New Senior Investment Group Inc. (“New Senior” or the “Company”)
(NYSE: SNR) announced today its results for the quarter and full
year ended December 31, 2016.
4Q 2016 FINANCIAL
HIGHLIGHTS
- Declared cash dividend of $0.26 per
common share
- Net loss of $2.8 million, or ($0.03)
per basic and diluted share
- Total net operating income (“NOI”) of
$57.1 million, compared to $57.7 million for 4Q’15
- Normalized Funds from Operations
(“Normalized FFO”) of $26.0 million, or $0.32 per basic share and
$0.31 per diluted share
- AFFO of $22.5 million, or $0.27 per
basic and diluted share
- Normalized Funds Available for
Distribution (“Normalized FAD”) of $20.1 million, or $0.25 per
basic share and $0.24 per diluted share
4Q 2016 AND RECENT BUSINESS
HIGHLIGHTS
- Total same store cash NOI increased
1.1% vs. 4Q’15
- Managed same store NOI decreased 0.1%
vs. 4Q’15
- Triple net same store cash NOI
increased 4.3% vs. 4Q’15
- In October, sold 2 AL/MC properties for
$23 million, realizing a gain on sale of $13 million
- In January, sold 2 AL/MC properties for
$16 million, realizing a gain on sale of $4 million
FOURTH QUARTER 2016
RESULTS
Dollars in thousands, except per share data
For the Quarter Ended December 31, 2016
For the Quarter Ended December 31, 2015 Amount
Per Basic
Share(B)
Per Diluted
Share(B)
Amount
Per Basic
Share(C)
Per Diluted
Share(C)
GAAP
Net loss $ (2,802) ($0.03) ($0.03) $ (22,023) ($0.26) ($0.26)
Non-GAAP(A)
NOI $57,053 N/A N/A $57,745 N/A N/A FFO 21,645 $0.26 $0.26 27,752
$0.32 $0.32 Normalized FFO 26,027 $0.32 $0.31 29,766 $0.35 $0.34
AFFO 22,463 $0.27 $0.27 25,707 $0.30 $0.30 Normalized FAD 20,140
$0.25 $0.24 23,313 $0.27 $0.27 (A) See end of press release
for reconciliation of non-GAAP measures to net loss.
(B) Non-GAAP measures based on 82.1
million basic shares and 82.6 million diluted shares outstanding,
representing the number of shares outstanding plus the number of
shares issuable upon the exercise of options. GAAP net loss per
basic share and per diluted share is based, in each case, on 82.1
million shares outstanding, because the inclusion of options in the
calculation of GAAP net loss per diluted share would be
anti-dilutive.
(C) Non-GAAP measures based on 86.3
million basic shares and 86.6 million diluted shares outstanding,
representing the number of shares outstanding plus the number of
shares issuable upon the exercise of options. GAAP net loss per
basic share and per diluted share is based, in each case, on 86.3
million shares outstanding, because the inclusion of options in the
calculation of GAAP net loss per diluted share would be
anti-dilutive.
FULL YEAR 2016 RESULTS
Dollars in thousands, except per share data
For the Year Ended December 31, 2016
For the Year Ended December 31, 2015 Amount
Per Basic
Share(B)
Per Diluted
Share(B)
Amount
Per Basic
Share(C)
Per Diluted
Share(C)
GAAP
Net loss $ (72,249) ($0.88) ($0.88) $ (82,425) ($1.08) ($1.08)
Non-GAAP(A)
NOI
$229,411
N/A N/A
$198,935
N/A N/A FFO 98,941 $1.20 $1.19 77,893 $1.02 $1.01 Normalized FFO
105,899 $1.29 $1.28 98,057 $1.28 $1.27 AFFO 94,400 $1.15 $1.14
83,986 $1.10 $1.09 Normalized FAD 86,177 $1.05 $1.04 76,605 $1.00
$0.99 (A) See end of press release for reconciliation of
non-GAAP measures to net loss.
