NEWTON, Mass., Nov 01, 2010 (BUSINESS WIRE) -- Senior Housing Properties Trust (NYSE: SNH) today announced its
financial results for the quarter and nine months ended September 30,
2010.
Results for the quarter ended September 30, 2010:
Funds from operations, or FFO, for the quarter ended September 30, 2010
was $53.5 million, or $0.42 per share. This compares to FFO for the
quarter ended September 30, 2009 of $49.4 million, or $0.41 per share.
Net income was $28.1 million, or $0.22 per share, for the quarter ended
September 30, 2010, compared to net income of $15.6 million, or $0.13
per share, for the quarter ended September 30, 2009.
Net income for the quarter ended September 30, 2010 includes a gain on
sale of approximately $109,000, or less than $0.01 per share, related to
the sale of four properties in August 2010. Net income for the quarter
ended September 30, 2009 includes an impairment of assets charge of
$11.2 million, or $0.09 per share, related to eight properties. For
purposes of calculating FFO, all of the foregoing items are excluded
from our determination of FFO.
The weighted average number of common shares outstanding totaled 127.4
million and 121.7 million for the quarters ended September 30, 2010 and
2009, respectively.
A reconciliation of net income determined according to U.S. generally
accepted accounting principles, or GAAP, to FFO for the quarters ended
September 30, 2010 and 2009 appears later in this press release.
Results for the nine months ended September 30, 2010:
FFO for the nine months ended September 30, 2010 was $161.6 million, or
$1.27 per share. This compares to FFO for the nine months ended
September 30, 2009 of $154.4 million, or $1.29 per share.
Net income was $82.6 million, or $0.65 per share, for the nine months
ended September 30, 2010, compared to net income of $77.6 million, or
$0.65 per share, for the nine months ended September 30, 2009.
Net income for the nine months ended September 30, 2010 includes a loss
on early extinguishment of debt of approximately $2.4 million, or $0.02
per share, related to the redemption of all $97.5 million of our
outstanding 7.875% senior notes due 2015. Net income for the nine months
ended September 30, 2010 also includes a gain on sale of approximately
$109,000, or less than $0.01 per share, related to the sale of four
properties in August 2010 and a non-cash impairment of assets charge of
$1.1 million, or $0.01 per share, related to five properties. Net income
for the nine months ended September 30, 2009 includes an impairment of
assets charge of $11.2 million, or $0.09 per share, related to eight
properties. For purposes of calculating FFO, all of the foregoing items
are excluded from our determination of FFO.
The weighted average number of common shares outstanding totaled 127.4
million and 120.0 million for the nine months ended September 30, 2010
and 2009, respectively.
A reconciliation of net income determined according to GAAP to FFO for
the nine months ended September 30, 2010 and 2009 appears later in this
press release.
Recent Investment and Sales Activities:
Since July 1, 2010, SNH has acquired three medical office buildings, or
MOBs, for an aggregate purchase price of approximately $43.2 million,
excluding closing costs. SNH also sold four skilled nursing facilities
for an aggregate sale price of $1.5 million.
-
In September 2010, SNH acquired a MOB located in Buffalo Grove
(Chicago), IL with 64,860 square feet. This property is 88% leased to
seven tenants for a weighted (by rents) average lease term of
approximately 7.5 years. The purchase price was $18.4 million,
excluding closing costs.
-
In September 2010, SNH acquired a MOB located in Conyers (Atlanta), GA
with 38,030 square feet. This property is 91% leased to seven tenants
for a weighted (by rents) average lease term of approximately 8.3
years. The purchase price was $9.8 million, excluding closing costs.
-
In October 2010, SNH acquired a MOB located in Conroe (Houston), TX
with 58,605 square feet. This property is 100% leased to Montgomery
County Management Company, LLC for approximately 13.8 years. The
purchase price was $15.0 million, excluding closing costs.
-
In August 2010, SNH sold four skilled nursing facilities located in
Nebraska with an aggregate 196 licensed beds. These four properties
were operated and leased by Five Star Quality Care, Inc. The aggregate
sale price was $1.5 million. SNH recognized a gain on sale of these
properties of approximately $109,000.
Recent Financing Activities:
On July 29, 2010, Moody's Investors Service upgraded SNH's senior
unsecured bonds to an investment grade rating of Baa3. On August 24,
2010, Standard and Poor's Ratings Services upgraded SNH's corporate
credit rating to an investment grade rating of BBB-.
Conference Call:
On Monday, November 1, 2010, at 1 p.m. Eastern Time, David J. Hegarty,
President and Chief Operating Officer, and Richard A. Doyle, Treasurer
and Chief Financial Officer, will host a conference call to discuss the
results for the quarter and nine months ended September 30, 2010. The
conference call telephone number is (800) 230-1074. Participants calling
from outside the United States and Canada should dial (612) 234-9960. 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 11:59 p.m. Eastern Time, Monday, November 8, 2010. To hear the
replay, dial (320) 365-3844. The replay pass code is: 169583.
