NEWTON, Mass.--(BUSINESS WIRE)--
Senior Housing Properties Trust (NYSE: SNH) today announced its
financial results for the quarter ended March 31, 2011.
Results for the quarter ended March 31, 2011:
Funds from operations, or FFO, for the quarter ended March 31, 2011 were
$62.1 million, or $0.44 per share. This compares to FFO for the quarter
ended March 31, 2010 of $54.8 million, or $0.43 per share.
Net income was $31.8 million, or $0.22 per share, for the quarter ended
March 31, 2011, compared to net income of $30.0 million, or $0.24 per
share, for the quarter ended March 31, 2010. Net income for the quarter
ended March 31, 2011 includes a non cash impairment of assets charge of
$166,000, or less than $0.01 per share, related to two properties.
The weighted average number of common shares outstanding totaled 141.9
million and 127.4 million for the quarters ended March 31, 2011 and
2010, respectively.
A reconciliation of net income determined according to U.S. generally
accepted accounting principles, or GAAP, to FFO for the quarters ended
March 31, 2011 and 2010 appears later in this press release.
Recent Investment and Sales Activities:
Since January 1, 2011, we have acquired or entered agreements to acquire
33 properties for an aggregate purchase price of approximately $450.5
million, including the assumption of $79.0 million of mortgage debt and
excluding closing costs:
-
In November 2010, we entered into a series of agreements to acquire 27
multi-tenanted medical office buildings, or MOBs, from CommonWealth
REIT located in 12 states for an aggregate purchase price of
approximately $470.0 million. The properties we agreed to acquire have
a current average occupancy of 95%. In November and December 2010, we
acquired 21 of these properties containing 2.1 million square feet for
approximately $374.1 million, excluding closing costs. In January
2011, we acquired the remaining six properties containing 737,000
square feet for approximately $95.9 million, excluding closing costs.
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In January 2011, we acquired a MOB located in Mendota Heights
(Minneapolis), MN with 82,854 square feet. This property is 100%
leased to WuXi AppTec, a medical biotech research company, for
approximately 8.2 years. The purchase price was $14.2 million,
excluding closing costs.
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In March 2011, we agreed to acquire 20 senior living communities
located in five states with an aggregate 2,111 living units (814
independent living units, 939 assisted living units, 311 Alzheimer's
care units and 47 skilled nursing beds) for approximately $304.0
million, which includes the assumption of $79.0 million of mortgage
debt and excludes closing costs. We expect to lease 15 of the 20
communities, costing approximately $211.5 million, to our taxable REIT
subsidiary and our former subsidiary, Five Star Quality Care, Inc., or
Five Star, will manage these 15 communities under a long term
contract. We expect to lease the remaining five communities, which
will cost approximately $92.5 million, to Five Star and to add them to
combination leases currently in effect between us and Five Star. We
expect to acquire these communities during the second quarter of 2011,
subject to required regulatory approvals and lender approval of our
assumption of mortgage debts on certain properties.
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As of April 28, 2011, we have agreed to acquire one additional senior
living facility, with 73 units, and five additional MOBs, with an
aggregate of approximately 206,900 square feet, for combined purchase
prices totaling approximately $36.5 million, excluding closing costs.
We expect to acquire these properties during the second quarter of
2011. The purchase of these properties is contingent upon completion
of our diligence and other customary closing conditions; accordingly,
we can provide no assurance that we will purchase these properties.
We have also entered agreements to sell six properties, including three
nursing homes with 329 beds, two MOBs with an aggregate of 12,578 square
feet and one former assisted living facility which is being converted to
another use, for combined sales prices totaling approximately $19.6
million. We expect the sale of these properties to occur during the
second quarter of 2011. The sale of these properties is contingent upon
completion of the buyer's diligence and other customary closing
conditions; accordingly, we can provide no assurance that we will sell
these properties.
Recent Financing Activities:
In January 2011, we sold $250.0 million of 4.30% senior unsecured notes
due 2016, raising net proceeds of approximately $245.4 million. We used
the net proceeds of this offering to repay borrowings outstanding under
our revolving credit facility and for general business purposes,
including funding in part the acquisitions described above.