(B) Non-GAAP measures based on 82.4
million basic shares and 82.9 million diluted shares outstanding,
representing the number of shares outstanding plus the number of
shares issuable upon the exercise of options. GAAP net loss per
basic share and per diluted share is based, in each case, on 82.4
million shares outstanding, because the inclusion of options in the
calculation of GAAP net loss per diluted share would be
anti-dilutive.
(C) Non-GAAP measures based on 76.6
million basic shares and 77.2 million diluted shares outstanding,
representing the number of shares outstanding plus the number of
shares issuable upon the exercise of options. GAAP net loss per
basic share and per diluted share is based, in each case, on 76.6
million shares outstanding, because the inclusion of options in the
calculation of GAAP net loss per diluted share would be
anti-dilutive.
FOURTH QUARTER 2016 GAAP
RESULTS
New Senior recorded a GAAP net loss of $2.8 million, or $0.03
per basic and diluted share, for the fourth quarter of 2016,
compared to a GAAP net loss of $22.0 million, or $0.26 per basic
and diluted share, for the fourth quarter of 2015. The
year-over-year decrease in the fourth quarter net loss was
primarily driven by a gain on sale of real estate of $13.4 million
and a decrease in expenses of $6.8 million.
FOURTH QUARTER 2016 PORTFOLIO
PERFORMANCE
Total NOI decreased 1% to $57.1 million compared to $57.7
million for 4Q 2015. Total same store cash NOI increased 1.1% vs.
4Q 2015.
For the managed portfolio, same store average occupancy
decreased 80 basis points to 87.3% compared to 88.1% for 4Q 2015,
and same store NOI decreased 0.1% to $28.3 million compared to
$28.3 million for 4Q 2015. Excluding 5 underperforming assets for
illustrative purposes, managed same store NOI would have increased
2.9% vs. 4Q 2015.
For the triple net portfolio, same store cash NOI increased 4.3%
compared to 4Q 2015. Same store triple net average occupancy
decreased 90 basis points to 88.0% compared to 88.9% for 4Q 2015.
EBITDARM Coverage as of December 31, 2016 was 1.19x, down from
1.28x as of December 31, 2015. Triple net average occupancy and
EBITDARM are presented one quarter in arrears on a trailing twelve
month basis.
ASSET SALES
In October, the Company completed the sale of two assisted
living / memory care properties for $23.0 million, realizing a gain
on sale of $13 million. In connection with the sale, the Company
repaid $13.7 million of debt.
In January, the Company completed the sale of two assisted
living / memory care properties for $15.5 million, realizing a gain
on sale of approximately $4 million. In connection with the sale,
the Company repaid $14.7 million of debt.
FOURTH QUARTER DIVIDEND
On February 27, 2017, the Company’s Board of Directors declared
a cash dividend of $0.26 per share for the quarter ended December
31, 2016. The dividend is payable on March 22, 2017 to shareholders
of record on March 10, 2017.
SHARE REPURCHASE
ACTIVITY
The Company did not complete any share repurchases during the
fourth quarter of 2016.
ADDITIONAL INFORMATION
For additional information that management believes to be useful
for investors, please refer to the presentation posted in the
Investor Relations section of the Company’s website,
www.newseniorinv.com.
EARNINGS CONFERENCE CALL
Management will host a conference call on February 28, 2017 at
9:00 A.M. Eastern Time. The conference call may be accessed by
dialing (877) 694-6694 (from within the U.S.) or (970) 315-0985
(from outside of the U.S.) ten minutes prior to the scheduled start
of the call; please reference “New Senior Fourth Quarter and Full
Year 2016 Earnings Call.” A simultaneous webcast of the conference
call will be available to the public on a listen-only basis at
www.newseniorinv.com. Please allow extra time prior to the call to
visit the website and download any necessary software required to
listen to the internet broadcast.
A telephonic replay of the conference call will also be
available approximately two hours following the call’s completion
through 11:59 P.M. Eastern Time on March 31, 2017 by dialing (855)
859-2056 (from within the U.S.) or (404) 537-3406 (from outside the
U.S.); please reference access code “53071589.”
