Exhibit 99.2
SENIOR HOUSING PROPERTIES TRUST
Fourth Quarter 2006
Supplemental Operating and Financial Data
Unless otherwise noted, all amounts in this report are unaudited.
TABLE OF CONTENTS
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CORPORATE INFORMATION | |
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| | Company Profile | 4 |
| | Investor Information | 5 |
| | Research Coverage | 6 |
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FINANCIAL INFORMATION | |
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| | Key Financial Data | 8 |
| | Consolidated Balance Sheet | 9 |
| | Consolidated Statement of Income | 10 |
| | Consolidated Statement of Cash Flows | 11 |
| | Calculation of EBITDA | 12 |
| | Calculation of Funds from Operations (FFO) | 13 |
| | Debt Summary | 14 |
| | Debt Maturity Schedule | 15 |
| | Leverage Ratios, Coverage Ratios and Public Debt Covenants | 16 |
| | 2006 Investments/Dispositions Information | 17 |
| | 2006 Financing Activities | 18 |
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PORTFOLIO INFORMATION | |
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| | Portfolio Summary by Facility Type and Tenant | 20 |
| | Occupancy by Facility Type and Tenant | 21 |
| | % Private Pay by Facility Type and Tenant | 22 |
| | Rent Coverage by Tenant | 23 |
| | Portfolio Lease Expiration Schedule | 24 |
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CORPORATE INFORMATION
Senior Housing Properties Trust
Supplemental Operating and Financial Data
December 31, 2006
COMPANY PROFILE
The Company: Senior Housing Properties Trust, or SNH, is a real estate investment trust, or REIT, which owns independent and assisted living properties, continuing care retirement communities, nursing homes and hospitals located throughout the United States. We are included in a number of stock indices, including the Russell 2000®, the MSCI US REIT Index, FTSE EPRA/NAREIT United States Index and the S&P REIT Composite Index. Management: Senior Housing Properties Trust is managed by Reit Management & Research LLC, or RMR. RMR is a large real estate management company which was founded in 1986 to manage public investments in real estate. As of December 31, 2006, RMR managed one of the largest portfolios of publicly owned real estate in the United States, including approximately 1,000 properties, with more than 93 million square feet, located in 43 states, Washington, DC, Puerto Rico and Ontario, Canada. RMR has over 450 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, a publicly traded REIT that owns hotels, HRPT Properties Trust, a publicly traded REIT that primarily owns office buildings, and five mutual funds which invest in unaffiliated real estate companies. The public companies managed by RMR and its affiliates had combined total market capitalization of approximately $14 billion as of December 31, 2006. 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 and assisted living properties, continuing care retirement communities and nursing homes and to acquire additional senior living properties primarily 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 with their 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. We also sometimes consider investing in properties other than senior living properties. 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: New York Stock Exchange Corporate Headquarters: 400 Centre Street Newton, MA 02458 (t) (617) 796-8350 (f) (617) 796-8349 Trading Symbol: Common Shares -- SNH Senior Unsecured Debt Ratings: Moody's -- Ba2 Standard & Poor's -- BB+ |
Portfolio Data (as of 12/31/06): | | | |
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| Total properties | | | 196 | |
| Total units / beds | | | 24,207 | |
| Percent of rent from private pay properties | | | 84.8% | (1) |
Portfolio Concentration by Facility Type (as of 12/31/06):
| | | Number of | | Number of | | Carrying Value of | | | | | Annualized | | | |
| | | Properties | | Units/Beds | | Investment (2) | | Percent | | | Current Rent | | Percent | |
| Independent Living (IL) (3) | | | 41 | | | 11,295 | | $ | 989,442 | | | 54.6 | % | | $ | 98,062 | | | 54.6 | % |
| Assisted Living (AL) | | | 95 | | | 6,679 | | | 566,708 | | | 31.2 | % | | | 54,250 | | | 30.2 | % |
| Nursing Homes | | | 58 | | | 5,869 | | | 214,655 | | | 11.8 | % | | | 17,006 | | | 9.5 | % |
| Rehabilitation Hospitals | | | 2 | | | 364 | | | 43,553 | | | 2.4 | % | | | 10,250 | | | 5.7 | % |
| Total | | | 196 | | | 24,207 | | $ | 1,814,358 | | | 100.0 | % | | $ | 179,568 | | | 100.0 | % |
Operating Statistics by Tenant:
| | | | | | | | | Q3 2006 | |
| | | Number of | | Number of | | Annualized | | Rent | | | | Percent | |
| Tenant | | Properties | | Units/Beds | | Current Rent | | Coverage (4) | | Occupancy (4) | | Private Pay (4) | |
| Five Star / Sunrise (5) | | | 30 | | | 7,275 | | $ | 65,012 | | | 1.50x | | | 92 | % | | 80 | % |
| Five Star | | | 114 | | | 9,424 | | | 49,139 | | | 1.53x | | | 88 | % | | 51 | % |
| Sunrise / Marriott (6) | | | 14 | | | 4,091 | | | 31,490 | | | NA | | | NA | | | NA | |
| Five Star Rehabilitation Hospitals (7) | | | 2 | | | 364 | | | 10,250 | | | NA | | | NA | | | NA | |
| NewSeasons / IBC (8) | | | 10 | | | 1,019 | | | 9,289 | | | 1.14x | | | 85 | % | | 100 | % |
| Alterra / Brookdale (9) | | | 18 | | | 894 | | | 7,632 | | | 2.21x | | | 89 | % | | 98 | % |
| Genesis HealthCare Corporation | | | 1 | | | 156 | | | 1,535 | | | 2.41x | | | 96 | % | | 24 | % |
| 5 Private Companies (combined) | | | 7 | | | 984 | | | 5,221 | | | 1.83x | | | 88 | % | | 26 | % |
| | | | 196 | | | 24,207 | | $ | 179,568 | | | | | | | | | | |
| (1) | Represents the percentage of SNH's rental income that is derived from properties where the underlying operating revenues are greater than 80% private pay. |
| (2) | Amounts are before depreciation, but after impairment write downs. |
| (3) | Properties where the majority of units are independent living apartments are classified as independent living communities. |
| (4) | All tenant operating data presented are based upon the operating results provided by our tenants for the indicated periods. Rent coverage is calculated as operating cash flow from our tenants’ facility operations, before subordinated charges and capital expenditure reserves, divided by rent payable to us. We have not independently verified our tenants’ operating data. |
| (5) | These 30 properties are leased to Five Star Quality Care, Inc., or Five Star. Historically, these properties were managed by Sunrise Senior Living Services, Inc., or Sunrise, but effective December 1, 2006, Five Star began managing all 30 of these properties. Prior to that, Sunrise managed seven properties during the third quarter. The rent that Five Star pays to us was subordinate to the management fees paid by Five Star to Sunrise, but is not subordinate to Five Star's internal management costs. For meaningful comparison purposes, the rent coverage presented for this lease is before management fees paid to Sunrise for all 30 properties. |
