Form: 8-K

Current report filing

July 27, 2004

Documents

8-K: Current report filing

Published on July 27, 2004


 

 

PRESS RELEASE – FOR IMMEDIATE RELEASE

OMEGA ANNOUNCES SECOND QUARTER 2004 FINANCIAL RESULTS AND
ADJUSTED FFO OF $0.22 PER SHARE FOR THE SECOND QUARTER


TIMONIUM, MARYLAND – JULY 27, 2004 – Omega Healthcare Investors, Inc. (NYSE:OHI) today announced its results of operations for the quarter ended June 30, 2004. The Company also reported Funds From Operations (“FFO”) available to common stockholders for the three months ended June 30, 2004 of $5.1 million or $0.11 per common share. The $5.1 million of FFO available to common stockholders for the quarter includes the impact of $2.3 million of non-cash preferred stock redemption charges and a $3.0 million charge relating to professional liability claims associated with the Company’s former owned and operated facilities. The Company has disposed of or re-leased all such facilities and no longer operates any facilities. FFO is presented in accordance with the guidelines for the calculation and reporting of FFO issued by the National Association of Real Estate Investment Trusts (“NAREIT”). Adjusted FFO, which excludes the impact of these charges, was $0.22 per share. For more information, see “FFO Results” below.

GAAP NET INCOME

After adjusting for the loss from discontinued operations of $137 thousand for the three months ended June 30, 2004, the Company reported a net loss available to common stockholders of ($376) thousand or a loss of ($0.01) per diluted common share and operating revenues of $22.3 million. This compares to net income available to common stockholders of $1.8 million or $0.05 per diluted common share and operating revenues of $21.5 million for the same period in 2003. A breakout of discontinued operations is included in a schedule attached to this Press Release.

SECOND QUARTER 2004 HIGHLIGHTS AND OTHER RECENT DEVELOPMENTS

  • Increased the Company’s $125 million revolving credit facility to $175 million.
  • Fully redeemed the Company’s $57.5 million, 9.25% Series A preferred stock.
  • Completed two separate acquisitions totaling $35 million of new investments.

FINANCING ACTIVITIES AND BORROWING ARRANGEMENTS

Credit Facility Increased to $175 Million
On April 30, 2004, the Company exercised its right to increase the revolving commitments under its existing $125 million credit facility by an additional $50 million, to $175 million. All other terms of the credit facility, which closed on March 22, 2004, remain the same. The increase of the credit facility’s revolving commitments provides the Company with a current undrawn and unused balance of approximately $135 million. Bank of America, N.A. serves as Administrative Agent for the credit facility.


On April 30, 2004, the Company fully redeemed its 9.25% Series A Cumulative Preferred Stock (NYSE:OHI PrA) (“Series A”). The Company redeemed the 2.3 million shares of Series A at a price of $25.57813, comprising the $25 liquidation value and accrued dividend. Under FASB-EITF Issue D-42, ‘‘The Effect on the Calculation of Earnings per Share for the Redemption or Induced Conversion of Preferred Stock,” the repurchase of the Series A preferred stock resulted in a non-cash charge to net income available to common shareholders of approximately $2.3 million reflecting the write-off of the original issuance costs of the Series A preferred stock. This non-cash charge did not have any effect on the Company’s net worth.




SECOND QUARTER 2004 RESULTS

Revenues for the three months ended June 30, 2004 were $22.3 million. Expenses for the three months ended June 30, 2004 totaled $7.2 million, comprised of $5.4 million of depreciation and amortization expense and $1.8 million of general, administrative and legal expenses. Cash interest expense for the quarter was $5.8 million. In addition, the Company recorded a $3.0 million charge associated with professional liability claims.

As a result of mediation discussions in late May and June, the Company settled a number of professional liability claims that were associated with the Company’s former owned and operated portfolio. “We are pleased to have settled the six most problematic patient liability lawsuits that arose during 2000 and 2001,” stated C. Taylor Pickett, President and Chief Executive Officer of Omega Healthcare Investors, Inc. “With only five lawsuits remaining, all of which have insurance coverage beyond certain deductibles, we believe we have eliminated the balance sheet risks that were created in 2000 and 2001 when Omega was the licensed operator of certain facilities. Furthermore, the expense recorded during the quarter is carved out of the covenants for both our credit facility and our bonds; therefore, Omega is not limited in any way, including our ability to pay dividends.”

