Normalized FFO of $0.47 Per Share for the Third Quarter, up 6.8% Year
over Year
Consolidated Same Property Cash Basis NOI up 1.9% Year over Year,
Including 11.0% Increase from Managed Senior Living Communities
Portfolio
NEWTON, Mass.--(BUSINESS WIRE)--
Senior Housing Properties Trust (NYSE: SNH) today announced its
financial results for the quarter and nine months ended September 30,
2015.
SNH's President and Chief Operating Officer, David Hegarty, made the
following statement:
"Our business produced strong operating results in the third quarter,
with a 6.8% increase in normalized FFO per share compared to the same
period a year ago. We also realized a 1.9% increase in
consolidated same property cash basis NOI during the quarter, which was
highlighted by an 11.0% increase at our managed senior living
communities. In addition, we improved our financial flexibility by
closing on a $200 million seven year unsecured term loan and exercising
a partial expansion under our unsecured revolving credit facility to
increase commitments to $1 billion."
Results for the quarter ended September 30, 2015:
Normalized funds from operations, or Normalized FFO, for the quarter
ended September 30, 2015 were $111.4 million, or $0.47 per basic and
diluted share. This compares to Normalized FFO for the quarter ended
September 30, 2014 of $89.6 million, or $0.44 per basic and diluted
share. The increase in Normalized FFO is primarily the result of
acquisitions since October 1, 2014 and strong performance from SNH's
managed senior living communities.
Net income was $38.2 million, or $0.16 per basic and diluted share, for
the quarter ended September 30, 2015, compared to net income of $37.1
million, or $0.18 per basic and diluted share, for the quarter ended
September 30, 2014.
The basic and diluted weighted average number of common shares
outstanding were approximately 237 million for the quarter ended
September 30, 2015, and approximately 204 million for the quarter ended
September 30, 2014.
Reconciliations of net income determined in accordance with U.S.
generally accepted accounting principles, or GAAP, to funds from
operations, or FFO, and Normalized FFO for the quarters ended September
30, 2015 and 2014 appear later in this press release.
Results for the nine months ended September 30, 2015:
Normalized FFO for the nine months ended September 30, 2015 were $316.7
million, or $1.37 per basic and diluted share. This compares to
Normalized FFO for the nine months ended September 30, 2014 of $256.3
million, or $1.30 per basic and diluted share.
Net income was $114.4 million, or $0.49 per basic and diluted share, for
the nine months ended September 30, 2015, compared to net income of
$113.4 million, or $0.57 per basic and diluted share, for the nine
months ended September 30, 2014.
The basic and diluted weighted average number of common shares
outstanding were approximately 231 million for the nine months ended
September 30, 2015, and approximately 197 million for the nine months
ended September 30, 2014.
Reconciliations of net income determined in accordance with GAAP to FFO
and Normalized FFO for the nine months ended September 30, 2015 and 2014
appear later in this press release.
Operating Results for the quarter ended September 30, 2015:
For the three months ended September 30, 2015, consolidated same
property net operating income, or NOI, and cash basis NOI increased 2.3%
and 1.9% respectively, compared to the quarter ended September 30, 2014.
For the three months ended September 30, 2015, 41.1% of SNH's NOI came
from 121 properties leased to medical providers, medical related
businesses, clinics and biotech laboratory tenants, or MOBs, with 11.3
million leasable square feet. As of September 30, 2015, 96.0% of SNH's
MOB leasable square feet were leased, compared to 96.4% as of June 30,
2015 and 95.6% as of September 30, 2014. Same property occupancy for
SNH's MOBs owned continuously since July 1, 2014 decreased to 95.1% as
of September 30, 2015, compared to 95.6% as of September 30, 2014. SNH's
MOB same property NOI increased 0.5% during the quarter ended September
30, 2015 compared to the quarter ended September 30, 2014, while SNH's
MOB same property cash basis NOI decreased 0.3% during the quarter ended
September 30, 2015 compared to the quarter ended September 30, 2014.
For the three months ended September 30, 2015, 40.6% of SNH's
consolidated NOI came from 232 triple net leased senior living
communities with 26,231 living units. Occupancy at triple net leased
senior living communities was 84.9% during the most recently reported
period, compared to 85.2% during the comparable period last year.(1)
Same property occupancy at SNH's triple net leased senior living
communities owned continuously since July 1, 2014 was unchanged at 85.3%
compared to the comparable period last year. Same property NOI and cash
basis NOI for SNH's triple net leased senior living communities
increased 1.3% and 1.1%, respectively, during the quarter ended
September 30, 2015 compared to the quarter ended September 30, 2014.
