EXHIBIT 99.2
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SENIOR HOUSING PROPERTIES TRUST
Second Quarter 2006
Supplemental Operating and Financial Data
Unless otherwise noted, all amounts in this report are unaudited.
TABLE OF CONTENTS
Page
CORPORATE INFORMATION
Company Profile 5
Investor Information 6
Research Coverage 7
FINANCIAL INFORMATION
Key Financial Data 9
Consolidated Balance Sheet 10
Consolidated Statement of Income 11
Consolidated Statement of Cash Flows 12
Calculation of EBITDA 13
Calculation of Funds from Operations (FFO) 14
Debt Summary 15
Debt Maturity Schedule 16
Leverage Ratios, Coverage Ratios and Public Debt Covenants 17
2006 Investments/Dispositions Information 18
2006 Financing Activities 19
PORTFOLIO INFORMATION
Portfolio Summary by Facility Type and Tenant 21
Occupancy by Facility Type and Tenant 22
% Private Pay by Facility Type and Tenant 23
Rent Coverage by Tenant 24
Portfolio Lease Expiration Schedule 25
2
WARNING CONCERNING FORWARD LOOKING STATEMENTS
THIS DOCUMENT CONTAINS FORWARD LOOKING STATEMENTS WITHIN THE MEANING OF THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 AND OTHER FEDERAL SECURITIES
LAWS. THESE STATEMENTS REPRESENT OUR PRESENT BELIEFS AND EXPECTATIONS, BUT THEY
MAY NOT OCCUR FOR VARIOUS REASONS. FOR EXAMPLE:
o A MASSACHUSETTS TRIAL COURT HAS HELD OUR TERMINATION OF HEALTHSOUTH
CORPORATION'S LEASE OF TWO HOSPITALS WAS PROPER AND ORDERED HEALTHSOUTH TO
PAY US THE NET PATIENT REVENUES, LESS A MANAGEMENT FEE AND OPERATION
COSTS, SINCE OCTOBER 26, 2004. HOWEVER, HEALTHSOUTH HAS APPEALED THESE
DECISIONS AND HEALTHSOUTH'S APPEAL MAY BE SUCCESSFUL.
o A MASSACHUSETTS TRIAL COURT HAS ORDERED HEALTHSOUTH TO COOPERATE WITH US
TO LICENSE A NEW TENANT FOR OUR HOSPITALS. HEALTHSOUTH HAS APPEALED THIS
DECISION AND THAT APPEAL HAS NOT BEEN DECIDED, ALTHOUGH A STAY PENDING
APPEAL SOUGHT BY HEALTHSOUTH WAS DENIED AND HEALTHSOUTH'S MOTIONS IN THE
TRIAL COURT SEEKING TO MODIFY AND OBTAIN OTHER RELIEF FROM THE COOPERATION
ORDER HAVE BEEN DENIED. FUTURE ACTIONS BY HEALTHSOUTH, FUTURE DECISIONS BY
COURTS WITH JURISDICTION OVER THESE MATTERS OR DECISIONS BY HEALTH
REGULATORY AUTHORITIES MAY DELAY OR PREVENT OUR ENTERING A LEASE WITH A
NEW TENANT FOR OUR HOSPITALS DESPITE THE EXISTING COURT ORDERS.
o THE COURT HAS ORDERED HEALTHSOUTH TO CONTINUE OPERATIONS OF OUR HOSPITALS
DURING THE PERIOD OF TRANSITION TO A NEW TENANT. HEALTHSOUTH MAY BE
UNWILLING OR UNABLE TO CONTINUE ITS OPERATIONS. IN SUCH CIRCUMSTANCES, WE
MAY SEEK DAMAGES FROM HEALTHSOUTH AND TO CONTINUE THE HOSPITALS'
OPERATIONS WITH APPROPRIATE REGULATORY APPROVALS, BUT WE MAY BE UNABLE TO
COLLECT DAMAGES FROM HEALTHSOUTH OR TO CONTINUE THE HOSPITALS' OPERATIONS.
o IN A SECOND LITIGATION, WE ARE SEEKING TO COLLECT INCREASED RENT FROM
HEALTHSOUTH SINCE JANUARY 2002. THE FACT THAT WE HAVE RECEIVED FAVORABLE
RULINGS IN A SEPARATE LITIGATION MAY IMPLY THAT WE WILL ALSO SUCCEED IN
THIS INCREASED RENT LITIGATION. HOWEVER, THE ISSUES IN THESE TWO
LITIGATIONS ARE SOMEWHAT DIFFERENT AND ARE PENDING IN DIFFERENT COURTS. WE
BELIEVE ALL OF OUR CLAIMS ARE VALID. HOWEVER, NOT ALL OF OUR CLAIMS HAVE
BEEN FINALLY DETERMINED AND THE FACT THAT WE HAVE RECEIVED FAVORABLE
RULINGS IN ONE CASE DOES NOT MEAN WE WILL SUCCEED IN THE OTHER CASE.
o THE IMPLICATION OF THE FORWARD LOOKING STATEMENTS IN THIS DOCUMENT
REGARDING OUR LITIGATIONS WITH HEALTHSOUTH MAY BE THAT WE WILL EVENTUALLY
RECOGNIZE MORE INCOME FROM OUR OWNERSHIP OF THE TWO HOSPITALS THAN $725,000
PER MONTH. HOWEVER, THIS IMPLICATION MAY NOT BE REALIZED FOR MANY DIFFERENT
REASONS: OUR REVIEW OF HEALTHSOUTH'S CALCULATIONS OF AMOUNTS DUE TO US MAY
RESULT IN ADJUSTMENTS THAT DECREASE OR INCREASE THE FINAL AMOUNTS DUE TO
US. HEALTHSOUTH MAY BECOME UNABLE TO PAY THE INCREASED AMOUNTS, IF ANY, DUE
TO US. WE MAY BE UNABLE TO IDENTIFY A NEW TENANT FOR THESE HOSPITALS WHO
OBTAINS APPROPRIATE LICENSES AND WHO IS WILLING OR ABLE TO PAY INCREASED
RENTS. HEALTHSOUTH'S APPEAL MAY BE SUCCESSFUL AND ITS LEASE MAY BE
REINSTATED. THE FINANCIAL RESULTS OF THE HOSPITALS' OPERATIONS MAY DECLINE
AND THIS DECLINE MAY BE MATERIAL. ALSO, HEALTHSOUTH MAY CEASE PAYING
AMOUNTS DUE TO US UNTIL A NEW TENANT IS INSTALLED AT THE HOSPITALS.
