Senior Housing Properties Trust (NYSE: SNH) today announced its
financial results for the quarter and year ended December 31,
2011.
Results for the quarter ended December 31, 2011:
Normalized funds from operations, or Normalized FFO, for the
quarter ended December 31, 2011 were $67.9 million, or $0.42 per
share. This compares to Normalized FFO for the quarter ended
December 31, 2010 of $57.2 million, or $0.44 per share. Normalized
FFO for the quarter ended December 31, 2011 were impacted by the
timing of acquisitions and deployment of the proceeds received from
our equity and debt offerings during the quarter, as well as the
negative impact of lease value amortization of our recent
acquisitions.
Net income was $38.6 million, or $0.24 per share, for the
quarter ended December 31, 2011, compared to net income of $33.9
million, or $0.26 per share, for the quarter ended December 31,
2010. Net income for the quarter ended December 31, 2011 includes a
non-cash impairment of assets charge of approximately $796,000, or
less than $0.01 per share, related to one property. Net income for
the quarter ended December 31, 2010 includes a non-cash impairment
of assets charge of approximately $4.9 million, or $0.04 per share,
related to two properties.
The weighted average number of common shares outstanding totaled
160.9 million and 130.1 million for the quarters ended December 31,
2011 and 2010, 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
December 31, 2011 and 2010 appears later in this press release.
Results for the year ended December 31, 2011:
Normalized FFO for the year ended December 31, 2011 were $258.0
million, or $1.73 per share. This compares to Normalized FFO for
the year ended December 31, 2010 of $218.8 million, or $1.71 per
share.
Net income was $151.4 million, or $1.01 per share, for the year
ended December 31, 2011, compared to net income of $116.5 million,
or $0.91 per share, for the year ended December 31, 2010. Net
income for the year ended December 31, 2011 includes a gain on sale
of properties of approximately $21.3 million, or $0.14 per share,
related to the sale of seven properties, a loss on early
extinguishment of debt of approximately $427,000, or less than
$0.01 per share, in connection with replacing our previous $550.0
million revolving credit facility with a new $750.0 million
revolving credit facility and a non-cash impairment of assets
charge of approximately $2.0 million, or $0.01 per share, related
to four properties. Net income for the year ended December 31, 2010
includes a loss on early extinguishment of debt of approximately
$2.4 million, or $0.02 per share, related to the redemption of all
$97.5 million of our outstanding 7.875% senior notes due 2015, a
gain on sale of properties of approximately $109,000, or less than
$0.01 per share, related to the sale of four properties in August
2010 and a non-cash impairment of assets charge of approximately
$6.0 million, or $0.05 per share, related to seven properties.
The weighted average number of common shares outstanding totaled
149.6 million and 128.1 million for the year ended December 31,
2011 and 2010, respectively.
A reconciliation of net income determined according to GAAP to
FFO and Normalized FFO for the year ended December 31, 2011 and
2010 appears later in this press release.
Recent Investment and Sales Activities:
Since October 1, 2011, we have acquired, or we currently have
under agreements to acquire, 21 properties for an aggregate
purchase price of approximately $723.1 million, including the
assumption of approximately $229.3 million of mortgage debt and
excluding closing costs:
- In July 2011, we agreed to acquire nine
senior living communities located in six states with an aggregate
2,226 living units (1,708 independent living units, 471 assisted
living units and 47 Alzheimer’s care units) for approximately
$478.0 million, including the assumption of approximately $162.8
million of mortgage debt and excluding closing costs. All the
residents at these communities pay for services with private
resources. In December 2011, we acquired eight of these nine
communities for approximately $379.0 million, including the
assumption of approximately $130.8 million of mortgage debt and
excluding closing costs. Five Star Quality Care, Inc., or Five
Star, manages these communities under long term contracts. The
purchase of the one remaining community for approximately $99.0
million, including the assumption of approximately $32.0 million of
mortgage debt and excluding closing costs, is subject to various
conditions, including regulatory and other third party approvals.
