Senior Housing Properties Trust (NYSE: SNH) today announced its
financial results for the quarter ended March 31, 2013.
Results for the quarter ended March 31, 2013:
Normalized funds from operations, or Normalized FFO, for the quarter
ended March 31, 2013 were $78.9 million, or $0.43 per share. This
compares to Normalized FFO for the quarter ended March 31, 2012 of $72.4
million, or $0.45 per share.
Net income was $35.2 million, or $0.19 per share, for the quarter ended
March 31, 2013, compared to net income of $32.4 million, or $0.20 per
share, for the quarter ended March 31, 2012. During the three months
ended March 31, 2013 and 2012, we recorded impairment of assets charges
of $1.3 million and $3.1 million, respectively, to reduce the carrying
value of one of our properties to its estimated net sale price.
The weighted average number of common shares outstanding totaled 184.6
million and 162.6 million for the quarters ended March 31, 2013 and
2012, respectively.
A reconciliation of net income determined according to U.S. generally
accepted accounting principles, or GAAP, to funds from operations, or
FFO, and Normalized FFO for the quarters ended March 31, 2013 and 2012
appears later in this press release.
Recent Investment and Sales Activities:
Since January 1, 2013, we have acquired four properties for a combined
purchase price of approximately $75.0 million, including the assumption
of approximately $12.3 million of mortgage debt and excluding closing
costs:
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In January 2013, we acquired a previously disclosed senior living
community located in Redmond, WA with 150 living units for
approximately $22.4 million, including the assumption of approximately
$12.3 million of mortgage debt and excluding closing costs. All the
residents at this community currently pay for occupancy and services
with private resources. We are leasing this property to subsidiaries
of Stellar Senior Living, LLC, a privately owned senior living
operating company pursuant to a long term lease.
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In February 2013, we acquired two previously disclosed properties
leased to medical providers, medical related businesses, clinics and
biotech laboratory tenants, or MOBs, with a total of 144,900 square
feet located in Bothell, WA for a combined purchase price of
approximately $38.0 million, excluding closing costs. Upon
acquisition, these properties were 100% leased to Seattle Genetics,
Inc. for a remaining lease term of 5.4 years.
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In March 2013, we acquired a previously disclosed MOB with 71,824
square feet located in Hattiesburg, MS for approximately $14.6
million, excluding closing costs. Upon acquisition, this property was
100% leased to six tenants (Forrest General Hospital, an A rated
hospital system, is the largest tenant) for a weighted (by rents)
average lease term of 6.8 years.
In April 2013, we entered into an agreement to acquire an MOB with
approximately 54,000 square feet located in Cherry Hill, NJ for
approximately $21.5 million, excluding closing costs. Also in April
2013, we entered into an agreement to acquire one senior living
community with 93 private pay assisted living units located in Cumming,
GA, for approximately $22.0 million, excluding closing costs. The
closings of these acquisitions are contingent upon completion of our
diligence and other customary closing conditions; accordingly, we can
provide no assurance that we will purchase these properties.
We are also currently marketing for sale a senior living community
located in Pittsburgh, PA which we classified as held for sale as of
March 31, 2013.
Recent Financing Activities:
In January 2013, we issued 11,500,000 common shares in a public
offering, raising gross proceeds of approximately $273.7 million, before
underwriting discounts and expenses. We used the net proceeds
(approximately $262.1 million before expenses) of this offering to repay
borrowings outstanding under our revolving credit facility and for
general business purposes, including funding in part acquisitions of
properties described above, with the remainder to be used for possible
future acquisitions.
Conference Call:
On Monday, April 29, 2013, at 1:00 p.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 ended March 31, 2013. The conference call
telephone number is (800) 230-1951. Participants calling from outside
the United States and Canada should dial (612) 332-0342. No pass code is
necessary to access the call from either number. Participants should
dial in about 15 minutes prior to the scheduled start of the call. A
replay of the conference call will be available through 11:59 p.m.
Eastern Time, Monday, May 6, 2013. To hear the replay, dial (320)
365-3844. The replay pass code is: 290596.