o LITIGATION IS EXPENSIVE. SINCE THE CURRENT LITIGATIONS BETWEEN US AND
HEALTHSOUTH BEGAN IN APRIL 2003, WE HAVE SPENT APPROXIMATELY $3.0 MILLION
IN LITIGATION COSTS. WE EXPECT THAT THESE EXPENSES WILL CONTINUE AND MAY
INCREASE SO LONG AS THE LITIGATIONS CONTINUE. MOREOVER, WE ARE UNABLE TO
PROVIDE ANY PROJECTIONS AS TO WHEN THESE LITIGATIONS MAY END OR THE
AMOUNTS OF FUTURE LITIGATION COSTS. WE HAVE REQUESTED THAT THE COURT ORDER
HEALTHSOUTH TO PAY SOME OF OUR LITIGATION COSTS. HEALTHSOUTH HAS OPPOSED
THIS REQUEST AND WE DO NOT KNOW HOW THE COURTS WILL RULE OR WHETHER
HEALTHSOUTH WILL BE WILLING OR ABLE TO HONOR ANY AWARD WHICH MAY BE MADE.
o OTHER RISKS MAY ADVERSELY IMPACT US, AS DESCRIBED MORE FULLY UNDER "ITEM
1A. RISK FACTORS" IN OUR ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED
DECEMBER 31, 2005.
YOU SHOULD NOT PLACE UNDUE RELIANCE UPON FORWARD LOOKING STATEMENTS. EXCEPT AS
MAY BE REQUIRED BY APPLICABLE LAW, WE MAY NOT UPDATE OR REVISE ANY FORWARD
LOOKING STATEMENTS AS A RESULT OF NEW INFORMATION, FUTURE EVENTS OR OTHERWISE.
3
CORPORATE INFORMATION
Senior Housing Properties Trust
Supplemental Operating and Financial Data
June 30, 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 and nursing homes located throughout the United States.
We are included in a number of stock indices, including the Russell 2000(R), 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 June 30, 2006, RMR manages one
of the largest portfolios of publicly owned real estate in the United States,
including approximately 1,000 properties, with more than 90 million square feet,
located in 42 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 $12 billion as of June 30, 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
living properties, assisted living properties 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 from private resources rather than through government
programs. We base our acquisition decisions on the historical and projected
operating results of the target properties and the financial strength of the
proposed tenants and their guarantors, among other considerations. 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
Trading Symbol:
- ---------------
Common Shares -- SNH
Senior Unsecured Debt Ratings:
- ------------------------------
Moody's -- Ba2
Standard & Poor's -- BB+
Corporate Headquarters:
- -----------------------
400 Centre Street
Newton, MA 02458
(t) (617) 796-8350
(f) (617) 796-8349
Portfolio Data (as of 6/30/06):
- -------------------------------
Total properties 188
Total units / beds 23,297
Percent of rent from private pay properties 84.4% (1)
Portfolio Concentration by facility type (as of 6/30/06):
- ---------------------------------------------------------
Number of Number of Carrying Value of Annualized
Properties Units/Beds Investment (2) Percent Current Rent Percent
---------------------------------------------------------------------------------------------------
Independent Living (IL) (3) 36 10,380 $ 919,721 54.1% $ 90,767 54.1%
Assisted Living (AL) 89 6,250 517,833 30.5% 50,744 30.3%
Nursing Homes 61 6,303 218,095 12.9% 17,432 10.4%
Hospitals 2 364 43,553 2.5% 8,700 5.2%
---------------------------------------------------------------------------------------------------
Total 188 23,297 $ 1,699,202 100.0% $ 167,643 100.0%
===================================================================================================
Operating Statistics by tenant:
- ------------------------------- Q1 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 $ 64,452 1.33x 93% 82%
Five Star 106 8,514 40,141 1.49x 91% 48%
Sunrise / Marriott (6) 14 4,091 31,087 1.26x 92% 80%
NewSeasons / IBC (7) 10 1,019 9,287 1.16x 85% 100%
HealthSouth (8) 2 364 8,700 NA NA NA
Alterra / Brookdale (9) 18 894 7,355 2.04x 90% 98%
Genesis HealthCare Corporation 1 156 1,535 1.77x 97% 17%
5 Private Companies (combined) 7 984 5,086 1.56x 90% 26%
----------------------------------------------
188 23,297 $ 167,643
==============================================
<fn>
(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, or
the most recent prior period for which tenant operating results are available to us from our tenants. 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. Sunrise Senior Living, Inc., or Sunrise,
currently operates seven and Five Star currently operates 23 of these 30 properties. Sunrise does not guaranty Five Star's
lease obligations. The rent that Five Star pays to us is subordinate to the management fees paid by Five Star to Sunrise, but
is not subordinate to Five Star's internal management costs. The rent coverage presented for this lease has been adjusted to
exclude management fees paid to Sunrise during the second quarter for the 23 properties that Five Star currently manages.
(6) Marriott International, Inc., or Marriott, guarantees the lease for these 14 properties leased to Sunrise.
(7) Independence Blue Cross, or IBC, a Pennsylvania health insurer, guarantees the lease for the 10 properties leased to NewSeasons
Assisted Living Communities, Inc., or NewSeasons.
(8) The financial and operating data included in HealthSouth's Annual Report on Form 10-K for the year ended December 31, 2005 and
Quarterly Report on Form 10-Q for the quarter ended March 31, 2006 show a substantial negative net worth and a history of
substantial operating losses. Also, HealthSouth's management identified several material weaknesses in its internal control
over financial reporting and stated that it did not maintain effective internal control over financial reporting as of December
31, 2005 and March 31, 2006. Because we do not have reliable information about HealthSouth's operations, we do not disclose any
operating or financial data for these hospitals or this operator. See also Note 1 on page 11 regarding our litigation with
HealthSouth.
