Normalized FFO of $0.43 Per Share
Same Property NOI Growth Across all Property
Segments
Senior Housing Properties Trust (NYSE:SNH) today announced its
financial results for the quarter and six months ended June 30,
2014.
SNH President and Chief Operating Officer David Hegarty made the
following statement:
“SNH’s second quarter results improved as we reported same
property NOI growth across all property types, we completed the
$1.1 billion acquisition of the Vertex Pharmaceuticals headquarters
located in the Seaport District of Boston, and we successfully
completed a disciplined capital raising program to finance that
acquisition so as to produce accretive results for shareholders. In
addition, SNH remains active in selectively pursuing acquisitions
and dispositions to further strengthen its senior housing and
medical office portfolios.”
Results for the quarter ended June 30, 2014:
Normalized funds from operations, or Normalized FFO, for the
quarter ended June 30, 2014 were $86.6 million, or $0.43 per share.
This compares to Normalized FFO for the quarter ended June 30, 2013
of $79.1 million, or $0.42 per share.
Net income was $37.7 million, or $0.19 per share, for the
quarter ended June 30, 2014, compared to net income of $5.6
million, or $0.03 per share, for the quarter ended June 30, 2013.
During the three months ended June 30, 2014, SNH recognized: (1) a
gain on sale of properties of $2.4 million, or $0.01 per share,
related to the sale of two senior living communities previously
classified as held for sale; and (2) impairment of assets
adjustments of $387,000, or less than $0.01 per share, to add back
previously recorded impairments to the carrying value of two
properties (two buildings) leased to medical providers, medical
related businesses, clinics and biotech laboratory tenants, or
MOBs, included in discontinued operations to their actual net sales
prices realized during the second quarter. During the three months
ended June 30, 2013, SNH recognized: (1) impairment of assets
charges of $4.4 million, or $0.02 per share, to reduce the carrying
value of four senior living communities to their aggregate
estimated net sale price; (2) a loss of $105,000, or less than
$0.01 per share, related to the early extinguishment of four
mortgage debts; and (3) impairment of assets charges of $27.9
million, or $0.15 per share, to reduce the carrying value of four
MOBs (seven buildings) included in discontinued operations to their
aggregate estimated net sale price.
The weighted average number of common shares outstanding were
199.8 million and 188.1 million for the quarters ended June 30,
2014 and 2013, respectively.
A reconciliation of net income determined in accordance with
U.S. generally accepted accounting principles, or GAAP, to funds
from operations, or FFO, and Normalized FFO for the quarters ended
June 30, 2014 and 2013 appears later in this press release.
Results for the six months ended June 30, 2014:
Normalized FFO for the six months ended June 30, 2014 were
$166.7 million, or $0.86 per share. This compares to Normalized FFO
for the six months ended June 30, 2013 of $158.1 million, or $0.85
per share.
Net income was $76.2 million, or $0.39 per share, for the six
months ended June 30, 2014, compared to net income of $40.8
million, or $0.22 per share, for the six months ended June 30,
2013. During the six months ended June 30, 2014, SNH recognized:
(1) a gain on sale of properties of $2.6 million, or $0.01 per
share, related to the sale of three senior living communities
previously classified as held for sale; and (2) impairment of
assets charges of $334,000, or less than $0.01 per share, to adjust
the carrying value of one MOB (four buildings) included in
discontinued operations to their aggregate estimated net sale
price, which charge was partially offset by the add back of
previously recorded impairments to the carrying value of two MOBs
(two buildings) to their net sales prices. During the six months
ended June 30, 2013, SNH recognized: (1) impairment of assets
charges of $5.7 million, or $0.03 per share, to reduce the carrying
value of four senior living communities and one parcel of land
included in continuing operations to their aggregate estimated net
sale price; (2) a loss of $105,000, or less than $0.01 per share,
related to the early extinguishment of four mortgage debts; and (3)
impairment of assets charges of $27.9 million, or $0.15 per share,
to reduce the carrying value of four MOBs (seven buildings)
included in discontinued operations to their aggregate estimated
net sale price.
The weighted average number of common shares outstanding were
194.0 million and 186.4 million for the six months ended June 30,
2014 and 2013, respectively.
