NEWTON, Mass., Aug 07, 2009 (BUSINESS WIRE) -- Senior Housing Properties Trust (NYSE: SNH) today announced its
financial results for the quarter and six months ended June 30, 2009, as
follows:
Results for the quarter ended June 30, 2009:
Net income was $30.5 million, or $0.25 per share, for the quarter ended
June 30, 2009, compared to net income of $21.7 million, or $0.22 per
share, for the quarter ended June 30, 2008. Net income for the quarter
ended June 30, 2008 includes an impairment of assets charge of $2.9
million, or $0.03 per share, related to one property we intend to sell.
Funds from operations, or FFO, for the quarter ended June 30, 2009 was
$52.8 million, or $0.44 per share. This compares to FFO for the quarter
ended June 30, 2008 of $41.2 million, or $0.41 per share.
The weighted average number of common shares outstanding totaled 120.5
million and 100.3 million for the quarters ended June 30, 2009 and 2008,
respectively.
Results for the six months ended June 30, 2009:
Net income for the six months ended June 30, 2009 was $62.0 million, or
$0.52 per share, compared to net income of $45.0 million, or $0.47 per
share, for the six months ended June 30, 2008. Net income for the six
months ended June 30, 2008 includes an impairment of assets charge of
$2.9 million, or $0.03 per share, related to one property we intend to
sell.
FFO for the six months ended June 30, 2009, was $105.0 million, or $0.88
per share. This compares to FFO for the six months ended June 30, 2008
of $79.6 million, or $0.83 per share.
The weighted average number of common shares outstanding totaled 119.2
million and 95.7 million for the six months ended June 30, 2009 and
2008, respectively.
A reconciliation of net income determined according to U.S. generally
accepted accounting principles, or GAAP, to FFO appears below in this
press release.
Recent Activities:
On June 26, 2009, SNH was elevated to the Russell 1000 Index.
On August 4, 2009, we closed a $512.9 million mortgage financing with
the Federal National Mortgage Association (NYSE: FNM). This mortgage
loan is secured by first liens on 28 senior living properties leased to
Five Star Quality Care, Inc., or Five Star, with 5,618 living units /
beds located in 16 states. We used a portion of the proceeds from this
mortgage financing to repay amounts outstanding under our revolving
credit facility and to purchase three medical office, clinic and biotech
laboratory buildings, or MOBs, from HRPT Properties Trust, or HRP. We
intend to use the balance of proceeds to fund investments, including
possibly accelerating the remaining MOB acquisitions from HRP, and for
general business purposes.
In connection with the FNM transaction, we realigned our four leases
with Five Star. Lease no. 1 now includes 80 properties, including
independent living communities, assisted living communities and skilled
nursing facilities, and expires in 2024. Lease no. 2 now includes 50
properties, including independent living communities, assisted living
communities, skilled nursing facilities and two rehabilitation
hospitals, and expires in 2026. Lease no. 3 now includes the 28 FNM
financed properties, including independent living communities and
assisted living communities, and expires in 2028. Lease no. 4 now
includes 25 properties, including independent living communities,
assisted living communities and skilled nursing facilities, and expires
in 2017.
In May 2008, we entered into a series of agreements to acquire 48 MOBs
from HRP for an aggregate purchase price of approximately $565.0
million. In January 2009, we acquired one of these MOBs containing
50,000 square feet for $19.3 million, plus closing costs. In May 2009,
we acquired two of these MOBs from HRP containing 192,000 square feet
for $50.8 million, plus closing costs. On August 6, 2009, we acquired
three of these MOBs from HRP containing 164,000 square feet for $115.7
million, plus closing costs. In May 2009, we sold one of our MOB
properties classified as held for sale to an unaffiliated party for
approximately $3.1 million which was its approximate net book value. We
now own 42 of these properties containing 1.9 million square feet for an
aggregate purchase price of approximately $527.6 million, plus closing
costs. One of the remaining buildings with an allocated value of $3.0
million is no longer subject to our purchase agreement and one of the
MOBs we acquired from HRP which was subject to a multi-property lease
was sold at the tenant's request. We expect the closing of the purchase
of the remaining four pending MOBs to occur by February 2010. We and HRP
may mutually agree to accelerate the closings of these acquisitions. We
funded these acquisitions using cash on hand, proceeds from equity
issuances, borrowings under our revolving credit facility and by
assuming three mortgage loans on two properties totaling $10.8 million
with a weighted average interest rate of 7.1% per annum and a weighted
average maturity in 2018.