(9) Brookdale Senior Living, Inc., or Brookdale, guarantees the lease for 18 properties leased to Alterra Healthcare Corporation,
or Alterra.
</FN>
5
Senior Housing Properties Trust
Supplemental Operating and Financial Data
June 30, 2006
INVESTOR INFORMATION
- --------------------------------------------------------------------------------
Board of Trustees
- --------------------------------------------------------------------------------
Barry M. Portnoy Gerard M. Martin
Managing Trustee Managing Trustee
Frank J. Bailey Frederick N. Zeytoonjian
Independent Trustee Independent Trustee
John L. Harrington
Independent Trustee
Senior Management
- --------------------------------------------------------------------------------
David J. Hegarty John R. Hoadley
President, Chief Operating Officer Treasurer and Chief Financial Officer
and Secretary
Contact Information
- --------------------------------------------------------------------------------
Investor Relations Inquiries
Senior Housing Properties Trust Financial inquiries should be directed
400 Centre Street to John R. Hoadley, Treasurer and Chief
Newton, MA 02458 Financial Officer, at (617) 796-8350
(t) (617) 796-8350 or jhoadley@reitmr.com.
(f) (617) 796-8349
(email) info@snhreit.com Investor and media inquiries should be
(website) www.snhreit.com directed to Timothy A. Bonang, Manager
of Investor Relations, at
(617) 796-8149 or tbonang@snhreit.com.
6
Senior Housing Properties Trust
Supplemental Operating and Financial Data
June 30, 2006
RESEARCH COVERAGE
- --------------------------------------------------------------------------------
Equity Research Coverage
- --------------------------------------------------------------------------------
Cantor Fitzgerald Stifel, Nicolaus
Philip Martin Jerry Doctrow
(312) 469-7485 (410) 454-5142
Merrill Lynch UBS
David Tsoupros Omotayo Okusanya
(212) 449-9697 (212) 713-1864
Raymond James Wachovia Securities
Paul Puryear Stephen Swett
(727) 573-3800 (212) 909-0954
Debt Research Coverage
- --------------------------------------------------------------------------------
UBS Wachovia Securities
Ray Garson Dan Sullivan
(203) 719-6415 (704) 383-6441
Rating Agencies
- --------------------------------------------------------------------------------
Moody's Investor Service Standard and Poor's
Lori Halpern George Skoufis
(212) 553-1098 (212) 438-2608
SNH is followed by the analysts and its publicly held debt is rated by the
rating agencies listed above. Please note that any opinions, estimates or
forecasts regarding SNH's performance made by these analysts or agencies do not
represent opinions, forecasts or predictions of SNH or its management. SNH does
not by its reference above imply its endorsement of or concurrence with any
information, conclusions or recommendations provided by any of these analysts or
agencies.
7
FINANCIAL INFORMATION
Senior Housing Properties Trust
Supplemental Operating and Financial Data
KEY FINANCIAL DATA
- -----------------------------------------------------------------------------------------------------------------------------------
(share amounts and dollars in thousands, except per share data)
As of and For the Three Months Ended
-------------------------------------------------------------------
6/30/2006 3/31/2006 12/31/2005 9/30/2005 6/30/2005
------------ ----------- ---------- ----------- ----------
Shares Outstanding:
- ------------------
Common shares outstanding (at end of period) 71,820 71,812 71,812 68,562 68,538
Weighted average common shares outstanding -
basic and diluted (1) 71,817 71,812 69,445 68,543 68,537
Common Share Data:
- -----------------
Price at end of period $17.91 $18.10 $16.91 $19.00 $18.91
High during period $18.18 $19.08 $19.35 $20.00 $19.45
Low during period $16.56 $16.75 $16.84 $17.79 $16.40
Annualized dividends paid per share $1.32 $1.28 $1.28 $1.28 $1.28
Annualized dividend yield (at end of period) 7.4% 7.1% 7.6% 6.7% 6.8%
Market Capitalization:
- ---------------------
Total debt (book value) $561,763 $545,444 $556,400 $551,757 $577,175
Plus: market value of common shares (at end of period) 1,286,296 1,299,797 1,214,341 1,302,678 1,296,054
---------- ---------- ---------- ---------- ----------
Total market capitalization $1,848,059 $1,845,241 $1,770,741 $1,854,435 $1,873,229
Total debt / total market capitalization 30.4% 29.6% 31.4% 29.8% 30.8%
Book Capitalization:
- -------------------
Total debt $561,763 $545,444 $556,400 $551,757 $577,175
Plus: total shareholders' equity 901,824 912,159 917,977 868,086 875,634
---------- ---------- ---------- ---------- ----------
Total book capitalization $1,463,587 $1,457,603 $1,474,377 $1,419,843 $1,452,809
Total debt / total book capitalization 38.4% 37.4% 37.7% 38.9% 39.7%
Selected Balance Sheet Data:
- ---------------------------
Total assets $1,490,557 $1,480,557 $1,499,648 $1,440,403 $1,473,413
Total liabilities $588,733 $568,398 $581,671 $572,317 $597,779
Gross book value of real estate assets (2) $1,699,202 $1,691,499 $1,686,169 $1,632,013 $1,652,231
Total debt / gross book value of real estate assets (2) 33.1% 32.2% 33.0% 33.8% 34.9%
Selected Income Statement Data:
- ------------------------------
Total revenues $41,276 $41,169 $44,111 $40,244 $39,605
EBITDA (3) $39,371 $39,028 $38,353 $37,775 $37,293
Income from continuing operations $12,686 $15,667 $10,472 $14,129 $14,316
Net income $12,686 $15,667 $15,686 $14,129 $15,033
Funds from operations (FFO) (4) $27,825 $27,657 $22,171 $25,864 $25,850
Common distributions paid $23,701 $22,980 $22,980 $21,940 $21,932
Per Share Data:
- --------------
Income from continuting operations $0.18 $0.22 $0.15 $0.21 $0.21
Net income $0.18 $0.22 $0.23 $0.21 $0.22
FFO (4) $0.39 $0.39 $0.32 $0.38 $0.38
Common distributions paid $0.33 $0.32 $0.32 $0.32 $0.32
FFO payout ratio (4) 84.6% 82.1% 100.0% 84.2% 84.2%
Coverage Ratios:
- ---------------
EBITDA (3) / interest expense 3.4x 3.4x 3.2x 3.2x 3.3x
<FN>
(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) See page 13 for calculation of EBITDA.
