8-K: Current report filing
Published on April 23, 2008
PRESS
RELEASE – FOR IMMEDIATE RELEASE
OMEGA
ANNOUNCES FIRST QUARTER 2008 FINANCIAL RESULTS;
ADJUSTED
FFO OF $0.36 PER SHARE; $123 MILLION OF NEW INVESTMENTS
TIMONIUM, MARYLAND – April 23, 2008
– Omega Healthcare Investors, Inc. (NYSE:OHI) today announced its results
of operations for the quarter ended March 31, 2008. The Company also
reported Funds From Operations (“FFO”) available to common stockholders for the
three months ended March 31, 2008 of $23.7 million or $0.34 per common
share. The $23.7 million of FFO available to common stockholders for
the first quarter includes a $1.5 million non-cash provision for impairment
charge, collection of a claim associated with a prior operator’s past due rental
obligations of $0.7 million, $0.5 million of non-cash restricted stock expense
and $45 thousand of non-cash consolidation adjustments due to Financial
Accounting Standards Board Interpretation No. 46R, Consolidation of Variable Interest
Entities (“FIN 46R”). 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
was $0.36 per common share for the three months ended March 31,
2008. Adjusted FFO is a non-GAAP financial measure, which excludes
the impact of certain non-cash items and certain items of revenue or expenses,
including: a non-cash provision for impairment, settlement of prior operator’s
past due obligation, FIN 46R consolidation adjustments and restricted stock
expense. For more information regarding FFO and adjusted FFO, see the
“Funds From Operations” section below.
GAAP NET
INCOME
For the
three-month period ended March 31, 2008, the Company reported net income of
$17.2 million, net income available to common stockholders of $14.8 million, or
$0.21 per diluted common share and operating revenues of $40.9
million. This compares to net income of $20.7 million, net income
available to common stockholders of $18.2 million, or $0.30 per diluted common
share, and operating revenues of $42.6 million for the same period in
2007.
The
decreases in net income, operating revenues and net income available to common
stockholders were due primarily to the impact of an allowance adjustment of $5.0
million, or $0.08 per common share, with respect to straight-line rent
recognition recorded in the first quarter of 2007 and a $1.5 million provision
for impairment charge recorded in 2008; partially offset by revenue associated
with $40 million of acquisitions completed in the third quarter of 2007 and $5
million of acquisitions completed in the first quarter of 2008.
FIRST QUARTER 2008
HIGHLIGHTS AND OTHER RECENT DEVELOPMENTS
|
·
|
On
April 18, 2008, the Company closed on $123 million of new investments
yielding approximately 10.5%.
|
|
·
|
In
April, the Company increased the quarterly common dividend per share by
$0.01 to $0.30 per share.
|
|
·
|
On
January 22, 2008, the Company purchased General Electric Capital
Corporation’s $39 million mortgage loan on seven skilled nursing
facilities (“SNFs”) operated by Haven Eldercare, LLC
(“Haven”).
|
|
·
|
On
January 17, 2008, the Company closed on a $5.2 million new investment
yielding 10%.
|
FIRST QUARTER 2008
RESULTS
Operating
Revenues and Expenses – Operating revenues for the three months ended
March 31, 2008 were $40.9 million. The $40.9 million included
collection of a claim associated with a prior operator’s past due rental
obligations of $0.7 million. Operating expenses for the three months
ended March 31, 2008 totaled $14.0 million, comprised of $9.4 million of
depreciation and amortization expense, $2.6 million of general and
administrative expenses, a $1.5 million non-cash provision for impairment charge
and $0.5 million of restricted stock expense.
Other Income and
Expense – Other income and expense for the three months ended March 31,
2008 was a net expense of $10.1 million and was primarily comprised of $9.7
million of interest expense and $0.5 million of amortization of deferred
financing costs.
