NEWTON, Mass.--(BUSINESS WIRE)--
Senior Housing Properties Trust (Nasdaq: SNH) today announced its
financial results for the quarter and year ended December 31, 2017.
“Operating results were stable in 2017, with consolidated annual Cash
Basis NOI growth of 1% year over year showcasing our strategic portfolio
composition of high quality healthcare real estate,” said David Hegarty,
President and Chief Operating Officer. “2017 was highlighted by our
ability to raise cost effective capital and to invest the proceeds on a
disciplined and accretive basis, and we continued to successfully
execute on this strategy during the first quarter with our $500 million
senior notes offering in February 2018. At year end, we announced that
we agreed to sell four senior living communities for $368 million and we
expect to report a gain of approximately $308 million on this sale.
During the 2017 fourth quarter, we acquired four medical office
buildings and two senior living communities for aggregate consideration
of $120 million at attractive cap rates and subsequent to year end, we
acquired three medical office buildings and two senior living
communities for $133 million.”
Results for the Quarter Ended December 31, 2017:
Net income attributable to common shareholders was $65.0 million, or
$0.27 per diluted share, for the quarter ended December 31, 2017,
compared to $42.9 million, or $0.18 per diluted share, for the quarter
ended December 31, 2016. This increase in net income attributable to
common shareholders is primarily the result of a $46.1 million gain on
sale of properties recognized for the quarter ended December 31, 2017,
as well as acquisitions since October 1, 2016, partially offset by an
increase in general and administrative expenses as a result of $33.7
million of business management incentive fee expense recognized for the
quarter ended December 31, 2017 as a result of SNH's total shareholder
return, as defined, exceeding the returns for the SNL U.S. REIT
Healthcare index over the applicable three year measurement period ended
December 31, 2017. Normalized funds from operations, or Normalized FFO,
were $59.2 million and $118.6 million, respectively, or $0.25 and $0.50
per diluted share, respectively, for the quarters ended December 31,
2017 and December 31, 2016.
Reconciliations of net income attributable to common shareholders
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 December 31, 2017 and 2016 appear later in
this press release.
Results for the Year Ended December 31, 2017:
Net income attributable to common shareholders was $147.6 million, or
$0.62 per diluted share, for the year ended December 31, 2017, compared
to $141.3 million, or $0.60 per diluted share, for the year ended
December 31, 2016. This increase in net income attributable to common
shareholders is primarily the result of a $46.1 million gain on sale of
properties recognized for the year ended December 31, 2017, acquisitions
since January 1, 2016 and decreases in depreciation and amortization
expense, acquisition and certain other transaction related costs and
asset impairment charges, partially offset by increases in general and
administrative expenses as a result of $55.7 million of business
management incentive fee expense recognized for the year ended
December 31, 2017 as a result of SNH's total shareholder return, as
defined, exceeding the returns for the SNL U.S. REIT Healthcare index
over the applicable three year measurement period ended December 31,
2017. Normalized FFO were $375.3 million and $446.4 million,
respectively, or $1.58 and $1.88 per diluted share, respectively, for
the years ended December 31, 2017 and December 31, 2016.
Reconciliations of net income attributable to common shareholders
determined in accordance with GAAP to FFO and Normalized FFO for the
years ended December 31, 2017 and 2016 appear later in this press
release.
Portfolio Operating Results:
For the quarter ended December 31, 2017, 45.1% of net operating income,
or NOI, came from 235 triple net leased senior living communities with
25,790 living units. As a result of increased capital investments, which
increase rents and may disrupt community operations during expansions
and renovations, along with other factors, the weighted average rent
coverage for triple net leased senior living communities decreased to
1.21x for the 12 month period ended September 30, 2017 compared to 1.28x
for the 12 month period ended September 30, 2016(1)(2). Cash
basis net operating income, or Cash Basis NOI, from triple net leased
senior living communities owned continuously since October 1, 2016, or
same property, increased 0.9% for the quarter ended December 31, 2017
compared to the quarter ended December 31, 2016.
For the quarter ended December 31, 2017, 39.0% of NOI came from 125
properties leased to medical providers, medical related businesses,
clinics and biotech laboratory tenants, or MOBs, with 12.1 million
leasable square feet. As of December 31, 2017, 95.0% of MOB square feet
were leased compared to 96.5% as of December 31, 2016. Same property
occupancy at MOBs was 94.9% as of December 31, 2017 compared to 96.4% as
of December 31, 2016. Same property Cash Basis NOI from MOBs decreased
1.6% for the quarter ended December 31, 2017 compared to the quarter
ended December 31, 2016. As of December 31, 2017, SNH's investments in
life science properties constituted approximately half of SNH's total
$3.7 billion invested in MOBs.
For the quarter ended December 31, 2017, 13.3% of NOI came from 70
managed senior living communities with 9,043 living units. Occupancy at
managed senior living communities was 85.9% for the quarter ended
December 31, 2017, compared to 85.2% for the quarter ended December 31,
2016. Same property occupancy at managed senior living communities was
87.4% for the quarter ended December 31, 2017 compared to 86.5% for the
quarter ended December 31, 2016. Same property average monthly rates at
managed senior living communities increased by 0.9% to $4,262 for the
quarter ended December 31, 2017 compared to the quarter ended
December 31, 2016. Same property Cash Basis NOI from managed senior
living communities decreased 3.4% for the quarter ended December 31,
2017 compared to the quarter ended December 31, 2016.
SNH's 10 wellness centers remained 100% leased as of December 31, 2017
and December 31, 2016 and provided SNH with Cash Basis NOI of $4.4
million in each of the three months ended December 31, 2017 and
December 31, 2016.
Consolidated same property Cash Basis NOI decreased 0.7% for the quarter
ended December 31, 2017 compared to the quarter ended December 31, 2016.
Reconciliations of net income determined in accordance with GAAP to same
property Cash Basis NOI by operating segment for the quarters ended
December 31, 2017 and 2016 appear later in this press release.
Financing Activities:
In December 2017, SNH prepaid approximately $8.4 million of secured debt
encumbering one MOB with an annual interest rate of 6.73% and a maturity
date in April 2018.
In January 2018, SNH prepaid approximately $4.3 million of secured debt
encumbering one senior living community with an annual interest rate of
4.375% and a maturity date in September 2043.
In February 2018, SNH issued $500.0 million of 4.75% senior unsecured
notes due 2028. SNH used the net proceeds of this offering to reduce the
outstanding balance under its revolving credit facility.