During the three-month period ended June 30, 2004, the Company sold one closed facility realizing proceeds of approximately $50 thousand, net of closing costs and other expenses, resulting in a loss of approximately $137 thousand.

FFO RESULTS

For the three months ended June 30, 2004, reportable FFO available to common stockholders was $5.1 million or $0.11 per common share compared to $8.5 million or $0.16 per common share for the same period in 2003 due to the factors mentioned above. The $5.1 million of FFO for the quarter includes the impact of $2.3 million of non-cash preferred stock redemption charges and a $3.0 million charge relating to professional liability legal settlements associated with the Company’s former owned and operated facilities. FFO is presented in accordance with the guidelines for the calculation and reporting of FFO issued by the National Association of Real Estate Investment Trusts (“NAREIT”). However, when excluding the $5.3 million of redemption and professional liability claim charges described above in 2004 and certain non-recurring revenue and expense items in 2003, adjusted FFO was $10.5 million or $0.22 per common share compared to $11.2 million or $0.21 per common share for the same period in 2003. For further information, see the attached “Funds From Operations” schedule and notes.

PORTFOLIO DEVELOPMENTS

Investment Activity

During the second quarter of 2004, the Company closed on new investments totaling approximately $35 million. The investment activity involved two separate transactions – one was the $26 million purchase of three facilities in New England and the other was a $9.4 million acquisition of two facilities in Texas. Yields for the two investments were 10.25% and 11%, respectively. Both acquisitions were done on behalf of existing tenants and the accompanying leases were combined with existing Master Leases.

Net investment activity for the quarter was $30 million reflecting the payoff of a $4.6 million mortgage loan on 5 facilities in Missouri.





Other Assets

Closed Facilities

On April 30, 2004, the Company sold one closed facility located in Illinois for net proceeds of approximately $50,000, resulting in a loss of approximately $137,000. At the time of this press release, the Company has three remaining closed facilities with a total net book value of approximately $1.8 million.

Sun Healthcare Group, Inc. Common Stock

Under the Company’s restructuring agreement with Sun, previously announced on January 26, 2004, the Company received the right to convert deferred base rent owed to the Company, totaling approximately $7.8 million, into 800,000 shares of Sun’s common stock, subject to certain non-dilution provisions and the right of Sun to pay cash in an amount equal to the value of that stock in lieu of issuing stock to the Company.

On March 30, 2004, the Company notified Sun of its intention to exercise its right to convert the deferred base rent into fully paid and non-assessable shares of Sun’s common stock. On April 16, 2004, the Company received a stock certificate for 760,000 shares of Sun’s common stock and cash in the amount of approximately $0.5 million in exchange for the remaining 40,000 shares of Sun’s common stock. The Company is accounting for these shares as “available-for-sale marketable securities” with changes in market value recorded in equity.

DIVIDENDS

On July 20, 2004, the Company’s Board of Directors announced a common stock dividend of $0.18 per share. The common stock dividend will be paid August 16, 2004 to common stockholders of record on July 30, 2004. At the date of this release, the Company had approximately 46.6 million common shares outstanding.

Also on July 20, 2004, the Company’s Board of Directors declared its regular quarterly dividends for all classes of preferred stock, payable August 16, 2004 to preferred stockholders of record on July 30, 2004. Series B and Series D preferred stockholders of record on July 30, 2004 will be paid dividends in the amount of approximately $0.53906 and $0.52344, per preferred share, respectively, on August 16, 2004. The liquidation preference for each of the Company's Series B and D preferred stock is $25.00. Regular quarterly preferred dividends represent dividends for the period May 1, 2004 through July 31, 2004 for the Series B and Series D preferred stock.

2004 AND 2005 ADJUSTED FFO GUIDANCE AFFIRMED

The Company affirmed its 2004 adjusted FFO available to common stockholders to be between $0.88 and $0.90 per common share and its 2005 adjusted FFO available to common stockholders to be between $0.96 and $0.98 per common share.

The Company's adjusted FFO guidance (and related GAAP earnings projections) for 2004 and 2005 excludes the future impacts of gains and losses on the sales of assets and the impact of acquisitions, expenses related to nursing home operations, additional divestitures, certain one-time revenue and expense items and capital transactions.