A live audio web cast of the conference call will also be available in
listen only mode on the SNH website at www.snhreit.com. 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. The
recording and retransmission in any way of SNH's second quarter
conference call is strictly prohibited without the prior written consent
of SNH.
Supplemental Data:
A copy of SNH's Third Quarter 2010 Supplemental Operating and Financial
Data is available for download from the SNH website, www.snhreit.com.
SNH's website is not incorporated as part of this press release.
SNH is a real estate investment trust, or REIT, that owns 299 properties
located in 35 states and Washington, D.C. SNH is headquartered in
Newton, MA.
|
Senior Housing Properties Trust
Financial Information
(in thousands, except per share data)
(unaudited)
|
|
Income Statement:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended September 30,
|
|
Nine Months Ended September 30,
|
|
|
|
|
2010
|
|
|
|
2009
|
|
|
|
2010
|
|
|
|
2009
|
|
|
Rental income
|
|
$
|
80,961
|
|
|
$
|
72,010
|
|
|
$
|
242,173
|
|
|
$
|
209,785
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
22,505
|
|
|
|
19,689
|
|
|
|
67,139
|
|
|
|
56,713
|
|
|
General and administrative
|
|
|
5,549
|
|
|
|
5,192
|
|
|
|
16,463
|
|
|
|
14,999
|
|
|
Property operating expenses
|
|
|
4,595
|
|
|
|
4,112
|
|
|
|
13,114
|
|
|
|
10,286
|
|
|
Acquisition related costs
|
|
|
286
|
|
|
|
517
|
|
|
|
725
|
|
|
|
1,911
|
|
|
Total expenses
|
|
|
32,935
|
|
|
|
29,510
|
|
|
|
97,441
|
|
|
|
83,909
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
48,026
|
|
|
|
42,500
|
|
|
|
144,732
|
|
|
|
125,876
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and other income
|
|
|
203
|
|
|
|
355
|
|
|
|
703
|
|
|
|
750
|
|
|
Interest expense
|
|
|
(20,226
|
)
|
|
|
(15,949
|
)
|
|
|
(59,155
|
)
|
|
|
(37,432
|
)
|
|
Loss on early extinguishment of debt (1)
|
|
|
-
|
|
|
|
-
|
|
|
|
(2,433
|
)
|
|
|
-
|
|
|
Impairment of assets (2)
|
|
|
-
|
|
|
|
(11,249
|
)
|
|
|
(1,095
|
)
|
|
|
(11,249
|
)
|
|
Gain on sale of properties (3)
|
|
|
109
|
|
|
|
-
|
|
|
|
109
|
|
|
|
-
|
|
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Equity in earnings (losses) of an investee
|
|
|
35
|
|
|
|
(23
|
)
|
|
|
(17
|
)
|
|
|
(132
|
)
|
|
Income before income tax expense
|
|
|
28,147
|
|
|
|
15,634
|
|
|
|
82,844
|
|
|
|
77,813
|
|
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Income tax expense
|
|
|
(69
|
)
|
|
|
(69
|
)
|
|
|
(223
|
)
|
|
|
(204
|
)
|
|
Net income
|
|
$
|
28,078
|
|
|
$
|
15,565
|
|
|
$
|
82,621
|
|
|
$
|
77,609
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding
|
|
|
127,423
|
|
|
|
121,665
|
|
|
|
127,404
|
|
|
|
120,005
|
|
|
|
|
|
|
|
|
|
|
|
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Net income per share
|
|
$
|
0.22
|
|
|
$
|
0.13
|
|
|
$
|
0.65
|
|
|
$
|
0.65
|
|
|
Balance Sheet:
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|
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At September 30, 2010
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At December 31, 2009
|
|
Assets
|
|
|
|
|
|
Real estate properties
|
|
$
|
3,378,618
|
|
$
|
3,317,983
|
|
Less accumulated depreciation
|
|
|
516,860
|
|
|
454,317
|
|
|
|
|
2,861,758
|
|
|
2,863,666
|
|
Cash and cash equivalents
|
|
|
8,513
|
|
|
10,494
|
|
Restricted cash
|
|
|
5,363
|
|
|
4,222
|
|
Deferred financing fees, net
|
|
|
15,985
|
|
|
14,882
|
|
Acquired real estate leases, net
|
|
|
44,743
|
|
|
42,769
|
|
Other assets
|
|
|
63,350
|
|
|
51,893
|
|
Total assets
|
|
$
|
2,999,712
|
|
$
|
2,987,926
|
|
Commitments and Contingencies
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Shareholders' Equity
|
|
|
|
|
|
Unsecured revolving credit facility
|
|
$
|
12,000
|
|
$
|
60,000
|
|
Senior unsecured notes, net of discount
|
|
|
422,794
|
|
|
322,160
|
|
Secured debt and capital leases
|
|
|
656,223
|
|
|
660,059
|
|
Accrued interest
|
|
|
13,358
|
|
|
13,693
|
|
Acquired real estate lease obligations, net
|
|
|
9,404
|
|
|
9,687
|
|
Other liabilities
|
|
|
33,161
|
|
|
21,677
|
|
Total liabilities
|
|
|
1,146,940
|
|
|
1,087,276
|
|
Shareholders' equity
|
|
|
1,852,772
|
|
|
1,900,650
|
|
Total liabilities and shareholders' equity
|
|
$
|
2,999,712
|
|
$
|
2,987,926
|
(1) In May 2010, we redeemed all $97.5 million of our outstanding 7.875%
senior notes due 2015. As a result of this redemption, we recorded a
loss on early extinguishment of debt of $2.4 million consisting of the
debt prepayment premium of approximately $1.3 million and the write off
of unamortized deferred financing fees and debt discount of
approximately $1.1 million.