For the three months ended September 30, 2015, 15.4% of SNH's NOI came
from 65 managed senior living communities with 8,606 living units.
Occupancy at the managed senior living communities was 87.7% during the
quarter ended September 30, 2015, compared to 88.2% during the
comparable period last year. Same property occupancy for managed senior
living communities owned continuously since July 1, 2014 decreased to
87.2% during the quarter ended September 30, 2015, from 88.2% during the
comparable period last year. Same property average monthly rates
increased 1.8% to $4,228 during the quarter ended September 30, 2015
compared to the quarter ended September 30, 2014. Same property NOI and
cash basis NOI for SNH's managed senior living communities both
increased 11.0% during the quarter ended September 30, 2015 compared to
the quarter ended September 30, 2014. This increase was the result of a
$1.1 million increase in revenues, which was primarily driven by rate
increases in excess of lost revenues from occupancy declines, and
$917,000 of expense reductions.
Reconciliations of NOI and cash basis NOI to net income determined in
accordance with GAAP for the quarters ended September 30, 2015 and 2014
appear later in this press release. In addition, calculations and
reconciliations of NOI, Cash Basis NOI, Same Property NOI and Same
Property Cash Basis NOI by SNH's operating segments for the quarters
ended September 30, 2015 and 2014 appear later in this press release.
Recent Investment and Sales Activities:
In September 2015, SNH acquired one senior living community with 87
living units for approximately $27.4 million, excluding closing costs
and including the assumption of approximately $12.3 million of mortgage
debt at an annual interest rate of 6.2%. SNH leases this community to a
third party senior living operator. This community was the last
remaining community to be acquired in conjunction with the May 2015
purchase of 37 senior living communities with 3,352 living units for
approximately $762.6 million.
Also in September 2015, SNH acquired one senior living community with 84
private pay assisted living units located in Georgia for approximately
$18.3 million, excluding closing costs. SNH leases this community to a
third party senior living operator.
In July 2015, SNH sold one senior living community with 12 living units
located in Iowa for $155,000, excluding closing costs. In August 2015,
SNH sold one senior living community with 63 living units located in
Wisconsin for $850,000, excluding closing costs. SNH did not recognize
any gains or losses from these sales.
Recent Financing Activities:
In September 2015, SNH closed on a new $200 million, seven year
unsecured term loan. The term loan matures in September 2022. The
interest rate on the term loan is LIBOR plus 180 basis points, subject
to adjustments based on changes to SNH's credit ratings. The term loan
has an accordion feature under which maximum borrowings may be increased
to up to $400 million in certain circumstances. SNH used the net
proceeds of the term loan to partially repay amounts outstanding under
its revolving credit facility.
Also in September 2015, SNH partially exercised the accordion feature
under its unsecured revolving credit facility agreement to increase the
lending commitments under the credit facility to $1 billion from its
previous amount of $750 million. All other material terms of the credit
facility remain unchanged.
In October 2015, SNH prepaid two mortgages with maturity dates in
January 2016 encumbering one property with an aggregate principal
balance of $52 million and a weighted average annual interest rate of
5.6%. Also, SNH's $250 million 4.3% senior unsecured notes due in
January 2016 have been called for prepayment on or about November 4,
2015. SNH funded or will fund these prepayments with cash on hand and
borrowings under its revolving credit facility.
Conference Call:
On Wednesday, November 4, 2015, 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
third quarter 2015 financial results. The conference call telephone
number is (877) 329-4297. Participants calling from outside the United
States and Canada should dial (412) 317-5435. No pass code is necessary
to access the call at 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 on
Wednesday, November 11, 2015. To hear the replay, dial (412) 317-0088.
The replay pass code is 10074253.
A live audio webcast of the conference call will also be available in a
listen only mode on the company's website, which is located at www.snhreit.com.
Participants wanting to access the webcast should visit the company's
website about five minutes before the call. The archived webcast will be
available for replay on the company's website after the call.
The transcription, recording and retransmission in any way of SNH's
third quarter 2015 conference call are strictly prohibited without the
prior written consent of SNH.