ABOUT NEW SENIOR
New Senior is a real estate investment trust focused on
investing in senior housing properties across the United States.
The Company is the only pure play senior housing REIT and is one of
the largest owners of senior housing properties. Currently, New
Senior owns 150 properties located across 37 states. New Senior is
managed by an affiliate of Fortress Investment Group LLC, a global
investment management firm. More information about New Senior can
be found at www.newseniorinv.com.
CAUTIONARY NOTE REGARDING
FORWARD-LOOKING STATEMENTS
Certain items in this press release may constitute
“forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995. These statements are not
historical facts. They represent management’s current expectations
regarding future events and are subject to a number of trends and
uncertainties, many of which are beyond our control, that could
cause actual results to differ materially from those described in
the forward-looking statements. Accordingly, you should not place
undue reliance on any forward-looking statements contained herein.
For a discussion of some of the risks and important factors that
could affect such forward-looking statements, see the sections
entitled “Risk Factors” and “Management’s Discussion and Analysis
of Financial Condition and Results of Operations” in the Company’s
annual and quarterly reports filed with the Securities and Exchange
Commission, which are available on the Company’s website
(www.newseniorinv.com). New risks and uncertainties emerge from
time to time, and it is not possible for New Senior to predict or
assess the impact of every factor that may cause its actual results
to differ from those contained in any forward-looking statements.
Forward-looking statements contained herein speak only as of the
date of this press release, and New Senior expressly disclaims any
obligation to release publicly any updates or revisions to any
forward-looking statements contained herein to reflect any change
in New Senior's expectations with regard thereto or change in
events, conditions or circumstances on which any statement is
based.
CAUTIONARY NOTE REGARDING ILLUSTRATIVE
INFORMATION
Illustrative information does not represent the Company’s
historical performance or management’s projections for any future
reporting period. The illustrative information presented herein
differs materially from actual results.
Consolidated Balance Sheets (dollars in thousands, except
share data) December
31, Assets 2016 2015 Real estate
investments: Land $ 220,317 $ 222,795 Buildings, improvements and
other 2,552,862 2,568,133 Accumulated depreciation (218,968
) (129,788 ) Net real estate property
2,554,211 2,661,140 Acquired
lease and other intangible assets 319,929 308,917 Accumulated
amortization (255,452 ) (166,714 ) Net real estate
intangibles
64,477 142,203
Net real estate investments 2,618,688 2,803,343 Cash
and cash equivalents 58,048 116,881 Straight-line rent receivables
73,758 51,916 Receivables and other assets, net 71,234
45,319
Total Assets $
2,821,728 $ 3,017,459
Liabilities and Equity Liabilities Mortgage notes
payable, net $ 2,130,387 $ 2,151,317 Due to affiliates 11,623 9,644
Accrued expenses and other liabilities 100,823
89,173
Total Liabilities $ 2,242,833
$ 2,250,134 Commitments and
contingencies
Equity
Preferred Stock $0.01 par value,
100,000,000 sharesauthorized and none issued or outstanding as of
bothDecember 31, 2016 and 2015
$ - $ -
Common stock $0.01 par value,
2,000,000,000 sharesauthorized, 82,127,247 and 85,447,551 shares
issued andoutstanding as of December 31, 2016 and 2015,
respectively
