-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, CMLxR3dEO6wmMUO4TI9slLfvS0Bc/LcnkbgW+mCFrD3SJYU9ZYUHjX84TV+tWYqD wlpwf29IeHpMFfhp5bEE7g== 0000908737-05-000313.txt : 20050503 0000908737-05-000313.hdr.sgml : 20050503 20050503122542 ACCESSION NUMBER: 0000908737-05-000313 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20050503 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20050503 DATE AS OF CHANGE: 20050503 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SENIOR HOUSING PROPERTIES TRUST CENTRAL INDEX KEY: 0001075415 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 043445278 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-15319 FILM NUMBER: 05793825 BUSINESS ADDRESS: STREET 1: 400 CENTRE STREET CITY: NEWTON STATE: MA ZIP: 02458 BUSINESS PHONE: 6173323990 8-K 1 snh8k_may03.htm 8K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): May 3, 2005

SENIOR HOUSING PROPERTIES TRUST

Maryland
(State of organization)

001-15319
(Commission file number)

04-3445278
(I.R.S. Employer Identification Number)

400 Centre Street, Newton, Massachusetts 02458

617-796-8350

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions.

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

On May 3, 2005, Senior Housing Properties Trust, or the Company, issued a press release setting forth the Company’s results of operations and financial condition for the quarter ended March 31, 2005 and also provided certain supplemental operating and financial data for the quarter ended March 31, 2005. Copies of the Company’s press release and supplemental operating and financial data are furnished as Exhibits 99.1 and 99.2 hereto, respectively.

Item 9.01. FINANCIAL STATEMENTS AND EXHIBITS.

The Company hereby furnishes the following exhibits:

99.1 Press release dated May 3, 2005.

99.2 First Quarter 2005 Supplemental Operating and Financial Data.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

SENIOR HOUSING PROPERTIES TRUST

By: /s/ John R. Hoadley
      Name: John R. Hoadley
      Title:   Treasurer and Chief Financial Officer

Date: May 3, 2005

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FOR IMMEDIATE RELEASE

Contact:
Timothy Bonang
Manager of Investor Relations
(617) 796-8149
www.snhreit.com

Senior Housing Properties Trust Announces Financial Results for the Quarter Ended March 31, 2005

Newton, MA (May 3, 2005): Senior Housing Properties Trust (NYSE: SNH) today announced its financial results for the quarter ended March 31, 2005.

Results for the quarter ended March 31, 2005:

Net income was $13.9 million, or $0.20 per share, for the quarter ended March 31, 2005, compared to $13.3 million, or $0.21 per share, for the same quarter last year.

Funds from operations (FFO) for the quarter ended March 31, 2005 were $25.4 million, or $0.37 per share. This compares to FFO for the quarter ended March 31, 2004 of $23.7 million, or $0.38 per share.

The weighted average number of common shares outstanding totaled 68,495,909 and 62,354,437 for the quarters ended March 31, 2005 and 2004, respectively.

Conference Call:

On Tuesday, May 3, 2005, at 1:00 p.m. EDT, David J. Hegarty, President, and John R. Hoadley, Chief Financial Officer, will host a conference call to discuss the results for the quarter ended March 31, 2005. The conference call telephone number is (800) 289-0493. Participants calling from outside the United States and Canada should dial (913) 981-5510. 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 May 12, 2005. To hear the replay, dial (719) 457-0820. The replay pass code is 8807413.

A live audio webcast of the conference call will also be available in listen-only mode on SNH’s 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 SNH’s web site for about one week after the call.

