8-K: Current report filing
Published on October 27, 2005
PRESS
RELEASE - FOR IMMEDIATE RELEASE
OMEGA
ANNOUNCES THIRD
QUARTER 2005 FINANCIAL RESULTS AND
ADJUSTED
FFO OF $0.27 PER SHARE FOR THE THIRD QUARTER
TIMONIUM,
MARYLAND - October 27, 2005 -
Omega
Healthcare Investors, Inc. (NYSE:OHI) today announced its results of operations
for the quarter ended September 30, 2005. The Company also reported Funds
From
Operations (“FFO”) available to common stockholders for the three months ended
September 30, 2005 of $8.2 million or $0.16 per common share. The $8.2 million
of FFO available to common stockholders for the quarter includes the impact
of a
$5.5 million non-cash provision for impairment and $0.3 million of non-cash
restricted stock amortization expense. 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 the non-cash provision for impairment and the non-cash
restricted stock amortization expense, was $0.27 per common share for the
three
months ended September 30, 2005. For more information regarding FFO, see
“FFO
Results” below.
GAAP
NET INCOME
The
Company reported net income of $5.1 million and $16.7 million for the three
and
nine month periods ending September 30, 2005, respectively. The Company also
reported net income available to common stockholders of $2.6 million, or
$0.05
per diluted common share, and
operating revenues of $26.0 million
for the
three months ended September 30, 2005. This compares to net income available
to
common stockholders of $5.1 million, or $0.11 per diluted common share, and
operating revenues of $21.2 million for the same period in 2004.
THIRD
QUARTER 2005 RESULTS
Operating
Revenues and Expenses
-
Operating revenues for the three months ended September 30, 2005 were $26.0
million. Operating expenses for the three months ended September 30, 2005
totaled $13.9 million, comprised of $6.2 million of depreciation and
amortization expense, $2.0 million of general and administrative expenses,
a
non-cash provision for impairment of $5.5 million and $0.3 million of restricted
stock amortization. The $5.5 million provision for impairment charge was
recorded to reduce the carrying value of three facilities to their estimated
fair value.
Other
Expenses
- Other
expenses for the three months ended September 30, 2005 were $8.2 million
and
were comprised of $7.7 million of interest expense and $0.5 million of non-cash
interest expense.
Funds
From Operations
- For
the three months ended September 30, 2005, reportable FFO available to common
stockholders was $8.2 million, or $0.16 per common share, compared to $10.5
million, or $0.22 per common share, for the same period in 2004. The $8.2
million of FFO for the quarter includes the impact of: i) $5.5 million of
non-cash provision for impairment charges; and ii) $0.3 million of non-cash
restricted stock amortization associated with the Company’s issuance of
restricted stock grants to executive officers during 2004. However, when
excluding the provision for impairment charge and the restricted stock
amortization expense in 2005, as well as, certain other non-recurring expense
items in 2004, adjusted FFO was $13.9 million, or $0.27 per common share,
compared to $10.8 million, or $0.23 per common share, for the same period
in
2004. For further information, see the attached “Funds From Operations” schedule
and notes.
Asset
Sales
- On
August
1, 2005, the Company sold 50.4 acres of undeveloped land, located in Ohio,
for
net cash proceeds of approximately $1 million. The sale resulted in an
accounting gain of approximately $0.7 million.
On
July
29, 2005, the Company received notice from AHC Properties, Inc. (“Alterra”) of
its intent to exercise its option to purchase six assisted living facilities
(“ALFs”) for approximately $20.4 million. The ALFs are currently leased to
Alterra in a master lease with annual revenue of approximately $1.7 million.
The
closing of this transaction is scheduled for the fourth quarter of 2005,
subject
to closing conditions typical in real estate transactions. At September 30,
2005, the net book value of these facilities was approximately $15.4
million.
On
June
23, 2005, a $1.0 million deposit related to an agreement to sell a skilled
nursing facility (“SNF”) in Florida was received into escrow on the Company’s
behalf. On July 26, 2005, an additional $0.5 million deposit was received
into
escrow. The purchase price of the facility is $14.5 million. The closing
is
scheduled for the fourth quarter of 2005. The due diligence period has expired
and the deposits are not refundable unless the Company breaches its obligations
under the purchase agreement. At September 30, 2005, the net book value of
the
facility was approximately $8.2 million.