In 2009, we invested $5.1 million in Affiliates Insurance Company, or
AIC, with Reit Management & Research LLC, or RMR, and other companies to
which RMR provides management services. This investment in AIC has a
carrying value of $5.0 million at June 30, 2009. We currently own 16.67%
of this insurance company.
Conference Call:
On Friday, August 7, 2009, at 10:00 a.m. Eastern Time, David J. Hegarty,
President and Chief Operating Officer, and Richard A. Doyle, Chief
Financial Officer, will host a conference call to discuss the results
for the second quarter ended June 30, 2009. The conference call
telephone number is 888-677-8756. Participants calling from outside the
United States and Canada should dial 913-312-1419. No pass code is
necessary to access the call from either number. Participants should
dial in about 15 minutes prior to the scheduled start of the call. A
replay of the conference call will be available through 1:00 p.m.
Eastern Time, Friday, August 14, 2009. To hear the replay, dial
719-457-0820. The replay pass code is 9178004.
A live audio web cast of the conference call will also be available in
listen only mode on the SNH website. Participants wanting to access the
webcast should visit the website about five minutes before the call. The
archived webcast will be available for replay on the SNH website for
about one week after the call.
Supplemental Data:
A copy of SNH's Second Quarter 2009 Supplemental Operating and Financial
Data is available for download from the SNH website, www.snhreit.com.
Senior Housing Properties Trust is a real estate investment trust, or
REIT, that owns 276 properties located in 34 states and Washington, D.C.
SNH is headquartered in Newton, Massachusetts.
Senior Housing Properties Trust |
Financial Information |
(in thousands, except per share data)
|
| | | | |
Income Statement: | | | | |
| | | | |
| | Quarter Ended June 30, | | Six Months Ended June 30, |
| | 2009 | | 2008 | | 2009 | | 2008 |
|
Revenues:
| | | | | | | | |
|
Rental income
| |
$
|
69,399
| |
$
|
52,708
| |
$
|
137,776
| |
$
|
101,747
|
|
Interest and other income
| | |
186
| | |
682
| | |
394
| | |
1,196
|
|
Total revenues
| | |
69,585
| | |
53,390
| | |
138,170
| | |
102,943
|
|
Expenses:
| | | | | | | | |
|
Property operating expenses
| | |
3,219
| | |
100
| | |
6,174
| | |
100
|
|
Interest
| | |
10,707
| | |
9,810
| | |
21,483
| | |
19,328
|
|
Depreciation
| | |
18,635
| | |
14,327
| | |
37,024
| | |
27,376
|
|
Acquisition costs (1) | | |
1,282
| | |
-
| | |
1,394
| | |
-
|
|
General and administrative
| | |
5,231
| | |
4,533
| | |
10,051
| | |
8,203
|
|
Impairment of assets (2) | | |
-
| | |
2,940
| | |
-
| | |
2,940
|
|
Total expenses
| | |
39,074
| | |
31,710
| | |
76,126
| | |
57,947
|
| | | | | | | | |
|
Net income
| |
$
|
30,511
| |
$
|
21,680
| |
$
|
62,044
| |
$
|
44,996
|
| | | | | | | | |
|
Weighted average shares outstanding
| | |
120,455
