8-K: Current report filing
Published on May 9, 2006
PRESS
RELEASE - FOR IMMEDIATE RELEASE
OMEGA
ANNOUNCES FIRST
QUARTER 2006 FINANCIAL RESULTS AND
ADJUSTED
FFO OF $0.28 PER SHARE FOR THE FIRST QUARTER
TIMONIUM,
MARYLAND - May 9,
2006 -
Omega
Healthcare Investors, Inc. (NYSE:OHI) today announced its results of operations
for the quarter ended March 31, 2006. The Company also reported Funds From
Operations (“FFO”) available to common stockholders for the three months ended
March 31, 2006 of $12.2 million or $0.21 per common share. The $12.2 million
of
FFO available to common stockholders for the quarter includes the impact of
a
one-time, non-cash charge of approximately $2.7 million relating to the
write-off of deferred financing costs associated with the termination of its
old
credit facility,
$0.8
million of interest expense associated with the tender offer and purchase of
approximately 20.7% of the Company’s $100 million aggregate principal amount of
6.95% notes due 2007 (the “2007 Notes”), $0.1 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 refinancing
interest expense, the non-cash provision for impairment, and the non-cash
restricted stock amortization expense, was $0.28 per common share for the three
months ended March 31, 2006. For more information regarding FFO, see “FFO
Results” below.
GAAP
NET INCOME
For
the
three-month period ended March 31, 2006, the Company reported net income of
$6.9
million, net income available to common stockholders of $4.4 million, or $0.08
per diluted common share and operating revenues of $30.8 million. This
compares to net income of $9.3 million, net income available to common
stockholders of $5.7 million, or $0.11 per diluted common share, and operating
revenues of $27.2 million for the same period in 2005.
The
$4.4
million net income available to common stockholders for the three months ended
March 31, 2006 includes the impact of $0.8 million of non-cash redemption
charges and $2.7 million of interest expense associated with refinancing-related
activities during 2006.
FIRST
QUARTER 2006 HIGHLIGHTS AND OTHER RECENT DEVELOPMENTS
· Redeemed
the remaining 20.7% of the Company's $100 million aggregate principal amount
of
6.95% notes due 2007.
· Moody's
raised the Company’s senior debt rating to Ba3 from B1.
· Standard
& Poor's raised the Company's senior debt rating to BB from
BB-.
· Entered
into a new $200 million revolving credit facility.
· Increased
the common dividend per share from $0.23 to $0.24.
FIRST
QUARTER 2006 RESULTS
Operating
Revenues and Expenses
-
Operating revenues for the three months ended March 31, 2006 were $30.8 million.
Operating expenses for the three months ended March 31, 2006 totaled $9.9
million, comprised of $7.5 million of depreciation and amortization expense,
$2.1 million of general and administrative expenses, and $0.3 million of
restricted stock amortization.
Other
Income and Expense
- Other
income and expense for the three months ended March 31, 2006 was $13.6 million
and was primarily comprised of $9.6 million of interest expense, $0.6 million
of
non-cash interest expense and $3.5 million of refinancing interest expense
(see
“Financing Activities” section below).
Funds
From Operations
- For
the three months ended March 31, 2006, reportable FFO available to common
stockholders was $12.2 million, or $0.21 per common share, compared to $12.0
million, or $0.23 per common share, for the same period in 2005. The $12.2
million of FFO for the quarter includes the impact of: i) $2.7
million of non-cash interest expense relating to the write-off of deferred
financing costs associated with the termination of its old credit facility;
ii)
$0.8
million of non-cash interest expense associated with the tender offer and
purchase of approximately 20.7% of the Company’s remaining $100 million
aggregate principal amount of 2007 Notes; iii) $0.1 million non-cash provision
for impairment charge recorded to reduce the carrying value of one facility,
currently under contract to be sold in the second quarter of 2006; and iv)
$0.3
million of non-cash restricted stock amortization associated with the Company’s
issuance of restricted stock grants to executive officers during
2004.
When
excluding the aforementioned items in 2006, as well as, certain similar
non-recurring or non-cash expense items in 2005, adjusted FFO was $16.1 million,
or $0.28 per common share for the three months ended March 31, 2006, compared
to
$13.0 million, or $0.25 per common share, for the same period in 2005. For
further information, see the attached “Funds From Operations” schedule and
notes.