Reconciliation of the FFO guidance to the Company's projected GAAP earnings is provided on a schedule attached to this Press Release. The Company may, from time to time, update its publicly announced FFO guidance, but it is not obligated to do so.

The Company's FFO guidance is based on a number of assumptions, which are subject to change and many of which are outside the control of the Company. If actual results vary from these assumptions, the Company's expectations may change. There can be no assurance that the Company will achieve these results.

CONFERENCE CALL

The Company will be conducting a conference call on Tuesday, July 27, 2004, at 10 a.m. EDT to review the Company’s 2004 second quarter results and current developments. To listen to the conference call via webcast, log on to www.omegahealthcare.com and click the “earnings call” icon on the Company’s home page. Webcast replays of the call will be available on the Company’s website for two weeks following the call.


* * * * * *


Omega is a Real Estate Investment Trust investing in and providing financing to the long-term care industry. At June 30, 2004, the Company owned or held mortgages on 208 skilled nursing and assisted living facilities with approximately 21,900 beds located in 29 states and operated by 39 third-party healthcare operating companies.


FOR FURTHER INFORMATION, CONTACT
Bob Stephenson, CFO at (410) 427-1700

________________________


This announcement includes forward-looking statements. All forward-looking statements included herein are based on current expectations and speak only as of the date of such statements. The Company undertakes no obligation to publicly update or revise any forward-looking statement, including its guidance for the years 2004 and 2005, whether as a result of future events, new information or otherwise Such forward-looking statements should be regarded solely as reflections of the Company’s current operating plans and estimates. Statements regarding future events and developments and the Company's future performance, as well as management's expectations, beliefs, plans, estimates or projections relating to the future, are forward-looking statements within the meaning of these laws. All forward-looking statements are subject to certain risks and uncertainties that could cause actual events to differ materially from those projected. Management believes that these forward-looking statements are reasonable; however, you should not place undue reliance on such statements. Actual results may differ materially from those reflected in such forward-looking statements as a result of a variety of factors, including, among other things: (i) uncertainties relating to the business operations of the operators of the Company’s properties, including those relating to reimbursement by third-party payors, regulatory matters and occupancy levels; (ii) regulatory and other changes in the healthcare sector, including without limitation, changes in Medicare reimbursement; (iii) changes in the financial position of the Company’s operators; (iv) the ability of operators in bankruptcy to reject unexpired lease obligations, modify the terms of the Company’s mortgages, and impede the ability of the Company to collect unpaid rent or interest during the pendency of a bankruptcy proceeding and retain security deposits for the debtor’s obligations; (v) the availability and cost of capital; (vi) competition in the financing of healthcare facilities; and (vii) other factors identified in the Company’s filings with the Securities and Exchange Commission.

 
     
 

OMEGA HEALTHCARE INVESTORS, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)

 
  
June 30,
December 31,
 
  
2004
2003
   
 
 
 
    
(Unaudited) 
    
 
  
ASSETS
    
 
    
 
  
Real estate properties
    
 
    
 
  
Land and buildings at cost
  
$
727,998
 
$
692,454
 
Less accumulated depreciation
    
(144,569
)
  
(134,477
)
   
 
 
   Real estate properties – net
   
583,429
    
557,977
  
Mortgage notes receivable – net
    
114,233
    
119,815
  
   
 
 
 
    
697,662
    
677,792
  
Other investments – net
    
36,392
    
29,787
  
   
 
 
Total investments
    
734,054
    
707,579
  
 
    
 
    
 
  
Cash and cash equivalents
    
2,662
    
3,094
  
Accounts receivable – net
    
3,063
    
1,893
  
Interest rate cap
    
—
    
5,537
  
Other assets
    
11,827
    
8,562
  
Operating assets for owned properties
    
649
    
2,289
  
   
 
 
Total assets
  
$
752,255
 
$
728,954
 
   
 
 
 
    
 
    
 
  
LIABILITIES AND STOCKHOLDERS’ EQUITY
    
 
    
 
  
Revolving lines of credit
  
$
35,000
 
$
177,074
 
Unsecured borrowings
    
300,000
    
100,000
  
Other long–term borrowings
    
3,520
    
3,520
  
Accrued expenses and other liabilities
    
20,363
    
8,194
  
Operating liabilities for owned properties
    
4,538
    
3,931
  
   
 
