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The information appearing on SNH’s website includes statements which constitute forward looking statements. These forward looking statements are based upon SNH’s present intents, beliefs or expectations, but forward looking statements are not guaranteed to occur and may not occur. SNH’s actual results may differ materially from those contained in SNH’s forward looking statements. The information contained in SNH’s filings with the Securities and Exchange Commission, including under “Risk Factors" and “Warnings Concerning Forward Looking Statements” in SNH’s periodic reports and other filings, identifies important factors that could cause SNH’s actual results to differ materially from those stated in SNH’s forward looking statements. SNH’s filings with the SEC are available on the SEC’s website at www.sec.gov and are also accessible on SNH’s website at the following link: SEC Filings. You should not place undue reliance upon forward looking statements.

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Senior Housing Properties Trust Announces Results for the Period Ended March 31, 2006

May 02, 2006

NEWTON, Mass.--Senior Housing Properties Trust (NYSE: SNH) today announced its financial results for the quarter ended March 31, 2006.

Results for the quarter ended March 31, 2006:

Net income was $15.7 million, or $0.22 per share, for the quarter ended March 31, 2006, compared to $13.9 million, or $0.20 per share for the quarter ended March 31, 2005. Net income for the quarter ended March 31, 2006, included $390,000 of legal costs related to SNH's litigation with HealthSouth Corporation, compared to $400,000 of similar legal costs for the quarter ended March 31, 2005.

Funds from operations (FFO) for the quarter ended March 31, 2006, were $27.7 million, or $0.39 per share. This compares to FFO for the quarter ended March 31, 2005, of $25.4 million, or $0.37 per share. FFO for the quarters ended March 31, 2006 and 2005 include the HealthSouth litigation costs described above.

The weighted average number of common shares outstanding were 71.8 million and 68.5 million for the quarters ended March 31, 2006 and 2005, respectively.

Conference Call:

On Tuesday, May 2, 2006, at 1:00 p.m. (EDT), David J. Hegarty, president and chief operating officer, and John R. Hoadley, treasurer and chief financial officer, will host a conference call to discuss the results for the first quarter ended March 31, 2006. The conference call telephone number is (877) 502-9276. Participants calling from outside the United States and Canada should dial (913) 981-5591. No pass code is necessary to access the call from either number. Participants should dial in about 15 minutes prior to the scheduled start of the call. A replay of the conference call will be available through May 8, 2006. To hear the replay, dial (719) 457-0820. The replay pass code is 6642868.

A live audio web cast of the conference call will also be available in listen only mode on the SNH web site. Participants wanting to access the webcast should visit the web site about five minutes before the call. The archived webcast will be available for replay on the SNH web site for about one week after the call.

Supplemental Data:

A copy of SNH's First Quarter 2006 Supplemental Operating and Financial Data is available for download from the SNH web site, www.snhreit.com.

Senior Housing Properties Trust is a real estate investment trust, or REIT, that owns 188 senior living properties located in 32 states. SNH is headquartered in Newton, Massachusetts.

                  Senior Housing Properties Trust
                         Financial Information
                 (in thousands, except per share data)

Income Statement:


                                             Quarter Ended March 31,
                                             -------------------------
                                                 2006         2005
                                             ------------ ------------
   Revenues:
     Rental income(1)                        $    40,823  $    38,888
     Interest and other income                       346          339
                                             ------------ ------------
       Total revenues                             41,169       39,227
                                             ------------ ------------
   Expenses:
     Interest                                     11,371       11,223
     Depreciation                                 10,731       10,746
     General and administrative(2)                 3,400        3,393
                                             ------------ ------------
     Total expenses                               25,502       25,362
                                             ------------ ------------
   Net income                                $    15,667  $    13,865
                                             ============ ============

   Weighted average shares outstanding            71,812       68,496
                                             ============ ============
   Per share data:
     Net income                              $      0.22  $      0.20
                                             ============ ============

Balance Sheet:

