8-K: Current report filing
Published on December 15, 2006
PRESS
RELEASE - FOR IMMEDIATE RELEASE
OMEGA
ANNOUNCES THIRD QUARTER 2006 AND RESTATEMENT RESULTS;
ADJUSTED
FFO OF $0.32 PER SHARE
FOR THE THIRD QUARTER 2006
TIMONIUM,
MARYLAND - December 14, 2006 -
Omega
Healthcare Investors, Inc. (NYSE:OHI) today announced its results of operations
for the quarter ended September 30, 2006. The Company also announced it has
filed amendments to restate its Annual Report on Form 10-K for the year ended
December 31, 2005 and its Quarterly Reports on Form 10-Q for the three-month
periods ended March 31, 2006 and June 30, 2006 (see “Restatement of Prior
Financial Statements” section below). In addition, the Company also reported
Funds From Operations (“FFO”) available to common stockholders for the three
months ended September 30, 2006 of $19.3 million or $0.33 per common share.
The
$19.3 million of FFO available to common stockholders for the third quarter
includes $3.6 million of non-cash restricted stock expense, a $2.7 million
accounting gain on the sale of an equity security, a $1.8 million non-cash
increase in the fair value of a derivative, a $0.6 million provision for
income
taxes, $0.3 million in non-cash accretion investment income and a provision
for
uncollectible accounts receivable of $0.2 million. 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 for certain non-cash items, including:
restricted stock expense, changes in derivative fair values, provision for
income taxes, accretion investment income, a provision for uncollectible
accounts receivable, and the cash gain on the sale of an equity security
was
$0.32 per common share for the three months ended September 30, 2006. For
more
information regarding FFO and adjusted FFO, see “Funds From Operations” section
below.
GAAP
NET INCOME
For
the
three-month period ended September 30, 2006, the Company reported net income
of
$14.6 million, net income available to common stockholders of $12.1 million,
or
$0.20 per diluted common share and operating revenues of $35.2 million. This
compares to net income of $5.7 million, net income available to common
stockholders of $3.2 million, or $0.06 per diluted common share, and operating
revenues of $27.1 million for the same period in 2005.
For
the
nine-month period ended September 30, 2006, the Company reported net income
of
$42.3 million, net income available to common stockholders of $34.8 million,
or
$0.60 per diluted common share and operating revenues of $99.8 million. This
compares to net income of $17.8 million, net income available to common
stockholders of $6.9 million, or $0.13 per diluted common share, and operating
revenues of $81.6 million for the same period in 2005.
THIRD
QUARTER 2006 HIGHLIGHTS AND OTHER RECENT DEVELOPMENTS
· On
August
1, 2006, the Company closed on $171 million of new investments yielding
10%.
· |
In
August, the Company sold its common stock investment in Sun Healthcare
Group (“Sun”) for $7.6 million of cash
proceeds.
|
· On
September 1, 2006, the Company closed on $25.0 million of investments yielding
over 10%.
· |
In
October, the Board of Directors increased the quarterly common dividend
per share by $0.01 to $0.25.
|
THIRD
QUARTER 2006 RESULTS
Operating
Revenues and Expenses
-
Operating revenues for the three months ended September 30, 2006 were $35.2
million. Operating expenses for the three months ended September 30, 2006
totaled $14.2 million, comprised of $8.4 million of depreciation and
amortization expense, $2.0 million of general and administrative expenses,
and
$3.6 million of restricted stock expense.
Other
Income and Expense
- Other
income and expense for the three months ended September 30, 2006 was a net
expense of $7.0 million and was primarily comprised of $11.2 million of interest
expense, $0.4 million of non-cash interest expense, $2.7 million of gain
on the
sale of Sun common stock and a $1.8 million increase in the fair value of
a
derivative.
Funds
From Operations
- For
the three months ended September 30, 2006, reportable FFO available to common
stockholders was $19.3 million, or $0.33 per common share, compared to $8.8
million, or $0.17 per common share, for the same period in 2005. The $19.3
million of FFO for the quarter includes $3.6 million of non-cash restricted
stock expense associated with the Company’s issuance of restricted stock and
unit grants to executive officers during 2004, a $2.7 million accounting
gain on
the sale of an equity security, a $1.8 million non-cash increase in the fair
value of a derivative, $0.6 million provision for income taxes, $0.3 million
of
non-cash accretion investment income and a provision for uncollectible accounts
receivable of $0.2 million. The $8.8 million of FFO for the three months
ended
September 30, 2005, includes a $5.5 million provision for impairment on real
estate properties and $0.3 million of non-cash restricted stock amortization
expense.
When
excluding the above mentioned non-cash or non-recurring items in 2006 and
2005,
adjusted FFO was $18.9 million, or $0.32 per common share for the three months
ended September 30, 2006, compared to $14.1 million, or $0.27 per common
share,
for the same period in 2005. For further information, see the attached “Funds
From Operations” schedule and notes.
PORTFOLIO
DEVELOPMENTS
Advocat
Inc.