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 first
quarter conference call is strictly prohibited without the prior written
consent of SNH.
Supplemental Data:
A copy of SNH’s First 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 395
properties located in 40 states and Washington, D.C. as of March 31,
2013. SNH is headquartered in Newton, MA.
Please see the pages attached hereto for a more detailed statement of
our 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 WE USE
WORDS SUCH AS “BELIEVE”, “EXPECT”, “ANTICIPATE”, “INTEND”, “PLAN”,
“ESTIMATE” OR SIMILAR EXPRESSIONS, WE ARE MAKING FORWARD LOOKING
STATEMENTS. THESE FORWARD LOOKING STATEMENTS ARE BASED UPON OUR PRESENT
INTENT, BELIEFS OR EXPECTATIONS, BUT FORWARD LOOKING STATEMENTS ARE NOT
GUARANTEED TO OCCUR AND MAY NOT OCCUR. ACTUAL RESULTS MAY DIFFER
MATERIALLY FROM THOSE CONTAINED IN OR IMPLIED BY THESE FORWARD LOOKING
STATEMENTS AS A RESULT OF VARIOUS FACTORS. FOR EXAMPLE:
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THIS PRESS RELEASE STATES THAT WE HAVE ENTERED INTO AGREEMENTS TO
ACQUIRE A MOB AND A SENIOR LIVING COMMUNITY. THESE TRANSACTIONS ARE
SUBJECT TO VARIOUS TERMS AND CONDITIONS TYPICAL OF COMMERCIAL REAL
ESTATE TRANSACTIONS FOR PROPERTIES OF THESE TYPES. THESE 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
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THIS PRESS RELEASE STATES THAT WE HAVE ONE PROPERTY CLASSIFIED AS HELD
FOR SALE. WE MAY NOT BE ABLE TO SELL THIS PROPERTY ON TERMS ACCEPTABLE
TO US OR OTHERWISE.
THE INFORMATION CONTAINED IN OUR FILINGS WITH THE SECURITIES AND
EXCHANGE COMMISSION, OR SEC, INCLUDING UNDER THE CAPTION “RISK FACTORS”
IN OUR PERIODIC REPORTS, OR INCORPORATED THEREIN, IDENTIFIES OTHER
IMPORTANT FACTORS THAT COULD CAUSE DIFFERENCES FROM OUR FORWARD LOOKING
STATEMENTS. OUR FILINGS WITH THE SEC ARE AVAILABLE ON THE SEC’S WEBSITE
AT WWW.SEC.GOV.
YOU SHOULD NOT PLACE UNDUE RELIANCE UPON OUR FORWARD LOOKING STATEMENTS.
EXCEPT AS REQUIRED BY LAW, WE DO NOT INTEND TO UPDATE OR CHANGE ANY
FORWARD LOOKING STATEMENTS AS A RESULT OF NEW INFORMATION, FUTURE EVENTS
OR OTHERWISE.