Asset
Sales
- On
March 31, 2006, the Company sold a SNF in Illinois resulting in an accounting
loss of approximately $0.2 million.
FINANCING
ACTIVITIES
New
$200 Million Revolving Credit Facility
- On
March
31, 2006, the Company entered into a
new
$200 million revolving senior secured credit facility (the “New Credit
Facility”). The New Credit Facility is being provided by Bank of America, N.A.,
as Administrative Agent, Deutsche Bank Trust Company Americas, UBS Securities
LLC, General Electric Capital Corporation, LaSalle Bank N.A., and Citicorp
North
America, Inc. and will be used for acquisitions and general corporate
purposes.
The
New
Credit Facility replaces the Company’s previous $200 million senior secured
credit facility, which has been terminated. The Company will realize a 125
basis
point savings on LIBOR-based loans under the New Credit Facility, as compared
to
LIBOR-based loans under its prior credit facility. The New Credit Facility
matures on March 31, 2010, and includes an “accordion feature” that permits the
Company to expand its borrowing capacity to $300 million during its first two
years.
For
the
three-month period ending March 31, 2006, the Company recorded a one-time,
non-cash charge of approximately $2.7 million relating to the write-off of
deferred financing costs associated with the termination of its prior credit
facility. At March 31, 2006, the Company had $4.5 million of borrowings
outstanding under its New Credit Facility.
$100
Million Aggregate Principal Amount of 6.95% Unsecured Notes Tender and
Redemption
- On
December 16, 2005, the Company initiated a tender offer and consent solicitation
for all of its outstanding 2007 Notes. On December 30, 2005, the Company
accepted for purchase 79.3% of the aggregate principal amount of the 2007 Notes
outstanding that were tendered. On December 30, 2005, the Company’s Board of
Directors also authorized the redemption of all outstanding 2007 Notes that
were
not otherwise tendered. On December 30, 2005, upon the Company’s irrevocable
funding of the redemption price for the 2007 Notes and certain other acts
required by the Indenture governing the 2007 Notes, the Trustee certified in
writing to the Company (the “Certificate of Satisfaction and Discharge”) that
the Indenture was satisfied and discharged as of December 30, 2005, except
for
certain provisions. In accordance with Statement of Financial Accounting
Standards No. 140, “Accounting for Transfers and Servicing of Financial Assets
and Extinguishment of Liabilities,” or
FAS
140, the Company removed 79.3% of the aggregate principal amount of the 2007
Notes and the corresponding portion of the funds held in trust by the Trustee
to
pay the tender price from its balance sheet and recognized $2.8 million of
interest expense associated with the tender offer in December 2005. On January
18, 2006, the Company completed the redemption of the remaining 2007 Notes
not
otherwise tendered. In connection with the redemption and in accordance with
FAS
140, the Company recognized $0.8 million of interest expense in the first
quarter of 2006. As of January 18, 2006, none of the 2007 Notes remained
outstanding.
Rating
Agencies Upgrade
- On
January 20, 2006, Moody’s Investors Services raised the
rating
of the Company’s senior unsecured debt to Ba3 from B1 and preferred stock to B2
from B3. As stated in Moody’s press release, “this rating action reflects
Omega’s increased size and improvement in asset quality and performance.” The
press release also stated; “Moody’s is encouraged by the significant progress
that Omega continues to make in executing its strategic plan, solidifying its
financial flexibility, and repositioning its healthcare
properties.”
On
January
27, 2006, Standard & Poor’s raised the
rating
of the Company’s senior unsecured debt to BB from BB- and preferred stock to B+
from B. As stated in Standard
& Poor’s
press
release, “the upgrade acknowledges the company’s ability to make accretive
acquisitions and access the capital markets to facilitate this growth while
preserving its financial profile.”
