(Exact name of Registrant as specified in its charter) | ||
Maryland | 38-3041398 | |
(State of incorporation) | (IRS Employer Identification No.) | |
200 International Circle, Suite 3500, Hunt Valley, MD 21030 | ||
(Address of principal executive offices) | ||
(410) 427-1700 | ||
(Telephone number, including area code) |
Common Stock, $.10 par value | 117,155,264 | |
(Class) | (Number of shares) |
Page No. | |||
2 | |||
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4 | |||
5 | |||
6 | |||
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33 | |||
33 | |||
34 | |||
34 | |||
36 |
June 30, | December 31, | |||||||
2013 | 2012 | |||||||
(Unaudited) | ||||||||
ASSETS | ||||||||
Real estate properties | ||||||||
Land and buildings | $ | 3,051,363 | $ | 3,038,553 | ||||
Less accumulated depreciation | (643,514 | ) | (580,373 | ) | ||||
Real estate properties – net | 2,407,849 | 2,458,180 | ||||||
Mortgage notes receivable – net | 241,254 | 238,621 | ||||||
2,649,103 | 2,696,801 | |||||||
Other investments – net | 74,646 | 47,339 | ||||||
2,723,749 | 2,744,140 | |||||||
Assets held for sale – net | 1,020 | 1,020 | ||||||
Total investments | 2,724,769 | 2,745,160 | ||||||
Cash and cash equivalents | 7,039 | 1,711 | ||||||
Restricted cash | 40,127 | 36,660 | ||||||
Accounts receivable – net | 138,059 | 125,180 | ||||||
Other assets | 69,802 | 73,294 | ||||||
Total assets | $ | 2,979,796 | $ | 2,982,005 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Revolving line of credit | $ | 5,000 | $ | 158,000 | ||||
Term loan | 200,000 | 100,000 | ||||||
Secured borrowings | 301,526 | 366,538 | ||||||
Unsecured borrowings – net | 1,200,139 | 1,200,394 | ||||||
Accrued expenses and other liabilities | 135,835 | 145,744 | ||||||
Total liabilities | 1,842,500 | 1,970,676 | ||||||
Stockholders’ equity: | ||||||||
Common stock $.10 par value 200,000 shares authorized –– 117,152 shares as of June 30, 2013 and 112,393 as of December 31, 2012 issued and outstanding | 11,715 | 11,239 | ||||||
Common stock – additional paid-in capital | 1,807,201 | 1,664,855 | ||||||
Cumulative net earnings | 841,306 | 754,128 | ||||||
Cumulative dividends paid | (1,522,926 | ) | (1,418,893 | ) | ||||
Total stockholders’ equity | 1,137,296 | 1,011,329 | ||||||
Total liabilities and stockholders’ equity | $ | 2,979,796 | $ | 2,982,005 |
2 |
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Revenue | ||||||||||||||||
Rental income | $ | 93,069 | $ | 75,228 | $ | 186,178 | $ | 151,203 | ||||||||
Mortgage interest income | 7,435 | 7,404 | 14,781 | 14,740 | ||||||||||||
Other investment income – net | 1,860 | 1,165 | 3,166 | 2,295 | ||||||||||||
Miscellaneous | 151 | 28 | 151 | 102 | ||||||||||||
Total operating revenues | 102,515 | 83,825 | 204,276 | 168,340 | ||||||||||||
Expenses | ||||||||||||||||
Depreciation and amortization | 32,225 | 27,199 | 64,184 | 54,346 | ||||||||||||
General and administrative | 5,483 | 4,954 | 10,680 | 10,480 | ||||||||||||
Acquisition costs | 9 | 98 | 143 | 203 | ||||||||||||
Impairment loss on real estate properties | - | - | - | 272 | ||||||||||||
Provisions for uncollectible mortgages, notes and accounts receivable | 65 | - | 65 | - | ||||||||||||
Total operating expenses | 37,782 | 32,251 | 75,072 | 65,301 | ||||||||||||
Income before other income and expense | 64,733 | 51,574 | 129,204 | 103,039 | ||||||||||||
Other income (expense) | ||||||||||||||||
Interest income | 14 | 9 | 17 | 16 | ||||||||||||
Interest expense | (24,952 | ) | (24,009 | ) | (50,624 | ) | (46,976 | ) | ||||||||
Interest – amortization of deferred financing costs | (698 | ) | (668 | ) | (1,380 | ) | (1,297 | ) | ||||||||
Interest – refinancing gain (costs) | 11,112 | 1,698 | 11,112 | (5,410 | ) | |||||||||||
Total other expense | (14,524 | ) | (22,970 | ) | (40,875 | ) | (53,667 | ) | ||||||||
Income before gain on assets sold | 50,209 | 28,604 | 88,329 | 49,372 | ||||||||||||
(Loss) gain on assets sold – net | (1,151 | ) | 1,968 | (1,151 | ) | 7,284 | ||||||||||