Supplemental Data:
A copy of SNH's Third Quarter 2015 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 428
properties (452 buildings) located in 43 states and Washington, D.C. as
of September 30, 2015. 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:
-
THE MAXIMUM BORROWING AVAILABILITY UNDER SNH'S REVOLVING CREDIT
FACILITY AND TERM LOANS MAY BE INCREASED TO UP TO $2.6 BILLION ON A
COMBINED BASIS IN CERTAIN CIRCUMSTANCES. HOWEVER, INCREASING THE
MAXIMUM BORROWING AVAILABILITY UNDER SNH'S REVOLVING CREDIT FACILITY
AND TERM LOANS IS SUBJECT TO SNH OBTAINING ADDITIONAL COMMITMENTS FROM
LENDERS, WHICH MAY NOT OCCUR.
THE INFORMATION CONTAINED IN SNH'S FILINGS WITH THE SEC, INCLUDING UNDER
THE CAPTION "RISK FACTORS" IN ITS PERIODIC REPORTS, OR INCORPORATED
THEREIN, IDENTIFIES OTHER IMPORTANT FACTORS THAT COULD CAUSE DIFFERENCES
FROM SNH'S 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 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.
(1) Most recent reported data is based upon the operating
results provided by SNH's tenants for the 12 months ended June 30, 2015
and 2014 or the most recent prior period for which tenant operating
results are available.
SENIOR HOUSING PROPERTIES TRUST CONSOLIDATED
STATEMENTS OF INCOME (amounts in thousands, except per
share data) (unaudited)
|
|
|
|
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Revenues:
|
|
|
|
|
|
|
|
|
Rental income
|
|
$
|
158,863
|
|
|
$
|
137,614
|
|
|
$
|
460,193
|
|
|
$
|
377,339
|
|
Residents fees and services
|
|
|
96,412
|
|
|
|
79,259
|
|
|
|
271,061
|
|
|
|
237,740
|
|
Total revenues
|
|
|
255,275
|
|
|
|
216,873
|
|
|
|
731,254
|
|
|
|
615,079
|
|
|
|
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
|
|
|
Property operating expenses
|
|
|
96,927
|
|
|
|
82,706
|
|
|
|
276,313
|
|
|
|
240,297
|
|
Depreciation
|
|
|
70,016
|
|
|
|
50,074
|
|
|
|
186,234
|
|
|
|
135,132
|
|
General and administrative
|
|
|
10,316
|
|
|
|
10,384
|
|
|
|
32,563
|
|
|
|
28,250
|
|
Acquisition related costs
|
|
|
742
|
|
|
|
15
|
|
|
|
6,517
|
|
|
|
2,649
|
|
Impairment of assets
|
|
|
(98
|
)
|
|
|
—
|
|
|
|
(98
|
)
|
|
|
-
|
|
Total expenses
|
|
|
177,903
|
|
|
|
143,179
|
|
|
|
501,529
|
|
|
|
406,328
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
77,372
|
|
|
|
73,694
|
|
|
|
229,725
|
|
|
|
208,751
|
|
|
|
|
|
|
|
|
|
|
Interest and other income
|
|
|
57
|
|
|
|
78
|
|
|
|
274
|
|
|
|
336
|
|
Interest expense
|
|
|
(38,989
|
)
|
|
|
(36,201
|
)
|
|
|
(112,838
|
)
|
|
|
(99,213
|
)
|
Loss on early extinguishment of debt
|
|
|
(21
|
)
|
|
|
—
|
|
|
|
(1,469
|
)
|
|
|
—
|
|
Income from continuing operations before income tax expense and
equity in (losses) earnings of an investee
|
|
|
38,419
|
|
|
|
37,571
|
|
|
|
115,692
|
|
|
|
109,874
|
|
Income tax expense
|
|
|
(146
|
)
|
|
|
(156
|
)
|
|
|
(385
|
)
|
|
|
(502
|
)
|
Equity in (losses) earnings of an investee
|
|
|
(24
|
)
|
|
|
38
|
|
|
|
70
|
|
|
|
59
|
|
Income from continuing operations
|
|
|
38,249
|
|
|
|
37,453
|
|
|
|
115,377
|
|
|
|
109,431
|
|
Discontinued operations:
|
|
|
|
|
|
|
|
|
(Loss) income from discontinued operations
|
|
|
—
|
|
|
|
(557
|
)
|
|
|
(350
|
)
|
|
|
1,484
|
|
Impairment of assets from discontinued operations
|
|
|
—
|
|
|
|
216
|
|
|
|
(602
|
)
|
|
|
(117
|
)
|
Income before gain on sale of properties
|
|
|
38,249
|
|
|
|
37,112
|
|
|
|
114,425
|
|
|
|
110,798
|
|
Gain on sale of properties
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2,552
|
|
Net income
|
|
$
|
38,249
|
|
|
$
|
37,112
|
|
|
$
|
114,425
|
|
|
$
|
113,350
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding (basic)
|
|
|
237,263
|
|
|
|
203,647
|
|
|
|
231,454
|
|
|
|
197,225
|
|
