<Page>
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): NOVEMBER 5, 2001
------------------------
SENIOR HOUSING PROPERTIES TRUST
(Exact name of registrant as specified in charter)
<Table>
MARYLAND 001-15319 04-3445278
(State or other jurisdiction (Commission File (I.R.S. Employer
of incorporation) Number) Identification Number)
400 CENTRE STREET, 02458
NEWTON, MASSACHUSETTS (Zip code)
(Address of principal
executive offices)
</Table>
Registrant's telephone number, including area code: 617-796-8350
------------------------
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--------------------------------------------------------------------------------
<Page>
ITEM 5. OTHER EVENTS
On October 1, 2001, we filed a Current Report on Form 8-K, relating to the
proposed spin-off of Five Star Quality Care, Inc., one of our wholly owned
subsidiaries, and the proposed acquisition of 31 senior living facilities from
Crestline Capital Corporation.
We are supplementing our disclosure in the October Form 8-K hereby.
In connection with the spin-off, we now expect to capitalize Five Star with
net equity of $50 million, rather than $40 million as described in the October
Form 8-K, as reflected in the accompanying pro forma financial statements.
As of November 5, 2001, we and Crestline entered into an amendment to the
stock purchase agreement relating to the Crestline transaction, which is filed
herewith. The provisions of the amendment do not change, in any material
respect, our disclosure of the Crestline transaction in the October Form 8-K.
As previously disclosed in the October Form 8-K, the registration statement
filed in connection with the Five Star spin-off has not yet become effective.
Five Star's common shares may not be sold nor may offers to buy be accepted
prior to the time the registration statement becomes effective. This Form 8-K
shall not constitute an offer to sell or the solicitation of an offer to buy
Five Star common shares, nor shall there be any sale of Five Star common shares
in any state in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of such state.
We have not entered into definitive documentation with Five Star regarding
the terms of the spin-off and related transactions, including its leases with
us. The description of these agreements in the October Form 8-K, as supplemented
hereby, includes the material terms which we currently expect and which are
based on our best estimate as of the date of this Form 8-K. The final terms may
be different from those that we now expect. Final terms are subject to
negotiation between us and Five Star, and are subject to approval by our Board
of Trustees and Five Star's Board of Directors. The final terms may be
influenced by factors which include, but are not limited to, changes to the
status of the economy, industry or regulatory changes, or changes in the
performance or expected performance of the facilities we expect to lease to Five
Star. These changes could affect any of the terms of the leases or the
transaction agreement, or all of them, and may include, for example, an increase
or decrease in the initial capital of Five Star on the date of the spin-off or
an increase or decrease in annual minimum rents, percentage rents, initial term
length or renewal options of the leases. While we are planning on consummating
the spin-off in December 2001, we can give no assurances that the spin-off will
be completed or that the final terms of the spin-off will not differ, including
in material respects, from the terms we currently expect, as described in the
October Form 8-K, as supplemented hereby.
The Crestline transaction remains subject to conditions, including those
disclosed in the October Form 8-K.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Pro Forma Financial Information and Other Data (see index on page F-1)
(b) Financial Statements of CSL Group, Inc. and Subsidiaries as Partitioned
For Sale to SNH/CSL Properties Trust (see index on page F-1)
(c) Exhibits
<Table>
10.1 Amendment to Stock Purchase Agreement among Senior Housing
Properties Trust, SNH/CSL Properties Trust, Crestline
Capital Corporation and CSL Group, Inc. dated November 5,
2001.