| (6) | Marriott International, Inc., or Marriott, guarantees this lease. Sunrise has not filed its Quarterly Reports on Form 10-Q with the Securities and Exchange Commission in 2006 due to an accounting issue. Because we do not know what impact the resolution of this accounting issue may have on the reported performance of our properties, we do not report operating data for this tenant. |
| (7) | On October 1, 2006, Five Star assumed the operations of two rehabilitation hospitals and began leasing them from us for annual rent of $10.25 million. These hospitals were formerly operated by HealthSouth Corporation, or HealthSouth. Because we do not have reliable information about the operations of the hospitals by HealthSouth, we do not report operating data for these hospitals before October 1, 2006. |
| (8) | Independence Blue Cross, or IBC, a Pennsylvania health insurer, guarantees this lease. |
| (9) | Brookdale Senior Living, Inc., or Brookdale, guarantees this lease. |
Senior Housing Properties Trust |
Supplemental Operating and Financial Data |
December 31, 2006 |
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INVESTOR INFORMATION |
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Board of Trustees |
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| Barry M. Portnoy | Gerard M. Martin |
Managing Trustee | Managing Trustee |
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| Frank J. Bailey | Frederick N. Zeytoonjian |
Independent Trustee | Independent Trustee |
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| John L. Harrington | |
Independent Trustee | |
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Senior Management |
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| David J. Hegarty | John R. Hoadley |
President, Chief Operating Officer and Secretary | Treasurer and Chief Financial Officer |
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Contact Information |
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Investor Relations | Inquiries |
| Senior Housing Properties Trust | Financial inquiries should be directed to John R. Hoadley, |
| 400 Centre Street | Treasurer and Chief Financial Officer, at (617) 796-8350 |
| Newton, MA 02458 | or jhoadley@snhreit.com. |
| (t) (617) 796-8350 | |
| (f) (617) 796-8349 | Investor and media inquiries should be directed to |
| (email) info@snhreit.com | Timothy A. Bonang, Manager of Investor Relations, at |
| (website) www.snhreit.com | (617) 796-8149 or tbonang@snhreit.com. |
Senior Housing Properties Trust |
Supplemental Operating and Financial Data |
December 31, 2006 |
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RESEARCH COVERAGE |
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Equity Research Coverage |
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Cantor Fitzgerald | Stifel, Nicolaus |
| Philip Martin | Jerry Doctrow |
| (312) 469-7485 | (410) 454-5142 |
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Merrill Lynch | UBS |
| David Tsoupros | Omotayo Okusanya |
| (212) 449-9697 | (212) 713-1864 |
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Raymond James | Wachovia Securities |
| Paul Puryear | Stephen Swett |
| (727) 573-3800 | (212) 909-0954 |
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RBC | |
| Mike Salinsky | |
| (216) 378-7627 | |
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Debt Research Coverage |
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UBS | Wachovia Securities |
| Ray Garson | Dan Sullivan |
| (203) 719-6415 | (704) 383-6441 |
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Rating Agencies |
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Moody’s Investor Service | Standard and Poor’s |
| Lori Marks | George Skoufis |
| (212) 553-1098 | (212) 438-2608 |
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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.
FINANCIAL INFORMATION
Senior Housing Properties Trust
Supplemental Operating and Financial Data
KEY FINANCIAL DATA
(share amounts and dollars in thousands, except per share data)
| | | As of and For the Three Months Ended | |
| | | 12/31/2006 | | 9/30/2006 | | 6/30/2006 | | 3/31/2006 | | 12/31/2005 | |
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Shares Outstanding: | | | | | | | | | | | | | | | | |
| Common shares outstanding (at end of period) | | | 77,613 | | | 71,860 | | | 71,820 | | | 71,812 | | | 71,812 | |
| Weighted average common shares outstanding - basic and diluted (1) | | | 74,641 | | | 71,824 | | | 71,817 | | | 71,812 | | | 69,445 | |
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Common Share Data: | | | | | | | | | | | | | | | | |
| Price at end of period | | $ | 24.48 | | $ | 21.34 | | $ | 17.91 | | $ | 18.10 | | $ | 16.91 | |
| High during period | | $ | 24.60 | | $ | 21.98 | | $ | 18.18 | | $ | 19.08 | | $ | 19.35 | |
| Low during period | | $ | 20.50 | | $ | 17.61 | | $ | 16.56 | | $ | 16.75 | | $ | 16.84 | |
| Annualized dividends paid per share | | $ | 1.32 | | $ | 1.32 | | $ | 1.32 | | $ | 1.28 | | $ | 1.28 | |
| Annualized dividend yield (at end of period) | | | 5.4 | % | | 6.2 | % | | 7.4 | % | | 7.1 | % | | 7.6 | % |
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Market Capitalization: | | | | | | | | | | | | | | | | |
| Total debt (book value) | | $ | 545,085 | | $ | 642,475 | | $ | 561,763 | | $ | 545,444 | | $ | 556,320 | |
| Plus: market value of common shares (at end of period) | | | 1,899,966 | | | 1,533,492 | | | 1,286,296 | | | 1,299,797 | | | 1,214,341 | |
| Total market capitalization | | $ | 2,445,051 | | $ | 2,175,967 | | $ | 1,848,059 | | $ | 1,845,241 | | $ | 1,770,661 | |
| Total debt / total market capitalization | | | 22.3 | % | | 29.5 | % | | 30.4 | % | | 29.6 | % | | 31.4 | % |
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Book Capitalization: | | | | | | | | | | | | | | | | |
| Total debt | | $ | 545,085 | | $ | 642,475 | | $ | 561,763 | | $ | 545,444 | | $ | 556,320 | |
| Plus: total shareholders' equity | | | 1,019,466 | | | 894,433 | | | 901,824 | | | 912,159 | | | 923,184 | |
| Total book capitalization | | $ | 1,564,551 | | $ | 1,536,908 | | $ | 1,463,587 | | $ | 1,457,603 | | $ | 1,479,504 | |
| Total debt / total book capitalization | | | 34.8 | % | | 41.8 | % | | 38.4 | % | | 37.4 | % | | 37.6 | % |
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Selected Balance Sheet Data: | | | | | | | | | | | | | | | | |
| Total assets | | $ | 1,584,774 | | $ | 1,559,745 | | $ | 1,490,557 | | $ | 1,480,557 | | $ | 1,500,641 | |
| Total liabilities | | $ | 565,308 | | $ | 665,312 | | $ | 588,733 | | $ | 568,398 | | $ | 577,457 | |
| Gross book value of real estate assets (2) | | $ | 1,814,358 | | $ | 1,767,047 | | $ | 1,699,202 | | $ | 1,691,499 | | $ | 1,686,169 | |
| Total debt / gross book value of real estate assets (2) | | | 30.0 | % | | 36.4 | % | | 33.1 | % | | 32.2 | % | | 33.0 | % |
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Selected Income Statement Data: | | | | | | | | | | | | | | | | |
| Total revenues (3) | | $ | 55,045 | | $ | 42,317 | | $ | 41,276 | | $ | 41,169 | | $ | 44,111 | |