A reconciliation of net income determined in accordance with
GAAP to FFO and Normalized FFO for the six months ended June 30,
2014 and 2013 appears later in this press release.
Operating Results:
For the three months ended June 30, 2014, 43.5% of SNH’s
consolidated net operating income, or NOI, came from 218 triple net
leased senior living communities with 24,383 living units.
Occupancy at triple net leased senior living communities was 85.2%
during the most recent reported period, compared to 85.6% during
the comparable period last year. (1) Same property occupancy for
triple net leased senior living communities owned continuously from
April 1, 2013 decreased 0.6 percentage points to 85.2% during the
most recent reported period, from 85.8% during the comparable
period last year.(1) Same property NOI increased 2.2% during the
quarter ended June 30, 2014.
For the three months ended June 30, 2014, 14.5% of SNH’s NOI
came from 44 managed senior living communities with 7,051 living
units. Occupancy at managed senior living communities was 88.5%
during the quarter ended June 30, 2014, compared to 87.4% during
the comparable period last year. Same property occupancy for
managed senior living communities owned continuously since April 1,
2013 increased 0.9 percentage points to 88.3% during the quarter
ended June 30, 2014, from 87.4% during the comparable period last
year. Same property NOI increased 6.4% during the quarter ended
June 30, 2014.
For the three months ended June 30, 2014, 38.5% of SNH’s NOI
came from 98 MOBs with 9.1 million square feet. As of June 30,
2014, 95.6% of MOB square feet was leased, compared to 95.0% as of
March 31, 2014 and 94.1% as of June 30, 2013. Same property
occupancy for MOBs owned continuously since April 1, 2013 increased
0.7 percentage points to 94.8% as of June 30, 2014, from 94.1% as
of June 30, 2013. Same property cash basis NOI increased 1.3%
during the quarter ended June 30, 2014.
A reconciliation of NOI and cash basis NOI to net income,
determined in accordance with GAAP, for the quarters ended June 30,
2014 and 2013 appears later in this press release.
Recent Investment and Sales Activities:
Since April 1, 2014, SNH has acquired two properties. In April
2014, SNH acquired one MOB (one building) with 125,240 square feet
for approximately $32.7 million, including the assumption of $15.6
million of mortgage debt, excluding closing costs. This property is
known as the Texas Center for Athletes and it is located in the
South Texas Medical Center area of San Antonio, TX. In May 2014,
SNH acquired one property (two buildings) with approximately
1,651,037 gross building square feet for approximately $1.125
billion, excluding closing costs. This recently built property is
certified by the U.S. Green Building Council as a LEED® Gold
property and it is located on the waterfront in Boston’s Seaport
District, Boston’s fastest growing submarket. The property is 96%
leased to Vertex Pharmaceuticals Incorporated, or Vertex, for an
initial term ending in 2028.
(1) Most recent reported data is based upon the operating
results provided by our tenants for the 12 months ended March 31,
2014 and 2013 or the most recent prior period for which tenant
operating results are available.
In July 2014, SNH entered into an agreement to acquire one
senior living community with 52 private pay assisted living units
located in Jackson, WI, for approximately $7.0 million, excluding
closing costs. SNH intends to acquire this community using a
taxable REIT subsidiary structure and it expects to enter into a
long term management agreement with Five Star Quality Care, Inc. to
manage this community.
In April 2014, SNH sold one MOB (one building) with 210,879
square feet located in New Hampshire for $5.0 million, excluding
closing costs, and in June 2014, SNH sold another MOB (one
building) with 235,079 square feet located in Pennsylvania for $6.0
million, excluding closing costs and recorded no gain or loss on
these sales.
In June 2014, SNH sold two skilled nursing facilities with 156
units located in Wisconsin for $4.5 million, excluding closing
costs. As a result, SNH recorded a gain on sale of $2.4
million.
SNH is also currently marketing for sale seven senior living
communities with 552 living units and two MOBs (five buildings)
with an aggregate of 385,541 square feet. The majority of the
combined revenues generated from the seven senior living
communities listed for sale comes from government funded programs,
such as Medicare and Medicaid. The results of operations from the
two MOBs (five buildings) listed for sale and the two MOBs (two
buildings) sold during the second quarter are included in
discontinued operations in SNH’s financial statements.