DIVIDENDS
Common
Dividends - On
October 18, 2005, the Company’s Board of Directors announced a common stock
dividend of $0.22 per share to be paid November 15, 2005 to common stockholders
of record on October 31, 2005. At the date of this release, the Company had
approximately 51 million outstanding common shares.
Series
D Preferred Dividends - On
October 18, 2005, the Company’s Board of Directors declared the regular
quarterly dividends for its 8.375% Series D Cumulative Redeemable Preferred
Stock (“Series D Preferred Stock”) to stockholders of record on October 31,
2005. The stockholders of record of the Series D Preferred Stock on October
31,
2005 will be paid dividends in the amount of $0.52344
per
preferred share on November 15, 2005. The liquidation preference for the
Company’s Series D Preferred Stock is $25.00 per share. Regular quarterly
preferred dividends for the Series D Preferred Stock represent dividends
for the
period August 1, 2005 through October 31, 2005.
2005
ADJUSTED FFO GUIDANCE AFFIRMED
The
Company affirmed its guidance for 2005 adjusted FFO available to common
stockholders to $1.04 per common share.
The
Company's adjusted FFO guidance (and related GAAP earnings projections) for
2005
excludes the future impacts of gains and losses on the sales of assets,
additional divestitures, certain one-time revenue and expense items, capital
transactions, and restricted stock amortization expense.
Reconciliation
of the adjusted 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 adjusted 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 Thursday, October 27, 2005,
at
10 a.m. EDT to review the Company’s 2005 third 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.
*
* * * *
*
The
Company is a Real Estate Investment Trust investing in and providing financing
to the long-term care industry. At September 30, 2005, the Company owned
or held
mortgages on 216 SNFs and ALFs with approximately 22,407 beds located in
28
states and operated by 38 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, 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 Section 27A of the
Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934,
the
Private Securities Litigation Reform Act of 1995 or in releases by the
Securities and Exchange Commission, all of which may be amended from time
to
time. 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)
|
September
30,
|
December
31,
|
||||||
|
2005
|
2004
|
||||||
|
(Unaudited)
|
|||||||
|
ASSETS
|
|||||||
|
Real
estate properties
|
|||||||
|
Land
and buildings at cost
|
$
|
869,382
|
$
|
808,574
|
|||
|
Less
accumulated depreciation
|
(151,410
|
)
|
(153,379
|
)
|
|||
|
Real
estate properties - net
|
717,972
|
655,195
|
|||||
|
Mortgage
notes receivable - net
|
43,506
|
118,058
|
|||||
|
761,478
|
773,253
|
||||||
|
Other
investments - net
|
25,270
|
29,699
|
|||||
|
786,748
|
802,952
|
||||||
|
Assets
held for sale - net
|
23,624
|
—
|
|||||
|
Total
investments
|
810,372
|
802,952
|
|||||
|
Cash
and cash equivalents
|
768
|
12,083
|
|||||
|
Accounts
receivable - net
|
4,778
|
5,582
|
|||||
|
Other
assets
|
12,992
|
12,733
|
|||||
|
Operating
assets for owned properties
|
—
|
213
|
|||||
|
Total
assets
|
$
|
828,910
|
$
|
833,563
|
|||
|
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
|||||||
|
Revolving
line of credit
|
$
|
80,700
|
$
|
15,000
|
|||
|
Unsecured
borrowings
|
360,000
|
360,000
|
|||||
|
Premium
on unsecured borrowings
|
1,219
|
1,338
|
|||||
|
Other
long-term borrowings
|
2,800
|
3,170
|
|||||
|
Accrued
expenses and other liabilities
|
22,294
|
21,067
|
|||||
|
Operating
liabilities for owned properties
|
374
|
508
|
|||||
|
Total
liabilities
|
467,387
|
401,083
|
|||||
|
Stockholders’
equity:
|
|||||||
|
Preferred
stock
|
118,488
|
168,488
|
|||||
|
Common
stock and additional paid-in-capital
|
601,336
|
597,780
|
|||||
|
Cumulative
net earnings
|
207,694
|
191,013
|
|||||
|
Cumulative
dividends paid
|
(522,206
|
)
|
(480,292
|
)
|
|||
|
Cumulative
dividends - redemption
|
(43,067
|
)
|
(41,054
|
)
|
|||
|
Unamortized
restricted stock awards
|
(1,452
|
)
|
(2,231
|
)
|
|||
|
Accumulated
other comprehensive loss
|
730
|
(1,224
|
)
|
||||
|
Total
stockholders’ equity
|
361,523
|
432,480
|
|||||
|
Total
liabilities and stockholders’ equity
|
$
|
828,910
|
$
|
833,563
|
|||
OMEGA
HEALTHCARE INVESTORS, INC.
