<PAGE>
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)
August 18, 1997 (January 2, 1997)
---------------------------------
NATIONWIDE HEALTH PROPERTIES, INC.
--------------------------------------------------
(Exact name of registrant as specified in charter)
Maryland 1-9028 95-3997619
- ------------------ ----------- --------------
(State or other (Commission (IRS employer
jurisdiction of file number) identification
incorporation) number)
610 Newport Center Drive, Suite 1150, Newport Beach, CA 92660-6429
------------------------------------------------------------------
(Address of principal executive offices)
Registrant's telephone number, including area code:
(714) 718-4400
--------------
Not Applicable
- -------------------------------------------------------------------------------
(Former name or former address, if changed since last report)
<PAGE>
ITEM 5. OTHER EVENTS.
- ------ ------------
During the period from January 1, 1997 through August 4, 1997, Nationwide
Health Properties, Inc. (the "Company") acquired from unrelated parties, 17
assisted living facilities ("ALF"), 8 long-term health care facilities ("SNF")
and one clinic ("CLN") in 20 separate transactions at an aggregate purchase
price of approximately $94,969,000. The facilities were, concurrently with
their acquisition, leased on a triple net basis to six different operators under
terms generally similar to the Company's existing leases. Each transaction was
funded by bank borrowings on the Company's revolving bank line of credit and by
cash on hand. The Company periodically uses funds raised through the issuance
of medium-term notes to repay indebtedness under its revolving bank line of
credit.
<TABLE>
<CAPTION>
Acquis-
Facility ition Purchase
Facility Name City State Type Beds Units Date Price
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Holley Court Terrace Oak Park IL ALF 178 1/2/97 $11,000,000
Trinity Towers Corpus Christi TX ALF 254 1/2/97 16,000,000
Liberty Village Muncie IN SNF 64 1/7/97 2,100,000
Oak Leaf Village Ligonier IN SNF 61 1/7/97 1,700,000
Countryside Health Care Muncie IN SNF 39 1/10/97 975,000
Sterling House of Mansfield Mansfield TX ALF 37 1/14/97 1,779,000
Sterling House of Richland Hills Richland Hills TX ALF 37 1/14/97 1,795,000
Sterling House of Oklahoma City Oklahoma City OK ALF 37 1/14/97 1,681,000
Sterling House of Broken Arrow Broken Arrow OK ALF 37 1/14/97 1,597,000
Sterling House of Salina II Salina KS ALF 42 3/19/97 2,100,000
Sterling House of Jacksonville Jacksonville FL ALF 42 4/10/97 2,715,000
Sterling House of Tavares Tavares FL ALF 42 4/28/97 2,600,000
Sterling House of Weatherford Weatherford TX ALF 37 5/6/97 1,725,000
Sterling House of Lewisville Lewisville TX ALF 42 5/21/97 2,135,000
Sterling House of Newark Newark OH ALF 42 6/28/97 2,250,000
Andover Health Center Andover KS SNF 153 7/1/97 9,300,000
Sterling House of Brighton Brighton CO ALF 42 7/11/97 2,350,000
Sterling House of Fairfield Fairfield OH ALF 42 7/22/97 2,171,500
Cleburne Center for Healthcare Heflin AL CLN(1) 7/28/97 3,860,784
Sterling House of Greenville Greenville OH ALF 42 7/29/97 2,510,000
Harborside HC Amesbury Rehab Amesbury MA SNF 120 8/1/97 4,432,410
Harborside Danvers Rehab Danvers MA SNF 101 8/1/97 3,167,410
Harborside Cedar Glen NH Danvers MA SNF 100 8/1/97 3,507,410
Harborside HC Northshore NC Saugus MA SNF 80 8/1/97 5,592,410
Sterling House of Punta Gorda Punta Gorda FL ALF 42 8/4/97 2,885,000
Sterling House of Gainesville Gainesville FL ALF 50 8/4/97 3,040,000
------------------------------------------
718 1,045 $94,968,923
------------------------------------------
</TABLE>
_______________________
(1) Approximately 17,500 square feet.
<PAGE>
The Company believes these acquisitions are consistent with the Company's
historical business strategy of acquiring and concurrently net leasing health
care facilities to qualified operators. In assessing the facilities, the
Company considered the type, location, age, design and physical condition of the
facilities acquired, as well as historical, if applicable, and projected
operating results of the health care operations conducted at the facilities.