| | |
100,302
| | |
119,161
| | |
95,691
|
|
Per share data:
| | | | | | | | |
|
Net income
| |
$
|
0.25
| |
$
|
0.22
| |
$
|
0.52
| |
$
|
0.47
|
| | | | |
Balance Sheet: | | | | |
| |
At June 30, 2009
| |
At December 31, 2008
|
Assets | | | | |
|
Real estate properties
| |
$
|
2,896,734
| |
$
|
2,807,256
|
|
Less accumulated depreciation
| | |
416,697
| | |
381,339
|
| | |
2,480,037
| | |
2,425,917
|
|
Cash and cash equivalents
| | |
5,373
| | |
5,990
|
|
Restricted cash
| | |
4,589
| | |
4,344
|
|
Deferred financing fees, net
| | |
6,340
| | |
5,068
|
|
Acquired real estate leases, net
| | |
31,834
| | |
30,546
|
|
Other assets
| | |
32,025
| | |
25,009
|
|
Total assets
| |
$
|
2,560,198
| |
$
|
2,496,874
|
| | | | |
Liabilities and Shareholders' Equity | | | | |
|
Unsecured revolving credit facility
| |
$
|
235,000
| |
$
|
257,000
|
|
Senior unsecured notes, net of discount
| | |
322,089
| | |
322,017
|
|
Secured debt and capital leases
| | |
149,931
| | |
151,416
|
|
Total debt
| | |
707,020
| | |
730,433
|
|
Acquired real estate lease obligations, net
| | |
8,509
| | |
7,974
|
|
Other liabilities
| | |
35,096
| | |
27,109
|
|
Total liabilities
| | |
750,625
| | |
765,516
|
|
Shareholders' equity
| | |
1,809,573
| | |
1,731,358
|
|
Total liabilities and shareholders' equity
| |
$
|
2,560,198
| |
$
|
2,496,874
|
| | | | |
(1) Acquisition costs are expensed under Statement of Financial
Accounting Standards No. 141(R), "Business Combinations",
commencing January 1, 2009.
|
(2) During the three and six months ended June 30, 2008, we
recognized an impairment of assets charge of $2.9 million related
to one property.
|
Senior Housing Properties Trust |
Funds from Operations |
(in thousands, except per share data)
|
| | | | |
Calculation of Funds from Operations (FFO) (1): |
| | | | |
| | Quarter Ended June 30, | | Six Months Ended June 30, |
| | 2009 | | 2008 | | 2009 | | 2008 |
|
Net income
| |
$
|
30,511
| |
$
|
21,680
| |
$
|
62,044
| |
$
|
44,996
|
|
Add: Depreciation expense
| | |
18,635
| | |
14,327
| | |
37,024
| | |
27,376
|
|
Acquisition costs (2) | | |
1,282
| | |
-
| | |
1,394
| | |
-
|
|
Impairment of assets (3) | | |
-
| | |
2,940
| | |
-
| | |
2,940
|
|
Deferred percentage rent (4) | | |
2,400
| | |
2,300
| | |
4,500
| | |
4,250
|
|
FFO
| |
$
|
52,828
| |
$
|
41,247
| |
$
|
104,962
| |
$
|
79,562
|
| | | | | | | | |
|
Weighted average shares outstanding
| | |
120,455
| | |
100,302
| | |
119,161
| | |
95,691
|
| | | | | | | | |
|
FFO per share
| |
$
|
0.44
| |
$
|
0.41
| |
$
|
0.88
| |
$
|
0.83
|
|
Distributions declared
| |
$
|
0.36
| |
$
|
0.35
| |
$
|
0.71
| |
$
|
0.70
|
(1) We compute FFO as shown above. FFO as defined by the National
Association of Real Estate Investment Trusts, or NAREIT, represents net
income (computed in accordance with GAAP), plus real estate depreciation
and amortization (excluding amortization of deferred financing fees).