- On
October 20, 2006 the Company restructured its relationship with Advocat (the
“Second Advocat Restructuring”) by entering into a Restructuring Stock Issuance
and Subscription Agreement with Advocat (the “2006 Advocat Agreement”). Pursuant
to the 2006 Advocat Agreement, the Company exchanged the Advocat Series B
preferred stock and subordinated note issued to the Company in November 2000
in
connection with a restructuring because Advocat was in default on its
obligations to the Company (the “Initial Advocat Restructuring”) for 5,000
shares of Advocat’s Series C non-convertible, redeemable (at the Company’s
option after September 30, 2010) preferred stock with a face value of
approximately $4.9 million and a dividend rate of 7% payable quarterly, and
a
secured non-convertible subordinated note in the amount of $2.5 million maturing
September 30, 2007 and bearing interest at 7% per annum. As part of the Second
Advocat Restructuring, the Company also amended its Consolidated Amended
and
Restated Master Lease by and between one of its subsidiaries, as lessor,
and a
subsidiary of Advocat, as lessee, to commence a new 12-year lease term through
September 30, 2018 (with a renewal option for an additional 12 year term)
and
Advocat has agreed to increase the master lease annual rent by approximately
$687,000 to approximately $14 million commencing on January 1,
2007.
The
Second Advocat Restructuring will be accounted for as a new lease in accordance
with FASB Statement No. 13, Accounting
for Leases
(“FAS
No. 13”) and FASB Technical Bulletin No. 88-1, Issues
Relating to Accounting for Leases
(“FASB
TB No. 88-1”). The fair value of the assets exchanged in the restructuring
(i.e., the Series B non-voting redeemable convertible preferred stock and
the
secured convertible subordinated note, with a fair value of $14.9 million
and
$2.5 million, respectively, at October 20, 2006) in excess of the fair value
of
the assets received (the Series C non-convertible redeemable preferred stock
and
the secured non-convertible subordinated note, with a fair value of $4.1
million
and $2.5 million, respectively, at October 20, 2006) will be recorded as
a lease
inducement asset of approximately $10.8 million in the fourth quarter of
2006.
The $10.8 million lease inducement asset will be
amortized as a reduction to rental income on a straight-line basis over the
term
of the new master lease. The exchange of securities will also result in a
gain
in the fourth quarter of 2006 of approximately $3.0 million representing:
(i)
the fair value of the secured convertible subordinated note of $2.5 million,
previously reserved; (ii) the realization of the gain on investments previously
classified as other comprehensive income of approximately $1.1 million relating
to the Series
B
non-voting redeemable convertible preferred stock; and (iii) a loss of
approximately $0.6 million resulting from the change in the fair value of
the
embedded derivative from September 30, 2006 to October 20, 2006.
Guardian
LTC Management, Inc.
- On
September 1, 2006, the Company completed a $25.0 million investment with
subsidiaries of Guardian LTC Management, Inc. (“Guardian”), an existing operator
of the Company. The transaction involved the purchase and leaseback of a
skilled
nursing facility (“SNF”) in Pennsylvania and termination of a purchase option on
a combination SNF and rehabilitation hospital in West Virginia owned by the
Company. The facilities were included in an existing master lease with Guardian
with an increase in contractual annual rent of approximately $2.6 million
in the
first year. This master lease now includes 17 facilities. In addition, the
master lease term was extended from October 2014 through August
2016.
In
accordance with FAS No. 13 and FAS TB No. 88-1, $19.2 million of the $25.0
million transaction amount will be accounted for as a lease inducement asset
and
is classified within accounts receivable - net on the Company’s consolidated
balance sheets. The lease inducement will be amortized as a reduction to
rental
income on a straight-line basis over the term of the new master lease. The
remaining $5.8 million will be allocated to the purchase of the Pennsylvania
SNF.
Sun
Healthcare Group, Inc. Common Stock - On
August
28, 2006, the Company sold its remaining 760,000 shares of Sun’s common stock
for net cash proceeds of approximately $7.6 million. The sale resulted in
an
accounting gain of approximately $2.7 million.
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 SNFs 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 in December of 2005. The Company used a combination of cash
on
hand and $150 million of credit facility borrowings to finance the Litchfield
transaction.
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 us and HQM. In addition, the 18 Nexion facilities were combined into
an
Amended and Restated Master Lease containing 22 facilities between us and
Nexion.
The
Company entered into a Master Lease, Assignment and Assumption Agreement
with
Litchfield relating to the six Sun facilities. These six facilities are
currently under a master lease that expires on September 30, 2007.
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 mortgage 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 the Haven entity into the Company’s financial statements. The consolidation
resulted in the following changes to the Company’s consolidated balance sheet as
of September 30, 2006: (1) an increase in total gross investments of $39.0
million; (2) an increase in accumulated depreciation of $1.2 million; (3)
an
increase in other long-term borrowings of $39.0 million; and (4) a reduction
of
$1.2 million in cumulative net earnings for the nine months ended September
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
October 24, 2006, the Company’s Board of Directors announced a common stock
dividend of $0.25 per share, an increase of $0.01 per common share compared
to
the prior quarter, which was paid November 15, 2006 to common stockholders
of
record on November 3, 2006.
Series
D Preferred Dividends - On
October 24, 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 November 3,
2006. The stockholders of record of the Series D Preferred Stock on November
3,
2006 were paid dividends in the amount of $0.52344
per
preferred share on November 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 August 1, 2006 through October 31, 2006.
2007
ADJUSTED FFO GUIDANCE
The
Company has increased its 2007 adjusted FFO guidance to be between $1.32
and
$1.36 per diluted share, compared to $1.21 and $1.26 per diluted share as
previously announced on October 24, 2006. The increase is primarily due to
the
straight-line rental recognition treatment of certain leases (see “Restatement
of Prior Financial Statements” section below).
The
Company's adjusted FFO guidance and related GAAP earnings projections for
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 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.