Funds From
Operations – For the three months ended March 31, 2008, reportable FFO
available to common stockholders was $23.7 million, or $0.34 per common share,
compared to $25.4 million, or $0.42 per common share, for the same period in
2007. The $23.7 million of FFO for the quarter includes the impact
of: i) a $1.5 million non-cash provision for impairment; ii) $0.7 million
collected from a claim associated with a prior operator’s past due rental
obligations; and iii) $0.5 million of non-cash restricted stock expense and
$45,000 of non-cash FIN 46R consolidation adjustments.
The $25.4
million of FFO for the three months ended March 31, 2007, includes the impact
of: i) a $5.0 million adjustment to the allowance for straight-line revenue
(resulting in an increase in revenue for the first quarter of 2007); ii) $0.1
million of non-cash FIN 46R consolidation adjustments; and iii)
$26,000 of non-cash restricted stock expense.
When
excluding the above mentioned items in 2008 and 2007, adjusted FFO was $25.0
million, or $0.36 per common share, for the three months ended March 31, 2008,
compared to $20.3 million, or $0.34 per common share, for the same period in
2007. For further information, see the attached “Funds From
Operations” schedule and notes.
PORTFOLIO
DEVELOPMENTS
CommuniCare
Health Services – On April 18, 2008, the Company completed approximately
$123 million of combined new investments with affiliates of CommuniCare Heath
Services (“CommuniCare”), an existing operator. Effective April 18,
2008, the Company purchased from several unrelated third parties seven (7) SNFs,
one (1) assisted living facility and one (1) rehabilitation hospital, all
located in Ohio, totaling 709 beds for a total investment of $48
million. The facilities were added into an existing master lease
(“Master Lease”) with CommuniCare. Annualized cash
rent increasing by approximately $4.7 million, subject to annual
escalators, and two ten-year renewal options. The term of the Master
Lease was extended to April 30, 2018.
Also on
April 18, 2008, and simultaneous with the close of the amended CommuniCare
Master Lease, the Company entered into a first mortgage loan with CommuniCare in
the amount of $74.9 million (the “Loan”). The Loan matures on April
30, 2018 and carries an interest rate of 11% per year. CommuniCare used the
proceeds of the Loan to acquire seven (7) SNFs located in Maryland, totaling 965
beds from several unrelated third parties. The Loan is secured by a
lien on the seven (7) facilities. At the closing, $4.9 million of
Loan proceeds were escrowed pending the acquisition of an additional 90 bed SNF,
also located in Maryland. The facility will be acquired by
CommuniCare within eight months upon the satisfaction of certain contingencies,
including the granting of a lien on such facility to secure the
Loan. If the additional facility in not acquired, CommuniCare will be
obligated to re-pay the $4.9 million of escrowed Loan proceeds.
Haven Eldercare,
LLC – On
January 22, 2008, the Company completed a transaction with General Electric
Capital Corporation to purchase an existing $39 million mortgage due October
2012 on seven Haven SNFs. The Company has an existing $23 million second
mortgage on these seven facilities. The Company now has a $62 million
combined mortgage on the seven facilities. The Company also has a
purchase option on the seven facilities that would allow the Company to acquire
the fee simple interest in the facilities. If the Company exercises
the purchase option, the seven facilities would be combined with an existing
eight facility master lease. The borrowers and guarantors under the
mortgage, and the lessee, sublessees and guarantors in respect of the master
lease are all debtors-in-possession in chapter 11 proceedings being jointly
administered in the United States Bankruptcy Court for the District of
Connecticut, New Haven Division.
On
January 23, 2008, Haven entered into a debtors-in-possession financing agreement
with the Company and one other financial institution, in which the Company’s
participation is approximately $5.0 million of a $50 million total
commitment.
As of the
date of this release, Haven is current on all post-petition revenue obligations
owed to the Company.
Sun Healthcare
Group, Inc. – On
February 1, 2008, the Company amended its master lease with Sun Healthcare
Group, Inc. and certain of its affiliates (“Sun”) primarily to: i) consolidate
three existing master leases between the Company and Sun into one master lease;
ii) on facilities acquired in August 2006, increased the annual cash rent by
$1.9 million with a lease term through September 2017; and iii) allow the
Company to sell two rehabilitation hospitals currently operated by
Sun. As of March 31, 2008, the net book value of these two facilities
was approximately $16.4 million and was reclassified to “Assets held for sale –
net” on the Company’s consolidated balance sheets.
