Senior Housing Properties Trust (NYSE: SNH) today announced its
financial results for the quarter and year ended December 31, 2006,
as follows: Results for the quarter ended December 31, 2006: Income
from continuing operations was $27.6 million, or $0.37 per share,
for the quarter ended December 31, 2006, compared to $15.7 million,
or $0.23 per share for the quarter ended December 31, 2005. Net
income for the quarter ended December 31, 2006, was $27.5 million,
or $0.37 per share, compared to net income of $20.9 million, or
$0.30 per share, for the quarter ended December 31, 2005. Funds
from operations (FFO) for the quarter ended December 31, 2006, was
$35.0 million, or $0.47 per share. This compares to FFO for the
quarter ended December 31, 2005 of $26.3 million, or $0.38 per
share. Weighted average number of common shares outstanding totaled
74.6 million and 69.4 million for the quarters ended December 31,
2006 and 2005, respectively. Results for the year ended December
31, 2006: Income from continuing operations was $66.1 million, or
$0.91 per share, for the year ended December 31, 2006, compared to
$58.0 million, or $0.84 per share, for the year ended December 31,
2005. Net income for the year ended December 31, 2006 was $66.1
million, or $0.91 per share, compared to net income of $63.9
million, or $0.93 per share, for the year ended December 31, 2005.
FFO for the year ended December 31, 2006 was $114.0 million, or
$1.57 per share. This compares to FFO for the year ended December
31, 2005 of $103.4 million, or $1.50 per share. Weighted average
number of common shares outstanding totaled 72.5 million and 68.8
million for the years ended December 31, 2006 and 2005,
respectively. Conference Call: On Wednesday, February 28, 2007, at
1:00 p.m. EST, David J. Hegarty, president and chief operating
officer, John R. Hoadley, treasurer and chief financial officer,
and Rick Doyle, our announced future treasurer and chief financial
officer, will host a conference call to discuss the results for the
fourth quarter and year ended December 31, 2006. The conference
call telephone number is 800-818-5264. Participants calling from
outside the United States and Canada should dial 913-981-4910. 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 Tuesday, March 6, 2007. To hear the replay, dial
719-457-0820. The replay pass code is 1290741. A live audio web
cast of the conference call will also be available in listen only
mode on the SNH web site. Participants wanting to access the
webcast should visit the web site about five minutes before the
call. The archived webcast will be available for replay on the SNH
web site for about one week after the call. Supplemental Data: A
copy of SNH�s Fourth Quarter 2006 Supplemental Operating and
Financial Data is available for download from the SNH web site,
www.snhreit.com. Senior Housing Properties Trust is a real estate
investment trust, or REIT, that owns 196 senior living properties
located in 32 states. SNH is headquartered in Newton,
Massachusetts. Senior Housing Properties Trust Financial
Information (in thousands, except per share data) � � Income
Statement: Quarter Ended December 31, � Year Ended December 31,
2006� 2005� 2006� 2005� Revenues: Rental income(1) $54,645�
$43,776� $178,372� $161,265� Interest and other income 400� 335�
1,434� 1,922� Total revenues 55,045� 44,111� 179,806� 163,187�
Expenses: Interest 12,269� 12,048� 47,020� 46,633� Depreciation
11,443� 11,266� 44,073� 43,694� General and administrative(2)
3,775� 3,356� 14,645� 13,117� Impairment of assets -� 1,762� 1,420�
1,762� Loss on early extinguishment of debt(3) -� -� 6,526� -�
Total expenses 27,487� 28,432� 113,684� 105,206� Income from
continuing operations 27,558� 15,679� 66,122� 57,981� (Loss) gain
on sale of properties (21) 5,214� (21) 5,931� Net income $27,537�
$20,893� $66,101� $63,912� � Weighted average shares outstanding
74,641� 69,445� 72,529� 68,757� Per share data: Income from
continuing operations $0.37� $0.23� $0.91� $0.84� Net income $0.37�
$0.30� $0.91� $0.93� Balance Sheet: (in thousands) At December 31,
2006 At December 31, 2005 Assets Real estate properties $1,814,358�
$1,686,169� Less accumulated depreciation 276,507� 239,031�
1,537,851� 1,447,138� Cash and cash equivalents 5,464� 14,642�
Restricted cash 2,435� 2,529� Deferred financing fees, net 8,173�
10,961� Other assets 30,851� 25,371� Total assets $1,584,774�
$1,500,641� � Liabilities and Shareholders� Equity Unsecured
revolving bank credit facility $112,000� $64,000� Senior unsecured
notes, net of discount 341,673� 393,938� Junior subordinated
debentures due 2041 -� 28,241� Secured debt and capital leases
91,412� 70,141� Total debt 545,085� 556,320� Other liabilities
20,223� 21,137� Total liabilities 565,308� 577,457� Shareholders�
equity 1,019,466� 923,184� Total liabilities and shareholders�
equity $1,584,774� $1,500,641� � (1) Rental income for the quarters
ended December 31, 2006 and 2005, includes $8.3 million and $2.2
million, respectively, and for the years ended December 31, 2006
and 2005, includes $14.8 million and $8.7 million, respectively, of
rental income from two hospitals formerly leased and operated by
HealthSouth Corporation, or HealthSouth. � Beginning in 2003 until
