Senior Housing Properties Trust (NYSE: SNH) today announced its
financial results for the quarter ended March 31, 2010.
Results for the quarter ended March 31, 2010:
Funds from operations, or FFO, for the quarter ended March 31,
2010 were $54.8 million, or $0.43 per share. This compares to FFO
for the quarter ended March 31, 2009 of $52.1 million, or $0.44 per
share.
Net income was $30.0 million, or $0.24 per share, for the
quarter ended March 31, 2010, compared to net income of $31.5
million, or $0.27 per share, for the quarter ended March 31,
2009.
The weighted average number of common shares outstanding totaled
127.4 million and 117.9 million for the quarters ended March 31,
2010 and 2009, respectively.
A reconciliation of net income determined according to U.S.
generally accepted accounting principles, or GAAP, to FFO appears
later in this press release.
Recent Activities:
In April 2010, we acquired a medical office building located in
Colorado with 14,695 rentable square feet for approximately $4.5
million, excluding closing costs. We funded this acquisition using
cash on hand and by assuming a mortgage loan totaling $2.5 million
with an interest rate of 6.73% per annum.
In April 2010, we entered into a purchase and sale agreement to
acquire a medical office building located in Texas with
approximately 55,800 rentable square feet for approximately $12.2
million, excluding closing costs. We expect to fund this
acquisition using cash on hand and borrowings under our revolving
credit facility, if necessary. The purchase of this property is
contingent upon completion of our diligence and other customary
closing conditions; accordingly, we can provide no assurance that
we will purchase this property.
In April 2010, we sold $200.0 million of senior unsecured notes.
The notes require interest at a fixed rate of 6.75% per annum and
are due in 2020. Net proceeds from the sale of the notes, after
underwriting discounts and other expenses, were approximately
$195.0 million. Interest on the notes is payable semi-annually in
arrears. No principal payments are due until maturity. We used a
portion of the net proceeds of this offering to repay $58.0 million
in borrowings under our revolving credit facility and we intend to
use the remaining net proceeds of this offering to fund the
redemption of our $97.5 million outstanding 7.875% senior notes due
2015 and for general business purposes, including pending and
possible future acquisitions. In April 2010, we called all of the
outstanding 7.875% senior notes due 2015 for redemption on May 17,
2010.
Conference Call:
On Tuesday, May 4, 2010, at 11:00 a.m. Eastern Time, David J.
Hegarty, President and Chief Operating Officer, and Richard A.
Doyle, Treasurer and Chief Financial Officer, will host a
conference call to discuss the results for the first quarter ended
March 31, 2010. The conference call telephone number is
888-263-2786. Participants calling from outside the United States
and Canada should dial 913-312-1430. 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 2:00 p.m. Eastern
Time, Tuesday, May 11, 2010. To hear the replay, dial 719-457-0820.
The replay pass code is 7509854.
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 recording and retransmission in any
way of SNH’s fourth quarter and year end conference call is
strictly prohibited without the prior written consent of SNH.
Supplemental Data:
A copy of SNH’s First Quarter 2010 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 owns 299
properties located in 35 states and Washington, D.C. SNH is
headquartered in Newton, MA.