RESTATEMENT
OF PRIOR FINANCIAL STATEMENTS
The
Company’s Board of Directors, including its Audit Committee, concluded on
October 24, 2006, to restate the Company’s audited financial results as of
December 31, 2005 and 2004 and for the three years ended December 31, 2005,
2004
and 2003 and for other periods affected, including its unaudited financial
statements for each quarterly period in 2004, 2005 and 2006 as necessary
(the
“Restatement”). The Company has now completed the Restatement, which is
reflected in the restated financial statements included in the amendments
filed
today to the Company’s Annual Report on Form 10-K for the year ended December
31, 2005 and its Quarterly Reports on Form 10-Q for the three-month periods
ended March 31, 2006 and June 30, 2006.
The
Restatement reflects the following adjustments that affect the comparable
three-
and nine- month periods ended September 30, 2005:
1. |
The
Company recorded asset values for securities received from Advocat
(and
the increases therein) since the completion of the restructuring
of
Advocat’s obligations pursuant to leases and mortgages for the facilities
then operated by Advocat in 2000. These adjustments increased net
income
by $0.4 million and $0.8 million for the three and nine months ended
September 30, 2005, respectively. These adjustments increased total
assets
by $5.4 million as of December 31, 2005. Changes in the fair value
of the
securities not currently recognized in net income were reflected
in other
comprehensive income.
|
2. |
As
a result of the Company’s holdings of Advocat securities, the Company
recorded reserves related to a potential tax liability arising from
its
ownership of such securities. This tax liability along with related
interest expense had not been previously accrued for and this adjustment
decreased net income by $0.6 million and $1.8 million for the three
and
nine months ended September 30, 2005, respectively. The amount accrued
represents the estimated liability, which remains subject to final
resolution and therefore is subject to
change.
|
3. |
Subsequent
to October 25, 2006, the Company made a correction to its accounting
for
certain leases because these leases contain provisions (such as increases
in rent based on the lesser of a fixed amount or two times the Consumer
Price Index (“CPI”)) that require us to record rental income on a
straight-line basis subject to an appropriate evaluation of
collectibility. The Company had not previously recorded rental income
on
these leases on a straight-line basis. As a result of this adjustment,
the
Company’s net income increased by $0.8 million and $2.1 million for the
three and nine months ended September 30, 2005, respectively. In
addition,
net accounts receivable and retained earnings increased by $9.1 million
as
of December 31, 2005, to reflect the effects of this adjustment from
inception of the affected leases.
|
The
impact of the adjustments related to the Restatement for the years ended
December 31, 2003, 2004 and 2005 and for the three-month periods ended March
31,
2006 and June 30, 2006 are summarized below:
Increase
(Decrease) to Reported Net Income ($000’s)
|
||||||||||||||||
Year
ended December 31,
|
Three
Months Ended
|
|||||||||||||||
2003
|
2004
|
2005
|
March
31, 2006
|
June
30, 2006
|
||||||||||||
Net
Income, As Previously Reported
|
$
|
23,030
|
$
|
16,738
|
$
|
36,688
|
$
|
6,881
|
$
|
11,261
|
||||||
Adjustments:
|
||||||||||||||||
Advocat
restructuring:
|
||||||||||||||||
Other
investment income - preferred stock accretion and dividend
income
|
-
|
810
|
1,636
|
412
|
414
|
|||||||||||
Change
in fair value of derivatives
|
-
|
1,105
|
(16
|
)
|
2,434
|
5,474
|
||||||||||
Provision
for income taxes
|
(520
|
)
|
(393
|
)
|
(2,385
|
)
|
(549
|
)
|
(590
|
)
|
||||||
Revenues
- straight-line rent
|
1,121
|
1,886
|
2,830
|
997
|
931
|
|||||||||||
Total
Adjustments
|
$
|
601
|
$
|
3,408
|
$
|
2,065
|
$
|
3,294
|
$
|
6,229
|
||||||
Net
Income, As Restated
|
$
|
23,631
|
$
|
20,146
|
$
|
38,753
|
$
|
10,175
|
$
|
17,490
|
Additional
information about the decision to restate these financial statements can
be
found in the Company’s Current Report on Form 8-K, filed with the SEC on October
25, 2006.
In
November 2000, Advocat, an operator of various skilled nursing facilities
owned
by the Company or mortgaged to the Company, was in default on its obligations
to
the Company. As a result, the Company entered into the Initial Advocat
Restructuring, an agreement with Advocat with respect to the restructuring
of
Advocat's obligations pursuant to leases and mortgages for the facilities
then
operated by Advocat. As part of the Initial Advocat Restructuring in 2000,
Advocat issued to us (i) 393,658 shares of Advocat’s Series B non-voting,
redeemable (on or after September 30, 2007), convertible preferred stock,
which
was convertible into up to 706,576 shares of Advocat’s common stock
(representing 9.9% of the outstanding shares of Advocat’s common stock on a
fully diluted, as-converted basis and accruing dividends at 7% per annum),
and
(ii) a secured convertible subordinated note in the amount of $1.7 million
bearing interest at 7% per annum with a September 30, 2007 maturity.
Subsequent
to the Initial Advocat Restructuring, Advocat’s operations and financial
condition have improved and there has been a significant increase in the
market
value of Advocat’s common stock from approximately $0.31 per share at the time
of the Initial Advocat Restructuring to the closing price on October 20,
2006 of
$18.84. As a result of the significant increase in the value of the common
stock
underlying the Series B preferred stock of Advocat held by the Company, on
October 20, 2006 the Company entered into the Second Advocat Restructuring.