(4) See page 14 for calculation of FFO; see also Note 1 and Note 4 on page 11.
</FN>
</table>
9
Senior Housing Properties Trust
Supplemental Operating and Financial Data
June 30, 2006
CONSOLIDATED BALANCE SHEET
- -----------------------------------------------------------------------------------------------------------------
(in thousands, except share data)
As of As of
June 30, December 31,
2006 2005
----------- ------------
(audited)
ASSETS
- ------
Real estate properties, at cost:
Land $185,819 $185,819
Buildings and improvements 1,513,383 1,500,350
----------- -----------
1,699,202 1,686,169
Less accumulated depreciation 254,087 239,031
----------- -----------
1,445,115 1,447,138
Cash and cash equivalents 2,747 14,642
Restricted cash 2,147 2,529
Deferred financing fees, net 7,817 9,968
Other assets 32,731 25,371
----------- -----------
Total assets $1,490,557 $1,499,648
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
- ------------------------------------
Unsecured revolving bank credit facility $141,000 $64,000
Senior unsecured notes due 2012 and 2015, net of discount 341,595 394,018
Junior subordinated debentures due 2041 -- 28,241
Secured debt and capital leases 79,168 70,141
Accrued interest 12,248 13,089
Other liabilities 14,722 12,182
----------- -----------
Total liabilities 588,733 581,671
----------- -----------
Commitments and contingencies
Shareholders' equity:
Common shares of beneficial interest, $0.01 par value:
80,000,000 shares authorized; 71,819,727 and 71,812,227 shares issued
and outstanding, respectively 718 718
Additional paid-in capital 1,093,612 1,093,480
Cumulative net income 295,549 267,196
Cumulative distributions (493,249) (447,289)
Unrealized gain on investments 5,194 3,872
----------- -----------
Total shareholders' equity 901,824 917,977
----------- -----------
Total liabilities and shareholders' equity $1,490,557 $1,499,648
=========== ===========
10
Senior Housing Properties Trust
Supplemental Operating and Financial Data
June 30, 2006
CONSOLIDATED STATEMENT OF INCOME
- -----------------------------------------------------------------------------------------------------------------------------------
(in thousands, except per share data)
For the Three For the Six
Months Ended Months Ended
------------------------ -----------------------
6/30/2006 6/30/2005 6/30/2006 6/30/2005
---------- --------- --------- ---------
Revenues:
Rental income (1) $40,921 $39,094 $81,744 $77,982
Interest and other income 355 511 701 850
------- ------- ------- -------
Total revenues 41,276 39,605 82,445 78,832
------- ------- ------- -------
Expenses:
Interest 11,546 11,443 22,917 22,675
Depreciation 10,922 10,759 21,653 21,505
General and administrative 3,383 3,087 6,783 6,480
Impairment of assets 1,420 -- 1,420 --
Loss on early extinguishment of debt (2) 1,319 -- 1,319 --
------- ------- ------- -------
Total expenses 28,590 25,289 54,092 50,660
------- ------- ------- -------
Income from continuing operations 12,686 14,316 28,353 28,172
Gain on sale of property -- 717 -- 717
------- ------- ------- -------
Net income $12,686 $15,033 $28,353 $28,889
======= ======= ======= =======
Weighted average common shares outstanding 71,817 68,537 71,814 68,516
======= ======= ======= =======
Basic and diluted earnings per share:
Income from continuing operations $0.18 $0.21 $0.39 $0.41
======= ======= ======= =======
Net income $0.18 $0.22 $0.39 $0.42
======= ======= ======= =======
Additional Data:
- ---------------
Straight-line rent included in rental income (3) $56 $107 $112 $214
Deferred percentage rent (4) $1,478 $775 $2,737 $1,590
Litigation expenses included in general and administrative expenses (5) $320 $500 $710 $900
<FN>
(1) Rental income for the quarter and six months ended June 30, 2006, includes $2.2 million and $4.4 million, respectively, of
income from two hospitals operated by HealthSouth Corporation, or HealthSouth. Effective January 2, 2002, we entered an
amended lease with HealthSouth for two hospitals. In April 2003, we commenced a lawsuit against HealthSouth seeking, among
other matters, to reform the amended lease based upon HealthSouth's fraud by increasing the rent payable to us from January
2, 2002 until the termination of the amended lease. This litigation is pending at this time. On October 26, 2004, we
terminated the amended lease for default because HealthSouth failed to deliver to us accurate and timely financial
information as required by the amended lease. On November 2, 2004, HealthSouth brought a second lawsuit against us seeking to
prevent our termination of the amended lease. On September 25, 2005, the court ruled that our termination was proper. On
January 13, 2006, the court ordered HealthSouth to cooperate with us in licensing a new tenant and to pay us the net patient
revenues, after a 5% management fee and payment of costs and expenses of operation since October 26, 2004. HealthSouth has
appealed the court's decisions; however, HealthSouth's motions for a stay of the court's decisions during the appeal have
been denied by both the trial court and the appeals court. HealthSouth has filed various motions to modify these decisions
which also have been denied. During the pendency of these disputes, HealthSouth continued to pay us at the disputed rent
amount of $725,000 per month through January 2006. In 2006, HealthSouth paid us $8.5 million which includes amounts
HealthSouth represented to be due from October 26, 2004 to June 30, 2006. The supporting data for the calculations of amounts
due to us provided by HealthSouth appears to be incomplete and contradictory. We have attempted to obtain accurate data and
clarifications from HealthSouth, but HealthSouth has been unwilling or unable to provide such data. Pending the resolution of
HealthSouth's appeal and the verification or correction of HealthSouth's calculations of amounts due to us, we have
recognized in income $2.2 million and $4.4 million for the quarter and six months ended June 30, 2006, respectively, which
represents the minimum amount we are entitled to if HealthSouth prevails in its appeal and HealthSouth's lease is reinstated.
