8-K: Current report filing
Published on August 3, 2006
PRESS
RELEASE - FOR IMMEDIATE RELEASE
OMEGA
ANNOUNCES SECOND
QUARTER 2006 RESULTS;
ADJUSTED
FFO OF $0.29 PER SHARE; $171 MILLION OF NEW
INVESTMENTS
TIMONIUM,
MARYLAND - August 3, 2006 -
Omega
Healthcare Investors, Inc. (NYSE:OHI) today announced its results of operations
for the quarter ended June 30, 2006. The Company also reported Funds From
Operations (“FFO”) available to common stockholders for the three months ended
June 30, 2006 of $16.5 million or $0.28 per common share. The $16.5 million
of
FFO available to common stockholders for the quarter includes $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 restricted stock amortization expense,
was $0.29 per common share for the three months ended June 30, 2006. For
more
information regarding FFO, see “Funds From Operations” below.
GAAP
NET INCOME
For
the
three-month period ended June 30, 2006, the Company reported net income of
$11.3
million, net income available to common stockholders of $8.8 million, or
$0.15
per diluted common share and operating revenues of $31.1 million. This
compares to net income of $2.3 million, net loss available to common
stockholders of $2.6 million, or ($0.05) per diluted common share, and operating
revenues of $25.3 million for the same period in 2005.
For
the
six-month period ended June 30, 2006, the Company reported net income of
$18.1
million, net income available to common stockholders of $13.2 million, or
$0.23
per diluted common share and operating revenues of $61.8 million. This
compares to net income of $11.6 million, net income available to common
stockholders of $3.1 million, or $0.06 per diluted common share, and operating
revenues of $52.5 million for the same period in 2005.
SECOND
QUARTER 2006 HIGHLIGHTS AND OTHER RECENT DEVELOPMENTS
· On
August
1, 2006, the Company closed on $171 million of new investments yielding
10%.
SECOND
QUARTER 2006 RESULTS
Operating
Revenues and Expenses
-
Operating revenues for the three months ended June 30, 2006 were $31.1 million.
Operating expenses for the three months ended June 30, 2006 totaled $9.9
million, comprised of $7.5 million of depreciation and amortization expense,
$2.0 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 June 30, 2006 was an expense
of
$9.8 million and was primarily comprised of $9.4 million of interest expense
and
$0.4 million of non-cash interest expense.
Funds
From Operations
- For
the three months ended June 30, 2006, reportable FFO available to common
stockholders was $16.5 million, or $0.28 per common share, compared to $8.1
million, or $0.16 per common share, for the same period in 2005. The $16.5
million and $8.1 million of FFO for the quarters include $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 non-cash restricted stock amortization in 2006, as well as,
certain non-recurring or non-cash expense items in 2005, adjusted FFO was
$16.7
million, or $0.29 per common share for the three months ended June 30, 2006,
compared to $13.6 million, or $0.26 per common share, for the same period
in
2005. For further information, see the attached “Funds From Operations” schedule
and notes.
Asset
Sales
- On
June 30, 2006, the Company sold two skilled nursing facilities (“SNFs”) in
California resulting in an accounting loss of approximately $0.1
million.
PORTFOLIO
DEVELOPMENTS
Litchfield
Investment Company, LLC - On
August
1, 2006, the Company completed a transaction with Litchfield Investment Company,
LLC and its affiliates (“Litchfield”) to purchase 30 skilled nursing facilities
and one independent living center for a total investment of approximately
$171
million. The facilities total 3,847 beds and are located in the states of
Colorado (5), Florida (7), Idaho (1), Louisiana (13), and Texas (5). The
facilities were subject to master leases with three national healthcare
providers, which are existing tenants of the Company. The tenants are Home
Quality Management, Inc. (“HQM”), Nexion Health, Inc. (“Nexion”), and Peak
Medical Corporation, which was acquired by Sun Healthcare Group, Inc. (“Sun”) in
December of 2005.