Weighted average shares outstanding (diluted)
|
|
|
237,293
|
|
|
|
203,675
|
|
|
|
231,486
|
|
|
|
197,256
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted per common share amounts:
|
|
|
|
|
|
|
|
|
Income from continuing operations per share
|
|
$
|
0.16
|
|
|
$
|
0.18
|
|
|
$
|
0.50
|
|
|
$
|
0.56
|
|
(Loss) income from discontinued operations per share
|
|
|
—
|
|
|
|
—
|
|
|
|
(0.01
|
)
|
|
|
0.01
|
|
Basic and diluted net income per share
|
|
$
|
0.16
|
|
|
$
|
0.18
|
|
|
$
|
0.49
|
|
|
$
|
0.57
|
|
|
|
|
|
|
|
|
|
|
SENIOR HOUSING PROPERTIES TRUST 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,
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
38,249
|
|
|
$
|
37,112
|
|
|
$
|
114,425
|
|
|
$
|
113,350
|
|
Depreciation expense
|
|
|
70,016
|
|
|
|
50,074
|
|
|
|
186,234
|
|
|
|
135,132
|
|
Gain on sale of properties
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(2,552
|
)
|
Impairment of assets from continuing operations
|
|
|
(98
|
)
|
|
|
—
|
|
|
|
(98
|
)
|
|
|
—
|
|
Impairment of assets from discontinued operations
|
|
|
—
|
|
|
|
(216
|
)
|
|
|
602
|
|
|
|
117
|
|
FFO
|
|
|
108,167
|
|
|
|
86,970
|
|
|
|
301,163
|
|
|
|
246,047
|
|
Acquisition related costs
|
|
|
742
|
|
|
|
15
|
|
|
|
6,517
|
|
|
|
2,649
|
|
Loss on early extinguishment of debt
|
|
|
21
|
|
|
|
—
|
|
|
|
1,469
|
|
|
|
—
|
|
Percentage rent adjustment(2)
|
|
|
2,500
|
|
|
|
2,600
|
|
|
|
7,600
|
|
|
|
7,600
|
|
Normalized FFO
|
|
$
|
111,430
|
|
|
$
|
89,585
|
|
|
$
|
316,749
|
|
|
$
|
256,296
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding (basic)
|
|
|
237,263
|
|
|
|
203,647
|
|
|
|
231,454
|
|
|
|
197,225
|
|
Weighted average shares outstanding (diluted)
|
|
|
237,293
|
|
|
|
203,675
|
|
|
|
231,486
|
|
|
|
197,256
|
|
|
|
|
|
|
|
|
|
|
FFO per share (basic and diluted)
|
|
$
|
0.46
|
|
|
$
|
0.43
|
|
|
$
|
1.30
|
|
|
$
|
1.25
|
|
Normalized FFO per share (basic and diluted)
|
|
$
|
0.47
|
|
|
$
|
0.44
|
|
|
$
|
1.37
|
|
|
$
|
1.30
|
|
Net income per share (basic and diluted)
|
|
$
|
0.16
|
|
|
$
|
0.18
|
|
|
$
|
0.49
|
|
|
$
|
0.57
|
|
Distributions declared per share
|
|
$
|
0.39
|
|
|
$
|
0.39
|
|
|
$
|
1.17
|
|
|
$
|
1.17
|
|
|
|
|
|
|
|
|
|
|
(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 SNH. SNH's calculation of Normalized FFO differs from
NAREIT's definition of FFO because SNH includes estimated percentage
rent in the period to which SNH estimates that it relates rather than
when it is recognized as income in accordance with GAAP, SNH includes
estimated business management incentive fees, if any, only in the fourth
quarter versus the quarter when they are recognized as expense in
accordance with GAAP and SNH excludes acquisition related costs, gains
and losses on early extinguishment of debt, gains and losses on lease
terminations and losses on impairment of intangible assets, if any. SNH
considers FFO and Normalized FFO to be appropriate measures of operating
performance for a 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 with 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 SNH's status as a REIT,
limitations in its revolving credit facility agreement, term loan
agreement and public debt covenants, the availability of debt and equity
capital, SNH's expectation of its future capital requirements and
operating performance, and SNH's 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
SNH's activities. These measures should be considered in conjunction
with net income, operating income and cash flow from operating
activities as presented in SNH's Condensed Consolidated Statements of
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 included during the first three
quarters.