Senior Housing Properties Trust is a real estate investment trust, or REIT, that owns 181 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 March 31,
	2005	2004
Revenues:
Rental income(1)	$38,888	$34,829
Interest and other income(2)	339	1,714

Total revenues	39,227	36,543

Expenses:
Interest	11,223	10,370
Depreciation	10,746	9,585
General and administrative(1)	3,393	3,319

Total expenses	25,362	23,274

Net income	$13,865	$13,269

Weighted average shares outstanding	68,496	62,354

Net income per share	$0.20	$0.21

Balance Sheet:

	At March 31, 2005	At December 31, 2004

Assets
Real estate properties	$1,604,693	$1,600,952
Less accumulated depreciation	209,978	199,232

	1,394,715	1,401,720
Cash and cash equivalents	3,564	3,409
Restricted cash	6,527	6,176
Deferred financing fees, net	8,885	9,367
Other assets	23,157	27,058

Total assets	$1,436,848	$1,447,730

Liabilities and Shareholders' Equity
Unsecured revolving bank credit facility	$38,000	$37,000
Senior unsecured notes, net of discount	393,816	393,775
Junior subordinated debentures due 2041	28,241	28,241
Secured debt and capital leases	75,691	76,162

Total debt	535,748	535,178
Other liabilities	19,408	21,885

Total liabilities	555,156	557,063
Shareholders' equity	881,692	890,667

Total liabilities and shareholders' equity	$1,436,848	$1,447,730

(1)

Rental income for the quarter ended March 31, 2005, includes $2.2 million of income from two hospitals operated by HealthSouth Corporation, or HealthSouth. Effective January 2, 2002, we entered an amended lease with HealthSouth for two hospitals. In April 2003, we commenced a lawsuit against HealthSouth seeking, among other matters, to reform the amended lease based upon HealthSouth’s fraud by increasing the rent payable to us from the date of amendment forward. This litigation is pending at this time. On October 26, 2004, we terminated the amended lease for default because HealthSouth failed to deliver to us accurate and timely financial information as required by the amended lease. On November 2, 2004, HealthSouth brought a new lawsuit against us seeking to prevent our termination of the amended lease. On November 9, 2004, after a hearing, the court denied HealthSouth’s request for a preliminary injunction to prevent the lease termination. We are currently seeking an expedited judicial determination that the lease termination was valid and we are pursuing damages against HealthSouth in the lawsuit which we brought in 2003. We have also begun work to identify and qualify a new tenant operator for the hospitals. Our lease with HealthSouth requires that, after termination, HealthSouth manage the hospitals for our account for a management fee during the period of the transition to a new tenant and remit the net cash flow to us. During the pendency of these disputes, HealthSouth has continued to pay us at the disputed rent amount and we have applied the payments received against the net cash flow due, but we do not know how long HealthSouth may continue to make payments. Legal expenses related to this matter were approximately $400,000 and $50,000, respectively, in the quarters ended March 31, 2005 and 2004, and are included in general and administrative expenses.

(2)	Included in Other Income for the quarter ended March 31, 2004 is $1.25 million received in a settlement of litigation with Marriott International, Inc.

Senior Housing Properties Trust
Funds From Operations
(In thousands, except per share data)

Calculation of Funds From Operations (FFO) ⁽¹⁾:

	Quarter Ended March 31,
	2005	2004
Net Income	$13,865	$13,269
Add: Depreciation expense	10,746	9,585
Deferred percentage rent(2)	815	840

FFO	$25,426	$23,694


Weighted average shares outstanding	68,496	62,354


FFO per share	$0.37	$0.38

Distributions declared	$0.32	$0.31

(1)

We compute FFO as shown in the calculation above. Our calculation of FFO differs from the NAREIT definition of FFO because we include deferred percentage rent in FFO as discussed in Note 2 below. 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 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 bank credit facility and public debt covenants, the availability of debt and equity capital to us and our expectation of our future performance.

(2)

We recognize percentage rental income received during the first, second and third quarters in the fourth quarter. Although recognition of revenue is deferred until the fourth quarter for purposes of calculating net income, the calculation of FFO for the first three quarters includes estimated amounts with respect to those periods. The fourth quarter FFO calculation excludes the amounts recognized during the first three quarters.

