Announces Exploration of Strategic
Alternatives
New Senior Investment Group Inc. (“New Senior” or the “Company”)
(NYSE:SNR) announced today its results for the quarter and full
year ended December 31, 2017 and that the Company’s Board of
Directors has been exploring strategic alternatives to maximize
shareholder value.
4Q 2017 FINANCIAL
HIGHLIGHTS
- Declared cash dividend of $0.26 per
common share
- Net income of $33.5 million, or $0.41
per basic and diluted share
- Total net operating income (“NOI”) of
$53.7 million, compared to $57.1 million for 4Q’16
- Normalized Funds from Operations
(“Normalized FFO”) of $22.9 million, or $0.28 per basic and diluted
share
- AFFO of $20.1 million, or $0.24 per
basic and diluted share
- Normalized Funds Available for
Distribution (“Normalized FAD”) of $18.5 million, or $0.23 per
basic share and $0.22 per diluted share
4Q 2017 AND RECENT BUSINESS
HIGHLIGHTS
- Total same store cash NOI increased
1.0% vs. 4Q’16
- Managed same store cash NOI decreased
1.5% vs. 4Q’16 and increased 2.4% vs. 3Q’17
- Triple net same store cash NOI
increased 4.4% vs. 4Q’16
- Completed the sale of 15 properties for
$296 million comprised of nine managed AL/MC properties for $109.5
million and six triple net lease properties for $186.0 million
FOURTH QUARTER
2017 RESULTS
Dollars in thousands, except per share data
For the Quarter Ended December 31, 2017
For the Quarter Ended December 31, 2016
Amount
Per BasicShare
Per DilutedShare
Amount
Per BasicShare
Per DilutedShare
GAAP Net Income (Loss) $33,521 $0.41 $0.41
$(2,802) $(0.03) $(0.03)
Non-GAAP(A) NOI $53,732 N/A
N/A $57,053 N/A N/A FFO 15,659 $0.19 $0.19 21,645 $0.26 $0.26
Normalized FFO 22,896 $0.28 $0.28 26,027 $0.32 $0.31 AFFO 20,070
$0.24 $0.24 22,463 $0.27 $0.27 Normalized FAD(B) 18,527 $0.23 $0.22
20,140 $0.25 $0.24 (A) See end of press release for reconciliation
of non-GAAP measures to net loss. (B) Normalized FAD, which does
not reflect debt principal payments and certain other expenses,
does not represent cash available for distribution to shareholders.
FULL YEAR 2017
RESULTS
Dollars in thousands, except per share
data
For the Year Ended December 31, 2017
For the Year Ended December 31, 2016
Amount
Per BasicShare
Per DilutedShare
Amount
Per BasicShare
Per DilutedShare
GAAP Net Income (Loss) $12,208 $0.15 $0.15
$(72,249) $(0.88) $(0.88)
Non-GAAP(A) NOI $219,085
N/A N/A $229,411 N/A N/A FFO 80,387 $0.98 $0.97 98,941 $1.20 $1.19
Normalized FFO 94,340 $1.15 $1.14 105,899 $1.29 $1.28 AFFO 85,159
$1.04 $1.03 94,400 $1.15 $1.14 Normalized FAD(B) 78,253 $0.95 $0.95
86,177 $1.05 $1.04 (A) See end of press release for reconciliation
of non-GAAP measures to net loss. (B) Normalized FAD, which does
not reflect debt principal payments and certain other expenses,
does not represent cash available for distribution to shareholders.
FOURTH QUARTER 2017 GAAP
RESULTS
New Senior recorded GAAP net income of $33.5 million, or $0.41
per basic and diluted share, for the fourth quarter of 2017,
compared to GAAP net loss of $2.8 million, or $(0.03) per basic and
diluted share, for the fourth quarter of 2016. The year over year
increase in the fourth quarter of 2017 net income was primarily
driven by a gain on sale of real estate of $49.2 million compared
to a gain on sale of real estate of $13.4 million in the fourth
quarter of 2016.