| EBITDA (4) | | $ | 47,254 | | $ | 39,492 | | $ | 39,371 | | $ | 39,028 | | $ | 38,353 | |
| Income from continuing operations | | $ | 27,558 | | $ | 15,418 | | $ | 12,686 | | $ | 10,460 | | $ | 15,679 | |
| Net income | | $ | 27,537 | | $ | 15,418 | | $ | 12,686 | | $ | 10,460 | | $ | 20,893 | |
| Funds from operations (FFO) (5) | | $ | 34,985 | | $ | 27,659 | | $ | 27,825 | | $ | 23,523 | | $ | 26,305 | |
| Common distributions paid | | $ | 25,612 | | $ | 23,714 | | $ | 23,701 | | $ | 22,980 | | $ | 22,980 | |
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Per Share Data: | | | | | | | | | | | | | | | | |
| Income from continuing operations | | $ | 0.37 | | $ | 0.21 | | $ | 0.18 | | $ | 0.15 | | $ | 0.23 | |
| Net income | | $ | 0.37 | | $ | 0.21 | | $ | 0.18 | | $ | 0.15 | | $ | 0.30 | |
| FFO (5) | | $ | 0.47 | | $ | 0.39 | | $ | 0.39 | | $ | 0.33 | | $ | 0.38 | |
| Common distributions paid | | $ | 0.33 | | $ | 0.33 | | $ | 0.32 | | $ | 0.32 | | $ | 0.32 | |
| FFO payout ratio (5) | | | 70.2 | % | | 84.6 | % | | 82.1 | % | | 97.0 | % | | 84.2 | % |
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Coverage Ratios: | | | | | | | | | | | | | | | | |
| EBITDA (3) / interest expense | | | 3.9x | | | 3.3x | | | 3.4x | | | 3.4x | | | 3.2x | |
| (1) | SNH has no outstanding common share equivalents, such as units, convertible debt or stock options. |
| (2) | Gross book value of real estate assets is real estate properties, at cost, after impairment write downs. |
| (3) | During the fourth quarters of 2006 and 2005, we recognized $5.3 million and $3.3 million of percentage rent as income for the years ended December 31, 2006 and 2005, respectively. |
| (4) | See page 12 for calculation of EBITDA. |
| (5) | See page 13 for calculation of FFO. As a result of the litigation settlement with HealthSouth, HealthSouth paid us additional rent of $5.7 million, or $0.08 per share, which we recognized as rental income in the fourth quarter of 2006. |
Senior Housing Properties Trust
Supplemental Operating and Financial Data
December 31, 2006
CONSOLIDATED BALANCE SHEET
(share amounts and dollars in thousands, except per share data)
| | | As of December 31, 2006 | | As of December 31, 2005 | |
| | | | | (audited) | |
ASSETS | | | | | |
| Real estate properties, at cost: | | | | | | | |
| Land | | $ | 198,887 | | $ | 185,819 | |
| Buildings and improvements | | | 1,615,471 | | | 1,500,350 | |
| | | | 1,814,358 | | | 1,686,169 | |
| Less accumulated depreciation | | | 276,507 | | | 239,031 | |
| | | | 1,537,851 | | | 1,447,138 | |
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| Cash and cash equivalents | | | 5,464 | | | 14,642 | |
| Restricted cash | | | 2,435 | | | 2,529 | |
| Deferred financing fees, net | | | 8,173 | | | 10,961 | |
| Other assets | | | 30,851 | | | 25,371 | |
| Total assets | | $ | 1,584,774 | | $ | 1,500,641 | |
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LIABILITIES AND SHAREHOLDERS' EQUITY | | | | | | | |
| Unsecured revolving bank credit facility | | $ | 112,000 | | $ | 64,000 | |
| Senior unsecured notes due 2012 and 2015, net of discount | | | 341,673 | | | 393,938 | |
| Junior subordinated debentures due 2041 | | | - | | | 28,241 | |
| Secured debt and capital leases | | | 91,412 | | | 70,141 | |
| Accrued interest | | | 11,694 | | | 13,089 | |
| Other liabilities | | | 8,529 | | | 8,048 | |
| Total liabilities | | | 565,308 | | | 577,457 | |
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| Commitments and contingencies | | | | | | | |
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| Shareholders' equity: | | | | | | | |
| Common shares of beneficial interest, $0.01 par value: | | | | | | | |
| 79,700,000 shares authorized;77,613,127 and 71,812,227 shares issued | | | | | | | |
| and outstanding, respectively | | | 776 | | | 718 | |
| Additional paid-in capital | | | 1,214,863 | | | 1,093,480 | |
| Cumulative net income | | | 338,504 | | | 272,403 | |
| Cumulative distributions | | | (540,663 | ) | | (447,289 | ) |
| Unrealized gain on investments | | | 5,986 | | | 3,872 | |
| Total shareholders' equity | | | 1,019,466 | | | 923,184 | |
| Total liabilities and shareholders' equity | | $ | 1,584,774 | | $ | 1,500,641 | |
Senior Housing Properties Trust
Supplemental Operating and Financial Data
December 31, 2006
CONSOLIDATED STATEMENT OF INCOME
(in thousands, except per share data)
| | | For the Three Months Ended | | For the Twelve Months Ended | |
| | | 12/31/2006 | | 12/31/2005 | | 12/31/2006 | | 12/31/2005 | |
| Revenues: | | | | | | | | | |
| Rental income (1) | | $ | 54,645 | | $ | 43,776 | | $ | 178,372 | | $ | 161,265 | |
| Interest and other income | | | 400 | | | 335 | | | 1,434 | | | 1,922 | |
| Total revenues | | | 55,045 | | | 44,111 | | | 179,806 | | | 163,187 | |
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| Expenses: | | | | | | | | | | | | | |
| Interest | | | 12,269 | | | 12,048 | | | 47,020 | | | 46,633 | |
| Depreciation | | | 11,443 | | | 11,266 | | | 44,073 | | | 43,694 | |
| General and administrative (2) | | | 3,775 | | | 3,356 | | | 14,645 | | | 13,117 | |
| Impairment of assets | | | - | | | 1,762 | | | 1,420 | | | 1,762 | |
| Loss on early extinguishment of debt (3) | | | - | | | - | | | 6,526 | | | - | |
| Total expenses | | | 27,487 | | | 28,432 | | | 113,684 | | | 105,206 | |
| | | | | | | | | | | | | | |
| Income from continuing operations | | | 27,558 | | | 15,679 | | | 66,122 | | | 57,981 | |
| (Loss) gain on sale of property | | | (21 | ) | | 5,214 | | | (21 | ) | | 5,931 | |
| Net income | | $ | 27,537 | | $ | 20,893 | | $ | 66,101 | | $ | 63,912 | |
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| Weighted average common shares outstanding | | | 74,641 | | | 69,445 | | | 72,529 | | | 68,757 | |
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| Basic and diluted earnings per share: | | | | | | | | | | | | | |
| Income from continuing operations | | $ | 0.37 | | $ | 0.23 | | $ | 0.91 | | $ | 0.84 | |
| Gain on sale of property | | | - | | | 0.07 | | | - | | | 0.09 | |
| Net income | | $ | 0.37 | | $ | 0.30 | | $ | 0.91 | | $ | 0.93 | |
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Additional Data: | | | | | | | | | | | | | |
| Straight-line rent included in rental income (4) | | $ | 140 | | $ | 107 | | $ | 391 | | $ | 429 | |
| Deferred percentage rent (5) | | $ | (4,016 | ) | $ | (2,402 | ) | $ | - | | $ | - | |
| Litigation expenses included in general and administrative expenses (6) | | $ | 260 | | $ | 600 | | $ | 1,670 | | $ | 1,850 | |
