Normalized FFO Per Share for the Second Quarter
Increases by 4.7% Year over Year to $0.45
Senior Housing Properties Trust (NYSE: SNH) today announced its
financial results for the quarter and six months ended June 30,
2015.
SNH’s President and Chief Operating Officer,
David Hegarty, made the following statement:
“We were pleased that for the third straight
quarter, SNH achieved growth of $0.02, or 4.7%, in Normalized FFO
per share compared to the same period a year ago. During the second
quarter, we closed the acquisition of 37 high quality private pay
senior living communities for approximately $763 million, 18 of
which are leased and 19 of which are operated in a taxable REIT
subsidiary structure.
“In addition, we announced a transaction
involving our manager, RMR, whereby we acquired a 17.0% economic
interest in our manager in exchange for $60.7 million and amended
the management agreements with RMR to extend the terms for 20
years. We believe this transaction further aligns the interests of
RMR management, ourselves and our shareholders and allows us to
continue benefiting from a low cost management structure.”
Results for the quarter ended June 30, 2015:
Normalized funds from operations, or Normalized FFO, for the
quarter ended June 30, 2015 were $106.8 million, or $0.45 per basic
and diluted share. This compares to Normalized FFO for the quarter
ended June 30, 2014 of $86.6 million, or $0.43 per basic and
diluted share. The increase in Normalized FFO is primarily the
result of acquisitions since July 1, 2014.
Net income was $36.4 million, or $0.15 per basic and diluted
share, for the quarter ended June 30, 2015, compared to net income
of $37.7 million, or $0.19 per basic and diluted share, for the
quarter ended June 30, 2014.
The basic and diluted weighted average number of common shares
outstanding were 235.5 million and 235.6 million, respectively, for
the quarter ended June 30, 2015, and 199.8 million and 199.9
million, respectively, for the quarter ended June 30, 2014.
Reconciliations 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, 2015 and 2014 appear later in this press release.
Results for the six months ended June 30, 2015:
Normalized FFO for the six months ended June 30, 2015 were
$205.3 million, or $0.90 per basic and diluted share. This compares
to Normalized FFO for the six months ended June 30, 2014 of $166.7
million, or $0.86 per basic and diluted share.
Net income was $76.2 million, or $0.33 per basic and diluted
share, for the six months ended June 30, 2015, compared to net
income of $76.2 million, or $0.39 per basic and diluted share, for
the six months ended June 30, 2014.
The basic and diluted weighted average number of common shares
outstanding were 228.5 million for the six months ended June 30,
2015, and 194.0 million for the six months ended June 30, 2014.
Reconciliations of net income determined in accordance with GAAP
to FFO and Normalized FFO for the six months ended June 30, 2015
and 2014 appears later in this press release.
Operating Results for the quarter ended June 30,
2015:
For the three months ended June 30, 2015, consolidated same
property net operating income, or NOI, and cash basis NOI increased
0.4% and decreased 0.1%, respectively, compared to the quarter
ended June 30, 2014.
For the three months ended June 30, 2015, 42.8% of SNH’s NOI
came from 121 properties leased to medical providers, medical
related businesses, clinics and biotech laboratory tenants, or
MOBs, with 11.3 million square feet of leasable area. As of June
30, 2015, 96.4% of SNH’s MOB square feet were leased, compared to
96.2% as of March 31, 2015 and 95.6% as of June 30, 2014. Same
property occupancy for SNH’s MOBs owned continuously since April 1,
2014 increased to 95.0% as of June 30, 2015, compared to 94.9% as
of June 30, 2014. Same property NOI and cash basis NOI for SNH’s
MOBs decreased 2.3% and 3.2%, respectively, during the quarter
ended June 30, 2015 compared to the quarter ended June 30,
2014.
For the three months ended June 30, 2015, 39.9% of SNH’s
consolidated NOI came from 232 triple net leased senior living
communities with 26,135 living units. Occupancy at triple net
leased senior living communities was 85.1% during the most recently
reported period, compared to 85.2% during the comparable period
last year.(1) Same property occupancy at triple net leased senior
living communities owned continuously since April 1, 2014 increased
to 85.5% during the most recently reported period, compared to
85.3% during the comparable period last year. Same property NOI and
cash basis NOI for SNH’s triple net leased senior living
communities increased 1.8% and 1.2%, respectively, during the
quarter ended June 30, 2015 compared to the quarter ended June 30,
2014.