Management believes that certain of the terms of the Advocat Series B preferred
stock previously held by the Company could be interpreted as affecting its
compliance with federal income tax rules applicable to real estate investment
trusts (“REITs”) regarding related party tenant income as described
below.
In
2000
at the time of the Initial Advocat Restructuring, the Company determined
that no
value should be ascribed to the Advocat preferred stock and subordinated
note
and, as a result, no value was recorded on the Company’s financial statements at
that time or in any subsequent period. Management now believes that the
accounting treatment in previous periods was incorrect and, in addition to
the
related party tenant issues described below, the Restatement reflects the
appropriate carrying value (in accordance with FASB Statement No. 115,
Accounting
for Certain Investments in Debt and Equity Securities (“FAS
No.
115”)) of the Advocat preferred stock and an embedded derivative (in accordance
with FASB Statement No. 133, Accounting
for Derivative Instruments and Hedging Activities,
(“FAS
No. 133”)) in its restated balance sheets as of June 30, 2006 and December 31,
2005. In addition, in accordance with FASB Statement No. 114, Accounting
by Creditors for Impairment of a Loan
(“FAS
No. 114”), the Advocat subordinated note of $1.7 million was fully reserved at
September 30, 2006 and December 31, 2005, respectively.
The
market value for Advocat’s common stock has increased significantly since the
completion of the Initial Advocat Restructuring. In connection with exploring
the potential disposition of the Advocat Series B preferred stock as part
of the
Second Advocat Restructuring, the Company was advised by its tax counsel
that
due to the structure of the Initial Advocat Restructuring, Advocat may be
deemed
to be a “related party tenant” under applicable federal income tax rules and, in
such event, rental income from Advocat would not be qualifying income under
the
gross income tests that are applicable to REITs.
In
order
to maintain qualification as a REIT, the Company annually must satisfy certain
tests regarding the source of its gross income. The applicable federal income
tax rules provide a “savings clause” for REITs that fail to satisfy the REIT
gross income tests, if such failure is due to reasonable cause. A REIT that
qualifies for the savings clause will retain its REIT status but will pay
a tax
under section 857(b)(5) and related interest.
The
Company currently plans to submit to the IRS a request for a closing agreement
to resolve the “related party tenant” issue. While the Company believes there
are valid arguments that Advocat should not be deemed a “related party tenant,”
the matter is not free from doubt, and the Company believes it is in its
best
interest to request a closing agreement in order to resolve the matter, minimize
potential interest charges and obtain assurances regarding its continuing
REIT
status. By submitting a request for a closing agreement, the Company intends
to
establish that any failure to satisfy the gross income tests was due to
reasonable cause. In the event that it is determined that the "savings clause"
described above does not apply, the Company could be treated as having failed
to
qualify as a REIT for one or more taxable years. If the Company fails to
qualify
for taxation as a REIT for any taxable year, its income will be taxed at
regular
corporate rates, and it could be disqualified as a REIT for the following
four
taxable years.
As
noted
above, the Company has completed the Second Advocat Restructuring and has
been
advised by tax counsel that it will not receive any non-qualifying related
party
tenant income from Advocat in future fiscal years. Accordingly, the Company
does
not expect to incur tax expense associated with related party tenant income
in
future periods
commencing January 1, 2007. The Company will continue to accrue an income
tax
liability related to this matter during 2006.
Recording
of Rental Income
During
the course of preparing the Restatement, the Company determined that it should
correct its accounting for certain leases because these leases contain
provisions (such as increases in rent based on the lesser of a fixed amount
or
two times CPI) and FAS No. 13 and FAS TB No. 88-1 require that rental income
for
such leases should be recorded on a straight-line basis subject to an
appropriate evaluation of collectibility.
CONFERENCE
CALL
The
Company will be conducting a conference call on Friday, December 15, 2006,
at 11
a.m. EDT to review the Company’s 2006 third quarter results, impact of the
restatement 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, 2006, the Company owned
or held
mortgages on 239 SNFs and ALFs with approximately 27,446 beds located in
27
states and operated by 33 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) the Company’s ability to maintain its status as a real estate investment
trust and to reach a closing agreement with the Internal Revenue Service
with
respect to the related party tenant issues described in our Form 10-K/A filed
with the Securities and Exchange Commission on December 14, 2006, (viii)
the
impact of the material weakness identified in the management’s report on
internal control over financial reporting included in our Form 10-K/A, including
expenses that may be incurred in efforts to remediate such weakness and
potential additional costs in preparing and finalizing financial statements
in
view of such material weakness; and (viii) 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.
In
addition, the
information in this press release related to the Restatement of the Form
10-Q
for the period ended March 31, 2006 and Form 10-Q for the period ended June
30,
2006 (the “2006 Restatements”) remains subject to audit by the Company’s
independent auditors for the year ending December 31, 2006.