Net income available to common stockholders | $ | 49,058 | $ | 30,572 | $ | 87,178 | $ | 56,656 | ||||||||
Income per common share available to common shareholders: | ||||||||||||||||
Basic: | ||||||||||||||||
Net income | $ | 0.42 | $ | 0.29 | $ | 0.76 | $ | 0.54 | ||||||||
Diluted: | ||||||||||||||||
Net income | $ | 0.42 | $ | 0.29 | $ | 0.76 | $ | 0.54 | ||||||||
Dividends declared and paid per common share | $ | 0.46 | $ | 0.42 | $ | 0.91 | $ | 0.83 | ||||||||
Weighted-average shares outstanding, basic | 116,199 | 105,717 | 114,491 | 104,736 | ||||||||||||
Weighted-average shares outstanding, diluted | 117,022 | 106,033 | 115,273 | 105,023 |
3 |
Common Stock Par Value | Additional Paid-in Capital | Cumulative Net Earnings | Cumulative Dividends | Total | ||||||||||||||||
Balance at December 31, 2012 (112,393 common shares) | $ | 11,239 | $ | 1,664,855 | $ | 754,128 | $ | (1,418,893 | ) | $ | 1,011,329 | |||||||||
Issuance of common stock: | ||||||||||||||||||||
Grant of restricted stock to company directors (15 shares at $30.33 per share) | 2 | (2 | ) | — | — | — | ||||||||||||||
Amortization of restricted stock | — | 2,883 | — | — | 2,883 | |||||||||||||||
Dividend reinvestment plan (1,462 shares at $28.46 per share) | 146 | 41,442 | — | — | 41,588 | |||||||||||||||
Grant of stock as payment of directors fees (3 shares at an average of $32.17 per share) | — | 87 | — | — | 87 | |||||||||||||||
Equity Shelf Program (3,279 shares at $30.69 per share, net of issuance costs) | 328 | 97,936 | — | — | 98,264 | |||||||||||||||
Net income | — | — | 87,178 | — | 87,178 | |||||||||||||||
Common dividends ($0.91 per share) | — | — | — | (104,033 | ) | (104,033 | ) | |||||||||||||
Balance at June 30, 2013 (117,152 common shares) | $ | 11,715 | $ | 1,807,201 | $ | 841,306 | $ | (1,522,926 | ) | $ | 1,137,296 |
4 |
Six Months Ended June 30, | ||||||||
2013 | 2012 | |||||||
Cash flows from operating activities | ||||||||
Net income | $ | 87,178 | $ | 56,656 | ||||
Adjustment to reconcile net income to cash provided by operating activities: | ||||||||
Depreciation and amortization | 64,184 | 54,346 | ||||||
Impairment on real estate properties | — | 272 | ||||||
Provision for uncollectible mortgages, notes and accounts receivable | 65 | — | ||||||
Amortization of deferred financing and debt extinguishment (gain)/costs | (9,732 | ) | 6,707 | |||||
Restricted stock amortization expense | 2,924 | 2,971 | ||||||
Loss (gain) on assets sold – net | 1,151 | (7,284 | ) | |||||
Amortization of acquired in-place leases - net | (2,503 | ) | (2,852 | ) | ||||
Other | — | (75 | ) | |||||
Change in operating assets and liabilities – net of amounts assumed/acquired: | ||||||||
Accounts receivable, net | 147 | 370 | ||||||
Straight-line rent | (13,702 | ) | (13,120 | ) | ||||
Lease inducement | 1,685 | 1,684 | ||||||
Effective yield receivable on mortgage notes | (1,074 | ) | (1,113 | ) | ||||
Other operating assets and liabilities | (8,995 | ) | (4,138 | ) | ||||
Net cash provided by operating activities | 121,328 | 94,424 | ||||||
Cash flows from investing activities | ||||||||
Acquisition of real estate – net of liabilities assumed and escrows acquired | — | (26,922 | ) | |||||
Placement of mortgage loans | (2,869 | ) | (4,955 | ) | ||||
Proceeds from sale of real estate investments | 2,288 | 22,006 | ||||||
Capital improvements to real estate investments | (17,307 | ) | (14,207 | ) | ||||
Proceeds from other investments | 2,942 | 10,040 | ||||||
Investments in other investments | (30,248 | ) | (3,558 | ) | ||||
Collection of mortgage principal | 237 | 243 | ||||||
Net cash used in investing activities | (44,957 | ) | (17,353 | ) | ||||
Cash flows from financing activities | ||||||||
Proceeds from credit facility borrowings | 201,000 | 92,000 | ||||||
Payments on credit facility borrowings | (254,000 | ) | (362,500 | ) | ||||
Receipts of other long-term borrowings | 59,355 | 400,000 | ||||||