SENIOR HOUSING PROPERTIES TRUST CALCULATION AND
RECONCILIATION OF NET OPERATING INCOME (NOI) AND CASH BASIS NOI (amounts
in thousands) (unaudited)
|
|
|
|
|
|
For the Three Months Ended
|
|
|
9/30/2015
|
|
9/30/2014
|
Calculation of NOI and Cash Basis NOI (1):
|
|
|
|
|
Revenues:
|
|
|
|
|
Rental income
|
|
$
|
158,863
|
|
|
$
|
137,614
|
|
Residents fees and services
|
|
|
96,412
|
|
|
|
79,259
|
|
Total revenues
|
|
|
255,275
|
|
|
|
216,873
|
|
Property operating expenses
|
|
|
96,927
|
|
|
|
82,706
|
|
Property net operating income (NOI):
|
|
|
158,348
|
|
|
|
134,167
|
|
Non cash straight line rent adjustments
|
|
|
(5,040
|
)
|
|
|
(2,876
|
)
|
Lease value amortization
|
|
|
(1,084
|
)
|
|
|
(1,264
|
)
|
Lease termination fees
|
|
|
(244
|
)
|
|
|
—
|
|
Non cash amortization included in property operating expenses(2)
|
|
|
(204
|
)
|
|
|
—
|
|
Cash Basis NOI
|
|
$
|
151,776
|
|
|
$
|
130,027
|
|
|
|
|
|
|
Reconciliation of Cash Basis NOI to Net Income:
|
|
|
|
|
Cash Basis NOI
|
|
$
|
151,776
|
|
|
$
|
130,027
|
|
Non cash straight line rent adjustments
|
|
|
5,040
|
|
|
|
2,876
|
|
Lease value amortization
|
|
|
1,084
|
|
|
|
1,264
|
|
Lease termination fees
|
|
|
244
|
|
|
|
—
|
|
Non cash amortization included in property operating expenses(2)
|
|
|
204
|
|
|
|
—
|
|
Property NOI
|
|
|
158,348
|
|
|
|
134,167
|
|
Depreciation expense
|
|
|
(70,016
|
)
|
|
|
(50,074
|
)
|
General and administrative expense
|
|
|
(10,316
|
)
|
|
|
(10,384
|
)
|
Acquisition related costs
|
|
|
(742
|
)
|
|
|
(15
|
)
|
Impairment of assets
|
|
|
98
|
|
|
|
—
|
|
Operating income
|
|
|
77,372
|
|
|
|
73,694
|
|
|
|
|
|
|
Interest and other income
|
|
|
57
|
|
|
|
78
|
|
Interest expense
|
|
|
(38,989
|
)
|
|
|
(36,201
|
)
|
Loss on early extinguishment of debt
|
|
|
(21
|
)
|
|
|
—
|
|
Income before income tax expense and equity in (losses)
earnings of an investee
|
|
|
38,419
|
|
|
|
37,571
|
|
Income tax expense
|
|
|
(146
|
)
|
|
|
(156
|
)
|
Equity in (losses) earnings of an investee
|
|
|
(24
|
)
|
|
|
38
|
|
Income from continuing operations
|
|
|
38,249
|
|
|
|
37,453
|
|
Discontinued operations
|
|
|
|
|
Loss from discontinued operations
|
|
|
—
|
|
|
|
(557
|
)
|
Impairment of assets from discontinued
operations
|
|
|
—
|
|
|
|
216
|
|
Net income
|
|
$
|
38,249
|
|
|
$
|
37,112
|
|
|
|
|
|
|
(1) The calculations of NOI and Cash Basis NOI exclude certain
components of net income in order to provide results that are more
closely related to SNH's property level results of operations. SNH
calculates NOI and Cash Basis NOI as shown above excluding properties
classified as discontinued operations. SNH defines NOI as income from
its real estate less its property operating expenses. NOI excludes
amortization of capitalized tenant improvement costs and leasing
commissions. SNH defines Cash Basis NOI as NOI excluding non cash
straight line rent adjustments, lease value amortization, lease
termination fees, if any, and non cash amortization included in property
operating expenses. SNH considers NOI and Cash Basis NOI to be
appropriate supplemental measures to net income because they may help
both investors and management to understand the operations of SNH's
properties. SNH uses NOI and Cash Basis NOI internally to evaluate