                                                 At           At
                                              March 31,   December 31,
                                                2006         2005
                                            ------------ -------------
   Assets
   ------
   Real estate properties                   $ 1,691,499  $  1,686,169
   Less accumulated depreciation                249,763       239,031
                                            ------------ -------------
                                              1,441,736     1,447,138
   Cash and cash equivalents                      1,247        14,642
   Restricted cash                                1,858         2,529
   Deferred financing fees, net                   9,551         9,968
   Other assets                                  26,165        25,371
                                            ------------ -------------
   Total assets                             $ 1,480,557  $  1,499,648
                                            ============ =============
   Liabilities and Shareholders' Equity
   ------------------------------------
   Unsecured revolving bank credit facility $   106,000  $     64,000
   Senior unsecured notes, net of discount      341,556       394,018
   Junior subordinated debentures due 2041       28,241        28,241
   Secured debt and capital leases               69,647        70,141
                                            ------------ -------------
   Total debt                                   545,444       556,400
   Other liabilities                             22,954        25,271
                                            ------------ -------------
   Total liabilities                            568,398       581,671
   Shareholders' equity                         912,159       917,977
                                            ------------ -------------
   Total liabilities and shareholders'
    equity                                  $ 1,480,557  $  1,499,648
                                            ============ =============

(1) Rental income for the quarter ended March 31, 2006, includes $2.2 million of income from two hospitals operated by HealthSouth Corporation, or HealthSouth. Effective January 2, 2002, we entered an amended lease with HealthSouth for two hospitals. In April 2003, we commenced a lawsuit against HealthSouth seeking, among other matters, to reform the amended lease, based upon HealthSouth's fraud, by increasing the rent payable to us from January 2, 2002 until the termination of the amended lease. This litigation is pending at this time. On October 26, 2004, we terminated the amended lease for default because HealthSouth failed to deliver to us accurate and timely financial information as required by the amended lease. On November 2, 2004, HealthSouth brought a second lawsuit against us seeking to prevent our termination of the amended lease. On September 25, 2005, the court ruled that our termination was proper. On January 18, 2006, the court ordered HealthSouth to cooperate with us in licensing a new tenant and to pay us the net patient revenues, after a 5% management fee and payment of costs and expenses of operation since October 26, 2004. HealthSouth has filed a notice of appeal of the court's decisions; but HealthSouth's motions for a stay of the court's decisions during the appeal have been denied by both the trial court and the appeals court. During the pendency of these disputes, HealthSouth continued to pay us at the disputed rent amount of $725,000 per month through January 2006. From February 1, 2006 to April 30, 2006, HealthSouth paid us an additional $6.0 million which HealthSouth represented to be amounts due from October 26, 2004 to March 31, 2006. The supporting data for the calculations of amounts due to us provided by HealthSouth appears to be incomplete and contradictory. We have attempted to obtain accurate data and clarifications from HealthSouth, but HealthSouth has been unwilling or unable to provide such data. Pending the resolution of HealthSouth's appeal and the conclusion of our review of HealthSouth's calculations of amounts due to us, we have recognized in income only $2.2 million, which represents the minimum amount we are entitled to if HealthSouth prevails in its appeal and HealthSouth's lease is reinstated. We have deferred recognition of the remaining $4.5 million of cash payments received from HealthSouth. Under Internal Revenue Code laws and regulations applicable to real estate investment trusts, or REITs, a portion of the payments received from HealthSouth will be subject to income tax at corporate rates. We have also deferred recognition of $2.3 million of estimated tax expense, pending the recognition in income of the deferred payments received. In March 2006, HealthSouth filed late an Annual Report on Form 10-K for the period ending December 31, 2005. The financial and operating data included in HealthSouth's Form 10-K show a substantial negative net worth and a history of substantial operating losses. Also, HealthSouth's management identified several material weaknesses in its internal control over financial reporting and stated that it did not maintain effective internal control over financial reporting as of December 31, 2005. To date we have been unable to obtain reliable current financial information about the operations of HealthSouth or our hospitals. Accordingly, we do not know if we will be able to collect any additional amounts which the courts may determine to be owed to us by HealthSouth.

(2) Legal expenses incurred related to the HealthSouth litigation were approximately $390,000 and $400,000, for the quarters ended March 31, 2006 and 2005, respectively and are included in general and administrative expenses.