Alpha Health Care
Properties, LLC – On
January 17, 2008, the Company purchased one SNF for $5.2 million from an
unrelated third party and leased the facility to Alpha Health Care Properties,
LLC (“Alpha”), an existing tenant of the Company. The facility was
added to Alpha’s existing master lease and provides for an additional $0.5
million of annual cash rent to the Company.
Advocat Inc.
– During
the first quarter of 2008, the Company amended its master lease with Advocat
Inc. (“Advocat”) to allow for the construction of a new facility to replace an
existing facility currently operated by Advocat. Upon completion
(estimated to be in mid-2009), Advocat’s annual cash rent will increase by
approximately $0.7 million. As a result of the Company’s plans to
replace an existing facility, the Company recorded a $1.5 million provision for
impairment loss during the first quarter of 2008.
Asset Sales
– In two separate
transactions during the first quarter of 2008, the Company sold individual
facilities that were classified on the Company’s December 31, 2007 consolidated
balance sheet as assets held for sale with a net book value of approximately
$2.5 million. The Company received gross cash proceeds of
approximately $3.0 million and recorded an accounting gain of approximately $0.5
million.
DIVIDENDS
Common Dividends
– On April 16, 2008, the Company’s Board of Directors announced a common
stock dividend of $0.30 per share to be paid May 15, 2008 to common stockholders
of record on April 30, 2008. At the date of this release, the Company
had approximately 69 million outstanding common shares.
Series D
Preferred Dividends –
On April 16, 2008, the Company’s Board of Directors declared the regular
quarterly dividends for the Company’s 8.375% Series D Cumulative Redeemable
Preferred Stock (“Series D Preferred Stock”) to stockholders of record on April
30, 2008. The stockholders of record of the Series D Preferred Stock
on April 30, 2008 will be paid dividends in the amount of $0.52344 per preferred
share on May 15, 2008. 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, 2008 through April 30, 2008.
2008 ADJUSTED FFO GUIDANCE
INCREASED
The
Company has increased its 2008 adjusted FFO available to common stockholders
guidance from a range of $1.41 to $1.43 per common share to a range of $1.49 to
$1.55 per common share.
The
Company's adjusted FFO guidance for 2008 excludes the future impacts of
acquisitions, gains and losses from the sale of assets, additional divestitures,
certain 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 adjusted 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. Without limiting the generality of the
foregoing, the completion of acquisitions, divestitures, capital and financing
transactions, variations in restricted stock amortization expense, and the
factors identified under the factors identified below may cause actual results
to vary materially from our current expectations. There can be no assurance that
the Company will achieve its projected results.
ANNUAL
MEETING
As
previously announced on January 17, 2008, the Company's 2008 Annual Meeting of
Stockholders will be held on Thursday, May 22, 2008, at 10:00 a.m., local time,
at the Crowne Plaza, Baltimore-North, 2004 Greenspring Drive, Timonium,
Maryland. Stockholders of record as of the close of business on April 14, 2008
will be entitled to receive notice of and to participate at the 2008 Annual
Meeting of Stockholders.
CONFERENCE
CALL
The
Company will be conducting a conference call on Wednesday, April 23, 2008, at 10
a.m. EDT to review the Company’s 2008 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, 2008, the Company owned
or held mortgages on 235 SNFs and assisted living facilities with approximately
27,209 beds located in 28 states and operated by 26 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) the Company’s ability to maintain
its credit ratings; (vii) competition in the financing of healthcare facilities;
(viii) the Company’s ability to maintain its status as a real estate investment
trust; (ix) uncertainties relating to Haven’s bankruptcy process, including the
ability of the debtors to accept or reject leases and the sufficiency of
proceeds to be received in the sale of Haven; and (x) 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.