Payments of other long-term borrowings | (112,208 | ) | (188,674 | ) | ||||
Payments of financing related costs | (1,032 | ) | (12,920 | ) | ||||
Receipts from dividend reinvestment plan | 41,588 | 68,976 | ||||||
Net proceeds from issuance of common stock | 98,264 | 15,574 | ||||||
Dividends paid | (104,010 | ) | (87,017 | ) | ||||
Net cash used in financing activities | (71,043 | ) | (74,561 | ) | ||||
Increase in cash and cash equivalents | 5,328 | 2,510 | ||||||
Cash and cash equivalents at beginning of period | 1,711 | 351 | ||||||
Cash and cash equivalents at end of period | $ | 7,039 | $ | 2,861 | ||||
Interest paid during the period, net of amounts capitalized | $ | 51,397 | $ | 46,323 |
5 |
6 |
June 30, | December 31, | |||||||
2013 | 2012 | |||||||
(in thousands) | ||||||||
Contractual receivables | $ | 3,757 | $ | 3,963 | ||||
Effective yield interest receivables | 4,650 | 3,576 | ||||||
Straight-line receivables | 112,610 | 98,973 | ||||||
Lease inducements | 17,622 | 19,307 | ||||||
Allowance | (580 | ) | (639 | ) | ||||
Accounts receivable – net | $ | 138,059 | $ | 125,180 |
7 |
Pro Forma | ||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
(in thousands, except per share amount, unaudited) | ||||||||||||||||
Revenues | $ | 102,515 | $ | 97,331 | $ | 204,276 | $ | 195,352 | ||||||||
Net income available to common stockholders | $ | 49,058 | $ | 36,178 | $ | 87,178 | $ | 67,868 | ||||||||
Earnings per share – diluted: | ||||||||||||||||
Net income available to common stockholders – as reported | $ | 0.42 | $ | 0.29 | $ | 0.76 | $ | 0.54 | ||||||||
Net income available to common stockholders – pro forma | $ | 0.42 | $ | 0.34 | $ | 0.76 | $ | 0.65 |
8 |
June 30, | December 31, | |||||||
2013 | 2012 | |||||||
(in thousands) | ||||||||
Other Investment note due 2015 | $ | 2,418 | $ | 2,518 | ||||
Other Investment notes due 2021 - 2023 | 12,061 | 9,775 | ||||||
Other Investment note due 2013 | 559 | 1,018 | ||||||
Other Investment note due 2014 | 438 | 812 | ||||||
$28.0 Million Other Investment note due 2017 | 25,250 | 26,500 | ||||||
$6.0 Million Other Investment note due 2013 | 5,439 | 3,450 | ||||||
Other Investment note due 2013 | - | 261 | ||||||
$1.3 Million Other Investment note due 2017 | 965 | 425 | ||||||
$25.0 Million Other Investment note due 2017 | 24,936 | - | ||||||
Notes receivable, gross(1) | 72,066 | 44,759 | ||||||
Allowance for loss on notes receivable | (1,977 | ) | (1,977 | ) | ||||
Notes receivable, net | 70,089 | 42,782 | ||||||
Marketable securities and other | 4,557 | 4,557 | ||||||
Total other investments | $ | 74,646 | $ | 47,339 |
(1) | The majority of these notes bear interest at approximately 10% annually. |
9 |
10 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
(in thousands) | ||||||||||||||||
Stock-based compensation expense | $ | 1,472 | $ | 1,486 | $ | 2,924 | $ | 2,971 |
11 |
Shares/ Units | Grant Date Average Fair Value Per Unit/ Share | Total Compensation Cost (in millions) | Weighted Average Period of Expense Recognition (in months) | Unrecognized Compensation Cost (in millions) | ||||||||||||||||
Restricted stock | 428,503 | $ | 22.44 | $ | 9.6 | 36 | $ | 1.6 | ||||||||||||
2013 Annual PRSUs | 124,244 | $ | 8.92 | 1.1 | 12 | 0.6 | ||||||||||||||
Multi-year absolute TSR PRSUs | 279,550 | $ | 11.06 | 3.1 | 44 | 0.9 | ||||||||||||||
Multi-year relative TSR PRSUs | 93,183 | $ | 12.26 | 1.1 | 44 | 0.3 | ||||||||||||||
Total | 925,480 | $ | 14.93 | $ | 14.9 | $ | 3.4 |
12 |
Current | June 30, | December 31, | |||||||||||||
Maturity | Rate | 2013 | 2012 | ||||||||||||
(in thousands) | |||||||||||||||
Secured borrowings: | |||||||||||||||
HUD Berkadia mortgages assumed June 2010 | 2036 - 2040 | - | $ | — | $ | 62,921 | |||||||||
HUD Capital Funding mortgages assumed June 2010 (1) | 2040 - 2045 | 4.85 | % | 129,773 | 130,887 | ||||||||||
HUD mortgages assumed October 2011 (1) | 2036 - 2040 | 4.87 | % | 31,571 | 31,991 | ||||||||||
HUD mortgages assumed December 2011(1) | 2044 | 3.06 | % | 59,166 | 58,884 | ||||||||||