FOURTH QUARTER 2017 PORTFOLIO
PERFORMANCE
Total NOI decreased 5.8% to $53.7 million compared to $57.1
million for 4Q 2016. Total same store cash NOI increased 1.0% vs.
4Q 2016.
For the managed portfolio, same store average occupancy
decreased 150 basis points to 86.8% compared to 88.3% for 4Q 2016,
and same store RevPOR increased 1.6% to $3,100 compared to $3,050
for 4Q 2016. Year over year, same store cash NOI decreased 1.5% to
$24.9 million compared to $25.2 million for 4Q 2016. Quarter over
quarter, same store cash NOI increased 2.4% to $25.3 million
compared to $24.7 million for 3Q 2017.
For the triple net portfolio, same store cash NOI increased 4.4%
to $19.9 million compared to $19.1 million for 4Q 2016. Same store
triple net average occupancy decreased 230 basis points to 87.7%
compared to 90.0% for 4Q 2016. Same store EBITDARM coverage as of
December 31, 2017 was 1.17x, down from 1.21x as of December 31,
2016. Triple net average occupancy and EBITDARM coverage are
presented one quarter in arrears on a trailing twelve month
basis.
ASSET SALE UPDATE
During the fourth quarter, the Company completed the sale of
$296 million of assets comprised of the following:
- $109.5 million sale of nine managed
AL/MC properties, which closed in November 2017. In connection with
the sale, the Company repaid $78.7 million of debt and realized a
gain on sale of $6.9 million, net of selling costs.
- $186.0 million sale of six triple net
leased properties, comprised of four CCRC, one IL property and one
AL/MC property, as well as termination of the related lease with
LCS, which closed in December 2017. In connection with the sale,
the Company repaid $98.1 million of debt and realized a gain on
sale of $42.3 million, net of selling costs.
FOURTH QUARTER DIVIDEND
On February 22, 2018, the Company’s Board of Directors declared
a cash dividend of $0.26 per share for the quarter ended December
31, 2017. The dividend is payable on March 22, 2018 to shareholders
of record on March 8, 2018.
EXPLORATION OF STRATEGIC
ALTERNATIVES
The Company also announced that the Company’s Board of
Directors, together with its management team and legal and
financial advisors, has been conducting a process to explore and
evaluate a full range of strategic alternatives to maximize
shareholder value.
There can be no assurance that this process will result in a
transaction or, if a transaction is undertaken, its terms or
timing. The Company does not intend to make any further public
comment regarding the review until it has been completed. The
Company retained J.P. Morgan Securities LLC as its financial
advisor and Skadden, Arps, Slate, Meagher & Flom LLP as its
legal advisor to assist in this ongoing review.
ADDITIONAL INFORMATION
For additional information that management believes to be useful
for investors, please refer to the presentation posted in the
Investor Relations section of the Company’s website,
www.newseniorinv.com.
EARNINGS CONFERENCE CALL
Management will host a conference call on February 23, 2018 at
9:00 A.M. Eastern Time. The conference call may be accessed by
dialing (877) 694-6694 (from within the U.S.) or (970) 315-0985
(from outside of the U.S.) ten minutes prior to the scheduled start
of the call; please reference “New Senior Fourth Quarter and Full
Year 2017 Earnings Call.” A simultaneous webcast of the conference
call will be available to the public on a listen-only basis at
www.newseniorinv.com. Please allow extra time prior to the call to
visit the website and download any necessary software required to
listen to the internet broadcast.
A telephonic replay of the conference call will also be
available approximately two hours following the call’s completion
through 11:59 P.M. Eastern Time on March 26, 2018 by dialing (855)
859-2056 (from within the U.S.) or (404) 537-3406 (from outside the
U.S.); please reference access code “4744689.”
ABOUT NEW SENIOR
New Senior Investment Group (NYSE: SNR) is a publicly-traded
real estate investment trust with a diversified portfolio of senior
housing properties located across the United States. As of December
31, 2017, New Senior is one of the largest owners of senior housing
properties, with 133 properties across 37 states. New Senior is
managed by an affiliate of Fortress Investment Group LLC, a global
investment management firm. More information about New Senior can
be found at www.newseniorinv.com.