individual and company wide property level performance, and it believes
that NOI and Cash Basis NOI provide useful information to investors
regarding its results of operations because these measures reflect only
those income and expense items that are generated and incurred at the
property level and may facilitate comparisons of its operating
performance between periods and with other REITs. NOI and Cash Basis NOI
do not represent cash generated by operating activities in accordance
with GAAP and should not be considered as an alternative 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 SNH's activities. These measures should be
considered in conjunction with net income, operating income and cash
flow from operating activities as presented in SNH's Condensed
Consolidated Statements of Comprehensive Income and Condensed
Consolidated Statements of Cash Flows. Other REITs and real estate
companies may calculate NOI and Cash Basis NOI differently than SNH does.
(2) SNH recorded a liability for the amount by which the estimated fair
value for accounting purposes exceeded the price SNH paid for its
investment in The RMR Group Inc. shares in June 2015. A portion of this
liability is being amortized on a straight line basis over the 20 year
life of the property management agreement with The RMR Group LLC as a
reduction to property management fees, which are included in property
operating expenses.
SENIOR HOUSING PROPERTIES TRUST Calculation and
Reconciliation of NOI, Cash Basis NOI, Same Property NOI and Same
Property Cash Basis NOI by Segment (1) (dollars
in thousands) (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended September 30, 2015
|
|
For the Three Months Ended September 30, 2014
|
Calculation of NOI and Cash Basis NOI:
|
|
Triple Net Leased Senior Living Communities
(2)
|
|
Managed Senior Living Communities (3)
|
|
MOBs (4)
|
|
Non-Segment (5)
|
|
Total
|
|
Triple Net Leased Senior Living Communities
(2)
|
|
Managed Senior Living Communities (3)
|
|
MOBs (4)
|
|
Non-Segment (5)
|
|
Total
|
Rental income / residents fees and services
|
|
$
|
64,222
|
|
|
$
|
96,412
|
|
|
$
|
90,072
|
|
|
$
|
4,569
|
|
|
$
|
255,275
|
|
|
$
|
55,266
|
|
$
|
79,259
|
|
|
$
|
77,798
|
|
|
$
|
4,550
|
|
$
|
216,873
|
|
Property operating expenses
|
|
|
-
|
|
|
|
(71,983
|
)
|
|
|
(24,944
|
)
|
|
|
-
|
|
|
|
(96,927
|
)
|
|
|
-
|
|
|
(61,330
|
)
|
|
|
(21,376
|
)
|
|
|
-
|
|
|
(82,706
|
)
|
Property net operating income (NOI)
|
|
$
|
64,222
|
|
|
$
|
24,429
|
|
|
$
|
65,128
|
|
|
$
|
4,569
|
|
|
$
|
158,348
|
|
|
$
|
55,266
|
|
$
|
17,929
|
|
|
$
|
56,422
|
|
|
$
|
4,550
|
|
$
|
134,167
|
|
NOI Growth
|
|
|
16.2
|
%
|
|
|
36.3
|
%
|
|
|
15.4
|
%
|
|
|
0.4
|
%
|
|
|
18.0
|
%
|
|
|
--
|
|
|
--
|
|
|
|
--
|
|
|
|
--
|
|
|
--
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property NOI
|
|
$
|
64,222
|
|
|
$
|
24,429
|
|
|
$
|
65,128
|
|
|
$
|
4,569
|
|
|
$
|
158,348
|
|
|
$
|
55,266
|
|
$
|
17,929
|
|
|
$
|
56,422
|
|
|
$
|
4,550
|
|
$
|
134,167
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non cash straight line rent adjustments
|
|
|
1,373
|
|
|
|
-
|
|
|
|
3,530
|
|
|
|
138
|
|
|
|
5,041
|
|
|
|
113
|
|
|
-
|
|
|
|
2,626
|
|
|
|
137
|
|
|
2,876
|
|