We have deferred recognition of the remaining $4.1 million of cash payments received from HealthSouth. Under Internal Revenue
Code laws and regulations applicable to real estate investment trusts, or REITs, a portion of the payments received from
HealthSouth may be subject to income tax at corporate rates. We have also deferred recognition of $3.2 million of estimated
tax expense, pending the recognition in income of the deferred payments received. The financial and operating data included
in HealthSouth's Annual Report on Form 10-K for the year ended December 31, 2005, and Quarterly Report on Form 10-Q for the
quarter ended March 31, 2006, show a substantial negative net worth and a history of substantial operating losses. Also,
HealthSouth's management identified several material weaknesses in its internal control over financial reporting and stated
that it did not maintain effective internal control over financial reporting as of December 31, 2005, and March 31, 2006. To
date we have been unable to obtain reliable current financial information about the operations of HealthSouth or our
hospitals. Accordingly, we do not know if we will be able to collect any additional amounts which the courts may determine to
be owed to us by HealthSouth.
(2) 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 is the write off of unamortized deferred financing fees related to these debentures.
(3) 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.
(4) This amount represents percentage rent with respect to the second quarter that is not included in rental income for the
second quarter. We recognize percentage rental income received during the first, second and third quarters in the fourth
quarter.
(5) These expenses relate to our HealthSouth litigation.
</FN>
11
Senior Housing Properties Trust
Supplemental Operating and Financial Data
June 30, 2006
CONSOLIDATED STATEMENT OF CASH FLOWS
- --------------------------------------------------------------------------------------------------------------------------
(in thousands)
For the Six Months Ended
-----------------------------------------
6/30/2006 6/30/2005
------------- ------------
Cash flows from operating activities:
Net income $28,353 $28,889
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation 21,653 21,505
Impairment of assets 1,420 --
Loss on early extinguishment of debt 1,319 --
Gain on sale of property -- (717)
Amortization of deferred financing fees and debt discounts 909 1,061
Change in assets and liabilities:
Restricted cash 382 4,089
Other assets (6,037) 2,698
Accrued interest (841) 183
Other liabilities 2,672 (863)
-------- --------
Cash provided by operating activities 49,830 56,845
-------- --------
Cash flows from investing activities:
Acquisitions (11,076) (31,704)
Mortgage financing provided -- (24,000)
Proceeds from sale of real estate -- 4,600
-------- --------
Cash used for investing activities (11,076) (51,104)
-------- --------
Cash flows from financing activities:
Proceeds from borrowings on revolving bank credit facility 90,000 66,000
Repayments of borrowings on revolving bank credit facility (13,000) (19,000)
Redemption of senior notes (52,500) --
Redemption of junior subordinated debentures (28,241) --
Repayment of other debt (948) (5,085)
Deferred financing fees -- (8)
Distributions to shareholders (45,960) (43,850)
-------- --------
Cash used for financing activities (50,649) (1,943)
-------- --------
(Decrease) increase in cash and cash equivalents (11,895) 3,798
Cash and cash equivalents at beginning of period 14,642 3,409
-------- --------
Cash and cash equivalents at end of period $2,747 $7,207
======== ========
Supplemental cash flow information:
Interest paid $22,850 $21,430
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 132 369
12
Senior Housing Properties Trust
Supplemental Operating and Financial Data
June 30, 2006
CALCULATION OF EBITDA
- ------------------------------------------------------------------------------------------------------------------------------
(dollars in thousands)
For the Three Months Ended For the Six Months Ended
--------------------------------- --------------------------------
6/30/2006 6/30/2005 6/30/2006 6/30/2005
------------ ------------ ------------ ------------
Income from continuing operations (1) $12,686 $14,316 $28,353 $28,172
Plus: interest expense 11,546 11,443 22,917 22,675
depreciation expense 10,922 10,759 21,653 21,505
impairment of assets 1,420 -- 1,420 --
loss on early extinguishment of debt 1,319 -- 1,319 --
deferred percentage rent adjustment (2) 1,478 775 2,737 1,590
------- ------- ------- -------
EBITDA $39,371 $37,293 $78,399 $73,942
======= ======= ======= =======
<FN>
(1) Income from continuing operations includes legal expenses incurred related to our HealthSouth litigation of
approximately $320,000 and $500,000 for the quarters ended June 30, 2006, and 2005, respectively, and $710,000 and
$900,000 for the six months ended June 30, 2006 and 2005, respectively. See Note 1 on page 11 regarding our HealthSouth
litigation.
(2) We recognize percentage rental income received during the first, second and third quarters in the fourth quarter.
Although recognition of revenue is deferred until the fourth quarter, for purposes of 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.
</FN>
We compute EBITDA as shown in the calculation above. Such calculation begins
with income from continuing operations or, if such 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.
13
Senior Housing Properties Trust
Supplemental Operating and Financial Data
June 30, 2006
CALCULATION OF FUNDS FROM OPERATIONS (FFO)
- -----------------------------------------------------------------------------------------------------------------------------------
(amounts in thousands, except per share data)
For the Three Months Ended For the Six Months Ended
-------------------------------- -------------------------------
6/30/2006 6/30/2005 6/30/2006 6/30/2005
----------- ----------- ----------- -----------
Income from continuing operations (1) $12,686 $14,316 $28,353 $28,172
Plus: depreciation expense 10,922 10,759 21,653 21,505
impairment of assets 1,420 -- 1,420 --
loss on early extinguishment of debt 1,319 -- 1,319 --
deferred percentage rent adjustment (2) 1,478 775 2,737 1,590
------- ------- ------- -------
FFO $27,825 $25,850 $55,482 $51,267
======= ======= ======= =======
Weighted average shares outstanding 71,817 68,537 71,814 68,516
Income from continuing operations per share $0.18 $0.21 $0.39 $0.41
FFO per share $0.39 $0.38 $0.77 $0.75
Supplemental data:
Straight-line rent included in rental income (3) $56 $107 $112 $214
Amortization of deferred financing fees and debt discounts $454 $530 $909 $1,061
<FN>
(1) Income from continuing operations includes legal expenses incurred related to our HealthSouth litigation of approximately
$320,000 and $500,000 for the quarters ended June 30, 2006, and 2005, respectively, and $710,000 and $900,000 for the six
months ended June 30, 2006 and 2005, respectively. See Note 1 on page 11 regarding our HealthSouth litigation.