Simultaneously
with the close of the purchase transaction, the seven HQM facilities were
combined into an Amended and Restated Master Lease containing 13 facilities
between the Company and HQM. In addition, the 18 Nexion facilities were combined
into an Amended and Restated Master Lease containing 22 facilities between
the
Company and Nexion. The Company entered into a Master Lease, Assignment and
Assumption Agreement with Litchfield on the six Sun facilities. These six
facilities are currently under a master lease that expires on September 30,
2007.
The
total
incremental annualized rent from the 31 facility transaction is approximately
$17.1 million.
Hickory
Creek Healthcare Foundation, Inc.
- On
June
16, 2006, the Company received approximately $10 million in proceeds on a
mortgage loan payoff. The Company held mortgages on 15 facilities located
in
Indiana, representing 619 beds.
Other
- As
previously reported, during the three months ended 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.
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 June 30, 2006: (1) an increase in total gross investments of $39.0 million;
(2) an increase in accumulated depreciation of $0.8 million; (3) an increase
in
other long-term borrowings of $39.0 million; and (4) a reduction of $0.8
million
in cumulative net earnings for the six months ended June 30, 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 reflect the effects of the consolidation of this entity,
which is accounted for similarly to the Company’s other purchase-leaseback
transactions.
DIVIDENDS
Common
Dividends
- On
July
17, 2006, the Company’s Board of Directors announced a common stock dividend of
$0.24 per share to be paid August 15, 2006 to common stockholders of record
on
July 31, 2006. At the date of this release, the Company had approximately
59
million outstanding common shares.
Series
D Preferred Dividends - On
July
17, 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 July 31, 2006. The stockholders
of record of the Series D Preferred Stock on July 31, 2006 will be paid
dividends in the amount of $0.52344
per
preferred share on August 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
May 1, 2006 through July 31, 2006.
2006
AND 2007 ADJUSTED FFO GUIDANCE
The
Company has increased its projection of 2006 adjusted FFO available to common
stockholders to be between $1.14 and $1.16 per common share. The previous
guidance was a range of $1.10 to $1.14 per common share. In addition, the
Company currently expects its 2007 adjusted FFO to be between $1.21 and $1.26
per diluted share.
The
Company's adjusted FFO guidance and related GAAP earnings projections for
2006
and 2007 exclude 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.
A
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 its projected
results.
CONFERENCE
CALL
The
Company will be conducting a conference call on Thursday, August 3, 2006,
at 10
a.m. EDT to review the Company’s 2006 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.
*
* * * *
*
The
Company is a real estate investment trust investing in and providing financing
to the long-term care industry. At June 30, 2006, the Company owned or held
