NHP Reports First Quarter 2008 Earnings

NEWPORT BEACH, Calif., May. 08 /PRNewswire/ --

NEWPORT BEACH, Calif., May 8 /PRNewswire-FirstCall/ -- Nationwide Health Properties, Inc. today announced its first quarter 2008 operating results and investment activity.

"We're pleased to start 2008 with strong operating results. Compared to 2007's first quarter, quarterly revenues are up 24%, diluted FFO per share is up 12% and diluted FAD per share is up 10%. Given our growth in 2007 and expectations for 2008, we increased our quarterly dividend per share in January 2008 by $0.03, or $0.12 on an annual basis," commented Douglas M. Pasquale, NHP's President and Chief Executive Officer. "We are also pleased to report that on April 1, 2008 we closed on the first tranche of the Pacific Medical Buildings transaction that we announced on February 25, 2008. This transformational transaction provides NHP with an exceptional medical office building platform comprised of Class A assets, a robust development pipeline with an experienced development team and a full-service property management company," Mr. Pasquale added.

FIRST QUARTER 2008 RESULTS

The following table presents selected financial results for the first quarter of 2008 as compared to the first quarter of 2007:

SELECTED FINANCIAL RESULTS ($ in thousands, except per share amounts) Three Months Ended March 31, Item 2008 2007 Change Revenues $ 86,713 $ 69,945 $ 16,768 24.0% Income from Continuing $ 24,125 $ 20,559 $ 3,566 17.3% Operations Net Income $ 37,455 $ 26,048 $ 11,407 43.8% Diluted Income Available to Common Stockholders Per Share $ 0.37 $ 0.25 $ 0.12 48.0% Diluted FFO $ 56,293 $ 46,711 $ 9,582 20.5% Diluted FFO Per Share $ 0.56 $ 0.50 $ 0.06 12.0% Diluted FAD Per Share $ 0.55 $ 0.50 $ 0.05 10.0% Funds From Operations (FFO) and Funds Available for Distribution (FAD)

FFO and FAD are non-GAAP measures that NHP believes are important to an understanding of its operations. 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). We believe FAD is an important supplemental measure of operating performance because, like FFO, 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). 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 and FFO and between net income and FAD, and a reconciliation of net income per share to both FFO 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.

NEW INVESTMENTS The following tables summarize our first quarter 2008 investment activity: FIRST QUARTER 2008 CLOSED INVESTMENTS Amount Unit Cap Initial CPI DARM Type (millions) Price Rate Yield Ups Cover (thousands) Senior Housing $22 $102 12.7% 9.3% 3.0% 1.6x Medical Office $2 $71/sf 7.4% 7.4% Total $24 Loans $30 7.25% Grand Total $54

In addition to these closed investments, on April 1, 2008 we closed on the first tranche of our previously announced transaction with Pacific Medical Buildings. The acquisition consisted of six medical office buildings for $132.3 million, including the assumption of $61.8 million of secured debt and the issuance of 951,407 partnership units with a value of $30.2 million, and a 50% interest in the full-service property management company for $1 million (with potential future payments based on six times the normalized annual net operating profit of the management company for 2009 and 2010, net of any prior payments). On May 1, 2008 we closed on one additional medical office building in the previously announced transaction for $26.7 million, including the assumption of $13.4 million of secured debt and the issuance of 288,397 partnership units with a value of $9.5 million.

2008 FINANCING TRANSACTIONS

During the first quarter of 2008, we issued 930,000 common shares through our controlled equity offering program at an average price of $34.00 per share resulting in net proceeds of approximately $31.3 million.

On April 2, 2008 we closed on the previously announced sale of 23 facilities to Emeritus Corporation for $305 million. We used a portion of the proceeds, net of the retirement of $56 million of secured debt and $30 million of short-term seller financing, to repay the entire outstanding balance on our credit facility.

2008 GUIDANCE

We are increasing the low and high end of our full-year 2008 FFO guidance by $0.01 per share to a range of $2.18 to $2.23 per share and FAD guidance by $0.02 per share to a range of $2.10 to $2.14 per share. Annualizing our first quarter results would result in somewhat higher FFO and FAD per share for the year than the high end of our guidance range; however, such an analysis does not reflect certain other factors that we expect will slightly lower our FFO and FAD per share in future quarters. These factors include the slower than expected reinvestment of proceeds from the sale of the Emeritus assets, the issuance of 930,000 shares during the first quarter and potential increased capital expenditures and tenant improvements for MOBs during the remainder of the year. Our revised guidance includes the effects of the Pacific Medical Buildings transaction and the sale of the Emeritus portfolio, as well as expected mortgage loan receivable prepayments and dispositions during 2008 as described in our supplemental information package available on our website. However, while we expect to continue to make accretive acquisitions during 2008, our FFO and FAD guidance ranges do not assume any additional acquisitions, impairments or capital transactions.

CONFERENCE CALL INFORMATION

The Company has scheduled a conference call and webcast on Friday, May 9, 2008 at 8:30 a.m. Pacific time in order to present the Company's performance and operating results for the quarter ended March 31, 2008. The conference call is accessible by dialing (877) 356-5705 and referencing conference ID number 43858991 or by logging on to our website at http://www.nhp-reit.com. The earnings release and any additional financial information that may be discussed on the conference call will also be available at the same location on our website. A digitized replay of the conference call will be available from 9:30 a.m. Pacific time that day until 9:00 p.m. Pacific time on Monday, June 9, 2008. Callers can access the replay by dialing (800) 642-1687 or (706) 645-9291 and entering conference ID number 43858991. 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 quarter ended March 31, 2008 is available on our website, free of charge, at by selecting investor relations followed by financial information and will also be included in our Current Report on Form 8-K filed May 8, 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 555 facilities in 43 states. For more information on Nationwide Health Properties, Inc., visit our website at http://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 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 from the transaction; 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.

