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:
- 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.
- 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.
- 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:
- 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
- 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.
SENIOR HOUSING PROPERTIES
TRUSTCONDENSED CONSOLIDATED STATEMENTS OF
INCOME(amounts in thousands, except per share
data)(unaudited)
Income Statement:
Quarter
EndedMarch 31,
2013
2012
Revenues: Rental income $ 114,373 $ 109,505 Residents fees
and services 75,056 35,568 Total
revenues 189,429 145,073 Expenses: Property operating
expenses 74,582 39,334 Depreciation 38,302 33,377 General and
administrative 8,648 7,685 Acquisition related costs 1,903 688
Impairment of assets 1,304 3,071 Total
expenses 124,739 84,155
Operating income 64,690 60,918 Interest and other income 173
482 Interest expense (29,564 ) (28,889 ) Equity in earnings of an
investee 76 45 Income before income tax
expense 35,375 32,556 Income tax expense (140 ) (204
) Net income $ 35,235 $ 32,352 Weighted
average shares outstanding 184,605 162,647
Net income per share $ 0.19 $ 0.20
SENIOR HOUSING PROPERTIES
TRUSTCONDENSED CONSOLIDATED BALANCE SHEETS(amounts in
thousands)(unaudited)
Balance Sheet:
At March 31,
2013
At December 31,
2012
Assets
Real estate properties $
5,261,340
$
5,183,307
Less accumulated depreciation 782,111 750,903
4,479,229 4,432,404 Cash and cash equivalents 38,989 42,382
Restricted cash 11,876 9,432 Deferred financing fees, net 28,409
29,410 Acquired real estate leases and other intangible assets, net
120,732 115,837 Other assets 132,034 118,537
Total assets $ 4,811,269 $ 4,748,002
Liabilities and
Shareholders’ Equity
Unsecured revolving credit facility $ - $ 190,000 Senior unsecured
notes, net of discount 1,092,374 1,092,053 Secured debt and capital
leases 734,227 724,477 Accrued interest 21,595 15,757 Assumed real
estate lease obligations, net 15,121 13,692 Other liabilities
63,807 65,455 Total liabilities
1,927,124 2,101,434 Shareholders’ equity 2,884,145
2,646,568 Total liabilities and shareholders’ equity
$ 4,811,269 $ 4,748,002
SENIOR HOUSING PROPERTIES
TRUSTCONDENSED CONSOLIDATED STATEMENTS OF FUNDS FROM
OPERATIONS AND NORMALIZED FUNDS FROM OPERATIONS(amounts in
thousands, except per share data)(unaudited)
Calculation of Funds from Operations
(FFO) and Normalized FFO (1):
Quarter
EndedMarch 31,
2013
2012
Net income $
35,235
$
32,352
Depreciation expense 38,302 33,377 Impairment of assets
1,304 3,071 FFO 74,841 68,800 Acquisition
related costs 1,903 688 Percentage rent (2) 2,200
2,900 Normalized FFO $ 78,944 $ 72,388
Weighted average shares outstanding 184,605
162,647 FFO per share $ 0.41 $ 0.42
Normalized FFO per share $ 0.43 $ 0.45
Distributions declared per share $ 0.39 $ 0.38 (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 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. (2) 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.
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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