Our calculation of FFO begins with income before gain or loss on sale of
properties or, if this amount is the same as net income, as net income,
and differs from NAREIT's definition of FFO because we include deferred
percentage rent, if any, impairment of assets, if any, and acquisition
costs, if any, in FFO. We consider FFO to be an appropriate measure of
performance for a REIT, along with net income and cash flow from
operating, investing and financing activities. We believe that FFO
provides useful information to investors because by excluding the
effects of certain historical amounts, such as depreciation expense,
acquisition costs and gain or loss on sale of properties, FFO can
facilitate a comparison of operating performances during different
periods and among REITs. FFO does not represent cash generated by
operating activities in accordance with GAAP, and should not be
considered an alternative to net income or cash flow from operating
activities as a measure of financial performance or liquidity. Also,
other REITs may not calculate FFO the same way as us.
(2) Acquisition costs are expensed under Statement of Financial
Accounting Standards No. 141(R), "Business Combinations", commencing
January 1, 2009.
(3) During the three and six months ended June 30, 2008, we recognized
an impairment of assets charge of $2.9 million related to one property.
(4) Our percentage rents are generally calculated on an annual basis. We
recognize percentage rental income received during the first, second and
third quarters in the fourth quarter when all contingencies related to
percentage rents are satisfied. Although recognition of revenue is
deferred until the fourth quarter, our FFO calculation for the first
three quarters includes estimated amounts of deferred percentage rents
with respect to those periods. The fourth quarter calculation of FFO
excludes the amounts recognized during the first three quarters.
WARNING CONCERNING FORWARD LOOKING
STATEMENTS
THIS PRESS RELEASE CONTAINS STATEMENTS WHICH CONSTITUTE FORWARD LOOKING
STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION
REFORM ACT OF 1995 AND OTHER FEDERAL SECURITIES LAWS. WHENEVER WE USE
WORDS SUCH AS "BELIEVE", "EXPECT", "ANTICIPATE", "INTEND", "PLAN",
"ESTIMATE" OR SIMILAR EXPRESSIONS, WE ARE MAKING FORWARD LOOKING
STATEMENTS. THESE FORWARD LOOKING STATEMENTS ARE BASED UPON OUR PRESENT
INTENT, BELIEFS OR EXPECTATIONS, BUT FORWARD LOOKING STATEMENTS ARE NOT
GUARANTEED TO OCCUR AND MAY NOT OCCUR. OUR ACTUAL RESULTS MAY DIFFER
MATERIALLY FROM THOSE CONTAINED IN OR IMPLIED BY OUR FORWARD LOOKING
STATEMENTS AS A RESULT OF VARIOUS FACTORS. FOR EXAMPLE:
-
THIS PRESS RELEASE STATES THAT WE INTEND TO USE A PORTION OF THE
PROCEEDS OF THE FNM MORTGAGE LOAN TO FUND INVESTMENTS, INCLUDING
ACCELERATING THE CLOSING OF PREVIOUSLY ANNOUNCED PURCHASES OF MOBS
FROM HRP. WE ARE CURRENTLY CONSIDERING SEVERAL ACQUISITION
OPPORTUNITIES; HOWEVER, THERE CAN BE NO ASSURANCE THAT WE WILL
CONCLUDE ANY OF THESE ACQUISITIONS OR THAT ALTERNATIVE ACQUISITIONS
WILL BE IDENTIFIED AND CLOSED. ALTHOUGH WE AND HRP HAVE PREVIOUSLY
AGREED UPON TERMS FOR OUR PURCHASES OF CERTAIN MOBS, THE CLOSING OF
THESE SALES REMAIN SUBJECT TO SATISFACTORY COMPLETION OF VARIOUS
CONDITIONS TYPICAL OF LARGE COMMERCIAL REAL ESTATE PURCHASES AND WE DO
NOT HAVE THE UNILATERAL RIGHT TO ACCELERATE THESE CLOSINGS, WHICH ARE
NOW SCHEDULED TO OCCUR BY FEBRUARY 2010. IN PARTICULAR, INVESTORS
SHOULD NOTE THAT WE AND HRP ARE BOTH MANAGED BY RMR AND HAVE CERTAIN
COMMON TRUSTEES; ACCORDINGLY, ANY CHANGE TO ACCELERATE THE CLOSINGS OF
SALES BY HRP TO US WILL REQUIRE THE SEPARATE APPROVALS OF OUR AND
HRP'S TRUSTEES, WHO ARE NOT ALSO TRUSTEES OF THE OTHER COMPANY; AND
-
OUR PARTICIPATION IN AN INSURANCE BUSINESS WITH RMR AND ITS AFFILIATES
INVOLVES POTENTIAL FINANCIAL RISKS AND REWARDS TYPICAL OF ANY START UP
BUSINESS VENTURE AS WELL AS OTHER FINANCIAL RISKS AND REWARDS SPECIFIC
TO INSURANCE COMPANIES. AMONG THE RISKS THAT ARE SPECIFIC TO INSURANCE
COMPANIES IS THE RISK THAT AIC MAY NOT BE ABLE TO ADEQUATELY PAY
CLAIMS WHICH COULD LEAVE OUR COMPANY UNDERINSURED AND INCREASE ITS
FUNDING EXPOSURE FOR CLAIMS THAT MIGHT OTHERWISE HAVE BEEN FUNDED IF
INSURANCE WAS PURCHASED FROM FINANCIALLY MORE SECURE INSURERS.