HUD mortgages assumed December 2012(1) | 2031 - 2045 | 5.50 | % | 81,016 | 81,855 | ||||||||||
Total secured borrowings | 301,526 | 366,538 | |||||||||||||
Unsecured borrowings: | |||||||||||||||
Revolving line of credit | 2016 | 1.69 | % | $ | 5,000 | $ | 158,000 | ||||||||
Term Loan | 2017 | 1.94 | % | 200,000 | 100,000 | ||||||||||
205,000 | 258,000 | ||||||||||||||
2020 Notes | 2020 | 7.50 | % | 200,000 | 200,000 | ||||||||||
2022 Notes | 2022 | 6.75 | % | 575,000 | 575,000 | ||||||||||
2024 Notes | 2024 | 5.875 | % | 400,000 | 400,000 | ||||||||||
Subordinated debt | 2021 | 9.00 | % | 20,969 | 21,049 | ||||||||||
1,195,969 | 1,196,049 | ||||||||||||||
Premium - net | 4,170 | 4,345 | |||||||||||||
Total unsecured borrowings | 1,405,139 | 1,458,394 | |||||||||||||
Totals – net | $ | 1,706,665 | $ | 1,824,932 |
(1) | Reflects the weighted average annual interest rate on the mortgages. |
13 |
14 |
June 30, 2013 | December 31, 2012 | |||||||||||||||
Carrying Amount | Fair Value | Carrying Amount | Fair Value | |||||||||||||
Assets: | (in thousands) | |||||||||||||||
Cash and cash equivalents | $ | 7,039 | $ | 7,039 | $ | 1,711 | $ | 1,711 | ||||||||
Restricted cash | 40,127 | 40,127 | 36,660 | 36,660 | ||||||||||||
Mortgage notes receivable – net | 241,254 | 239,346 | 238,621 | 235,705 | ||||||||||||
Other investments – net | 74,646 | 71,596 | 47,339 | 44,077 | ||||||||||||
Totals | $ | 363,066 | $ | 358,108 | $ | 324,331 | $ | 318,153 | ||||||||
Liabilities: | ||||||||||||||||
Revolving line of credit | $ | 5,000 | $ | 5,000 | $ | 158,000 | $ | 158,000 | ||||||||
Term loan | 200,000 | 200,000 | 100,000 | 100,000 | ||||||||||||
7.50% Notes due 2020 – net | 197,718 | 228,267 | 197,546 | 252,363 | ||||||||||||
6.75% Notes due 2022 – net | 581,452 | 648,030 | 581,799 | 724,240 | ||||||||||||
5.875% Notes due 2024 – net | 400,000 | 424,311 | 400,000 | 441,761 | ||||||||||||
HUD debt | 301,526 | 304,041 | 366,538 | 433,803 | ||||||||||||
Subordinated debt | 20,969 | 25,118 | 21,049 | 27,896 | ||||||||||||
Totals | $ | 1,706,665 | $ | 1,834,767 | $ | 1,824,932 | $ | 2,138,063 |
● | Cash and cash equivalents and restricted cash: The carrying amount of cash and cash equivalents and restricted cash reported in the balance sheet approximates fair value because of the short maturity of these instruments (i.e., less than 90 days). |
● | Mortgage notes receivable: The fair values of the mortgage notes receivables are estimated using a discounted cash flow analysis, using interest rates being offered for similar loans to borrowers with similar credit ratings (Level 3). |
● | Other investments: Other investments are primarily comprised of: (i) notes receivable and (ii) an investment in a redeemable non-convertible preferred security of an unconsolidated business accounted for using the cost method of accounting. The fair values of notes receivable are estimated using a discounted cash flow analysis, using interest rates being offered for similar loans to borrowers with similar credit ratings (Level 3). The fair value of the investment in the unconsolidated business is estimated using quoted market value and considers the terms of the underlying arrangement (Level 3). |
15 |
● | Revolving line of credit: The fair value of our borrowings under variable rate agreements are estimated using an expected present value technique based on expected cash flows discounted using the current market rates (Level 2). |
● | Senior notes and other long-term borrowings: The fair value of our borrowings under fixed rate agreements are estimated based on open market trading activity provided by a third party (Level 2). |
16 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
(in thousands, except per share amounts) | ||||||||||||||||
Numerator: | ||||||||||||||||
Net income | $ | 49,058 | $ | 30,572 | $ | 87,178 | $ | 56,656 | ||||||||
Numerator for net income available to common per share - basic and diluted | $ | 49,058 | $ | 30,572 | $ | 87,178 | $ | 56,656 | ||||||||
