On Tuesday, October 29, 2013, 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
financial results for the quarter and nine months ended September 30,
2013. The conference call telephone number is (877) 209-9919.
Participants calling from outside the United States and Canada should
dial (612) 332-0637. 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, Tuesday, November 5, 2013. To
hear the replay, dial (320) 365-3844. The replay pass code is: 305211.
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
transcription, recording and retransmission in any way of SNH's third
quarter conference call are strictly prohibited without the prior
written consent of SNH.
A copy of SNH's Third Quarter 2013 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 396
properties located in 40 states and Washington, D.C. as of September 30,
2013. SNH is headquartered in Newton, MA.
Please see the pages attached hereto for a more detailed statement of
SNH's operating results and financial condition.
WARNING CONCERNING FORWARD LOOKING STATEMENTS
THIS PRESS RELEASE CONTAINS STATEMENTS THAT CONSTITUTE FORWARD LOOKING
STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION
REFORM ACT OF 1995 AND OTHER SECURITIES LAWS. ALSO, WHENEVER SNH USES
WORDS SUCH AS "BELIEVE", "EXPECT", "ANTICIPATE", "INTEND", "PLAN",
"ESTIMATE" OR SIMILAR EXPRESSIONS, SNH IS MAKING FORWARD LOOKING
STATEMENTS. THESE FORWARD LOOKING STATEMENTS ARE BASED UPON SNH'S
PRESENT INTENT, BELIEFS OR EXPECTATIONS, BUT FORWARD LOOKING STATEMENTS
ARE NOT GUARANTEED TO OCCUR AND MAY NOT OCCUR. ACTUAL RESULTS MAY DIFFER
MATERIALLY FROM THOSE CONTAINED IN OR IMPLIED BY THESE FORWARD LOOKING
STATEMENTS AS A RESULT OF VARIOUS FACTORS. FOR EXAMPLE:
-
THIS PRESS RELEASE STATES THAT SNH HAS AGREED TO SELL ITS TWO
REHABILITATION HOSPITALS FOR $90 MILLION, THAT IT EXPECTS TO RECORD A
GAIN FROM THIS SALE OF OVER $30 MILLION AND THAT IT EXPECTS THIS SALE
MAY BE COMPLETED BY MID-2014. THE SALE OF THESE HOSPITALS IS SUBJECT
TO HEALTH REGULATORY APPROVALS AND OTHER CONDITIONS TYPICAL OF THESE
TYPES OF TRANSACTIONS. SNH HAS NO CONTROL OVER THE REQUIRED REGULATORY
APPROVAL PROCESSES OR OVER CERTAIN OTHER CONDITIONS APPLICABLE TO THIS
SALE, THESE APPROVALS MAY NOT BE OBTAINED AND THE CONDITIONS MAY NOT
BE SATISFIED. ACCORDINGLY, THE PROPOSED SALE MAY BE DELAYED, IT MAY
NOT OCCUR OR ITS TERMS MAY CHANGE, AND SNH MAY NOT RECEIVE THE SALE
PROCEEDS, THE GAIN ON SALE MAY BE LESS THAN $30 MILLION OR THE
TRANSACTION MAY RESULT IN RECORDING A LOSS ON SALE INSTEAD OF A GAIN
ON SALE;
-
THIS PRESS RELEASE STATES THAT SNH EXPECTS TO ENTER INTO A LONG TERM
MANAGEMENT AGREEMENT WITH FIVE STAR TO MANAGE ONE ADDITIONAL SENIOR
LIVING COMMUNITY IT HAS AGREED TO ACQUIRE. HOWEVER, THERE CAN BE NO
ASSURANCE THAT SNH WILL ACQUIRE THIS COMMUNITY OR THAT SNH AND FIVE
STAR WILL ENTER INTO ANY ADDITIONAL MANAGEMENT AGREEMENTS;
-
THIS PRESS RELEASE STATES THAT SNH HAS ENTERED INTO AGREEMENTS TO
ACQUIRE FOUR PROPERTIES. THESE TRANSACTIONS ARE SUBJECT TO VARIOUS
TERMS AND CONDITIONS TYPICAL OF COMMERCIAL REAL ESTATE TRANSACTIONS
FOR PROPERTIES OF THESE TYPES. SUCH TERMS AND CONDITIONS MAY NOT BE
MET. AS A RESULT, THESE TRANSACTIONS MAY NOT OCCUR OR MAY BE DELAYED
OR THEIR TERMS MAY CHANGE; AND
-
THIS PRESS RELEASE STATES THAT SNH HAS 10 SENIOR LIVING COMMUNITIES
AND SEVEN MOBS CURRENTLY LISTED FOR SALE. SNH MAY NOT BE ABLE TO SELL
THESE PROPERTIES ON ACCEPTABLE TERMS, AND THE SALES OF ANY OR ALL OF
THESE PROPERTIES MAY NOT OCCUR.
