NEWTON, Mass.--(BUSINESS WIRE)--
Senior Housing Properties Trust (NYSE: SNH) today announced its
financial results for the quarter ended March 31, 2012.
Results for the quarter ended March 31, 2012:
Normalized funds from operations, or Normalized FFO, for the quarter
ended March 31, 2012 were $72.4 million, or $0.45 per share. This
compares to Normalized FFO for the quarter ended March 31, 2011 of $62.1
million, or $0.44 per share.
Net income was $32.4 million, or $0.20 per share, for the quarter ended
March 31, 2012, compared to net income of $31.8 million, or $0.22 per
share, for the quarter ended March 31, 2011. Net income for the quarter
ended March 31, 2012 includes a non-cash impairment of assets charge of
approximately $3.1 million, or $0.02 per share, related to one property.
Net income for the quarter ended March 31, 2011 includes a non-cash
impairment of assets charge of approximately $166,000, or less than
$0.01 per share, related to two properties.
The weighted average number of common shares outstanding totaled 162.6
million and 141.9 million for the quarters ended March 31, 2012 and
2011, respectively.
A reconciliation of net income determined according to U.S. generally
accepted accounting principles, or GAAP, to funds from operations, or
FFO, and Normalized FFO for the quarters ended March 31, 2012 and 2011
appears later in this press release.
Recent Investment and Sales Activities:
Since January 1, 2012, we have acquired, or we currently have under
agreements to acquire, 14 properties for total purchase prices of
approximately $340.5 million, including the assumption of approximately
$113.9 million of mortgage debt and excluding closing costs:
-
In March and April 2012, we entered three separate agreements to
acquire four senior living communities and two properties leased to
medical providers, medical related businesses, clinics and biotech
laboratory tenants, or MOBs, for total purchase prices of $71.4
million, including the assumption of approximately $25.0 million of
mortgage debt and excluding closing costs. The senior living
communities are located in Colorado, Idaho and Washington and include
a total of 511 living units, and the MOBs are located in Maryland and
Massachusetts and include a total of 127,180 square feet. The closings
of these acquisitions are contingent upon completion of our diligence
and other customary closing conditions; accordingly, we can provide no
assurance that we will purchase these properties.
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In February 2012, we acquired a previously disclosed senior living
community located in Alabama with 92 assisted living units for
approximately $11.3 million, excluding closing costs. All the
residents at this community currently pay for occupancy and services
with private resources. A subsidiary of Five Star Quality Care, Inc.,
which, together with its subsidiaries, we refer to as Five Star,
manages this community for our taxable REIT subsidiary under a long
term contract.
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We have previously disclosed agreements to acquire seven properties
which have not yet closed, including four senior living communities
and three MOBs for total purchase prices of $257.8 million, including
the assumption of approximately $88.9 million of mortgage debt and
excluding closing costs. The four senior living communities are
located in Missouri, New York and South Carolina and include a total
of 688 living units, and the three MOBs are located in Georgia and
Hawaii and include a total of 343,198 square feet. The closings of
these acquisitions are 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 an agreement to sell one MOB located in
Massachusetts with approximately 18,900 square feet for a sale price of
approximately $1.2 million. The sale of this property is contingent upon
completion of the buyer's diligence and other customary closing
conditions; accordingly, we can provide no assurance that we will sell
this property.
As a result of findings during our diligence, in April 2012, we
terminated a previously disclosed agreement to acquire a MOB located in
Connecticut with 171,211 square feet for approximately $31.5 million,
excluding closing costs.
Recent Financing Activities:
In January 2012, we repaid all $225.0 million of our 8.625% unsecured
senior notes at their maturity date. We funded this repayment using
borrowings under our revolving credit facility.
In February 2012, we repaid a mortgage loan encumbering one of our
properties that had a principal balance of approximately $12.4 million,
an interest rate of 6.03% and a maturity date in March 2012. Later
today, we expect to pay in full 17 mortgage loans with a weighted
average interest rate of 6.95% encumbering 17 of our properties for
approximately $32.8 million, including accrued interest, that have
maturity dates in June and July 2012.