Investment Activities:
In October 2017, SNH acquired two MOBs (two buildings) located in
Minnesota and North Carolina with a total of approximately 255,000
square feet for an aggregate purchase price of approximately $38.5
million, excluding closing costs.
In November 2017, SNH acquired one MOB (one building) located in
California with approximately 63,000 square feet for approximately $26.5
million, excluding closing costs.
In November 2017, SNH agreed to acquire six senior living communities
from Five Star Senior Living Inc. (Nasdaq: FVE), or Five Star, for an
aggregate purchase price of approximately $104.0 million, including
SNH’s assumption of approximately $33.7 million of mortgage debt secured
by certain of these senior living communities and excluding closing
costs. In December 2017, SNH acquired two of these communities for an
aggregate purchase price of approximately $39.2 million, excluding
closing costs. In January 2018, SNH acquired one of these communities
for approximately $19.7 million, excluding closing costs. In February
2018, SNH acquired one of these communities for approximately $22.2
million, including the assumption of approximately $16.8 million of
mortgage debt and excluding closing costs. In connection with these
acquisitions, SNH entered management and pooling agreements with Five
Star for Five Star to manage these senior living communities for SNH,
and SNH expects to enter additional management and pooling agreements
with Five Star concurrent with the acquisition of the remaining two
communities. The closings of the acquisitions of the remaining two
communities for an aggregate purchase price of approximately $23.3
million, including SNH's assumption of approximately $16.8 million of
mortgage debt, are expected to occur as third party approvals are
received by the end of the first quarter of 2018.
In December 2017, SNH acquired one MOB (one building) located in
Virginia with approximately 136,000 square feet for approximately $15.6
million, excluding closing costs.
In January 2018, SNH acquired three MOBs (three buildings) located in
Kansas, Missouri and California with a total of approximately 400,000
square feet for an aggregate purchase price of approximately $91.2
million, excluding closing costs.
In November 2017, SNH entered an agreement to acquire one MOB (one
building) located in Virginia with approximately 135,000 square feet for
approximately $22.8 million, including the assumption of approximately
$11.2 million of mortgage debt and excluding closing costs. This
acquisition is expected to close by the end of the first quarter of 2018.
During the quarter ended December 31, 2017, SNH invested approximately
$10.7 million in improvements at its owned senior living communities
that has generated or will generate additional rent under the terms of
its existing senior living communities’ leases. SNH regularly makes
additional investments at its MOBs and its managed senior living
communities that it expects may maintain or enhance the competitive
positions of those properties and may increase its operating revenue
from those properties.
Disposition Activities:
In December 2017, SNH agreed to sell four senior living communities with
a total of 1,619 living units that were leased to Sunrise Senior Living,
LLC, or Sunrise, for an aggregate sales price of $368.0 million,
excluding closing costs. The sale of one of these communities was
completed in December 2017 for a sales price of $55.0 million, excluding
closing costs, resulting in a gain of approximately $45.9 million. SNH
expects the closings of the sales of the remaining three senior living
communities, for an aggregate sales price of $313.0 million, to occur by
the end of the first quarter of 2018. These four communities produced
rental income to SNH during 2017 of approximately $14.8 million. SNH
expects to realize a total of approximately $308.0 million from the sale
of these four Sunrise leased communities.
At December 31, 2017, four senior living communities, including the
three communities leased to Sunrise that are discussed above and one
additional community leased to Five Star, were classified as held for
sale.
Conference Call:
On Tuesday, February 27, 2018, at 10:00 a.m. Eastern Time, President and
Chief Operating Officer, David Hegarty, Chief Financial Officer and
Treasurer, Richard Siedel, and Senior Vice President of The RMR Group
LLC, Jennifer Francis, will host a conference call to discuss SNH's
fourth quarter 2017 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 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 on
Tuesday, March 6, 2018. To hear the replay, dial (412) 317-0088. The
replay pass code is 10115724.
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 following the call for
about one week. The transcription, recording and retransmission in
any way of SNH’s fourth quarter conference call are strictly prohibited
without the prior written consent of SNH.
Supplemental Data:
A copy of SNH’s Fourth Quarter 2017 Supplemental Operating and Financial
Data is available for download at SNH’s 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, which owns senior living
communities, medical office and life science properties and wellness
centers throughout the United States. SNH is managed by the operating
subsidiary of The RMR Group Inc. (Nasdaq: RMR), or RMR Inc., an
alternative asset management company that is headquartered in Newton, MA.
Please see the pages attached hereto for a more detailed statement of
SNH’s operating results and financial condition, and for an explanation
of SNH’s calculations of FFO, Normalized FFO, NOI and Cash Basis NOI and
reconciliations of net income attributable to common shareholders and
net income, respectively, determined in accordance with GAAP to these
amounts.
___________________________________________________________________________________________________________________________________
(1)
SNH reports rent coverage one quarter in arrears because operating
results from tenants are usually provided to SNH three months after the
end of a fiscal quarter. Operating data from triple net leased senior
living communities are provided by tenants and SNH has not independently
verified this information.
(2) Excludes data for periods prior to SNH's ownership of
certain properties, as well as properties sold or classified as held for
sale during the periods presented.
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”, "WILL", “MAY” AND NEGATIVES OR DERIVATIVES OF THESE 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 SNH’S FORWARD LOOKING STATEMENTS AS A RESULT
OF VARIOUS FACTORS. FOR EXAMPLE:
-
MR. HEGARTY NOTES SNH’S STRATEGY TO RAISE COST EFFECTIVE CAPITAL AND
TO INVEST THE PROCEEDS ON A DISCIPLINED AND ACCRETIVE BASIS AND
REFERENCES RECENT EXAMPLES OF SNH EXECUTING ON THIS STRATEGY. HOWEVER,
SNH MAY FAIL TO SUSTAIN THIS STRATEGY IN THE FUTURE AND IT MAY INCUR
COSTS AND REALIZE LOSSES AS A RESULT OF SUCH FAILURE.
-
THIS PRESS RELEASE INCLUDES A STATEMENT THAT SNH EXPECTS THE
ADDITIONAL INVESTMENTS IT REGULARLY MAKES AT ITS OWNED MOBS AND ITS
OWNED AND MANAGED SENIOR LIVING COMMUNITIES MAY MAINTAIN OR ENHANCE
THE COMPETITIVE POSITION OF THOSE PROPERTIES AND MAY INCREASE ITS
OPERATING REVENUE FROM THOSE PROPERTIES. HOWEVER, THERE CAN BE NO
ASSURANCE THAT THE FUTURE COMPETITIVE POSITION OF, OR THE OPERATING
REVENUE FROM, THOSE PROPERTIES WILL INCREASE OR REMAIN AT CURRENT
LEVELS. IN FACT, THE COMPETITIVE POSITION OF, AND SNH’S REVENUES FROM,
THOSE PROPERTIES MAY DECLINE.