THE INFORMATION CONTAINED IN SNH'S FILINGS WITH THE SECURITIES AND
EXCHANGE COMMISSION, OR SEC, INCLUDING UNDER THE CAPTION "RISK FACTORS"
IN ITS PERIODIC REPORTS, OR INCORPORATED THEREIN, IDENTIFIES OTHER
IMPORTANT FACTORS THAT COULD CAUSE DIFFERENCES FROM ITS FORWARD LOOKING
STATEMENTS. SNH'S FILINGS WITH THE SEC ARE AVAILABLE ON THE SEC'S
WEBSITE AT WWW.SEC.GOV.
YOU SHOULD NOT PLACE UNDUE RELIANCE UPON SNH'S FORWARD LOOKING
STATEMENTS.
EXCEPT AS REQUIRED BY LAW, SNH DOES NOT INTEND TO UPDATE OR CHANGE ANY
FORWARD LOOKING STATEMENTS AS A RESULT OF NEW INFORMATION, FUTURE EVENTS
OR OTHERWISE.
|
SENIOR HOUSING PROPERTIES TRUST
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(amounts in thousands, except per share data)
(unaudited)
|
|
Income Statement:
|
|
|
|
|
Three Months Ended
September 30,
|
|
|
|
Nine Months Ended
September 30,
|
|
|
|
|
2013
|
|
|
2012
|
|
|
|
2013
|
|
|
2012
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental income
|
|
|
|
$
|
112,319
|
|
|
$
|
113,756
|
|
|
|
$
|
336,468
|
|
|
$
|
329,191
|
Residents fees and services
|
|
|
|
|
74,946
|
|
|
|
42,352
|
|
|
|
|
224,634
|
|
|
|
113,906
|
Total revenues
|
|
|
|
|
187,265
|
|
|
|
156,108
|
|
|
|
|
561,102
|
|
|
|
443,097
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property operating expenses
|
|
|
|
|
74,729
|
|
|
|
46,805
|
|
|
|
|
222,893
|
|
|
|
125,109
|
Depreciation
|
|
|
|
|
38,473
|
|
|
|
35,276
|
|
|
|
|
114,472
|
|
|
|
102,673
|
General and administrative
|
|
|
|
|
7,798
|
|
|
|
8,352
|
|
|
|
|
24,615
|
|
|
|
24,106
|
Acquisition related costs
|
|
|
|
|
396
|
|
|
|
4,297
|
|
|
|
|
2,590
|
|
|
|
6,814
|
Impairment of assets
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
5,675
|
|
|
|
3,071
|
Total expenses
|
|
|
|
|
121,396
|
|
|
|
94,730
|
|
|
|
|
370,245
|
|
|
|
261,773
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
|
|
65,869
|
|
|
|
61,378
|
|
|
|
|
190,857
|
|
|
|
181,324
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and other income
|
|
|
|
|
42
|
|
|
|
248
|
|
|
|
|
612
|
|
|
|
957
|
Interest expense
|
|
|
|
|
(29,405)
|
|
|
|
(30,417)
|
|
|
|
|
(88,536)
|
|
|
|
(87,426)
|
Loss on early extinguishment of debt
|
|
|
|
|
(692)
|
|
|
|
(6,349)
|
|
|
|
|
(797)
|
|
|
|
(6,349)
|
Loss on lease terminations
|
|
|
|
|
-
|
|
|
|
(104)
|
|
|
|
|
-
|
|
|
|
(104)
|
Gain (Loss) on sale of properties
|
|
|
|
|
1,141
|
|
|
|
(101)
|
|
|
|
|
1,141
|
|
|
|
(101)
|
Equity in earnings of an investee
|
|
|
|
|
64
|
|
|
|
115
|
|
|
|
|
219
|
|
|
|
236
|
Income before income tax expense
|
|
|
|
|
37,019
|
|
|
|
24,770
|
|
|
|
|
103,496
|
|
|
|
88,537
|
Income tax expense
|
|
|
|
|
(125)
|
|
|
|
(43)
|
|
|
|
|
(405)
|
|
|
|
(290)
|
Income from continuing operations
|
|
|
|
|
36,894
|
|
|
|
24,727
|
|
|
|
|
103,091
|
|
|
|
88,247
|
Discontinued operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from discontinued operations
|
|
|
|
|
1,231
|
|
|
|
919
|
|
|
|
|
3,762
|
|
|
|
3,001
|
Impairment of assets from discontinued operations
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
(27,896)
|
|
|
|
-
|
Net income
|
|
|
|
$
|
38,125
|
|
|
$
|
25,646
|
|
|
|
$
|
78,957
|
|
|
$
|
91,248
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in net unrealized (loss) / gain on investments
|
|
|
|
|
(2,166)
|
|
|
|
7,499
|
|
|
|
|
2,195
|
|
|
|
8,416
|
Share of comprehensive income of an investee
|
|
|
|
|
13
|
|
|
|
35
|
|
|
|
|
(68)
|
|
|
|
31
|
Comprehensive income
|
|
|
|
$
|
35,972
|
|
|
$
|
33,180
|
|
|
|
$
|