Denominator: | ||||||||||||||||
Denominator for basic earnings per share | 116,199 | 105,717 | 114,491 | 104,736 | ||||||||||||
Effect of dilutive securities: | ||||||||||||||||
Restricted stock | 786 | 299 | 750 | 270 | ||||||||||||
Deferred stock | 37 | 17 | 32 | 17 | ||||||||||||
Denominator for diluted earnings per share | 117,022 | 106,033 | 115,273 | 105,023 | ||||||||||||
Earnings per share – basic: | ||||||||||||||||
Net income – basic | $ | 0.42 | $ | 0.29 | $ | 0.76 | $ | 0.54 | ||||||||
Earnings per share – diluted: | ||||||||||||||||
Net income – diluted | $ | 0.42 | $ | 0.29 | $ | 0.76 | $ | 0.54 |
17 |
June 30, 2013 | ||||||||||||||||
Issuer & Subsidiary Guarantors | Non-Guarantor Subsidiaries | Elimination Company | Consolidated | |||||||||||||
ASSETS | ||||||||||||||||
Real estate properties | ||||||||||||||||
Land and buildings | $ | 2,479,752 | $ | 571,611 | $ | - | $ | 3,051,363 | ||||||||
Less accumulated depreciation | (585,589 | ) | (57,925 | ) | - | (643,514 | ) | |||||||||
Real estate properties – net | 1,894,163 | 513,686 | - | 2,407,849 | ||||||||||||
Mortgage notes receivable – net | 241,254 | - | - | 241,254 | ||||||||||||
2,135,417 | 513,686 | - | 2,649,103 | |||||||||||||
Other investments – net | 74,646 | - | - | 74,646 | ||||||||||||
2,210,063 | 513,686 | - | 2,723,749 | |||||||||||||
Assets held for sale – net | 1,020 | - | - | 1,020 | ||||||||||||
Total investments | 2,211,083 | 513,686 | - | 2,724,769 | ||||||||||||
Cash and cash equivalents | 7,039 | - | - | 7,039 | ||||||||||||
Restricted cash | 6,677 | 33,450 | - | 40,127 | ||||||||||||
Accounts receivable – net | 129,141 | 8,918 | - | 138,059 | ||||||||||||
Investment in affiliates | 222,047 | - | (222,047 | ) | - | |||||||||||
Other assets | 35,234 | 34,568 | - | 69,802 | ||||||||||||
Total assets | $ | 2,611,221 | $ | 590,622 | $ | (222,047 | ) | $ | 2,979,796 | |||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||||
Revolving line of credit | $ | 5,000 | $ | - | $ | - | $ | 5,000 | ||||||||
Term loan | 200,000 | - | - | 200,000 | ||||||||||||
Secured borrowings | - | 301,526 | - | 301,526 | ||||||||||||
Unsecured borrowings – net | 1,179,170 | 20,969 | - | 1,200,139 | ||||||||||||
Accrued expenses and other liabilities | 89,755 | 46,080 | - | 135,835 | ||||||||||||
Intercompany payable | - | 181,624 | (181,624 | ) | - | |||||||||||
Total liabilities | 1,473,925 | 550,199 | (181,624 | ) | 1,842,500 | |||||||||||
Stockholders’ equity: | ||||||||||||||||
Common stock | 11,715 | - | - | 11,715 | ||||||||||||
Common stock – additional paid-in capital | 1,807,201 | - | - | 1,807,201 | ||||||||||||
Cumulative net earnings | 841,306 | 40,423 | (40,423 | ) | 841,306 | |||||||||||
Cumulative dividends paid | (1,522,926 | ) | - | - | (1,522,926 | ) | ||||||||||
Total stockholders’ equity | 1,137,296 | 40,423 | (40,423 | ) | 1,137,296 | |||||||||||
Total liabilities and stockholders’ equity | $ | 2,611,221 | $ | 590,622 | (222,047 | ) | $ | 2,979,796 |
18 |
December 31, 2012 | ||||||||||||||||
Issuer & Subsidiary Guarantors | Non – Guarantor Subsidiaries | Elimination Company | Consolidated | |||||||||||||
ASSETS | ||||||||||||||||
Real estate properties | ||||||||||||||||
Land and buildings | $ | 2,466,866 | $ | 571,687 | $ | — | $ | 3,038,553 | ||||||||
Less accumulated depreciation | (535,223 | ) | (45,150 | ) | — | (580,373 | ) | |||||||||
Real estate properties – net | 1,931,643 | 526,537 | — | 2,458,180 | ||||||||||||
Mortgage notes receivable – net | 238,621 | — | — | 238,621 | ||||||||||||
2,170,264 | 526,537 | — | 2,696,801 | |||||||||||||
Other investments – net | 47,339 | — | — | 47,339 | ||||||||||||
2,217,603 | 526,537 | — | 2,744,140 | |||||||||||||
Assets held for sale – net | 1,020 | — | — | 1,020 | ||||||||||||
Total investments | 2,218,623 | 526,537 | — | 2,745,160 | ||||||||||||
Cash and cash equivalents | 1,711 | — | — | 1,711 | ||||||||||||
Restricted cash | 7,078 | 29,582 | — | 36,660 | ||||||||||||