Additionally, the Company considers the operating ability, financial condition
and reputation of the operator to which the acquired facilities are to be
leased. The Company, after reasonable inquiry, is not aware of any material
factors that would cause the financial information reported not to be
necessarily indicative of future operating results. The Company intends to
continue the current use of each property.
Although no single acquisition is considered a "significant acquisition"
pursuant to the rules governing the reporting of transactions on Form 8-K, under
Rule 3-14 of Regulation S-X, these acquisitions in the aggregate, may be
considered to be material in nature. Certain audited pro forma financial
information concerning these properties is provided in Item 7 of this Current
Report on Form 8-K.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
- ------ ---------------------------------
Financial information for the health care operations of the acquired
facilities is not presented because the related operating information for such
facilities, after exclusion of items not comparable to the proposed net leased
real estate operations by the Company pursuant to Rule 3-14 of Regulation S-X,
would not be meaningful. Alternatively, the Company has presented audited pro
forma operating information for each of the acquired properties as if the
acquired properties had been owned and net leased by the Company since January
1, 1996.
(a)(3) -Audited pro forma statements of income for the acquired facilities
for the year ended December 31, 1996.
(b)(1) -Unaudited pro forma balance sheet as of June 30, 1997 for the
Company after giving effect to the acquisition of the facilities.
-Pro forma statement of operations for the Company after giving
effect to the acquisition of the facilities for the six-month period
ended June 30, 1997.
-Pro forma statement of operations for the Company after giving
effect to the acquisition of the facilities for the year ended
December 31, 1996.
(c) Consent of Arthur Andersen LLP.
<PAGE>
REPORT OF THE INDEPENDENT PUBLIC ACCOUNTANTS
TO THE STOCKHOLDERS AND DIRECTORS, NATIONWIDE HEALTH PROPERTIES, INC:
We have examined the pro forma adjustments reflecting the transactions described
in Note 1 and the application of those adjustments to the assembly of the
accompanying pro forma statements of income of the properties acquired by
Nationwide Health Properties, Inc. during the period January 1, 1997 to August
4, 1997 as indicated in Item 5 of this Form 8-K (collectively "the Acquired
Properties") for the year ended December 31, 1996. The historical statements of
income are omitted since substantially all historical amounts are not relevant
on a pro forma basis and in some cases, the facilities were opened in 1997. The
pro forma adjustments are based upon management's assumptions described in Note
2. Our examination was made in accordance with standards established by the
American Institute of Certified Public Accountants and, accordingly, included
such procedures as we considered necessary in the circumstances.
The objective of this pro forma financial information is to show what the
significant effects on the historical financial information might have been had
the transactions occurred at an earlier date. However, the pro forma statements
of income are not necessarily indicative of the results of operations that would
have been attained had the above-mentioned transactions actually occurred
earlier.
In our opinion, management's assumptions provide a reasonable basis for
presenting the significant effects directly attributable to the above-mentioned
transactions described in Note 1, the related pro forma adjustments give
appropriate effect to those assumptions, and the pro forma statements of income
for the year ended December 31, 1996 reflect the proper application of those
adjustments to the historical statement of income amounts.
Arthur Andersen LLP
Orange County, California
August 15, 1997
<PAGE>
Pro Forma Statements of Income
For the Year Ended December 31, 1996
<TABLE>
<CAPTION>
Sterling
Sterling Sterling House
Holly Oak House House of
Court Trinity Liberty Leaf Countryside of of Oklahoma
Terrace Towers Village Village Healthcare Mansfield Richland Hills City
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues:
Minimum Rent $1,036,794 $1,508,097 $ 298,000 $ 240,000 $ 128,000 $ 171,727 $ 173,271 $ 162,227
------------------------------------------------------------------------------------------------------------
1,036,794 1,508,097 298,000 240,000 128,000 171,727 173,271 162,227
Expenses:
Depreciation 261,837 372,692 32,580 55,602 29,581 39,303 39,755 38,279
Interest 774,473 1,131,009 148,462 120,406 69,670 125,656 126,781 119,294
------------------------------------------------------------------------------------------------------------
1,036,310 1,503,701 181,042 176,008 99,251 164,959 166,536 157,573
------------------------------------------------------------------------------------------------------------
Net Income $ 484 $ 4,396 $ 116,958 $ 63,992 $ 28,749 $ 6,768 $ 6,735 $ 4,654
============================================================================================================
</TABLE>
See accompanying notes.