-
SNH HAS AGREED TO ACQUIRE TWO SENIOR LIVING COMMUNITIES AND ONE MOB
FOR APPROXIMATELY $46.1 MILLION, INCLUDING SNH’S ASSUMPTION OF
APPROXIMATELY $28.1 MILLION OF MORTGAGE DEBT AND EXCLUDING CLOSING
COSTS, AND SNH EXPECTS TO ENTER MANAGEMENT AND POOLING AGREEMENTS WITH
FIVE STAR FOR FIVE STAR TO MANAGE THE TWO SENIOR LIVING COMMUNITIES
SNH EXPECTS TO ACQUIRE. THESE ACQUISITIONS ARE SUBJECT TO CONDITIONS.
THESE CONDITIONS MAY NOT BE MET AND THESE ACQUISITIONS AND ANY RELATED
MANAGEMENT AND POOLING AGREEMENTS MAY NOT OCCUR, MAY BE DELAYED BEYOND
THE FIRST QUARTER OF 2018 OR THEIR TERMS MAY CHANGE.
-
SNH HAS AGREED TO SELL THREE SENIOR LIVING COMMUNITIES CURRENTLY
LEASED TO SUNRISE FOR $313.0 MILLION, EXCLUDING CLOSING COSTS. THESE
SALES ARE SUBJECT TO CONDITIONS. THESE CONDITIONS MAY NOT BE MET AND
THESE SALES MAY NOT OCCUR, MAY BE DELAYED BEYOND THE FIRST QUARTER OF
2018 OR THEIR TERMS MAY CHANGE, AND SNH MAY NOT REALIZE THE EXPECTED
GAINS ON THESE SALES.
THE INFORMATION CONTAINED IN SNH’S FILINGS WITH THE SECURITIES AND
EXCHANGE COMMISSION, OR SEC, INCLUDING UNDER “RISK FACTORS” IN SNH’S
PERIODIC REPORTS, OR INCORPORATED THEREIN, IDENTIFIES OTHER IMPORTANT
FACTORS THAT COULD CAUSE SNH’S ACTUAL RESULTS TO DIFFER MATERIALLY FROM
THOSE STATED IN OR IMPLIED BY 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.
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|
|
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|
SENIOR HOUSING PROPERTIES TRUST
CONSOLIDATED STATEMENTS OF INCOME
(amounts in thousands, except per share data)
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
Year Ended
|
|
|
|
|
December 31,
|
|
|
|
December 31,
|
|
|
|
|
2017
|
|
|
|
2016
|
|
|
|
2017
|
|
|
|
2016
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental income
|
|
|
|
$
|
179,585
|
|
|
|
|
$
|
175,277
|
|
|
|
|
$
|
681,022
|
|
|
|
|
$
|
666,200
|
|
Residents fees and services
|
|
|
|
98,981
|
|
|
|
|
99,019
|
|
|
|
|
393,797
|
|
|
|
|
391,822
|
|
Total revenues
|
|
|
|
278,566
|
|
|
|
|
274,296
|
|
|
|
|
1,074,819
|
|
|
|
|
1,058,022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property operating expenses
|
|
|
|
104,865
|
|
|
|
|
101,021
|
|
|
|
|
413,430
|
|
|
|
|
399,790
|
|
Depreciation and amortization
|
|
|
|
67,398
|
|
|
|
|
72,893
|
|
|
|
|
276,861
|
|
|
|
|
287,831
|
|
General and administrative
|
|
|
|
45,813
|
|
|
|
|
11,619
|
|
|
|
|
103,702
|
|
|
|
|
46,559
|
|
Acquisition and certain other transaction related costs
|
|
|
|
255
|
|
|
|
|
642
|
|
|
|
|
547
|
|
|
|
|
2,085
|
|
Impairment of assets
|
|
|
|
—
|
|
|
|
|
1,744
|
|
|
|
|
5,082
|
|
|
|
|
18,674
|
|
Total expenses
|
|
|
|
218,331
|
|
|
|
|
187,919
|
|
|
|
|
799,622
|
|
|
|
|
754,939
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
|
60,235
|
|
|
|
|
86,377
|
|
|
|
|
275,197
|
|
|
|
|
303,083
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividend income
|
|
|
|
659
|
|
|
|
|
659
|
|
|
|
|
2,637
|
|
|
|
|
2,108
|
|
Interest and other income
|
|
|
|
83
|
|
|
|
|
99
|
|
|
|
|
406
|
|
|
|
|
430
|
|
Interest expense
|
|
|
|
(40,625
|
)
|
|
|
|
(43,737
|
)
|
|
|
|
(165,019
|
)
|
|
|
|
(167,574
|
)
|
Loss on early extinguishment of debt
|
|
|
|
—
|
|
|
|
|
(437
|
)
|
|
|
|
(7,627
|
)
|
|
|
|
(526
|
)
|
Income from continuing operations before income tax expense and
equity in earnings of an investee
|
|
|
|
20,352
|
|
|
|
|
42,961
|
|
|
|
|
105,594
|
|
|
|
|
137,521
|
|
Income tax expense
|
|
|
|
(154
|
)
|
|
|
|
(106
|
)
|
|
|
|
(454
|
)
|
|
|
|
(424
|
)
|
Equity in earnings of an investee
|
|
|
|
75
|
|
|
|
|
30
|
|
|
|
|
608
|
|
|
|
|
137
|
|
Income before gain on sale of properties
|
|
|
|
20,273
|
|
|
|
|
42,885
|
|
|
|
|
105,748
|
|
|
|
|
137,234
|
|
Gain on sale of properties
|
|
|
|
46,055
|
|
|
|
|
—
|
|
|
|
|
46,055
|
|
|
|
|
4,061
|
|
Net income
|
|
|
|
66,328
|
|
|
|
|
42,885
|
|
|
|
|
151,803
|
|
|
|
|
141,295
|
|
Net income attributable to noncontrolling interest
|
|
|
|
(1,328
|
)
|
|
|
|
—
|
|
|
|
|
(4,193
|
)
|
|
|
|
—
|
|
Net income attributable to common shareholders
|
|
|
|
$
|
65,000
|
|
|
|
|
$
|
42,885
|
|
|
|
|
$
|
147,610
|
|
|
|
|
$
|
141,295
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding (basic)
|
|
|
|
237,467
|
|
|
|
|
237,391
|
|
|
|
|
237,420
|
|
|
|
|
237,345
|
|
Weighted average common shares outstanding (diluted)
|
|
|
|
237,475
|
|
|
|
|
237,393
|
|
|
|
|
237,452
|
|
|
|
|
237,382
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
Per common share data (basic and diluted):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to common shareholders
|
|
|
|
$
|
0.27
|
|
|
|
|
$
|
0.18
|
|
|
|
|
$
|
0.62
|
|
|
|
|
$
|
0.60
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SENIOR HOUSING PROPERTIES TRUST
CONSOLIDATED STATEMENTS OF FFO AND NORMALIZED FFO
(amounts in thousands, except per share data)
(unaudited)
|
Calculation of FFO and Normalized FFO (1):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31,