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)
September
30,
|
December
31,
|
||||||
2006
|
2005
|
||||||
(Unaudited)
|
(Restated)
|
||||||
ASSETS
|
|||||||
Real
estate properties
|
|||||||
Land
and buildings at cost
|
$
|
1,240,398
|
$
|
996,127
|
|||
Less
accumulated depreciation
|
(180,270
|
)
|
(157,255
|
)
|
|||
Real
estate properties - net
|
1,060,128
|
838,872
|
|||||
Mortgage
notes receivable - net
|
32,185
|
104,522
|
|||||
1,092,313
|
943,394
|
||||||
Other
investments - net
|
37,327
|
28,918
|
|||||
1,129,640
|
972,312
|
||||||
Assets
held for sale - net
|
737
|
1,243
|
|||||
Total
investments
|
1,130,377
|
973,555
|
|||||
Cash
and cash equivalents
|
—
|
3,948
|
|||||
Accounts
receivable - net
|
39,488
|
15,018
|
|||||
Other
assets
|
13,189
|
37,769
|
|||||
Total
assets
|
$
|
1,183,054
|
$
|
1,030,290
|
|||
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
|||||||
Revolving
line of credit
|
$
|
157,500
|
$
|
58,000
|
|||
Unsecured
borrowings
|
485,000
|
505,682
|
|||||
Discount
on unsecured borrowings - net
|
(265
|
)
|
(253
|
)
|
|||
Other
long-term borrowings
|
41,410
|
2,800
|
|||||
Accrued
expenses and other liabilities
|
27,813
|
19,563
|
|||||
Income
tax liabilities
|
5,038
|
3,299
|
|||||
Operating
liabilities for owned properties
|
98
|
256
|
|||||
Total
liabilities
|
716,594
|
589,347
|
|||||
Stockholders’
equity:
|
|||||||
Preferred
stock
|
118,488
|
118,488
|
|||||
Common
stock and additional paid-in-capital
|
695,948
|
662,440
|
|||||
Cumulative
net earnings
|
279,357
|
237,069
|
|||||
Cumulative
dividends paid
|
(585,397
|
)
|
(536,041
|
)
|
|||
Cumulative
dividends - redemption
|
(43,067
|
)
|
(43,067
|
)
|
|||
Accumulated
other comprehensive income
|
1,131
|
2,054
|
|||||
Total
stockholders’ equity
|
466,460
|
440,943
|
|||||
Total
liabilities and stockholders’ equity
|
$
|
1,183,054
|
$
|
1,030,290
|
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,
|
||||||||||||
2006
|
2005
(Restated
|
)
|
2006
|
2005
(Restated
|
)
|
||||||||
Revenues
|
|||||||||||||
Rental
income
|
$
|
33,153
|
$
|
24,858
|
$
|
93,056
|
$
|
70,329
|
|||||
Mortgage
interest income
|
1,054
|
1,221
|
3,392
|
4,417
|
|||||||||
Other
investment income - net
|
994
|
867
|
2,878
|
2,364
|
|||||||||
Miscellaneous
|
42
|
141
|
483
|
4,453
|
|||||||||
Total
operating revenues
|
35,243
|
27,087
|
99,809
|
81,563
|
|||||||||
Expenses
|
|||||||||||||
Depreciation
and amortization
|
8,360
|
6,182
|
23,414
|
17,872
|
|||||||||
General
and administrative
|
2,030
|
1,950
|
6,107
|
5,614
|
|||||||||
Restricted
stock expense
|
3,639
|
285
|
4,224
|
856
|
|||||||||
Provision
for impairment on real estate properties
|
-
|
3,072
|
-
|
3,072
|
|||||||||
Provision
for uncollectible mortgages, notes and accounts receivable
|
179
|
-
|
179
|
83
|
|||||||||
Leasehold
expiration expense
|
-
|
-
|
-
|
750
|
|||||||||
Total
operating expenses
|
14,208
|
11,489
|
33,924
|
28,247
|
|||||||||
Income
before other income and expense
|
21,035
|
15,598
|
65,885
|
53,316
|
|||||||||
Other
income (expense):
|
|||||||||||||
Interest
and other investment income
|
189
|
25
|
371
|
90
|
|||||||||
Interest
|
(11,190
|
)
|
(7,709
|
)
|
(30,246
|
)
|
(21,431
|
)
|
|||||
Interest
- amortization of deferred financing costs
|
(439
|
)
|
(539
|
)
|
(1,513
|
)
|
(1,570
|
)
|
|||||
Interest
- refinancing costs
|
-
|
-
|
(3,485
|
)
|
-
|
||||||||
Provision
for impairment on equity securities
|
-
|
-
|
-
|
(3,360
|
)
|
||||||||
Gain
on sale of equity securities
|
2,709
|
-
|
2,709
|
-
|
|||||||||
Change
in fair value of derivatives
|
1,764
|
(16
|
)
|
9,672
|
(427
|
)
|
|||||||
Total
other expense
|
(6,967
|
)
|
(8,239
|
)
|
(22,492
|
)
|
(26,698
|
)
|
|||||
Income
before gain on assets sold
|
14,068
|
7,359
|
43,393
|
26,618
|
|||||||||
Gain
from assets sold - net
|
1,188
|
-
|
1,188
|
-
|
|||||||||
Income
from continuing operations before income taxes
|
15,256
|
7,359
|
44,581
|
26,618
|
|||||||||
Provision
for income taxes
|
(600
|
)
|
(588
|
)
|
(1,739
|
)
|
(1,776
|
)
|
|||||
Income
from continuing operations
|
14,656
|
6,771
|
42,842
|
24,842
|
|||||||||
(Loss)
from discontinued operations
|
(33
|
)
|
(1,087
|
)
|
(554
|
)
|
(7,061
|
)
|
|||||
Net
income
|
14,623
|
5,684
|
42,288
|
17,781
|
|||||||||
Preferred
stock dividends
|
(2,480
|
)
|
(2,481
|
)
|
(7,442
|
)
|
(8,904
|
)
|
|||||
Preferred
stock conversion and redemption charges
|
-
|
-
|
-
|
(2,013
|
)
|
||||||||
Net
income available to common
|
$
|
12,143
|
$
|
3,203
|
$
|
34,846
|
$
|
6,864
|
|||||
Income
per common share:
|
|||||||||||||
Basic:
|
|||||||||||||
Income
from continuing operations
|
$