ACCORDINGLY, ANY IMPLICATION THAT WE WILL BENEFIT FROM OUR INVESTMENT
IN AIC MAY NOT OCCUR. RATHER, OUR EXPECTED FINANCIAL BENEFITS FROM OUR
INITIAL OR FUTURE INVESTMENTS IN AIC MAY BE DELAYED OR MAY NOT OCCUR
AND AIC MAY REQUIRE MORE FUNDING THAN WE EXPECT.
FOR MORE INFORMATION REGARDING SNH'S RELATIONSHIPS AND DEALINGS WITH
RMR, HRP, AIC AND FIVE STAR AND THEIR OFFICERS, DIRECTORS OR TRUSTEES
AND AFFILIATES AND ABOUT THE RISKS WHICH MAY ARISE AS A RESULT OF THESE
RELATED PERSON TRANSACTIONS, PLEASE SEE SNH'S ANNUAL REPORT ON FORM 10-K
FOR THE YEAR ENDED DECEMBER 31, 2008 (THE "ANNUAL REPORT"), ITS
QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 2009 (THE
"QUARTERLY REPORT") AND ITS OTHER FILINGS MADE WITH THE SECURITIES AND
EXCHANGE COMMISSION; AND IN PARTICULAR THE SECTION CAPTIONED "RISK
FACTORS" IN THE ANNUAL REPORT, THE SECTIONS CAPTIONED "MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
- RELATED PERSON TRANSACTIONS" IN THE ANNUAL REPORT AND THE QUARTERLY
REPORT AND THE SECTION CAPTIONED "RELATED PERSON TRANSACTIONS AND
COMPANY REVIEW OF SUCH TRANSACTIONS" IN SNH'S PROXY STATEMENT DATED
MARCH 30, 2009 RELATED TO ITS 2009 ANNUAL SHAREHOLDERS MEETING.
OTHER IMPORTANT FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER
MATERIALLY FROM THOSE IN OUR FORWARD LOOKING STATEMENTS ARE DESCRIBED
MORE FULLY UNDER "ITEM 1A. RISK FACTORS" IN OUR ANNUAL REPORT ON FORM
10-K FOR THE YEAR ENDED DECEMBER 31, 2008.
YOU SHOULD NOT PLACE UNDUE RELIANCE UPON FORWARD LOOKING
STATEMENTS.EXCEPT AS REQUIRED BY LAW, WE DO NOT INTEND TO UPDATE OR
CHANGE ANY FORWARD LOOKING STATEMENTS AS A RESULT OF NEW INFORMATION,
FUTURE EVENTS OR OTHERWISE.
SOURCE: Senior Housing Properties Trust
Senior Housing Properties Trust
Timothy A. Bonang, 617-796-8234
Director of Investor Relations
or
Katherine L. Johnston, 617-796-8234
Manager of Investor Relations
www.snhreit.com
Copyright Business Wire 2009