Accounts receivable – net | 118,473 | 6,707 | — | 125,180 | ||||||||||||
Investment in affiliates | 163,610 | — | (163,610 | ) | — | |||||||||||
Other assets | 38,224 | 35,070 | — | 73,294 | ||||||||||||
Total assets | $ | 2,547,719 | $ | 597,896 | (163,610 | ) | $ | 2,982,005 | ||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||||
Revolving line of credit | $ | 158,000 | $ | — | $ | — | $ | 158,000 | ||||||||
Term loan | 100,000 | — | — | 100,000 | ||||||||||||
Secured borrowings | — | 366,538 | — | 366,538 | ||||||||||||
Unsecured borrowings – net | 1,179,345 | 21,049 | — | 1,200,394 | ||||||||||||
Accrued expenses and other liabilities | 99,045 | 46,699 | — | 145,744 | ||||||||||||
Intercompany payable | — | 143,158 | (143,158 | ) | — | |||||||||||
Total liabilities | 1,536,390 | 577,444 | (143,158 | ) | 1,970,676 | |||||||||||
Stockholders’ equity: | ||||||||||||||||
Common stock | 11,239 | — | — | 11,239 | ||||||||||||
Common stock – additional paid-in-capital | 1,664,855 | — | — | 1,664,855 | ||||||||||||
Cumulative net earnings | 754,128 | 20,452 | (20,452 | ) | 754,128 | |||||||||||
Cumulative dividends paid | (1,418,893 | ) | — | — | (1,418,893 | ) | ||||||||||
Total stockholders’ equity | 1,011,329 | 20,452 | (20,452 | ) | 1,011,329 | |||||||||||
Total liabilities and stockholders’ equity | $ | 2,547,719 | $ | 597,896 | $ | (163,610 | ) | $ | 2,982,005 |
19 |
Three Months Ended June 30, 2013 | Six Months Ended June 30, 2013 | |||||||||||||||||||||||||||||||
Issuer & Subsidiary Guarantors | Non – Guarantor Subsidiaries | Elimination | Consolidated | Issuer & Subsidiary Guarantors | Non – Guarantor Subsidiaries | Elimination | Consolidated | |||||||||||||||||||||||||
Revenue | ||||||||||||||||||||||||||||||||
Rental income | $ | 77,602 | $ | 15,467 | $ | - | $ | 93,069 | $ | 155,243 | $ | 30,935 | $ | - | $ | 186,178 | ||||||||||||||||
Mortgage interest income | 7,435 | - | - | 7,435 | 14,781 | - | - | 14,781 | ||||||||||||||||||||||||
Other investment income – net | 1,860 | - | - | 1,860 | 3,166 | - | - | 3,166 | ||||||||||||||||||||||||
Miscellaneous | 151 | - | - | 151 | 151 | - | - | 151 | ||||||||||||||||||||||||
Total operating revenues | 87,048 | 15,467 | - | 102,515 | 173,341 | 30,935 | - | 204,276 | ||||||||||||||||||||||||
Expenses | ||||||||||||||||||||||||||||||||
Depreciation and amortization | 25,834 | 6,391 | - | 32,225 | 51,409 | 12,775 | - | 64,184 | ||||||||||||||||||||||||
General and administrative | 5,400 | 83 | - | 5,483 | 10,482 | 198 | - | 10,680 | ||||||||||||||||||||||||
Acquisition costs | 9 | - | - | 9 | 143 | - | - | 143 | ||||||||||||||||||||||||
Provision for uncollectible mortgages, notes and accounts receivable | 65 | - | - | 65 | 65 | - | - | 65 | ||||||||||||||||||||||||
Total operating expenses | 31,308 | 6,474 | - | 37,782 | 62,099 | 12,973 | - | 75,072 | ||||||||||||||||||||||||
Income before other income and expense | 55,740 | 8,993 | - | 64,733 | 111,242 | 17,962 | - | 129,204 | ||||||||||||||||||||||||
Other income (expense): | ||||||||||||||||||||||||||||||||
Interest income | 6 | 8 | - | 14 | 1 | 16 | - | 17 | ||||||||||||||||||||||||
Interest expense | (20,736 | ) | (4,216 | ) | - | (24,952 | ) | (41,510 | ) | (9,114 | ) | - | (50,624 | ) | ||||||||||||||||||
Interest – amortization of deferred financing costs | (693 | ) | (5 | ) | - | (698 | ) | (1,375 | ) | (5 | ) | - | (1,380 | ) | ||||||||||||||||||
Interest – refinancing gain (costs) | - | 11,112 | - | 11,112 | - | 11,112 | - | 11,112 | ||||||||||||||||||||||||
Equity in earnings | 15,892 | - | (15,892 | ) | - | 19,971 | - | (19,971 | ) | - | ||||||||||||||||||||||
Total other expense | (5,531 | ) | 6,899 | (15,892 | ) | (14,524 | ) | (22,913 | ) | 2,009 | (19,971 | ) | (40,875 | ) | ||||||||||||||||||
Income before gain on assets sold | 50,209 | 15,892 | (15,892 | ) | 50,209 | 88,329 | 19,971 | (19,971 | ) | 88,329 | ||||||||||||||||||||||
Loss on assets sold – net | (1,151 | ) | - | - | (1,151 | ) | (1,151 | ) | - | - | (1,151 | ) | ||||||||||||||||||||