CONTACT: Abdo H. Khoury Chief Financial and Portfolio Officer (949) 718-4400 Consolidated Statements of Operations In thousands, except per share data Three Months Ended March 31, 2008 2007 Revenues: Triple-net lease rent $70,516 $62,911 Medical office building operating rent 10,930 2,763 81,446 65,674 Interest and other income 5,267 4,271 86,713 69,945 Expenses: Interest and amortization of deferred financing costs 24,738 22,743 Depreciation and amortization 27,550 19,813 General and administrative 6,498 5,617 Medical office building operating expenses 4,864 1,414 63,650 49,587 Income before minority interests and unconsolidated joint venture 23,063 20,358 Minority interests in net loss (income) of consolidated joint ventures 9 (17) Income from unconsolidated joint venture 1,053 218 Income from continuing operations 24,125 20,559 Discontinued operations: Gain on sale of facilities, net 10,866 66 Income from discontinued operations 2,464 5,423 13,330 5,489 Net income 37,455 26,048 Preferred stock dividends (2,062) (3,791) Income available to common stockholders $35,393 $22,257 Basic earnings per share (EPS): Income from continuing operations $0.23 $0.19 Discontinued operations 0.14 0.06 Income available to common stockholders $0.37 $0.25 Diluted EPS: Income from continuing operations $0.23 $0.19 Discontinued operations 0.14 0.06 Income $0.37 $0.25 Weighted average shares outstanding for EPS: Basic 95,274 88,188 Diluted 95,783 88,676 Reconciliation of Net Income to Funds From Operations (FFO) In thousands, except per share data Three Months Ended March 31, 2008 2007 Net income to FFO Net income $37,455 $26,048 Preferred stock dividends (2,062) (3,791) Real estate related depreciation and amortization 28,589 22,294 Depreciation in income from unconsolidated joint venture 1,115 164 Gains on sale of facilities (10,866) (66) FFO available to common stockholders 54,231 44,649 Series B preferred dividend add-back 2,062 2,062 Diluted FFO 56,293 46,711 Weighted average shares outstanding for FFO Diluted weighted average shares outstanding 95,783 88,676 Series B preferred stock add-back 4,728 4,698 Fully diluted weighted average shares outstanding 100,511 93,374 Diluted per share amounts: FFO $0.56 $0.50 Dividends declared per common share $0.44 $0.41 FFO payout ratio 79% 82% FFO coverage 1.27 1.22 Reconciliation of Net Income to Funds Available for Distribution (FAD) In thousands, except per share data Three Months Ended March 31, 2008 2007 Net income to FAD Net income $37,455 $26,048 Preferred stock dividends (2,062) (3,791) Real estate related depreciation and amortization 28,589 22,294 Gains on sale of facilities (10,866) (66) Straight-lined rent (2,837) (937) Amortization of above and below market lease intangibles 124 38 Non-cash stock-based compensation expense 1,331 1,020 Deferred finance cost amortization 747 687 Lease commissions and tenant and capital improvements (847) (613) NHP's share of FAD reconciling items from unconsolidated joint venture Real estate related depreciation and amortization 1,115 164 Deferred finance cost amortization 19 - FAD available to common stockholders 52,768 44,844 Series B preferred dividend add-back 2,062 2,062 Diluted FAD $54,830 $46,906 Weighted average shares outstanding for FAD Weighted average shares outstanding 95,783 88,676 Series B preferred stock add-back 4,728 4,698 Fully diluted weighted average shares outstanding 100,511 93,374 Diluted per share amounts: FAD $0.55 $0.50 Dividends declared per common share $0.44 $0.41 FAD payout ratio 80% 82% FAD coverage 1.25 1.22

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

Guidance Low High Net income $2.72 $2.77 Real estate related depreciation and amortization 1.14 1.14 Less: gains on sale (1.66) (1.66) Dilution from convertible preferred stock (0.02) (0.02) Diluted FFO guidance $2.18 $2.23 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 (0.05) (0.06) Diluted FAD guidance $2.10 $2.14 Consolidated Balance Sheets In thousands March 31, December 31, 2008 2007 Assets Real estate related investments: Land $286,771 $301,100 Buildings and improvements 2,747,883 2,896,876 3,034,654 3,197,976 Less accumulated depreciation (416,364) (410,865) Net real estate 2,618,290 2,787,111 Mortgage loans receivable, net 112,591 121,694 Investment in unconsolidated joint venture 50,417 52,637 Net real estate related investments 2,781,298 2,961,442 Cash and cash equivalents 30,117 19,407 Receivables, net 3,164 3,808 Assets held for sale 168,550 - Other assets 200,186 159,696 Total assets $3,183,315 $3,144,353 Liabilities and Stockholders' Equity Credit facility $56,000 $41,000 Senior notes due 2008 - 2038 1,156,500 1,166,500 Notes and bonds payable 334,269 340,150 Accounts payable and accrued liabilities 115,432 107,844 Total liabilities 1,662,201 1,655,494 Minority interests 5,720 6,166 Stockholders' equity: Series B convertible preferred stock 106,435 106,445 Common stock 9,615 9,481 Capital in excess of par value 1,604,746 1,565,249 Cumulative net income 1,326,206 1,288,751 Accumulated other comprehensive income 2,442 2,561 Cumulative dividends (1,534,050) (1,489,794) Total stockholders' equity 1,515,394 1,482,693 Total liabilities and stockholders' equity $3,183,315 $3,144,353