|
|
|
|
Year Ended December 31,
|
|
|
|
|
2017
|
|
|
|
2016
|
|
|
|
2017
|
|
|
|
2016
|
Net income attributable to common shareholders
|
|
|
|
$
|
65,000
|
|
|
|
|
$
|
42,885
|
|
|
|
|
$
|
147,610
|
|
|
|
|
$
|
141,295
|
|
Depreciation and amortization expense
|
|
|
|
67,398
|
|
|
|
|
72,893
|
|
|
|
|
276,861
|
|
|
|
|
287,831
|
|
Noncontrolling interest's share of net FFO adjustments
|
|
|
|
(5,304
|
)
|
|
|
|
—
|
|
|
|
|
(16,370
|
)
|
|
|
|
—
|
|
Gain on sale of properties
|
|
|
|
(46,055
|
)
|
|
|
|
—
|
|
|
|
|
(46,055
|
)
|
|
|
|
(4,061
|
)
|
Impairment of assets
|
|
|
|
—
|
|
|
|
|
1,744
|
|
|
|
|
5,082
|
|
|
|
|
18,674
|
|
FFO
|
|
|
|
81,039
|
|
|
|
|
117,522
|
|
|
|
|
367,128
|
|
|
|
|
443,739
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated business management incentive fees (2)
|
|
|
|
(22,048
|
)
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
Acquisition and certain other transaction related costs
|
|
|
|
255
|
|
|
|
|
642
|
|
|
|
|
547
|
|
|
|
|
2,085
|
|
Loss on early extinguishment of debt
|
|
|
|
—
|
|
|
|
|
437
|
|
|
|
|
7,627
|
|
|
|
|
526
|
|
Normalized FFO
|
|
|
|
$
|
59,246
|
|
|
|
|
$
|
118,601
|
|
|
|
|
$
|
375,302
|
|
|
|
|
$
|
446,350
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding (basic)
|
|
|
|
237,467
|
|
|
|
|
237,391
|
|
|
|
|
237,420
|
|
|
|
|
237,345
|
|
Weighted average common shares outstanding (diluted)
|
|
|
|
237,475
|
|
|
|
|
237,393
|
|
|
|
|
237,452
|
|
|
|
|
237,382
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per common share data (basic and diluted):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to common shareholders
|
|
|
|
$
|
0.27
|
|
|
|
|
$
|
0.18
|
|
|
|
|
$
|
0.62
|
|
|
|
|
$
|
0.60
|
|
FFO
|
|
|
|
$
|
0.34
|
|
|
|
|
$
|
0.50
|
|
|
|
|
$
|
1.55
|
|
|
|
|
$
|
1.87
|
|
Normalized FFO
|
|
|
|
$
|
0.25
|
|
|
|
|
$
|
0.50
|
|
|
|
|
$
|
1.58
|
|
|
|
|
$
|
1.88
|
|
Distributions declared
|
|
|
|
$
|
0.39
|
|
|
|
|
$
|
0.39
|
|
|
|
|
$
|
1.56
|
|
|
|
|
$
|
1.56
|
|
(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
attributable to common shareholders, calculated in accordance with
GAAP, excluding any gain or loss on sale of properties and loss on
impairment of real estate assets, if any, plus real estate
depreciation and amortization and the difference between net income
attributable to common shareholders and FFO attributable to
noncontrolling interest, 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
business management incentive fees, if any, only in the fourth
quarter versus the quarter when they are recognized as expense in
accordance with GAAP due to their quarterly volatility not
necessarily being indicative of SNH’s core operating performance and
the uncertainty as to whether any such business management incentive
fees will be payable when all contingencies for determining such
fees are known at the end of the calendar year, and SNH excludes
acquisition and certain other transaction related costs expensed
under GAAP such as legal and professional fees associated with SNH's
acquisition and disposition activities, gains and losses on early
extinguishment of debt, if any, and Normalized FFO from
noncontrolling interest, net of FFO attributable to noncontrolling
interest, if any. SNH considers FFO and Normalized FFO to be
appropriate supplemental measures of operating performance for a
REIT, along with net income, net income attributable to common
shareholders and operating income. SNH believes that FFO and
Normalized FFO provide useful information to investors, because by
excluding the effects of certain historical amounts, such as
depreciation and amortization expense, FFO and Normalized FFO may
facilitate a comparison of SNH's 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 qualification
for taxation as a REIT, limitations in SNH’s revolving credit
facility and term loan agreements and SNH’s public debt covenants,
the availability to SNH of debt and equity capital, SNH’s
expectation of its future capital requirements and operating
performance and SNH’s expected needs for 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 alternatives to net income, net income
attributable to common shareholders or operating income as
indicators of SNH’s operating performance or as measures of SNH’s
liquidity. These measures should be considered in conjunction with
net income, net income attributable to common shareholders and
operating income as presented in SNH’s consolidated statements of
income. Other real estate companies and REITs may calculate FFO and
Normalized FFO differently than SNH does.
|
|
|
|
|
|
(2)
|
|
|
|
Incentive fees under SNH’s business management agreement are payable
after the end of each calendar year, are calculated based on common
share total return, as defined, and are included in general and
administrative expense in SNH’s consolidated statements of income.
