Senior Housing Prop : Senior Housing Properties Trust Announces Results for the Periods Ended June 30, 2007
07/30/2007| 09:00am US/Eastern
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Senior Housing Properties Trust (NYSE: SNH) today announced its
financial results for the quarter and six months ended June 30, 2007, as
follows:
Results for the quarter ended June 30, 2007:
Net income for the quarter ended June 30, 2007, was $20.6million,
or $0.25 per share, compared to net income of $12.7 million, or $0.18
per share, for the quarter ended June 30, 2006. During the three months
ended June 30, 2006, we recognized (1) an impairment of assets charge of
$1.4 million, or $0.02 per share, related to three properties that we
later sold during the fourth quarter of 2006 and (2) a loss on early
extinguishment of debt of $1.3 million, or $0.02 per share, related to
the $28.2 million redemption of all of SNH's
10.125% junior subordinated debentures.
Funds from operations (FFO) for the quarter ended June 30, 2007, was
$34.0million, or $0.41 per share. This compares to FFO for the
quarter ended June 30, 2006 of $27.8 million, or $0.39 per share.
The weighted average number of common shares outstanding totaled 83.6
million and 71.8 million for the quarters ended June 30, 2007 and 2006,
respectively.
Results for the six months ended June 30, 2007:
Net income for the six months ended June 30, 2007, was $38.2 million, or
$0.46 per share, compared to net income of $23.1 million, or $0.32 per
share, for the six months ended June 30, 2006. Net income for the six
months ended June 30, 2007, includes a loss on early extinguishment of
debt of $2.0 million, or $0.02 per share, related to the purchase and
retirement of $20.0 million of SNH's 8 5/8%
senior notes due 2012. Net income for the same period in 2006 includes
(1) an impairment of assets charge of $1.4 million, or $0.02 per share,
related to three properties that we later sold during the fourth quarter
of 2006, (2) a loss on early extinguishment of debt of $1.3 million, or
$0.02 per share, related to the $28.2 million redemption of all of SNH's
10.125% junior subordinated debentures and (3) a loss on early
extinguishment of debt of $5.2 million, or $0.07 per share, related to
the $52.5 million redemption of SNH's 7 7/8%
senior notes due 2015.
FFO for the six months ended June 30, 2007, was $65.0 million, or $0.79
per share. FFO includes a loss on early extinguishment of debt paid in
cash of $1.8 million, or $0.02 per share, related to the purchase and
retirement of the senior notes due 2012 described above. This compares
to FFO for the six months ended June 30, 2006 of $51.3 million, or $0.72
per share. FFO for the six months ended June 30, 2006, includes a $4.1
million, or $ 0.06 per share, loss for the cash premium paid for partial
redemption of the senior notes due 2015 described above.
The weighted average number of common shares outstanding totaled 82.2
million and 71.8 million for the six months ended June 30, 2007 and
2006, respectively.
A reconciliation of FFO to net income determined according to U.S.
generally accepted accounting principles, or GAAP, is set forth below.
Conference Call:
On Monday, July 30, 2007, at 1:00 p.m. EDT, David J. Hegarty, president
and chief operating officer, and Richard A. Doyle, treasurer and chief
financial officer, will host a conference call to discuss the results
for the second quarter ended June 30, 2007. The conference call
telephone number is 1-888-202-2422. Participants calling from outside
the United States and Canada should dial 1-913-981-5592. 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 midnight Sunday,
August 5th, 2007. To hear the replay, dial 1-719-457-0820. The replay
pass code is 6569134.
A live audio web cast of the conference call will also be available in
listen only mode on the SNH web site. Participants wanting to access the
webcast should visit the web site about five minutes before the call.
The archived webcast will be available for replay on the SNH web site
for about one week after the call.
Supplemental Data:
A copy of SNH's Second Quarter 2007
Supplemental Operating and Financial Data is available for download from
the SNH website, www.snhreit.com.
Senior Housing Properties Trust is a real estate investment trust, or
REIT, that owns 196 senior living properties located in 32 states. SNH
is headquartered in Newton, Massachusetts.