</Table>
<Page>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
<Table>
SENIOR HOUSING PROPERTIES TRUST
By: /s/ DAVID J. HEGARTY
-----------------------------------------
Name: David J. Hegarty
Title: President
By: /s/ JOHN R. HOADLEY
-----------------------------------------
Name: John R. Hoadley
Title: Chief Financial Officer
Date: November 5, 2001
</Table>
<Page>
INDEX TO FINANCIAL STATEMENTS
<Table>
SENIOR HOUSING PROPERTIES TRUST UNAUDITED PRO FORMA
CONSOLIDATED FINANCIAL STATEMENTS
Introduction to Unaudited Pro Forma Consolidated Financial
Statements................................................ F-2
Unaudited Pro Forma Consolidated Balance Sheet at
September 30, 2001........................................ F-3
Unaudited Pro Forma Consolidated Statement of Income for the
year ended
December 31, 2000......................................... F-4
Unaudited Pro Forma Consolidated Statement of Income for the
nine months ended September 30, 2001...................... F-5
Notes to Unaudited Pro Forma Consolidated Financial
Statements................................................ F-6
CONSOLIDATED FINANCIAL STATEMENTS OF CSL GROUP, INC. AND
SUBSIDIARIES AS PARTITIONED FOR SALE TO SNH/CSL PROPERTIES
TRUST
Unaudited Condensed Consolidated Balance Sheet at
September 7, 2001......................................... F-12
Unaudited Condensed Consolidated Statements of Operations
for the Thirty-six weeks ended September 7, 2001 and
September 8, 2000......................................... F-13
Unaudited Condensed Consolidated Statements of Cash Flows
for the Thirty-six weeks ended September 7, 2001 and
September 8, 2000......................................... F-14
Notes to Condensed Consolidated Financial Statements........ F-15
</Table>
F-1
<Page>
SENIOR HOUSING PROPERTIES TRUST
INTRODUCTION TO PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
PRO FORMA CONSOLIDATED BALANCE SHEET AS OF SEPTEMBER 30, 2001 AND PRO FORMA
CONSOLIDATED STATEMENTS OF INCOME FOR THE YEAR ENDED DECEMBER 31, 2000
AND THE NINE MONTHS ENDED SEPTEMBER 30, 2001
The following unaudited pro forma consolidated balance sheet gives separate
effect to: (1) our issuance of 14,047,000 common shares of beneficial interest
in October 2001; (2) the proposed spin-off of Five Star, the commencement of the
lease for 56 facilities which we currently own and certain related transactions
described in the notes thereto; and (3) the proposed Crestline transaction and
the commencement of the lease with Five Star for the 31 facilities thereby
acquired and certain related transactions described in the notes thereto, as
though all such transactions had occurred on September 30, 2001.
The following unaudited pro forma consolidated statements of income give
separate effect to: (1) our foreclosure or acquisition of facilities from former
tenants, our sale of four properties in October 2000, financing transactions
completed after January 1, 2000 and certain other transactions described in the
notes thereto; (2) the proposed spin-off of Five Star, the commencement of the
lease for 56 facilities which we currently own, and related transactions as
described in the notes thereto; and (3) the proposed Crestline transaction and
the commencement of the lease with Five Star for the 31 facilities thereby
acquired and certain related transactions described in the notes hereto, as
though all such transactions occurred on January 1, 2000.
The pro forma information is based in part upon our historical financial
statements filed on our Form 10-Q for the quarter ended September 30, 2001 and
Form 10-K for the year ended December 31, 2000, and financial statements of CSL
Group, Inc. and Subsidiaries as Partitioned For Sale to SNH/ CSL Properties
Trust, filed herewith, and the financial statements of our acquired businesses
filed on Form 8-K dated January 30, 2001, as amended, and this pro forma
information should be read in conjunction with all of these financial statements
and notes thereto. In the opinion of management, all adjustments necessary to
reflect the effects of the transactions discussed above have been reflected in
the pro forma information.
We currently have sufficient financial resources to effect the closing of
the Crestline transaction through a combination of assumed debt, seller
financing, cash on hand and our credit facility (see Notes N and CC). We may
undertake one or more financings from time to time and at any time in the
future. Those financings could include common equity, preferred equity, debt or
other forms of capital. It is likely that any financing will reduce the amount
of proceeds under our revolving credit facility that we use to close the
Crestline transaction, if it closes at all. Any common equity financing will
increase our total shares outstanding and will cause our per share results to be
less than the per share results shown on the accompanying pro forma income
statements, whether or not the Crestline transaction or the spin-off is
completed. Any financing other than common shares will also cause our per share
results to be less than the per share results shown on the accompanying pro
forma income statements, whether or not the Crestline transaction or the
spin-off is completed, because if we undertake these financings, we will likely
incur interest or other fixed charges which are higher than the pro forma
interest charges on outstanding amounts under our credit facility. Although it
is not possible to estimate the effect of future possible financings because
their terms are unknown at this time, their impact may be material.
The following unaudited pro forma financial data is not necessarily
indicative of what our actual financial position or results of operations would
have been as of the date or for the period indicated, nor does it purport to
represent our financial position or results of operations for future periods.