|
0.21
|
$
|
0.08
|
$
|
0.61
|
$
|
0.27
|
|||||
Net
income
|
$
|
0.21
|
$
|
0.06
|
$
|
0.60
|
$
|
0.13
|
|||||
Diluted:
|
|||||||||||||
Income
from continuing operations
|
$
|
0.20
|
$
|
0.08
|
$
|
0.61
|
$
|
0.27
|
|||||
Net
income
|
$
|
0.20
|
$
|
0.06
|
$
|
0.60
|
$
|
0.13
|
|||||
Dividends
declared and paid per common share
|
$
|
0.24
|
$
|
0.22
|
$
|
0.71
|
$
|
0.63
|
|||||
Weighted-average
shares outstanding, basic
|
59,021
|
51,187
|
58,203
|
51,050
|
|||||||||
Weighted-average
shares outstanding, diluted
|
59,446
|
51,479
|
58,407
|
51,386
|
|||||||||
Components
of other comprehensive income:
|
|||||||||||||
Net
income
|
$
|
14,623
|
$
|
5,684
|
$
|
42,288
|
$
|
17,781
|
|||||
Unrealized
gain on common stock investment
|
-
|
730
|
1,580
|
730
|
|||||||||
Reclassification
adjustment for gains on common stock investment
|
(1,740
|
)
|
-
|
(1,740
|
)
|
-
|
|||||||
Unrealized
loss on preferred stock investment
|
(172
|
)
|
(332
|
)
|
(763
|
)
|
(959
|
)
|
|||||
Total
comprehensive income
|
$
|
12,711
|
$
|
6,082
|
$
|
41,365
|
$
|
17,552
|
OMEGA
HEALTHCARE INVESTORS, INC.
FUNDS
FROM OPERATIONS
Unaudited
(In
thousands, except per share amounts)
Three
Months Ended
|
Nine
Months Ended
|
||||||||||||
September
30,
|
September
30,
|
||||||||||||
2006
|
2005
(Restated)
|
2006
|
2005
(Restated)
|
||||||||||
Net
income available to common stockholders
|
$
|
12,143
|
$
|
3,203
|
$
|
34,846
|
$
|
6,864
|
|||||
Add
back loss (deduct gain) from real estate dispositions(1)
|
(1,188
|
)
|
(710
|
)
|
(807
|
)
|
3,492
|
||||||
Sub-total
|
10,955
|
2,493
|
34,039
|
10,356
|
|||||||||
Elimination
of non-cash items included in net income:
|
|||||||||||||
Depreciation
and amortization(1)
|
8,362
|
6,275
|
23,432
|
19,068
|
|||||||||
Funds
from operations available to common stockholders
|
$
|
19,317
|
$
|
8,768
|
$
|
57,471
|
$
|
29,424
|
|||||
Weighted-average
common shares outstanding, basic
|
59,021
|
51,187
|
58,203
|
51,050
|
|||||||||
Assumed
restricted units
|
318
|
—
|
121
|
—
|
|||||||||
Effect
of restricted stock awards
|
86
|
111
|
63
|
73
|
|||||||||
Assumed
exercise of stock options
|
21
|
181
|
20
|
263
|
|||||||||
Weighted-average
common shares outstanding, diluted
|
59,446
|
51,479
|
58,407
|
51,386
|
|||||||||
Fund
from operations per share available to common
stockholders
|
$
|
0.33
|
$
|
0.17
|
$
|
0.98
|
$
|
0.57
|
|||||
Adjusted
funds from operations:
|
|||||||||||||
Funds
from operations available to common stockholders
|
$
|
19,317
|
$
|
8,768
|
$
|
57,471
|
$
|
29,424
|
|||||
Deduct
gain from sale of Sun common stock
|
(2,709
|
)
|
—
|
(2,709
|
)
|
—
|
|||||||
Deduct
non-cash increase in fair value of Advocat derivative
|
(1,764
|
)
|
16
|
(9,672
|
)
|
427
|
|||||||
Deduct
prepayment penalty/administration fee
|
—
|
—
|
—
|
(4,059
|
)
|
||||||||
Deduct
Advocat non-cash accretion investment income
|
(329
|
)
|
(410
|
)
|
(1,155
|
)
|
(1,225
|
)
|
|||||
Add
back one-time non-cash interest refinancing expense
|
—
|
—
|
3,485
|
—
|
|||||||||
Add
back non-cash restricted stock expense
|
3,639
|
285
|
4,224
|
856
|
|||||||||
Add
back non-cash preferred stock conversion/redemption charges
|
—
|
—
|
—
|
2,013
|
|||||||||
Add
back leasehold expiration expense
|
—
|
—
|
—
|
750
|
|||||||||
Add
back non-cash provision for impairments on real estate
properties(1)
|
—
|
5,454
|
121
|
9,154
|
|||||||||
Add
back non-cash provision for impairments on equity securities
|
—
|
—
|
—
|
3,360
|
|||||||||
Add
back non-cash provisions for uncollectible mortgages, notes and
accounts
receivable
|
179
|
—
|
179
|
83
|
|||||||||
Add
back non-cash provision for income taxes
|
600
|
—
|
1,739
|
—
|
|||||||||
Adjusted
funds from operations available to common
stockholders
|
$
|
18,933
|
$
|
14,113
|
$
|
53,683
|
$
|
40,783
|
(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 reconciliation of our guidance regarding 2007
FFO and
Adjusted FFO to net income available to common stockholders:
2007
Projected
|
||||||||||
Per
diluted share:
|
||||||||||
Net
income available to common stockholders
|
$
|
0.76
|
−
|
$
|
0.80
|
|||||
Adjustments:
|
||||||||||
Depreciation
and amortization
|
0.56
|
−
|
0.56
|
|||||||
Funds
from operations available to common stockholders
|
$
|
1.32
|
−
|
$
|
1.36
|
|||||
Adjustments:
|
||||||||||
Restricted
stock
expense
|
0.00
|
−
|
0.00
|
|||||||
Adjusted
funds from operations available to common
stockholders
|
$
|
1.32
|
−
|
$
|
1.36
|
The
following table summarizes the results of operations of assets held for sale
and
facilities sold during the three and nine months ended September 30, 2006
and
2005, respectively.