mortgages on 208 SNFs and ALFs with approximately 23,573 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 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. 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)
|
June
30,
|
December
31,
|
||||||
|
2006
|
2005
|
||||||
|
(Unaudited)
|
|||||||
|
ASSETS
|
|||||||
|
Real
estate properties
|
|||||||
|
Land
and buildings at cost
|
$
|
1,060,226
|
$
|
996,127
|
|||
|
Less
accumulated depreciation
|
(171,948
|
)
|
(157,255
|
)
|
|||
|
Real
estate properties - net
|
888,278
|
838,872
|
|||||
|
Mortgage
notes receivable - net
|
32,381
|
104,522
|
|||||
|
920,659
|
943,394
|
||||||
|
Other
investments - net
|
29,060
|
23,490
|
|||||
|
949,719
|
966,884
|
||||||
|
Assets
held for sale - net
|
248
|
1,243
|
|||||
|
Total
investments
|
949,967
|
968,127
|
|||||
|
Cash
and cash equivalents
|
14,053
|
3,948
|
|||||
|
Accounts
receivable - net
|
6,342
|
5,885
|
|||||
|
Other
assets
|
13,998
|
37,769
|
|||||
|
Total
assets
|
$
|
984,360
|
$
|
1,015,729
|
|||
|
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
|||||||
|
Revolving
line of credit
|
$
|
—
|
$
|
58,000
|
|||
|
Unsecured
borrowings
|
485,000
|
505,682
|
|||||
|
Discount
on unsecured borrowings - net
|
(261
|
)
|
(253
|
)
|
|||
|
Other
long-term borrowings
|
41,800
|
2,800
|
|||||
|
Accrued
expenses and other liabilities
|
22,399
|
19,563
|
|||||
|
Operating
liabilities for owned properties
|
125
|
256
|
|||||
|
Total
liabilities
|
549,063
|
586,048
|
|||||
|
Stockholders’
equity:
|
|||||||
|
Preferred
stock
|
118,488
|
118,488
|
|||||
|
Common
stock and additional paid-in-capital
|
680,443
|
662,440
|
|||||
|
Cumulative
net earnings
|
245,843
|
227,701
|
|||||
|
Cumulative
dividends paid
|
(568,150
|
)
|
(536,041
|
)
|
|||
|
Cumulative
dividends - redemption
|
(43,067
|
)
|
(43,067
|
)
|
|||
|
Accumulated
other comprehensive income
|
1,740
|
160
|
|||||
|
Total
stockholders’ equity
|
435,297
|
429,681
|
|||||
|
Total
liabilities and stockholders’ equity
|
$
|
984,360
|
$
|
1,015,729
|
|||
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,
|
||||||||||||
|
2006
|
2005
|
2006
|
2005
|
||||||||||
|
Revenues
|
|||||||||||||
|
Rental
income
|
$
|
29,042
|
$
|
22,514
|
$
|
57,975
|
$
|
44,262
|
|||||
|
Mortgage
interest income
|
1,154
|
1,240
|
2,338
|
3,196
|
|||||||||
|
Other
investment income - net
|
533
|
385
|
1,058
|
682
|
|||||||||
|
Miscellaneous
|
332
|
1,146
|
441
|
4,312
|
|||||||||
|
Total
operating revenues
|
31,061
|
25,285
|
61,812
|
52,452
|
|||||||||
|
Expenses
|
|||||||||||||
|
Depreciation
and amortization
|
7,542
|
6,044
|
15,060
|
11,742
|
|||||||||
|
General
and administrative
|
2,021
|
1,838
|
4,077
|
3,664
|
|||||||||
|
Restricted
stock expense
|
292
|
285
|
585
|
571
|
|||||||||
|
Provision
for uncollectible mortgages, notes and accounts receivable
|
-
|
83
|
-
|
83
|
|||||||||
|
Leasehold
expiration expense
|
-
|
750
|
-
|
750
|
|||||||||
|
Total
operating expenses
|
9,855
|
9,000
|
19,722
|
16,810
|
|||||||||
|
Income
before other income and expense
|
21,206
|
16,285
|
42,090
|
35,642
|
|||||||||
|
Other
income (expense):
|
|||||||||||||
|
Interest
and other investment income
|
69
|
24
|
182
|
65
|
|||||||||
|
Interest
|
(9,447