Lease value amortization
|
|
|
-
|
|
|
|
-
|
|
|
|
1,029
|
|
|
|
55
|
|
|
|
1,084
|
|
|
|
-
|
|
|
-
|
|
|
|
1,209
|
|
|
|
55
|
|
|
1,264
|
|
Lease termination fees
|
|
|
-
|
|
|
|
-
|
|
|
|
244
|
|
|
|
-
|
|
|
|
244
|
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
Non cash amortization included in property operating expenses (7)
|
|
|
-
|
|
|
|
-
|
|
|
|
203
|
|
|
|
-
|
|
|
|
203
|
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
Cash Basis NOI
|
|
$
|
62,849
|
|
|
$
|
24,429
|
|
|
$
|
60,122
|
|
|
$
|
4,376
|
|
|
$
|
151,776
|
|
|
$
|
55,153
|
|
$
|
17,929
|
|
|
$
|
52,587
|
|
|
$
|
4,358
|
|
$
|
130,027
|
|
Cash Basis NOI Growth
|
|
|
14.0
|
%
|
|
|
36.3
|
%
|
|
|
14.3
|
%
|
|
|
0.4
|
%
|
|
|
16.7
|
%
|
|
|
--
|
|
|
--
|
|
|
|
--
|
|
|
|
--
|
|
|
--
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of NOI to Same Property NOI:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property NOI
|
|
$
|
64,222
|
|
|
$
|
24,429
|
|
|
$
|
65,128
|
|
|
$
|
4,569
|
|
|
$
|
158,348
|
|
|
$
|
55,266
|
|
$
|
17,929
|
|
|
$
|
56,422
|
|
|
$
|
4,550
|
|
$
|
134,167
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOI not included in same property
|
|
|
8,665
|
|
|
|
4,521
|
|
|
|
8,548
|
|
|
|
-
|
|
|
|
21,734
|
|
|
|
441
|
|
|
-
|
|
|
|
124
|
|
|
|
-
|
|
|
565
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same property NOI (6)
|
|
$
|
55,557
|
|
|
$
|
19,908
|
|
|
$
|
56,580
|
|
|
$
|
4,569
|
|
|
$
|
136,614
|
|
|
$
|
54,825
|
|
$
|
17,929
|
|
|
$
|
56,298
|
|
|
$
|
4,550
|
|
$
|
133,602
|
|
Same property NOI growth
|
|
|
1.3
|
%
|
|
|
11.0
|
%
|
|
|
0.5
|
%
|
|
|
0.4
|
%
|
|
|
2.3
|
%
|
|
|
--
|
|
|
--
|
|
|
|
--
|
|
|
|
--
|
|
|
--
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Same Property NOI to Same Property Cash Basis
NOI:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same property NOI (6)
|
|
$
|
55,557
|
|
|
$
|
19,908
|
|
|
$
|
56,580
|
|
|
$
|
4,569
|
|
|
$
|
136,614
|
|
|
$
|
54,825
|
|
$
|
17,929
|
|
|
$
|
56,298
|
|
|
$
|
4,550
|
|
$
|
133,602
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non cash straight line rent adjustments
|
|
|
233
|
|
|
|
-
|
|
|
|
2,828
|
|
|
|
138
|
|
|
|
3,199
|
|
|
|
113
|
|
|
-
|
|
|
|
2,625
|
|
|
|
137
|
|
|
2,875
|
|
Lease value amortization
|
|
|
-
|
|
|
|
-
|
|
|
|
1,039
|
|
|
|
55
|
|
|
|
1,094
|
|
|
|
-
|
|
|
-
|
|
|
|
1,209
|
|
|
|
55
|
|
|
1,264
|
|
Lease termination fees
|
|
|
-
|
|
|
|
-
|
|
|
|
244
|
|
|
|
-
|
|
|
|
244
|
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
Non cash amortization included in property operating expenses (7)
|
|
|
-
|
|
|
|
-
|
|
|
|
179
|
|
|
|
|
|
179
|
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
Same property cash basis NOI (6)
|
|
$
|
55,324
|
|
|
$
|
19,908
|
|
|
$
|
52,290
|
|
|
$
|
4,376
|
|
|
$
|
131,898
|
|
|
$
|
54,712
|
|
$
|
17,929
|
|
|
$
|
52,464
|
|
|
$
|
4,358
|
|
$
|
129,463
|
|
Same property cash basis NOI growth
|
|
|
1.1
|
%
|
|
|
11.0
|
%
|
|
|
(0.3
|
%)
|
|
|
0.4
|
%
|
|
|
1.9
|
%
|
|
|
--
|
|
|
--
|
|
|
|
--
|
|
|
|
--
|
|
|
--
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) For a calculation, reconciliation and definition of NOI and Cash
Basis NOI, please see pages 8 and 9. Excludes properties classified in
discontinued operations.