CAUTIONARY NOTE REGARDING
FORWARD-LOOKING STATEMENTS
Certain items in this press release may constitute
“forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995, including without
limitation statements regarding the Company’s exploration of
strategic alternatives. These statements are not historical facts.
They represent management’s current expectations regarding future
events and are subject to a number of risks and uncertainties, many
of which are beyond our control, that could cause actual results to
differ materially from those described in the forward-looking
statements. These risks and uncertainties include, but are not
limited to, risks and uncertainties relating to contemplated asset
sales and the Company’s review of strategic alternatives and
announcement thereof. Accordingly, you should not place undue
reliance on any forward-looking statements contained herein. For a
discussion of these and other risks and important factors that
could affect such forward-looking statements, see the sections
entitled “Risk Factors” and “Management’s Discussion and Analysis
of Financial Condition and Results of Operations” in the Company’s
annual and quarterly reports filed with the Securities and Exchange
Commission, which are available on the Company’s website
(www.newseniorinv.com). New risks and uncertainties emerge from
time to time, and it is not possible for New Senior to predict or
assess the impact of every factor that may cause its actual results
to differ from those contained in any forward-looking statements.
Forward-looking statements contained herein speak only as of the
date of this press release, and New Senior expressly disclaims any
obligation to release publicly any updates or revisions to any
forward-looking statements contained herein to reflect any change
in New Senior's expectations with regard thereto or change in
events, conditions or circumstances on which any statement is
based.
Consolidated Balance Sheets (dollars in thousands,
except share data) December 31, Assets
2017 2016 Real estate investments: Land $ 182,238 $
220,317 Buildings, improvements and other 2,329,524 2,552,862
Accumulated depreciation (275,794) (218,968) Net real estate
property
2,235,968 2,554,211 Acquired lease and other
intangible assets 264,438 319,929 Accumulated amortization
(249,198) (255,452) Net real estate intangibles
15,240
64,477 Net real estate investments 2,251,208 2,618,688
Cash and cash equivalents 137,327 58,048 Straight-line rent
receivables 82,445 73,758 Receivables and other assets, net 37,047
71,234
Total Assets $ 2,508,027 $ 2,821,728
Liabilities and Equity Liabilities Mortgage
notes payable, net $ 1,907,928 $ 2,130,387 Due to affiliates 9,550
11,623 Accrued expenses and other liabilities 84,664 100,823
Total Liabilities $ 2,002,142 $ 2,242,833
Commitments and contingencies Equity
Preferred Stock $0.01 par value,
100,000,000 sharesauthorized and none issued or outstanding as of
bothDecember 31, 2017 and 2016
$ - $ -
Common stock $0.01 par value,
2,000,000,000 sharesauthorized, 82,148,869 and 82,127,247 shares
issued andoutstanding as of December 31, 2017 and
2016,respectively
821 821 Additional paid-in capital 898,132 897,918 Accumulated
deficit (393,068) (319,844)
Total Equity $ 505,885
$ 578,895 Total Liabilities and Equity
$ 2,508,027 $ 2,821,728
Consolidated Statement of Operations (dollars in
thousands, except share data)
Three Months Ended December 31,
Year Ended December 31, 2017 2016 2017
2016 Revenues
(unaudited)
Resident fees and services $ 79,266 $ 89,252 $ 336,739 $ 359,472