Recent Financing Activities:
In April 2014, SNH issued 15,525,000 common shares in a public
offering, raising gross proceeds of approximately $337.7 million,
before underwriting discounts and expenses. SNH used the net
proceeds of this offering (approximately $323.3 million after
underwriting discounts but before expenses) to repay borrowings
outstanding under its unsecured revolving credit facility, with the
remainder used for general business purposes, including the partial
funding of the acquisition of the property leased to Vertex
described above.
In April 2014, SNH sold $400 million of 3.25% senior unsecured
notes due 2019 and $250 million of 4.75% senior unsecured notes due
2024, raising net proceeds of approximately $644.9 million after
underwriting discounts but before expenses. SNH used the net
proceeds of this offering for general business purposes, including
partially funding the acquisition of the property leased to Vertex
described above.
In May 2014, SNH entered into a term loan agreement with Wells
Fargo Bank, National Association and a syndicate of other lenders,
pursuant to which SNH obtained a $350.0 million unsecured term
loan. This term loan matures on January 15, 2020, and is prepayable
without penalty at any time. In addition, the term loan includes a
feature under which maximum borrowings may be increased to up to
$700.0 million in certain circumstances. The term loan bears
interest at a rate of LIBOR plus a premium of 140 basis points that
is subject to adjustment based upon changes to SNH’s senior
unsecured debt ratings. SNH used the net proceeds of its term loan
to repay amounts outstanding under its revolving credit facility,
to repay existing mortgage notes and for general business
purposes.
In June 2014, SNH repaid mortgage notes at maturity that
encumbered two of its properties that had an aggregate principal
balance of $35.3 million and a weighted average interest rate of
5.8%.
Conference Call:
On Monday, August 4, 2014, 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 and six months ended
June 30, 2014. The conference call telephone number is (800)
230-1085. Participants calling from outside the United States and
Canada should dial (612) 288-0329. 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, August 11, 2014. To hear the replay, dial (320)
365-3844. The replay pass code is: 332523.
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 second quarter conference call are strictly prohibited
without the prior written consent of SNH.
Supplemental Data:
A copy of SNH’s Second Quarter 2014 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 372
properties (399 buildings) located in 39 states and Washington,
D.C. as of June 30, 2014. SNH is headquartered in Newton, MA.
Please see the pages attached hereto for a more detailed
statement of SNH’s 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 SNH USES WORDS SUCH AS “BELIEVE”, “EXPECT”, “ANTICIPATE”,
“INTEND”, “PLAN”, “ESTIMATE” OR SIMILAR EXPRESSIONS, SNH IS MAKING
FORWARD LOOKING STATEMENTS. THESE FORWARD LOOKING STATEMENTS ARE
BASED UPON SNH’S 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 SNH HAS
ENTERED INTO AN AGREEMENT TO ACQUIRE ONE SENIOR LIVING COMMUNITY.
THIS TRANSACTION IS SUBJECT TO CLOSING CONDITIONS. THESE CONDITIONS
MAY NOT BE MET. AS A RESULT, THIS TRANSACTION MAY NOT OCCUR OR MAY
BE DELAYED OR ITS TERMS MAY CHANGE;
- THIS PRESS RELEASE STATES THAT SNH HAS
SEVEN SENIOR LIVING COMMUNITIES AND TWO MOBS CURRENTLY LISTED FOR
SALE. SNH MAY NOT BE ABLE TO SELL THESE PROPERTIES ON TERMS
ACCEPTABLE TO IT OR OTHERWISE, AND THE SALES OF ANY OR ALL OF THESE
PROPERTIES MAY NOT OCCUR;
- INCREASING THE MAXIMUM BORROWINGS UNDER
SNH’S TERM LOAN IS SUBJECT TO SNH OBTAINING ADDITIONAL COMMITMENTS
FROM LENDERS, WHICH MAY NOT OCCUR; AND
- THIS PRESS RELEASE STATES THAT SNH
EXPECTS TO ENTER INTO A LONG TERM MANAGEMENT AGREEMENT WITH FIVE
STAR TO MANAGE A SENIOR LIVING COMMUNITY SNH HAS AGREED TO ACQUIRE.