For the three months ended June 30, 2015, 14.3% of SNH’s NOI
came from 65 managed senior living communities with 8,563 living
units. Occupancy at managed senior living communities was 88.1%
during the quarter ended June 30, 2015, compared to 88.5% during
the comparable period last year. Same property occupancy for
managed senior living communities owned continuously since April 1,
2014 decreased to 87.6% during the quarter ended June 30, 2015,
from 88.5% during the comparable period last year. Same property
average monthly rates increased 2.4% to $4,276 during the quarter
ended June 30, 2015 compared to the quarter ended June 30, 2014.
Same property NOI and cash basis NOI for SNH’s managed senior
living communities both increased 1.4% during the quarter ended
June 30, 2015 compared to the quarter ended June 30, 2014.
Reconciliations of NOI and cash basis NOI to net income
determined in accordance with GAAP for the quarters ended June 30,
2015 and 2014 appear later in this press release. In addition,
calculations and reconciliations of NOI, Cash Basis NOI, Same
Property NOI and Same Property Cash Basis NOI by Segment for the
quarters ended June 30, 2015 and 2014 appear later in this press
release.
Recent Investment and Sales Activities:
As previously disclosed, on May 1, 2015, SNH completed the
acquisition of 37 (out of a portfolio of 38) senior living
communities with 3,352 living units for approximately $762.6
million. SNH amended the purchase agreement related to these
communities to accommodate a delayed closing of one senior living
community with 87 living units, which SNH expects to acquire before
year end 2015. Nineteen of the 38 communities, with 2,206 living
units, including the one community that SNH has not yet acquired,
are leased to seven senior living operators. The remaining 19
communities, with 1,233 living units, were acquired using taxable
REIT subsidiary, or TRS, structures. SNH terminated the
pre-existing management agreements for 14 of these communities,
with 838 living units, and entered into management agreements with
Five Star Quality Care, Inc., or Five Star, to manage these
communities. The remaining five communities, with 395 living units,
continue to be managed by the current third party senior living
operator. SNH financed this acquisition using cash on hand,
borrowings under its revolving credit facility and the assumption
of approximately $139.2 million of mortgage debt with a weighted
average annual interest rate of 4.43%.
Also in May 2015, SNH acquired a newly constructed senior living
community with 40 private pay independent living units located in
Georgia for approximately $9.8 million, excluding closing costs.
This community is adjacent to another community that SNH owns which
is managed by Five Star. This community and the community already
owned are treated as one property, and are being operated as a
single integrated community under the same management
agreement.
In July 2015, SNH entered into an agreement to acquire one
senior living community with 84 private pay assisted living units
located in Georgia for approximately $18.3 million, excluding
closing costs. SNH intends to lease this community to a third party
senior living operator. This acquisition is expected to close in
2015.
In April 2015, SNH sold one MOB (four buildings) with an
aggregate 323,541 square feet located in New Mexico for $1.5
million, excluding closing costs. SNH did not recognize a gain or
loss on this sale. In July 2015, SNH sold one senior living
community with 12 living units located in Iowa for $155,000,
excluding closing costs. In August 2015, SNH sold one senior living
community with 63 living units located in Wisconsin for $850,000,
excluding closing costs. Any adjustments to net book value related
to these sales will be recognized in the third quarter of 2015 when
all of the costs of these sales are known.
As previously announced, on June 5, 2015, SNH acquired 5.3
million shares of Reit Management & Research Inc., or RMR Inc.,
for $60.7 million, excluding transaction costs. As payment for the
shares, SNH issued 2.3 million of its common shares valued at the
volume weighted average trading prices during the 20 days prior to
the acquisition and paid the remainder of the purchase price in
cash. Through SNH’s acquisition of the RMR Inc. shares, SNH
indirectly acquired an economic ownership of 17.0% of Reit
Management & Research LLC, or RMR LLC, SNH’s manager. SNH
currently expects to distribute half of its RMR Inc. shares to its
shareholders by year end 2015, but SNH will not distribute its RMR
Inc. shares until a registration statement is declared effective by
the Securities and Exchange Commission, or SEC. In connection with
entering into a transaction agreement with RMR Inc., SNH and RMR
LLC entered into amended and restated business management and
property management agreements, which, among other things, extend
the terms of these agreements for 20 years.