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SENIOR HOUSING PROPERTIES TRUST
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME
(amounts in
thousands, except per share data)
(unaudited)
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Income Statement:
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Quarter Ended
March 31,
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2013
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2012
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Revenues:
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Rental income
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$
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114,373
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$
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109,505
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Residents fees and services
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75,056
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35,568
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Total revenues
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189,429
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145,073
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Expenses:
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Property operating expenses
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74,582
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39,334
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Depreciation
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38,302
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33,377
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General and administrative
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8,648
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7,685
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Acquisition related costs
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1,903
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688
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Impairment of assets
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1,304
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3,071
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Total expenses
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124,739
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84,155
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Operating income
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64,690
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60,918
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Interest and other income
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173
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482
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Interest expense
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(29,564
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)
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(28,889
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Equity in earnings of an investee
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76
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45
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Income before income tax expense
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35,375
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32,556
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Income tax expense
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(140
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)
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(204
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Net income
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$
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35,235
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$
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32,352
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Weighted average shares outstanding
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184,605
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162,647
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Net income per share
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$
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0.19
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$
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0.20
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SENIOR HOUSING PROPERTIES TRUST
CONDENSED
CONSOLIDATED BALANCE SHEETS
(amounts in thousands)
(unaudited)
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Balance Sheet:
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At March 31, 2013
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At December 31, 2012
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Assets
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Real estate properties
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$
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5,261,340
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$
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5,183,307
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Less accumulated depreciation
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782,111
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750,903
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4,479,229
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4,432,404
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Cash and cash equivalents
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38,989
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42,382
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Restricted cash
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11,876
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9,432
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Deferred financing fees, net
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28,409
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29,410
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Acquired real estate leases and other intangible assets, net
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120,732
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115,837
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Other assets
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132,034
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118,537
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Total assets
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$
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4,811,269
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$
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4,748,002
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Liabilities and Shareholders’ Equity
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Unsecured revolving credit facility
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$
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-
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$
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190,000
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Senior unsecured notes, net of discount
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1,092,374
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1,092,053
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Secured debt and capital leases
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734,227
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724,477
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Accrued interest
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21,595
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15,757
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Assumed real estate lease obligations, net
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15,121
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13,692
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Other liabilities
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63,807
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65,455
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Total liabilities
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1,927,124
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2,101,434
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Shareholders’ equity
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2,884,145
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2,646,568
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Total liabilities and shareholders’ equity
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$
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4,811,269
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$
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4,748,002
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SENIOR HOUSING PROPERTIES TRUST
CONDENSED
CONSOLIDATED STATEMENTS OF FUNDS FROM OPERATIONS AND NORMALIZED
FUNDS FROM OPERATIONS
(amounts in thousands, except
per share data)
(unaudited)
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Calculation of Funds from Operations (FFO) and Normalized FFO
(1):
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Quarter Ended
March 31,
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2013
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2012
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Net income
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$
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35,235
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$
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32,352
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Depreciation expense
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38,302
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33,377
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Impairment of assets
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1,304
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3,071
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FFO
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74,841
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68,800
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Acquisition related costs
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1,903
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688
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Percentage rent (2) |
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2,200
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2,900
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Normalized FFO
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$
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78,944
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$
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72,388
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Weighted average shares outstanding
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184,605
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162,647
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FFO per share
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$
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0.41
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$
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0.42
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Normalized FFO per share
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$
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0.43
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$
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0.45
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Distributions declared per share
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$
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0.39
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$
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0.38
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(1)
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We calculate FFO and Normalized FFO as shown above. FFO is
calculated on the basis defined by The National Association of Real
Estate Investment Trusts, or NAREIT, which is net income, calculated
in accordance with GAAP, excluding any gain or loss on sale of
properties and impairment of real estate assets, plus real estate
depreciation and amortization, as well as other adjustments
currently not applicable to us. Our calculation of Normalized FFO
differs from NAREIT’s definition of FFO because we include estimated
percentage rent in the period to which we estimate 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. We consider 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. We believe that FFO and Normalized FFO
provide useful information to investors because by excluding the
effects of certain historical amounts, such as depreciation expense,
FFO and Normalized FFO may facilitate a comparison of our operating
performance between periods and between us and other REITs. FFO and
Normalized FFO are among the factors considered by our Board of
Trustees when determining the amount of distributions to our
shareholders. Other factors include, but are not limited to,
requirements to maintain our status as a REIT, limitations in our
revolving credit facility agreement and public debt covenants, the
availability of debt and equity capital to us, our expectation of
our future capital requirements and operating performance and our
expected needs and availability of cash to pay our 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 our financial performance or liquidity, nor are these
measures necessarily indicative of sufficient cash flow to fund all
of our needs. We believe that FFO and Normalized FFO may facilitate
an understanding of our historical operating results. These measures
should be considered in conjunction with net income, operating
income and cash flow from operating activities as presented in our
Consolidated Statements of Income and Comprehensive Income and
Consolidated Statements of Cash Flows. Other REITs and real estate
companies may calculate FFO and Normalized FFO differently than we
do.
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(2)
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In calculating net income in accordance with GAAP, we recognize
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 we defer recognition of this
revenue until the fourth quarter for purposes of calculating net
income, we include these estimated amounts in our 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.
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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.