| (1) | Rental income for the quarters ended December 31, 2006 and 2005, includes $8.3 million and $2.2 million, respectively, and for the years ended December 31, 2006 and 2005, includes $14.8 million and $8.7 million, respectively, of rental income from two hospitals formerly leased and operated by HealthSouth. Beginning in 2003 until November 2006, we were involved in two separate litigations with HealthSouth seeking to increase the rent due under an amended lease of two hospitals to HealthSouth and to terminate the amended lease and repossess the hospitals. On November 8, 2006, we and HealthSouth agreed to settle our litigations, to recognize HealthSouths lease until September 30, 2006 and to increase the annual rent due under the lease from $8.7 million to $9.9 million for the period from January 2, 2002 to September 30, 2006. As a result of the settlement, HealthSouth paid us additional rent of $5.7 million, or $0.08 per share, for periods through September 30, 2006, which we recognized as rental income in the fourth quarter of 2006. On October 1, 2006, Five Star Quality Care Inc., or Five Star, assumed the operations of these two hospitals and began leasing them from us for an annual rent of $10.25 million. |
| (2) | Expenses incurred related to the HealthSouth litigation were approximately $260,000 and $600,000, respectively, for the quarters ended December 31, 2006 and 2005, and $1,670,000 and $1,850,000, respectively, for the years ended December 31, 2006 and 2005, and are included in general and administrative expenses. |
| (3) | On January 9, 2006 we redeemed $52.5 million of our 7 7/8% senior unsecured notes. The loss on early extinguishment of debt includes a $4.1 million redemption premium and a $1.1 million write off of deferred financing fees and unamortized discount related to these senior notes. On June 15, 2006, we redeemed all of our $28.2 million of 10.125% junior subordinated debentures. The loss on early extinguishment of debt includes a $1.3 million write off of unamortized deferred financing fees related to these debentures. |
| (4) | 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. |
| (5) | 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, for purposes of this calculation, total revenues for the first three quarters included estimated amounts with respect to those periods. The fourth quarter calculation excludes the amounts recognized during the first three quarters. During the fourth quarters of 2006 and 2005, we recognized $5.3 million and $3.3 million of percentage rent as income for the years ended December 31, 2006 and 2005, respectively. |
| (6) | These expenses relate to our HealthSouth litigation described in Notes 1 and 2 above. |
Senior Housing Properties Trust
Supplemental Operating and Financial Data
December 31, 2006
CONSOLIDATED STATEMENT OF CASH FLOWS
(in thousands)
| | | For the Years Ended | |
| | | 12/31/2006 | | 12/31/2005 | |
| Cash flows from operating activities: | | | | | |
| Net income | | $ | 66,101 | | $ | 63,912 | |
| Adjustments to reconcile net income to cash provided by operating activities: | | | | | | | |
| Depreciation | | | 44,073 | | | 43,694 | |
| Impairment of assets | | | 1,420 | | | 1,762 | |
| Loss on early extinguishment of debt | | | 2,392 | | | - | |
| Loss (gain) on sale of property | | | 21 | | | (5,931 | ) |
| Amortization of deferred financing fees and debt discounts | | | 1,852 | | | 2,212 | |
| Change in assets and liabilities: | | | | | | | |
| Restricted cash | | | 94 | | | (523 | ) |
| Other assets | | | (3,364 | ) | | (813 | ) |
| Accrued interest | | | (1,395 | ) | | 570 | |
| Other liabilities | | | 1,141 | | | (661 | ) |
| Cash provided by operating activities | | | 112,335 | | | 104,222 | |
| | | | | | | | |
| Cash flows from investing activities: | | | | | | | |
| Acquisitions | | | (133,132 | ) | | (97,480 | ) |
| Mortgage financing provided | | | - | | | (24,000 | ) |
| Mortgage financing repaid | | | - | | | 24,000 | |
| Proceeds from sale of real estate | | | 6,879 | | | 12,537 | |
| Cash used for investing activities | | | (126,253 | ) | | (84,943 | ) |
| | | | | | | | |
| Cash flows from financing activities: | | | | | | | |
| Proceeds from issuance of common shares, net | | | 120,781 | | | 58,170 | |
| Proceeds from borrowings on revolving bank credit facility | | | 213,000 | | | 143,000 | |
| Repayments of borrowings on revolving bank credit facility | | | (165,000 | ) | | (116,000 | ) |
| Redemption of senior notes | | | (52,500 | ) | | - | |
| Redemption of junior subordinated debentures | | | (28,241 | ) | | - | |
| Repayment of other debt | | | 11,296 | | | (1,851 | ) |
| Deferred financing fees | | | (1,222 | ) | | (3,643 | ) |
| Distributions to shareholders | | | (93,374 | ) | | (87,722 | ) |
| Cash provided by (used for) financing activities | | | 4,740 | | | (8,046 | ) |
| | | | | | | | |
| (Decrease) increase in cash and cash equivalents | | | (9,178 | ) | | 11,233 | |
| Cash and cash equivalents at beginning of period | | | 14,642 | | | 3,409 | |
| Cash and cash equivalents at end of period | | $ | 5,464 | | $ | 14,642 | |
| | | | | | | | |
| Supplemental cash flow information: | | | | | | | |
| Interest paid | | $ | 46,563 | | $ | 43,851 | |
| | | | | | | | |
| Non cash investing activity: | | | | | | | |
| Increase in capital lease assets | | $ | (9,975 | ) | $ | - | |
| | | | | | | | |
| Non cash financing activities: | | | | | | | |
| Increase in capital lease obligations | | $ | 9,975 | | $ | - | |
| Issuance of common shares | | | 660 | | | 657 | |
| Release of restricted cash to us | | | - | | | 4,170 | |
| Repayment of debt with cash previously restricted | | | - | | | (4,170 | ) |
Senior Housing Properties Trust
Supplemental Operating and Financial Data
December 31, 2006
CALCULATION OF EBITDA
(dollars in thousands)
| | | | | For the Three Months Ended | | For the Twelve Months Ended |
| | | | | 12/31/2006 | | 12/31/2005 | | 12/31/2006 | | 12/31/2005 | |
| | | | | | | | | | | | |
| Income from continuing operations (1) | | | | | $ | 27,558 | | $ | 15,679 | | $ | 66,122 | | $ | 57,981 | |
| Plus: interest expense | | | | | | 12,269 | | | 12,048 | | | 47,020 | | | 46,633 | |
| depreciation expense | | | | | | 11,443 | | | 11,266 | | | 44,073 | | | 43,694 | |
| impairment of assets | | | | | | - | | | 1,762 | | | 1,420 | | | 1,762 | |
| loss on early extinguishment of debt | | | | | | - | | | - | | | 6,526 | | | - | |
| Less: deferred percentage rent adjustment (2) | | | | | | (4,016 | ) | | (2,402 | ) | | - | | | - | |
| EBITDA | | | | | $ | 47,254 | | $ | 38,353 | | $ | 165,161 | | $ | 150,070 | |
| (1) | Income from continuing operations includes expenses incurred related to our HealthSouth litigation of approximately $260,000 and $600,000 for the quarters ended December 31, 2006, and 2005, respectively, and $1,670,000 and $1,850,000 for the years ended December 31, 2006 and 2005, respectively. As a result of the settlement, HealthSouth paid us additional rent of $5.7 million, or $0.08 per share, for that period, which we recognized as rental income in the fourth quarter of 2006. See also Note 1 on page 10 for additional information regarding our HealthSouth litigation. |
| (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, for purposes of this calculation total revenues for the first three quarters includes estimated amounts with respect to those periods. The fourth quarter calculation excludes the amounts recognized during the first three quarters. |
We compute EBITDA 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. 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.