Recent Financing Activities:
During the second quarter of 2015, SNH repaid mortgage notes
encumbering seven properties with an aggregate principal balance of
$30.6 million and a weighted average annual interest rate of
5.7%.
Conference Call:
On Thursday, August 6, 2015, 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, 2015. The conference call telephone number is (877)
329-4297. Participants calling from outside the United States and
Canada should dial (412) 317-5435. 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 on Thursday, August 13, 2015. To hear the replay, dial (412)
317-0088. The replay pass code is 10068793.
A live audio webcast of the conference call will also be
available in a listen-only mode on the company’s website, which is
located at www.snhreit.com. Participants wanting to access the
webcast should visit the company’s website about five minutes
before the call. The archived webcast will be available for replay
on the company’s website for about one week after the call.
The transcription, recording and retransmission in any way of
SNH’s second quarter 2015 conference call are strictly prohibited
without the prior written consent of SNH.
Supplemental Data:
A copy of SNH’s Second Quarter 2015 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 428
properties (452 buildings) located in 43 states and Washington,
D.C. as of June 30, 2015. 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.
(1) Most recent reported data is based upon the operating
results provided by SNH’s tenants for the 12 months ended March 31,
2015 and 2014 or the most recent prior period for which tenant
operating results are available.
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
EXPECTS TO COMPLETE THE CLOSING OF ONE SENIOR LIVING COMMUNITY
BEFORE YEAR END 2015. THE ACQUISITION OF THIS REMAINING SENIOR
LIVING COMMUNITY IS SUBJECT TO CLOSING CONDITIONS. THESE CONDITIONS
MAY NOT BE SATISFIED AND THE ACQUISITION MAY BE DELAYED FURTHER OR
THE TERMS MAY CHANGE,
- THIS PRESS RELEASE STATES THAT SNH HAS
AGREED TO ACQUIRE ONE SENIOR LIVING COMMUNITY FOR APPROXIMATELY
$18.3 MILLION AND THAT THE CLOSING IS EXPECTED TO OCCUR IN 2015.
THIS TRANSACTION IS SUBJECT TO CLOSING CONDITIONS. THESE CONDITIONS
MAY NOT BE SATISFIED AND THE ACQUISITION MAY NOT OCCUR, MAY BE
DELAYED OR THE PRICE AND TERMS MAY CHANGE,
- THIS PRESS RELEASE STATES THE PURCHASE
PRICE SNH PAID FOR THE RMR INC. SHARES AND SNH’S ECONOMIC OWNERSHIP
INTEREST IN RMR LLC. AN IMPLICATION OF THESE STATEMENTS MAY BE THAT
THE RMR INC. SHARES TO BE DISTRIBUTED TO SNH’S SHAREHOLDERS WILL
HAVE A MARKET VALUE AT LEAST EQUAL TO THE VALUE SNH PAID FOR THE
RMR INC. SHARES. IN FACT, THE VALUE OF THE RMR INC. SHARES MAY BE
DIFFERENT FROM THE PRICE SNH PAID FOR THE RMR INC. SHARES AND THE
MARKET VALUE OF THE RMR INC. SHARES WILL DEPEND UPON VARIOUS
FACTORS, INCLUDING SOME THAT ARE BEYOND SNH’S CONTROL, SUCH AS
MARKET CONDITIONS GENERALLY AT THE TIME THE RMR INC. SHARES ARE
AVAILABLE FOR TRADING. THERE CAN BE NO ASSURANCE PROVIDED REGARDING
THE PRICE AT WHICH THE RMR INC. SHARES WILL TRADE IF AND WHEN THEY
ARE DISTRIBUTED AND LISTED ON A NATIONAL STOCK EXCHANGE.