(2) Includes triple net leased senior
living communities that provide short term and long term residential
care and dining services for residents.
(3) Includes managed senior
living communities that provide short term and long term residential
care and dining services for residents.
(4) Includes properties
leased to medical providers, medical related businesses, clinics and
biotech laboratory tenants.
(5) Includes the operating results of
certain properties that offer wellness and spa services to members.
(6)
Consists of properties owned continuously since July 1, 2014.
(7)
We recorded a liability for the amount by which the estimated fair value
for accounting purposes exceeded the price we paid for our investment in
RMR Inc. shares in June 2015. A portion of this liability is being
amortized on a straight line basis over the 20 year life of the property
management agreement with RMR LLC as a reduction to property management
fees, which are included in property operating expenses.
|
SENIOR HOUSING PROPERTIES TRUST CONDENSED
CONSOLIDATED BALANCE SHEETS (amounts in thousands) (unaudited)
|
|
|
|
|
|
Balance Sheet:
|
|
|
|
|
|
|
September 30, 2015
|
|
December 31, 2014
|
ASSETS
|
|
|
|
|
Real estate properties
|
|
$
|
7,439,088
|
|
|
$
|
6,238,611
|
|
Less accumulated depreciation
|
|
|
(1,101,434
|
)
|
|
|
(983,850
|
)
|
|
|
|
6,337,654
|
|
|
|
5,254,761
|
|
Cash and cash equivalents
|
|
|
61,408
|
|
|
|
27,594
|
|
Restricted cash
|
|
|
8,179
|
|
|
|
10,544
|
|
Deferred financing fees, net
|
|
|
29,486
|
|
|
|
30,549
|
|
Acquired real estate leases and other intangible assets, net
|
|
|
628,706
|
|
|
|
472,788
|
|
Other assets
|
|
|
287,563
|
|
|
|
172,033
|
|
Total assets
|
|
$
|
7,352,996
|
|
|
$
|
5,968,269
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY
|
|
|
|
|
Unsecured revolving credit facility
|
|
$
|
467,757
|
|
|
$
|
80,000
|
|
Unsecured term loans
|
|
|
550,000
|
|
|
|
350,000
|
|
Senior unsecured notes, net of discount
|
|
|
1,744,694
|
|
|
|
1,743,628
|
|
Secured debt and capital leases
|
|
|
739,114
|
|
|
|
627,076
|
|
Accrued interest
|
|
|
33,662
|
|
|
|
20,046
|
|
Assumed real estate lease obligations, net
|
|
|
118,099
|
|
|
|
122,826
|
|
Other liabilities
|
|
|
194,130
|
|
|
|
72,286
|
|
Total liabilities
|
|
|
3,847,456
|
|
|
|
3,015,862
|
|
|
|
|
|
|
Total shareholders' equity
|
|
|
3,505,540
|
|
|
|
2,952,407
|
|
Total liabilities and shareholders' equity
|
|
$
|
7,352,996
|
|
|
$
|
5,968,269
|
|
|
|
|
|
|
|
|
|
|
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.

View source version on businesswire.com: http://www.businesswire.com/news/home/20151104005543/en/
Senior Housing Properties Trust
Olivia Snyder, 617-796-8234
Investor
Relations Analyst
Source: Senior Housing Properties Trust
News Provided by Acquire Media