In calculating net income attributable to common shareholders in
accordance with GAAP, SNH recognizes estimated business management
incentive fee expense, if any, in the first, second and third
quarters. Although SNH recognizes this expense, if any, in the
first, second and third quarters for purposes of calculating net
income attributable to common shareholders, SNH does not include
these amounts in the calculation of Normalized FFO until the fourth
quarter, when the amount of the business management incentive fee
expense for the calendar year, if any, is determined. Excluding
business management incentive fee expense of $55,740 included in
Normalized FFO for the three months ended December 31, 2017,
Normalized FFO per share for this period would have been $0.48.
|
|
|
|
|
|
|
|
|
|
SENIOR HOUSING PROPERTIES TRUST
CALCULATION AND RECONCILIATION OF NET OPERATING INCOME (NOI)
AND CASH BASIS NOI
(amounts in thousands)
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31,
|
|
|
|
Year Ended December 31,
|
|
|
|
|
2017
|
|
|
|
2016
|
|
|
|
2017
|
|
|
|
2016
|
Calculation of NOI and Cash Basis NOI(1):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental income
|
|
|
|
$
|
179,585
|
|
|
|
|
$
|
175,277
|
|
|
|
|
$
|
681,022
|
|
|
|
|
$
|
666,200
|
|
Residents fees and services
|
|
|
|
98,981
|
|
|
|
|
99,019
|
|
|
|
|
393,797
|
|
|
|
|
391,822
|
|
Total revenues
|
|
|
|
278,566
|
|
|
|
|
274,296
|
|
|
|
|
1,074,819
|
|
|
|
|
1,058,022
|
|
Property operating expenses
|
|
|
|
(104,865
|
)
|
|
|
|
(101,021
|
)
|
|
|
|
(413,430
|
)
|
|
|
|
(399,790
|
)
|
Property net operating income (NOI):
|
|
|
|
173,701
|
|
|
|
|
173,275
|
|
|
|
|
661,389
|
|
|
|
|
658,232
|
|
Non-cash straight line rent adjustments
|
|
|
|
(3,473
|
)
|
|
|
|
(4,006
|
)
|
|
|
|
(13,958
|
)
|
|
|
|
(17,604
|
)
|
Lease value amortization
|
|
|
|
(1,386
|
)
|
|
|
|
(1,147
|
)
|
|
|
|
(5,349
|
)
|
|
|
|
(4,941
|
)
|
Non-cash amortization included in property operating expenses(2)
|
|
|
|
(200
|
)
|
|
|
|
(199
|
)
|
|
|
|
(798
|
)
|
|
|
|
(798
|
)
|
Cash Basis NOI
|
|
|
|
$
|
168,642
|
|
|
|
|
$
|
167,923
|
|
|
|
|
$
|
641,284
|
|
|
|
|
$
|
634,889
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Net Income to Cash
Basis NOI:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
|
$
|
66,328
|
|
|
|
|
$
|
42,885
|
|
|
|
|
$
|
151,803
|
|
|
|
|
$
|
141,295
|
|
Gain on sale of properties
|
|
|
|
(46,055
|
)
|
|
|
|
—
|
|
|
|
|
(46,055
|
)
|
|
|
|
(4,061
|
)
|
Income before gain on sale of properties
|
|
|
|
20,273
|
|
|
|
|
42,885
|
|
|
|
|
105,748
|
|
|
|
|
137,234
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in earnings of an investee
|
|
|
|
(75
|
)
|
|
|
|
(30
|
)
|
|
|
|
(608
|
)
|
|
|
|
(137
|
)
|
Income tax expense
|
|
|
|
154
|
|
|
|
|
106
|
|
|
|
|
454
|
|
|
|
|
424
|
|
Loss on early extinguishment of debt
|
|
|
|
—
|
|
|
|
|
437
|
|
|
|
|
7,627
|
|
|
|
|
526
|
|
Interest expense
|
|
|
|
40,625
|
|
|
|
|
43,737
|
|
|
|
|
165,019
|
|
|
|
|
167,574
|
|
Interest and other income
|
|
|
|
(83
|
)
|
|
|
|
(99
|
)
|
|
|
|
(406
|
)
|
|
|
|
(430
|
)
|
Dividend income
|
|
|
|
(659
|
)
|
|
|
|
(659
|
)
|
|
|
|
(2,637
|
)
|
|
|
|
(2,108
|
)
|
Operating income
|
|
|
|
60,235
|
|
|
|
|
86,377
|
|
|
|
|
275,197
|
|
|
|
|
303,083
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment of assets
|
|
|
|
—
|
|
|
|
|
1,744
|
|
|
|
|
5,082
|
|
|
|
|
18,674
|
|
Acquisition and certain other transaction related costs
|
|
|
|
255
|
|
|
|
|
642
|
|
|
|
|
547
|
|
|
|
|
2,085
|
|
General and administrative expense
|
|
|
|
45,813
|
|
|
|
|
11,619
|
|
|
|
|
103,702
|
|
|
|
|
46,559
|
|
Depreciation and amortization expense
|
|
|
|
67,398
|
|
|
|
|
72,893
|
|
|
|
|
276,861
|
|
|
|
|
287,831
|
|
Property NOI
|
|
|
|
173,701
|
|
|
|
|
173,275
|
|
|
|
|
661,389
|
|
|
|
|
658,232
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-cash amortization included in property operating expenses(2)
|
|
|
|
(200
|
)
|
|
|
|
(199
|
)
|
|
|
|
(798
|
)
|
|
|
|
(798
|
)
|
Lease value amortization
|
|
|
|
(1,386
|
)
|
|
|
|
(1,147
|
)
|
|
|
|
(5,349
|
)
|
|
|
|
(4,941
|
)
|
Non-cash straight line rent adjustments
|
|
|
|
(3,473
|
)
|
|
|
|
(4,006
|
)
|
|
|
|
(13,958
|
)
|
|
|
|
(17,604
|
)
|
Cash Basis NOI
|
|
|
|
$
|
168,642
|
|
|
|
|
$
|
167,923
|
|
|
|
|
$
|
641,284
|
|
|
|
|
$
|
634,889
|
|
(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. 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 that SNH records as depreciation and
amortization. SNH defines Cash Basis NOI as NOI excluding non-cash
straight line rent adjustments, lease value amortization, lease
termination fee amortization, 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
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 alternatives to net income, net income attributable to
common shareholders or operating income as indicators of SNH’s
operating performance or as measures of SNH’s liquidity. These
measures should be considered in conjunction with net income, net
income attributable to common shareholders and operating income as
presented in SNH’s consolidated statements of income. Other real
estate companies and REITs 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 RMR Inc. common stock in June 2015. A portion of this
liability is being amortized on a straight line basis through
December 31, 2035 as a reduction to property management fee expense,