(2) During the nine months ended September 30, 2010, we recognized an
impairment of assets charge of approximately $1.1 million related to
five properties.
(3) In August 2010, we sold four skilled nursing facilities located in
Nebraska with an aggregate 196 licensed beds for $1.5 million and
recognized a gain on sale of approximately $109,000.
|
Senior Housing Properties Trust
Funds from Operations
(in thousands, except per share data)
(unaudited)
|
|
Calculation of Funds from Operations (FFO) (1):
|
|
|
|
|
|
|
|
|
|
Quarter Ended
September
30,
|
|
Nine Months Ended
September
30,
|
|
|
|
2010
|
|
2009
|
|
2010
|
|
2009
|
|
Net income
|
|
$
|
28,078
|
|
|
$
|
15,565
|
|
$
|
82,621
|
|
|
$
|
77,609
|
|
Add: Depreciation expense
|
|
|
22,505
|
|
|
|
19,689
|
|
|
67,139
|
|
|
|
56,713
|
|
Acquisition related costs
|
|
|
286
|
|
|
|
517
|
|
|
725
|
|
|
|
1,911
|
|
Loss on early extinguishment of debt (2)
|
|
|
-
|
|
|
|
-
|
|
|
2,433
|
|
|
|
-
|
|
Impairment of assets (3)
|
|
|
-
|
|
|
|
11,249
|
|
|
1,095
|
|
|
|
11,249
|
|
Deferred percentage rent (4)
|
|
|
2,700
|
|
|
|
2,400
|
|
|
7,700
|
|
|
|
6,900
|
|
Less: Gain on sale of properties (5)
|
|
|
(109
|
)
|
|
|
-
|
|
|
(109
|
)
|
|
|
-
|
|
FFO
|
|
$
|
53,460
|
|
|
$
|
49,420
|
|
$
|
161,604
|
|
|
$
|
154,382
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding
|
|
|
127,423
|
|
|
|
121,665
|
|
|
127,404
|
|
|
|
120,005
|
|
|
|
|
|
|
|
|
|
|
|
FFO per share
|
|
$
|
0.42
|
|
|
$
|
0.41
|
|
$
|
1.27
|
|
|
$
|
1.29
|
|
Distributions declared per share
|
|
$
|
0.37
|
|
|
$
|
0.36
|
|
$
|
1.09
|
|
|
$
|
1.07
|
(1) We compute FFO as shown above. Our calculation of FFO differs from
the definition of FFO by the National Association of Real Estate
Investment Trusts, or NAREIT, because we include deferred percentage
rent, if any, exclude loss on early extinguishment of debt, if any,
exclude impairment of assets, if any, and exclude acquisition related
costs, if any, in the determination of 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 related costs and gain or loss on sale of properties, FFO
can facilitate a comparison of operating performances by a REIT over
time 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
calculate FFO differently than we do.
(2) In May 2010, we redeemed all $97.5 million of our outstanding 7.875%
senior notes due 2015. As a result of this redemption, we recorded a
loss on early extinguishment of debt of $2.4 million consisting of the
debt prepayment premium of approximately $1.3 million and the write off
of unamortized deferred financing fees and debt discount of
approximately $1.1 million.
(3) During the nine months ended September 30, 2010, we recognized an
impairment of assets charge of approximately $1.1 million related to
five properties.
(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 this 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.
(5) In August 2010, we sold four skilled nursing facilities located in
Nebraska with an aggregate 196 licensed beds for $1.5 million and
recognized a gain on sale of approximately $109,000.
A Maryland Real Estate Investment Trust with transferable shares of
beneficial interest listed on the New York Stock Exchange.
No shareholder, Trustee or officer is personally liable for any act
or obligation of the Trust.
SOURCE: Senior Housing Properties Trust
Senior Housing Properties Trust
Timothy A. Bonang, 617-796-8234
Vice President, Investor Relations
or
Elisabeth Heiss, 617-796-8234
Manager, Investor Relations
www.snhreit.com
Copyright Business Wire 2010