OMEGA
HEALTHCARE INVESTORS, INC.
CONSOLIDATED
BALANCE SHEETS
(in
thousands)
|
March
31,
|
December
31,
|
|||||||
|
2008
|
2007
|
|||||||
|
(Unaudited)
|
(Audited)
|
|||||||
|
ASSETS
|
||||||||
|
Real
estate properties
|
||||||||
|
Land and
buildings
|
$ | 1,259,581 | $ | 1,274,722 | ||||
|
Less accumulated
depreciation
|
(222,998 | ) | (221,366 | ) | ||||
|
Real estate properties –
net
|
1,036,583 | 1,053,356 | ||||||
|
Mortgage notes receivable –
net
|
31,505 | 31,689 | ||||||
| 1,068,088 | 1,085,045 | |||||||
|
Other
investments – net
|
15,969 | 13,683 | ||||||
| 1,084,057 | 1,098,728 | |||||||
|
Assets
held for sale – net
|
16,746 | 2,870 | ||||||
|
Total
investments
|
1,100,803 | 1,101,598 | ||||||
|
Cash
and cash equivalents
|
1,516 | 1,979 | ||||||
|
Restricted
cash
|
3,754 | 2,104 | ||||||
|
Accounts
receivable – net
|
65,297 | 64,992 | ||||||
|
Other
assets
|
12,357 | 11,614 | ||||||
|
Total assets
|
$ | 1,183,727 | $ | 1,182,287 | ||||
|
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
||||||||
|
Revolving
line of credit
|
$ | 82,000 | $ | 48,000 | ||||
|
Unsecured
borrowings – net
|
485,000 | 485,000 | ||||||
|
Discount
on unsecured borrowings – net
|
(290 | ) | (286 | ) | ||||
|
Other
long–term borrowings
|
1,995 | 40,995 | ||||||
|
Accrued
expenses and other liabilities
|
25,460 | 22,378 | ||||||
|
Income
tax liabilities
|
73 | 73 | ||||||
|
Total
liabilities
|
594,238 | 596,160 | ||||||
|
Stockholders’
equity:
|
||||||||
|
Preferred
stock
|
118,488 | 118,488 | ||||||
|
Common
stock and additional paid-in-capital
|
841,303 | 832,736 | ||||||
|
Cumulative
net earnings
|
379,374 | 362,140 | ||||||
|
Cumulative
dividends paid
|
(749,676 | ) | (727,237 | ) | ||||
|
Total stockholders’
equity
|
589,489 | 586,127 | ||||||
|
Total liabilities and
stockholders’ equity
|
$ | 1,183,727 | $ | 1,182,287 | ||||
OMEGA
HEALTHCARE INVESTORS, INC.
CONSOLIDATED
STATEMENTS OF OPERATIONS
Unaudited
(in
thousands, except per share amounts)
|
Three
Months Ended
|
||||||||
|
March
31,
|
||||||||
|
2008
|
2007
|
|||||||
|
Revenues
|
||||||||
|
Rental
income
|
$ | 38,013 | $ | 40,832 | ||||
|
Mortgage interest
income
|
979 | 1,009 | ||||||
|
Other investment income –
net
|
636 | 645 | ||||||
|
Miscellaneous
|
1,238 | 137 | ||||||
|
Total
operating
revenues
|
40,866 | 42,623 | ||||||
|
Expenses
|
||||||||
|
Depreciation and
amortization
|
9,396 | 8,788 | ||||||
|
General and
administrative
|
2,568 | 2,547 | ||||||
|
Restricted stock
expense
|
526 | 26 | ||||||
|
Impairment loss on real estate
properties
|
1,514 | — | ||||||
|
Total
operating
expenses
|
14,004 | 11,361 | ||||||
|
Income
before other income and
expense
|
26,862 | 31,262 | ||||||
|
Other
income (expense):
|
||||||||
|
Interest
income
|
65 | 40 | ||||||
|
Interest
|
(9,685 | ) | (11,844 | ) | ||||
|
Interest – amortization of
deferred financing
costs
|
(500 | ) | (459 | ) | ||||
|
Total
other
expense
|
(10,120 | ) | (12,263 | ) | ||||
|
Income
before gain on assets
sold
|