 
Total liabilities
    
363,421
    
292,719
  
   
 
 
 
    
 
    
 
  
Stockholders equity:
    
 
    
 
  
Preferred stock
    
168,488
    
212,342
  
Common stock and additional paid-in-capital
    
549,059
    
485,196
  
Cumulative net earnings
    
169,915
    
174,275
  
Cumulative dividends paid
    
(455,841
)
  
(431,123
)
Cumulative dividends – redemption
    
(41,054
)
  
—
  
Accumulated other comprehensive loss
    
(1,733
)
  
(4,455
)
   
 
 
Total stockholders’ equity
    
388,834
    
436,235
  
   
 
 
Total liabilities and stockholders’ equity
  
$
752,255
 
$
728,954
 
   
 
 


 
     
 
OMEGA HEALTHCARE INVESTORS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
Unaudited
(In thousands, except per share amounts)

 
  
 
 
 
 
 
  
Three Months Ended
Six Months Ended
 
  
June 30,
June 30,
   
 
  
2004
2003
2004
2003
   
Revenues
    
 
    
 
    
 
    
 
  
Rental income    
 
$
18,170
 
$
15,898
 
$
35,293
 
$
32,317
  
Mortgage interest income    
   
3,336
   
3,489
   
6,703
   
7,881
 
Other investment income – net    
   
548
   
756
   
1,189
   
1,746
 
Miscellaneous    
   
291
   
302
   
421
   
569
 
Nursing home revenues of owned and operated assets    
   
-
    
1,044
   
-
    
2,379
 
   
 
 
 
 
Total operating revenues    
   
22,345
   
21,489
   
43,606
   
44,892
 
 
    
 
    
 
    
 
    
 
  
Expenses
    
 
    
 
    
 
    
 
  
Depreciation and amortization    
   
5,385
   
5,277
   
10,608
   
10,483
 
General and administrative    
   
1,401
   
1,622
   
2,914
   
3,251
 
Legal    
   
382
    
784
    
872
    
1,342
  
Nursing home expenses of owned and operated assets    
   
-
    
1,035
   
-
    
3,509
 
   
 
 
 
 
Total operating expenses    
   
7,168
    
8,718
    
14,394
    
18,585
  
   
 
 
 
 
 
    
 
    
 
    
 
    
 
  
Income before other income and expense    
   
15,177
    
12,771
    
29,212
    
26,307
  
Other income (expense):
    
 
    
 
    
 
    
 
  
Interest and other investment income     
   
77
    
88
   
96
   
142
 
Interest    
   
(5,753
)
  
(4,315
)
  
(10,446
)
  
(8,735
)
Interest – amortization of deferred financing costs    
   
(427
)
  
(482
)
  
(881
)
  
(1,174
)
Interest – refinancing costs    
   
-
    
(2,586
)
  
(19,106
)
  
(2,586
)
Owned and operated professional liability claims    
   
(3,000
)
  
-
    
(3,000
)
  
-
  
Litigation settlement    
   
-
   
-
    
-
   
2,187
  
Provision for impairment    
   
-
    
-
    
-
    
(4,618
)
Adjustment of derivatives to fair value    
   
-
    
-
    
256
    
-
 
   
 
 
 
 
Total other (expense) income    
   
(9,103
)
  
(7,295
)
  
(33,081
)
  
(14,784
)
 
    
 
    
 
    
 
    
 
  
Income (loss) before gain on assets sold
    
6,074
    
5,476
    
(3,869
)
  
11,523
  
Gain from assets sold – net     
   
-
    
1,338
    
-
    
1,338
 
   
 
 
 
 
Income (loss) from continuing operations    
   
6,074
    
6,814
    
(3,869
)
  
12,861
  
(Loss) gain from discontinued operations    
   
(137
)
  
15
    
(491
)
  
(47
)
   
 
 
 
 
Net income (loss)     
   
5,937
    
6,829
    
(4,360
)
  
12,814
  
Preferred stock dividends    
   
(4,002
)
  
(5,029
)
  
(8,689
)
  
(10,058
)
Preferred stock conversion and redemption charges    
   
(2,311
)
  
-
    
(41,054
)
  
-
  
   
 
 
 
 
Net (loss) income available to common    
 
$
(376
)
$
1,800
  
$
(54,103
)
$
2,756
  
   
 
 
 
 
 
