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Senior Housing Properties Trust (SNH) filed Quarterly Report for the period ended 2011-09-30.
Senior Housing Properties Trust has a market cap of $3.54 billion; its shares were traded at around $23.11 with a P/E ratio of 13.2 and P/S ratio of 10.5. The dividend yield of Senior Housing Properties Trust stocks is 6.6%.
This is the annual revenues and earnings per share of SNH over the last 10 years. For detailed 10-year financial data and charts, go to 10-Year Financials of SNH.
Highlight of Business Operations:
In May 2011, we and Five Star entered into a loan agreement under which we agreed to lend Five Star up to $80,000, or the Bridge Loan, to fund Five Star’s purchase of six senior living communities that Five Star had agreed to acquire for an aggregate purchase price of approximately $122,800. Since June 2011, Five Star has completed its acquisition of these six communities and had borrowed all $80,000 of this Bridge Loan (including $39,000 borrowed during the quarter ended September 30, 2011) and has repaid $32,000. As of September 30, 2011, $48,000 in aggregate principal amount was outstanding and no additional borrowings were available under this Bridge Loan. The Bridge Loan is secured by mortgages on three of these senior living communities that Five Star acquired and on four other senior living communities owned by Five Star. The Bridge Loan matures on July 1, 2012 and bears interest at a rate equal to the annual rates of interest applicable to our borrowings under our revolving credit facility, plus 1%; as of September 30, 2011, the interest rate was 2.8% under the Bridge Loan. We recognized interest income from this Bridge Loan of $187 and $245 in the three and nine months ended September 30, 2011, respectively, which is included in interest and other income in our condensed consolidated statements of income.For the three and nine months ended September 30, 2011 and 2010, the total rent we recognized from Five Star was $48,392 and $141,875, respectively, and $46,388 and $138,698, respectively. As of September 30, 2011 and December 31, 2010, our rents receivable from Five Star were $17,434 and $16,762, respectively, and are included in other assets in our condensed consolidated balance sheets. Additional information regarding our leases with Five Star appears in our Annual Report. During the three and nine months ended September 30, 2011, pursuant to the terms of our existing leases with Five Star, we purchased $10,554 and $25,877, respectively, of improvements made to our properties leased to Five Star, and, as a result, the annual rent payable to us by Five Star increased by approximately $845 and $2,073, respectively.
We currently own approximately 14.29% of the outstanding equity of AIC. The other shareholders of AIC are RMR and five other companies to which RMR provides management services, including Five Star and CWH. All of our Trustees, all of the trustees and directors of the other publicly held AIC shareholders and nearly all of the directors of RMR currently serve on the board of directors of AIC. RMR provides management and administrative services to AIC. Although we own less than 20% of AIC, we use the equity method to account for this investment because we believe that we have significant influence over AIC because all of our Trustees are also directors of AIC. As of September 30, 2011, we have invested approximately $5,209 in AIC. We may invest additional amounts in AIC in the future if the expansion of this insurance business requires additional capital, but we are not obligated to do so. Our investment had a carrying value of $5,245 and $5,076 as of September 30, 2011 and December 31, 2010, respectively. During the three and nine months ended September 30, 2011 and 2010 we recognized income of approximately $28 and $111 and income of $35 and a loss of $17, respectively, related to this investment. In 2010, AIC designed a combination property insurance program for us and other AIC shareholders in which AIC participates as a reinsurer. That program was modified and extended in June 2011 for a one year term. Our total premiums under this program for the policy years expiring May 31, 2011 and 2012 were approximately $275 and $1,170, respectively. We are currently investigating the possibilities to expand our insurance relationships with AIC to include other types of insurance. By participating in this insurance business with RMR and the other companies to which RMR provides management services, we expect that we may benefit financially by possibly reducing our insurance expenses or by realizing our pro rata share of any profits of this insurance business.
During the nine months ended September 30, 2011, we purchased 19 senior living communities and 25 MOBs for approximately $569,893, sold seven properties for $39,460, recorded a gain on sale of approximately $21,315 and, pursuant to the terms of our existing leases with Five Star, we purchased $10,554 of improvements made to our properties leased to Five Star. We also recognized an impairment of assets charge of $1,194 related to three properties. In January 2011, we sold $250,000 unsecured senior notes due 2016 at a fixed rate of 4.30% per annum and incurred $1,973 of deferred financing fees related to this debt financing. In June 2011, we replaced our previous $550,000 revolving credit facility with a new $750,000 revolving credit facility and incurred a loss on early extinguishment of debt of $427 from the write off of unamortized deferred financing fees. During the nine months ended September 30, 2011, we also issued 11.5 million of our common shares.
Interest expense. Interest expense increased because of our issuance of $200.0 million of unsecured senior notes with an interest rate of 6.75% in April 2010, our issuance of $250.0 million of unsecured senior notes with an interest rate of 4.30% in January 2011 and greater amounts outstanding under our revolving credit facility at higher weighted average interest rates, offset by reduced interest because of the redemption in May 2010 of all $97.5 million of our 7.875% unsecured senior notes due 2015. Our weighted average balance outstanding and interest rate under our revolving credit facility was $17.3 million and 1.8%, and $267,000 and 1.0%, for the three months ended September 30, 2011 and 2010, respectively.
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