16,742 | 18,999 | ||||||
|
Gain
on assets sold –
net
|
46 | — | ||||||
|
Income
from continuing
operations
|
16,788 | 18,999 | ||||||
|
Discontinued
operations
|
446 | 1,660 | ||||||
|
Net
income
|
17,234 | 20,659 | ||||||
|
Preferred
stock
dividends
|
(2,481 | ) | (2,481 | ) | ||||
|
Net
income available to
common
|
$ | 14,753 | $ | 18,178 | ||||
|
Income
per common share:
|
||||||||
|
Basic:
|
||||||||
|
Income from continuing
operations
|
$ | 0.21 | $ | 0.27 | ||||
|
Net income available to
common
|
$ | 0.21 | $ | 0.30 | ||||
|
Diluted:
|
||||||||
|
Income from continuing
operations
|
$ | 0.21 | $ | 0.27 | ||||
|
Net income available to
common
|
$ | 0.21 | $ | 0.30 | ||||
|
Dividends
declared and paid per common
share
|
$ | 0.29 | $ | 0.26 | ||||
|
Weighted-average
shares outstanding,
basic
|
68,680 | 60,094 | ||||||
|
Weighted-average
shares outstanding,
diluted
|
68,747 | 60,118 | ||||||
|
Components
of other comprehensive income:
|
||||||||
|
Net
income
|
$ | 17,234 | $ | 20,659 | ||||
|
Total
comprehensive
income
|
$ | 17,234 | $ | 20,659 | ||||
OMEGA
HEALTHCARE INVESTORS, INC.
FUNDS
FROM OPERATIONS
Unaudited
(In
thousands, except per share amounts)
|
Three
Months Ended
|
||||||||
|
March
31,
|
||||||||
|
2008
|
2007
|
|||||||
|
Net income
available to common stockholders
|
$ | 14,753 | $ | 18,178 | ||||
|
Deduct gain from real estate
dispositions (1)
|
(477 | ) | (1,597 | ) | ||||
|
Sub-total
|
14,276 | 16,581 | ||||||
|
Elimination of non-cash items
included in net income:
|
||||||||
|
Depreciation and amortization
(1)
|
9,396 | 8,799 | ||||||
|
Funds
from operations available to common stockholders
|
$ | 23,672 | $ | 25,380 | ||||
|
Weighted-average
common shares outstanding, basic
|
68,680 | 60,094 | ||||||
|
Effect of restricted stock
awards
|
56 | — | ||||||
|
Assumed exercise of stock
options
|
11 | 24 | ||||||
|
Weighted-average
common shares outstanding, diluted
|
68,747 | 60,118 | ||||||
|
Funds
from operations per share available to common stockholders
|
$ | 0.34 | $ | 0.42 | ||||
|
Adjusted
funds from operations:
|
||||||||
|
Funds from operations available
to common stockholders
|
$ | 23,672 | $ | 25,380 | ||||
|
Deduct Advocat straight-line
valuation allowance adjustment
|
— | (5,040 | ) | |||||
|
Deduct FIN 46R
adjustment
|
(45 | ) | (76 | ) | ||||
|
Deduct collection of prior
operator’s past due rental obligation
|
(650 | ) | — | |||||
|
Add back non-cash provision for
impairments on real estate properties(1)
|
1,514 | — | ||||||
|
Add back non-cash restricted
stock expense
|
526 | 26 | ||||||
|
Adjusted
funds from operations available to common stockholders
|
$ | 25,017 | $ | 20,290 | ||||
(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 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. 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.
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
Company uses FFO as one of several criteria to measure the 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.