Conference Call:
On Thursday, April 28, 2011, 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 ended March 31, 2011. 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, Thursday, May 5, 2011. To hear the replay, dial (800)
475-6701. The replay pass code is: 179320.
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 first quarter
conference call is strictly prohibited without the prior written consent
of SNH.
Supplemental Data:
A copy of SNH's First Quarter 2011 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 327 properties
located in 37 states and Washington, D.C. SNH is headquartered in
Newton, MA.
Financial Information
(in thousands, except per share data)
(unaudited)
Income Statement:
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Quarter Ended March 31,
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2011
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2010
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Rental income
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$98,077
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$80,447
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Expenses:
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Depreciation
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26,361
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22,289
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Property operating expenses
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10,003
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4,385
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General and administrative
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6,134
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5,491
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Acquisition related costs
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1,113
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35
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Total expenses
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43,611
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32,200
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Operating income
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54,466
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48,247
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Interest and other income
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255
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257
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Interest expense
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(22,746)
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(18,414)
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Impairment of assets
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(166)
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-
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Equity in earnings (losses) of an investee
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37
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(28)
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Income before income tax expense
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31,846
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30,062
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Income tax expense
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(71)
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(78)
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Net income
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$31,775
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$29,984
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Weighted average shares outstanding
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141,855
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127,380
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Net income per share
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$0.22
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$0.24
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Balance Sheet:
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At March 31, 2011
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At December 31, 2010
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Assets
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Real estate properties
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$3,873,118
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$3,761,712
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Less accumulated depreciation
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562,609
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538,872
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3,310,509
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3,222,840
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Cash and cash equivalents
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14,810
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10,866
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Restricted cash
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5,158
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4,994
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Deferred financing fees, net
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17,372
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16,262
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Acquired real estate leases, net
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72,339
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63,593
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Other assets
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105,220
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74,101
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Total assets
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$3,525,408
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$3,392,656
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Commitments and Contingencies
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Liabilities and Shareholders' Equity
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Unsecured revolving credit facility
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$25,000
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$128,000
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Senior unsecured notes, net of discount
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670,410
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422,880
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Secured debt and capital leases
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651,657
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654,010
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Accrued interest
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16,063
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14,993
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Acquired real estate lease obligations, net
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18,806
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18,239
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Other liabilities
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32,554
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26,557
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Total liabilities
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1,414,490
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1,264,679
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Shareholders' equity
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2,110,918
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2,127,977
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Total liabilities and shareholders' equity
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$3,525,408
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$3,392,656
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Funds from Operations
(in thousands, except per share data)
(unaudited)
Calculation of Funds from Operations (FFO) (1):
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Quarter Ended March 31,
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2011
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2010
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Net income
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$31,775
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$29,984
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Add: Depreciation expense
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26,361
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22,289
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Acquisition related costs
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1,113
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35
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Impairment of assets
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166
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-
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Deferred percentage rent (2)
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2,700
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2,500
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FFO
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$62,115
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$54,808
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Weighted average shares outstanding
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141,855
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127,380
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FFO per share
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$0.44
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$0.43
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Distributions declared per share
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$0.37
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$0.36
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(1)
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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, and exclude loss on early extinguishment of debt, if
any, impairment of assets, if any, and acquisition related costs, if
any. 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 our operating performances during
different periods. 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.
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(2)
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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.
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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 AND THEIR IMPLICATIONS ARE
BASED UPON OUR PRESENT INTENT, BELIEFS OR EXPECTATIONS, BUT FORWARD
LOOKING STATEMENTS AND THEIR IMPLICATIONS 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 HAVE AGREED TO ACQUIRE 20 SENIOR
LIVING COMMUNITIES FOR APPROXIMATELY $304.0 MILLION, EXCLUDING CLOSING
COSTS, AND THAT WE EXPECT THIS TRANSACTION TO CLOSE DURING THE SECOND
QUARTER OF 2011. THE CLOSING OF THIS PURCHASE IS SUBJECT TO VARIOUS
CONDITIONS TYPICAL OF PURCHASES OF MULTIPLE LOCATION SENIOR LIVING
PROPERTIES, INCLUDING VARIOUS REGULATORY AND LENDER APPROVALS. THESE
CONDITIONS MAY NOT BE SATISFIED OR MAY CAUSE THE NUMBER OF PROPERTIES
AND THE PURCHASE PRICE TO CHANGE. ALSO, THESE CONDITIONS MAY CAUSE THE
CLOSING DATE TO BE CHANGED. WE CAN PROVIDE NO ASSURANCE THAT WE WILL
PURCHASE THESE PROPERTIES OR WHEN WE MAY DO SO.