HOWEVER, THERE CAN BE NO ASSURANCE THAT SNH WILL ACQUIRE THIS
COMMUNITY OR THAT SNH AND FIVE STAR WILL ENTER INTO ANY ADDITIONAL
MANAGEMENT AGREEMENTS.
THE INFORMATION CONTAINED IN SNH’S FILINGS WITH THE SECURITIES
AND EXCHANGE COMMISSION, OR SEC, INCLUDING UNDER THE CAPTION “RISK
FACTORS” IN ITS PERIODIC REPORTS, OR INCORPORATED THEREIN,
IDENTIFIES OTHER IMPORTANT FACTORS THAT COULD CAUSE DIFFERENCES
FROM SNH’S FORWARD LOOKING STATEMENTS. SNH’S FILINGS WITH THE SEC
ARE AVAILABLE ON THE SEC’S WEBSITE AT WWW.SEC.GOV.
YOU SHOULD NOT PLACE UNDUE RELIANCE UPON SNH’S FORWARD LOOKING
STATEMENTS.
EXCEPT AS REQUIRED BY LAW, SNH DOES NOT INTEND TO UPDATE OR
CHANGE ANY FORWARD LOOKING STATEMENTS AS A RESULT OF NEW
INFORMATION, FUTURE EVENTS OR OTHERWISE.
SENIOR HOUSING PROPERTIES TRUST
CONSOLIDATED STATEMENTS OF
INCOME
(amounts in thousands, except per share
data)
(unaudited)
Three Months EndedJune
30, Six Months EndedJune 30, 2014 2013 2014 2013
Revenues: Rental income $ 127,669 $ 112,297 $ 239,724 $ 224,150
Residents fees and services 79,039 74,631
158,481 149,687 Total revenues 206,708 186,928 398,205
373,837 Expenses: Property operating expenses 79,786 74,484
157,590 148,163 Depreciation 46,703 38,296 85,058 75,999 General
and administrative 9,577 8,168 17,866 16,816 Acquisition related
costs 2,512 292 2,635 2,187 Impairment of assets -
4,371 - 5,675 Total expenses 138,578
125,611 263,149 248,840 Operating income
68,130 61,317 135,056 124,997 Interest and other income 154
397 258 570 Interest expense (34,112) (29,567) (63,012) (59,131)
Loss on early extinguishment of debt - (105) - (105) Income
from continuing operations before income tax expense and equity in
earnings of an investee 34,172 32,042 72,302 66,331 Income tax
expense (155) (140) (346) (280) Equity in earnings of an investee
118 79 21 155 Income from continuing
operations 34,135 31,981 71,977 66,206 Discontinued operations:
Income from discontinued operations 741 1,513 2,041 2,523
Impairment of assets from discontinued operations 387
(27,896) (334) (27,896) Income before gain on sale of
properties 35,263 5,598 73,684 40,833 Gain on sale of properties
2,396 - 2,552 - Net income $ 37,659 $
5,598 $ 76,236 $ 40,833 Weighted average shares outstanding
199,810 188,081 194,025 186,350
Income from continuing operations per share 0.18 0.17 0.38 0.36
Income (loss) from discontinued operations per share 0.01
(0.14) 0.01 (0.14) Net income per share $ 0.19
$ 0.03 $ 0.39 $ 0.22
SENIOR HOUSING PROPERTIES TRUST
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):
Three Months Ended June
30, Six Months Ended June 30, 2014
2013 2014 2013 Net income $
37,659 $ 5,598 $ 76,236 $ 40,833 Depreciation expense from
continuing operations 46,703 38,296 85,058 75,999 Depreciation
expense from discontinued operations - 199 - 799 Gain on sale of
properties (2,396) - (2,552) - Impairment of assets - 4,371 - 5,675
Impairment of assets from discontinued operations (387)
27,896 334 27,896 FFO 81,579 76,360 159,076
151,202 Estimated business management incentive fees (2) - - - 75
Acquisition related costs from continuing operations 2,512 292
2,635 2,187 Loss on early extinguishment of debt - 105 - 105
Percentage rent adjustment (3) 2,500 2,300
5,000 4,500 Normalized FFO $ 86,591 $ 79,057 $ 166,711 $
158,069 Weighted average shares outstanding 199,810