F-2
<Page>
SENIOR HOUSING PROPERTIES TRUST
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 2001
(DOLLARS IN THOUSANDS)
<Table>
<Caption>
PRO FORMA FOR
ADJUSTED PRO FORMA CRESTLINE SPIN-OFF AND
Company Financing COMPANY FOR Transaction CRESTLINE
Historical Adjustments HISTORICAL Spin-off SPIN-OFF Adjustments TRANSACTION
---------- ----------- ---------- -------- ---------- ----------- --------------
ASSETS
Real estate, net............ 476,437 476,437 (3,040)(D) 473,397 604,086 (K) 1,077,483
Cash and cash equivalents... 8,084 140,635 (A) 148,719 (28,286)(E) 120,433 (119,420)(L) 1,013
Accounts receivable, net.... 39,133 39,133 (34,511)(F) 4,622 4,622
Other assets................ 37,994 37,994 (4,548)(G) 33,446 269 (M) 33,715
-------- -------- -------- -------- --------- -------- ----------
$561,648 $140,635 $702,283 $(70,385) $ 631,898 $484,935 $1,116,833
======== ======== ======== ======== ========= ======== ==========
LIABILITIES AND
SHAREHOLDERS' EQUITY
Revolving credit facility... $ 31,000 $(31,000)(B) $ -- $ -- $ -- $ 55,000 (N) $ 55,000
Other debt.................. 9,100 9,100 9,100 428,386 (N) 437,486
Prepaid and deferred
rents..................... 9,475 9,475 9,475 9,475
Security deposits........... 1,520 1,520 1,520 1,520
Accounts payable and accrued
expenses of facilities'
operations................ 16,113 16,113 (16,113)(H) -- --
Other liabilities........... 7,185 7,185 (4,272)(I) 2,913 1,549 (O) 4,462
-------- -------- -------- -------- --------- -------- ----------
Total liabilities........... 74,393 (31,000) 43,393 (20,385) 23,008 484,935 507,943
Trust Preferred
Securities................ 27,394 27,394 27,394 27,394
Shareholders' equity........ 459,861 171,635 (C) 631,496 (50,000)(J) 581,496 581,496
-------- -------- -------- -------- --------- -------- ----------
$561,648 $140,635 $702,283 $(70,385) $ 631,898 $484,935 $1,116,833
======== ======== ======== ======== ========= ======== ==========
</Table>
F-3
<Page>
SENIOR HOUSING PROPERTIES TRUST
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 2000
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<Table>
<Caption>
DISPOSITION PRO FORMA FOR
AND ADJUSTED CRESTLINE SPIN-OFF AND
Company Financing COMPANY PRO FORMA FOR Transaction CRESTLINE
Historical Adjustments HISTORICAL Spin-off SPIN-OFF Adjustments TRANSACTION
---------- -------------- ---------- -------- -------------- ----------- --------------
REVENUES:
Rental income............. $ 64,377 $ (9,366)(P) $ 54,426 $(1,227)(W) $53,199 $63,000 (AA) $116,199
(585)(Q)
Other real estate
income.................. 2,520 2,520 (2,520)(X) -- --
Interest and other
income.................. 1,520 400 (R) 1,920 (695)(Y) 1,225 1,225
FF&E reserve income....... -- -- -- 6,794 (BB) 6,794
Gain on foreclosures and
lease terminations...... 7,105 (7,105)(S) -- -- --
-------- -------- -------- ------- ------- ------- --------
Total revenues............ 75,522 (16,656) 58,866 (4,442) 54,424 69,794 124,218
-------- -------- -------- ------- ------- ------- --------
EXPENSES:
Interest.................. 15,366 (14,509)(T) 857 -- 857 44,867 (CC) 45,724
Distributions on Trust
Preferred Securities.... -- 2,811 (U) 2,811 2,811 2,811
Depreciation.............. 20,140 (1,936)(P) 18,167 (619)(Z) 17,548 17,116 (DD) 34,664
(37)(Q)
General and
administrative..........