PORTFOLIO
DEVELOPMENTS
Haven
Eldercare, LLC
- During
the three months ending March 31, 2006, Haven Eldercare, LLC (“Haven”), an
existing operator for the Company, entered into a $39 million first mortgage
loan with General Electric Capital Corporation (“GE Loan”). Haven used the $39
million of proceeds to partially repay on a $62 million mortgage it has with
the
Company. Simultaneously, the Company subordinated the payment of its remaining
$23 million to that of the GE Loan. As a result of this transaction, the
interest rate on the Company’s remaining mortgage note to Haven rose from 10% to
approximately 15%, with annual escalators.
In
conjunction with the above transactions and the application of Financial
Accounting Standards Board Interpretation No. 46R, Consolidation
of Variable Interest Entities,
or FIN
46R, the Company consolidated the financial statements and related real estate
of a Haven entity into the Company’s financial statements. The consolidation
resulted in the following changes to the Company’s consolidated balance sheet as
of March 31, 2006: (1) an increase in total gross investments of $39.0 million;
(2) an increase in accumulated depreciation of $0.4 million; (3) an increase
in
other long-term borrowings of $39.0 million; and (4) a reduction of $0.4
million
in cumulative net earnings for the three months ended March 31, 2006 due
to
increased depreciation expense. General Electric Capital Corporation and
Haven’s
other creditors do not have recourse to the Company’s assets. The Company’s
results of operations will reflect the effects of the consolidation of this
entity, which will be accounted for similar to the Company’s other
purchase-leaseback transactions.
DIVIDENDS
Common
Dividends - On
April
18, 2006, the Company’s Board of Directors announced a common stock dividend of
$0.24 per share to be paid May 15, 2006 to common stockholders of record on
April 28, 2006. At the date of this release, the Company had approximately
58
million outstanding common shares.
Series
D Preferred Dividends - On
April
18, 2006, 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 April 28, 2006. The
stockholders of record of the Series D Preferred Stock on April 28, 2006 will
be
paid dividends in the amount of $0.52344
per
preferred share on May 15, 2006. 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
February 1, 2006 through April 30, 2006.
2006
ADJUSTED FFO GUIDANCE AFFIRMED
The
Company affirmed its 2006 adjusted FFO available to common stockholders to
be
between $1.10 and $1.14 per common share.
The
Company's adjusted FFO guidance (and related GAAP earnings projections) for
2006
excludes the future impacts of gains and losses from the sale 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.
ANNUAL
MEETING
The
Company’s 2006 Annual Meeting of Stockholders will be held on Thursday, May 25,
2006, at 10:00 a.m., EDT, at the Holiday Inn Select, Baltimore-North, 2004
Greenspring Drive, Timonium, Maryland. Stockholders of record as of the close
of
business on April 21, 2006 will be entitled to receive notice of and to
participate at the 2006 Annual Meeting of Stockholders.
CONFERENCE
CALL
The
Company will be conducting a conference call on Tuesday, May 9, 2006, at 10
a.m.
EDT to review the Company’s 2006 first 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 March 31, 2006, the Company owned or held
mortgages on 223 SNFs and ALFs with approximately 24,192 beds located in 27
states and operated by 34 third-party healthcare operating
companies.
FOR
FURTHER INFORMATION, CONTACT
Bob
Stephenson, CFO at (410) 427-1700
________________________
This
announcement includes forward-looking 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 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. 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. 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.
OMEGA
HEALTHCARE INVESTORS, INC.