which is 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 December 31, 2017
|
|
|
|
For the Three Months Ended December 31, 2016
|
Calculation of NOI and Cash Basis NOI:
|
|
|
|
Triple Net Leased Senior Living Communities
|
|
|
|
Managed Senior Living Communities
|
|
|
|
MOBs
|
|
|
|
Non- Segment (2)
|
|
|
|
Total
|
|
|
|
Triple Net Leased Senior Living Communities
|
|
|
|
Managed Senior Living Communities
|
|
|
|
MOBs
|
|
|
|
Non- Segment (2)
|
|
|
|
Total
|
Rental income / residents fees and services
|
|
|
|
$
|
78,301
|
|
|
|
|
$
|
98,981
|
|
|
|
|
$
|
96,714
|
|
|
|
|
$
|
4,570
|
|
|
|
|
$
|
278,566
|
|
|
|
|
$
|
77,428
|
|
|
|
|
$
|
99,019
|
|
|
|
|
$
|
93,270
|
|
|
|
|
$
|
4,579
|
|
|
|
|
$
|
274,296
|
|
Property operating expenses
|
|
|
|
—
|
|
|
|
|
(75,915
|
)
|
|
|
|
(28,950
|
)
|
|
|
|
—
|
|
|
|
|
(104,865
|
)
|
|
|
|
—
|
|
|
|
|
(74,613
|
)
|
|
|
|
(26,408
|
)
|
|
|
|
—
|
|
|
|
|
(101,021
|
)
|
Property net operating income (NOI)
|
|
|
|
$
|
78,301
|
|
|
|
|
$
|
23,066
|
|
|
|
|
$
|
67,764
|
|
|
|
|
$
|
4,570
|
|
|
|
|
$
|
173,701
|
|
|
|
|
$
|
77,428
|
|
|
|
|
$
|
24,406
|
|
|
|
|
$
|
66,862
|
|
|
|
|
$
|
4,579
|
|
|
|
|
$
|
173,275
|
|
NOI change
|
|
|
|
1.1
|
%
|
|
|
|
(5.5
|
)%
|
|
|
|
1.3
|
%
|
|
|
|
(0.2
|
)%
|
|
|
|
0.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property NOI
|
|
|
|
$
|
78,301
|
|
|
|
|
$
|
23,066
|
|
|
|
|
$
|
67,764
|
|
|
|
|
$
|
4,570
|
|
|
|
|
$
|
173,701
|
|
|
|
|
$
|
77,428
|
|
|
|
|
$
|
24,406
|
|
|
|
|
$
|
66,862
|
|
|
|
|
$
|
4,579
|
|
|
|
|
$
|
173,275
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-cash straight line rent adjustments
|
|
|
|
759
|
|
|
|
|
—
|
|
|
|
|
2,577
|
|
|
|
|
137
|
|
|
|
|
3,473
|
|
|
|
|
948
|
|
|
|
|
—
|
|
|
|
|
2,921
|
|
|
|
|
137
|
|
|
|
|
4,006
|
|
Lease value amortization
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
1,331
|
|
|
|
|
55
|
|
|
|
|
1,386
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
1,092
|
|
|
|
|
55
|
|
|
|
|
1,147
|
|
Non-cash amortization included in property operating expenses (3)
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
200
|
|
|
|
|
—
|
|
|
|
|
200
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
199
|
|
|
|
|
—
|
|
|
|
|
199
|
|
Cash Basis NOI
|
|
|
|
$
|
77,542
|
|
|
|
|
$
|
23,066
|
|
|
|
|
$
|
63,656
|
|
|
|
|
$
|
4,378
|
|
|
|
|
$
|
168,642
|
|
|
|
|
$
|
76,480
|
|
|
|
|
$
|
24,406
|
|
|
|
|
$
|
62,650
|
|
|
|
|
$
|
4,387
|
|
|
|
|
$
|
167,923
|
|
Cash Basis NOI change
|
|
|
|
1.4
|
%
|
|
|
|
(5.5
|
)%
|
|
|
|
1.6
|
%
|
|
|
|
(0.2
|
)%
|
|
|
|
0.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of NOI to Same Property NOI:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property NOI
|
|
|
|
$
|
78,301
|
|
|
|
|
$
|
23,066
|
|
|
|
|
$
|
67,764
|
|
|
|
|
$
|
4,570
|
|
|
|
|
$
|
173,701
|
|
|
|
|
$
|
77,428
|
|
|
|
|
$
|
24,406
|
|
|
|
|
$
|
66,862
|
|
|
|
|
$
|
4,579
|
|
|
|
|
$
|
173,275
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOI not included in same property
|
|
|
|
1,595
|
|
|
|
|
932
|
|
|
|
|
2,401
|
|
|
|
|
—
|
|
|
|
|
4,928
|
|
|
|
|
1,233
|
|
|
|
|
1,489
|
|
|
|
|
283
|
|
|
|
|
—
|
|
|
|
|
3,005
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same property NOI (4)
|
|
|
|
$
|
76,706
|
|
|
|
|
$
|
22,134
|
|
|
|
|
$
|
65,363
|
|
|
|
|
$
|
4,570
|
|
|
|
|
$
|
168,773
|
|
|
|
|
$
|
76,195
|
|
|
|
|
$
|
22,917
|
|
|
|
|
$
|
66,579
|
|
|
|
|
$
|
4,579
|
|
|
|
|
$
|
170,270
|
|
Same property NOI change
|
|
|
|
0.7
|
%
|
|
|
|
(3.4
|
)%
|
|
|
|
(1.8
|
)%
|
|
|
|
(0.2
|
)%
|
|
|
|
(0.9
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Same Property NOI to Same Property Cash Basis
NOI:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same property NOI (4)
|
|
|
|
$
|
76,706
|
|
|
|
|
$
|
22,134
|
|
|
|
|
$
|
65,363
|
|
|
|
|
$
|
4,570
|
|
|
|
|
$
|
168,773
|
|
|
|
|
$
|
76,195
|
|
|
|
|
$
|
22,917
|
|
|
|
|
$
|
66,579
|
|
|
|
|
$
|
4,579
|
|
|
|
|
$
|
170,270
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-cash straight line rent adjustments
|
|
|
|
759
|
|
|
|
|
—
|
|
|
|
|
2,400
|
|
|
|
|
137
|
|
|
|
|
3,296
|
|
|
|
|
948
|
|
|
|
|
—
|
|
|
|
|
2,873
|
|
|
|
|
137
|
|
|
|
|
3,958
|
|
Lease value amortization
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
1,333
|
|
|
|
|
55
|
|
|
|
|
1,388
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
1,092
|
|
|
|
|
55
|
|
|
|
|
1,147
|
|
Non-cash amortization included in property operating expenses
(3)
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
200
|
|
|
|
|
—
|
|
|
|
|
200
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
199
|
|
|
|
|
—
|
|
|
|
|
199
|
|
Same property cash basis NOI (4)
|
|
|
|
$
|
75,947
|
|
|
|
|
$
|
22,134
|
|
|
|
|
$
|
61,430
|
|
|
|
|
$
|
4,378
|
|
|
|
|
$
|
163,889
|
|
|
|
|
$
|
75,247
|
|
|
|
|
$
|
22,917
|
|
|
|
|
$
|
62,415
|
|
|
|
|
$
|
4,387
|
|
|
|
|
$
|
164,966
|
|
Same property cash basis NOI change
|
|
|
|
0.9
|
%
|
|
|
|
(3.4
|
)%
|
|
|
|
(1.6
|
)%
|
|
|
|
(0.2
|
)%
|
|
|
|
(0.7
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
|
|
See above for the calculation of NOI and a reconciliation of net
income determined in accordance with GAAP to that amount. For a
definition of NOI and Cash Basis NOI, a description of why
management believes they are appropriate supplemental measures and a
description of how management uses these measures, please see
footnote 1 to the table included on page 8.