-- Recurring.............. 5,475 (424)(P) 4,995 4,995 3,520 (DD) 8,515
(56)(Q)
-- Related to foreclosures
and lease
terminations............ 3,519 (3,519)(S) -- -- --
-------- -------- -------- ------- ------- ------- --------
Total expenses............ 44,500 (17,670) 26,830 (619) 26,211 65,503 91,714
-------- -------- -------- ------- ------- ------- --------
Income before gain on sale
of properties........... $ 31,022 $ 1,014 $ 32,036 $(3,823) $28,213 $ 4,291 $ 32,504
======== ======== ======== ======= ======= ======= ========
Weighted average shares
outstanding............. 25,958 17,464 (V) 43,422 -- 43,422 -- 43,422
======== ======== ======== ======= ======= ======= ========
Basic and diluted earnings
per share:
Net income................ $ 1.20 $ 0.74 $ 0.65 $ 0.75
======== ======== ======= ========
</Table>
F-4
<Page>
SENIOR HOUSING PROPERTIES TRUST
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
FOR NINE MONTHS ENDED SEPTEMBER 30, 2001
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
<Table>
<Caption>
PRO FORMA FOR
ADJUSTED Crestline SPIN-OFF AND
Company Financing COMPANY PRO FORMA FOR Transaction CRESTLINE
Historical Adjustments HISTORICAL Spin-off SPIN-OFF Adjustments TRANSACTION
---------- ----------- ---------- -------- -------------- ----------- --------------
Revenues:
Rental income.............. $ 33,302 $ -- $ 33,302 $ 5,250 (W) $ 38,552 $ 47,250 (AA) $ 85,802
Facilities' operations..... 170,681 170,681 (170,681)(X) -- --
Interest and other
income................... 897 897 897 897
FF&E reserve income........ -- -- -- 4,293 (BB) 4,293
-------- -------- -------- -------- --------- -------- ----------
Total revenues............. 204,880 -- 204,880 (165,431) 39,449 51,543 90,992
-------- -------- -------- -------- --------- -------- ----------
EXPENSES:
Interest................... 4,900 (4,373)(T) 527 -- 527 28,643 (CC) 29,170
Distributions on Trust
Preferred Securities..... 749 1,359 (U) 2,108 2,108 2,108
Depreciation............... 14,537 14,537 (1,098)(Z) 13,439 12,837 (DD) 26,276
Facilities' operations..... 166,230 166,230 (166,230)(X) -- --
General and
administrative...........
-- Recurring............... 3,189 3,189 3,189 2,640 (DD) 5,829
-- Related to foreclosures
and lease terminations... 4,167 (4,167)(S) -- -- --
-------- -------- -------- -------- --------- -------- ----------
Total expenses............. 193,772 (7,181) 186,591 (167,328) 19,263 44,120 63,383
-------- -------- -------- -------- --------- -------- ----------
Net income................. $ 11,108 $ 7,181 $ 18,289 $ 1,897 $ 20,186 $ 7,423 $ 27,609
======== ======== ======== ======== ========= ======== ==========
Weighted average shares
outstanding.............. 27,049 16,373 (V) 43,422 -- 43,422 -- 43,422
======== ======== ======== ======== ========= ======== ==========
Basic and diluted earnings
per share:
Net income................. $ 0.41 $ 0.42 $ 0.46 $ 0.64
======== ======== ========= ==========
</Table>
F-5
<Page>
SENIOR HOUSING PROPERTIES TRUST
CONDENSED CONSOLIDATED BALANCE SHEET ADJUSTMENTS (DOLLARS IN THOUSANDS)
FINANCING ADJUSTMENTS
Subsequent to September 30, 2001, we issued 14,047,000 common shares of
beneficial interest. A portion of the net proceeds of this transaction were
applied to reduce the outstanding balance on our revolving credit facility to
zero.
A. Represents net cash available for the purpose of funding initial cash
amounts to be contributed to Five Star, completing the Crestline
transaction or for general business purposes. (See Note B).
B. Amount represents pro forma net cash applied as a reduction of our
revolving credit facility and remaining cash as follows:
<Table>
Net proceeds from issuance of 14,047,000 common shares (see
Note C)................................................... $171,635
Total net proceeds applied to credit facility............... (31,000)
--------
Net cash available.......................................... $140,635
========
</Table>
C. Represents our issuance in October 2001 of 14,047,000 common shares
($12.90 per share) as follows:
<Table>
Gross proceeds.............................................. $181,206
Underwriters' discount and other offering costs............. (9,571)
--------
Net proceeds................................................ $171,635
========
</Table>
SPIN-OFF ADJUSTMENTS
Although contingent upon a number of factors at this time, we currently
expect to spin-off our subsidiary, Five Star Quality Care, Inc., which will
separate our real estate ownership activities from our operating activities. The
operating assets and liabilities associated with our ownership of 56 senior
housing facilities which we repossessed or acquired from former tenants will be
contributed to Five Star. In addition, certain properties that are currently not
being operated or leased will be transferred to Five Star.
D. Represents the real estate, net, of properties and personal property to
be transferred to Five Star as part of the spin-off.
E. Represents cash used to fund initial cash amounts expected to be
contributed to Five Star.