WARNING REGARDING FORWARD LOOKING STATEMENTS

THE FOREGOING PRESS RELEASE CONTAINS FORWARD LOOKING STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 AND FEDERAL SECURITIES LAWS. THESE STATEMENTS REPRESENT OUR PRESENT BELIEFS AND EXPECTATIONS BUT THEY MAY NOT OCCUR FOR VARIOUS REASONS. FOR EXAMPLE, AS NOTED ABOVE, WE ARE CURRENTLY INVOLVED IN LITIGATION WITH HEALTHSOUTH. WE HAVE SENT HEALTHSOUTH A LEASE TERMINATION NOTICE AND HEALTHSOUTH HAS DISPUTED THE LEASE TERMINATION AND HAS CONTINUED TO PAY US AT A DISPUTED RENT AMOUNT. WE CANNOT PREDICT HOW OR WHEN OUR DISPUTES WITH HEALTHSOUTH WILL BE RESOLVED. DISCOVERY DURING LAWSUITS OR DECISIONS BY COURTS MAY CREATE RESULTS THAT ARE DIFFERENT FROM ANY IMPLICATIONS HEREIN. YOU SHOULD NOT PLACE UNDUE RELIANCE UPON FORWARD LOOKING STATEMENTS.

(End)

-5-

EX-99.2 4 ex99-2.txt [GRAPHIC OMITTED] SENIOR HOUSING PROPERTIES TRUST First Quarter 2005 Supplemental Operating and Financial Data All amounts in this report are unaudited, except for the December 31, 2004 Consolidated Balance Sheet. TABLE OF CONTENTS Page CORPORATE INFORMATION Company Profile 5 Investor Information 6 Research Coverage 7 FINANCIAL INFORMATION Key Financial Data 9 Consolidated Balance Sheet 10 Consolidated Statement of Income 11 Consolidated Statement of Cash Flows 12 Calculation of EBITDA 13 Calculation of Funds from Operations (FFO) 14 Debt Summary 15 Debt Maturity Schedule 16 Leverage Ratios, Coverage Ratios and Public Debt Covenants 17 Acquisitions Information 18 Financing Activities 19 PORTFOLIO INFORMATION Portfolio Summary by Facility Type and Tenant 21 Occupancy by Facility Type and Tenant 22 % Private Pay by Facility Type and Tenant 23 Rent Coverage by Tenant 24 Portfolio Lease Expiration Schedule 25 2 WARNING REGARDING FORWARD LOOKING STATEMENTS CERTAIN STATEMENTS CONTAINED IN THIS SUPPLEMENTAL OPERATING AND FINANCIAL DATA REPORT FOR THE QUARTER ENDED MARCH 31, 2005 ARE FORWARD LOOKING STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 AND FEDERAL SECURITIES LAWS. THESE FORWARD LOOKING STATEMENTS ARE BASED UPON OUR PRESENT BELIEFS AND EXPECTATIONS, BUT THEY ARE NOT GUARANTEED TO OCCUR AND MAY NOT OCCUR. ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE CONTAINED IN OR IMPLIED BY OUR FORWARD LOOKING STATEMENTS AS A RESULT OF VARIOUS FACTORS. SUCH FACTORS INCLUDE, WITHOUT LIMITATION, CHANGES IN MEDICARE OR MEDICAID RATES WHICH MAY AFFECT SOME OF OUR TENANTS' ABILITIES TO PAY RENTS DUE TO US. IN ADDITION, WE ARE CURRENTLY INVOLVED IN LITIGATION WITH HEALTHSOUTH. WE HAVE SENT HEALTHSOUTH A LEASE TERMINATION NOTICE AND HEALTHSOUTH HAS DISPUTED THE LEASE TERMINATION AND CONTINUED TO PAY US MONTHLY AMOUNTS EQUAL TO THE DISPUTED AMOUNTS DUE UNDER THE TERMINATED LEASE. WE CANNOT PREDICT HOW OR WHEN OUR DISPUTES WITH HEALTHSOUTH WILL BE RESOLVED. DISCOVERY DURING LAWSUITS OR DECISIONS BY COURTS MAY CREATE RESULTS THAT ARE DIFFERENT FROM ANY IMPLICATIONS HEREIN. YOU SHOULD NOT PLACE UNDUE RELIANCE UPON FORWARD LOOKING STATEMENTS. EXCEPT AS MAY BE REQUIRED BY APPLICABLE LAW, WE DO NOT INTEND TO IMPLY THAT WE WILL RELEASE PUBLICLY THE RESULT OF ANY REVISION TO THE FORWARD LOOKING STATEMENTS TO REFLECT THE FUTURE OCCURRENCE OF PRESENTLY UNANTICIPATED EVENTS. CORPORATE INFORMATION Senior Housing Properties Trust Supplemental Operating and Financial Data March 31, 2005 COMPANY PROFILE - -------------------------------------------------------------------------------- The Company: Senior Housing Properties Trust is a