Net income available to common stockholders | $ | 49,058 | $ | 15,892 | $ | (15,892 | ) | $ | 49,058 | $ | 87,178 | $ | 19,971 | $ | (19,971 | ) | $ | 87,178 |
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Three Months Ended June 30, 2012 | Six Months Ended June 30, 2012 | |||||||||||||||||||||||||||||||
Issuer & Subsidiary Guarantors | Non – Guarantor Subsidiaries | Elimination Company | Consolidated | Issuer & Subsidiary Guarantors | Non – Guarantor Subsidiaries | Elimination Company | Consolidated | |||||||||||||||||||||||||
Revenue | ||||||||||||||||||||||||||||||||
Rental income | $ | 63,216 | $ | 12,012 | $ | - | $ | 75,228 | $ | 127,180 | $ | 24,023 | $ | - | $ | 151,203 | ||||||||||||||||
Mortgage interest income | 7,404 | - | - | 7,404 | 14,740 | - | - | 14,740 | ||||||||||||||||||||||||
Other investment income – net | 1,165 | - | - | 1,165 | 2,295 | - | - | 2,295 | ||||||||||||||||||||||||
Miscellaneous | 28 | - | - | 28 | 102 | - | - | 102 | ||||||||||||||||||||||||
Total operating revenues | 71,813 | 12,012 | - | 83,825 | 144,317 | 24,023 | - | 168,340 | ||||||||||||||||||||||||
Expenses | ||||||||||||||||||||||||||||||||
Depreciation and amortization | 21,889 | 5,310 | - | 27,199 | 43,788 | 10,558 | - | 54,346 | ||||||||||||||||||||||||
General and administrative | 4,829 | 125 | - | 4,954 | 10,243 | 237 | - | 10,480 | ||||||||||||||||||||||||
Acquisition costs | 98 | - | - | 98 | 203 | - | - | 203 | ||||||||||||||||||||||||
Impairment loss on real estate properties | - | - | - | - | 272 | - | - | 272 | ||||||||||||||||||||||||
Total operating expenses | 26,816 | 5,435 | - | 32,251 | 54,506 | 10,795 | - | 65,301 | ||||||||||||||||||||||||
Income before other income and expense | 44,997 | 6,577 | - | 51,574 | 89,811 | 13,228 | - | 103,039 | ||||||||||||||||||||||||
Other income (expense): | ||||||||||||||||||||||||||||||||
Interest income | 2 | 7 | - | 9 | 2 | 14 | - | 16 | ||||||||||||||||||||||||
Interest expense | (20,137 | ) | (3,872 | ) | - | (24,009 | ) | (39,244 | ) | (7,732 | ) | - | (46,976 | ) | ||||||||||||||||||
Interest – amortization of deferred financing costs | (668 | ) | - | - | (668 | ) | (1,297 | ) | - | - | (1,297 | ) | ||||||||||||||||||||
Interest – refinancing gain (costs) | 1,698 | - | - | 1,698 | (5,410 | ) | - | - | (5,410 | ) | ||||||||||||||||||||||
Equity in earnings | 2,712 | - | (2,712 | ) | - | 5,510 | - | (5,510 | ) | - | ||||||||||||||||||||||
Total other expense | (16,393 | ) | (3,865 | ) | (2,712 | ) | (22,970 | ) | (40,439 | ) | (7,718 | ) | (5,510 | ) | (53,667 | ) | ||||||||||||||||
Income before gain on assets sold | 28,604 | 2,712 | (2,712 | ) | 28,604 | 49,372 | 5,510 | (5,510 | ) | 49,372 | ||||||||||||||||||||||
Gain on assets sold – net | 1,968 | - | - | 1,968 | 7,284 | - | - | 7,284 | ||||||||||||||||||||||||
Net income available to common stockholders | $ | 30,572 | $ | 2,712 | $ | (2,712 | ) | $ | 30,572 | $ | 56,656 | $ | 5,510 | $ | (5,510 | ) | $ | 56,656 |
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(i) | those items discussed under “Risk Factors” in Item 1A to our annual report on Form 10-K for the year ended December 31, 2012, and in Part II, Item 1A of our Quarterly Report on From 10-Q for the three months ended March 31, 2013 and in Part II, Item 1A of this report; |
(ii) | uncertainties relating to the business operations of the operators of our assets, including those relating to reimbursement by third-party payors, regulatory matters and occupancy levels; |
(iii) | the ability of any operators in bankruptcy to reject unexpired lease obligations, modify the terms of our mortgages and impede our ability to collect unpaid rent or interest during the process of a bankruptcy proceeding and retain security deposits for the debtors’ obligations; |
(iv) | our ability to sell closed or foreclosed assets on a timely basis and on terms that allow us to realize the carrying value of these assets; |