81,084
|
|
|
$
|
99,695
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding
|
|
|
|
|
188,102
|
|
|
|
174,690
|
|
|
|
|
186,942
|
|
|
|
166,698
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations per share
|
|
|
|
|
0.20
|
|
|
|
0.14
|
|
|
|
|
0.55
|
|
|
|
0.53
|
Income (loss) from discontinued operations per share
|
|
|
|
|
0.00
|
|
|
|
0.01
|
|
|
|
|
(0.13)
|
|
|
|
0.02
|
Net income per share
|
|
|
|
$
|
0.20
|
|
|
$
|
0.15
|
|
|
|
$
|
0.42
|
|
|
$
|
0.55
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SENIOR HOUSING PROPERTIES TRUST
CONDENSED CONSOLIDATED STATEMENTS OF FUNDS FROM OPERATIONS AND
NORMALIZED FUNDS FROM OPERATIONS
(amounts in thousands, except per share data)
(unaudited)
|
|
Calculation of Funds from Operations (FFO) and Normalized FFO
(1):
|
|
|
|
|
|
|
|
Three Months Ended September 30,
|
|
|
|
Nine Months Ended September 30,
|
|
2013
|
|
|
2012
|
|
|
|
2013
|
|
|
2012
|
Net income
|
|
|
|
$
|
38,125
|
|
|
$
|
25,646
|
|
|
|
$
|
78,957
|
|
|
$
|
91,248
|
Depreciation expense from continuing operations
|
|
|
|
|
38,473
|
|
|
|
35,276
|
|
|
|
|
114,472
|
|
|
|
102,673
|
Depreciation expense from discontinued operations
|
|
|
|
|
-
|
|
|
|
604
|
|
|
|
|
799
|
|
|
|
1,815
|
(Gain) loss on sale of properties
|
|
|
|
|
(1,141)
|
|
|
|
101
|
|
|
|
|
(1,141)
|
|
|
|
101
|
Impairment of assets
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
5,675
|
|
|
|
3,071
|
Impairment of assets from discontinued operations
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
27,896
|
|
|
|
-
|
FFO
|
|
|
|
|
75,457
|
|
|
|
61,627
|
|
|
|
|
226,658
|
|
|
|
198,908
|
Acquisition related costs from continuing operations
|
|
|
|
|
396
|
|
|
|
4,297
|
|
|
|
|
2,590
|
|
|
|
6,814
|
Loss on early extinguishment of debt
|
|
|
|
|
692
|
|
|
|
6,349
|
|
|
|
|
797
|
|
|
|
6,349
|
Loss on lease terminations
|
|
|
|
|
-
|
|
|
|
104
|
|
|
|
|
|
|
|
|
104
|
Percentage rent adjustment(2)
|
|
|
|
|
2,300
|
|
|
|
2,400
|
|
|
|
|
6,800
|
|
|
|
8,200
|
Normalized FFO
|
|
|
|
$
|
78,845
|
|
|
$
|
74,777
|
|
|
|
$
|
236,845
|
|
|
$
|
220,375
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding
|
|
|
|
|
188,102
|
|
|
|
174,690
|
|
|
|
|
186,942
|
|
|
|
166,698
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO per share
|
|
|
|
$
|
0.40
|
|
|
$
|
0.35
|
|
|
|
$
|
1.21
|
|
|
$
|
1.19
|
Normalized FFO per share
|
|
|
|
$
|
0.42
|
|
|
$
|
0.43
|
|
|
|
$
|
1.27
|
|
|
$
|
1.32
|
Distributions declared per share
|
|
|
|
$
|
0.39
|
|
|
$
|
0.39
|
|
|
|
$
|
1.17
|
|
|
$
|
1.15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) SNH calculates 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 real estate assets, plus real estate depreciation and
amortization, as well as certain other adjustments currently not
applicable to them. SNH's calculation of Normalized FFO differs from
NAREIT's definition of FFO because SNH's includes estimated percentage
rent in the period to which it estimates that it relates rather than
when it is recognized as income in accordance with GAAP and exclude
acquisition related costs, gain or loss on early extinguishment of debt,
gain or loss on lease terminations and loss on impairment of intangible
assets, if any. SNH considers FFO and Normalized FFO to be appropriate
measures of operating performance for a real estate investment trust, or
REIT, along with net income, operating income and cash flow from
operating activities. SNH believes 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 may facilitate a comparison of its operating performance