real estate investment trust, or REIT, which owns independent and assisted living properties, continuing care retirement communities and nursing homes located throughout the United States. All of our properties are triple net leased, meaning that each tenant pays us rent, but remains responsible to pay all operating costs, taxes, insurance and maintenance costs that arise from the use of our property. Our 181 properties are leased to eleven tenants under 12 leases. We are included in a number of stock indices, including the Russell 2000(R), the Morgan Stanley REIT Index and the S&P REIT Composite Index. Management: Senior Housing Properties Trust is managed by Reit Management & Research LLC (RMR). RMR was founded in 1986 to manage public investments in real estate. As of March 31, 2005, RMR oversaw one of the largest portfolios of public real estate in the United States, including more than 850 properties, with approximately 81 million square feet, located in 42 states, Washington, DC, Puerto Rico and Ontario, Canada. RMR has almost 400 employees in its headquarters and regional offices located throughout the country. In addition to managing SNH, RMR and its affiliates also manage Hospitality Properties Trust (HPT), a publicly traded REIT that owns hotels, HRPT Properties Trust (HRP), a publicly traded REIT that primarily owns and leases office buildings and industrial properties and three mutual funds which invest in unaffiliated real estate companies. The three REITs managed by RMR had combined total market capitalization of approximately $11 billion as of March 31, 2005. We believe that being managed by RMR is a competitive advantage for SNH because RMR provides SNH with a depth of management and experience which may be unequaled in the real estate industry. We also believe RMR is able to provide management services to SNH at costs that are lower than SNH would have to pay for similar quality services. Strategy: Our present business plan is to maintain an investment portfolio of independent living properties, assisted living properties and nursing homes and to acquire additional senior living properties primary for income and secondarily for appreciation potential. Our current growth strategy is generally focused on making portfolio acquisitions of geographically diverse, primarily independent and assisted senior living properties where the majority of the residents pay for occupancy and services from private resources rather than through government programs. We base our acquisition decisions on the historical and projected operating results of the target properties and the financial strength of the proposed tenants and their guarantors, among other considerations. Our present financial strategy is to maintain a conservative capital structure which limits the amount of debt that we issue. We do not have any investments in joint ventures or partnerships. Also, the majority of our debt is fixed rate, and we have no significant debt maturities until 2012. Stock Exchange Listing: Corporate Headquarters: New York Stock Exchange 400 Centre Street Newton, MA 02458 Trading Symbol: (t) (617) 796-8350 (f) (617) 796-8349 Common Shares -- SNH Senior Unsecured Debt Ratings: Moody's -- Ba2 Standard & Poor's -- BB+ Portfolio Data as of 3/31/05: Total properties 181 Total units / beds 22,546 Percent of rent from private pay properties 83.7% (1) Portfolio Concentration as of 3/31/05 (by facility type):

Operating Statistics for Q1 2005 (by tenant):