(2) We recognize percentage rental income received during the first, second and third quarters in the fourth quarter. Although
recognition of revenue is deferred until the fourth quarter for purposes of calculating income from continuing operations,
the calculation of FFO for the first three quarters includes estimated amounts with respect to those periods. The fourth
quarter FFO calculation excludes the amounts recognized during the first three quarters.
(3) 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.
</FN>
We compute FFO as shown in the calculation above. Such calculation begins with
income from continuing operations or, if such 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 from FFO. 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 performance
among REITs. FFO does not represent cash generated by operating activities in
accordance with GAAP and should not be considered an alternative to net income
or cash flow from operating activities as a measure of financial performance or
liquidity. FFO is one important factor considered by our board of trustees in
determining the amount of distributions to shareholders. Other important factors
include, but are not limited to, requirements to maintain our status as a REIT,
limitations in our revolving bank credit facility and public debt covenants, the
availability of debt and equity capital to us and our expectation of our future
performance.
14
Senior Housing Properties Trust
Supplemental Operating and Financial Data
June 30, 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 21.4
Mortgage - secured by 16 properties (1) 6.970% 6.330% 36,213 6/2/12 30,069 5.9
Mortgage - secured by 4 properties (1) 6.110% 6.420% 12,326 11/30/13 10,218 7.4
Capital leases - 2 properties 7.700% 7.700% 15,929 4/30/26 -- 19.8
----- ----- -------- -------- -----
Total / weighted average secured fixed rate debt 6.780% 6.535% $79,168 $54,987 11.8
===== ===== ======== ======== =====
Unsecured Debt:
- --------------
Unsecured Floating Rate Debt:
----------------------------
Revolving credit facility (LIBOR + 100 b.p.) 6.350% 6.350% $141,000 11/30/09 $141,000 3.4
Unsecured Fixed Rate Debt:
-------------------------
Senior notes due 2012 8.625% 8.625% $245,000 1/15/12 $245,000 5.5
Senior notes due 2015 7.875% 7.875% 97,500 4/15/15 97,500 8.8
----- ----- -------- -------- -----
Total / weighted average unsecured fixed rate debt 8.411% 8.411% $342,500 $342,500 6.5
===== ===== ======== ======== =====
Total / weighted average unsecured debt 7.810% 7.810% $483,500 $483,500 5.6
===== ===== ======== ======== =====
Total / weighted average secured debt fixed rate debt 6.780% 6.535% $79,168 $54,987 11.8
Total / weighted average unsecured floating rate debt 6.350% 6.350% 141,000 141,000 3.4
Total / weighted average unsecured fixed rate debt 8.411% 8.411% 342,500 342,500 6.5
----- ----- -------- -------- -----
Total / weighted average debt 7.665% 7.631% $562,668 $538,487 6.5
===== ===== ======== ======== =====
<FN>
(1) Includes the effect of mark to market accounting for certain assumed mortgages.
</FN>
15
Senior Housing Properties Trust
Supplemental Operating and Financial Data
June 30, 2006
DEBT MATURITY SCHEDULE
- ---------------------------------------------------------------------------------------------------------------------
(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
- -------------------------- ------------------ ------------------- ------------------ ------------------
2006 $ 667 $ - $ - $ 667
2007 1,410 - - 1,410
2008 1,496 - - 1,496
2009 1,605 141,000 - 142,605
2010 1,714 - - 1,714
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 26,855 - - 26,855
------------------ ------------------- ------------------ ------------------
$ 79,168 $ 141,000 $ 342,500 $ 562,668
================== =================== ================== ==================
16
Senior Housing Properties Trust
Supplemental Operating and Financial Data
June 30, 2006
LEVERAGE RATIOS, COVERAGE RATIOS AND PUBLIC DEBT COVENANTS
- ---------------------------------------------------------------------------------------------------------------------------------
As Of And For The Three Months Ended
----------------------------------------------------------------
6/30/2006 3/31/2006 12/31/2005 9/30/2005 6/30/2005
----------- ----------- ------------ ----------- -----------
Leverage Ratios:
- ----------------
Total debt / total assets 37.7% 36.8% 37.1% 38.3% 39.2%
Total debt / gross book value of real estate assets (1) 33.1% 32.2% 33.0% 33.8% 34.9%
Total debt / total market capitalization 30.4% 29.6% 31.4% 29.8% 30.8%
Total debt / total book capitalization 38.4% 37.4% 37.7% 38.9% 39.7%
Secured debt / total assets 5.3% 4.7% 4.7% 4.9% 4.8%
Variable rate debt / total debt 25.1% 19.4% 11.5% 10.7% 14.6%
Coverage Ratios:
- ----------------
EBITDA (2) / interest expense 3.4x 3.4x 3.2x 3.2x 3.3x
Public Debt Covenants (3):
- --------------------------
Total debt / adjusted total assets - allowable
maximum 60.0% 32.4% 30.0% 30.5% 34.5% 32.6%
Secured debt / adjusted total assets - allowable
maximum 40.0% 4.6% 4.1% 4.1% 4.3% 4.2%
Consolidated income available for debt service /
debt service - required minimum 2.00x 3.75x 3.83x 3.53x 3.59x 3.66x
Total unencumbered assets to unsecured debt -
required minimum 1.50x 3.30x 3.55x 3.49x 3.38x 3.25x
<FN>
(1) Gross book value of real estate assets is real estate properties, at cost, less impairment write downs.
(2) See page 13 for the calculation of EBITDA.
(3) 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.