<PAGE>
Pro Forma Statements of Income
For the Year Ended December 31, 1996
<TABLE>
<CAPTION>
Sterling
House Sterling Sterling Sterling Sterling Sterling Sterling
of House House House House House House Andover
Broken of of of of of of Health
Arrow Salina II Jacksonville Tavares Weatherford Lewisville Newark Center
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues:
Minimum Rent $154,158 $204,792 $270,604 $263,380 $174,777 $214,012 $220,478 $906,750
---------------------------------------------------------------------------------------
154,158 204,792 270,604 263,380 174,777 214,012 220,478 906,750
Expenses:
Depreciation 36,106 47,880 59,177 61,410 39,644 46,970 50,999 257,743
Interest 113,427 147,896 191,098 182,660 121,016 149,546 158,367 651,309
---------------------------------------------------------------------------------------
149,533 195,776 250,275 244,070 160,660 196,516 209,366 909,052
---------------------------------------------------------------------------------------
Net Income $ 4,625 $ 9,016 $ 20,329 $ 19,310 $ 14,117 $ 17,496 $ 11,112 $ (2,302)
=======================================================================================
</TABLE>
See Accompanying Notes.
<PAGE>
Pro Forma Statements of Income
For the Year Ended December 31, 1996
<TABLE>
<CAPTION>
Sterling
Sterling Sterling Cleburne Sterling Harborside House
House House Center House Harborside HC Harborside Harborside HC of
of of for of Amesbury Danvers Cedar Northshore Punta
Brighton Fairfield Healthcare Greenville Rehab Rehab Glen NH NC Gorda
---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues:
Minimum Rent $227,880 $208,095 $391,483 $239,906 $ 418,508 $ 299,067 $ 331,170 $ 528,035 $ 273,873
---------------------------------------------------------------------------------------------------------------------
227,880 208,095 391,483 239,906 418,508 299,067 331,170 528,035 273,873
Expenses:
Depreciation 53,875 47,913 90,695 57,750 140,733 95,856 106,504 174,728 67,250
Interest 165,362 152,881 270,996 176,549 311,215 222,395 246,268 392,663 202,769
---------------------------------------------------------------------------------------------------------------------
219,237 200,794 361,691 234,299 451,948 318,251 352,772 567,391 270,019
---------------------------------------------------------------------------------------------------------------------
Net income $ 8,643 $ 7,301 $ 29,792 $ 5,607 $ (33,440) $ (19,184) $ (21,602) $ (39,356) $ 3,854
=====================================================================================================================
</TABLE>
See Accompanying Notes.
<PAGE>
Pro Forma Statements of Income
For the Year Ended December 31, 1996
<TABLE>
<CAPTION>
Sterling
House
of
Gainesville
-------------
<S> <C>
Revenues:
Minimum Rent $ 288,587
-------------
288,587
Expenses:
Depreciation 67,475
Interest 213,607
-------------
281,082
-------------
Net Income $ 7,505
=============
</TABLE>
See accompanying notes
<PAGE>
FOOTNOTES TO PRO FORMA STATEMENTS OF INCOME
NOTE 1: Nationwide Health Properties, Inc. (the "Company") acquired 17 assisted
living facilities, 8 long-term health care facilities and one clinic in 20
separate transactions at an aggregate purchase price of approximately
$94,969,000. The facilities were leased to six different operators under terms
generally similar to the Company's existing leases. The facilities are leased
under "net" leases which are accounted for as operating leases. The leases have
initial terms of 9 to 14 years. The Company earns fixed monthly minimum rent and
may earn periodic additional rents. The additional payments are generally
computed based upon increases in the Consumer Price Index or as a percentage of
facility net patient revenues in excess of base amounts. Additional rents
generally commence in the second year of the leases. Under terms of the leases,
the lessees are responsible for all maintenance, repairs, taxes and insurance on
the leased properties.
The pro forma statements of income reflect the acquisitions of the properties as
if they had been owned since January 1, 1996.
NOTE 2: Pro forma minimum rents are based upon the monthly minimum rents
specified in the leases. No additional rent amounts are assumed for purposes of
the pro forma statements of income based upon the terms of the lease.
Pro forma depreciation is based upon the purchase prices of the facilities being
allocated to building and depreciated over 30 to 40 year lives.
Pro forma interest expense is based upon allocating the Company's weighted
average borrowing on the Company's 1997 medium term note issuances and its June
30, 1997 cost on its unsecured revolving line of credit applied against the
aggregate purchase prices. Such weighted average rate was 6.99%. The Company's
unsecured line of credit matures on May 31, 2000. The Company anticipates
repaying such line of credit borrowings at some time in the future prior to its
current maturity with proceeds from public offerings or private placements of
long-term unsecured debt or equity. Accordingly, the actual interest expense
resulting from the acquisitions of the facilities may vary.