November 2006, we were involved in two separate litigations with
HealthSouth seeking to increase the rent due under an amended lease
of two hospitals to HealthSouth and to terminate the amended lease
and repossess the hospitals. On November 8, 2006, we and
HealthSouth agreed to settle our litigations, to recognize
HealthSouth�s lease until September 30, 2006 and to increase the
annual rent due under the lease from $8.7 million to $9.9 million
for the period from January 2, 2002 to September 30, 2006. As a
result of the settlement, HealthSouth paid us additional rent of
$5.7 million, or $0.08 per share, for periods through September 30,
2006, which we recognized as rental income in the fourth quarter of
2006. On October 1, 2006, Five Star Quality Care Inc., or Five
Star, assumed the operations of these two hospitals and began
leasing them from us for an annual rent of $10.25 million. � (2)
Expenses incurred related to the HealthSouth litigation were
approximately $260,000 and $600,000, respectively, for the quarters
ended December 31, 2006 and 2005, and $1,670,000 and $1,850,000,
respectively, for the years ended December 31, 2006 and 2005, and
are included in general and administrative expenses. � (3) On
January 9, 2006, we redeemed $52.5 million of our 7 7/8% senior
unsecured notes. The loss on early extinguishment of debt includes
a $4.1 million redemption premium and a $1.1 million write off of
deferred financing fees and unamortized discount related to these
senior notes. On June 15, 2006, we redeemed all of our $28.2
million of 10.125% junior subordinated debentures. The loss on
early extinguishment of debt includes a $1.3 million write off of
unamortized deferred financing fees related to these debentures.
Senior Housing Properties Trust Funds from Operations (in
thousands, except per share data) � Calculation of Funds from
Operations (FFO) (1): � Quarter Ended December 31, Year Ended
December 31, 2006� 2005� 2006� 2005� Income from continuing
operations(2) $27,558� $15,679� $66,122� $57,981� Add: Depreciation
expense 11,443� 11,266� 44,073� 43,694� Impairment of assets -�
1,762� 1,420� 1,762� Loss on early extinguishment of debt -� -�
6,526� -� Less: Deferred percentage rent(3) (4,016) (2,402) -� -�
Loss on early extinguishment of debt settled in cash(4) -� -�
(4,134) -� FFO $34,985� $26,305� $114,007� $103,437� � Weighted
average shares outstanding 74,641� 69,445� 72,529� 68,757� � FFO
per share $0.47� $0.38� $1.57� $1.50� Distributions declared $0.34�
$0.32� $1.32� $1.28� � (1) We compute FFO as shown in the
calculation above. This calculation begins with income from
continuing operations or, if that amount is the same as net income,
with net income. Our calculation of FFO differs from the National
Association of Real Estate Investment Trusts, or NAREIT, definition
of FFO because we include deferred percentage rent in FFO as
discussed in Note 3 below and we exclude loss on early
extinguishment of debt not settled in cash from FFO. We consider
FFO to be an appropriate measure of performance for a real estate
investment trust, or REIT, along with net income and cash flow from
operating, investing and financing activities. We believe that FFO
provides useful information to investors because by excluding the
effects of certain historical costs, such as depreciation expense
and gain or loss on sale of properties, FFO can facilitate
comparison of current operating performance among REITs. FFO does
not represent cash generated by operating activities in accordance
with U.S. generally accepted accounting principles, or GAAP, and
should not be considered an alternative to net income or cash flow
from operating activities as a measure of financial performance or
liquidity. FFO is one important factor considered by our board of
trustees in determining the amount of distributions to
shareholders. Other important factors include, but are not limited
to, requirements to maintain our status as a REIT, limitations in
our revolving bank credit facility and public debt covenants, the
availability of debt and equity capital to us and our expectation
of our future performance. � (2) Income from continuing operations
includes legal expenses incurred related to the HealthSouth
litigation of approximately $260,000 and $600,000, respectively,
for the quarters ended December 31, 2006 and 2005, and $1,670,000
and $1,850,000, respectively, for the years ended December 31, 2006
and 2005. � (3) Our percentage rents are generally calculated on an
annual basis. We recognize percentage rental income received during
the first, second and third quarters in the fourth quarter when all
contingencies related to percentage rents are satisfied. Although
recognition of revenue is deferred until the fourth quarter for
purposes of calculating net income, the calculation of FFO for the
first three quarters includes estimated amounts with respect to
those periods. The fourth quarter FFO calculation excludes the
amounts recognized during the first three quarters. � (4) FFO for
the year ended December 31, 2006, includes a $4.1 million, or $0.06
per share, loss for the cash premium paid for our redemption of
$52.5 million of our 7 7/8% senior notes.
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