</FN>
17
Senior Housing Properties Trust
Supplemental Operating and Financial Data
June 30, 2006
2006 INVESTMENTS/DISPOSITIONS INFORMATION
- ------------------------------------------------------------------------------------------------------------------------------------
(dollars in thousands)
Acquisitions (1):
- -----------------
Purchase
Date Number of Purchase Price Cap
Acquired Tenant Type of Property Properties Units Price Per Unit Rate
- --------------- --------- -------------------- ---------------- ----------- -------------- ---------------- ---------
There were no acquisitions during the six months ended June 30, 2006.
Dispositions:
- ------------- Original Sale Price
Allocated Multiple of
Date Number of Purchase Original Book Gain
Sold Location Type of Property Properties Sale Price Price Purchase Price on Sale
- ------- ----------------- -------------------- ---------------- ------------- -------------- ----------------- ----------
There were no dispositions during the six months ended June 30, 2006.
<FN>
(1) Excludes investments in existing properties.
</FN>
18
Senior Housing Properties Trust
Supplemental Operating and Financial Data
June 30, 2006
2006 FINANCING ACTIVITIES
- --------------------------------------------------------------------------------------------------------------
(share amounts and dollars in thousands)
For the Three Months Ended
6/30/2006 3/31/2006
--------------------- ------------------
Debt Transactions:
- ------------------
New debt raised $ - $ -
New debt assumed as part of acquisitions - -
--------------------- ------------------
Total new debt - -
Debt retired 28,241 52,500
--------------------- ------------------
Net debt $ (28,241) $ (52,500)
===================== ==================
Equity Transactions:
- --------------------
New common shares issued - -
New common equity raised, net $ - $ -
Revolving Credit Facility Transactions:
- ---------------------------------------
Balance oustanding at beginning of period $ 106,000 $ 64,000
Drawings during period $ 43,000 $ 47,000
Repayments during period $ (8,000) $ (5,000)
--------------------- ------------------
Balance oustanding at end of period $ 141,000 $ 106,000
Balance available for drawing $ 409,000 $ 444,000
19
PORTFOLIO INFORMATION
Senior Housing Properties Trust
Supplemental Operating and Financial Data
June 30, 2006
PORTFOLIO SUMMARY BY FACILITY TYPE AND TENANT
- ------------------------------------------------------------------------------------------------------------------------------------
(dollars in thousands)
Number of Number of Carrying Value of Investment Annualized
Properties Units/Beds Investment (1) Percent per unit Current Rent Percent
-----------------------------------------------------------------------------------------------
Facility Type:
- --------------
Independent Living (IL) (2) 36 10,380 $919,721 54.1% $88.6 $90,767 54.1%
Assisted Living (AL) 89 6,250 517,833 30.5% 82.9 50,744 30.3%
Nursing Homes 61 6,303 218,095 12.9% 34.6 17,432 10.4%
Hospitals (3) 2 364 43,553 2.6% 119.7 8,700 5.2%
-----------------------------------------------------------------------------------------------
Total 188 23,297 $1,699,202 100.0% $72.9 $167,643 100.0%
===============================================================================================
Tenant:
- -------
Five Star / Sunrise (4) 30 7,275 $646,270 38.0% $88.8 $64,452 38.4%
Five Star 106 8,514 486,045 28.6% 57.1 40,141 23.9%
Sunrise / Marriott (5) 14 4,091 325,473 19.2% 79.6 31,087 18.6%
NewSeasons / IBC (6) 10 1,019 87,641 5.2% 86.0 9,287 5.6%
HealthSouth (3) 2 364 43,553 2.5% 119.7 8,700 5.2%
Alterra / Brookdale (7) 18 894 61,126 3.6% 68.4 7,355 4.4%
Genesis HealthCare Corporation 1 156 13,007 0.8% 83.4 1,535 0.9%
5 Private Companies (combined) 7 984 36,087 2.1% 36.7 5,086 3.0%
-----------------------------------------------------------------------------------------------
Total 188 23,297 $1,699,202 100.0% $72.9 $167,643 100.1%
===============================================================================================
<FN>
(1) Amounts are before depreciation, but after impairment write downs, and include purchase price allocations related to FAS 141.
(2) Properties where the majority of units are independent living apartments are classified as independent living communities.
(3) See Note 1 on page 11.
(4) These 30 properties are leased to Five Star. As of June 30, 2006, Sunrise operated 7 and Five Star operated 23 of these 30
properties. Sunrise does not guaranty Five Star's lease obligations.
(5) Marriott guarantees the lease for the 14 properties leased to Sunrise.
(6) IBC guarantees the lease for the 10 properties leased to NewSeasons.
(7) Brookdale guarantees the lease for the 18 properties leased to Alterra.
</FN>
21
Senior Housing Properties Trust
Supplemental Operating and Financial Data
June 30, 2006
OCCUPANCY BY FACILITY TYPE AND TENANT
- ------------------------------------------------------------------------------------------------------------------------------------
For the Three Months Ended
-------------- -------------- --------------- --------------- --------------
3/31/2006 12/31/2005 9/30/2005 6/30/2005 3/31/2005
-------------- -------------- --------------- --------------- --------------
Facility Type:
--------------
Independent Living (IL) 93% 92% 91% 91% 91%
Assisted Living (AL) 91% 91% 90% 84% 84%
Nursing Homes 92% 90% 90% 91% 88%
Hospitals (1) NA NA NA NA NA
Tenant:
-------
Five Star / Sunrise 93% 93% 92% 92% 92%
Five Star (2) 91% 91% 90% 87% 87%
Sunrise / Marriott 92% 92% 90% 89% 90%
NewSeasons / IBC 85% 80% 80% 81% 79%
HealthSouth (1) NA NA NA NA NA
Alterra / Brookdale 90% 90% 88% 84% 84%
Genesis HealthCare Corporation 97% 97% 94% 96% 96%
5 Private Companies (combined) 90% 88% 84% 84% 87%
<FN>
(1) The financial and operating data included in HealthSouth's Annual Report on Form 10-K for the year ended December 31,
2005, and Quarterly Report on Form 10-Q for the quarter ended March 31, 2006, show a substantial negative net worth and a
history of substantial operating losses. Also, HealthSouth's management identified several material weaknesses in its
internal control over financial reporting and stated that it did not maintain effective internal control over financial
reporting as of December 31, 2005 and March 31, 2006. Because we do not have reliable information about HealthSouth's
operations, we do not disclose any operating or financial data for these hospitals or this operator. See also Note 1 on
page 11 regarding our litigation with HealthSouth.