Three
Months Ended
|
Nine
Months Ended
|
||||||||||||
September
30,
|
September
30,
|
||||||||||||
2006
|
2005
|
2006
|
2005
|
||||||||||
(In
thousands)
|
|||||||||||||
Revenues
|
|||||||||||||
Rental
income
|
$
|
—
|
$
|
678
|
$
|
—
|
$
|
3,685
|
|||||
Other
income
|
—
|
—
|
—
|
24
|
|||||||||
Subtotal
revenues
|
—
|
678
|
—
|
3,709
|
|||||||||
Expenses
|
|||||||||||||
Depreciation
and amortization
|
2
|
93
|
18
|
1,196
|
|||||||||
General
and administrative
|
31
|
—
|
34
|
—
|
|||||||||
Provision
for impairment
|
—
|
2,382
|
121
|
6,082
|
|||||||||
Subtotal
expenses
|
33
|
2,475
|
173
|
7,278
|
|||||||||
Income
(loss) before loss on sale of assets
|
(33
|
)
|
(1,797
|
)
|
(173
|
)
|
(3,569
|
)
|
|||||
Gain
(loss) on assets sold - net
|
—
|
710
|
(381
|
)
|
(3,492
|
)
|
|||||||
(Loss)
from discontinued operations
|
$
|
(33
|
)
|
$
|
(1,087
|
)
|
$
|
(554
|
)
|
$
|
(7,061
|
)
|
The
following tables present selected portfolio information, including operator
and
geographic concentrations, and revenue maturities for the period ending
September 30, 2006.
Portfolio
Composition ($000's)
|
||||||||||||||||
Balance
Sheet Data
|
#
of Properties
|
#
Beds
|
Investment
|
%
Investment
|
||||||||||||
Real
Property(1)(2)
|
229
|
26,182
|
$
|
1,259,647
|
98
|
%
|
||||||||||
Loans
Receivable
|
10
|
1,264
|
32,185
|
2
|
%
|
|||||||||||
Total
Investments
|
239
|
27,446
|
$
|
1,291,832
|
100
|
%
|
||||||||||
(1)
Excludes two held for sale facilities and includes $19.2 million
for lease
inducement.
(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 (1)
|
229
|
26,782
|
$
|
1,236,007
|
96
|
%
|
$
|
46
|
||||||||
Assisted
Living Facilities
|
8
|
494
|
32,390
|
2
|
%
|
66
|
||||||||||
Rehab
Hospitals
|
2
|
170
|
23,435
|
2
|
%
|
138
|
||||||||||
239
|
27,446
|
$
|
1,291,832
|
100
|
%
|
$
|
47
|
|||||||||
(1)
Investment amount includes $19.2 million for lease
inducement.
|
Revenue
Composition ($000's)
|
|||||||||||||
Revenue
by Investment Type
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||
September
30, 2006
|
September
30, 2006
|
||||||||||||
Rental
Property (1)
|
$
|
33,153
|
94
|
%
|
$
|
93,056
|
94
|
%
|
|||||
Mortgage
Notes
|
1,054
|
3
|
%
|
3,392
|
3
|
%
|
|||||||
Other
Investment Income
|
994
|
3
|
%
|
2,878
|
3
|
%
|
|||||||
$
|
35,201
|
100
|
%
|
$
|
99,326
|
100
|
%
|
||||||
Revenue
by Facility Type
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||
September
30, 2006
|
September
30, 2006
|
||||||||||||
Assisted
Living Facilities
|
$
|
506
|
1
|
%
|
$
|
1,327
|
1
|
%
|
|||||
Skilled
Nursing Facilities (1)
|
33,701
|
96
|
%
|
95,121
|
96
|
%
|
|||||||
Other
|
994
|
3
|
%
|
2,878
|
3
|
%
|
|||||||
$
|
35,201
|
100
|
%
|
$
|
99,326
|
100
|
%
|
||||||
(1)
Revenue includes $0.2 million reduction for lease
inducement.
|
Operator
Concentration ($000's)
|
||||||||||
Concentration
by Investment
|
#
of Properties
|
Investment
|
%
Investment
|
|||||||
Sun
Healthcare Group, Inc.
|
38
|
$
|
210,314
|
16
|
%
|
|||||
Communicare
|
19
|
192,163
|
15
|
%
|
||||||
Haven
|
15
|
117,230
|
9
|
%
|
||||||
Advocat,
Inc.