|
)
|
(6,948
|
)
|
(19,056
|
)
|
(13,722
|
)
|
|||||
|
Interest
- amortization of deferred financing costs
|
(431
|
)
|
(525
|
)
|
(1,074
|
)
|
(1,031
|
)
|
|||||
|
Interest
- refinancing costs
|
-
|
-
|
(3,485
|
)
|
-
|
||||||||
|
Provision
for impairment on equity securities
|
-
|
(3,360
|
)
|
-
|
(3,360
|
)
|
|||||||
|
Total
other expense
|
(9,809
|
)
|
(10,809
|
)
|
(23,433
|
)
|
(18,048
|
)
|
|||||
|
Income
from continuing operations
|
11,397
|
5,476
|
18,657
|
17,594
|
|||||||||
|
(Loss)
from discontinued operations
|
(136
|
)
|
(3,219
|
)
|
(515
|
)
|
(6,033
|
)
|
|||||
|
Net
income
|
11,261
|
2,257
|
18,142
|
11,561
|
|||||||||
|
Preferred
stock dividends
|
(2,481
|
)
|
(2,864
|
)
|
(4,962
|
)
|
(6,423
|
)
|
|||||
|
Preferred
stock conversion and redemption charges
|
-
|
(2,013
|
)
|
-
|
(2,013
|
)
|
|||||||
|
Net
income (loss) available to common
|
$
|
8,780
|
$
|
(2,620
|
)
|
$
|
13,180
|
$
|
3,125
|
||||
|
Income
(loss) per common share:
|
|||||||||||||
|
Basic:
|
|||||||||||||
|
Income
from continuing operations
|
$
|
0.15
|
$
|
0.01
|
$
|
0.24
|
$
|
0.18
|
|||||
|
Net
income (loss)
|
$
|
0.15
|
$
|
(0.05
|
)
|
$
|
0.23
|
$
|
0.06
|
||||
|
Diluted:
|
|||||||||||||
|
Income
from continuing operations
|
$
|
0.15
|
$
|
0.01
|
$
|
0.24
|
$
|
0.18
|
|||||
|
Net
income (loss)
|
$
|
0.15
|
$
|
(0.05
|
)
|
$
|
0.23
|
$
|
0.06
|
||||
|
Dividends
declared and paid per common share
|
$
|
0.24
|
$
|
0.21
|
$
|
0.47
|
$
|
0.41
|
|||||
|
Weighted-average
shares outstanding, basic
|
58,158
|
51,031
|
57,787
|
50,980
|
|||||||||
|
Weighted-average
shares outstanding, diluted
|
58,237
|
51,365
|
57,858
|
51,339
|
|||||||||
|
Components
of other comprehensive income:
|
|||||||||||||
|
Net
income
|
$
|
11,261
|
$
|
2,257
|
$
|
18,142
|
$
|
11,561
|
|||||
|
Unrealized
gain on investments
|
881
|
-
|
1,580
|
-
|
|||||||||
|
Total
comprehensive income
|
$
|
12,142
|
$
|
2,257
|
$
|
19,722
|
$
|
11,561
|
|||||
OMEGA
HEALTHCARE INVESTORS, INC.
FUNDS
FROM OPERATIONS
Unaudited
(In
thousands, except per share amounts)
|
Three
Months Ended
|
Six
Months Ended
|
||||||||||||
|
June
30,
|
June
30,
|
||||||||||||
|
2006
|
2005
|
2006
|
2005
|
||||||||||
|
Net
income (loss) available to common stockholders
|
$
|
8,780
|
$
|
(2,620
|
)
|
$
|
13,180
|
$
|
3,125
|
||||
|
Add
back loss from real estate dispositions(1)
|
133
|
4,165
|
381
|
4,202
|
|||||||||
|
Sub-total
|
8,913
|
1,545
|
13,561
|
7,327
|
|||||||||
|
Elimination
of non-cash items included in net income (loss):
|
|||||||||||||
|
Depreciation
and amortization(1)
|
7,542
|
6,540
|
15,069
|
12,793
|
|||||||||
|
Funds
from operations available to common stockholders
|
$
|
16,455
|
$
|
8,085
|
$
|
28,630
|
$
|
20,120
|
|||||
|
Weighted-average
common shares outstanding, basic
|
58,158
|
51,031
|
57,787
|
50,980
|
|||||||||
|
Effect
of restricted stock awards
|
60
|
71
|
52
|
55
|
|||||||||
|
Assumed
exercise of stock options
|
19
|
263
|
19
|
304
|
|||||||||
|
Weighted-average
common shares outstanding, diluted
|
58,237
|
51,365
|
57,858
|
51,339
|
|||||||||
|
Fund
from operations per share available to common
stockholders
|
$
|
0.28
|
$
|
0.16
|
$
|
0.49
|
$
|
0.39
|
|||||
|
Adjusted
funds from operations:
|
|||||||||||||
|
Funds
from operations available to common stockholders
|
$
|
16,455
|
$
|
8,085
|
$
|
28,630
|
$
|
20,120
|
|||||
|
Deduct
prepayment penalty/administration fee
|
—
|
(1,003
|
)
|
—
|
(4,059
|
)
|
|||||||
|
Add
back one-time interest refinancing expense
|
—
|
—
|
3,485
|
—
|
|||||||||
|
Add
back restricted stock amortization expense
|
292
|
285
|
585
|
571
|
|||||||||
|
Add
back non-cash preferred stock conversion/redemption charges
|
—
|
2,013
|
—
|
2,013
|
|||||||||
|
Add
back leasehold expiration expense
|
—
|
750
|
—
|
750
|
|||||||||
|
Add
back non-cash provision for impairments on real estate
properties(1)
|
—
|
—
|
121
|
3,700
|
|||||||||
| Add back non-cash provision for impairments on equity securities |
—
|
3,360
|
—
|
3,360
|
|||||||||
|
Add
back provisions for uncollectible mortgages, notes and accounts
receivable
|
—
|
83
|
—
|
83
|
|||||||||
|
Adjusted
funds from operations available to common
stockholders
|
$
|
16,747
|
$
|
13,573
|
$
|
32,821
|
$
|
26,538
|
|||||
(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
and
2007:
|
2006
Projected FFO
|
2007
Projected FFO
|
|||||||||||||||||
|
Per
diluted share:
|
||||||||||||||||||
|
Net
income available to common stockholders
|
$
|
0.51
|
−
|
$
|
0.53
|
$
|
0.64
|
−
|
$
|
0.69
|
||||||||
|
Adjustments:
|
||||||||||||||||||
|
Depreciation
and amortization
|
0.50
|
−
|
0.50
|
0.55
|
−
|
0.55
|
||||||||||||
|
Funds
from operations available to common stockholders
|
$
|
1.01
|
−
|
$
|
1.03
|
$
|
1.19
|
−
|
$
|
1.24
|
||||||||
|
Adjustments:
|
||||||||||||||||||
|
Interest
expense - refinancing
|
0.06
|
−
|
0.06
|
-
|
−
|
-
|
||||||||||||
|
Provision
for impairment of real estate assets
|
0.00
|
−
|
0.00
|
-
|
−
|
-
|
||||||||||||
|
Restricted
stock expense
|
0.07
|
−
|
0.07
|
0.02
|
−
|
0.02
|
||||||||||||
|
Adjusted
funds from operations available to common
stockholders
|
$
|
1.14
|
−
|
$
|
1.16
|
$
|
1.21
|
−
|
$
|
1.26
|
||||||||
The
following table summarizes the results of operations of assets held for sale
and
facilities sold during the three and six months ended June 30, 2006 and 2005,
respectively.
|
Three
Months Ended
|
Six
Months Ended
|
||||||||||||
|
June
30,
|
June
30,
|
||||||||||||
|
2006
|
2005
|
2006
|
2005
|
||||||||||
|
(In
thousands)
|
|||||||||||||
|
Revenues
|
|||||||||||||
|
Rental
income
|
$
|
—
|
$
|
1,430
|
$
|
—
|
$
|
2,896
|
|||||
|
Other
income
|
—
|
12
|
—
|
24
|
|||||||||
|
Subtotal
revenues
|
—
|
1,442
|
—
|
2,920
|
|||||||||
|
Expenses
|
|||||||||||||
|
Depreciation
and amortization
|
—
|
496
|
9
|
1,051
|
|||||||||
|
General
and administrative
|
3
|
—
|
4
|
—
|
|||||||||
|
Provision
for impairment
|
—
|
—
|
121
|
3,700
|
|||||||||
|
Subtotal
expenses
|
3
|
496
|
134
|
4,751
|
|||||||||
|
Income
(loss) before loss on sale of assets
|
(3
|
)
|
946
|
(134
|
)
|
(1,831
|
)
|
||||||
|
Loss
on assets sold - net
|
(133
|
)
|
(4,165
|
)
|
(381
|
)
|
(4,202
|
)
|
|||||
|
(Loss)
from discontinued operations
|
$
|
(136
|
)
|
$
|
(3,219
|
)
|
$
|
(515
|
)
|
$
|
(6,033
|
)
|
|
The
following tables present selected portfolio information, including operator
and
geographic concentrations, and revenue maturities for the period ending June
30,
2006.