(2) Includes data for periods prior to our ownership of certain properties included in this lease.
</FN>
All tenant operating data presented are based upon the operating results
provided by our tenants for the indicated quarterly periods, or the most recent
prior period for which tenant operating results are available to us from our
tenants. We have not independently verified our tenants' operating data.
22
Senior Housing Properties Trust
Supplemental Operating and Financial Data
June 30, 2006
% PRIVATE PAY BY FACILITY TYPE AND TENANT
- -----------------------------------------------------------------------------------------------------------------------------------
For the Three Months Ended
-------------- -------------- -------------- -------------- ---------------
3/31/2006 12/31/2005 9/30/2005 6/30/2005 3/31/2005
-------------- -------------- -------------- -------------- ---------------
Facility Type:
--------------
Independent Living (IL) 84% 87% 84% 84% 84%
Assisted Living (AL) 93% 92% 94% 93% 92%
Nursing Homes 30% 27% 29% 26% 18%
Hospitals (1) NA NA NA NA NA
Tenant:
-------
Five Star / Sunrise 82% 84% 84% 84% 85%
Five Star (2) 48% 45% 44% 42% 41%
Sunrise / Marriott 80% 80% 79% 81% 80%
NewSeasons / IBC 100% 100% 100% 100% 100%
HealthSouth (1) NA NA NA NA NA
Alterra / Brookdale 98% 98% 98% 98% 98%
Genesis HealthCare Corporation 17% 17% 20% 23% 23%
5 Private Companies (combined) 26% 24% 24% 27% 24%
<FN>
(1) The financial and operating data included in HealthSouth's Annual Report on Form 10-K for the year ended December 31,
2005, and Quarterly Report on Form 10-Q for the quarter ended March 31, 2006, show a substantial negative net worth and a
history of substantial operating losses. Also, HealthSouth's management identified several material weaknesses in its
internal control over financial reporting and stated that it did not maintain effective internal control over financial
reporting as of December 31, 2005 and March 31, 2006. Because we do not have reliable information about HealthSouth's
operations, we do not disclose any operating or financial data for these hospitals or this operator. See also Note 1 on
page 11 regarding our litigation with HealthSouth.
(2) Includes data for periods prior to our ownership of certain properties included in this lease.
</FN>
All tenant operating data presented are based upon the operating results
provided by our tenants for the indicated quarterly periods, or the most recent
prior period for which tenant operating results are available to us from our
tenants. We have not independently verified our tenants' operating data.
23
Senior Housing Properties Trust
Supplemental Operating and Financial Data
June 30, 2006
RENT COVERAGE
- ---------------------------------------------------------------------------------------------------------------------------
For the Three Months Ended
--------------- --------------- --------------- --------------- ---------------
Tenant 3/31/2006 12/31/2005 9/30/2005 6/30/2005 3/31/2005
- -------------------------------------- --------------- --------------- --------------- --------------- ---------------
Five Star / Sunrise (1) 1.33x 1.27x 1.37x 1.43x 1.41x
Five Star (2) 1.49x 1.78x 1.77x 1.68x 1.77x
Sunrise / Marriott 1.26x 1.25x 1.27x 1.25x 1.25x
NewSeasons / IBC 1.16x 1.10x 1.17x 1.10x 1.11x
HealthSouth (3) NA NA NA NA NA
Alterra / Brookdale 2.04x 1.98x 1.87x 1.80x 1.63x
Genesis HealthCare Corporation 1.77x 2.16x 1.82x 2.03x 1.71x
5 Private companies (combined) 1.56x 1.92x 1.86x 1.65x 1.87x
<FN>
(1) These 30 properties are leased to Five Star. As of June 30, 2006, Sunrise operated 7 and Five Star operated 23 of these
properties. Sunrise does not guaranty Five Star's lease obligations. The rent that Five Star pays to us is subordinate
to the management fees that Five Star pays to Sunrise, but is not subordinate to Five Star's internal management costs.
The rent coverage presented for this lease has been adjusted to exclude management fees paid to Sunrise during the
periods presented for the 23 properties that Five Star currently manages.
(2) Includes data for periods prior to our ownership of certain properties included in this lease.
(3) The financial and operating data included in HealthSouth's Annual Report on Form 10-K for the year ended December 31,
2005, and Quarterly Report on Form 10-Q for the quarter ended March 31, 2006, show a substantial negative net worth and
a history of substantial operating losses. Also, HealthSouth's management identified several material weaknesses in its
internal control over financial reporting and stated that it did not maintain effective internal control over financial
reporting as of December 31, 2005 and March 31, 2006. Because we do not have reliable information about HealthSouth's
operations, we do not disclose any operating or financial data for these hospitals or this operator. See also Note 1 on
page 11 regarding our litigation with HealthSouth.
</FN>
All tenant operating data presented are based upon the operating results
provided by our tenants for the indicated periods, or the most recent prior
period for which tenant operating results are available to us from our tenants.
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.
24
Senior Housing Properties Trust
Supplemental Operating and Financial Data
June 30, 2006
PORTFOLIO LEASE EXPIRATION SCHEDULE (1)
- -------------------------------------------------------------------------------------------------------------------------
(dollars in thousands)
Cumulative % of
Annualized % of Annualized Annualized
Current Rent Current Rent Current Rent
-------------------------- -------------------------- -------------------------
2006 $ - $ - 0.0%
2007 - - 0.0%
2008 - - 0.0%
2009 - - 0.0%
2010 1,269 0.8% 0.8%
2011 - - 0.8%
2012 - - 0.8%
2013 32,287 20.3% 21.1%
2014 - - 21.1%
2015 2,006 1.3% 22.4%
2016 and thereafter 123,381 77.6% 100.0%
-------------------------- --------------------------
Total $ 158,943 100.0%
========================== ==========================
Weighted average remaining
lease term (in years) 11.2
<FN>
(1) Excludes the two hospitals operated by HealthSouth. See Note 1 on page 11.
</FN>
25