- THIS PRESS RELEASE STATES THAT SNH
CURRENTLY EXPECTS TO DISTRIBUTE HALF OF THE RMR INC. SHARES SNH
ACQUIRED TO SNH’S SHAREHOLDERS AND THAT SNH CURRENTLY EXPECTS THE
DISTRIBUTION OF RMR INC. SHARES WILL OCCUR BY YEAR END 2015. THE
PROCESS OF PREPARING A REGISTRATION STATEMENT FOR THE DISTRIBUTION
OF THE RMR INC. SHARES REQUIRES EXTENSIVE LEGAL AND ACCOUNTING
SERVICES. AFTER A REGISTRATION STATEMENT IS FILED, IT WILL BE
SUBJECT TO REVIEW BY SEC STAFF, WHICH MAY ALSO TAKE CONSIDERABLE
TIME. SNH CAN PROVIDE NO ASSURANCE WHEN OR IF THE REGISTRATION
STATEMENT WILL BE DECLARED EFFECTIVE BY THE SEC, THAT THE RMR INC.
SHARES WILL BE APPROVED FOR LISTING ON A NATIONAL STOCK EXCHANGE OR
IF THE DISTRIBUTION OF THE RMR INC. SHARES WILL OCCUR BY YEAR END
2015, OR EVER.
- THIS PRESS RELEASE STATES THAT THE
BUSINESS MANAGEMENT AND PROPERTY MANAGEMENT AGREEMENTS BETWEEN SNH
AND RMR LLC HAVE BEEN AMENDED AND EXTENDED FOR 20 YEAR TERMS. THE
AMENDED MANAGEMENT AGREEMENTS INCLUDE TERMS WHICH PERMIT EARLY
TERMINATION AND EXTENSIONS IN CERTAIN CIRCUMSTANCES. ACCORDINGLY,
THERE CAN BE NO ASSURANCE THAT THESE AGREEMENTS WILL REMAIN IN
EFFECT FOR 20 YEARS OR FOR SHORTER OR LONGER TERMS.
THE INFORMATION CONTAINED IN SNH’S FILINGS WITH THE 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 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 Ended Six Months Ended June
30, June 30, 2015 2014
2015 2014 Revenues: Rental income $
155,546 $ 127,669 $ 301,329 $ 239,724 Residents fees and services
91,856 79,039 174,649
158,481 Total revenues 247,402 206,708 475,978
398,205 Expenses: Property operating expenses 93,592 79,786
179,386 157,590 Depreciation 62,511 46,703 116,218 85,058 General
and administrative 11,674 9,577 22,248 17,866 Acquisition related
costs 4,617 2,512 5,775
2,635 Total expenses 172,394
138,578 323,627 263,149
Operating income 75,088 68,130 152,351 135,056 Interest and
other income 142 154 217 258 Interest expense (37,907 ) (34,112 )
(73,848 ) (63,012 ) Loss on early extinguishment of debt (39
) — (1,448 ) — Income from
continuing operations before income tax expense and equity in
earnings of an investee 37,204 34,172 77,272 72,302 Income tax
expense (129 ) (155 ) (239 ) (346 ) Equity in earnings of an
investee 23 118 95
21 Income from continuing operations 37,098 34,135 77,128
71,977 Discontinued operations: (Loss) income from discontinued
operations (109 ) 741 (350 ) 2,041 Impairment of assets from
discontinued operations (602 ) 387 (602
) (334 ) Income before gain on sale of properties 36,387
35,263 76,176 73,684 Gain on sale of properties —
2,396 — 2,552 Net income
$ 36,387 $ 37,659 $ 76,176 $ 76,236
Weighted average shares outstanding (basic) 235,549
199,830 228,501 193,962
Weighted average shares outstanding (diluted) 235,592
199,867 228,534 193,990
Basic and diluted per common share amounts: Income
from continuing operations per share 0.16 0.18 0.34 0.38 Income
from discontinued operations per share (0.01 ) 0.01
(0.01 ) 0.01 Basic and diluted net
income per share $ 0.15 $ 0.19 $ 0.33 $ 0.39
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 Six Months Ended June
30, June 30, 2015 2014
2015 2014 Net income $ 36,387 $
37,659 $ 76,176 $ 76,236 Depreciation expense from continuing
operations 62,511 46,703 116,218 85,058 Gain on sale of properties
— (2,396 ) — (2,552 ) Impairment of assets from discontinued
operations 602 (387 ) 602 334
FFO 99,500 81,579 192,996 159,076 Acquisition related costs 4,617
2,512 5,775 2,635 Loss on early extinguishment of debt 39 — 1,448 —
Percentage rent adjustment(2) 2,600 2,500
5,100 5,000 Normalized FFO $ 106,756 $ 86,591
$ 205,319 $ 166,711 Weighted average shares
outstanding (basic) 235,549 199,830
228,501 193,962 Weighted average shares outstanding
(diluted) 235,592 199,867 228,534
193,990 FFO per share $ 0.42 $ 0.41 $
0.84 $ 0.82 Normalized FFO per share $ 0.45 $ 0.43 $
0.90 $ 0.86 Net income per share $ 0.15 $ 0.19 $ 0.33
$ 0.39 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
includes estimated percentage rent in the period to which SNH
estimates that it relates rather than when it is recognized as
income in accordance with GAAP, SNH includes estimated business
management incentive fees, if any, only in the fourth quarter
versus the quarter when they are recognized as expense in
accordance with GAAP and SNH excludes acquisition related costs,
gains and losses on early extinguishment of debt, gains and losses
on lease terminations and losses on impairment of intangible
assets, if any. SNH considers 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. 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 its
shareholders. Other factors include, but are not limited to,
requirements to maintain SNH’s 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 Condensed Consolidated Statements of
Comprehensive Income and Condensed Consolidated Statements of Cash
Flows. Other REITs and real estate companies may calculate FFO and
Normalized FFO differently than SNH does.
