EX-99.1 2 a08-13507_1ex99d1.htm EX-99.1

Exhibit 99.1

 

 


400 Centre Street, Newton, MA 02458-2076


tel: (617) 796-8350      fax: (617) 796-8349

 

FOR IMMEDIATE RELEASE

 

Contact:

 

 

Timothy A. Bonang, Manager of Investor Relations, or

 

 

Katherine L. Johnston, Investor Relations Analyst

 

 

(617) 796-8234

 

 

www.snhreit.com

 

Senior Housing Properties Trust Announces Results for the Period Ended March 31, 2008

 

Newton, MA (May 7, 2008):  Senior Housing Properties Trust (NYSE: SNH) today announced its financial results for the quarter ended March 31, 2008, as follows:

 

Results for the quarter ended March 31, 2008:

 

Net income was $23.3 million, or $0.26 per share, for the quarter ended March 31, 2008, compared to net income of $17.5 million, or $0.22 per share, for the quarter ended March 31, 2007. Net income for the quarter ended March 31, 2007, includes a loss of $2.0 million, or $0.02 per share, related to the early retirement of $20.0 million of SNH’s 8 5/8% senior notes due 2012.

 

Funds from operations (FFO) for the quarter ended March 31, 2008, were $38.3 million, or $0.42 per share. This compares to FFO for the quarter ended March 31, 2007 of $31.0 million, or $0.38 per share. FFO for the quarter ended March 31, 2007, includes a cash loss of $1.8 million, or $0.02 per share, related to the early retirement of the senior notes due 2012 described above.

 

The weighted average number of common shares outstanding totaled 91.1 million and 80.8 million for the quarters ended March 31, 2008 and 2007, respectively.  The increase in common shares is a result of public offerings in February and December 2007 and February 2008 of 6.0 million, 5.0 million and 6.2 million common shares, respectively.

 

A reconciliation of net income determined according to U.S. generally accepted accounting principles, or GAAP, to FFO is set forth below.

 

Investing Activities and Subsequent Events:

 

During the three months ended March 31, 2008, we purchased 19 senior living properties with a total of 1,692 units for approximately $272.3 million from five unaffiliated parties. We leased these properties to Five Star Quality Care Inc., or Five Star, for initial rent of $21.8 million and added them to the combined lease for 114 properties with Five Star, which has a current term expiring in 2020.  Percentage rent, based on increases in gross revenues at these properties, will commence in 2010. We funded these acquisitions using cash on hand, proceeds from equity issuances and borrowings under our revolving credit facility.

 

On May 6, 2008, we announced that we have entered into a series of agreements to acquire 48 medical office, clinic and biotech laboratory buildings for approximately $565.0 million.  These buildings are currently 98.3% leased to more than 370 unaffiliated tenants for an average term of 6.7 years.  We expect the closings of these acquisitions to occur over the next 12 months.  In addition, we also acquired a right of first refusal to purchase any of 45 additional buildings (approximately 4.6 million square feet) that are leased to tenants in medical related business.

 

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.

 



 

Conference Call:

 

On Wednesday, May 7, 2008, at 1 p.m. Eastern Time, 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 first quarter ended March 31, 2008.  The conference call telephone number is 866-550-6338. Participants calling from outside the United States and Canada should dial 347-284-6930. 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 4 p.m. Eastern Time, Wednesday, May 14, 2008. To hear the replay, dial 719-457-0820. The replay pass code is 4408781.

 

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 First Quarter 2008 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 221 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,

 

 

 

2008

 

2007

 

Revenues:

 

 

 

 

 

Rental income

 

$

48,983

 

$

44,301

 

Interest and other income

 

570

 

451

 

Total revenues

 

49,553

 

44,752

 

 

 

 

 

 

 

Expenses:

 

 

 

 

 

Interest

 

9,518

 

9,893

 

Depreciation

 

13,023

 

11,595

 

General and administrative

 

3,696

 

3,716

 

Loss on early extinguishment of debt(1)

 

 

2,026

 

Total expenses

 

26,237

 

27,230

 

Net income

 

$

23,316

 

$

17,522

 

 

 

 

 

 

 

Weighted average shares outstanding

 

91,080

 

80,815

 

Per share data:

 

 

 

 

 

Net income

 

$

0.26

 

$

0.22

 

 

Balance Sheet:

 

 

 

At March 31, 2008

 

At December 31, 2007

 

Assets

 

 

 

 

 

Real estate properties

 

$

2,229,291

 

$

1,940,347

 

Less accumulated depreciation

 

336,914

 

323,891

 

 

 

1,892,377

 

1,616,456

 

Cash and cash equivalents

 

5,192

 

43,521

 

Restricted cash

 

3,957

 

3,642

 

Deferred financing fees, net

 