5 Senior Housing Properties Trust Supplemental Operating and Financial Data Contact Information March 31, 2005 INVESTOR INFORMATION - -------------------------------------------------------------------------------- Board of Trustees - -------------------------------------------------------------------------------- Barry M. Portnoy Gerard M. Martin Managing Trustee Managing Trustee Frank J. Bailey Frederick N. Zeytoonjian Independent Trustee Independent Trustee John L. Harrington Independent Trustee Senior Management - -------------------------------------------------------------------------------- David J. Hegarty John R. Hoadley President, Chief Operating Officer Treasurer and Chief Financial Officer and Secretary Contact Information - -------------------------------------------------------------------------------- Investor Relations Inquiries Senior Housing Properties Trust Financial inquiries should be directed to 400 Centre Street John R. Hoadley, Treasurer and Chief Newton, MA 02458 Financial Officer, at (617) 796-8350 or (t) (617) 796-8350 jhoadley@reitmr.com. (f) (617) 796-8349 (email) info@snhreit.com Investor and media inquiries should be (website) www.snhreit.com directed to Timothy A. Bonang, Manager of Investor Relations, at (617) 796-8149 or tbonang@reitmr.com. 6 Senior Housing Properties Trust Supplemental Operating and Financial Data March 31, 2005 RESEARCH COVERAGE - -------------------------------------------------------------------------------- Equity Research Coverage - -------------------------------------------------------------------------------- A.G. Edwards & Sons RBC Capital Markets John Sheehan Jay Leupp (314) 955-5834 (415) 633-8588 Legg Mason Stifel, Nicolaus Jerry Doctrow Phillip Martin (410) 454-5142 (312) 832-2756 Merrill Lynch UBS David Tsoupros Christopher Pike (212) 449-9697 (212) 713-2087 Raymond James Wachovia Securities Paul Puryear Stephen Swett (727) 573-3800 (212) 909-0954 Debt Research Coverage - -------------------------------------------------------------------------------- UBS Wachovia Securities Ray Garson Dan Sullivan (203) 719-6415 (704) 383-6441 Rating Agencies - -------------------------------------------------------------------------------- Moody's Investor Service Standard and Poor's Karen Nickerson George Skoufis (212) 553-4924 (212) 438-2608 SNH is followed by the analysts and its publicly held debt is rated by the rating agencies listed above. Please note that any opinions, estimates or forecasts regarding SNH's performance made by these analysts or agencies do not represent opinions, forecasts or predictions of SNH or its management. SNH does not by its reference above imply its endorsement of or concurrence with any information, conclusions or recommendations provided by any of these analysts or agencies. 7 FINANCIAL INFORMATION Senior Housing Properties Trust Supplemental Operating and Financial Data KEY FINANCIAL DATA - -------------------------------------------------------------------------------- (share amounts and dollars in thousands, except per share data)