CONSOLIDATED
STATEMENTS OF OPERATIONS
Unaudited
(in
thousands, except per share amounts)
|
Three
Months Ended
|
Nine
Months Ended
|
||||||||||||
|
September
30,
|
September
30,
|
||||||||||||
|
2005
|
2004
|
2005
|
2004
|
||||||||||
|
Revenues
|
|||||||||||||
|
Rental
income
|
$
|
23,962
|
$
|
17,201
|
$
|
67,862
|
$
|
49,742
|
|||||
|
Mortgage
interest income
|
1,221
|
3,224
|
4,417
|
9,926
|
|||||||||
|
Other
investment income - net
|
670
|
597
|
1,778
|
1,757
|
|||||||||
|
Miscellaneous
|
141
|
202
|
4,453
|
623
|
|||||||||
|
Total
operating revenues
|
25,994
|
21,224
|
78,510
|
62,048
|
|||||||||
|
Expenses
|
|||||||||||||
|
Depreciation
and amortization
|
6,230
|
4,858
|
18,052
|
14,393
|
|||||||||
|
General
and administrative
|
1,950
|
1,947
|
5,614
|
5,733
|
|||||||||
|
Restricted
stock expense
|
285
|
279
|
856
|
279
|
|||||||||
|
Provisions
for impairment on real estate properties
|
5,454
|
-
|
9,154
|
-
|
|||||||||
|
Provisions
for uncollectible mortgages, notes and accounts receivable
|
-
|
-
|
83
|
-
|
|||||||||
|
Leasehold
expiration expense
|
-
|
-
|
750
|
-
|
|||||||||
|
Total
operating expenses
|
13,919
|
7,084
|
34,509
|
20,405
|
|||||||||
|
Income
before other income and expense
|
12,075
|
14,140
|
44,001
|
41,643
|
|||||||||
|
Other
income (expense):
|
|||||||||||||
|
Interest
and other investment income
|
25
|
7
|
90
|
103
|
|||||||||
|
Interest
|
(7,709
|
)
|
(5,873
|
)
|
(21,431
|
)
|
(16,319
|
)
|
|||||
|
Interest
- amortization of deferred financing costs
|
(539
|
)
|
(479
|
)
|
(1,570
|
)
|
(1,359
|
)
|
|||||
|
Interest
- refinancing costs
|
-
|
-
|
-
|
(19,106
|
)
|
||||||||
|
Provisions
for impairment on equity securities
|
-
|
-
|
(3,360
|
)
|
-
|
||||||||
|
Owned
and operated professional liability claims
|
-
|
-
|
-
|
(3,000
|
)
|
||||||||
|
Adjustment
of derivatives to fair value
|
-
|
-
|
-
|
256
|
|||||||||
|
Total
other expense
|
(8,223
|
)
|
(6,345
|
)
|
(26,271
|
)
|
(39,425
|
)
|
|||||
|
Income
from continuing operations
|
3,852
|
7,795
|
17,730
|
2,218
|
|||||||||
|
Gain
(loss) from discontinued operations
|
1,267
|
847
|
(1,049
|
)
|
2,063
|
||||||||
|
Net
income
|
5,119
|
8,642
|
16,681
|
4,281
|
|||||||||
|
Preferred
stock dividends
|
(2,481
|
)
|
(3,559
|
)
|
(8,904
|
)
|
(12,248
|
)
|
|||||
|
Preferred
stock conversion and redemption charges
|
-
|
-
|
(2,013
|
)
|
(41,054
|
)
|
|||||||
|
Net
income (loss) available to common
|
$
|
2,638
|
$
|
5,083
|
$
|
5,764
|
$
|
(49,021
|
)
|
||||
|
Income
(loss) per common share:
|
|||||||||||||
|
Basic:
|
|||||||||||||
|
Income
(loss) from continuing operations
|
$
|
0.03
|
$
|
0.09
|
$
|
0.13
|
$
|
(1.14
|
)
|
||||
|
Net
income (loss)
|
$
|
0.05
|
$
|
0.11
|
$
|
0.11
|
$
|
(1.09
|
)
|
||||
|
Diluted:
|
|||||||||||||
|
Income
(loss) from continuing operations
|
$
|
0.03
|
$
|
0.09
|
$
|
0.13
|
$
|
(1.14
|
)
|
||||
|
Net
income (loss)
|
$
|
0.05
|
$
|
0.11
|
$
|