Senior Housing Properties Trust
Supplemental Operating and Financial Data
December 31, 2006
CALCULATION OF FUNDS FROM OPERATIONS (FFO)
(dollars in thousands)
| | | | | For the Three Months Ended | | For the Twelve Months Ended | |
| | | | | 12/31/2006 | | 12/31/2005 | | 12/31/2006 | | 12/31/2005 | |
| | | | | | | | | | | | |
| Income from continuing operations (1) | | | | | $ | 27,558 | | $ | 15,679 | | $ | 66,122 | | $ | 57,981 | |
| Plus: depreciation expense | | | | | | 11,443 | | | 11,266 | | | 44,073 | | | 43,694 | |
| impairment of assets | | | | | | - | | | 1,762 | | | 1,420 | | | 1,762 | |
| loss on early extinguishment of debt | | | | | | - | | | - | | | 6,526 | | | - | |
| Less: deferred percentage rent adjustment (2) | | | | | | (4,016 | ) | | (2,402 | ) | | - | | | - | |
| loss on early extinguishment of debt settled in cash (3) | | | | | | - | | | - | | | (4,134 | ) | | - | |
| FFO | | | | | $ | 34,985 | | $ | 26,305 | | $ | 114,007 | | $ | 103,437 | |
| | | | | | | | | | | | | | | | | |
| Weighted average shares outstanding | | | | | | 74,641 | | | 69,445 | | | 72,529 | | | 68,757 | |
| | | | | | | | | | | | | | | | | |
| Income from continuing operations per share | | | | | $ | 0.37 | | $ | 0.23 | | $ | 0.91 | | $ | 0.84 | |
| FFO per share | | | | | $ | 0.47 | | $ | 0.38 | | $ | 1.57 | | $ | 1.50 | |
| | | | | | | | | | | | | | | | | |
| Supplemental data: | | | | | | | | | | | | | | | | |
| Straight-line rent included in rental income (4) | | | | | $ | 140 | | $ | 107 | | $ | 391 | | $ | 429 | |
| Amortization of deferred financing fees and debt discounts | | | | | $ | 496 | | $ | 483 | | $ | 1,852 | | $ | 2,212 | |
| (1) | Income from continuing operations includes expenses incurred related to our HealthSouth litigation of approximately $260,000 and $600,000 for the quarters ended December 31, 2006, and 2005, respectively, and $1,670,000 and $1,850,000 for the years ended December 31, 2006 and 2005, respectively. As a result of the settlement, HealthSouth paid us additional rent of $5.7 million, or $0.08 per share, for periods through September 30, 2006, which we recognized as rental income in the fourth quarter of 2006. See also Note 1 on page 10 for additional information regarding our HealthSouth litigation. |
| (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, for purposes of this FFO calculation total revenues for the first three quarters includes estimated amounts with respect to those periods. The fourth quarter calculation of FFO excludes the amounts recognized during the first three quarters. |
| (3) | FFO for the year ended December 31, 2006, includes a $4.1 million, or $0.06 per share, loss for the cash premium paid for our redemption of $52.5 million of our 7 7/8% senior notes. |
| (4) | 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. |
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 as discussed in Note 2 above, and exclude loss on early extinguishment of debt not settled in cash. We consider FFO to be an appropriate measure of performance for a 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 performances 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 bank credit facility and public debt covenants, the availability of debt and equity capital to us and our expectation of our future performance.
Senior Housing Properties Trust
Supplemental Operating and Financial Data
December 31, 2006
DEBT SUMMARY
(dollars in thousands)
| | | Coupon | | Interest | | Principal | | Maturity | | Due at | | Years to | |
| | Rate | | Rate | | Balance | | Date | | Maturity | | Maturity | |
| | | | | | | | | | | | | | |
Secured Fixed Rate Debt: | | | | | | | | | | | | | |
| Tax exempt bonds - secured by 1 property | | | 5.875 | % | | 5.875 | % | $ | 14,700 | | | 12/1/27 | | $ | 14,700 | | | 20.9 | |
| Mortgage - secured by 16 properties (1) | | | 6.970 | % | | 6.330 | % | | 35,788 | | | 6/2/12 | | | 30,069 | | | 5.4 | |
| Mortgage - secured by 4 properties (1) | | | 6.110 | % | | 6.420 | % | | 12,214 | | | 11/30/13 | | | 10,218 | | | 6.9 | |
| Mortgage - secured by 1 properties (1) | | | 7.150 | % | | 6.440 | % | | 12,911 | | | 6/30/08 | | | 11,877 | | | 1.5 | |
| Capital leases - 2 properties | | | 7.700 | % | | 7.700 | % | | 15,799 | | | 4/30/26 | | | - | | | 19.3 | |
| Total / weighted average secured fixed rate debt | | | 6.831 | % | | 6.521 | % | $ | 91,412 | | | | | $ | 66,864 | | | 10.0 | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Unsecured Debt: | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Unsecured Floating Rate Debt: | | | | | | | | | | | | | | | | | | | |
| Revolving credit facility (LIBOR + 80 b.p.) (2) | | | 6.150 | % | | 6.150 | % | $ | 112,000 | | | 12/31/10 | | $ | 112,000 | | | 4.0 | |
| | | | | | | | | | | | | | | | | | | | |
Unsecured Fixed Rate Debt: | | | | | | | | | | | | | | | | | | | |
| Senior notes due 2012 | | | 8.625 | % | | 8.625 | % | $ | 245,000 | | | 1/15/12 | | $ | 245,000 | | | 5.0 | |
| Senior notes due 2015 (3) | | | 7.875 | % | | 7.875 | % | | 97,500 | | | 4/15/15 | | | 97,500 | | | 8.3 | |
| Total / weighted average unsecured fixed rate debt | | | 8.411 | % | | 8.411 | % | $ | 342,500 | | | | | $ | 342,500 | | | 6.0 | |
| | | | | | | | | | | | | | | | | | | | |
| Total / weighted average unsecured debt | | | 7.854 | % | | 7.854 | % | $ | 454,500 | | | | | $ | 454,500 | | | 5.5 | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
| Total / weighted average secured debt fixed rate debt | | | 6.831 | % | | 6.521 | % | $ | 91,412 | | | | | $ | 66,864 | | | 10.0 | |
| Total / weighted average unsecured floating rate debt | | | 6.150 | % | | 6.150 | % | | 112,000 | | | | | | 112,000 | | | 4.0 | |
| Total / weighted average unsecured fixed rate debt | | | 8.411 | % | | 8.411 | % | | 342,500 | | | | | | 342,500 | | | 6.0 | |
| Total / weighted average debt | | | 7.683 | % | | 7.631 | % | $ | 545,912 | | | | | $ | 521,364 | | | 6.2 | |
| (1) | Includes the effect of mark to market accounting for certain assumed mortgages. |
| (2) | On November 15, 2006, we amended our $550 million revolving bank credit facility. As a result, interest paid on drawings under the facility were reduced from LIBOR plus 100 b.p. to LIBOR plus 80 b.p. and the maturity date was extended from November 30, 2009 to December 31, 2010. |
| (3) | On January 9, 2006, we redeemed $52.5 million of these notes. In connection with the redemption, we paid a premium of $4.1 million and wrote off $1.1 million of deferred financing fees and unamortized discount. The remaining $97.5 million can be repaid at par, plus a premium, beginning in April 2008. |
Senior Housing Properties Trust
Supplemental Operating and Financial Data
December 31, 2006
DEBT MATURITY SUMMARY
(dollars in thousands)