Adjusted
FFO is calculated as FFO available to common stockholders less non-cash
stock-based compensation and one-time revenue and expense items. The
Company believes that adjusted FFO provides an enhanced measure of the operating
performance of the Company’s core portfolio as a REIT. The Company's
computation of adjusted FFO is not comparable to the NAREIT definition of FFO or
to similar measures reported by other REITs, but the Company believes it is an
appropriate measure for this Company.
The
following table presents a reconciliation of our guidance regarding 2008 FFO and
Adjusted FFO to net income available to common stockholders:
|
2008
Projected
|
||||||||||||
|
Per
diluted share:
|
||||||||||||
|
Net
income available to common stockholders
|
$ | 0.80 | − | $ | 0.86 | |||||||
|
Adjustments:
|
||||||||||||
|
Depreciation and
amortization
|
0.64 | − | 0.64 | |||||||||
|
Funds
from operations available to common stockholders
|
$ | 1.44 | − | $ | 1.50 | |||||||
|
Adjustments:
|
||||||||||||
|
One-time revenue
|
(0.01 | ) | − | (0.01 | ) | |||||||
|
Provision for impairment of real
estate assets
|
0.03 | − | 0.03 | |||||||||
|
Restricted stock
expense
|
0.03 | − | 0.03 | |||||||||
|
Adjusted
funds from operations available to common stockholders
|
$ | 1.49 | − | $ | 1.55 | |||||||
The
following table summarizes the results of operations of assets held for sale and
facilities sold during the three months ended March 31, 2008 and 2007,
respectively.
|
Three
Months Ended
|
||||||||
|
March
31,
|
||||||||
|
2008
|
2007
|
|||||||
|
(in
thousands)
|
||||||||
|
Revenues
|
||||||||
|
Rental income
|
$ | 15 | $ | 77 | ||||
|
Other income
|
— | — | ||||||
|
Subtotal
revenues
|
15 | 77 | ||||||
|
Expenses
|
||||||||
|
Depreciation and
amortization
|
— | 11 | ||||||
|
General and
administrative
|
— | 3 | ||||||
|
Subtotal
expenses
|
— | 14 | ||||||
|
Income
before gain on sale of assets
|
15 | 63 | ||||||
|
Gain
on assets sold – net
|
431 | 1,597 | ||||||
|
Discontinued
operations
|
$ | 446 | $ | 1,660 | ||||
The
following tables present selected portfolio information, including operator and
geographic concentrations, and revenue maturities for the period ending March
31, 2008.
|
Portfolio
Composition ($000's)
|
||||||||||||||||||||
|
Balance
Sheet Data
|
#
of Properties
|
#
Beds
|
Investment
|
%
Investment
|
||||||||||||||||
|
Real
Property(1)(2)
|
226 | 26,089 | $ | 1,295,527 | 98 | % | ||||||||||||||
|
Loans
Receivable(3)
|
9 | 1,120 | 31,505 | 2 | % | |||||||||||||||
|
Total
Investments
|
235 | 27,209 | $ | 1,327,032 | 100 | % | ||||||||||||||
|
Investment
Data
|
#
of Properties
|
#
Beds
|
Investment
|
%
Investment
|
Investment
per Bed
|
|||||||||||||||
|
Skilled
Nursing Facilities (1) (2)
(3)
|
227 | 26,623 | $ | 1,280,283 | 97 | % | $ | 48 | ||||||||||||
|
Assisted
Living Facilities
|
6 | 416 | 30,323 | 2 | % | 73 | ||||||||||||||
|
Rehab
Hospitals
|
2 | 170 | 16,426 | 1 | % | 97 | ||||||||||||||
| 235 | 27,209 | $ | 1,327,032 | 100 | % | $ | 49 | |||||||||||||
|
(1)
Includes two held for sale facilities and includes $19.2 million for lease
inducement.
(2)
Includes 7 facilities worth $61.8 million resulting from FIN 46R
consolidation.