0.11
|
$
|
(1.09
|
)
|
||||
|
Dividends
declared and paid per common share
|
$
|
0.22
|
$
|
0.18
|
$
|
0.63
|
$
|
0.53
|
|||||
|
Weighted-average
shares outstanding, basic
|
51,187
|
46,552
|
51,050
|
44,798
|
|||||||||
|
Weighted-average
shares outstanding, diluted
|
51,479
|
47,134
|
51,386
|
44,798
|
|||||||||
|
Components
of other comprehensive income:
|
|||||||||||||
|
Net
income
|
$
|
5,119
|
$
|
8,642
|
$
|
16,681
|
$
|
4,281
|
|||||
|
Unrealized
gain (loss) on investments and hedging contracts
|
730
|
(708
|
)
|
730
|
2,015
|
||||||||
|
Total
comprehensive income
|
$
|
5,849
|
$
|
7,934
|
$
|
17,411
|
$
|
6,296
|
|||||
OMEGA
HEALTHCARE INVESTORS, INC.
FUNDS
FROM OPERATIONS
Unaudited
(In
thousands, except per share amounts)
|
Three
Months Ended
|
Nine
Months Ended
|
||||||||||||
|
September
30,
|
September
30,
|
||||||||||||
|
2005
|
2004
|
2005
|
2004
|
||||||||||
|
Net
income (loss) available to common stockholders
|
$
|
2,638
|
$
|
5,083
|
$
|
5,764
|
$
|
(49,021
|
)
|
||||
|
Add
back loss (deduct gain) from real estate dispositions
|
(710
|
)
|
—
|
3,492
|
488
|
||||||||
|
Sub-total
|
1,928
|
5,083
|
9,256
|
(48,533
|
)
|
||||||||
|
Elimination
of non-cash items included in net income (loss):
|
|||||||||||||
|
Depreciation
and amortization
|
6,275
|
5,394
|
19,068
|
16,005
|
|||||||||
|
Funds
from operations available to common stockholders
|
$
|
8,203
|
$
|
10,477
|
$
|
28,324
|
$
|
(32,528
|
)
|
||||
|
Weighted-average
common shares outstanding, basic
|
51,187
|
46,552
|
51,050
|
44,798
|
|||||||||
|
Effect
of restricted stock awards
|
111
|
3
|
73
|
3
|
|||||||||
|
Assumed
exercise of stock options
|
181
|
579
|
263
|
733
|
|||||||||
|
Weighted-average
common shares outstanding, diluted
|
51,479
|
47,134
|
51,386
|
45,534
|
|||||||||
|
Fund
from operations per share available to common
stockholders
|
$
|
0.16
|
$
|
0.22
|
$
|
0.55
|
$
|
(0.73
|
)
|
||||
|
Adjusted
funds from operations:
|
|||||||||||||
|
Funds
from operations available to common stockholders
|
$
|
8,203
|
$
|
10,477
|
$
|
28,324
|
$
|
(32,528
|
)
|
||||
|
Deduct/add
legal settlements
|
—
|
—
|
—
|
3,000
|
|||||||||
|
Deduct
adjustment of derivatives to fair value
|
—
|
—
|
—
|
(256
|
)
|
||||||||
|
Deduct
revenue from prepayment penalty/administration fee
|
—
|
—
|
(4,059
|
)
|
—
|
||||||||
|
Add
back restricted stock amortization expense
|
285
|
279
|
856
|
279
|
|||||||||
|
Add
back non-cash preferred stock conversion/redemption charges
|
—
|
—
|
2,013
|
41,054
|
|||||||||
|
Add
back credit facility exit fee
|
—
|
—
|
—
|
6,378
|
|||||||||
|
Add
back leasehold expiration expense
|
—
|
—
|
750
|
—
|
|||||||||
|
Add
back non-cash provision for impairments on real estate
properties
|
5,454
|
—
|
9,154
|
—
|
|||||||||
|
Add
back non-cash provision for impairments on equity securities
|
—
|
—
|
3,360
|
—
|
|||||||||
|
Add
back provisions for uncollectible mortgages, notes and accounts