| | | Scheduled Principal Payments During Period | |
| | | Secured | | | | | | | |
| | | Fixed Rate | | Unsecured | | Unsecured | | | |
| | | Debt and | | Floating | | Fixed | | | |
| Year | | Capital Leases | | Rate Debt | | Rate Debt | | Total | |
| 2007 | | $ | 2,110 | | $ | - | | $ | - | | $ | 2,110 | |
| 2008 | | | 13,595 | | | - | | | - | | | 13,595 | |
| 2009 | | | 1,605 | | | - | | | - | | | 1,605 | |
| 2010 | | | 1,714 | | | 112,000 | | | - | | | 113,714 | |
| 2011 | | | 1,829 | | | - | | | - | | | 1,829 | |
| 2012 | | | 31,418 | | | - | | | 245,000 | | | 276,418 | |
| 2013 | | | 11,016 | | | - | | | - | | | 11,016 | |
| 2014 | | | 544 | | | - | | | - | | | 544 | |
| 2015 | | | 614 | | | - | | | 97,500 | | | 98,114 | |
| 2016 and thereafter | | | 26,967 | | | - | | | - | | | 26,967 | |
| | | $ | 91,412 | | $ | 112,000 | | $ | 342,500 | | $ | 545,912 | |
Senior Housing Properties Trust
Supplemental Operating and Financial Data
December 31, 2006
LEVERAGE RATIOS, COVERAGE RATIOS AND PUBLIC DEBT COVENANTS
| | | As Of And For The Three Months Ended | |
| | | 12/31/2006 | 9/30/2006 | 6/30/2006 | 3/31/2006 | 12/31/2005 |
Leverage Ratios: | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Total debt / total assets | | | 34.4 | | | 41.2 | % | | 37.7 | % | | 36.8 | % | | 37.1 | % |
| Total debt / gross book value of real estate assets (1) | | | 30.0 | % | | 36.4 | % | | 33.1 | % | | 32.2 | % | | 33.0 | % |
| Total debt / total market capitalization | | | 22.3 | % | | 29.5 | % | | 30.4 | % | | 29.6 | % | | 31.4 | % |
| Total debt / total book capitalization | | | 34.8 | % | | 41.8 | % | | 38.4 | % | | 37.4 | % | | 37.6 | % |
| Secured debt / total assets | | | 5.8 | % | | 5.1 | % | | 5.3 | % | | 4.7 | % | | 4.7 | % |
| Variable rate debt / total debt | | | 20.5 | % | | 34.6 | % | | 25.1 | % | | 19.4 | % | | 11.5 | % |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Coverage Ratios: | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| EBITDA (2)(3) / interest expense | | | 3.9x | | | 3.3x | | | 3.4x | | | 3.4x | | | 3.2x | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Public Debt Covenants (3) (4): | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Total debt / adjusted total assets - allowable maximum 60.0% | | | 29.4 | % | | 35.4 | % | | 32.4 | % | | 30.0 | % | | 30.5 | % |
| Secured debt / adjusted total assets - allowable maximum 40.0% | | | 4.9 | % | | 4.3 | % | | 4.6 | % | | 4.1 | % | | 4.1 | % |
| Consolidated income available for debt service / debt service - required minimum 2.00x | | | 4.00x | | | 3.47x | | | 3.75x | | | 3.83x | | | 3.53x | |
| Total unencumbered assets to unsecured debt - required minimum 1.50x | | | 3.75x | | | 2.97x | | | 3.30x | | | 3.55x | | | 3.49x | |
| | | | | | | | | | | | | | | | | |
| (1) | Gross book value of real estate assets is real estate properties, at cost, less impairment write downs. |
| (2) | See page 12 for the calculation of EBITDA. |
| (3) | The quarter ended December 31, 2006 includes $5.7 million of additional rental income related to our settlement of litigation with HealthSouth. |
| (4) | Adjusted total assets and unencumbered assets include original cost of real estate assets less impairment write downs and exclude depreciation and amortization, accounts receivable and intangible assets. Consolidated income available for debt service is earnings from operations excluding interest expense, depreciation and amortization, taxes, gains and losses on sales of property and amortization of deferred charges. |
Senior Housing Properties Trust
Supplemental Operating and Financial Data
December 31, 2006
2006 INVESTMENTS/DISPOSITIONS INFORMATION
(dollars in thousands)
Acquisitions (1):
Date Acquired | | Tenant | | Type of Property | | Number of Properties | | Units | | Purchase Price | | Purchase Price Per Unit | | Cap Rate | |
| | | | | | | | | | | | | | | | |
| 8/31/06 | | | Five Star | | | IL/AL/CCRC | | | 5 | | | 783 | | $ | 61,500 | | $ | 78.5 | | | 8.25 | % |
| 10/1/06 | | | Five Star | | | AL | | | 2 | | | 110 | | $ | 12,400 | | $ | 112.7 | | | 8.25 | % |
| 10/1/06 | | | Five Star | | | IL/CCRC | | | 1 | | | 276 | | $ | 19,100 | | $ | 69.2 | | | 8.50 | % |
| 11/1/06 | | | Five Star | | | AL | | | 1 | | | 75 | | $ | 6,000 | | $ | 80.0 | | | 8.25 | % |
| 11/6/06 | | | Five Star | | | AL/SNF | | | 1 | | | 54 | | $ | 5,200 | | $ | 96.3 | | | 8.25 | % |
| 12/31/06 | | | Five Star | | | AL | | | 1 | | | 48 | | $ | 3,300 | | $ | 68.8 | | | 8.25 | % |
| | | | | | | Total / weighted average | | | 11 | | | 1,346 | | $ | 107,500 | | $ | 79.9 | | | 8.29 | % |
Date Sold | | Location | | Type of Property | | Number of Properties | | Sale Price | | NBV | | Book Gain (Loss) on Sale (2) | |
| | | | | | | | | | | | | | |
| 11/1/06 | | | New Haven, CT | | | SNF | | | 1 | | | 3,762 | | | 3,525 | | | (77 | ) |
| 11/1/06 | | | Waterbury, CT | | | SNF | | | 1 | | | 2,488 | | | 2,375 | | | (136 | ) |
| 12/22/06 | | | Milwaukee, WI | | | SNF | | | 1 | | | 1,650 | | | 1,000 | | | 192 | |
| | | | | | Total | | | 3 | | | 7,900 | | | 6,900 | | | (21 | ) |
| (1) | Excludes investments in existing properties. |
| (2) | Calculated after deducting selling costs. |
Senior Housing Properties Trust
Supplemental Operating and Financial Data
December 31, 2006
2006 FINANCING ACTIVITIES
(share amounts and dollars in thousands)
| | | For the Three Months Ended | |
| | | 12/31/2006 | | 9/30/2006 | | 6/30/2006 | | 3/31/2006 | |
| | | | | | | | | | |
Debt Transactions: | | | | | | | | | | | | | |
| New debt raised | | $ | - | | $ | - | | $ | - | | $ | - | |
| New debt assumed as part of acquisitions (1) | | | 12,785 | | | - | | | - | | | - | |
| Total new debt | | | 12,785 | | | - | | | - | | | - | |
| | | | | | | | | | | | | | |
| Debt retired | | | - | | | - | | | 28,241 | | | 52,500 | |
| Net debt | | $ | 12,785 | | $ | - | | $ | (28,241 | ) | $ | (52,500 | ) |
| | | | | | | | | | | | | | |
Equity Transactions: | | | | | | | | | | | | | |
| New common shares issued | | | 5,750 | | | - | | | - | | | - | |
| New common equity raised, net | | $ | 120,780 | | $ | - | | $ | - | | $ | - | |
| | | | | | | | | | | | | | |
Revolving Credit Facility Transactions (2): | | | | | | | | | | | | | |
| Balance oustanding at beginning of period | | $ | 222,000 | | $ | 141,000 | | $ | 106,000 | | $ | 64,000 | |
| Drawings during period | | | 14,000 | | | 109,000 | | | 43,000 | | | 47,000 | |
| Repayments during period | | | (124,000 | ) | | (28,000 | ) | | (8,000 | ) | | (5,000 | ) |
| Balance oustanding at end of period | | $ | 112,000 | | $ | 222,000 | | $ | 141,000 | | $ | 106,000 | |
| | | | | | | | | | | | | | |
| Balance available for drawing | | $ | 438,000 | | $ | 328,000 | | $ | 409,000 | | $ | 444,000 | |