5,486

 

5,974

 

Other assets

 

29,960

 

32,301

 

Total assets

 

$

1,936,972

 

$

1,701,894

 

 

 

 

 

 

 

Liabilities and Shareholders’ Equity

 

 

 

 

 

Unsecured revolving bank credit facility

 

$

115,000

 

$

 

Senior unsecured notes, net of discount

 

321,909

 

321,873

 

Secured debt and capital leases

 

104,465

 

104,979

 

Total debt

 

541,374

 

426,852

 

Other liabilities

 

25,564

 

25,632

 

Total liabilities

 

566,938

 

452,484

 

Shareholders’ equity

 

1,370,034

 

1,249,410

 

Total liabilities and shareholders’ equity

 

$

1,936,972

 

$

1,701,894

 

 


(1)          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.

 



 

Senior Housing Properties Trust

Funds from Operations

(in thousands, except per share data)

 

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

 

 

 

Quarter Ended March 31,

 

 

 

2008

 

2007

 

Net income

 

$

23,316

 

$

17,522

 

Add:

Depreciation expense

 

13,023

 

11,595

 

 

Loss on early extinguishment of debt

 

 

2,026

 

 

Deferred percentage rent(2)

 

1,950

 

1,600

 

Less:

Loss on early extinguishment of debt settled in cash(3)

 

 

(1,750

)

FFO

 

$

38,289

 

$

30,993

 

 

 

 

 

 

 

Weighted average shares outstanding

 

91,080

 

80,815

 

 

 

 

 

 

 

FFO per share

 

$

0.42

 

$

0.38

 

 

 

 

 

 

 

Distributions declared

 

$

0.35

 

$

0.34

 

 


(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, which we believe is the closest U.S. generally accepted accounting principles, or GAAP, measure of our performance.  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 (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 a comparison of our current operating performance with our past operating performance and of operating performance among REITs.  FFO does not represent cash generated by operating activities in accordance with 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 quarter ended March 31, 2007, includes a $1.8 million cash loss relating to our early retirement of $20.0 million of our 8 5/8% senior notes due 2012.

 



 

WARNING CONCERNING FORWARD LOOKING STATEMENTS

 

THIS PRESS RELEASE CONTAINS FORWARD LOOKING STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 AND OTHER FEDERAL SECURITIES LAWS.  ALSO, WHENEVER WE USE WORDS SUCH AS “BELIEVE”, “EXPECT”, “ANTICIPATE”, “INTEND”, “PLAN”, “ESTIMATE” OR SIMILAR EXPRESSIONS, WE ARE MAKING FORWARD LOOKING STATEMENTS.  THESE FORWARD LOOKING STATEMENTS ARE BASED UPON OUR 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 OUR FORWARD LOOKING STATEMENTS AS A RESULT OF VARIOUS FACTORS.  FOR EXAMPLE, THIS PRESS RELEASE STATES THAT WE HAVE AGREED TO PURCHASE 48 MEDICAL OFFICE, CLINIC AND BIOTECH LABORATORY BUILDINGS FOR $565 MILLION AND THAT THESE SALES ARE EXPECTED TO BE COMPLETED IN PHASES DURING THE NEXT 12 MONTHS.  IN FACT, OUR OBLIGATION TO COMPLETE THESE PURCHASES IS SUBJECT TO VARIOUS CONDITIONS TYPICAL OF COMMERCIAL REAL ESTATE PURCHASES, INCLUDING, WITH RESPECT TO CERTAIN PROPERTIES, OBTAINING CONSENTS FROM MORTGAGEES AND WAIVERS OF RIGHTS OF FIRST REFUSAL FROM TENANTS.  ALSO, WE HAVE A FINANCING CONTINGENCY RELATING TO CERTAIN PROPERTIES. AS A RESULT OF ANY FAILURE OF THESE CONDITIONS, SOME OR ALL OF THE PROPERTIES MAY NOT BE PURCHASED, THE PURCHASE PRICES MAY BE CHANGED OR SOME OF THESE PURCHASES MAY BE ACCELERATED OR DELAYED.

 

OTHER IMPORTANT FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE IN FORWARD LOOKING STATEMENTS ARE DESCRIBED MORE FULLY UNDER “ITEM 1A. RISK FACTORS” IN OUR ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2007.

 

YOU SHOULD NOT PLACE UNDUE RELIANCE UPON FORWARD LOOKING STATEMENTS.

 

EXCEPT AS MAY BE REQUIRED BY APPLICABLE LAW, WE UNDERTAKE NO OBLIGATION TO UPDATE OR REVISE ANY FORWARD LOOKING STATEMENTS AS A RESULT OF NEW INFORMATION, FUTURE EVENTS OR OTHERWISE.

 

(END)