9 Senior Housing Properties Trust Supplemental Operating and Financial Data March 31, 2005 CONSOLIDATED BALANCE SHEET - -------------------------------------------------------------------------------- (in thousands, except share data) As of As of March 31, December 31, 2005 2004 ----------- ----------- (audited) ASSETS Real estate properties, at cost: Land $ 178,357 $ 178,353 Buildings and improvements 1,426,336 1,422,599 ----------- ----------- 1,604,693 1,600,952 Less accumulated depreciation 209,978 199,232 ----------- ----------- 1,394,715 1,401,720 Cash and cash equivalents 3,564 3,409 Restricted cash 6,527 6,176 Deferred financing fees, net 8,885 9,367 Other assets 23,157 27,058 ----------- ----------- Total assets $ 1,436,848 $ 1,447,730 =========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY Unsecured revolving bank credit facility $ 38,000 $ 37,000 Senior unsecured notes due 2012 and 2015, net of discount 393,816 393,775 Junior subordinated debentures due 2041 28,241 28,241 Secured debt and capital leases 75,691 76,162 Accrued interest 10,582 12,519 Other liabilities 8,826 9,366 ----------- ----------- Total liabilities 555,156 557,063 ----------- ----------- Commitments and contingencies Shareholders' equity: Common shares of beneficial interest, $0.01 par value: 80,000,000 shares authorized; 68,495,908 shares issued and outstanding 685 685 Additional paid-in capital 1,034,686 1,034,686 Cumulative net income 222,356 208,491 Cumulative distributions (381,486) (359,567) Unrealized gain on investments 5,451 6,372 ----------- ----------- Total shareholders' equity 881,692 890,667 ----------- ----------- Total liabilities and shareholders' equity $ 1,436,848 $ 1,447,730 =========== =========== 10 Senior Housing Properties Trust Supplemental Operating and Financial Data March 31, 2005 CONSOLIDATED STATEMENT OF INCOME - -------------------------------------------------------------------------------- (in thousands, except per share data) For the Three Months Ended ------------------------- 3/31/2005 3/31/2004 ----------- ----------- Revenues: Rental income (1) $ 38,888 $ 34,829 Interest and other income (2) 339 1,714 ----------- ----------- Total revenues 39,227 36,543 ----------- ----------- Expenses: Interest 11,223 10,370 Depreciation 10,746 9,585 General and administrative (1) 3,393 3,319 ----------- ----------- Total expenses 25,362 23,274 ----------- ----------- Net income $ 13,865 $ 13,269 =========== =========== Weighted average common shares outstanding 68,496 62,354 =========== =========== Basic and diluted net income per share $ 0.20 $ 0.21 =========== =========== Additional Data: General and administrative expenses (3)/ total revenues (4) 7.5% 6.5% General and administrative expenses (3)/ total assets (at end of period) 0.21% 0.17% Straight-line rent included in rental income (5) $ 107 $ 89 (1) Rental income for the quarter ended March 31, 2005, includes $2.2 million of income from two hospitals operated by HealthSouth Corporation, or HealthSouth. Effective January 2, 2002, we entered an amended lease with HealthSouth for two hospitals. In April 2003, we commenced a lawsuit against HealthSouth seeking, among other matters, to reform the amended lease based upon HealthSouth's fraud by increasing the rent payable to us from the date of the amendment forward. This litigation is pending at this time. On October 26, 2004, we terminated the amended lease for default because HealthSouth failed to deliver to us accurate and timely financial information as required by the amended lease. On November 2, 2004, HealthSouth brought a new lawsuit against us seeking to prevent our termination of the amended lease. On November 9, 2004, after a hearing, the court denied HealthSouth's request for a preliminary injunction to prevent the lease termination. We are currently seeking an expedited judicial determination that the lease termination was valid and we are pursuing damages against HealthSouth in the lawsuit which we brought in 2003. We have also begun work to identify and qualify a new tenant operator for the hospitals. Our lease with HealthSouth requires that, after termination, HealthSouth manage the hospitals for our account for a management fee during the period of the transition to a new tenant and remit the net cash flow to us. During the pendency of these disputes, HealthSouth has continued to pay us at the disputed rent amount and we have applied the payments received against the net cash flow due, but we do not know how long HealthSouth may continue to make payments. Legal expenses related to this matter were approximately $400,000 and $50,000, respectively, in the quarters ended March 31, 2005 and 2004, and are included in general and administrative expenses. (2) Included in Other Income for the quarter ended March 31, 2004 is $1.25 million received in a settlement of litigation with Marriott International, Inc. (3) Costs associated with our litigations with HealthSouth (on going) and Marriott (settled in January 2004) and costs associated with a failed acquisition written off in the first quarter of 2004 are excluded from general and administrative expenses for purposes of these calculations. (4) Includes deferred percentage rent (see Note 1 on pages 13 and 14). (5) We report rental income on a straight-line basis over the terms of the respective leases. Rental income includes non-cash straight-line rent adjustments. 