    
 
    
 
    
 
    
 
  
(Loss) income per common share:
    
 
    
 
    
 
    
 
  
Basic:
    
 
    
 
    
 
    
 
  
(Loss) income from continuing operations    
 
$
(0.01
)
$
0.05
  
$
(1.22
)
$
0.08
  
   
 
 
 
 
Net (loss) income    
 
$
(0.01
)
$
0.05
  
$
(1.23
)
$
0.07
  
   
 
 
 
 
Diluted:
    
 
    
 
    
 
    
 
  
(Loss) income from continuing operations    
 
$
(0.01
)
$
0.05
  
$
(1.22
)
$
0.07
  
   
 
 
 
 
Net (loss) income    
 
$
(0.01
)
$
0.05
  
$
(1.23
)
$
0.07
  
   
 
 
 
 
 
    
 
    
 
    
 
    
 
  
Dividends declared and paid per common share    
 
$
0.18
  
$
-
  
$
0.35
 
$
-
  
   
 
 
 
 
 
    
 
    
 
    
 
    
 
  
Weighted-average shares outstanding, basic    
   
46,365
    
37,153
    
43,912
    
37,149
  
   
 
 
 
 
Weighted-average shares outstanding, diluted     
   
46,365
    
37,625
    
43,912
    
37,415
  
   
 
 
 
 
 
    
 
    
 
    
 
    
 
  
Components of other comprehensive income:
    
 
    
 
    
 
    
 
  
Net income (loss)    
 
$
5,937
  
$
6,829
  
$
(4,360
)
$
12,814
 
Unrealized (loss) gain on investments and hedging contracts    
   
(1,733
)
  
(2,529
)
  
2,722
    
(3,152
)
   
 
 
 
 
Total comprehensive income (loss)    
 
$
4,204
  
$
4,300
  
$
(1,638
)
$
9,662
 
   
 
 
 
 

 
     
 

OMEGA HEALTHCARE INVESTORS, INC.
FUNDS FROM OPERATIONS
Unaudited
(In thousands, except per share amounts)
 
 
 
 
 
Three Months Ended
 
Six Months Ended
 
June 30,
 
June 30,
 
2004
 
2003
 
2004
 
2003
 
 
 
 
 
 
 
 
Net (loss) income available to common        
$ (376)
 
$ 1,800
 
$(54,103)
 
$ 2,756
Add back loss (deduct gain) from real estate dispositions    
137
 
(1,338)
 
488
 
(1,338)
Sub-total        
(239)
 
462
 
(53,615)
 
1,418
Elimination of non-cash items included in net income (loss):
 
 
 
 
 
 
 
Depreciation and amortization        
5,385
 
5,404
 
10,611
 
10,733
Funds from operations    
5,146
 
5,866
 
(43,004)
 
12,151
Series C Preferred Dividends        
—
 
2,621
 
—
 
5,242
Funds from operations available to common stockholders    
$ 5,146
 
$ 8,487
 
$(43,004)
 
$ 17,393
 
 
 
 
 
 
 
 
Weighted-average common shares outstanding, basic        
46,365
 
37,153
 
43,912
 
37,149
Assumed conversion of Series C Preferred Stock        
—
 
16,775
 
—
 
16,775
Assumed exercise of stock options        
777
 
472
 
789
 
266
Weighted-average common shares outstanding, diluted        
47,142
 
54,400
 
44,701
 
54,190
 
 
 
 
 
 
 
 
FFO per share available to common stockholders    
$ 0.11
 
$ 0.16
 
$ (0.98)
 
$ 0.32
 
 
 
 
 
 
 
 
Adjusted funds from operations:
 
 
 
 
 
 
 
 Funds from operations available to common stockholders       
$ 5,146
 
$ 8,487
 
$(43,004)
 
$ 17,393
 Deduct /add legal settlements       
3,000
 
—
 
3,000
 
(2,187)
 Deduct nursing home revenues   
—
 
(1,045)
 
—
 
(2,584)
 Deduct adjustment of derivatives to fair value   
—
 
—
 
(256)
 
—
 Add back non-cash preferred stock conversion charges   
—
 
—
 
32,144
 
—
 Add back non-cash preferred stock redemption charges   
2,311
 
—
 
8,910
 
—
 Add back GECC exit fee   
—
 
—
 
6,378
 
—
 Add back nursing home expenses   
—
 
1,150
 
—
 
4,022
 Add back write-off of deferred financing charges   
—
 
2,586
 
12,728
 
2,586
Adjusted funds from operations available to common stockholders    
$ 10,457
 