-
THIS PRESS RELEASE STATES THAT WE HAVE AGREED TO ACQUIRE SIX OTHER
PROPERTIES AND THAT THE ACQUISITIONS ARE EXPECTED TO OCCUR DURING THE
SECOND QUARTER OF 2011. THE PURCHASE OF THESE PROPERTIES IS CONTINGENT
UPON OUR COMPLETION OF DILIGENCE AND OTHER CUSTOMARY CLOSING
CONDITIONS; ACCORDINGLY, SOME OR ALL OF THESE PURCHASES MAY BE DELAYED
OR MAY NOT OCCUR.
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THIS PRESS RELEASE STATES THAT WE EXPECT TO ENTER INTO A LONG TERM
AGREEMENT WITH FIVE STAR. THE TERMS OF THE LONG TERM AGREEMENT ARE
SUBJECT TO APPROVAL BY SPECIAL COMMITTEES OF OUR BOARD OF TRUSTEES AND
OF FIVE STAR'S BOARD OF DIRECTORS COMPOSED OF INDEPENDENT TRUSTEES /
DIRECTORS WHO ARE NOT TRUSTEES / DIRECTORS OF BOTH PARTIES.
ACCORDINGLY, THIS MANAGEMENT AGREEMENT MAY NOT BE CONCLUDED.
-
THIS PRESS RELEASE STATES THAT WE EXPECT TO LEASE PROPERTIES TO FIVE
STAR AND TO ADD THEM TO COMBINATION LEASES CURRENTLY IN EFFECT BETWEEN
US AND FIVE STAR. FIVE STAR'S ABILITY TO PAY RENT DUE UNDER ITS
COMBINATION LEASES WITH US DEPENDS IN LARGE PART UPON THE SUCCESS OF
ITS TOTAL BUSINESS ACTIVITIES. THE STATEMENTS AND IMPLICATIONS IN THIS
PRESS RELEASE SHOULD NOT BE CONSIDERED A GUARANTY THAT FIVE STAR WILL
BE ABLE TO PAY RENT DUE TO US.
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THIS PRESS RELEASE STATES THAT WE HAVE ENTERED INTO AGREEMENTS TO SELL
SIX PROPERTIES AND THAT WE EXPECT THE SALES TO OCCUR DURING THE SECOND
QUARTER OF 2011. THE CLOSINGS OF THESE SALES ARE SUBJECT TO VARIOUS
CONDITIONS TYPICAL OF COMMERCIAL REAL ESTATE TRANSACTIONS. AS A
RESULT, SOME OR ALL OF THESE SALES MAY BE DELAYED OR MAY NOT OCCUR.
THE INFORMATION CONTAINED IN OUR FILINGS WITH THE SECURITIES AND
EXCHANGE COMMISSION, INCLUDING UNDER "RISK FACTORS" IN OUR PERIODIC
REPORTS, IDENTIFIES OTHER IMPORTANT FACTORS THAT COULD CAUSE ACTUAL
RESULTS TO DIFFER MATERIALLY FROM THOSE IN OR IMPLIED BY OUR FORWARD
LOOKING STATEMENTS. OUR FILINGS WITH THE SECURITIES AND EXCHANGE
COMMISSION ARE AVAILABLE ON ITS WEBSITE AT WWW.SEC.GOV.
YOU SHOULD NOT PLACE UNDUE RELIANCE UPON OUR 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.
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.
Senior Housing Properties Trust
Timothy A. Bonang, Vice President,
Investor Relations
or
Elisabeth Heiss, Manager, Investor
Relations
617-796-8234
www.snhreit.com
Source: Senior Housing Properties Trust
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