receivable
|
—
|
—
|
83
|
—
|
|||||||||
|
Add
back write-off of deferred financing charges
|
—
|
—
|
—
|
12,728
|
|||||||||
|
Adjusted
funds from operations available to common
stockholders
|
$
|
13,942
|
$
|
10,756
|
$
|
40,481
|
$
|
30,655
|
|||||
This
press release includes Funds From Operations, or FFO, which is a non-GAAP
financial measure. For purposes of the Securities and Exchange Commission’s
(“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 generally 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. FFO available to
common
stockholders is further adjusted for the effect of restricted stock awards
and
the exercise of in-the-money stock options. 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.
Adjusted
FFO is calculated as FFO available to common stockholders less 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. Investors and potential investors in
the
Company’s securities should not rely on this measure as a 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 2005:
|
Per
diluted share:
|
||||
|
Net
income available to common stockholders
|
$
|
0.32
|
||
|
Adjustments:
|
||||
|
Depreciation
and amortization
|
0.48
|
|||
|
Funds
from operations available to common stockholders
|
$
|
0.80
|
||
|
Adjustments:
|
||||
|
Provision
for impairment on real estate properties
|
0.18
|
|||
|
Provision
for impairment on equity securities
|
0.06
|
|||
|
Lease
expiration expense accrual
|
0.01
|
|||
|
Provision
for uncollectible notes receivable
|
0.00
|
|||
|
One-time
revenue items
|
(0.08
|
)
|
||
|
Restricted
stock expense
|
0.02
|
|||
|
Series
B preferred stock redemption
|
0.04
|
|||
|
Adjusted
funds from operations available to common
stockholders
|
$
|
1.04
|
The
following table summarizes the results of operations of facilities sold or
held
for sale during the three and nine months ended September 30, 2005 and 2004,
respectively.
|
Three
Months Ended
|
Nine
Months Ended
|
||||||||||||
|
September
30,
|
September
30,
|
||||||||||||
|
2005
|
2004
|
2005
|
2004
|
||||||||||
|
(In
thousands)
|
(In
thousands)
|
||||||||||||
|
Revenues
|
|||||||||||||
|
Rental
income
|
$
|
602
|
$
|
1,371
|
$
|
3,434
|
$
|
4,122
|
|||||
|
Other
income
|
—
|
12
|
24
|
41
|
|||||||||
|
Subtotal
revenues
|
602
|
1,383
|
3,458
|
4,163
|
|||||||||
|
Expenses
|
|||||||||||||
|
Depreciation
and amortization
|
45
|
536
|
1,015
|
1,612
|
|||||||||
|
Subtotal
expenses
|
45
|
536
|
1,015
|
1,612
|
|||||||||
|
Income
before loss on sale of assets
|
557
|
847
|
2,443
|
2,551
|
|||||||||
|
Gain
(loss) on assets sold - net
|
710
|
—
|
(3,492
|
)
|
(488
|
)
|
|||||||
|
Gain
(loss) from discontinued operations
|
$
|
1,267
|
$
|
847
|
$
|
(1,049
|
)
|
$
|
2,063
|
||||
The
following tables present selected portfolio information, including operator
and
geographic concentrations and revenue maturities, for the period ending
September 30, 2005.