| (1) | Amount represents the original mortgage we assumed related to the Savannah, Georgia acquisition on October 1, 2006. This amount does not include the adjustment for FAS 141. |
| (2) | On November 15, 2006, we amended our $550 million revolving bank credit facility. As a result, interest paid on drawings under the facility were reduced from LIBOR plus 100 b.p. to LIBOR plus 80 b.p. and the maturity date was extended from November 30, 2009 to December 31, 2010. |
PORTFOLIO INFORMATION
Senior Housing Properties Trust
Supplemental Operating and Financial Data
December 31, 2006
PORTFOLIO SUMMARY BY FACILITY TYPE AND TENANT
(dollars in thousands)
| | | Number of Properties | | Number of Units/Beds | | Carrying Value of Investment (1) | | Percent | | Investment per unit | | Annualized Current Rent | | Percent | |
Facility Type: | | | | | | | | | | | | | | | | | | | | | | |
| Independent Living (IL) (2) | | | 41 | | | 11,295 | | $ | 989,442 | | | 54.6 | % | $ | 87.6 | | $ | 98,062 | | | 54.6 | % |
| Assisted Living (AL) | | | 95 | | | 6,679 | | | 566,708 | | | 31.2 | % | | 84.8 | | | 54,250 | | | 30.2 | % |
| Nursing Homes | | | 58 | | | 5,869 | | | 214,655 | | | 11.8 | % | | 36.6 | | | 17,006 | | | 9.6 | % |
| Rehabilitation Hospitals (3) | | | 2 | | | 364 | | | 43,553 | | | 2.4 | % | | 119.7 | | | 10,250 | | | 5.7 | % |
| Total | | | 196 | | | 24,207 | | $ | 1,814,358 | | | 100.0 | % | $ | 75.0 | | $ | 179,568 | | | 100.0 | % |
| | | | | | | | | | | | | | | | | | | | | | | |
Tenant: | | | | | | | | | | | | | | | | | | | | | | |
| Five Star / Sunrise (4) | | | 30 | | | 7,275 | | $ | 651,865 | | | 35.9 | % | $ | 89.6 | | $ | 65,012 | | | 36.2 | % |
| Five Star | | | 114 | | | 9,424 | | | 595,606 | | | 32.8 | % | | 63.2 | | | 49,139 | | | 27.4 | % |
| Sunrise / Marriott (5) | | | 14 | | | 4,091 | | | 325,473 | | | 18.0 | % | | 79.6 | | | 31,490 | | | 17.5 | % |
| Five Star Rehabilitation Hospitals (3) | | | 2 | | | 364 | | | 43,553 | | | 2.4 | % | | 119.7 | | | 10,250 | | | 5.7 | % |
| NewSeasons / IBC (6) | | | 10 | | | 1,019 | | | 87,641 | | | 4.8 | % | | 86.0 | | | 9,289 | | | 5.2 | % |
| Alterra / Brookdale (7) | | | 18 | | | 894 | | | 61,126 | | | 3.4 | % | | 68.4 | | | 7,632 | | | 4.3 | % |
| Genesis HealthCare Corporation | | | 1 | | | 156 | | | 13,007 | | | 0.7 | % | | 83.4 | | | 1,535 | | | 0.8 | % |
| 5 Private Companies (combined) | | | 7 | | | 984 | | | 36,087 | | | 2.0 | % | | 36.7 | | | 5,221 | | | 2.9 | % |
| Total | | | 196 | | | 24,207 | | $ | 1,814,358 | | | 100.0 | % | $ | 75.0 | | $ | 179,568 | | | 100.0 | % |
| (1) | Amounts are before depreciation, but after impairment write downs. |
| (2) | Properties where the majority of units are independent living apartments are classified as independent living communities. |
| (3) | Beginning in 2003 until November 2006, we were in two separate litigations with HealthSouth seeking to increase the rent due under an amended lease with HealthSouth and to terminate the amended lease and repossess the hospitals. On November 8, 2006, we and HealthSouth agreed to settle our litigations, to recognize HealthSouth’s lease until September 30, 2006 and to increase the annual rent due under the lease for the period from January 2, 2002 to September 30, 2006. As a result of the settlement, HealthSouth paid us additional rent of $5.7 million, or $0.08 per share, for periods through September 30, 2006, which we recognized as rental income in the fourth quarter of 2006. On October 1, 2006, Five Star Quality Care Inc., or Five Star, assumed the operations of these two hospitals and began leasing them from us for an annual rent of $10.25 million. |
| (4) | These 30 properties are leased to Five Star. Historically, these properties were managed by Sunrise, but effective December 1, 2006, Five Star began managing all 30 of these properties. Prior to that, Sunrise managed seven properties during the third quarter. |
| (5) | Marriott guarantees this lease. |
| (6) | IBC guarantees this lease. |
| (7) | Brookdale guarantees this lease. |
Senior Housing Properties Trust
Supplemental Operating and Financial Data
December 31, 2006
OCCUPANCY BY FACILITY TYPE AND TENANT
| | | For the Three Months Ended | |
| | | 9/30/2006 | 6/30/2006 | 3/31/2006 | 12/31/2005 | 9/30/2005 |
Facility Type: | | | | | | | | | | | | | | | | |
| Independent Living (IL) (1) | | | 93 | % | | 92 | % | | 93 | % | | 92 | % | | 91 | % |
| Assisted Living (AL) (1) | | | 91 | % | | 89 | % | | 90 | % | | 91 | % | | 88 | % |
| Nursing Homes | | | 88 | % | | 89 | % | | 92 | % | | 91 | % | | 89 | % |
| Rehabilitation Hospitals (2) | | | NA | | | NA | | | NA | | | NA | | | NA | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Tenant: | | | | | | | | | | | | | | | | |
| Five Star / Sunrise (3) | | | 92 | % | | 93 | % | | 93 | % | | 93 | % | | 92 | % |
| Five Star (4) | | | 88 | % | | 89 | % | | 90 | % | | 89 | % | | 86 | % |
| Sunrise / Marriott (5) | | | NA | | | NA | | | NA | | | NA | | | NA | |
| Five Star Rehabilitation Hospitals (2) | | | NA | | | NA | | | NA | | | NA | | | NA | |
| NewSeasons / IBC | | | 85 | % | | 85 | % | | 85 | % | | 80 | % | | 80 | % |
| Alterra / Brookdale | | | 89 | % | | 86 | % | | 90 | % | | 90 | % | | 88 | % |
| Genesis HealthCare Corporation | | | 96 | % | | 97 | % | | 97 | % | | 97 | % | | 94 | % |
| 5 Private Companies (combined) | | | 88 | % | | 89 | % | | 90 | % | | 88 | % | | 84 | % |
| (1) | Includes operating statistics provided by Sunrise that may not be accurate due to an accounting issue at Sunrise. See Note 5 below. However, the Sunrise statistics do not materially affect the cumulative occupancy percentages for these two facility type leases. |
| (2) | On October 1, 2006, Five Star assumed the operations of the two rehabilitation hospitals and began leasing them from us for annual rent of $10.25 million. These hospitals were formerly operated by HealthSouth. Because we do not have reliable information about the operations for the hospitals by HealthSouth, we do not report operating data for these hospitals before October 1, 2006. |
| (3) | These 30 properties are leased to Five Star. Historically, these properties were managed by Sunrise, but effective December 1, 2006, Five Star began managing all 30 of these properties. Prior to that, Sunrise managed seven properties during the third quarter. |
| (4) | Includes data for periods prior to our ownership of certain properties included in this lease. |
| (5) | Sunrise has not filed its Quarterly Reports on Form 10-Q with the Securities and Exchange Comission in 2006 due to an accounting issue. Because we do not know what impact the resolution of this accounting issue may have on the reported performance of our properties, we do not report operating data for this tenant. |
| | |