821 854 Additional paid-in capital 897,918 928,654 Accumulated
deficit (319,844 ) (162,183 )
Total Equity
$ 578,895 $ 767,325
Total Liabilities and Equity $
2,821,728 $ 3,017,459
Consolidated Statement of Operations (dollars in
thousands, except share data)
Three Months Ended December 31, Year Ended
December 31, 2016 2015 2016
2015 Revenues Resident fees and
services $ 89,252 $ 89,940 $ 359,472 $ 277,324 Rental revenue
28,243 28,493 112,966
111,154 Total revenues 117,495
118,433 472,438 388,478
Expenses Property operating expense 60,442 60,688 243,027
189,543 Depreciation and amortization 37,803 49,775 184,546 160,318
Interest expense 23,122 22,675 91,780 75,021 Acquisition,
transaction, and integration expense 2,172 1,954 3,942 13,444
Management fees and incentive compensation to affiliate 5,946 4,072
18,143 14,279 General and administrative expense 3,594 4,543 15,194
15,233 Loss on extinguishment of debt 245 - 245 5,091 Other expense
(income) (79 ) 60 727
1,629 Total expenses $ 133,245 $ 143,767 $ 557,604 $ 474,558
Gain on sale of real estate 13,356 -
13,356 -
Loss Before Income
Taxes (2,394 ) (25,334 ) (71,810 ) (86,080 ) Income tax expense
(benefit) 408 (3,311 ) 439
(3,655 )
Net Loss $ (2,802 )
$ (22,023 ) $ (72,249 )
$ (82,425 ) Loss Per Share of Common
Stock Basic and diluted(A) $ (0.03 ) $ (0.26 ) $ (0.88 ) $
(1.08 )
Weighted Average Number of Shares of Common Stock
Outstanding Basic and diluted(B) 82,127,247
86,271,022 82,357,349 76,601,161
Dividends Declared Per Share of Common Stock $
0.26 $ 0.26 $ 1.04 $ 0.75 (A)
Basic earnings per share (“EPS”) is calculated by dividing net
income by the weighted average number of shares of common stock
outstanding. Diluted EPS is computed by dividing net income by the
weighted average number of shares of common stock outstanding plus
the additional dilutive effect, if any, of common stock equivalents
during each period. (B) All outstanding options were
excluded from the diluted share calculation as their effect would
have been anti-dilutive.
Consolidated Statement of
Cash Flows (dollars in thousands)
Three Months Ended December 31, Year
Ended December 31, 2016 2015
2016 2015 Cash Flows From Operating
Activities Net loss $ (2,802 ) $ (22,023 ) $ (72,249 ) $
(82,425 ) Adjustments to reconcile net loss to net cash provided by
operating activities: Depreciation of tangible assets and
amortization of intangible assets 37,837 49,809 184,689 160,460
Amortization of deferred financing costs 2,366 2,543 9,582 9,320
Amortization of deferred community fees (262 ) 745 (1,646 ) (1,141
) Amortization of (premium) discount on mortgage notes payable (156
) (151 ) (603 ) 77 Non-cash straight-line rent (5,379 ) (6,577 )
(21,842 ) (25,462 ) Gain on sale of real estate (13,356 ) - (13,356
) - Loss on extinguishment of debt 245 - 245 5,091 Equity-based
compensation - - 144 17 Provision for bad debt 598 656 2,150 2,105
Other non-cash expense 37 127 702 964 Changes in: Receivables and
other assets, net 5,578 (1,720 ) (3,069 ) (14,868 ) Due to
affiliates 837 (1,785 ) 1,979 2,762 Accrued expenses and other
liabilities (5,930 ) (6,038 ) 12,573
12,602
Net cash provided by operating
activities $ 19,613 $ 15,586
$ 99,299 $ 69,502
Cash Flows From Investing Activities Proceeds from
the sale of real estate 22,711 - 22,711 - Cash paid for
acquisitions, net of deposits $ - $ (39,174 ) $ - $ (1,251,343 )
Capital expenditures (5,398 ) (3,623 ) (21,151 ) (11,411 ) Funds
reserved for future capital expenditures (1,157 ) (1,166 ) (2,423 )
(3,169 ) Deposits refunded (paid) for real estate investments
- - 584 (11,355 )
Net cash provided by (used in) investing activities $
16,156 $ (43,963 ) $
(279 ) $ (1,277,278 )