In May 2011, we and Five Star entered into a loan agreement, or the
Bridge Loan, under which we lent Five Star $80.0 million to fund Five
Star's purchase of six senior living communities. In September 2011,
Five Star completed the acquisition of these communities. After
prepayments by Five Star, as of March 31, 2012, $38.0 million in
aggregate principal amount was outstanding under the Bridge Loan. In
April 2012, Five Star repaid the remaining $38.0 million outstanding,
resulting in the termination of the Bridge Loan.
Conference Call:
On Monday, April 30, 2012, at 1:00 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
financial results for the quarter ended March 31, 2012. The conference
call telephone number is (800) 230-1951. Participants calling from
outside the United States and Canada should dial (612) 332-0107. 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, May 7, 2012. To hear the replay, dial (320)
365-3844. The replay pass code is: 242632.
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 2012 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 owned 370
properties located in 38 states and Washington, D.C. as of March 31,
2012. SNH is headquartered in Newton, MA.
Please see the pages attached hereto for a more detailed statement of
our operating results and financial condition.
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Financial Information
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(amounts in thousands, except per share data)
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(unaudited)
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Income Statement:
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Quarter Ended March 31,
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2012
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2011
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Revenues:
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Rental income
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$
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109,505
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$
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98,552
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Residents fees and services
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35,568
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|
-
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Total revenues
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145,073
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98,552
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Expenses:
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Depreciation
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33,377
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26,361
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Property operating expenses
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39,334
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10,433
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General and administrative
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7,685
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6,156
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Acquisition related costs
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688
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1,113
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Impairment of assets
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3,071
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166
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Total expenses
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84,155
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44,229
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Operating income
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60,918
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54,323
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Interest and other income
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482
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|
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232
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Interest expense
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(28,889
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)
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(22,746
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)
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Equity in earnings of an investee
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45
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37
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Income before income tax expense
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32,556
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31,846
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Income tax expense
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(204
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)
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(71
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)
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Net income
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$
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32,352
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$
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31,775
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Weighted average shares outstanding
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162,647
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141,855
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Net income per share
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$
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0.20
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$
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0.22
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Financial Information (continued)
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(dollars in thousands)
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(unaudited)
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Balance Sheet:
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At March 31, 2012
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At December 31, 2011
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Assets
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Real estate properties
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$
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4,737,687
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$
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4,721,591
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Less accumulated depreciation
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658,991
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630,261
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4,078,696
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4,091,330
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Cash and cash equivalents
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25,302
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23,560
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Restricted cash
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10,296
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7,128
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Deferred financing fees, net
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24,402
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25,434
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Acquired real estate leases and other intangible assets, net
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95,337
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100,235
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Loan receivable
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38,000
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38,000
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Other assets
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111,788
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97,361
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Total assets
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$
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4,383,821
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$
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4,383,048
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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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$
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265,000
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$
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-
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Senior unsecured notes, net of discount
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741,091
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965,770