(2) 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 6/30/2015
6/30/2014
Calculation of
NOI and Cash Basis NOI (1):
Revenues: Rental income $ 155,546 $ 127,669 Residents fees and
services 91,856 79,039 Total revenues 247,402 206,708 Property
operating expenses 93,592 79,786 Property net operating income
(NOI): 153,810 126,922 Non cash straight line rent adjustments
(5,190) (2,351) Lease value amortization (1,179) (569) Lease
termination fees (163) — Cash Basis NOI $ 147,278 $ 124,002
Reconciliation of
Cash Basis NOI to Net Income:
Cash Basis NOI $ 147,278 $ 124,002 Non cash straight line rent
adjustments 5,190 2,351 Lease value amortization 1,179 569 Lease
termination fees 163 — Property NOI 153,810 126,922 Depreciation
expense (62,511) (46,703) General and administrative expense
(11,674) (9,577) Acquisition related costs (4,617) (2,512)
Operating income 75,008 68,130 Interest and other income 142
154 Interest expense (37,907) (34,112) Loss on early extinguishment
of debt (39) — Income before income tax expense and equity in
earnings of an investee 37,204 34,172 Income tax expense (129)
(155) Equity in earnings of an investee 23 118 Income from
continuing operations 37,098 34,135 Discontinued operations (Loss)
income from discontinued operations (109) 741 Impairment of assets
from discontinued
operations
(602) 387 Income before gain on sale of properties 36,387 35,263
Gain on sale of properties — 2,396 Net income $ 36,387 $ 37,659
(1) The calculations of NOI and Cash Basis NOI exclude certain
components of net income in order to provide results that are more
closely related to SNH’s property level results of operations. SNH
calculates NOI and Cash Basis 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 SNH’s 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. 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 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 Condensed Consolidated
Statements of Comprehensive Income and Condensed 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
Calculation and Reconciliation of NOI, Cash Basis NOI, Same
Property NOI and Same Property Cash Basis NOI by Segment
(1)(amounts in thousands)(unaudited)
For the Three Months Ended June 30, 2015 For the
Three Months Ended June 30, 2014
Calculation of NOI and Cash Basis
NOI:
Triple NetLeased
SeniorLivingCommunities (2)
ManagedSenior
LivingCommunities (3)
MOBs (4) Non-Segment (5) Total
Triple Net Leased
SeniorLivingCommunities (2)
ManagedSenior
LivingCommunities (3)
MOBs (4) Non-Segment (5) Total
Rental income / residents fees and services $ 61,347 $ 91,856 $
89,591 $ 4,608 $ 247,402 $ 55,166 $ 79,039 $ 68,027 $ 4,476 $
206,708 Property operating expenses - (69,792
) (23,800 ) - (93,592 ) -
(60,624 ) (19,162 ) - (79,786 ) Property net
operating income (NOI) $ 61,347 $ 22,064 $ 65,791
$ 4,608 $ 153,810 $ 55,166 $ 18,415 $
48,865 $ 4,476 $ 126,922 NOI Growth 11.2 % 19.8 %
34.6 % 2.9 % 21.2 % -- -- -- -- -- Property NOI $ 61,347 $
22,064 $ 65,791 $ 4,608 $ 153,810 $ 55,166 $ 18,415 $ 48,865 $
4,476 $ 126,922 Less: Non cash straight line rent adjustments 1,251
- 3,803 137 5,191 120 - 2,094 137 2,351 Lease value amortization -
- 1,123 55 1,178 - - 514 55 569 Lease termination fees -
- 163 - 163
- - - - -
