure showing the medical office buildings can be found on our website at www.nhp-reit.com.

J.P. Morgan Securities Inc. and Shattuck Hammond Partners were investment banking advisers to NHP. Skadden, Arps, Slate, Meagher & Flom LLP and Sherry, Meyerhoff, Hanson & Crance LLP served as legal counsel to NHP, while Latham & Watkins LLP represented Pacific Medical Buildings in the transaction.

CONFERENCE CALL INFORMATION

The company has scheduled a conference call on Tuesday, February 26, 2008 at 8:30AM, Pacific Standard Time, to discuss this transaction. The conference call is accessible by dialing 877-356-5705 and referencing conference ID number 34719103, or by logging on to our website at http://www.nhp-reit.com. The international dial-in number is 706-643-7409. This announcement, along with supplemental information regarding the transaction, will also be available on our website. A digitized replay of the conference call will be available from 11:00 a.m. Pacific time (2:00 p.m. Eastern time) that day until 9:00 p.m. Pacific time (12:00 a.m. Eastern time) Wednesday, March 12, 2008. Callers can access the replay by dialing (800) 642-1687 or (706) 645-9291 and entering conference ID number 34719103. 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 facilities, long-term care facilities and medical office buildings. The company has investments in 567 facilities in 43 states. For more information on Nationwide Health Properties, Inc., visit our website at www.nhp-reit.com.

Pacific Medical Buildings LLC is a San Diego based firm specializing exclusively in developing and operating medical office buildings, outpatient facilities and parking structures for hospitals and medical groups. Pacific Medical Buildings has completed over 65 medical buildings throughout the Western United States. For more information on Pacific Medical Buildings, visit their website at www.pacificmedicalbuildings.com.

Investors:

Abdo H. Khoury

Chief Financial and Portfolio Officer

(949) 718-4400

Media:

For NHP:

Neal B. Rosen

(415) 692-3058

For PMB:

Emily Porter

(619) 234-0345

negative thereof. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those described in the statements. Risks and uncertainties associated with the PMB transaction include (without limitation) the following: delay or failure to obtain third party consents; the exclusion of certain properties (which may include properties described herein) from the transaction; uncertainty as to whether the transaction will be completed; the failure to achieve the perceived advantages from the transaction; larger than expected or unexpected costs associated with the transaction; unexpected liabilities resulting from the transaction; potential litigation associated with the transaction; and the retention of key personnel after the transaction. Other risks and uncertainties associated with our business, many of which will apply to the assets acquired in the PMB transaction, include (without limitation) the following: deterioration in the operating results or financial condition, including bankruptcies, of our tenants; non-payment or late payment of rent by our tenants; our reliance on two operators for a significant percentage of our revenues; occupancy levels at certain facilities; our level of indebtedness; 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; increasing competition in our business sector; 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; our ability to retain key personnel; potential liability under environmental laws; the possibility that we could be required to repurchase some of our medium-term notes; the rights and influence of holders of our outstanding preferred stock; 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 other factors discussed from time to time in our news releases, public statements and/or filings with the Securities and Exchange Commission, especially the “Risk Factors” sections of our Annual and Quarterly Reports on Forms 10-K and 10-Q. Forward-looking information is provided by NHP pursuant to the safe harbor established under the Private Securities Litigation Reform Act of 1995 and should be evaluated in the context of these factors. We disclaim any intent or obligation to update these forward-looking statements.

EX-99.4 5 dex994.htm SUPPLEMENTAL INFORMATION PACKAGE FOR PMB TRANSACTION Supplemental information package for PMB transaction

Supplemental Information

February 25, 2008

Multi-Year MOB Transaction

EXHIBIT 99.4

February 25, 2008 | Multi-Year MOB Transaction Supplemental Information