Rental revenue 27,650 28,243 112,391 112,966 Total revenues 106,916
117,495 449,130 472,438
Expenses Property operating
expense 53,184 60,442 230,045 243,027 Depreciation and amortization
31,355 37,803 139,942 184,546 Interest expense 23,128 23,122 93,597
91,780 Acquisition, transaction, and integration expense 984 2,172
2,453 3,942 Management fees and incentive compensation to affiliate
3,823 5,946 18,225 18,143 General and administrative expense 3,612
3,594 15,307 15,194 Loss on extinguishment of debt 3,230 245 3,902
245 Other expense (income) 57 (79) 1,702 727 Total expenses $
119,373 $ 133,245 $ 505,173 $ 557,604 Gain on sale of real estate
49,217 13,356 71,763 13,356
Income (Loss) Before Income
Taxes 36,760 (2,394) 15,720 (71,810) Income tax expense 3,239
408 3,512 439
Net Income (Loss) $ 33,521 $
(2,802) $ 12,208 $ (72,249) Net Income
(Loss) Per Share of Common Stock Basic (A) $ 0.41 $ (0.03) $
0.15 $ (0.88) Diluted (A) $ 0.41 $ (0.03) $ 0.15 $ (0.88)
Weighted Average Number of
Sharesof Common Stock Outstanding
Basic 82,148,869 82,127,247 82,145,295 82,357,349 Diluted (B)
82,632,232 82,127,247 82,741,322 82,357,349
Dividends
Declared Per Share of Common Stock 0.26 0.26 $ 1.04 $ 1.04 (A)
Basic earnings per share (“EPS”) is
calculated by dividing net income by the weighted average number of
shares of common stock outstanding. Diluted EPS is computed by
dividing net income by the weighted average number of shares of
common stock outstanding plus the additional dilutive effect, if
any, of common stock equivalents during each period.
(B)
All outstanding options were excluded from
the diluted share calculation for the three months and year ended
December 31, 2016 as their effect would have been
anti-dilutive.
Consolidated Statement of Cash
Flows
(dollars in thousands) Three
Months Ended December 31, Year Ended December 31,
2017 2016 2017 2016 Cash Flows From
Operating Activities
(unaudited)
Net income (loss) $ 33,521 $ (2,802) $ 12,208 $ (72,249)
Adjustments to reconcile net income (loss) to net cash provided by
operating activities: Depreciation of tangible assets and
amortization of intangible assets 31,380 37,837 140,078 184,689
Amortization of deferred financing costs 2,093 2,366 9,090 9,582
Amortization of deferred revenue, net (604) (92) (385) 1,903
Amortization of (premium) discount on mortgage notes payable (56)
(156) (512) (603) Non-cash straight-line rent (4,338) (5,379)
(17,865) (21,842) Gain on sale of real estate (49,217) (13,356)
(71,763) (13,356) Loss on extinguishment of debt 3,230 245 3,902
245 Equity-based compensation - - 75 144 Provision for bad debt 509
598 2,228 2,150 Remeasurement of deferred tax assets 2,966 - 2,966
- Other non-cash expense (53) 37 1,168 702 Changes in: Receivables
and other assets, net 7,258 5,578 (658) (3,069) Due to affiliates
(6,018) 837 (2,073) 1,979 Accrued expenses and other liabilities
(24,252) (6,100) (16,948) 9,024
Net Cash Provided by (Used In)
Operating Activities $ (3,581) $ 19,613 $
61,511 $ 99,299 Cash Flows From Investing
Activities Proceeds from the sale of real estate, net $ 292,270
$ 22,711 $ 339,624 $ 22,711 Capital expenditures, net of insurance
proceeds (5,253) (5,398) (19,729) (21,151) Reimbursements (escrows)
for capital expenditures, net 2,275 (1,157) 6,871 (2,423) Deposits
refunded (paid) for real estate investments - - - 584
Net Cash
Provided by (Used In) Investing Activities $ 289,292
$ 16,156 $ 326,766 $ (279) Cash
Flows From Financing Activities Principal payments of mortgage
notes payable $ (7,642) (4,446) $ (26,946) $ (16,240) Repayments of
mortgage notes payable (176,762) (13,725) (204,730) (13,725)