188,081 194,025 186,350 FFO per share $
0.41 $ 0.41 $ 0.82 $ 0.81 Normalized FFO per share $ 0.43 $ 0.42 $
0.86 $ 0.85 Net income per share $ 0.19 $ 0.03 $ 0.39 $ 0.22
Distributions declared per share $ 0.39 $ 0.39 $ 0.78 $ 0.78
(1) SNH calculates 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 certain other
adjustments currently not applicable to SNH. SNH’s calculation of
Normalized FFO differs from NAREIT’s definition of FFO because
SNH’s includes estimated percentage rent in the period to which it
estimates that it relates rather than when it is recognized as
income in accordance with GAAP and excludes acquisition related
costs, gain or loss on early extinguishment of debt, gain or loss
on lease terminations, estimated business management incentive fees
and loss on impairment of intangible assets, if any. SNH considers
FFO and Normalized FFO to be appropriate measures of operating
performance for a real estate investment trust, or REIT, along with
net income, operating income and cash flow from operating
activities. SNH believes 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 its operating
performance between periods and with other REITs. FFO and
Normalized FFO are among the factors considered by SNH’s Board of
Trustees when determining the amount of distributions to
shareholders. Other factors include, but are not limited to,
requirements to maintain its status as a REIT, limitations in its
revolving credit facility agreement, term loan agreement and public
debt covenants, the availability of debt and equity capital, SNH’s
expectation of its future capital requirements and operating
performance and SNH’s expected needs and availability of cash to
pay its 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 SNH’s financial
performance or liquidity, nor are these measures necessarily
indicative of sufficient cash flow to fund all of SNH’s needs.
These measures should be considered in conjunction with net income,
operating income and cash flow from operating activities as
presented in SNH’s 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 SNH does.
(2) Amounts represent estimated incentive fees under SNH’s
business management agreement payable in common shares after the
end of each calendar year calculated: (i) prior to 2014 based upon
increases in annual Normalized FFO per share and (ii) beginning in
2014 based on common share total return. In calculating net income
in accordance with GAAP, SNH recognizes an estimated business
management incentive fee expense, if any, each quarter. Although
SNH recognizes this expense each quarter for purposes of
calculating net income, SNH does not include these amounts in the
calculation of Normalized FFO until the fourth quarter, which is
when the actual expense amount for the year is determined.
Adjustments were made to prior period amounts to conform to the
current period Normalized FFO calculation.
(3) In calculating net income in accordance with GAAP, SNH
recognizes 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 SNH defers
recognition of this revenue until the fourth quarter for purposes
of calculating net income, it includes these estimated amounts in
its calculation of Normalized FFO for each quarter of the year. The
fourth quarter Normalized FFO calculation excludes the amounts
included during the first three quarters.