Senior Housing Properties Trust
Financial Information
(in thousands, except per share data)
Income Statement:
Quarter Ended
June 30,
Six Months Ended
June 30,
2007
2006
2007
2006
Revenues:
Rental income
$44,406
$40,921
$88,708
$81,744
Interest and other income
556
355
1,006
701
Total revenues
44,962
41,276
89,714
82,445
Expenses:
Interest
9,160
11,546
19,053
22,917
Depreciation
11,704
10,922
23,299
21,653
General and administrative
3,449
3,383
7,165
6,783
Impairment of assets(1)
-
1,420
-
1,420
Loss on early extinguishment of debt(2)
-
1,319
2,026
6,526
Total expenses
24,313
28,590
51,543
59,299
Net income
$20,649
$12,686
$38,171
$23,146
Weighted average shares outstanding
83,649
71,817
82,240
71,814
Per share data:
Net income
$0.25
$0.18
$0.46
$0.32
Balance Sheet:
At June 30,
2007
At December 31,
2006
Assets
Real estate properties
$
1,831,525
$
1,814,358
Less accumulated depreciation
299,806
276,507
1,531,719
1,537,851
Cash and cash equivalents
8,924
5,464
Restricted cash
2,478
2,435
Investments in trading securities
10,153
-
Deferred financing fees, net
6,949
8,173
Other assets
24,408
30,851
Total assets
$
1,584,631
$
1,584,774
Liabilities and Shareholders'
Equity
Unsecured revolving credit facility
$
-
$
112,000
Senior unsecured notes, net of discount
321,801
341,673
Secured debt and capital leases
90,559
91,412
Total debt
412,360
545,085
Other liabilities
18,894
20,223
Total liabilities
431,254
565,308
Shareholders' equity
1,153,377
1,019,466
Total liabilities and shareholders' equity
$
1,584,631
$
1,584,774
(1) During the three months ended June 30, 2006, we recognized an
impairment of assets charge of $1.4 million related to three properties
that were sold during the fourth quarter of 2006.
(2) In January 2007, we purchased and retired $20.0 million of our 8
5/8% senior notes due 2012 and paid a premium of $1.8 million and wrote
off $276,000 of deferred financing fees and unamortized discount related
to these senior notes. In June 2006, we redeemed all of our $28.2
million of 10.125% junior subordinated debentures; the loss on early
extinguishment of debt of $1.3 million is the write off of unamortized
deferred financing fees related to these debentures. In January 2006, we
redeemed $52.5 million of our 7 7/8% senior unsecured notes and paid a
$4.1 million redemption premium and wrote off $1.1 million of deferred
financing fees and unamortized discount related to these senior notes.
Senior Housing Properties Trust
Funds from Operations
(in thousands, except per share data)
Calculation of Funds from Operations (FFO) (1):
Quarter Ended June 30,
Six Months Ended June 30,
2007
2006
2007
2006
Net income
$20,649
$12,686
$38,171
$23,146
Add: Depreciation expense
11,704
10,922
23,299
21,653
Impairment of assets
-
1,420
-
1,420
Loss on early extinguishment of debt
-
1,319
2,026
6,526
Deferred percentage rent (2)
1,661
1,478
3,261
2,737
Less: Loss on early extinguishment of debt settled in cash (3)
-
-
(1,750)
(4,134)
FFO
$34,014
$27,825
$65,007
$51,348
Weighted average shares outstanding
83,649
71,817
82,240
71,814
FFO per share
$0.41
$0.39
$0.79
$0.72
Distributions declared
$0.34
$0.33
$0.68
$0.65
(1) We compute FFO as shown in the calculation above. This calculation
begins with income from continuing operations or, if that amount is the
same as net income, with net income. Our calculation of FFO differs from
the National Association of Real Estate Investment Trusts, or NAREIT,
definition of FFO because we include deferred percentage rent in FFO as
discussed in footnote (2) below and we exclude loss on early
extinguishment of debt not settled in cash from FFO. We consider FFO to
be an appropriate measure of performance for a real estate investment
trust, or REIT, along with net income and cash flow from operating,
investing and financing activities. We believe that FFO provides useful
information to investors because by excluding the effects of certain
historical costs, such as depreciation expense and gain or loss on sale
of properties, FFO can facilitate comparison of current operating
performance among REITs. FFO does not represent cash generated by
operating activities in accordance with U.S. generally accepted
accounting principles, or GAAP, and should not be considered an
alternative to net income or cash flow from operating activities as a
measure of financial performance or liquidity. FFO is one important
factor considered by our board of trustees in determining the amount of
distributions to shareholders. Other important factors include, but are
not limited to, requirements to maintain our status as a REIT,
limitations in our revolving credit facility and public debt covenants,
the availability of debt and equity capital to us and our expectation of
our future performance.
(2) Our percentage rents are generally calculated on an annual basis. We
recognize percentage rental income received during the first, second and
third quarters in the fourth quarter when all contingencies related to
percentage rents are satisfied. Although recognition of revenue is
deferred until the fourth quarter, our FFO calculation for the first
three quarters includes estimated amounts of deferred percentage rents
with respect to those periods. The fourth quarter calculation of FFO
excludes the amounts recognized during the first three quarters.
(3) FFO for the six months ended June 30, 2007, includes a $1.8 million
loss for the cash premium paid for our retirement of $20.0 million of
our 8 5/8% senior notes due 2012. FFO of the six months ended June 30,
2006, includes a $4.1 million loss for the cash premium paid for our
redemption of $52.5 million of our 7 7/8% senior notes due 2015.
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