CONSOLIDATED
BALANCE SHEETS
(in
thousands)
March
31,
|
December
31,
|
||||||
2006
|
2005
|
||||||
(Unaudited)
|
|||||||
ASSETS
|
|||||||
Real
estate properties
|
|||||||
Land
and buildings at cost
|
$
|
1,057,936
|
$
|
996,127
|
|||
Less
accumulated depreciation
|
(164,438
|
)
|
(157,255
|
)
|
|||
Real
estate properties - net
|
893,498
|
838,872
|
|||||
Mortgage
notes receivable - net
|
42,577
|
104,522
|
|||||
936,075
|
943,394
|
||||||
Other
investments - net
|
25,985
|
23,490
|
|||||
962,060
|
966,884
|
||||||
Assets
held for sale - net
|
1,863
|
1,243
|
|||||
Total
investments
|
963,923
|
968,127
|
|||||
Cash
and cash equivalents
|
403
|
3,948
|
|||||
Accounts
receivable - net
|
6,495
|
5,885
|
|||||
Other
assets
|
14,091
|
37,769
|
|||||
Total
assets
|
$
|
984,912
|
$
|
1,015,729
|
|||
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
|||||||
Revolving
line of credit
|
$
|
4,500
|
$
|
58,000
|
|||
Unsecured
borrowings
|
485,000
|
505,682
|
|||||
(Discount)/premium
on unsecured borrowings - net
|
(257
|
)
|
(253
|
)
|
|||
Other
long-term borrowings
|
41,800
|
2,800
|
|||||
Accrued
expenses and other liabilities
|
24,262
|
19,563
|
|||||
Operating
liabilities for owned properties
|
53
|
256
|
|||||
Total
liabilities
|
555,358
|
586,048
|
|||||
Stockholders’
equity:
|
|||||||
Preferred
stock
|
118,488
|
118,488
|
|||||
Common
stock and additional paid-in-capital
|
670,418
|
662,440
|
|||||
Cumulative
net earnings
|
234,582
|
227,701
|
|||||
Cumulative
dividends paid
|
(551,726
|
)
|
(536,041
|
)
|
|||
Cumulative
dividends - redemption
|
(43,067
|
)
|
(43,067
|
)
|
|||
Accumulated
other comprehensive income
|
859
|
160
|
|||||
Total
stockholders’ equity
|
429,554
|
429,681
|
|||||
Total
liabilities and stockholders’ equity
|
$
|
984,912
|
$
|
1,015,729
|
OMEGA
HEALTHCARE INVESTORS, INC.
CONSOLIDATED
STATEMENTS OF OPERATIONS
Unaudited
(in
thousands, except per share amounts)
Three
Months Ended
|
|||||||
March
31,
|
|||||||
2006
|
2005
|
||||||
Revenues
|
|||||||
Rental
income
|
$
|
28,933
|
$
|
21,748
|
|||
Mortgage
interest income
|
1,184
|
1,956
|
|||||
Other
investment income - net
|
525
|
297
|
|||||
Miscellaneous
|
109
|
3,165
|
|||||
Total
operating revenues
|
30,751
|
27,166
|
|||||
Expenses
|
|||||||
Depreciation
and amortization
|
7,518
|
5,697
|
|||||
General
and administrative
|
2,056
|
1,827
|
|||||
Restricted
stock expense
|
293
|
285
|
|||||
Total
operating expenses
|
9,867
|
7,809
|
|||||
Income
before other income and expense
|
20,884
|
19,357
|
|||||
Other
income (expense):
|
|||||||
Interest
and other investment income
|
113
|
41
|
|||||
Interest
|
(9,609
|
)
|
(6,774
|
)
|
|||
Interest
- amortization of deferred financing costs
|
(643
|
)
|
(506
|
)
|
|||
Interest
- refinancing costs
|
(3,485
|
)
|
-
|
||||
Total
other expense
|
(13,624
|
)
|
(7,239
|
)
|
|||
Income
from continuing operations
|
7,260
|
12,118
|
|||||
Loss
from discontinued operations
|
(379
|
)
|
(2,814
|
)
|
|||
Net
income
|
6,881
|
9,304
|
|||||
Preferred
stock dividends
|
(2,481
|
)
|
(3,559
|
)
|
|||
Net
income available to common
|
$
|
4,400
|
$
|
5,745
|
|||
Income
per common share:
|
|||||||
Basic:
|
|||||||
Income
from continuing operations
|
$
|
0.08
|
$
|
0.17
|
|||
Net
income
|
$
|
0.08
|
$
|
0.11
|
|||
Diluted:
|
|||||||
Income
from continuing operations
|
$
|
0.08
|
$
|
0.17
|
|||
Net
income
|
$
|
0.08
|
$
|
0.11
|
|||
Dividends
declared and paid per common share
|
$
|
0.23
|
$
|
0.20
|
|||
Weighted-average
shares outstanding, basic
|
57,412
|
50,928
|
|||||
Weighted-average
shares outstanding, diluted
|
57,474
|
51,313
|
|||||
Components
of other comprehensive income:
|
|||||||
Net
income
|
$
|
6,881
|
$
|
9,304
|
|||
Unrealized
gain (loss) on investments and hedging contracts
|
699
|
(1,961
|
)
|
||||
Total
comprehensive income
|
$
|
7,580
|
$
|
7,343
|
OMEGA
HEALTHCARE INVESTORS, INC.