F. Represents patient accounts receivable to be transferred to Five Star as
part of the spin-off generated by the 56 facilities which will be owned
by us and leased to Five Star subsequent to the spin-off.
G. Represents primarily prepaid expenses to be transferred to Five Star as
part of the spin-off related to the 56 facilities which will be owned by
us and leased to Five Star subsequent to the spin-off.
H. Represents accounts payable and accrued expenses to be transferred to
Five Star as part of the spin-off generated by the 56 facilities which
will be owned by us and leased to Five Star subsequent to the spin-off.
F-6
<Page>
SENIOR HOUSING PROPERTIES TRUST
I. In connection with the foreclosures of two former bankrupt tenants,
Senior Housing identified deferred maintenance at the facilities which
had been allowed to occur by its former tenants. In connection therewith,
Senior Housing accounted for the estimated liability to correct this
deferred maintenance, of which $4,272 remains at September 30, 2001. We
will transfer this liability, along with the cash to satisfy it, to Five
Star in the spin-off.
J. Represents the estimated net equity (assets in excess of liabilities,
see Notes D, E, F, G, H, and I) of Five Star and distributed to our
shareholders in the spin-off.
CRESTLINE TRANSACTION ADJUSTMENTS
Pursuant to an agreement we announced in August 2001, we expect to acquire
31 senior living facilities from Crestline. Concurrent with the Crestline
transaction, we expect to lease these 31 facilities to Five Star. As described
in this Form 8-K, the Crestline transaction is subject to contingencies and may
not close.
K. The Crestline transaction will result in the allocation of consideration
using the purchase method of accounting. In addition to the payments made
on the closing date of the Crestline transaction of the contract purchase
price and adjustments thereto, we estimate we will pay closing costs of
$10 million and we expect to make a cash payment to Five Star. The
expected cash payment to Five Star of $3,573 on a pro forma basis is
intended to compensate Five Star for assuming certain liabilities in
excess of assets used in the operation of the 31 facilities. Amounts
allocated to tangible fixed assets are as follows:
<Table>
Contract purchase price................................... $600,000
Contract purchase price adjustments, net.................. (3,267)
Estimated closing costs................................... 10,000
Estimated payment to Five Star at lease commencement...... 3,573
--------
Subtotal................................................ 610,306
Monetary assets received in Crestline transaction (see
Note M)................................................. (7,769)
Monetary liabilities received in Crestline transaction
other than funded debt (see Note O)..................... 1,549
--------
Total fixed assets........................................ $604,086
========
</Table>
L. Represents cash used to complete the Crestline transaction (see Note B).
M. Amounts allocated to other assets represent cash deposits in accounts
restricted for use: (1) servicing future interest payments on assumed
mortgage debt; (2) making future payments for real estate taxes on
properties which secure the related mortgage debt; and (3) cash escrow
accounts for routine capital expenditures at the facilities. The assets
received in the Crestline transaction are offset by a deposit in escrow
that will be applied to the purchase price when the Crestline transaction
is closed:
<Table>
Assets received............................................. $7,769
Deposit to be applied....................................... (7,500)
------
Net adjustment.............................................. $ 269
======
</Table>
F-7
<Page>
SENIOR HOUSING PROPERTIES TRUST
N. To finance the Crestline transaction and cash payment to Five Star, we
expect to assume certain existing Crestline debts and to contribute
additional funds from our own sources:
<Table>
Assumed term debt, including capital leases............... $233,386
New term debt............................................. 170,000
Seller financing.......................................... 25,000
--------
Total debt assumed or seller financed..................... 428,386
Borrowings under our credit facility...................... 55,000
--------
Total debt to close the Crestline transaction............. $483,386
========
</Table>
O. Amounts allocated to other liabilities primarily represent accrued
interest related to the Crestline debt to be assumed.
CONDENSED CONSOLIDATED STATEMENT OF INCOME ADJUSTMENTS (DOLLARS IN THOUSANDS)
DISPOSITION AND FINANCING ADJUSTMENTS
P. Represents elimination of rental income, depreciation expense and
general and administrative expense recognized related to four facilities
we sold during 2000 for cash of $123,000. Net proceeds were applied to
reduce then outstanding amounts under our revolving credit facility. See
Note T.
Q. Represents the elimination of rental and interest income, depreciation
expense and general and administrative expense recognized during the
period prior to transfer to a former tenant of five facilities and
transfer to a former borrower of one mortgage as part of foreclosure
settlements, net of impact from one facility transferred to us as part of
a foreclosure settlement and leased to a new tenant.