between periods and between them and other REITs. FFO and Normalized FFO
are among the factors considered by SNH's Board of Trustees when
determining the amount of distributions to its shareholders. Other
factors include, but are not limited to, requirements to maintain its
status as a REIT, limitations in its revolving credit facility agreement
and public debt covenants, the availability of debt and equity capital
to them, SNH's expectation of its future capital requirements and
operating performance and its expected needs and availability of cash to
pay its obligations. 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, or
as indicators of SNH's financial performance or liquidity, nor are these
measures necessarily indicative of sufficient cash flow to fund all of
its needs. SNH believes that FFO and Normalized FFO may facilitate an
understanding of its historical operating results. These measures should
be considered in conjunction with net income, operating income and cash
flow from operating activities as presented in its 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 SNH does.
(2) In calculating net income in accordance with GAAP, SNH recognizes
percentage rental income received for the first, second and third
quarters in the fourth quarter, which is when all contingencies are met
and the income is earned. Although SNH defers recognition of this
revenue until the fourth quarter for purposes of calculating net income,
it includes these estimated amounts in its calculation of Normalized FFO
for each quarter of the year. The fourth quarter Normalized FFO
calculation excludes the amounts recognized during the first three
quarters.
|
SENIOR HOUSING PROPERTIES TRUST
CONDENSED CONSOLIDATED BALANCE SHEETS
(amounts in thousands)
(unaudited)
|
|
Balance Sheet:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30,
|
|
|
December 31,
|
|
|
|
|
|
|
2013
|
|
|
2012
|
ASSETS
|
|
|
|
Real estate properties
|
|
|
|
|
5,197,999
|
|
|
|
5,019,615
|
Less accumulated depreciation
|
|
|
|
|
(808,264)
|
|
|
|
(714,687)
|
|
|
|
|
|
|
|
4,389,735
|
|
|
|
4,304,928
|
Cash and cash equivalents
|
|
|
|
|
52,258
|
|
|
|
42,382
|
Restricted cash
|
|
|
|
|
10,046
|
|
|
|
9,432
|
Deferred financing fees, net
|
|
|
|
|
29,063
|
|
|
|
29,410
|
Acquired real estate leases and other intangible assets, net
|
|
|
|
|
105,705
|
|
|
|
113,986
|
Other assets
|
|
|
|
|
220,523
|
|
|
|
247,864
|
Total assets
|
|
|
|
$
|
4,807,330
|
|
|
$
|
4,748,002
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
Unsecured revolving credit facility
|
|
|
|
$
|
125,000
|
|
|
$
|
190,000
|
Senior unsecured notes, net of discount
|
|
|
|
|
1,093,016
|
|
|
|
1,092,053
|
Secured debt and capital leases
|
|
|
|
|
703,058
|
|
|
|
724,477
|
Accrued interest
|
|
|
|
|
21,763
|
|
|
|
15,757
|
Assumed real estate lease obligations, net
|
|
|
|
|
13,299
|
|
|
|
13,482
|
Other liabilities
|
|
|
|
|
74,751
|
|
|
|
65,665
|
Total liabilities
|
|
|
|
|
2,030,887
|
|
|
|
2,101,434
|
|
|
|
|
|
|
|
|
|
|
|
Total shareholders' equity
|
|
|
|
|
2,776,443
|
|
|
|
2,646,568
|
Total liabilities and shareholders' equity
|
|
|
|
$
|
4,807,330
|
|
|
$
|
4,748,002
|
|
|
|
|
|
|
|
|
|
|
Senior Housing Properties Trust
Timothy A. Bonang, 617-796-8234
Vice
President, Investor Relations
or
Elisabeth H. Olmsted,
617-796-8234
Manager, Investor Relations
www.snhreit.com
Source: Senior Housing Properties Trust
News Provided by Acquire Media