FUNDS
FROM OPERATIONS
Unaudited
(In
thousands, except per share amounts)
Three
Months Ended
|
|||||||
March
31,
|
|||||||
2006
|
2005
|
||||||
Net
income available to common stockholders
|
$
|
4,400
|
$
|
5,745
|
|||
Add
back loss from real estate dispositions (1)
|
248
|
37
|
|||||
Sub-total
|
4,648
|
5,782
|
|||||
Elimination
of non-cash items included in net income :
|
|||||||
Depreciation
and amortization (1)
|
7,527
|
6,253
|
|||||
Funds
from operations available to common stockholders
|
$
|
12,175
|
$
|
12,035
|
|||
Weighted-average
common shares outstanding, basic
|
57,412
|
50,928
|
|||||
Effect
of restricted stock awards
|
42
|
39
|
|||||
Assumed
exercise of stock options
|
20
|
346
|
|||||
Weighted-average
common shares outstanding, diluted
|
57,474
|
51,313
|
|||||
Funds
from operations per share available to common
stockholders
|
$
|
0.21
|
$
|
0.23
|
|||
Adjusted
funds from operations:
|
|||||||
Funds
from operations available to common stockholders
|
$
|
12,175
|
$
|
12,035
|
|||
Deduct
revenue from prepayment penalty/administration fee
|
—
|
(2,986
|
)
|
||||
Deduct
one-time deferred revenue
|
—
|
(70
|
)
|
||||
Add
back one-time interest refinancing expense
|
3,485
|
—
|
|||||
Add
back restricted stock amortization expense
|
293
|
285
|
|||||
Add
back non-cash provision for impairments on real estate properties
(1)
|
121
|
3,700
|
|||||
Adjusted
funds from operations available to common
stockholders
|
$
|
16,074
|
$
|
12,964
|
(1)
Includes
amounts in discontinued operations
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,
the
Company has provided reconciliations of the non-GAAP financial measures to
the
most directly comparable GAAP financial measures.
The
Company calculates and reports 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. The
Company believes that FFO is an important supplemental measure of its 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
its 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 its financial statements
in
analyzing its 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, the Company has applied this interpretation
and
has not excluded asset impairment charges in calculating its FFO. As a result,
its 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 the Company’s 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
2006:
2006
Projected FFO
|
||||||||||
Per
diluted share:
|
||||||||||
Net
income available to common stockholders
|
$ 0.54
|
−
|
$ 0.57
|
|||||||
Adjustments:
|
||||||||||
Depreciation
and amortization
|
0.48
|
−
|
0.49
|
|||||||
Funds
from operations available to common stockholders
|
$
|
1.02
|
−
|
$
|
1.06
|
|||||
Adjustments:
|
||||||||||
Interest
expense - refinancing
|
0.06
|
−
|
0.06
|
|||||||
Provision
for impairment of real estate assets
|
0.00
|
−
|
0.00
|
|||||||
Restricted
stock expense
|
0.02
|
−
|
0.02
|
|||||||
Adjusted
funds from operations available to common
stockholders
|
$
|
1.10
|
−
|
$
|
1.14
|
The
following table summarizes the results of operations of assets held for sale
and
facilities
sold during the three months ended March 31, 2006 and 2005,
respectively.
Three
Months Ended
|
|||||||
March
31,
|
|||||||
2006
|
2005
|
||||||
(In
thousands)
|
|||||||
Revenues
|
|||||||
Rental
income
|
$
|
—
|
$
|
1,467
|
|||
Other
income
|
—
|
12
|
|||||
Subtotal
revenues
|
—
|
1,479
|
|||||
Expenses
|
|||||||
Depreciation
and amortization
|
9
|
556
|
|||||
General
and administrative
|
1
|
—
|
|||||
Provision
for impairment
|
121
|
3,700
|
|||||
Subtotal
expenses
|
131
|
4,256
|
|||||
Income
(loss) before loss on sale of assets
|
(131
|
)
|
(2,777
|
)
|
|||
Loss
on assets sold - net
|
(248
|
)
|
(37
|
)
|
|||
Loss
from discontinued operations
|
$
|
(379
|
)
|
$
|
(2,814
|
)
|
The
following
tables present selected portfolio information, including operator and geographic
concentrations, and revenue maturities for the period ending March 31,
2006.