Payment of exit fee on extinguishment of debt (2,953) (189) (3,264)
(189) Payment of common stock dividend (21,359) (21,353) (85,432)
(85,412) Cash returned from (escrowed with) lender 11,374 (11,374)
11,374 (11,374) Repurchase of common stock - (29) - (30,913)
Payment of deferred financing costs 579 - - -
Net Cash Used In
Financing Activities $ (196,763) $ (51,116) $
(308,998) $ (157,853) Net increase (decrease) in cash
and cash equivalents 88,948 (15,347) 79,279 (58,833) Cash and cash
equivalents, beginning of year 48,379 73,395 58,048 116,881
Cash
and Cash Equivalents, End of Year $ 137,327 $
58,048 $ 137,327 $ 58,048 Supplemental
Disclosure of Cash Flow Information Cash paid during the year
for interest expense $ 21,513 $ 20,625 $ 85,373 $ 82,557 Cash paid
during the year for income taxes - - 274 266
Supplemental
Schedule of Non-Cash Investing and Financing Activities
Issuance of common stock and exercise of options $ - $ - $ 214 $
139
Reconciliation of NOI to Net Income
(dollars in thousands) 2016 2017
NOI $ 229,411 $ 219,085 Depreciation
and amortization (184,546) (139,942) Interest expense (91,780)
(93,597) Acquisition, transaction and integration expense (3,942)
(2,453) Management fees and incentive compensation to affiliate
(18,143) (18,225) General and administrative expense (15,194)
(15,307) Loss on extinguishment of debt (245) (3,902) Other expense
(727) (1,702) Gain on sale of real estate 13,356 71,763 Income tax
expense (439) (3,512)
Net Income (Loss) $ (72,249)
$ 12,208 Reconciliation of Net Income to FFO,
Normalized FFO, AFFO and Normalized FAD (dollars and shares
in thousands, except per share data) (unaudited)
For the Quarter Ended For the Year Ended December
31, 2017 December 31, 2017 Net Income $
33,521 $ 12,208 Adjustments: Gain on sale of real estate
(49,217) (71,763) Depreciation and amortization 31,355 139,942
FFO $ 15,659 $ 80,387 FFO per diluted
share $ 0.19 $ 0.97 Acquisition, transaction and
integration expense 984 2,453 Loss on extinguishment of debt 3,230
3,902 Incentive compensation on sale of real estate(1) - 2,930
Remeasurement of deferred tax assets(2) 2,966 2,966 Other expense
57 1,702
Normalized FFO $ 22,896 $ 94,340
Normalized FFO per diluted share $ 0.28 $ 1.14
Straight-line rent (4,338) (17,865) Amortization of deferred
financing costs 2,093 9,090 Amortization of deferred community fees
and other(3) (581) (406)
AFFO $ 20,070 $
85,159 AFFO per diluted share $ 0.24 $
1.03 Routine capital expenditures (1,543) (6,906)
Normalized
FAD $ 18,527 $ 78,253 Normalized FAD per
diluted share $ 0.22 $ 0.95 Weighted
average diluted shares outstanding 82,632 82,741
(1) Reflects incentive compensation
directly related to the gain on sale of real estate, which may
represent a portion of total incentive compensation earned by the
Manager in a given quarter, as reported in "Management fees and
incentive compensation to affiliate" in the Consolidated Statement
of Operations. The calculation of gain on sale for purposes of the
incentive compensation calculation differs significantly from gain
on sale calculated in accordance with GAAP.
(2) Reflects the remeasurement of our
deferred tax assets due to the reduction in the U.S. corporate
income tax rate and is included in “Income tax expense (benefit)”
in the Consolidated Statements of Operations.
(3) Includes amortization of above / below
market lease intangibles, amortization of premium on mortgage notes
payable and amortization of deferred community fees and other,
which includes the net change in deferred community fees and other
rent discounts or incentives.