|
Portfolio
Composition ($000's)
|
||||||||||||||||
|
Balance
Sheet Data
|
#
of Properties
|
#
Beds
|
Investment
|
%
Investment
|
||||||||||||
|
Real
Property(1)(2)
|
198
|
22,309
|
$
|
1,060,226
|
97
|
%
|
||||||||||
|
Loans
Receivable
|
10
|
1,264
|
32,381
|
3
|
%
|
|||||||||||
|
Total
Investments
|
208
|
23,573
|
$
|
1,092,607
|
100
|
%
|
||||||||||
|
(1)
Excludes one 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
|
198
|
22,981
|
$
|
1,045,048
|
96
|
%
|
$
|
45
|
||||||||
|
Assisted
Living Facilities
|
8
|
422
|
24,124
|
2
|
%
|
57
|
||||||||||
|
Rehab
Hospitals
|
2
|
170
|
23,435
|
2
|
%
|
138
|
||||||||||
|
208
|
23,573
|
$
|
1,092,607
|
100
|
%
|
$
|
46
|
|||||||||
|
Revenue
Composition ($000's)
|
|||||||||||||
|
Revenue
by Investment Type
|
Three
Months Ended
|
Six
Months Ended
|
|||||||||||
|
June
30, 2006
|
June
30, 2006
|
||||||||||||
|
Rental
Property
|
$
|
29,042
|
94
|
%
|
$
|
57,975
|
94
|
%
|
|||||
|
Mortgage
Notes
|
1,154
|
4
|
%
|
2,338
|
4
|
%
|
|||||||
|
Other
Investment Income
|
533
|
2
|
%
|
1,058
|
2
|
%
|
|||||||
|
$
|
30,729
|
100
|
%
|
$
|
61,371
|
100
|
%
|
||||||
|
Revenue
by Facility Type
|
Three
Months Ended
|
Six
Months Ended
|
|||||||||||
|
|
June
30, 2006
|
June
30, 2006
|
|||||||||||
|
Assisted
Living Facilities
|
$
|
405
|
1
|
%
|
$
|
810
|
1
|
%
|
|||||
|
Skilled
Nursing Facilities
|
29,791
|
97
|
%
|
59,503
|
97
|
%
|
|||||||
|
Other
|
533
|
2
|
%
|
1,058
|
2
|
%
|
|||||||
|
$
|
30,729
|
100
|
%
|
$
|
61,371
|
100
|
%
|
||||||
|
Operator
Concentration ($000's)
|
||||||||||
|
Concentration
by Investment
|
#
of Properties
|
Investment
|
%
Investment
|
|||||||
|
CommuniCare
|
19
|
$
|
192,072
|
17
|
%
|
|||||
|
Sun
Healthcare Group, Inc.
|
32
|
160,978
|
15
|
%
|
||||||
|
Haven
|
15
|
117,230
|
11
|
%
|
||||||
|
Advocat,
Inc.