We currently expect to acquire this community in 2012; however, we
can provide no assurance that we will purchase this property.
- In November 2011, we acquired two
properties leased to medical providers or medical related
businesses, clinics and biotech laboratory tenants, or MOBs, with
45,645 square feet located in Virginia for approximately $11.4
million, including the assumption of approximately $9.6 million of
mortgage debt and excluding closing costs. Upon acquisition, these
properties were 100% leased to three tenants for weighted (by
rents) average lease terms of 6.5 years.
- In December 2011, we acquired one MOB
with 94,238 square feet located in Indiana for approximately $21.0
million, excluding closing costs. Upon acquisition, this property
was 94.8% leased to eight tenants for weighted (by rents) average
lease terms of 9.8 years.
- In December 2011, we acquired one
senior living community located in California with 57 assisted
living units for approximately $11.3 million, excluding closing
costs. All the residents at this community pay for services with
private resources. Five Star manages this community under a long
term contract.
- In March 2011, we agreed to acquire 20
senior living communities located in five states with an aggregate
2,111 living units (814 independent living units, 939 assisted
living units, 311 Alzheimer’s care units and 47 skilled nursing
beds) for approximately $304.0 million, including $78.2 million of
mortgage debt and excluding closing costs. Substantially all the
residents at these communities pay for services with private
resources. Prior to October 1, 2011, we had closed on the
acquisition of 18 of these communities. Five Star manages 13 of
these communities and leases five of these 18 communities under
long term contracts. We currently expect to acquire the remaining
two of these 20 communities for an aggregate purchase price of
approximately $45.3 million, including the assumption of
approximately $4.9 million of mortgage debt and excluding closing
costs, in 2012, subject to various closing conditions; accordingly,
we can provide no assurance that we will purchase these
properties.
- In February 2012, we acquired one
senior living community located in Alabama with 92 assisted living
units for approximately $11.3 million, excluding closing costs. All
the residents at this community pay for services with private
resources. Five Star manages this community under a long term
contract.
- In December 2011 and January and
February 2012, we entered five separate agreements to acquire one
senior living community and four MOBs for an aggregate purchase
price of $144.8 million, including the assumption of approximately
$52.0 million of mortgage debt and excluding closing costs. The
senior living community is located in Missouri and includes 87
independent living units, and all the residents at this community
pay for services with private resources. The four MOBs are located
in Connecticut, Georgia and Hawaii and include an aggregate of
514,409 square feet. 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.
In May 2011, we and Five Star entered into a loan agreement
under which we agreed to lend Five Star up to $80.0 million, or the
Bridge Loan, to fund Five Star’s purchase of six senior living
communities. In September 2011, Five Star completed the acquisition
of these communities. As of December 31, 2011, $38.0 million in
aggregate principal amount was outstanding and no additional
borrowings were available under this Bridge Loan. The Bridge Loan
is secured by mortgages on three of the senior living communities
that Five Star acquired and on four other senior living communities
owned by Five Star. The Bridge Loan matures on July 1, 2012
and bears interest at a rate equal to the annual rate of interest
applicable to our borrowings under our revolving credit facility,
plus 1%. We recognized interest income from this Bridge Loan of
$348,000 and $593,000, respectively, for the quarter and year ended
December 31, 2011, which is included in interest and other income
in our condensed consolidated statements of income.
Recent Financing Activities:
In October 2011, we issued 9.2 million common shares in a public
offering, raising net proceeds of approximately $184.7 million. We
used the net proceeds of this offering to repay borrowings
outstanding under our revolving credit facility.
In December 2011, we sold $300.0 million of 6.75% senior
unsecured notes due 2021, raising net proceeds of approximately
$292.2 million. We used the net proceeds of this offering to repay
borrowings outstanding under our revolving credit facility and for
general business purposes, including funding in part the
acquisitions described above.