Cash Flows From Financing Activities Proceeds from mortgage
notes payable $ - $ 26,000 $ - $ 1,248,252 Principal payments of
mortgage notes payable (4,446 ) (3,916 ) (16,240 ) (15,599 )
Repayments of mortgage notes payable (13,725 ) - (13,725 ) (304,484
) Payment of exit fee on extinguishment of debt (189 ) - (189 )
(1,499 ) Payment of deferred financing costs - (771 ) - (13,065 )
Payment of common stock dividend (21,353 ) (22,498 ) (85,412 )
(70,318 ) Purchase of interest rate caps - (210 ) - (1,247 )
Proceeds from issuance of common stock and exercise of options - -
- 276,569 Costs related to issuance of common stock - - - (10,056 )
Repurchase of common stock (29 ) (10,273 ) (30,913 ) (10,273 ) Cash
escrowed with lender (11,374 ) -
(11,374 ) -
Net cash (used in) provided by
financing activities $ (51,116 ) $
(11,668 ) $ (157,853 ) $
1,098,280 Net Decrease in Cash and Cash Equivalents
(15,347 ) (40,045 ) (58,833 ) (109,496 ) Cash and Cash Equivalents,
Beginning of Year 73,395 156,926
116,881 226,377
Cash and Cash Equivalents,
End of Year $ 58,048 $
116,881 $ 58,048 $
116,881 Supplemental Disclosure of Cash
Flow Information Cash paid during the period for interest
expense $ 20,625 $ 19,984 $ 82,557 $ 62,870 Cash paid during the
period for income taxes - - 266 190
Supplemental
Disclosure of Non-Cash Investing and Financing Activities
Issuance of common stock and exercise of options $ - $ 254 $ 139 $
316 Other liabilities assumed with acquisitions - - - 651
Reconciliation of NOI to Net Loss (dollars in
thousands) For the Quarter Ended
December 31, 2016 Total revenues $ 117,495 Property
operating expense (60,442 )
NOI 57,053
Depreciation and amortization (37,803 ) Interest expense (23,122 )
Acquisition, transaction and integration expense (2,172 )
Management fees and incentive compensation to affiliate (5,946 )
General and administrative expense (3,594 ) Loss on extinguishment
of debt (245 ) Other income 79 Gain on sale of real estate 13,356
Income tax expense (408 )
Net Loss $
(2,802 ) Reconciliation of Net Loss
to FFO, Normalized FFO, AFFO and Normalized FAD (dollars and
shares in thousands, except per share data)
For the Quarter Ended December 31, 2016
Net loss $ (2,802 ) Adjustments: Gain
on sale of real estate (13,356 ) Depreciation and amortization
37,803
FFO $
21,645 FFO per diluted share
$ 0.26 Acquisition, transaction and
integration expense 2,172 Loss on extinguishment of debt 245
Incentive compensation earned on sale of
real estate(1)
2,044 Other income (79 )
Normalized
FFO $ 26,027 Normalized FFO per diluted
share $ 0.31
Straight-line rent (5,379 ) Amortization of deferred financing
costs 2,366
Amortization of deferred community fees
and other(2)
(551 )
AFFO $
22,463 AFFO per diluted share
$ 0.27 Routine capital expenditures
(2,323 )
Normalized FAD $
20,140 Normalized FAD per diluted share
$ 0.24 Weighted average basic
shares outstanding 82,127
Weighted average diluted shares
outstanding(3)
82,633
(1) Represents incentive compensation
directly related to the sale of real estate and reflects the
portion of the gain on sale calculated in accordance with
the Management Agreement, which differs
significantly from the gain on sale as calculated under GAAP, and
is included in “Management fees and
incentive compensation to affiliate” in
the Consolidated Statements of Operations.
(2) Includes amortization of above / below
market lease intangibles, amortization of premium on mortgage notes
payable and amortization of deferred community fees and other,
which includes the net change in deferred community fees and other
rent discounts or incentives.
(3) Includes dilutive effect of
options.