Cash Basis NOI $ 60,096 $ 22,064 $ 60,702
$ 4,416 $ 147,278 $ 55,046 $ 18,415 $
46,257 $ 4,284 $ 124,002 Cash Basis NOI Growth 9.2 %
19.8 % 31.2 % 3.1 % 18.8 % -- -- -- -- --
Reconciliation
of NOI to Same Property NOI: Property NOI $ 61,347 $ 22,064 $
65,791 $ 4,608 $ 153,810 $ 55,166 $ 18,415 $ 48,865 $ 4,476 $
126,922 Less: NOI not included in same property 5,645 3,400 30,634
- 39,679 424 - 12,878 - 13,302
Same property NOI (6) $ 55,702
$ 18,664 $ 35,157 $ 4,608 $ 114,131
$ 54,742 $ 18,415 $ 35,987 $ 4,476 $ 113,620
Same property NOI growth 1.8 % 1.4 % (2.3 %) 2.9 % 0.4 % --
-- -- -- --
Reconciliation of Same Property NOI to Same
Property Cash Basis NOI: Same property NOI $ 55,702 $ 18,664 $
35,157 $ 4,608 $ 114,131 $ 54,742 $ 18,415 $ 35,987 $ 4,476 $
113,620 Less: Non cash straight line rent adjustments 435 - 1,320
137 1,892 120 - 1,125 137 1,382 Lease value amortization - - (845 )
55 (790 ) - - (792 ) 55 (737 ) Lease termination fees -
- 163 - 163
- - - - -
Same property cash basis NOI (6) $ 55,267 $ 18,664
$ 34,519 $ 4,416 $ 112,866 $ 54,622 $
18,415 $ 35,654 $ 4,284 $ 112,975 Same
property cash basis NOI growth 1.2 % 1.4 % (3.2 %) 3.1 % (0.1 %) --
-- -- -- -- (1) For a calculation, reconciliation and
definition of NOI and Cash Basis NOI, please see pages 10 and 11.
Excludes properties classified in discontinued operations. (2)
Includes triple net senior living communities that provide short
term and long term residential care and dining services for
residents. (3) Includes managed senior living communities that
provide short term and long term residential care and dining
services for residents. (4) Includes properties where medical
related activities occur but where residential overnight stays and
dining services are not provided. (5) Includes the operating
results of certain properties that offer fitness, wellness and spa
services to members. (6) Consists of properties owned continuously
since April 1, 2014.
SENIOR HOUSING PROPERTIES TRUST
CONDENSED CONSOLIDATED BALANCE
SHEETS
(amounts in thousands)
(unaudited)
Balance Sheet:
June 30, December 31, 2015 2014
ASSETS
Real estate properties $ 7,392,221 $ 6,238,611 Less accumulated
depreciation (1,066,686 ) (983,850 ) 6,325,535
5,254,761 Cash and cash equivalents 52,231 27,594 Restricted cash
9,121 10,544 Deferred financing fees, net 27,691 30,549 Acquired
real estate leases and other intangible assets, net 650,020 472,788
Other assets 283,428 172,033 Total
assets $ 7,348,026 $ 5,968,269
LIABILITIES AND
SHAREHOLDERS’ EQUITY
Unsecured revolving credit facility $ 615,000 $ 80,000 Unsecured
term loan 350,000 350,000 Senior unsecured notes, net of discount
1,744,339 1,743,628 Secured debt and capital leases 730,213 627,076
Accrued interest 21,258 20,046 Assumed real estate lease
obligations, net 120,732 122,826 Other liabilities 200,263
72,286 Total liabilities 3,781,805 3,015,862
Total shareholders’ equity 3,566,221
2,952,407 Total liabilities and shareholders’ equity $
7,348,026 $ 5,968,269
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.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20150806005402/en/
Senior Housing Properties TrustKimberly Brown,
617-796-8237Director, Investor Relationswww.snhreit.com
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