(3)
Includes $1.3 million of unamortized principal.
|
||||||||||||||||||||
|
Revenue
Composition ($000's)
|
||||||||
|
Revenue
by Investment Type
|
Three
Months Ended
|
|||||||
|
March
31, 2008
|
||||||||
|
Rental
Property (1)
|
$ | 38,013 | 96 | % | ||||
|
Mortgage
Notes
|
979 | 2 | % | |||||
|
Other
Investment Income
|
636 | 2 | % | |||||
| $ | 39,628 | 100 | % | |||||
|
Revenue
by Facility Type
|
Three
Months Ended
|
|||||||
|
March
31, 2008
|
||||||||
|
Assisted
Living Facilities
|
$ | 680 | 2 | % | ||||
|
Skilled
Nursing Facilities
|
38,312 | 97 | % | |||||
|
Other
|
636 | 1 | % | |||||
| $ | 39,628 | 100 | % | |||||
|
(1)
Revenue includes $0.8 million reduction for lease
inducement.
|
||||||||
|
Operator
Concentration ($000's)
|
||||||||||||
|
Concentration
by Investment
|
#
of Properties
|
Investment
|
%
Investment
|
|||||||||
|
Sun
Healthcare Group, Inc. (2)
|
42 | $ | 226,313 | 17 | % | |||||||
|
CommuniCare
Health Services
|
19 | 198,980 | 15 | % | ||||||||
|
Advocat
Inc. (4)
|
40 | 144,083 | 11 | % | ||||||||
|
Signature
Holdings, LLC
|
18 | 138,759 | 10 | % | ||||||||
|
Haven
Eldercare (3)
|
15 | 118,186 | 9 | % | ||||||||
|
Guardian
LTC Management (1)
|
17 | 105,171 | 8 | % | ||||||||
|
Nexion
Health, Inc.
|
20 | 79,833 | 6 | % | ||||||||
|
Essex
Healthcare Corp.
|
13 | 79,354 | 6 | % | ||||||||
|
Alpha
Healthcare Properties, LLC
|
8 | 55,424 | 4 | % | ||||||||
|
Mark
Ide Limited Liability Company
|
8 | 25,595 | 2 | % | ||||||||
|
Remaining
Operators
|
35 | 155,334 | 12 | % | ||||||||
| 235 | $ | 1,327,032 | 100 | % | ||||||||
|
(1) Investment
amount includes a $19.2 million lease inducement.
(2) Includes
two held for sale facilities.
(3) Includes
7 facilities worth $61.8 million resulting from FIN 46R
consolidation.
(4) Includes
$1.3 million of unamortized principal.
|
||||||||||||
|
Concentration
by State
|
#
of Properties
|
Investment
|
%
Investment
|
|||||||||
|
Ohio
|
37 | $ | 284,847 | 22 | % | |||||||
|
Florida
(4)
|
25 | 172,257 | 13 | % | ||||||||
|
Pennsylvania
|
17 | 110,225 | 8 | % | ||||||||
|
Texas
|
21 | 80,140 | 6 | % | ||||||||
|
Louisiana
|
14 | 55,343 | 4 | % | ||||||||
|
West
Virginia (1)
|
8 | 53,775 | 4 | % | ||||||||
|
Colorado
|
8 | 52,709 | 4 | % | ||||||||
|
California
(2)
|
13 | 50,158 | 4 | % | ||||||||
|
Arkansas
|
11 | 44,820 | 3 | % | ||||||||
|
Alabama
|
10 | 42,426 | 3 | % | ||||||||
|
Massachusetts
(3)
|
6 | 38,884 | 3 | % | ||||||||
|
Rhode
Island
|
4 | 38,740 | 3 | % | ||||||||
|
Connecticut
|
5 | 36,409 | 3 | % | ||||||||
|
Kentucky
|
10 | 36,251 | 3 | % | ||||||||
|
Tennessee
|
6 | 28,715 | 2 | % | ||||||||
|
Remaining
States
|
40 | 201,333 | 15 | % | ||||||||
| 235 | $ | 1,327,032 | 100 | % | ||||||||
|
(1) Investment
amount includes a $19.2 million lease inducement.
(2) Includes
two held for sale facilities.