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Secured debt and capital leases
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845,708
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861,615
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Accrued interest
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19,604
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22,281
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Assumed real estate lease obligations, net
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16,756
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17,778
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Other liabilities
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49,827
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42,998
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Total liabilities
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1,937,986
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1,910,442
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Shareholders' equity
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2,445,835
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2,472,606
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Total liabilities and shareholders' equity
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$
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4,383,821
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$
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4,383,048
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Funds from Operations and Normalized Funds from Operations
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(amounts in thousands, except per share data)
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(unaudited)
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Calculation of Funds from Operations (FFO) and Normalized FFO
(1):
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Quarter Ended March 31,
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2012
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2011
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Net income
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$
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32,352
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$
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31,775
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Depreciation expense
|
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33,377
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26,361
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Impairment of assets
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3,071
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|
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166
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FFO
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68,800
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58,302
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Acquisition related costs
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|
688
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1,113
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Percentage rent (2)
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2,900
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2,700
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Normalized FFO
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$
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72,388
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$
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62,115
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Weighted average shares outstanding
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162,647
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141,855
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FFO per share
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$
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0.42
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$
|
0.41
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Normalized FFO per share
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$
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0.45
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$
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0.44
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Distributions declared per share
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$
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0.38
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$
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0.37
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(1)
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We calculate FFO and Normalized FFO as shown above. FFO is
calculated on the basis defined by The National Association of Real
Estate Investment Trusts, or NAREIT, which is net income, calculated
in accordance with GAAP, excluding any gain or loss on sale of
properties and impairment of assets, plus real estate depreciation
and amortization. Our calculation of Normalized FFO differs from
NAREIT's definition of FFO because we include percentage rent and
exclude acquisition related costs and loss on early extinguishment
of debt, if any. We consider FFO and Normalized FFO to be
appropriate measures of performance for a REIT, along with net
income, operating income and cash flow from operating, investing and
financing activities. We believe that FFO and Normalized FFO provide
useful information to investors because by excluding the effects of
certain historical amounts, such as depreciation expense, FFO and
Normalized FFO can facilitate a comparison of operating performances
between periods. FFO and Normalized FFO are among the factors
considered by our Board of Trustees when determining the amount of
distributions to our shareholders. Other factors include, but are
not limited to, requirements to maintain our status as a REIT,
limitations in our revolving credit facility and public debt
covenants, the availability of debt and equity capital to us and our
expectation of our future capital requirements and operating
performance. FFO and Normalized FFO do not represent cash generated
by operating activities in accordance with GAAP and should not be
considered as alternatives to net income, operating income or cash
flow from operating activities determined in accordance with GAAP as
indicators of our financial performance or liquidity, nor are these
measures necessarily indicative of sufficient cash flow to fund all
of our needs. We believe that FFO and Normalized FFO may facilitate
an understanding of our consolidated historical operating results.
These measures should be considered in conjunction with net income,
operating income and cash flow from operating activities as
presented in our Condensed Consolidated Statements of Income and
Comprehensive Income and Condensed Consolidated Statements of Cash
Flows. Other REITs and real estate companies may calculate FFO and
Normalized FFO differently than we do.
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(2)
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Our percentage rents are generally determined on an annual basis. We
defer recognition of percentage rental income we receive during the
first, second and third quarters until the fourth quarter when all
contingencies related to percentage rents are satisfied. Although
recognition of this revenue is deferred until the fourth quarter,
our Normalized FFO calculation for the first three quarters includes
estimated amounts of percentage rents with respect to those periods.
When we calculate our Normalized FFO for the fourth quarter, we
exclude percentage rents we presented for 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 SECURITIES LAWS. ALSO, 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 OUR FORWARD LOOKING STATEMENTS AS A
RESULT OF VARIOUS FACTORS. FOR EXAMPLE:
-
OUR PENDING ACQUISITIONS AND SALES OF SENIOR LIVING COMMUNITIES AND
MOBS ARE CONTINGENT UPON VARIOUS CONDITIONS, INCLUDING IN SOME CASES,
COMPLETION OF DILIGENCE AND / OR REGULATORY, LENDER OR OTHER THIRD
PARTY APPROVALS. ACCORDINGLY, SOME OR ALL OF THESE PURCHASES AND SALES
MAY BE DELAYED OR MAY NOT OCCUR, AND
-
THIS PRESS RELEASE STATES THAT WE EXPECT TODAY TO PREPAY IN FULL 17
MORTGAGE LOANS SECURED BY OUR PROPERTIES. WE MAY ELECT TO DELAY THE
PREPAYMENT OF, OR ELECT NOT TO PREPAY, ANY OR ALL OF SUCH MORTGAGE
LOANS. ACCORDINGLY, SOME OR ALL OF THESE MORTGAGE LOANS MAY NOT BE
PAID PRIOR TO THEIR RESPECTIVE MATURITY DATES IN JUNE AND JULY 2012.
THE INFORMATION CONTAINED IN OUR FILINGS WITH THE SECURITIES AND
EXCHANGE COMMISSION, INCLUDING UNDER "RISK FACTORS" IN OUR PERIODIC
REPORTS, OR INCORPORATED THEREIN, IDENTIFIES OTHER IMPORTANT FACTORS
THAT COULD CAUSE OUR ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE
STATED IN 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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