Reconciliation of Year-over-Year Same Store NOI
(unaudited) (dollars in thousands) 4Q 2015
4Q 2016
NNN Properties
Same Store Managed
Properties
Non-Same Store
Managed Properties
Total
NNN Properties
Same Store Managed
Properties
Non-Same Store
Managed Properties
Total NOI $28,493 $28,289
$963 $57,745 $28,243
$28,258 $552 $57,053
Depreciation and amortization (49,775) (37,803) Interest expense
(22,675) (23,122)
Acquisition, transaction and
integrationexpense
(1,954) (2,172)
Management fees and incentivecompensation
to affiliate
(4,072) (5,946) General and administrative expense (4,543) (3,594)
Loss on extinguishment of debt - (245) Other income (expense) (60)
79 Gain on sale of real estate - 13,356 Income tax benefit
(expense) 3,311 (408)
Net Loss ($22,023)
($2,802) Reconciliation of
Quarter-over-Quarter Same Store NOI (unaudited) (dollars in
thousands) 3Q 2016 4Q 2016
NNN Properties
Same Store Managed
Properties
Non-Same Store
Managed Properties
Total
NNN Properties
Same Store Managed
Properties
Non-Same Store
Managed Properties
Total NOI $28,240 $28,355
$508 $57,103 $28,243 $28,752 $58
$57,053 Depreciation and amortization (45,510)
(37,803) Interest expense (23,065) (23,122)
Acquisition, transaction and
integrationexpense
(364) (2,172)
Management fees and incentivecompensation
to affiliate
(3,839) (5,946) General and administrative expense (3,676) (3,594)
Loss on extinguishment of debt - (245) Other income (expense) (108)
79 Gain on sale of real estate - 13,356 Income tax expense (782)
(408)
Net Loss ($20,241) ($2,802)
Reconciliation of Year-over-Year Cash NOI (unaudited)
(dollars in thousands) 4Q 2015
4Q 2016
Same Store NNN
Properties
Non-Same Store NNN
Properties
Same Store Managed
Properties
Non-Same Store
Managed Properties
Total
Same Store NNN
Properties
Non-Same Store NNN
Properties
Same Store Managed
Properties
Non-Same Store
Managed Properties
Total Cash NOI $21,955 - $28,380 $959 $51,294 $22,906
- $27,981 $393 $51,280 Straight-line rent 6,577 - - - $6,577 5,379
- - - $5,379
Amortization of deferred community feesand
other(1)
(39) - (91) 4 ($126) (42) - 277 159 $394
Segment / Total
NOI $28,493 - $28,289
$963 $57,745 $28,243 -
$28,258 $552 $57,053
Depreciation and amortization (49,775) (37,803) Interest expense
(22,675) (23,122)
Acquisition, transaction and
integrationexpense
(1,954) (2,172)
Management fees and incentivecompensation
to affiliate
(4,072) (5,946) General and administrative expense (4,543) (3,594)
Loss on extinguishment of debt - (245) Other income (expense) (60)
79 Gain on sale of real estate - 13,356 Income tax benefit
(expense) 3,311 (408)
Net loss ($22,023)
($2,802) (1) Includes amortization of above / below
market lease intangibles and amortization of deferred community
fees and other, which includes the net change in deferred community
fees and other rent discounts or incentives.
NON-GAAP FINANCIAL
MEASURES
The tables above set forth reconciliations of non-GAAP measures
to net loss, which is the most directly comparable GAAP financial
measure.
A non-GAAP financial measure is a measure of historical or
future financial performance, financial position or cash flows that
excludes or includes amounts that are not excluded from or included
in the most comparable GAAP measure. We consider certain non-GAAP
financial measures to be useful supplemental measures of our
operating performance. GAAP accounting for real estate assets
assumes that the value of real estate assets diminishes predictably
over time, even though real estate values historically have risen
or fallen with market conditions. As a result, many industry
investors look to non-GAAP financial measures for supplemental
information about real estate companies.
You should not consider non-GAAP measures as alternatives to
GAAP net income, which is an indicator of our financial
performance, or as alternatives to GAAP cash flow from operating
activities, which is a liquidity measure, nor are non-GAAP measures
necessarily indicative of our ability to satisfy our funding
requirements. In order to facilitate a clear understanding of our
consolidated historical operating results, you should examine our
non-GAAP measures in conjunction with GAAP net income as presented
in our Consolidated Financial Statements and other financial data
included elsewhere in this report. Moreover, the comparability of
non-GAAP financial measures across companies may be limited as a
result of differences in the manner in which real estate companies
calculate such measures, the capital structure of such companies or
other factors.