|
(2)
|
|
|
|
Includes the operating results of certain properties that offer
wellness, fitness and spa services to members.
|
(3)
|
|
|
|
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 RMR Inc. common stock in June 2015. A portion of this
liability is being amortized on a straight line basis through
December 31, 2035 as a reduction to property management fee expense,
which is included in property operating expenses.
|
(4)
|
|
|
|
Consists of properties owned continuously and properties owned and
managed continuously by the same operator since October 1, 2016 and
includes SNH's MOB (two buildings) that is owned in a joint venture
arrangement and excludes properties classified as held for sale, if
any.
|
|
|
|
|
|
|
|
|
|
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 Year Ended December 31, 2017
|
|
|
|
For the Year Ended December 31, 2016
|
Calculation of NOI and Cash Basis NOI:
|
|
|
|
Triple Net Leased Senior Living Communities
|
|
|
|
Managed Senior Living Communities
|
|
|
|
MOB
|
|
|
|
Non-Segment (2)
|
|
|
|
Total
|
|
|
|
Triple Net Leased Senior Living Communities
|
|
|
|
Managed Senior Living Communities
|
|
|
|
MOBs
|
|
|
|
Non-Segment (2)
|
|
|
|
Total
|
Rental income / residents fees and services
|
|
|
|
$
|
280,641
|
|
|
|
|
$
|
393,797
|
|
|
|
|
$
|
382,127
|
|
|
|
|
$
|
18,254
|
|
|
|
|
$
|
1,074,819
|
|
|
|
|
$
|
275,697
|
|
|
|
|
$
|
391,822
|
|
|
|
|
$
|
372,233
|
|
|
|
|
$
|
18,270
|
|
|
|
|
$
|
1,058,022
|
|
Property operating expenses
|
|
|
|
—
|
|
|
|
|
(300,500
|
)
|
|
|
|
(112,930
|
)
|
|
|
|
—
|
|
|
|
|
(413,430
|
)
|
|
|
|
(833
|
)
|
|
|
|
(293,195
|
)
|
|
|
|
(105,762
|
)
|
|
|
|
—
|
|
|
|
|
(399,790
|
)
|
Property net operating income (NOI)
|
|
|
|
$
|
280,641
|
|
|
|
|
$
|
93,297
|
|
|
|
|
$
|
269,197
|
|
|
|
|
$
|
18,254
|
|
|
|
|
$
|
661,389
|
|
|
|
|
$
|
274,864
|
|
|
|
|
$
|
98,627
|
|
|
|
|
$
|
266,471
|
|
|
|
|
$
|
18,270
|
|
|
|
|
$
|
658,232
|
|
NOI change
|
|
|
|
2.1
|
%
|
|
|
|
(5.4
|
)%
|
|
|
|
1.0
|
%
|
|
|
|
(0.1
|
)%
|
|
|
|
0.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property NOI
|
|
|
|
$
|
280,641
|
|
|
|
|
$
|
93,297
|
|
|
|
|
$
|
269,197
|
|
|
|
|
$
|
18,254
|
|
|
|
|
$
|
661,389
|
|
|
|
|
$
|
274,864
|
|
|
|
|
$
|
98,627
|
|
|
|
|
$
|
266,471
|
|
|
|
|
$
|
18,270
|
|
|
|
|
$
|
658,232
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-cash straight line rent adjustments
|
|
|
|
3,063
|
|
|
|
|
—
|
|
|
|
|
10,346
|
|
|
|
|
549
|
|
|
|
|
13,958
|
|
|
|
|
4,133
|
|
|
|
|
—
|
|
|
|
|
12,922
|
|
|
|
|
549
|
|
|
|
|
17,604
|
|
Lease value amortization
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
5,128
|
|
|
|
|
221
|
|
|
|
|
5,349
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
4,720
|
|
|
|
|
221
|
|
|
|
|
4,941
|
|
Non-cash amortization included in property operating expenses
(3)
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
798
|
|
|
|
|
—
|
|
|
|
|
798
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
798
|
|
|
|
|
—
|
|
|
|
|
798
|
|
Cash Basis NOI
|
|
|
|
$
|
277,578
|
|
|
|
|
$
|
93,297
|
|
|
|
|
$
|
252,925
|
|
|
|
|
$
|
17,484
|
|
|
|
|
$
|
641,284
|
|
|
|
|
$
|
270,731
|
|
|
|
|
$
|
98,627
|
|
|
|
|
$
|
248,031
|
|
|
|
|
$
|
17,500
|
|
|
|
|
$
|
634,889
|
|
Cash Basis NOI change
|
|
|
|
2.5
|
%
|
|
|
|
(5.4
|
)%
|
|
|
|
2.0
|
%
|
|
|
|
(0.1
|
)%
|
|
|
|
1.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of NOI to Same Property NOI:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property NOI
|
|
|
|
$
|
280,641
|
|
|
|
|
$
|
93,297
|
|
|
|
|
$
|
269,197
|
|
|
|
|
$
|
18,254
|
|
|
|
|
$
|
661,389
|
|
|
|
|
$
|
274,864
|
|
|
|
|
$
|
98,627
|
|
|
|
|
$
|
266,471
|
|
|
|
|
$
|
18,270
|
|
|
|
|
$
|
658,232
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOI not included in same property
|
|
|
|
12,739
|
|
|
|
|
4,376
|
|
|
|
|
13,907
|
|
|
|
|
—
|
|
|
|
|
31,022
|
|
|
|
|
9,643
|
|
|
|
|
5,405
|
|
|
|
|
8,215
|
|
|
|
|
—
|
|
|
|
|
23,263
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same property NOI (4)
|
|
|
|
$
|
267,902
|
|
|
|
|
$
|
88,921
|
|
|
|
|
$
|
255,290
|
|
|
|
|
$
|
18,254
|
|
|
|
|
$
|
630,367
|
|
|
|
|
$
|
265,221
|
|
|
|
|
$
|
93,222
|
|
|
|
|
$
|
258,256
|
|
|
|
|
$
|
18,270
|
|
|
|
|
$
|
634,969
|
|
Same property NOI change
|
|
|
|
1.0
|
%
|
|
|
|
(4.6
|
)%
|
|
|
|
(1.1
|
)%
|
|
|
|
(0.1
|
)%
|
|
|
|
(0.7