|
33
|
108,021
|
8
|
%
|
||||||
Guardian
(1)
|
17
|
105,230
|
8
|
%
|
||||||
HQM
|
13
|
98,369
|
8
|
%
|
||||||
Remaining
Operators
|
104
|
460,505
|
36
|
%
|
||||||
239
|
$
|
1,291,832
|
100
|
%
|
||||||
(1)
Investment amount includes $19.2 million for lease
inducement.
|
Geographic
Concentration ($000's)
|
||||||||||
Concentration
by Region
|
#
of Properties
|
Investment
|
%
Investment
|
|||||||
South
(1)
|
113
|
$
|
522,130
|
41
|
%
|
|||||
Midwest
|
55
|
337,520
|
26
|
%
|
||||||
Northeast
|
37
|
259,022
|
20
|
%
|
||||||
West
|
34
|
173,160
|
13
|
%
|
||||||
239
|
$
|
1,291,832
|
100
|
%
|
Concentration
by State
|
#
of Properties
|
Investment
|
%
Investment
|
|||||||
Ohio
|
37
|
$
|
278,142
|
22
|
%
|
|||||
Florida
|
25
|
171,995
|
13
|
%
|
||||||
Pennsylvania
|
17
|
110,100
|
9
|
%
|
||||||
Texas
|
24
|
83,858
|
6
|
%
|
||||||
California
|
15
|
60,665
|
5
|
%
|
||||||
Remaining
States (1)
|
121
|
587,072
|
45
|
%
|
||||||
239
|
$
|
1,291,832
|
100
|
%
|
||||||
(1)
Investment amount includes $19.2 million for lease
inducement.
|
Revenue
Maturities ($000's)
|
||||||||||||||||
Operating
Lease Expirations & Loan Maturities
|
Year
|
Current
Lease Revenue(1
|
)
|
Current
Interest Revenue(1
|
)
|
Lease
and Interest Revenue
|
|
%
|
||||||||
2006
|
$
|
-
|
$
|
-
|
$
|
-
|
0.0
|
%
|
||||||||
2007
|
1,684
|
18
|
1,702
|
1.4
|
%
|
|||||||||||
2008
|
1,024
|
-
|
1,024
|
0.8
|
%
|
|||||||||||
2009
|
-
|
-
|
-
|
0.0
|
%
|
|||||||||||
2010
|
11,011
|
1,451
|
12,462
|
9.9
|
%
|
|||||||||||
Thereafter
|
108,032
|
2,206
|
110,238
|
87.9
|
%
|
|||||||||||
$
|
121,751
|
$
|
3,675
|
$
|
125,426
|
100.0
|
%
|
|||||||||
Note:
(1) Based on '06 contractual rents & interest (assumes no annual
escalators)
|
||||||||||||||||
Selected
Facility Data
|
||||||||||||||||
TTM
ending 6/30/06
|
Coverage
Data
|
|||||||||||||||
%
Payor Mix
|
Before
|
After
|
||||||||||||||
Census
|
Private
|
Medicare
|
Mgmt.
Fees
|
Mgmt.
Fees
|
||||||||||||
All
Healthcare Facilities
|
82.6
|
%
|
11.8
|
%
|
13.9
|
%
|
2.1
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 September 30, 2006.
Current
Capitalization ($000's)
|
|||||||
Outstanding
Balance
|
%
|
||||||
Borrowings
Under Bank Lines
|
$
|
157,500
|
13.7
|
%
|
|||
Long-Term
Debt Obligations (1)
|
526,410
|
45.8
|
%
|
||||
Stockholder's
Equity
|
466,460
|
40.5
|
%
|
||||
Total
Book Capitalization
|
$
|
1,150,370
|
100.0
|
%
|
|||
(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.
|
|||||||
Leverage
& Performance Ratios
|
|||||||
Debt
/ Total Book Cap
|
59.5
|
%
|
|||||
Debt
/ Total Market Cap
|
40.2
|
%
|
|||||
Interest
Coverage:
|
|||||||
3rd
quarter 2006
|
2.87
x
|
Debt
Maturities ($000's)
|
Secured
Debt
|
||||||||||||||||||
Year
|
Lines
of Credit(1
|
)
|
Haven
FIN-46 Consolidation
|
Other
|
Senior
Notes
|
Total
|
|||||||||||||
2006
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
|||||||||
2007
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||
2008
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||
2009
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||
Thereafter
|
200,000
|
39,000
|
2,410
|
485,000
|
726,410
|
||||||||||||||
$
|
200,000
|
$
|
39,000
|
$
|
2,410
|
$
|
485,000
|
$
|
726,410
|
||||||||||
Note:
(1) Reflected at 100% capacity.
|
|||||||||||||||||||
The
following table presents investment activity for the three- and nine-month
periods ending September 30, 2006.
Investment
Activity ($000's)
|
|||||||||||||
Three
Months Ended
|
Nine
Months Ended
|
||||||||||||
September
30, 2006
|
September
30, 2006
|
||||||||||||
$
Amount
|
%
|
$
|
Amount
|
|
%
|
||||||||
Funding
by Investment Type:
|
|||||||||||||
Real
Property (1)
|
$
|
196,000
|
100
|
%
|
$
|
196,000
|
100
|
%
|
|||||
Mortgages
|
-
|
0
|
%
|
-
|
0
|
%
|
|||||||
Other
|
-
|
0
|
%
|
-
|
0
|
%
|
|||||||
Total
|
$
|
196,000
|
100
|
%
|
$
|
196,000
|
100
|
%
|
|||||
(1)
Investment amount includes $19.2 M for lease
inducement.
|