11 Senior Housing Properties Trust Supplemental Operating and Financial Data March 31, 2005 CONSOLIDATED STATEMENT OF CASH FLOWS - -------------------------------------------------------------------------------- (in thousands) For the Three Months Ended ------------------------- 3/31/2005 3/31/2004 ----------- ----------- Cash flows from operating activities: Net income $ 13,865 $ 13,269 Adjustments to reconcile net income to cash provided by operating activities: Depreciation 10,746 9,585 Amortization of deferred finance fees and debt discounts 531 526 Change in assets and liabilities: Restricted cash (351) (2) Other assets 2,998 2,001 Accrued interest (1,937) (2,095) Other liabilities (559) 1,620 ----------- ----------- Cash provided by operating activities 25,293 24,904 ----------- ----------- Cash flows from investing activities: Acquisitions (3,741) (24,466) ----------- ----------- Cash used for investing activities (3,741) (24,466) ----------- ----------- Cash flows from financing activities: Proceeds from issuance of common shares, net - 86,144 Proceeds from borrowings on revolving bank credit facility 10,000 29,000 Repayments of borrowings on revolving bank credit facility (9,000) (97,000) Repayment of debt (471) (192) Deferred financing fees (8) - Distributions to shareholders (21,919) (18,121) ----------- ----------- Cash provided by financing activities (21,398) (169) ----------- ----------- Increase in cash and cash equivalents 155 269 Cash and cash equivalents at beginning of period 3,409 3,530 ----------- ----------- Cash and cash equivalents at end of period $ 3,564 $ 3,799 =========== =========== Supplemental cash flow information: Interest paid $ 12,629 $ 11,939 12 Senior Housing Properties Trust Supplemental Operating and Financial Data March 31, 2005 CALCULATION OF EBITDA - -------------------------------------------------------------------------------- (dollars in thousands) For the Three Months Ended ------------------------- 3/31/2005 3/31/2004 ----------- ----------- Net income $ 13,865 $ 13,269 Plus: interest expense 11,223 10,370 Plus: depreciation expense 10,746 9,585 Plus: deferred percentage rent adjustment (1) 815 840 ----------- ----------- EBITDA $ 36,649 $ 34,064 =========== =========== (1) We recognize percentage rental income received during the first, second and third quarters in the fourth quarter. Although recognition of revenue is deferred until the fourth quarter for purposes of calculating net income, our calculation of EBITDA for the first three quarters includes estimated amounts with respect to those periods. The fourth quarter EBITDA calculation excludes the amounts recognized during the first three quarters. We compute EBITDA as net income plus interest expense, depreciation expense and deferred percentage rent. We consider EBITDA to be an appropriate measure of performance for a REIT, along with net income and cash flow from operating, investing and financing activities. EBITDA does not represent cash generated by operating activities in accordance with generally accepted accounting principals, 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. 13 Senior Housing Properties Trust Supplemental Operating and Financial Data March 31, 2005 CALCULATION OF FUNDS FROM OPERATIONS (FFO) - -------------------------------------------------------------------------------- (dollars in thousands) For the Three Months Ended ------------------------- 3/31/2005 3/31/2004 ----------- ----------- Net income $ 13,865 $ 13,269 Plus: depreciation expense 10,746 9,585 deferred percentage rent adjustment (1) 815 840 ----------- ----------- FFO $ 25,426 $ 23,694 =========== =========== Weighted average shares outstanding 68,496 62,354 Net income per share 0.20 0.21 FFO per share 0.37 0.38 (1) We recognize percentage rental income received during the first, second and third quarters in the fourth quarter. Although recognition of revenue is deferred until the fourth quarter for purposes of calculating net income, our calculation of FFO for the first three quarters includes estimated amounts with respect to those periods. The fourth quarter FFO calculation excludes the amounts recognized during the first three quarters. We compute FFO as shown in the calculation above. 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 Note 1 above. 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 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 bank credit facility and public debt covenants, the availability of debt and equity capital to us and our expectation of our future performance. 14 Senior Housing Properties Trust Supplemental Operating and Financial Data March 31, 2005 DEBT SUMMARY - -------------------------------------------------------------------------------- (dollars in thousands)