Conference Call:
On Thursday, February 16, 2012, at 1 p.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 quarter and year
ended December 31, 2011. The conference call telephone number is
(800) 700-7860. Participants calling from outside the United States
and Canada should dial (612) 332-0820. 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, Thursday, February 23, 2012. To hear the replay, dial (320)
365-3844. The replay pass code is: 227513.
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 conference call is strictly prohibited
without the prior written consent of SNH.
Supplemental Data:
A copy of SNH’s Fourth Quarter 2011 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 369
properties located in 38 states and Washington, D.C. as of December
31, 2011. SNH is headquartered in Newton, MA.
Financial Information
(in thousands, except per share data)
(unaudited)
Income Statement:
Quarter Ended December 31, Year Ended December
31, 2011
2010 2011
2010 Revenues: Rental income $
120,327 $ 97,363 $ 422,166 $ 340,113 Residents fees and services
16,276 - 27,851 -
Total revenues 136,603 97,363 450,017 340,113
Expenses: Depreciation 31,145 23,270 113,265 90,409 Property
operating expenses 27,079 6,404 68,967 20,169 General and
administrative 6,528 5,345 26,041 21,677 Acquisition related costs
5,692 2,885 12,239 3,610 Impairment of assets 796
4,870 1,990 5,965 Total
expenses 71,240 42,774 222,502
141,830 Operating income 65,363 54,589
227,515 198,283 Interest and other income 581 198 1,451 844
Interest expense (27,425 ) (20,862 ) (98,262 ) (80,017 ) Loss on
early extinguishment of debt - - (427 ) (2,433 ) Gain on sale of
properties - - 21,315 109 Equity in earnings (losses) of an
investee 28 16 139
(1 ) Income before income tax expense 38,547 33,941 151,731 116,785
Income tax benefit (expense) 52 (77 )
(312 ) (300 ) Net income $ 38,599 $ 33,864 $
151,419 $ 116,485 Weighted average shares
outstanding 160,946 130,136
149,577 128,092 Net income per share $
0.24 $ 0.26 $ 1.01 $ 0.91
Financial Information
(continued)
(in thousands, except per share data)
(unaudited)
Balance Sheet:
At December 31, 2011 At December 31, 2010
Assets
Real estate properties $ 4,721,591 $ 3,761,712 Less accumulated
depreciation 630,261 538,872 4,091,330 3,222,840 Cash
and cash equivalents 23,560 10,866 Restricted cash 7,128 4,994
Deferred financing fees, net 25,434 16,262 Acquired real estate
leases, net 100,235 63,593 Loan receivable 38,000 - Other assets
97,361 74,101 Total assets $ 4,383,048 $ 3,392,656
Commitments and Contingencies
Liabilities and
Shareholders’ Equity
Unsecured revolving credit facility $ - $ 128,000 Senior unsecured
notes, net of discount 965,770 422,880 Secured debt and capital
leases 861,615 654,010 Accrued interest 22,281 14,993 Assumed real
estate lease obligations, net 17,778 18,239 Other liabilities
42,998 26,557 Total liabilities 1,910,442 1,264,679
Shareholders’ equity 2,472,606 2,127,977 Total
liabilities and shareholders’ equity $ 4,383,048 $ 3,392,656
Funds from Operations and Normalized
Funds from Operations
(in thousands, except per share data)
(unaudited)
Calculation of Funds from Operations
(FFO) and Normalized FFO (1):
Quarter Ended December 31, Year Ended December
31, 2011
2010 2011
2010 Net income $ 38,599 $ 33,864 $
151,419 $ 116,485 Depreciation expense 31,145 23,270 113,265 90,409
Impairment of assets 796 4,870 1,990 5,965 Gain on sale of
properties - - (21,315 )
(109 ) FFO 70,540 62,004 245,359 212,750 Acquisition related costs
5,692 2,885 12,239 3,610 Loss on early extinguishment of debt - -
427 2,433 Percentage rent (2) (8,300 ) (7,700 )
- - Normalized FFO $ 67,932 $