$ 11,178
 
$ 19,900
 
$ 19,230

This press release includes Funds From Operations, or FFO, which is a non-GAAP financial measure. For purposes of SEC Regulation G, a non-GAAP financial measure is a numerical measure of a company’s historical or future financial performance, financial position or cash flows that excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the most directly comparable financial measure calculated and presented in accordance with GAAP in the statement of operations, balance sheet or statement of cash flows (or equivalent statements) of the company; or includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the most directly comparable financial measure so calculated and presented. As used in this press release, GAAP refers to general accepted accounting principles in the United States of America. Pursuant to the requirements of Regulation G, we have provided reconciliations of the non-GAAP financial measures to the most directly comparable GAAP financial measures.

We calculate and report FFO in accordance with the definition and interpretive guidelines issued by the National Association of Real Estate Investment Trusts ("NAREIT"), and consequently, FFO is defined as net income available to common stockholders, adjusted for the effects of asset dispositions and certain non-cash items, primarily depreciation and amortization. We believe that FFO is an important supplemental measure of our operating performance. Because the historical cost accounting convention used for real estate assets requires depreciation (except on land), such accounting presentation implies that the value of real estate assets diminishes predictably over time, while real estate values instead have historically risen or fallen with market conditions. The term FFO was designed by the real estate industry to address this issue. FFO herein is not necessarily comparable to FFO of other real estate investment trusts, or REITs, that do not use the same definition or implementation guidelines or interpret the standards differently from the Company. FFO available to common stockholders is adjusted for the assumed conversion of Series C preferred stock and the exercise of in-the-money stock options.

Adjusted FFO is calculated as FFO available to common stockholders less revenues and expenses related to nursing home operations and one-time revenue and expense items. The Company believes that adjusted FFO provides an enhanced measure of the operating performance of the Company’s core portfolio as a REIT. The Company's computation of adjusted FFO is not comparable to the NAREIT definition of FFO or to similar measures reported by other REITs, but the Company believes it is an appropriate measure for this Company.

The Company uses FFO as one of several criteria to measure operating performance of our business. The Company further believes that by excluding the effect of depreciation, amortization and gains or losses from sales of real estate, all of which are based on historical costs and which may be of limited relevance in evaluating current performance, FFO can facilitate comparisons of operating performance between periods and between other REITs. The Company offers this measure to assist the users of our financial statements in analyzing our performance; however, this is not a measure of financial performance under GAAP and should not be considered a measure of liquidity, an alternative to net income or an indicator of any other performance measure determined in accordance with GAAP. Investor and potential investors in the Company’s securities should not rely on this measure as substitute for any GAAP measure, including net income.

In February 2004, NAREIT informed its member companies that it was adopting the position of the SEC with respect to asset impairment charges and would no longer recommend that impairment write-downs be excluded from FFO. In the tables included in this press release, we have applied this interpretation and have not excluded asset impairment charges in calculating our FFO. As a result, our FFO may not be comparable to similar measures reported in previous disclosures. According to NAREIT, there is inconsistency among NAREIT member companies as to the adoption of this interpretation of FFO. Therefore, a comparison of our FFO results to another company's FFO results may not be meaningful.


The following table presents a range of the Company’s projected FFO per common share for the years ended December 2004 and 2005:

 
  
2004 Projected FFO
2005 Projected FFO
Per diluted share:
    
 
    
 
    
 
    
 
    
 
    
 
  
Net (loss) income available to common    
 
$
(0.90
)
 
-
  
$
(0.88
)
$
0.52
   
-
  
$
0.54
  
Adjustments:
    
 
    
 
    
 
    
 
    
 
    
 
  
Depreciation and amortization        
   
   0.44
   
-
    
   0.44
   
   0.44
   
-
    
0.44
  
   
 
 
 
 
 
 
Funds from operations available to common stockholders    
 
$
(0.45
)
 
-
  
$
(0.43
)
$
0.96
   
-
  
$
0.98
  
 
    
 
    
 
    
 
    
 
    
 
    
 
  
Adjustments:
    
 
    
 
    
 
    