Portfolio
Composition ($000's)
|
||||||||||||||||
Balance
Sheet Data
|
#
of Properties
|
|
|
#
Beds
|
|
|
Investment
|
|
|
%
Investment
|
||||||
Real
Property(1)(2)
|
198
|
22,309
|
$
|
1,057,936
|
96
|
%
|
||||||||||
Loans
Receivable
|
25
|
1,883
|
42,577
|
4
|
%
|
|||||||||||
Total
Investments
|
223
|
24,192
|
$
|
1,100,513
|
100
|
%
|
||||||||||
(1)
Excludes three held for sale facilities
(2)
Includes 7 buildings worth $61.8 million resulting from FIN 46
Consolidation
|
||||||||||||||||
Investment
Data
|
#
of Properties
|
|
|
#
Beds
|
|
|
Investment
|
|
|
%
Investment
|
Investment
per Bed
|
|||||
Skilled
Nursing Facilities
|
213
|
23,600
|
$
|
1,052,954
|
96
|
%
|
$
|
45
|
||||||||
Assisted
Living Facilities
|
8
|
422
|
24,124
|
2
|
%
|
57
|
||||||||||
Rehab
Hospitals
|
2
|
170
|
23,435
|
2
|
%
|
138
|
||||||||||
223
|
24,192
|
$
|
1,100,513
|
100
|
%
|
$
|
45
|
|||||||||
Revenue
Composition ($000's)
|
|||||||
Revenue
by Investment Type
|
Three
Months Ended
|
||||||
March
31, 2006
|
|||||||
Rental
Property
|
$
|
28,933
|
94
|
%
|
|||
Mortgage
Notes
|
1,184
|
4
|
%
|
||||
Other
Investment Income
|
525
|
2
|
%
|
||||
$
|
30,642
|
100
|
%
|
||||
Revenue
by Facility Type
|
Three
Months Ended
|
||||||
March
31, 2006
|
|||||||
Assisted
Living Facilities
|
$
|
405
|
1
|
%
|
|||
Skilled
Nursing Facilities
|
29,712
|
97
|
%
|
||||
Other
|
525
|
2
|
%
|
||||
$
|
30,642
|
100
|
%
|
||||
Operator
Concentration ($000's)
|
||||||||||
Concentration
by Investment
|
#
of Properties
|
|
|
Investment
|
|
|
%
Investment
|
|||
CommuniCare
|
19
|
$
|
192,033
|
17
|
%
|
|||||
Sun
Healthcare Group, Inc.
|
32
|
160,811
|
15
|
%
|
||||||
Haven
|
15
|
117,230
|
11
|
%
|
||||||
Advocat,
Inc.