|
Portfolio
Composition ($000's)
|
||||||||||||||||
|
Balance
Sheet Data
|
#
of Properties
|
#
Beds
|
Investment
|
%
Investment
|
||||||||||||
|
Real
Property
|
188
|
20,172
|
$
|
893,006
|
95
|
%
|
||||||||||
|
Loans
Receivable
|
28
|
2,235
|
43,506
|
5
|
%
|
|||||||||||
|
Total
Investments
|
216
|
22,407
|
$
|
936,512
|
100
|
%
|
||||||||||
|
Investment
Data
|
#
of Properties
|
#
Beds
|
Investment
|
%
Investment
|
Investment
per Bed
|
|||||||||||
|
Skilled
Nursing Facilities
|
202
|
21,686
|
$
|
882,440
|
94
|
%
|
$
|
41
|
||||||||
|
Assisted
Living Facilities
|
12
|
551
|
30,637
|
3
|
%
|
56
|
||||||||||
|
Rehab
and LTAC Hospitals
|
2
|
170
|
23,435
|
3
|
%
|
138
|
||||||||||
|
216
|
22,407
|
$
|
936,512
|
100
|
%
|
$
|
42
|
|||||||||
|
Revenue
Composition ($000's)
|
|||||||||||||
|
Revenue
by Investment Type
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||
|
September
30, 2005
|
September
30, 2005
|
||||||||||||
|
Rental
Property
|
$
|
23,962
|
93
|
%
|
$
|
67,862
|
92
|
%
|
|||||
|
Mortgage
Notes
|
1,221
|
5
|
%
|
4,417
|
6
|
%
|
|||||||
|
Other
Investment Income
|
670
|
2
|
%
|
1,778
|
2
|
%
|
|||||||
|
$
|
25,853
|
100
|
%
|
$
|
74,057
|
100
|
%
|
||||||
|
Revenue
by Facility Type
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||
|
September
30, 2005
|
September
30, 2005
|
||||||||||||
|
Assisted
Living Facilities
|
$
|
705
|
3
|
%
|
$
|
2,275
|
3
|
%
|
|||||
|
Skilled
Nursing Facilities
|
24,478
|
95
|
%
|
70,004
|
95
|
%
|
|||||||
|
Other
|
670
|
2
|
%
|
1,778
|
2
|
%
|
|||||||
|
$
|
25,853
|
100
|
%
|
$
|
74,057
|
100
|
%
|
||||||
|
Operator
Concentration ($000's)
|
|||||||||||||
|
Concentration
by Investment
|
#
of Properties
|
Investment
|
%
Investment
|
||||||||||
|
Sun
Healthcare Group, Inc.
|
30
|
$
|
149,958
|
16
|
%
|
||||||||
|
Advocat,
Inc.
|
33
|
104,417
|
11
|
%
|
|||||||||
|
Guardian
|
16
|
80,200
|
9
|
%
|
|||||||||
|
Essex
|
13
|
79,354
|
8
|
%
|
|||||||||
|
CommuniCare
|
8
|
76,642
|
8
|
%
|
|||||||||
|
Remaining
Operators
|
116
|
445,941
|
48
|
%
|
|||||||||
|
216
|
$
|
936,512
|
100
|
%
|
|||||||||
|
Geographic
Concentration ($000's)
|
|||||||||||||
|
Concentration
by Region
|
#
of Properties
|
Investment
|
%
Investment
|
||||||||||
|
South
|
90
|
$
|
381,097
|
41
|
%
|
||||||||
|
Midwest
|
65
|
238,447
|
25
|
%
|
|||||||||
|
Northeast
|
29
|
188,344
|
20
|
%
|
|||||||||
|
West
|
32
|
128,624
|
14
|
%
|
|||||||||
|
216
|
$
|
936,512
|
100
|
%
|
|||||||||
|
Concentration
by State
|
#
of Properties
|
Investment
|
%
Investment
|
|||||||
|
Ohio
|
27
|
$
|
162,667
|
17
|
%
|
|||||
|
Florida
|
19
|
119,851
|
13
|
%
|
||||||
|
Pennsylvania
|
16
|
101,090
|
11
|
%
|
||||||
|
California
|
18
|
63,721
|
7
|
%
|
||||||
|
Texas
|
18
|
59,304
|
6
|
%
|
||||||
|
Remaining
States
|
118
|
429,879
|
46
|
%
|
||||||
|
216
|
$
|
936,512
|
100
|
%
|
||||||
|
Revenue
Maturities ($000's)