57,189 $ 258,025 $ 218,793 Weighted
average shares outstanding 160,946 130,136
149,577 128,092 FFO per
share $ 0.44 $ 0.48 $ 1.64 $ 1.66
Normalized FFO per share $ 0.42 $ 0.44 $ 1.73
$ 1.71 Distributions declared per share $ 0.38 $ 0.37
$ 1.50 $ 1.46
(1) 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 gain or loss on sale
of properties and impairment of assets, plus real estate
depreciation and amortization. Our calculation of Normalized FFO
differs from NAREIT’s definition of FFO because we include
percentage rent and exclude loss on early extinguishment of debt
and acquisition related costs. We consider FFO and Normalized FFO
to be appropriate measures of performance for a REIT, along with
net income and cash flow from operating, investing and financing
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 can facilitate a comparison of operating
performances between periods. 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 and public debt
covenants, the availability of debt and equity capital to us and
our expectation of our future capital requirements and operating
performance. 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 or cash flow from
operating activities determined in accordance with GAAP 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 consolidated historical operating results.
These measures should be considered in conjunction with net income
and cash flow from operating activities as presented in our
Consolidated Statements of Income and Consolidated Statements of
Cash Flows. Other REITs and real estate companies may calculate FFO
and Normalized FFO differently than we do.
(2) Our percentage rents are generally determined on an annual
basis. We defer recognition of percentage rental income we receive
during the first, second and third quarters until the fourth
quarter when all contingencies related to percentage rents are
satisfied. Although recognition of this revenue is deferred until
the fourth quarter, our Normalized FFO calculation for the first
three quarters includes estimated amounts of percentage rents with
respect to those periods. The fourth quarter calculation of
Normalized FFO excludes percentage rents we presented for the first
three quarters. During the fourth quarters of 2011 and 2010, we
recognized $11.3 million and $10.3 million of percentage rent for
the years ended December 31, 2011 and 2010, respectively.
WARNING CONCERNING
FORWARD LOOKING STATEMENTS
THIS PRESS RELEASE CONTAINS STATEMENTS WHICH 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.
OUR ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE CONTAINED IN
OUR FORWARD LOOKING STATEMENTS AS A RESULT OF VARIOUS FACTORS. FOR
EXAMPLE:
- OUR PENDING ACQUISITIONS OF SENIOR
LIVING COMMUNITIES AND MOBS ARE CONTINGENT UPON VARIOUS CLOSING
CONDITIONS, INCLUDING IN SOME CASES, OUR COMPLETION OF DILIGENCE
AND / OR REGULATORY, LENDER OR OTHER THIRD PARTY APPROVALS.
ACCORDINGLY, SOME OR ALL OF THESE PURCHASES MAY BE DELAYED OR MAY
NOT OCCUR.
THE INFORMATION CONTAINED IN OUR FILINGS WITH THE SECURITIES AND
EXCHANGE COMMISSION, INCLUDING UNDER “RISK FACTORS” IN OUR PERIODIC
REPORTS, OR INCORPORATED THEREIN, IDENTIFIES OTHER IMPORTANT
FACTORS THAT COULD CAUSE OUR ACTUAL RESULTS TO DIFFER MATERIALLY
FROM THOSE STATED IN OUR FORWARD LOOKING STATEMENTS. OUR FILINGS
WITH THE SECURITIES AND EXCHANGE COMMISSION ARE AVAILABLE ON ITS
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.
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.
Senior Housing Properties (NASDAQ:SNH)
Historical Stock Chart
From Jun 2024 to Jul 2024
Senior Housing Properties (NASDAQ:SNH)
Historical Stock Chart
From Jul 2023 to Jul 2024