|
33
|
105,452
|
10
|
%
|
||||||
Guardian
|
16
|
80,166
|
7
|
%
|
||||||
Essex
|
13
|
79,354
|
7
|
%
|
||||||
Remaining
Operators
|
95
|
365,467
|
33
|
%
|
||||||
223
|
$
|
1,100,513
|
100
|
%
|
||||||
Geographic
Concentration ($000's)
|
||||||||||
Concentration
by Region
|
#
of Properties
|
Investment
|
%
Investment
|
|||||||
South
|
88
|
$
|
380,077
|
34
|
%
|
|||||
Midwest
|
71
|
346,691
|
32
|
%
|
||||||
Northeast
|
36
|
249,997
|
23
|
%
|
||||||
West
|
28
|
123,748
|
11
|
%
|
||||||
223
|
$
|
1,100,513
|
100
|
%
|
||||||
Concentration
by State
|
#
of Properties
|
Investment
|
%
Investment
|
|||||||
Ohio
|
38
|
$
|
278,045
|
25
|
%
|
|||||
Florida
|
18
|
111,575
|
10
|
%
|
||||||
Pennsylvania
|
16
|
101,074
|
9
|
%
|
||||||
Texas
|
19
|
71,426
|
7
|
%
|
||||||
California
|
15
|
60,665
|
6
|
%
|
||||||
Remaining
States
|
117
|
477,728
|
43
|
%
|
||||||
223
|
$
|
1,100,513
|
100
|
%
|
||||||
Revenue
Maturities ($000's)
|
||||||||||||||||
Operating
Lease Expirations & Loan Maturities
|
Year
|
|
|
Current
Lease Revenue(1)
|
|
|
Current
Interest Revenue(1)
|
|
|
Lease
and Interest Revenue
|
|
%
|
||||
2006
|
$
|
1,260
|
$
|
2,288
|
$
|
3,548
|
3.0
|
%
|
||||||||
2007
|
374
|
145
|
519
|
0.4
|
%
|
|||||||||||
2008
|
1,024
|
-
|
1,024
|
0.8
|
%
|
|||||||||||
2009
|
199
|
-
|
199
|
0.2
|
%
|
|||||||||||
2010
|
23,788
|
1,498
|
25,286
|
21.2
|
%
|
|||||||||||
Thereafter
|
81,192
|
7,623
|
88,815
|
74.4
|
%
|
|||||||||||
$
|
107,837
|
$
|
11,554
|
$
|
119,391
|
100.0
|
%
|
|||||||||
Note:
(1) Based on '06 contractual rents & interest (no annual
escalators)
|
||||||||||||||||
Selected
Facility Data
|
||||||||||||||||
TTM
ending 12/31/2005
|
Coverage
Data
|
|||||||||||||||
|
%
Payor Mix
|
Before
|
After
|
|||||||||||||
Census
|
Private
|
Medicare
|
Mgmt.
Fees
|
Mgmt.
Fees
|
||||||||||||
All
Healthcare Facilities
|
82.0
|
%
|
11.4
|
%
|
13.8
|
%
|
2.0
x
|
1.5
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
March
31, 2006.
Current
Capitalization ($000's)
|
||||||
Outstanding
Balance
|
%
|
|||||
Borrowings
Under Bank Lines
|
$
4,500
|
0.5%
|
||||
Long-Term
Debt Obligations (1)
|
526,800
|
54.8%
|
||||
Stockholder's
Equity
|
429,554
|
44.7%
|
||||
Total
Book Capitalization
|
$
960,854
|
100.00%
|
||||
Leverage
& Performance Ratios (1)
|
||||||
Debt
/ Total Book Cap
|
55%
|
|||||
Debt
/ Total Market Cap
|
36%
|
|||||
Interest
Coverage:
|
||||||
First
quarter 2006
|
2.81
x
|
|||||
(1)
Excludes net discount of $0.3 million on unsecured borrowings. Includes
$39.0 million of additional debt due to required consolidation of
Haven
real estate entity per FASB Interpretation No. 46R.
|
||||||
Debt
Maturities ($000's)
|
Secured
Debt
|
||||||||||||||||||
Year
|
Lines
of Credit(1
|
)
|
Haven
Consolidation
|
Other
|
Senior
Notes
|
Total
|
|||||||||||||
2006
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
|||||||||
2007
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||
2008
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||
2009
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||
Thereafter
|
200,000
|
39,000
|
2,800
|
485,000
|
726,800
|
||||||||||||||
$
|
200,000
|
$
|
39,000
|
$
|
2,800
|
$
|
485,000
|
$
|
726,800
|
||||||||||
Note:
(1) Reflected at 100% capacity.
|
|||||||||||||||||||
The
following
table presents investment activity for the three- and twelve-month periods
ending March 31, 2006.
Investment
Activity ($000's)
|
|||||||
Three
Months Ended
|
|||||||
March
31, 2006
|
|||||||
$
Amount
|
%
|
||||||
Funding
by Investment Type:
|
|||||||
Real
Property
|
$ -
|
0
|
%
|
||||
Mortgages
|
-
|
0
|
%
|
||||
Other
|
-
|
0
|
%
|
||||
Total
|
$
|
-
|
0
|
%
|