R. Represents annualized dividend income on common shares of HRPT Properties
Trust conveyed to us at the time of our foreclosure on properties
formerly leased to a former tenant which were transferred to us as part
of a foreclosure settlement.
S. Represents the elimination of the gain on foreclosure and lease
terminations and the related general and administrative expenses because
they are not expected to recur.
T. Represents the elimination of historically incurred interest expense on
our revolving credit facility and an adjustment for interest on the
mortgages payable, which we obtained in July 2001, as follows:
<Table>
<Caption>
NINE MONTHS
YEAR ENDED ENDED
DECEMBER 31, SEPTEMBER 30,
2000 2001
------------- --------------
Elimination of interest expense on revolving
credit facility........................... $(15,366) $(4,792)
Adjustment for mortgage interest............ 857 419
-------- -------
$(14,509) $(4,373)
======== =======
</Table>
The financing described in Note B and the sale of properties described in
Note P produced pro forma total net proceeds of $294,635, an amount
sufficient to repay our outstanding revolving credit facility balance in
full on a pro forma basis. The mortgages require interest to
F-8
<Page>
SENIOR HOUSING PROPERTIES TRUST
be paid based on prime less a discount. The interest expense adjustment
was calculated as follows:
<Table>
<Caption>
NINE MONTHS
YEAR ENDED ENDED
DECEMBER 31, SEPTEMBER 30,
2000 2001
------------ -------------
Mortgage balance............................ $9,100 $9,100
Average rate for period..................... 8.2% 6.5%
------ ------
Interest expense............................ 746 444
Plus amortization of deferred financing
fees...................................... 111 83
------ ------
Total expense............................... 857 527
Less amount included in historical
results................................... -- 108
------ ------
Net adjustment.............................. $ 857 $ 419
====== ======
</Table>
U. Represents impact on distributions from the issuance of 10.125% preferred
securities of a subsidiary as follows:
<Table>
<Caption>
YEAR ENDED NINE MONTHS
DECEMBER 31, ENDED
2000 SEPTEMBER 30, 2001
------------- -------------------
Gross amount of securities issued....... $27,394 $27,394
Distribution rate (10.125% per annum)... 10.125% 7.59375%
------- -------
Total distributions during the period... 2,774 2,080
Amortization of deferred issuance
costs................................. 37 28
------- -------
Expense for period...................... 2,811 2,108
Less amount included in historical
results............................... -- (749)
------- -------
Total adjustment........................ $ 2,811 $ 1,359
======= =======
</Table>
V. Represents the impact of the transaction described in Note B on our
weighted average common shares outstanding during the period.
SPIN-OFF ADJUSTMENTS
W. Represents expected minimum rents under the terms of our lease with Five
Star as follows, net of rent received from former tenants prior to
foreclosure:
<Table>
<Caption>
YEAR ENDED NINE MONTHS
DECEMBER 31, ENDED
2000 SEPTEMBER 30, 2001
------------- -------------------
Minimum rent for 56 facilities currently
owned by us to be leased to Five
Star.................................. $ 7,000 $ 5,250
Less rent received from former tenants
prior to foreclosure.................. (8,227) --
------- -------
Net adjustment.......................... $(1,227) $ 5,250
======= =======
</Table>
X. Represents elimination, for the period subsequent to December 31, 2000,
of facilities' operating revenues and expenses, and for the period prior
to December 31, 2000, of other real estate income. These amounts were
derived from the operations of facilities that were
F-9
<Page>
SENIOR HOUSING PROPERTIES TRUST
conducted for our own account. The facilities will be operated by Five
Star subsequent to the spin-off under the terms of a lease agreement
between us and Five Star.
Y. Represents elimination of interest income received from a former
mortgagee prior to foreclosure.
Z. Represents the elimination of historical depreciation expense related to
the properties to be transferred to Five Star (see Note D).
CRESTLINE TRANSACTION ADJUSTMENTS
AA. Represents expected minimum rents under the terms of our lease with Five
Star.
BB. Represents deposits made into reserves for capital improvements in
accordance with existing management agreements for the properties to be
acquired in the Crestline transaction and the expected leases with Five
Star.