No pro forma general and administrative costs are included because: (1) such
amounts are expected to be immaterial, and (2) the Company does not expect to
add additional staff as a result of the transactions described in Note 1 above.
NOTE 3: The preparation of financial statements requires management to make
estimates and assumptions that affect the revenues and expenses during the
reporting period. Actual results could differ from those estimates.
<PAGE>
PRO FORMA FINANCIAL INFORMATION
The following unaudited Pro Forma Balance Sheet as of June 30, 1996 and
unaudited Pro Forma Statements of Operations for the six months ended June 30,
1997 and for the year ended December 31, 1996 have been prepared to reflect the
acquisition of 26 facilities during the period from January 1, 1997 through
August 4, 1997 (the "Acquired Facilities") and the adjustments described in the
accompanying notes. The pro forma financial information is based on the
historical financial statements of Nationwide Health Properties, Inc. in the
Company's Form 10-Q for the period ended June 30, 1997 and the other financial
information in the Company's 1996 Annual Report to Shareholders on Form 10-K,
and should be read in conjunction with those financial statements and the notes
thereto.
The Pro Forma Balance Sheet was prepared as if the Acquired Facilities were
purchased on June 30, 1997. The Pro Forma Statements of Operations were
prepared as if the Acquired Facilities were purchased as of January 1, 1996.
The combined pro forma financial information is not necessarily indicative
of the financial position or results of operations which actually would have
occurred if such transactions had been consummated on the dates described, nor
does it purport to represent the Company's future financial position or results
of operations.
<PAGE>
NATIONWIDE HEALTH PROPERTIES, INC.
UNAUDITED PRO FORMA CONDENSED BALANCE SHEETS
JUNE 30, 1997
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
Pro Forma
June 30, June 30,
ASSETS 1997 Adjustments 1997
--------- ------------ ----------
<S> <C> <C> <C>
Investments in real estate:
Real estate properties
Land $ 83,974 $ 3,038 $ 87,012
Buildings and improvements 623,754 39,954 663,708
Construction in progress 10,631 10,631
--------- ---------- ---------
718,359 42,992 761,351
Less accumulated depreciation (97,250) (97,250)
--------- ---------- ---------
621,109 42,992 664,101
Mortgage loans receivable, net 199,487 199,487
--------- ---------- ---------
820,596 42,992 863,588
Cash and cash equivalents 10,686 (175) 10,511
Receivables 4,595 4,595
Other assets 8,062 8,062
--------- ---------- ---------
$ 843,939 $ 42,817 $ 886,756
========= ========== =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Bank borrowings $ 46,300 $ 17,817 $ 64,117
Senior notes due 2000-2015 275,000 25,000 300,000
Convertible debentures 64,720 64,720
Notes and bonds payable 9,189 9,189
Accounts payable and accrued
liabilities 22,666 22,666
Stockholders' equity:
Common stock 4,181 4,181
Capital in excess of par value 462,946 462,946
Cumulative net income 329,748 329,748
Cumulative dividends (370,811) (370,811)
--------- ---------- ---------
Total stockholders' equity 426,064 - 426,064
--------- ---------- ---------
$ 843,939 $ 42,817 $ 886,756
========= ========== =========
</TABLE>
See accompanying notes.
<PAGE>
NATIONWIDE HEALTH PROPERTIES, INC.
UNAUDITED PRO FORMA CONDENSED STATEMENTS OF OPERATIONS
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
Pro Forma
Six Months Six Months
Ended Ended
June 30, 1997 Adjustments June 30, 1997
------------- ------------- --------------
<S> <C> <C> <C>
Revenues:
Base rent $ 36,747 $ 2,543 $ 39,290
Interest and other income 10,095 10,095
Additional rent and additional interest 6,658 6,658
---------------------------------------------
53,500 2,543 56,043
Expenses:
Interest and amort. of deferred financing costs 12,767 1,842 14,609
Depreciation and non-cash charges 9,252 598 9,850
General and administrative 1,812 - 1,812
---------------------------------------------
23,831 2,440 26,271
---------------------------------------------
Net income $ 29,669 $ 103 $ 29,772
=============================================
Net income per share $ 0.71 $ 0.71
========== ========
Weighted average shares outstanding 41,802 41,802
========== ========
</TABLE>
See accompanying notes
<PAGE>
NATIONWIDE HEALTH PROPERTIES, INC.