|
33
|
106,657
|
10
|
%
|
||||||
|
Guardian
|
16
|
80,166
|
7
|
%
|
||||||
|
Essex
|
13
|
79,354
|
7
|
%
|
||||||
|
Remaining
Operators
|
80
|
356,150
|
33
|
%
|
||||||
|
208
|
$
|
1,092,607
|
100
|
%
|
||||||
|
Geographic
Concentration ($000's)
|
||||||||||
|
Concentration
by Region
|
#
of Properties
|
Investment
|
%
Investment
|
|||||||
|
South
|
88
|
$
|
381,516
|
35
|
%
|
|||||
|
Midwest
|
56
|
337,225
|
31
|
%
|
||||||
|
Northeast
|
36
|
250,009
|
23
|
%
|
||||||
|
West
|
28
|
123,857
|
11
|
%
|
||||||
|
208
|
$
|
1,092,607
|
100
|
%
|
||||||
|
Concentration
by State
|
#
of Properties
|
Investment
|
%
Investment
|
|||||||
|
Ohio
|
38
|
$
|
278,072
|
25
|
%
|
|||||
|
Florida
|
18
|
111,890
|
10
|
%
|
||||||
|
Pennsylvania
|
16
|
101,086
|
9
|
%
|
||||||
|
Texas
|
19
|
71,334
|
7
|
%
|
||||||
|
California
|
15
|
60,665
|
6
|
%
|
||||||
|
Remaining
States
|
102
|
469,560
|
43
|
%
|
||||||
|
208
|
$
|
1,092,607
|
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
|
$
|
1,289
|
$
|
2,549
|
2.2
|
%
|
||||||||
|
2007
|
374
|
145
|
519
|
0.4
|
%
|
|||||||||||
|
2008
|
1,024
|
-
|
1,024
|
0.8
|
%
|
|||||||||||
|
2009
|
199
|
-
|
199
|
0.2
|
%
|
|||||||||||
|
2010
|
23,861
|
1,498
|
25,359
|
21.4
|
%
|
|||||||||||
|
Thereafter
|
87,380
|
1,435
|
88,815
|
75.0
|
%
|
|||||||||||
|
$
|
114,098
|
$
|
4,367
|
$
|
118,465
|
100.0
|
%
|
|||||||||
|
Note:
(1) Based on '06 contractual rents & interest (no annual
escalators)
|
||||||||||||||||
|
Selected
Facility Data
|
||||||||||||||||
|
TTM
ending 3/31/06
|
Coverage
Data
|
|||||||||||||||
|
|
%
Payor Mix
|
Before
|
After
|
|||||||||||||
|
Census
|
Private
|
Medicare
|
Mgmt.
Fees
|
Mgmt.
Fees
|
||||||||||||
|
All
Healthcare Facilities
|
82.2
|
%
|
11.3
|
%
|
13.8
|
%
|
2.0
x
|
1.6
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 June 30, 2006.
|
Current
Capitalization ($000's)
|
|||||||
|
Outstanding
Balance
|
%
|
||||||
|
Borrowings
Under Bank Lines
|
$
-
|
0.0%
|
|||||
|
Long-Term
Debt Obligations (1)
|
526,800
|
54.8%
|
|||||
|
Stockholder's
Equity
|
435,297
|
45.2%
|
|||||
|
Total
Book Capitalization
|
$
|
962,097
|
100
|
%
|
|||
|
Leverage
& Performance Ratios (1)
|
|||||||
|
Debt
/ Total Book Cap
|
54.8
|
%
|
|||||
|
Debt
/ Total Market Cap
|
37.0
|
%
|
|||||
|
Interest
Coverage:
|
|||||||
|
Second
quarter 2006
|
2.95
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 six-month
periods ending June30, 2006.
|
Investment
Activity ($000's)
|
|||||||||||||
|
Three
Months Ended
|
Six
Months Ended
|
||||||||||||
|
June
30, 2006
|
June
30, 2006
|
||||||||||||
|
$
|
Amount
|
%
|
$
|
Amount
|
|
%
|
|||||||
|
Funding
by Investment Type:
|
|||||||||||||
|
Real
Property
|
$
|
-
|
0
|
%
|
$
|
-
|
0
|
%
|
|||||
|
Mortgages
|
-
|
0
|
%
|
-
|
0
|
%
|
|||||||
|
Other
|
-
|
0
|
%
|
-
|
0
|
%
|
|||||||
|
Total
|
$
|
-
|
0
|
%
|
$
|
-
|
0
|
%
|
|||||