| | All tenant operating data presented are based upon the operating results provided by our tenants for the indicated quarterly periods. We have not independently verified our tenants’ operating data. |
Senior Housing Properties Trust
Supplemental Operating and Financial Data
December 31, 2006
% PRIVATE PAY BY FACILITY TYPE AND TENANT
| | | For the Three Months Ended | |
| | | 9/30/2006 | 6/30/2006 | 3/31/2006 | 12/31/2005 | 9/30/2005 |
Facility Type: | | | | | | | | | | | | | | | | |
| Independent Living (IL) (1) | | | 86 | % | | 83 | % | | 84 | % | | 87 | % | | 83 | % |
| Assisted Living (AL) (1) | | | 99 | % | | 94 | % | | 94 | % | | 93 | % | | 94 | % |
| Nursing Homes | | | 28 | % | | 28 | % | | 28 | % | | 27 | % | | 32 | % |
| Rehabilitation Hospitals (2) | | | NA | | | NA | | | NA | | | NA | | | NA | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Tenant: | | | | | | | | | | | | | | | | |
| Five Star / Sunrise (3) | | | 80 | % | | 81 | % | | 82 | % | | 84 | % | | 84 | % |
| Five Star (4) | | | 51 | % | | 50 | % | | 50 | % | | 48 | % | | 54 | % |
| Sunrise / Marriott (5) | | | NA | | | NA | | | NA | | | NA | | | NA | |
| Five Star Rehabilitation Hospitals (2) | | | NA | | | NA | | | NA | | | NA | | | NA | |
| NewSeasons / IBC | | | 100 | % | | 100 | % | | 100 | % | | 100 | % | | 100 | % |
| Alterra / Brookdale | | | 98 | % | | 98 | % | | 98 | % | | 98 | % | | 98 | % |
| Genesis HealthCare Corporation | | | 24 | % | | 19 | % | | 17 | % | | 17 | % | | 20 | % |
| 5 Private Companies (combined) | | | 26 | % | | 27 | % | | 26 | % | | 24 | % | | 24 | % |
| (1) | Includes operating statistics provided by Sunrise that may not be accurate due to an accounting issue at Sunrise. See Note 5 below. However, the Sunrise statistics do not materially affect the cumulative private pay percentages for these two facility type leases. |
| (2) | On October 1, 2006, Five Star assumed the operations of the two rehabilitation hospitals and began leasing them from us for annual rent of $10.25 million. These hospitals were formerly operated by HealthSouth. Because we do not have reliable information about the operations for the hospitals by HealthSouth, we do not report operating data for these hospitals before October 1, 2006. |
| (3) | These 30 properties are leased to Five Star. Historically, these properties were managed by Sunrise, but effective December 1, 2006, Five Star began managing all 30 of these properties.Prior to that, Sunrise managed seven properties during the third quarter. |
| (4) | Includes data for periods prior to our ownership of certain properties included in this lease. |
| (5) | Sunrise has not filed its Quarterly Reports on Form 10-Q with the Securities and Exchange Commission in 2006 due to an accounting issue. Because we do not know what impact the resolution of this accounting issue may have on the reported performance of our properties, we do not report operating data for this tenant. |
| | |
| | All tenant operating data presented are based upon the operating results provided by our tenants for the indicated quarterly periods. We have not independently verified our tenants’ operating data. |
Senior Housing Properties Trust
Supplemental Operating and Financial Data
December 31, 2006
RENT COVERAGE
| | | For the Three Months Ended | |
| Tenant | | 9/30/2006 | | 6/30/2006 | | 3/31/2006 | | 12/31/2005 | | 9/30/2005 | |
| Five Star / Sunrise (1) | | | 1.50x | | | 1.50x | | | 1.42x | | | 1.46x | | | 1.52x | |
| Five Star (2) | | | 1.53x | | | 1.45x | | | 1.49x | | | 1.82x | | | 1.72x | |
| Sunrise / Marriott (3) | | | NA | | | NA | | | NA | | | NA | | | NA | |
| Five Star Rehabilitation Hospitals (4) | | | NA | | | NA | | | NA | | | NA | | | NA | |
| NewSeasons / IBC | | | 1.14x | | | 1.21x | | | 1.16x | | | 1.10x | | | 1.17x | |
| Alterra / Brookdale | | | 2.21x | | | 1.97x | | | 2.04x | | | 1.98x | | | 1.87x | |
| Genesis HealthCare Corporation | | | 2.41x | | | 2.15x | | | 1.77x | | | 2.16x | | | 1.96x | |
| 5 Private companies (combined) | | | 1.83x | | | 1.95x | | | 1.67x | | | 1.92x | | | 1.81x | |
| (1) | These 30 properties are leased to Five Star. Historically, these properties were managed by Sunrise, but effective December 1, 2006, Five Star began managing all 30 of these properties. Prior to that, Sunrise managed seven properties during the third quarter. The rent that Five Star pays to us is subordinate to the management fees paid by Five Star to Sunrise, but our rent is not subordinate to Five Star's internal management costs. For meaningful comparison purposes, the rent coverage presented for this lease is before management fees paid to Sunrise for all 30 properties. |
| (2) | Includes data for periods prior to our ownership of certain properties included in this lease. |
| (3) | Sunrise has not filed its Quarterly Report on Form 10-Q with the Securities and Exchange Commission in 2006 due to an accounting issue. Because we do not know what impact the resolution of this accounting issue may have on the reported performance of our properties, we do not report operating data for this tenant. |
| (4) | On October 1, 2006, Five Star assumed the operations of the two rehabilitation hospitals and began leasing them from us for annual rent of $10.25 million. These hospitals were formerly operated by HealthSouth. Because we do not have reliable information about the operations for the hospitals by HealthSouth, we do not report operating data for these hospitals before October 1, 2006. |
| | |
| | All tenant operating data presented are based upon the operating results provided by our tenants for the indicated periods. Rent coverage is calculated as operating cash flow from our tenants’ facility operations, before subordinated charges and capital expenditure reserves, if any, divided by rent payable to us. We have not independently verified our tenants’ operating data. |
Senior Housing Properties Trust
Supplemental Operating and Financial Data
December 31, 2006
PORTFOLIO LEASE EXPIRATION SCHEDULE
(dollars in thousands)
| | | Annualized Current Rent | | % of Annualized Current Rent | | Cumulative % of Annualized Current Rent | |
| 2006 | | $ | - | | | - | | | 0.0 | % |
| 2007 | | | - | | | - | | | 0.0 | % |
| 2008 | | | - | | | - | | | 0.0 | % |
| 2009 | | | - | | | - | | | 0.0 | % |
| 2010 | | | 1,295 | | | 0.7 | % | | 0.7 | % |
| 2011 | | | - | | | - | | | 0.7 | % |
| 2012 | | | - | | | - | | | 0.7 | % |
| 2013 | | | 31,490 | | | 17.5 | % | | 18.3 | % |
| 2014 | | | - | | | - | | | 18.3 | % |
| 2015 | | | 2,020 | | | 1.1 | % | | 19.4 | % |
| 2016 and thereafter | | | 144,763 | | | 80.6 | % | | 100.0 | % |
| Total | | $ | 179,568 | | | 100.0 | % | | | |
| | | | | | | | | | | |
| Weighted average remaining | | | | | | |
| lease term (in years) | | | 11.5 | | | | | | | |
| | | | | | | | | | | |