Reconciliation of Year-over-Year Cash
NOI (unaudited)
(dollars in thousands)
4Q 2016
4Q 2017
Same
StoreNNNProperties
Non-SameStore
NNNProperties
Same
StoreManagedProperties
Non-SameStoreManagedProperties
Total
Same
StoreNNNProperties
Non-SameStore
NNNProperties
Same
StoreManagedProperties
Non-SameStoreManagedProperties
Total Cash NOI $19,080 $3,826 $25,249 $3,125 $51,280 $19,925
$3,414 $24,869 $661 $48,869 Straight-line rent 4,817 562 - - 5,379
3,975 363 - - 4,338 Amortization of deferred community fees and
other(1) (25) (17) 251 185 394 (25) (2) 175 377 525
NOI
$23,872 $4,371 $25,500 $3,310
$57,053 $23,875 $3,775 $25,044
$1,038 $53,732 Depreciation and amortization
(37,803) (31,355) Interest expense (23,122) (23,128) Acquisition,
transaction and integration expense (2,172) (984) Management fees
and incentive compensation to affiliate (5,946) (3,823) General and
administrative expense (3,594) (3,612) Loss on extinguishment of
debt (245) (3,230) Other income (expense) 79 (57) Gain on sale of
real estate 13,356 49,217 Income tax expense (408) (3,239)
Net
Income (Loss) ($2,802) $33,521 (1) Includes
amortization of above / below market lease intangibles and
amortization of deferred community fees and other, which includes
the net change in deferred community fees and other rent discounts
or incentives.
Reconciliation of Quarter-over-Quarter
Cash NOI (unaudited) (dollars in thousands)
3Q 2017 4Q 2017
Same
StoreNNNProperties
Non-SameStore
NNNProperties
SameStoreManagedProperties
Non-SameStoreManagedProperties
Total
Same
StoreNNNProperties
Non-SameStore
NNNProperties
Same
StoreManagedProperties
Non-SameStoreManagedProperties
Total Cash NOI $19,925 $3,969 $24,701 $1,503 $50,098 $19,925
$3,414 $25,287 $243 $48,869 Straight-line rent 3,975 419 - - 4,394
3,975 363 - - 4,338 Amortization of deferred community fees and
other(1) (25) (16) (132) 27 (146) (25) (2) 153 399 525
NOI $23,875 $4,372 $24,569
$1,530 $54,346 $23,875 $3,775
$25,440 $642 $53,732 Depreciation and
amortization (35,126) (31,355) Interest expense (23,898) (23,128)
Acquisition, transaction and integration expense (675) (984)
Management fees and incentive compensation to affiliate (3,824)
(3,823) General and administrative expense (3,958) (3,612) Loss on
extinguishment of debt - (3,230) Other expense (1,484) (57) Gain on
sale of real estate - 49,217 Income tax benefit (expense) 80
(3,239)
Net Income (Loss) ($14,539) $33,521
(1) Includes amortization of above / below market lease intangibles
and amortization of deferred community fees and other, which
includes the net change in deferred community fees and other rent
discounts or incentives.
NON-GAAP FINANCIAL
MEASURES
The tables above set forth reconciliations of non-GAAP measures
to net income (loss), which is the most directly comparable GAAP
financial measure.
A non-GAAP financial measure is a measure of historical or
future financial performance, financial position or cash flows that
excludes or includes amounts that are not excluded from or included
in the most comparable GAAP measure. We consider certain non-GAAP
financial measures to be useful supplemental measures of our
operating performance. GAAP accounting for real estate assets
assumes that the value of real estate assets diminishes predictably
over time, even though real estate values historically have risen
or fallen with market conditions. As a result, many industry
investors look to non-GAAP financial measures for supplemental
information about real estate companies.
You should not consider non-GAAP measures as alternatives to
GAAP net income, which is an indicator of our financial
performance, or as alternatives to GAAP cash flow from operating
activities, which is a liquidity measure, nor are non-GAAP measures
necessarily indicative of our ability to satisfy our funding
requirements. In order to facilitate a clear understanding of our
consolidated historical operating results, you should examine our
non-GAAP measures in conjunction with GAAP net income as presented
in our Consolidated Financial Statements and other financial data
included elsewhere in this report. Moreover, the comparability of
non-GAAP financial measures across companies may be limited as a
result of differences in the manner in which real estate companies
calculate such measures, the capital structure of such companies or
other factors.