CC. As part of the Crestline transaction, we will assume debts as described
in Note M above. These debts bear interest at various rates, including
some at floating rates based on LIBOR. The applicable interest rates
during the pro forma periods, assuming LIBOR equals its monthly average
during the periods presented, were as follows:
<Table>
<Caption>
YEAR ENDED NINE MONTHS
DECEMBER 31, ENDED
2000 SEPTEMBER 30, 2001
------------- -------------------
Assumed term debt including capitalized
leases, fixed rates................... 9.4% 9.4%
Assumed term debt, floating rates....... 9.2% 7.0%
New mortgage financing, floating rate... 9.4% 7.3%
Seller financing, fixed rate............ 10.0% 10.0%
Credit facility, floating rate.......... 8.4% 6.3%
</Table>
The table below estimates interest on the new mortgage financing based
upon our preliminary discussions with a financing source.
Some of the debt we will assume in the Crestline transaction requires
both interest and principal payments. The weighted average outstanding
balance for the obligations described above are as follows:
<Table>
<Caption>
YEAR ENDED NINE MONTHS
DECEMBER 31, ENDED
2000 SEPTEMBER 30, 2001
------------- -------------------
Assumed term debt including capitalized
leases, fixed rates................... $142,370 $141,016
Assumed term debt, floating rates....... 92,370 92,370
New mortgage financing, floating rate... 170,000 170,000
Seller financing, fixed rate............ 25,000 25,000
Credit facility, floating rate.......... 53,646 55,000
-------- --------
Total................................... $483,386 $483,386
======== ========
</Table>
F-10
<Page>
SENIOR HOUSING PROPERTIES TRUST
On a pro forma basis, the combination of the average interest rates and
the average debt balances set forth above produce interest expense as
follows:
<Table>
<Caption>
YEAR ENDED NINE MONTHS
DECEMBER 31, ENDED
2000 SEPTEMBER 30, 2001
------------- -------------------
Assumed term debt including capitalized
leases, fixed rates................... $13,383 $ 9,942
Assumed term debt, floating rates....... 8,498 4,919
New mortgage financing, floating rate... 15,980 9,308
Seller financing, fixed rate............ 2,500 1,875
Credit facility, floating rate.......... 4,506 2,599
------- -------
Total................................... $44,867 $28,643
======= =======
</Table>
As outlined above, a substantial portion of the debt we expect to incur
as part of the Crestline transaction will be at floating rates. A
1/8 percentage point increase in interest rates would produce pro forma
interest expense which is $397 higher per annum.
DD. Represents the impact of the Crestline transaction on depreciation
expense and general and administrative expense.
F-11
<Page>
CSL GROUP, INC. AND SUBSIDIARIES
AS PARTITIONED FOR SALE TO SNH/CSL PROPERTIES TRUST
CONDENSED CONSOLIDATED BALANCE SHEET
(UNAUDITED, IN THOUSANDS)
<Table>
<Caption>
SEPTEMBER 7,
2001
-------------
ASSETS
Property and equipment, net................................. $631,644
Due from Marriott Senior Living Services, net............... 8,787
Other assets................................................ 11,000
Cash and cash equivalents................................... 20,107
--------
Total assets............................................ $671,538
========
LIABILITIES AND EQUITY
Debt........................................................ $246,627
Accounts payable and accrued expenses....................... 1,247
Deferred income taxes....................................... 60,882
Other liabilities........................................... 16,057
--------
Total liabilities....................................... $324,813
Equity:
Investments in and advances from parent................... 346,725
--------
Total liabilities and equity............................ $671,538
========
</Table>
See Notes to Condensed Consolidated Financial Statements.
F-12
<Page>
CSL GROUP, INC. AND SUBSIDIARIES
AS PARTITIONED FOR SALE TO SNH/CSL PROPERTIES TRUST
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THIRTY-SIX WEEKS ENDED SEPTEMBER 7, 2001 AND SEPTEMBER 8, 2000
(UNAUDITED, IN THOUSANDS)
<Table>
<Caption>
SEPTEMBER 7, SEPTEMBER 8,
2001 2000
------------ ------------
REVENUES
Routine................................................... $174,154 $164,446
Ancillary................................................. 16,434 16,115
-------- --------
190,588 180,561
Equity in earnings of affiliates.......................... 20 37
-------- --------
Total revenues.......................................... 190,608 180,598
-------- --------
OPERATING COSTS AND EXPENSES
Property-level operating costs and expenses
Routine................................................. 111,274 105,751
Ancillary............................................... 9,206 9,982
Other operating costs and expenses
Depreciation and amortization........................... 16,717 16,591
Management fees......................................... 12,441 11,005
Property taxes and other................................ 6,199 6,654
-------- --------
Total operating costs and expenses.................... 155,837 149,983
-------- --------
OPERATING PROFIT............................................ 34,771 30,615
Corporate expenses.......................................... (1,338) (1,526)
Interest expense............................................ (14,379) (12,582)
Interest income............................................. 610 640
-------- --------
INCOME BEFORE INCOME TAXES.................................. 19,664 17,147
Provision for income taxes.................................. (8,062) (7,030)
-------- --------
INCOME BEFORE EXTRAORDINARY ITEM............................ 11,602 10,117
Gain on early extinguishment of debt, net of tax............ -- 253
-------- --------
NET INCOME.................................................. $ 11,602 $ 10,370
======== ========
</Table>
See Notes to Condensed Consolidated Financial Statements.