15 Senior Housing Properties Trust Supplemental Operating and Financial Data March 31, 2005 DEBT MATURITY SCHEDULE - -------------------------------------------------------------------------------- (dollars in thousands)

16 Senior Housing Properties Trust Supplemental Operating and Financial Data March 31, 2005 LEVERAGE RATIOS, COVERAGE RATIOS AND PUBLIC DEBT COVENANTS - --------------------------------------------------------------------------------

17 Senior Housing Properties Trust Supplemental Operating and Financial Data March 31, 2005 ACQUISITIONS INFORMATION - -------------------------------------------------------------------------------- (dollars in thousands)

THERE WERE NO ACQUISITIONS DURING THE THREE MONTHS ENDED MARCH 31, 2005. 18 Senior Housing Properties Trust Supplemental Operating and Financial Data March 31, 2005 FINANCING ACTIVITIES - -------------------------------------------------------------------------------- (share amounts and dollars in thousands) For the Three Months Ended 3/31/2005 ----------- Debt Transactions (1): New debt raised $ - New debt assumed as part of acquisitions - ----------- Total new debt - Debt retired - ----------- Net debt $ - =========== Equity Transactions: New common shares issued - New common equity raised, net $ - (1) Exclude drawings and repayments on our revolving credit facility. THERE WERE NO NEW FINANCING ACTIVITIES DURING THE THREE MONTHS ENDED MARCH 31, 2005. 19 PORTFOLIO INFORMATION Senior Housing Properties Trust Supplemental Operating and Financial Data March 31, 2005 PORTFOLIO SUMMARY BY FACILITY TYPE AND TENANT - -------------------------------------------------------------------------------- (dollars in thousands)

21 Senior Housing Properties Trust Supplemental Operating and Financial Data March 31, 2005 OCCUPANCY BY FACILITY TYPE AND TENANT - --------------------------------------------------------------------------------

All tenant operating data presented are based upon the operating results provided by our tenants for the indicated quarterly periods, or the most recent prior period for which tenant operating results are available to us from our tenants. We have not independently verified our tenants' operating data. 22 Senior Housing Properties Trust Supplemental Operating and Financial Data March 31, 2005 % PRIVATE PAY BY FACILITY TYPE AND TENANT - --------------------------------------------------------------------------------

All tenant operating data presented are based upon the operating results provided by our tenants for the indicated quarterly periods, or the most recent prior period for which tenant operating results are available to us from our tenants. We have not independently verified our tenants' operating data. 23 Senior Housing Properties Trust Supplemental Operating and Financial Data March 31, 2005 RENT COVERAGE BY TENANT - --------------------------------------------------------------------------------

All tenant operating data presented are based upon the operating results provided by our tenants for the indicated periods, or the most recent prior period for which tenant operating results are available to us from our tenants. coverage is calculated as operating cash flow from our tenants' facility operations, before subordinated charges capital expenditure reserves, if any, divided by rent payable to us. We have not independently verified our tenants' operating data. 24 Senior Housing Properties Trust Supplemental Operating and Financial Data March 31, 2005 PORTFOLIO LEASE EXPIRATION SCHEDULE - -------------------------------------------------------------------------------- (dollars in thousands) Annualized % of Annualized Current Rent Current Rent ----------- ----------- 2005 $ - 0.0% 2006 1,522 1.0% 2007 - 0.0% 2008 - 0.0% 2009 - 0.0% 2010 1,244 0.8% 2011 8,700 5.5% 2012 - 0.0% 2013 32,272 20.3% 2014 - 0.0% 2015 1,914 1.2% 2016 - 0.0% 2017 80,629 50.7% 2018 - 0.0% 2019 597 0.4% 2020 and thereafter 32,005 20.1% ----------- ----------- Total $ 158,883 100.0% =========== =========== Weighted average remaining lease term (in years) 12.0 25 -----END PRIVACY-ENHANCED MESSAGE-----

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549