(v) | our ability to negotiate appropriate modifications to the terms of our credit facilities; |
(vi) | our ability to manage, re-lease or sell any owned and operated facilities; |
(vii) | the availability and cost of capital; |
(viii) | changes in our credit ratings and the ratings of our debt securities; |
(ix) | competition in the financing of healthcare facilities; |
(x) | regulatory and other changes in the healthcare sector; |
(xi) | the effect of economic and market conditions generally and, particularly, in the healthcare industry; |
(xii) | changes in the financial position of our operators; |
(xiii) | changes in interest rates; |
(xiv) | the amount and yield of any additional investments; |
(xv) | changes in tax laws and regulations affecting real estate investment trusts; and |
(xvi) | our ability to maintain our status as a real estate investment trust. |
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FFO is a non-GAAP financial measure. We use FFO as one of several criteria to measure operating performance of our business. We further believe that by excluding the effect of depreciation, amortization, impairment on real estate assets and gains or losses from sales of real estate, all of which are based on historical costs and which may be of limited relevance in evaluating current performance, FFO can facilitate comparisons of operating performance between periods and between other REITs. We offer this measure to assist the users of our financial statements in evaluating our financial performance under GAAP, and FFO should not be considered a measure of liquidity, an alternative to net income or an indicator of any other performance measure determined in accordance with GAAP. Investors and potential investors in our securities should not rely on this measure as a substitute for any GAAP measure, including net income.
28 |
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
(in thousands) | ||||||||||||||||
Net income available to common stockholders | $ | 49,058 | $ | 30,572 | $ | 87,178 | $ | 56,656 | ||||||||
Add back loss (deduct gain) from real estate dispositions | 1,151 | (1,968 | ) | 1,151 | (7,284 | ) | ||||||||||
Sub-total | 50,209 | 28,604 | 88,329 | 49,372 | ||||||||||||
Elimination of non-cash items included in net income: | ||||||||||||||||
Depreciation and amortization | 32,225 | 27,199 | 64,184 | 54,346 | ||||||||||||
Add back impairments on real estate properties | — | — | — | 272 | ||||||||||||
Funds from operations available to common stockholders | $ | 82,434 | $ | 55,803 | $ | 152,513 | $ | 103,990 |
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Exhibit No. | ||
10.1 | Omega Healthcare Investors, Inc. 2013 Stock Incentive Plan (incorporated by reference to Annex A to the Registrant’s Proxy Statement on Schedule 14A filed on April 22, 2013). | |
10.2 | Form of Officer Deferred Performance Restricted Stock Unit Agreement.* | |
31.1 | Rule 13a-14(a)/15d-14(a) Certification of the Chief Executive Officer. | |
31.2 | Rule 13a-14(a)/15d-14(a) Certification of the Chief Financial Officer. | |
32.1 | Section 1350 Certification of the Chief Executive Officer. | |
32.2 | Section 1350 Certification of the Chief Financial Officer. | |
101.INS | XBRL Instance Document.** | |
101.SCH | XBRL Taxonomy Extension Schema Document.** | |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document.** | |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document.** | |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document.** | |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document.** |
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OMEGA HEALTHCARE INVESTORS, INC. | |||||
Registrant | |||||
Date: August 5, 2013 | By: | /S/ C. TAYLOR PICKETT | |||
C. Taylor Pickett | |||||
Chief Executive Officer | |||||
Date: August 5, 2013 | By: | /S/ ROBERT O. STEPHENSON | |||
Robert O. Stephenson | |||||
Chief Financial Officer |
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