(3) Includes
7 facilities worth $61.8 million resulting from FIN 46R
consolidation.
(4) Includes
$1.3 million of unamortized principal.
|
||||||||||||
|
Revenue
Maturities ($000's)
|
|||||||||||||||||
|
Operating
Lease Expirations & Loan Maturities
|
Year
|
Current
Lease Revenue (1)
|
Current
Interest Revenue (1)
|
Lease
and Interest Revenue
|
%
|
||||||||||||
|
2008
|
935 | - | 935 | 1 | % | ||||||||||||
|
2009
|
- | - | - | 0 | % | ||||||||||||
|
2010
|
11,494 | 1,438 | 12,932 | 8 | % | ||||||||||||
|
2011
|
11,676 | 163 | 11,839 | 8 | % | ||||||||||||
|
2012
|
11,425 | - | 11,425 | 7 | % | ||||||||||||
|
Thereafter
|
112,530 | 2,118 | 114,648 | 76 | % | ||||||||||||
| $ | 148,060 | $ | 3,719 | $ | 151,779 | 100 | % | ||||||||||
|
(1)
Based on 2008 contractual rents and interest (assumes no annual
escalators).
|
|||||||||||||||||
|
Selected
Facility Data
|
|||||||||||||||||
|
TTM
ending 12/31/07
|
Coverage
Data
|
||||||||||||||||
|
%
Revenue Mix
|
Before
|
After
|
|||||||||||||||
|
Census
|
Private
|
Medicare
|
Mgmt.
Fees
|
Mgmt.
Fees
|
|||||||||||||
|
Total
Portfolio
|
82.1%
|
9.6 | % | 28.1 | % | 2.2 | x | 1.8 | 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, 2008.
|
Current
Capitalization ($000's)
|
||||||||
|
Outstanding
Balance
|
%
|
|||||||
|
Borrowings
Under Bank Lines
|
$ | 82,000 | 7.1 | % | ||||
|
Long-Term
Debt Obligations (1)
|
486,995 | 42.0 | % | |||||
|
Stockholders’
Equity
|
589,489 | 50.9 | % | |||||
|
Total
Book Capitalization
|
$ | 1,158,484 | 100.0 | % | ||||
|
(1)
Excludes net discount of $0.3 million on unsecured
borrowings.
|
||||||||
|
Leverage
& Performance Ratios
|
||||||||
|
Debt
/ Total Book Cap
|
49.1 | % | ||||||
|
Debt
/ Total Market Cap
|
30.2 | % | ||||||
|
Interest
Coverage:
|
||||||||
|
1st quarter 2008
|
3.77 | x | ||||||
|
Debt
Maturities ($000's)
|
Secured
Debt
|
||||||||||||||||
|
Year
|
Lines
of Credit (1)
|
Other
|
Senior
Notes
|
Total
|
|||||||||||||
|
2008
|
$ | - | $ | 435 | $ | - | $ | 435 | |||||||||
|
2009
|
- | 465 | - | 465 | |||||||||||||
|
2010
|
255,000 | 495 | - | 255,495 | |||||||||||||
|
2011
|
- | 290 | - | 290 | |||||||||||||
|
Thereafter
|
- | 310 | 485,000 | 485,310 | |||||||||||||
| $ | 255,000 | $ | 1,995 | $ | 485,000 | $ | 741,995 | ||||||||||
| (1) Reflected at 100% borrowing capacity. | |||||||||||||||||
The
following table presents investment activity for the three-month period ending
March 31, 2008.
|
Investment
Activity ($000's)
|
||||||||
|
Three
Months Ended
|
||||||||
|
March
31, 2008
|
||||||||
|
$
Amount
|
%
|
|||||||
|
Funding
by Investment Type:
|
||||||||
|
Real
Property
|
$ | 5,200 | 49 | % | ||||
|
Mortgages
|
- | 0 | % | |||||
|
Other
|
5,402 | 51 | % | |||||
|
Total
|
$ | 10,602 | 100 | % | ||||