Below is a description of the non-GAAP financial measures
presented herein.
NOI AND CASH NOI
The Company evaluates the performance of each of its two
business segments based on NOI. The Company defines NOI as total
revenues less property-level operating expenses, which include
property management fees, payroll expense and travel cost
reimbursements to affiliates. The sum of the NOI for each segment
is total NOI, which the Company uses to evaluate the aggregate
performance of its segments. Management believes that NOI serves as
a useful supplement to net income because it allows investors,
analysts and management to measure unlevered property-level
operating results and to compare the Company’s operating results
between periods and to the operating results of other real estate
companies on a consistent basis.
The Company defines cash NOI as NOI excluding the effects of
straight-line rent, amortization of above / below market lease
intangibles and amortization of deferred community fees and other,
which includes the net change in deferred community fees and other
rent discounts or incentives. Management believes that cash NOI
serves as a useful supplement to NOI and net income because it
represents actual cash received during the relevant reporting
period.
Same store NOI and cash NOI include only properties owned for
the entirety of comparable periods and exclude assets classified as
held for sale.
FFO and Other Non-GAAP Measures
We use Funds From Operations ("FFO") and Normalized FFO as
supplemental measures of our operating performance. We use the
National Association of Real Estate Investment Trusts ("NAREIT")
definition of FFO. NAREIT defines FFO as GAAP net income excluding
gains (losses) from sales of depreciable real estate assets and
impairment charges of depreciable real estate, plus real estate
depreciation and amortization, and after adjustments for
unconsolidated entities and joint ventures to reflect FFO on the
same basis. FFO does not account for debt principal payments and is
not intended as a measure of a REIT’s ability to satisfy such
payments or any other cash requirements.
Normalized FFO, as defined below, measures the financial
performance of our portfolio of assets excluding items that,
although incidental to, are not reflective of the day-to-day
operating performance of our portfolio of assets. We believe that
Normalized FFO is useful because it facilitates the evaluation of
our portfolio’s operating performance (i) between periods on a
consistent basis and (ii) to the operating performance of other
real estate companies. However, comparability may be limited
because our calculation of Normalized FFO may differ significantly
from that of other companies, or because of features of our
business that are not present in other companies.
We define Normalized FFO as FFO excluding the following income
and expense items, as applicable: (a) acquisition, transaction and
integration related costs and expenses; (b) the write off of
unamortized discounts, premiums, deferred financing costs, or
additional costs, make whole payments and penalties or premiums
incurred as the result of early repayment of debt (collectively
“Gain (Loss) on extinguishment of debt”); (c) incentive
compensation recognized as a result of sales of property and (d)
other items that we believe are not indicative of operating
performance, generally reported as “Other (income) expense” in the
Consolidated Statements of Operations.
Management also uses AFFO and Normalized FAD as supplemental
measures of the Company’s operating performance.
We define AFFO as Normalized FFO excluding the impact of the
following: (a) straight-line rents; (b) amortization of above /
below market lease intangibles; (c) amortization of deferred
financing costs; (d) amortization of premium on mortgage notes
payable and (e) amortization of deferred community fees and other,
which includes the net change in deferred community fees and other
rent discounts or incentives. We believe AFFO is useful because it
facilitates the evaluation of (i) the current economic return on
our portfolio of assets between periods on a consistent basis and
(ii) our portfolio versus those of other real estate companies that
report AFFO. However, comparability may be limited because our
calculation of AFFO may differ significantly from that of other
companies, or because of features of our business that are not
present in other companies.
We define Normalized FAD as AFFO less routine capital
expenditures, which we view as a cost associated with the current
economic return.
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version on businesswire.com: http://www.businesswire.com/news/home/20170228005923/en/
New Senior Investment Group Inc.David Smith, 212-515-7783
New Senior Investment (NYSE:SNR)
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