Below is a description of the non-GAAP financial measures
presented herein.
NOI and Cash NOI
The Company evaluates the performance of each of its two
business segments based on NOI. The Company defines NOI as total
revenues less property-level operating expenses, which include
property management fees and travel cost reimbursements. The sum of
the NOI for each segment is total NOI, which the Company uses to
evaluate the aggregate performance of its segments. The Company
defines cash NOI as NOI excluding the effects of straight-line
rent, amortization of above / below market lease intangibles and
amortization of deferred community fees and other, which includes
the net change in deferred community fees and other rent discounts
or incentives. We believe that NOI and cash NOI serve as useful
supplemental measures to net income because they allow investors,
analysts and management to measure unlevered property-level
operating results and to compare our operating results between
periods and to the operating results of other real estate companies
on a consistent basis.
Same store NOI and same store cash NOI include only properties
owned for the entirety of comparable periods. Properties acquired,
sold, transitioned to other operators or classified as held for
sale during the comparable periods are excluded from the same store
amounts.
FFO and Other Non-GAAP Measures
We use Funds From Operations ("FFO") and Normalized FFO as
supplemental measures of our operating performance. We use the
National Association of Real Estate Investment Trusts ("NAREIT")
definition of FFO. NAREIT defines FFO as GAAP net income excluding
gains (losses) from sales of depreciable real estate assets and
impairment charges of depreciable real estate, plus real estate
depreciation and amortization, and after adjustments for
unconsolidated entities and joint ventures to reflect FFO on the
same basis. FFO does not account for debt principal payments and is
not intended as a measure of a REIT’s ability to satisfy such
payments or any other cash requirements.
Normalized FFO, as defined below, measures the financial
performance of our portfolio of assets excluding items that,
although incidental to, are not reflective of the day-to-day
operating performance of our portfolio of assets. We believe that
Normalized FFO is useful because it facilitates the evaluation of
our portfolio’s operating performance (i) between periods on a
consistent basis and (ii) to the operating performance of other
real estate companies. However, comparability may be limited
because our calculation of Normalized FFO may differ significantly
from that of other companies, or because of features of our
business that are not present in other companies.
We define Normalized FFO as FFO excluding the following income
and expense items, as applicable: (a) acquisition, transaction and
integration related costs and expenses; (b) the write off of
unamortized discounts, premiums, deferred financing costs, or
additional costs, make whole payments and penalties or premiums
incurred as the result of early repayment of debt (collectively
“Gain (Loss) on extinguishment of debt”); (c) incentive
compensation recognized as a result of sales of property; (d) the
remeasurement of deferred tax assets and (e) other items that we
believe are not indicative of operating performance, generally
reported as “Other (income) expense” in the Consolidated Statements
of Operations.
Management also uses AFFO and Normalized FAD as supplemental
measures of the Company’s operating performance.
We define AFFO as Normalized FFO excluding the impact of the
following: (a) straight-line rents; (b) amortization of above /
below market lease intangibles; (c) amortization of deferred
financing costs; (d) amortization of premium on mortgage notes
payable and (e) amortization of deferred community fees and other,
which includes the net change in deferred community fees and other
rent discounts or incentives. We believe AFFO is useful because it
facilitates the evaluation of (i) the current economic return on
our portfolio of assets between periods on a consistent basis and
(ii) our portfolio versus those of other real estate companies that
report AFFO. However, comparability may be limited because our
calculation of AFFO may differ significantly from that of other
companies, or because of features of our business that are not
present in other companies.
We define Normalized FAD as AFFO less routine capital
expenditures, which we view as a cost associated with the current
economic return. Normalized FAD, which does not reflect debt
principal payments and certain other expenses, does not represent
cash available for distribution to shareholders.
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version on businesswire.com: http://www.businesswire.com/news/home/20180223005120/en/
New Senior Investment Group Inc.David Smith, 212-515-7783
New Senior Investment (NYSE:SNR)
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