 
    
 
    
 
  
 Series C preferred stock conversion/ redemption charges       
   
   0.82
   
-
    
   0.82
   
   —
   
-
    
—
  
 Old credit facility exit fees       
   
   0.14
   
-
    
   0.14
   
   —
   
-
    
—
  
 Old credit facility deferred financing costs write-off       
   
   0.13
   
-
    
   0.13
   
   —
   
-
    
—
  
 Loss on sale of interest rate cap       
   
   0.14
   
-
    
   0.14
   
   —
   
-
    
—
  
 Adjustment of derivatives to fair value       
   
   (0.01
)
 
-
    
   (0.01
)
 
   —
   
-
    
—
  
 Owned and operated professional liability claims       
   
   0.06
   
-
    
   0.06
   
   —
   
-
    
—
  
 Series A preferred stock redemption   
   
   0.05
   
-
    
   0.05
   
   —
   
-
    
—
  
   
 
 
 
 
 
 
Adjusted funds from operations available to common stockholders    
 
$
   0.88
   
-
  
$
0.90
 
$
0.96
   
-
  
$
0.98
 
   
 
 
 
 
 
 


The following table summarizes the results of operations of facilities sold during the three and six months ended June 30, 2004 and 2003, respectively.


 

 
  
Three Months Ended
Six Months Ended
 
June 30, 
June 30,
   
 
    
2004
    
2003
    
2004
    
2003
  
   
 
 
 
 
 
  

(In thousands)
(In thousands)
Revenues
    
 
    
 
    
 
    
 
  
Rental income
  
$
—
 
$
255
 
$
—
 
$
511
 
Owned & operated revenue
    
—
    
2
    
—
    
205
  
   
 
 
 
 
Subtotal revenues
    
—
    
257
    
—
    
716
  
   
 
 
 
 
Expenses
    
 
    
 
    
 
    
 
  
Owned & operated expenses
    
—
    
115
    
—
    
513
  
Depreciation and amortization
    
—
    
127
    
2
    
250
  
   
 
 
 
 
Subtotal expenses
    
—
    
242
    
2
    
763
  
   
 
 
 
 
 
    
 
    
 
    
 
    
 
  
(Loss) income before (loss) gain on sale of assets
    
—
    
15
    
(2
)
  
(47
)
(Loss) gain on assets sold – net
    
(137
)
  
—
    
(489
)
  
—
  
   
 
 
 
 
(Loss) gain from discontinued operations
  
$
(137
)
$
15
 
$
(491
)
$
(47
)
   
 
 
 
 


The table below summarizes the Company’s number of properties and investment by category for the quarter ended June 30, 2004:


 

 
  
 
 
 
Total
 
  
Purchase /
Mortgages
Closed
Healthcare
Facility Count
  
Leaseback
Receivable
Facilities
Facilities
 
 
 
 
 
Balance at March 31, 2004
    
154
    
51
    
4
    
209
  
Properties closed
    
-
    
-
    
-
    
-
  
Properties sold/mortgages paid
    
-
    
(5
)
  
(1
)
  
(6
)
Transition leasehold interest
    
-
    
-
    
-
    
-
  
Properties acquired
   
5
    
-
    
-
    
5
  
Properties transferred to purchase/leaseback
    
-
    
-
    
-
    
-
  
   
 
 
 
 
Balance at June 30, 2004
    
159
    
46
    
3
    
208
  
   
 
 
 
 
 
    
 
    
 
    
 
    
 
  
Investment ($000’s)
    
 
    
 
    
 
    
 
  
                         
Balance at March 31, 2004
  
$
688,277
 
$
119,225
 
$
4,088
 
$
811,590
 
Properties closed
    
-
    
-
    
-
    
-
  
Properties sold/mortgages paid
    
-
    
(4,470
)
  
(309
)
  
(4,779
)
Transition leasehold interest
    
-
    
-
    
-
    
-
  
Properties acquired
    
34,600
    
-
    
-
    
34,600
  
Properties transferred to purchase/leaseback
    
-
    
-
    
-
    
-
  
Impairment on properties
    
-
    
-
    
-
    
-
  
Capex and other
    
1,342
    
(522
)
  
-
    
820
  
   
 
 
 
 
Balance at June 30, 2004
  
$
724,219
 
$
114,233
 
$
3,779
 
$
842,231