|
||||||||||||||||
|
Operating
Lease Expirations & Loan Maturities
|
Year
|
Current
Lease Revenue (1)
|
Current
Interest Revenue (1)
|
Lease
and Interest Revenue
|
%
|
|||||||||||
|
2005
|
$
|
1,260
|
$
|
-
|
$
|
1,260
|
1.3
|
%
|
||||||||
|
2006
|
-
|
3,051
|
3,051
|
3.1
|
%
|
|||||||||||
|
2007
|
363
|
145
|
508
|
0.5
|
%
|
|||||||||||
|
2008
|
877
|
-
|
877
|
0.9
|
%
|
|||||||||||
|
2009
|
445
|
-
|
445
|
0.5
|
%
|
|||||||||||
|
Thereafter
|
88,726
|
2,897
|
91,623
|
93.7
|
%
|
|||||||||||
|
$
|
91,671
|
$
|
6,093
|
$
|
97,764
|
100
|
%
|
|||||||||
|
Note:
(1) Based on '05 contractual rents & interest (no annual
escalators)
|
||||||||||||||||
|
Selected
Facility Data
|
||||||||||||||||
|
TTM
ending 6/30/05
|
Coverage
Data
|
|||||||||||||||
|
%
Payor Mix
|
Before
|
After
|
||||||||||||||
|
Census
|
Private
|
Medicare
|
Mgmt.
Fees
|
Mgmt.
Fees
|
||||||||||||
|
All
Healthcare Facilities
|
81.7
|
%
|
11.8
|
%
|
12.7
|
%
|
1.9
x
|
1.4
x
|
||||||||
The
following tables present selected financial information, including leverage
and
interest coverage ratios, as well as a debt maturity schedule for the period
ending September 30, 2005.
|
Current
Capitalization ($000's)
|
|||||||
|
Outstanding
Balance*
|
%
|
||||||
|
Borrowings
Under Bank Lines
|
$
|
80,700
|
10
|
%
|
|||
|
Long-Term
Debt Obligations
|
362,800
|
45
|
%
|
||||
|
Stockholder's
Equity
|
361,523
|
45
|
%
|
||||
|
Total
Book Capitalization
|
$
|
805,023
|
100
|
%
|
|||
|
*Excludes
premium of $1.2 million from sale on October 29, 2004 of $60 million
of
7.00% Notes due 2014.
|
|||||||
|
Leverage
& Performance Ratios
|
|||||||
|
Debt
/ Total Book Cap
|
55
|
%
|
|||||
|
Debt
/ Total Market Cap
|
35
|
%
|
|||||
|
Interest
Coverage:
|
|||||||
|
Third
quarter 2005
|
2.92
x
|
||||||
|
Debt
Maturities ($000's)
|
Secured
Debt
|
|||||||||||||||
|
Year
|
Lines
of Credit (1)
|
Other
|
Senior
Notes
|
Total
|
||||||||||||
|
2005
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||||
|
2006
|
-
|
-
|
-
|
-
|
||||||||||||
|
2007
|
-
|
-
|
100,000
|
100,000
|
||||||||||||
|
2008
|
200,000
|
-
|
-
|
200,000
|
||||||||||||
|
Thereafter
|
-
|
2,800
|
260,000
|
262,800
|
||||||||||||
|
$
|
200,000
|
$
|
2,800
|
$
|
360,000
|
$
|
562,800
|
|||||||||
|
Note:
(1) Reflected at 100% capacity.
|
||||||||||||||||
The
following table presents investment activity for the three- and nine-month
periods ending September 30, 2005.
|
Investment
Activity ($000's)
|
|||||||||||||
|
Three
Months Ended
|
Nine
Months Ended
|
||||||||||||
|
September
30, 2005
|
September
30, 2005
|
||||||||||||
|
$
Amount
|
%
|
$
Amount
|
%
|
||||||||||
|
Funding
by Investment Type:
|
|||||||||||||
|
Real
Property
|
$
|
-
|
0
|
%
|
$
|
117,200
|
100
|
%
|
|||||
|
Mortgages
|
-
|
0
|
%
|
-
|
0
|
%
|
|||||||
|
Other
|
-
|
0
|
%
|
-
|
0
|
%
|
|||||||
|
Total
|
$
|
-
|
0
|
%
|
$
|
117,200
|
100
|
%
|
|||||