SENIOR HOUSING PROPERTIES TRUST
CALCULATION AND RECONCILIATION OF NET
OPERATING INCOME (NOI) AND CASH BASIS NOI
(amounts in thousands)
(unaudited)
For the Three Months Ended For the Six
Months Ended 6/30/2014 6/30/2013 6/30/2014 6/30/2013
Calculation of
NOI (1):
Revenues: Rental income $ 127,669 $ 112,297 $ 239,724 $ 224,150
Residents fees and services 79,039 74,631
158,481 149,687 Total revenues
206,708 186,928 398,205 373,837 Property operating expenses
79,786 74,484 157,590
148,163 Property net operating income (NOI): 126,922 112,444
240,615 225,674 Non cash straight line rent adjustments (2,351 )
(1,939 ) (3,929 ) (3,846 ) Lease value amortization (569 ) 916 153
1,834 Lease termination fees - (4 ) -
(4 ) Cash Basis NOI $ 124,002 $ 111,417
$ 236,839 $ 223,658
Reconciliation of
Cash Basis NOI to Net Income:
Cash Basis NOI $ 124,002 $ 111,417 $ 236,839 $ 223,658 Non cash
straight line rent adjustments 2,351 1,939 3,929 3,846 Lease value
amortization 569 (916 ) (153 ) (1,834 ) Lease termination fees
- 4 - 4
Property NOI $ 126,922 $ 112,444 $ 240,615 $ 225,674 Depreciation
expense (46,703 ) (38,296 ) (85,058 ) (75,999 ) General and
administrative expense (9,577 ) (8,168 ) (17,866 ) (16,816 )
Acquisition related costs (2,512 ) (292 ) (2,635 ) (2,187 )
Impairment of assets - (4,371 ) -
(5,675 ) Operating income 68,130 61,317 135,056
124,997 Interest and other income 154 397 258 570 Interest
expense (34,112 ) (29,567 ) (63,012 ) (59,131 ) Loss on early
extinguishment of debt - (105 ) -
(105 ) Income before income tax expense and equity in
earnings of an investee 34,172 32,042 72,302 66,331 Income tax
expense (155 ) (140 ) (346 ) (280 ) Equity in earnings of an
investee 118 79 21
155 Income from continuing operations 34,135 31,981 71,977
66,206 Discontinued operations Income from discontinued operations
741 1,513 2,041 2,523 Impairment of assets from discontinued
operations 387 (27,896 ) (334 )
(27,896 ) Income before gain on sale of properties 35,263 5,598
73,684 40,833 Gain on sale of properties 2,396
- 2,552 - Net income $ 37,659
$ 5,598 $ 76,236 $ 40,833
(1) SNH calculates NOI as shown above excluding properties
classified as discontinued operations. SNH defines NOI as income
from its real estate less its property operating expenses. NOI
excludes amortization of capitalized tenant improvement costs and
leasing commissions. SNH defines Cash Basis NOI as NOI less non
cash straight line rent adjustments, lease value amortization and
lease termination fees, if any. SNH considers NOI and Cash Basis
NOI to be appropriate supplemental measures to net income because
they may help both investors and management to understand the
operations of our properties. SNH uses NOI and Cash Basis NOI
internally to evaluate individual and company wide property level
performance, and it believes that NOI and Cash Basis NOI provide
useful information to investors regarding its results of operations
because these measures reflect only those income and expense items
that are incurred at the property level and may facilitate
comparisons of its operating performance between periods and with
other REITs. The calculation of NOI and Cash Basis NOI excludes
certain components of net income in order to provide results that
are more closely related to its properties' results of operations.
NOI and Cash Basis NOI do not represent cash generated by operating
activities in accordance with GAAP and should not be considered as
an alternative to net income, operating income or cash flow from
operating activities determined in accordance with GAAP, or as
indicators of SNH’s financial performance or liquidity, nor are
these measures necessarily indicative of sufficient cash flow to
fund all of its needs. 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 NOI and
Cash Basis NOI differently than SNH does.
SENIOR HOUSING PROPERTIES TRUST
CONDENSED CONSOLIDATED BALANCE
SHEETS
(amounts in thousands)
(unaudited)
Balance Sheet:
June 30, December 31, 2014 2013
ASSETS
Real estate properties
$ 6,167,692 $ 5,263,625 Less accumulated depreciation
(909,021) (840,760) 5,258,671 4,422,865 Cash and cash
equivalents 79,392 39,233 Restricted cash 10,960 12,514 Deferred
financing fees, net 33,500 27,975 Acquired real estate leases and
other intangible assets, net 495,782 103,494 Other assets
138,550 158,585 Total assets $ 6,016,855 $ 4,764,666
LIABILITIES AND
SHAREHOLDERS’ EQUITY
Unsecured revolving credit facility $ - $ 100,000 Unsecured term
loan 350,000 - Senior unsecured notes, net of discount 1,742,893
1,093,337 Secured debt and capital leases 672,761 699,427 Accrued
interest 20,401 15,839 Assumed real estate lease obligations, net
128,207 12,528 Other liabilities 73,012 66,546 Total
liabilities 2,987,274 1,987,677
Total shareholders’ equity
3,029,581 2,776,989 Total liabilities and
shareholders’ equity $ 6,016,855 $ 4,764,666
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 TrustKimberly Brown,
617-796-8237Director, Investor Relationswww.snhreit.com
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