UNAUDITED PRO FORMA CONDENSED STATEMENTS OF OPERATIONS
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
Pro Forma
Year Year
Ended Ended
December 31, December 31,
------------ ------------
1996 Adjustments 1996
------------------------------------------
<S> <C> <C> <C>
Revenues:
Base rent $66,536 $9,334 $75,870
Interest and other income 17,104 17,104
Additional rent and additional interest 12,136 12,136
------------------------------------------
95,776 9,334 105,110
Expenses:
Interest and amort. of deferred financing costs 20,797 6,686 27,483
Depreciation and non-cash charges 16,723 2,372 19,095
General and administrative 3,312 - 3,312
------------------------------------------
40,832 9,058 49,890
------------------------------------------
Net income $54,944 $ 276 $55,220
==========================================
Net income per share $ 1.36 $ 1.37
============ =======
Weighted average shares outstanding 40,373 40,373
============ =======
</TABLE>
See accompanying notes
<PAGE>
FOOTNOTES TO UNAUDITED PRO FORMA FINANCIAL STATEMENTS
NOTE 1: Nationwide Health Properties, Inc. (the "Company") acquired 17 assisted
living facilities, 8 long-term health care facilities and one clinic in 20
separate transactions at an aggregate purchase price of approximately
$94,969,000. The facilities were leased to six different operators under terms
generally similar to the Company's existing leases. The facilities are leased
under "net" leases which are accounted for as operating leases. The leases have
initial terms of 9 to 14 years. The Company earns fixed monthly minimum rent
and may earn periodic additional rents. The additional payments are generally
computed based upon increases in the Consumer Price Index or as a percentage of
facility net patient revenues in excess of base amounts. Additional rents
generally commence in the second year of the leases. Under terms of the leases,
the lessees are responsible for all maintenance, repairs, taxes and insurance
on the leased properties.
The pro forma statements of operations reflect the acquisitions of the
properties as if they had been owned since January 1, 1996, and the pro forma
balance sheet reflects the acquisition of the properties as if they had been
owned on June 30, 1997.
NOTE 2: The pro forma balance sheet adjustments reflect the allocation between
land and building and improvements of the $42,992,000 of acquired properties
purchased after June 30, 1997, the increase in bank borrowings and a medium term
note issuance used to fund the purchase, and a reduction in cash to reflect
payment of miscellaneous closing costs. No adjustment has been made to
accumulated depreciation for those properties acquired prior to June 30, 1997.
NOTE 3: The pro forma minimum rent adjustment is based upon the monthly minimum
rents specified in the leases. No additional rent amounts are assumed for
purposes of the pro forma statements of income based upon the terms of the
lease.
The pro forma depreciation adjustment is based upon the purchase prices of the
facilities being allocated to building and depreciated over 30 to 40 year lives.
The pro forma interest expense adjustment is based upon allocating the Company's
weighted average borrowing on the Company's 1997 medium term note issuances and
its June 30, 1997 cost on its unsecured revolving line of credit applied against
the aggregate purchase prices. Such weighted average rate was 6.99%. The
Company's unsecured line of credit matures on May 31, 2000. The Company
anticipates repaying such line of credit borrowings at some time in the future
prior to its current maturity with proceeds from public offerings or private
placements of long-term unsecured debt or equity. Accordingly, the actual
interest expense resulting from the acquisitions of the facilities may vary.
<PAGE>
No pro forma general and administrative costs are included because: (1) such
amounts are expected to be immaterial, and (2) the Company does not expect to
add additional staff as a result of the transactions described in Note 1 above.
NOTE 4: The preparation of financial statements requires management to make
estimates and assumptions that affect the revenues and expenses during the
reporting period. Actual results could differ from those estimates.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
NATIONWIDE HEALTH PROPERTIES, INC.
Date: August 18, 1997 By: /s/ MARK L. DESMOND
-------------------------------
Name: Mark L. Desmond
Title: Senior Vice President and
Chief Financial Officer
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the previously filed
Registration Statements (No. 33-35276, No. 33-39156, No. 33-64798, No. 33-65423,
No. 333-17061, No. 333-20589, and No. 333-32135) of Nationwide Health
Properties, Inc. of our report dated August 15, 1997, with respect to the Pro
Forma Statements of Income of the Acquired Properties (as listed in Item 5 of
the Current Report on Form 8-K) included in the Current Report on Form 8-K dated
August 18, 1997, filed with the Securities and Exchange Commission.
ARTHUR ANDERSEN LLP
Orange County, California
August 18, 1997