Senior Housing Properties
Trust
Financial Information
(in thousands, except per share
data)
(unaudited)
Income Statement:
Quarter Ended March 31, 2010
2009 Rental income $80,447 $68,377 Expenses:
Depreciation 22,289 18,389 General and administrative 5,501 4,751
Property operating expenses 4,375 2,955 Acquisition costs 35 112
Total expenses 32,200 26,207 Operating income 48,247 42,170
Interest and other income 257 208 Interest expense (18,414)
(10,776) Equity in losses of an investee (28) - Income before
income tax expense 30,062 31,602 Income tax expense (78) (69) Net
income $29,984 $31,533 Weighted average shares outstanding
127,380 117,853 Per share data: Net income $0.24 $0.27
Balance Sheet:
At March 31, 2010 At December 31, 2009
Assets
Real estate properties $3,324,345 $3,317,983 Less accumulated
depreciation 475,451 454,317 2,848,894 2,863,666 Cash and cash
equivalents 5,486 10,494 Restricted cash 4,643 4,222 Deferred
financing fees, net 14,942 14,882 Acquired real estate leases, net
41,032 42,769 Other assets 51,025 51,893 Total assets $2,966,022
$2,987,926 Commitments and Contingencies
Liabilities and Shareholders’ Equity
Unsecured revolving credit facility $58,000 $60,000 Senior
unsecured notes, net of discount 322,196 322,160 Secured debt and
capital leases 657,862 660,059 Accrued interest 10,836 13,693
Acquired real estate lease obligations, net 9,318 9,687 Other
liabilities 22,493 21,677 Total liabilities 1,080,705 1,087,276
Shareholders’ equity 1,885,317 1,900,650 Total liabilities and
shareholders’ equity $2,966,022 $2,987,926
Senior Housing Properties
Trust
Funds from Operations
(in thousands, except per share
data)
(unaudited)
Calculation of Funds from
Operations (FFO) (1):
Quarter Ended March 31, 2010
2009 Net income $29,984 $31,533 Add:
Depreciation expense 22,289 18,389 Acquisition costs 35 112
Deferred percentage rent (2) 2,500 2,100 FFO $54,808 $52,134
Weighted average shares outstanding 127,380 117,853 FFO per
share $0.43 $0.44 Distributions declared $0.36 $0.35
(1) We compute FFO as shown above. Our calculation of FFO
differs from the definition of FFO by the National Association of
Real Estate Investment Trusts, or NAREIT, because we include
deferred percentage rent, if any, exclude impairment of assets, if
any, and exclude acquisition costs, if any, in the determination of
FFO. We consider FFO to be an appropriate measure of performance
for a 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 amounts, such as depreciation expense,
acquisition costs and gain or loss on sale of properties, FFO can
facilitate a comparison of operating performances by a REIT over
time and among REITs. FFO does not represent cash generated by
operating activities in accordance with 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.
Also, other REITs may calculate FFO differently than we do.
(2) 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 this revenue is deferred until the fourth quarter,
our FFO calculation for the first three quarters includes estimated
amounts of deferred percentage rents with respect to those periods.
The fourth quarter calculation of FFO excludes the amounts
recognized during the first three quarters.
WARNING CONCERNING FORWARD LOOKING
STATEMENTS
THIS PRESS RELEASE CONTAINS STATEMENTS AND IMPLICATIONS WHICH
CONSTITUTE FORWARD LOOKING STATEMENTS WITHIN THE MEANING OF THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 AND OTHER FEDERAL
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. OUR ACTUAL RESULTS MAY
DIFFER MATERIALLY FROM THOSE CONTAINED IN OR IMPLIED BY OUR FORWARD
LOOKING STATEMENTS AS A RESULT OF VARIOUS FACTORS. FOR EXAMPLE:
- THIS PRESS RELEASE STATES THAT
WE HAVE ENTERED INTO AN AGREEMENT TO PURCHASE ONE MEDICAL OFFICE
BUILDING. OUR OBLIGATION TO COMPLETE THIS CURRENTLY PENDING
ACQUISITION IS SUBJECT TO VARIOUS CONDITIONS TYPICAL OF COMMERCIAL
REAL ESTATE ACQUISITIONS. AS A RESULT OF ANY FAILURE OF THESE
CONDITIONS, WE MAY NOT ACQUIRE THIS PROPERTY.
OTHER IMPORTANT FACTORS THAT COULD CAUSE ACTUAL RESULTS TO
DIFFER MATERIALLY FROM THOSE IN OUR FORWARD LOOKING STATEMENTS ARE
DESCRIBED MORE FULLY UNDER “ITEM 1A. RISK FACTORS” IN OUR ANNUAL
REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2009.
YOU SHOULD NOT PLACE UNDUE RELIANCE UPON 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.
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.
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