F-13
<Page>
CSL GROUP, INC. AND SUBSIDIARIES
AS PARTITIONED FOR SALE TO SNH/CSL PROPERTIES TRUST
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THIRTY-SIX WEEKS ENDED SEPTEMBER 7, 2001 AND SEPTEMBER 8, 2000
(UNAUDITED, IN THOUSANDS)
<Table>
<Caption>
SEPTEMBER 7, SEPTEMBER 8,
2001 2000
------------- -------------
OPERATING ACTIVITIES
Cash provided by operations................................. $23,684 $ 28,518
------- --------
INVESTING ACTIVITIES
Expansions of senior living communities................... -- (3,163)
Other capital expenditures................................ (5,770) (6,434)
Increase in capital improvement reserve................... 5 556
------- --------
Cash used in investing activities........................... (5,765) (9,041)
------- --------
FINANCING ACTIVITIES
Repayments of debt........................................ (2,089) (46,207)
Issuances of debt......................................... -- 92,370
Decrease in financing escrows............................. -- 487
Net advances to parent.................................... (2,399) (66,065)
------- --------
Cash used in financing activities........................... (4,488) (19,415)
------- --------
Increase in cash and cash equivalents....................... 13,431 62
Cash and cash equivalents, beginning of period.............. 6,676 3,006
------- --------
Cash and cash equivalents, end of period.................... $20,107 $ 3,068
======= ========
</Table>
See Notes to Condensed Consolidated Financial Statements.
F-14
<Page>
CSL GROUP, INC. AND SUBSIDIARIES
AS PARTITIONED FOR SALE TO SNH/CSL PROPERTIES TRUST
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. On August 9, 2001, Crestline Capital Corporation ("Crestline Capital") and
CSL Group, Inc. ("CSL Group") entered into a stock purchase agreement (the
"Stock Purchase Agreement") with Senior Housing Properties Trust ("SNH") and
SNH/CSL Properties Trust ("SNH/CSL"). Pursuant to the Stock Purchase
Agreement, SNH/CSL would purchase the stock of CSL Group and certain other
subsidiaries of Crestline Capital that compose Crestline Capital's senior
living business (the "Partitioned Business") for $600 million, including the
assumption of approximately $235 million in existing debt. The transaction
is expected to close in the first quarter of 2002 and is subject to a
successful vote by at least two-thirds of Crestline Capital's shareholders,
arranging additional mortgage debt financing for $150 million to
$175 million, obtaining certain consents and customary closing conditions.
These condensed consolidated financial statements include only the assets
and liabilities, along with the results from operations generated from the
Partitioned Business, as described in the Stock Purchase Agreement. The
Partitioned Business is an organizational unit of Crestline Capital and is
not a distinct legal entity. As of September 7, 2001, the Partitioned
Business consisted of the ownership of 31 senior living communities, a
general partnership interest in one senior living community and a second
mortgage note receivable on a senior living community.
The accompanying condensed consolidated financial statements of the
Partitioned Business have been prepared by management without audit. Certain
information and footnote disclosures normally included in financial
statements presented in accordance with generally accepted accounting
principles have been condensed or omitted. Management believes the
disclosures made are adequate to make the information presented not
misleading. However, the condensed consolidated financial statements should
be read in conjunction with the consolidated financial statements and notes
thereto included in the Partitioned Business's audited financial statements
for the fiscal year ended December 29, 2000.
The accompanying unaudited condensed consolidated financial statements
reflect all adjustments (which include only normal and recurring
adjustments) necessary to present fairly the financial position of the
Partitioned Business as of September 7, 2001 and the results of operations
and cash flows for the thirty-six week period ended September 7, 2001. All
significant intercompany accounts and transactions have been eliminated.
Interim results are not necessarily indicative of fiscal year performance
because of the impact of seasonal and short-term variations.
F-15