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Same Property NOI to Same Property Cash Basis
NOI:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same property NOI (4)
|
|
|
|
$
|
267,902
|
|
|
|
|
$
|
88,921
|
|
|
|
|
$
|
255,290
|
|
|
|
|
$
|
18,254
|
|
|
|
|
$
|
630,367
|
|
|
|
|
$
|
265,221
|
|
|
|
|
$
|
93,222
|
|
|
|
|
$
|
258,256
|
|
|
|
|
$
|
18,270
|
|
|
|
|
$
|
634,969
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-cash straight line rent adjustments
|
|
|
|
3,063
|
|
|
|
|
—
|
|
|
|
|
8,966
|
|
|
|
|
549
|
|
|
|
|
12,578
|
|
|
|
|
4,172
|
|
|
|
|
—
|
|
|
|
|
12,241
|
|
|
|
|
549
|
|
|
|
|
16,962
|
|
Lease value amortization
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
4,984
|
|
|
|
|
221
|
|
|
|
|
5,205
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
4,421
|
|
|
|
|
221
|
|
|
|
|
4,642
|
|
Non-cash amortization included in property operating expenses (3)
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
798
|
|
|
|
|
—
|
|
|
|
|
798
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
791
|
|
|
|
|
—
|
|
|
|
|
791
|
|
Same property cash basis NOI (4)
|
|
|
|
$
|
264,839
|
|
|
|
|
$
|
88,921
|
|
|
|
|
$
|
240,542
|
|
|
|
|
$
|
17,484
|
|
|
|
|
$
|
611,786
|
|
|
|
|
$
|
261,049
|
|
|
|
|
$
|
93,222
|
|
|
|
|
$
|
240,803
|
|
|
|
|
$
|
17,500
|
|
|
|
|
$
|
612,574
|
|
Same property cash basis NOI change
|
|
|
|
1.5
|
%
|
|
|
|
(4.6
|
)%
|
|
|
|
(0.1
|
)%
|
|
|
|
(0.1
|
)%
|
|
|
|
(0.1
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
|
|
See above for the calculation of NOI and a reconciliation of net
income determined in accordance with GAAP to that amount. For a
definition of NOI and Cash Basis NOI, a description of why
management believes they are appropriate supplemental measures and a
description of how management uses these measures, please see
footnote 1 to the table included on page 8.
|
(2)
|
|
|
|
Includes the operating results of certain properties that offer
wellness, fitness and spa services to members.
|
(3)
|
|
|
|
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 RMR Inc. common stock in June 2015. A portion of this
liability is being amortized on a straight line basis through
December 31, 2035 as a reduction to property management fee expense,
which is included in property operating expenses.
|
(4)
|
|
|
|
Consists of properties owned continuously and properties owned and
managed continuously by the same operator since January 1, 2016 and
includes SNH's MOB (two buildings) that is owned in a joint venture
arrangement and excludes properties classified as held for sale, if
any.
|
|
|
|
|
|
|
|
|
|
SENIOR HOUSING PROPERTIES TRUST
CONDENSED CONSOLIDATED BALANCE SHEETS
(amounts in thousands)
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2017
|
|
|
|
December 31, 2016
|
ASSETS
|
|
|
|
|
|
|
|
|
Real estate properties
|
|
|
|
$
|
7,824,763
|
|
|
|
|
$
|
7,617,547
|
|
Accumulated depreciation
|
|
|
|
(1,454,477
|
)
|
|
|
|
(1,270,716
|
)
|
|
|
|
|
6,370,286
|
|
|
|
|
6,346,831
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
31,238
|
|
|
|
|
31,749
|
|
Restricted cash
|
|
|
|
16,083
|
|
|
|
|
3,829
|
|
Acquired real estate leases and other intangible assets, net
|
|
|
|
472,265
|
|
|
|
|
514,446
|
|
Other assets, net
|
|
|
|
404,147
|
|
|
|
|
330,899
|
|
Total assets
|
|
|
|
$
|
7,294,019
|
|
|
|
|
$
|
7,227,754
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
|
Unsecured revolving credit facility
|
|
|
|
$
|
596,000
|
|
|
|
|
$
|
327,000
|
|
Unsecured term loans, net
|
|
|
|
547,460
|
|
|
|
|
547,058
|
|
Senior unsecured notes, net
|
|
|
|
1,725,662
|
|
|
|
|
1,722,758
|
|
Secured debt and capital leases, net
|
|
|
|
805,404
|
|
|
|
|
1,117,649
|
|
Accrued interest
|
|
|
|
17,987
|
|
|
|
|
18,471
|
|
Assumed real estate lease obligations, net
|
|
|
|
96,018
|
|
|
|
|
106,038
|
|
Other liabilities
|
|
|
|
228,300
|
|
|
|
|
189,375
|
|
Total liabilities
|
|
|
|
4,016,831
|
|
|
|
|
4,028,349
|
|
|
|
|
|
|
|
|
|
|
Total equity
|
|
|
|
3,277,188
|
|
|
|
|
3,199,405
|
|
Total liabilities and equity
|
|
|
|
$
|
7,294,019
|
|
|
|
|
$
|
7,227,754
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
A Maryland Real Estate Investment Trust with transferable shares of
beneficial interest listed on the Nasdaq.
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/20180227005607/en/
Source: Senior Housing Properties Trust