                    Senior Housing Properties Trust
                         Funds From Operations
                 (in thousands, except per share data)


Calculation of Funds From Operations (FFO) (1):


                                               Quarter Ended March 31,
                                             -------------------------
                                                 2006         2005
                                             ------------ ------------
   Net income(2)                             $    15,667  $    13,865
   Add:      Depreciation expense                 10,731       10,746
             Deferred percentage rent(3)           1,259          815
                                             ------------ ------------
   FFO                                       $    27,657  $    25,426
                                             ============ ============

   Weighted average shares outstanding            71,812       68,496
                                             ============ ============

   FFO per share                             $      0.39  $      0.37
                                             ============ ============
   Distributions declared                    $      0.32  $      0.32
                                             ============ ============

(1) We compute FFO as shown in the calculation above. Such calculation begins with income from continuing operations or, if such amount is the same as net income, with net income. Our calculation of FFO differs from the National Association of Real Estate Investment Trusts, or NAREIT, definition of FFO because we include deferred percentage rent in FFO as discussed in Note 3 below. We consider FFO to be an appropriate measure of performance for a REIT along with net income and cash flow from operating, investing and financing activities. We believe that FFO provides useful information to investors because by excluding the effects of certain historical costs, such as depreciation expense and gain or loss on sale of properties, FFO can facilitate comparison of current operating performance among REITs. FFO does not represent cash generated by operating activities in accordance with generally accepted accounting principles, or GAAP, and should not be considered an alternative to net income or cash flow from operating activities as a measure of financial performance or liquidity. FFO is one important factor considered by our board of trustees in determining the amount of distributions to shareholders. Other important factors include, but are not limited to, requirements to maintain our status as a REIT, limitations in our revolving bank credit facility and public debt covenants, the availability of debt and equity capital to us and our expectation of our future performance.

(2) Net income includes legal expenses incurred related to the HealthSouth litigation of approximately $390,000 and $400,000 for the quarters ended March 31, 2006 and 2005, respectively.

(3) We recognize percentage rental income received during the first, second and third quarters in the fourth quarter. Although recognition of revenue is deferred until the fourth quarter for purposes of calculating net income, the calculation of FFO for the first three quarters includes estimated amounts with respect to those periods. The fourth quarter FFO calculation excludes the amounts recognized during the first three quarters.

WARNING CONCERNING FORWARD LOOKING STATEMENTS

THIS PRESS RELEASE CONTAINS FORWARD LOOKING STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 AND OTHER FEDERAL SECURITIES LAWS. THESE STATEMENTS REPRESENT OUR PRESENT BELIEFS AND EXPECTATIONS, BUT THEY MAY NOT OCCUR FOR VARIOUS REASONS. FOR EXAMPLE:

  • THIS PRESS RELEASE REPORTS DECISIONS BY A MASSACHUSETTS TRIAL COURT THAT OUR TERMINATION OF HEALTHSOUTH'S LEASE OF TWO HOSPITALS WAS PROPER AND THAT HEALTHSOUTH IS TO PAY US THE NET PATIENT REVENUES, LESS A MANAGEMENT FEE AND OPERATION COSTS, SINCE OCTOBER 26, 2004. HEALTHSOUTH HAS FILED A NOTICE OF APPEAL OF THESE DECISIONS AND HEALTHSOUTH'S APPEAL MAY BE SUCCESSFUL.

  • THIS PRESS RELEASE REPORTS THAT A MASSACHUSETTS TRIAL COURT HAS ORDERED HEALTHSOUTH TO COOPERATE WITH US TO LICENSE A NEW TENANT FOR OUR HOSPITALS OPERATED BY HEALTHSOUTH. HEALTHSOUTH HAS FILED A NOTICE TO APPEAL THIS DECISION AND THAT APPEAL HAS NOT BEEN DECIDED, ALTHOUGH A STAY PENDING APPEAL SOUGHT BY HEALTHSOUTH WAS DENIED. HEALTHSOUTH RECENTLY FILED A MOTION IN THE TRIAL COURT SEEKING TO LIMIT ITS COOPERATION WITH THE LICENSING PROCESS AND FOR OTHER RELIEF. FUTURE ACTIONS BY HEALTHSOUTH, FUTURE DECISIONS BY COURTS WITH JURISDICTION OVER THESE MATTERS OR DECISIONS BY HEALTH REGULATORY AUTHORITIES MAY DELAY OR PREVENT OUR ENTERING A LEASE WITH A NEW TENANT FOR OUR HOSPITALS DESPITE THE EXISTING COURT ORDERS.

  • THIS PRESS RELEASE STATES THAT THE COURT HAS ORDERED HEALTHSOUTH TO CONTINUE OPERATIONS OF THE HOSPITALS DURING THE PERIOD OF TRANSITION TO A NEW TENANT. HEALTHSOUTH MAY BE UNWILLING OR UNABLE TO CONTINUE ITS OPERATIONS. IN SUCH CIRCUMSTANCES, WE MAY SEEK DAMAGES FROM HEALTHSOUTH AND TO CONTINUE THE HOSPITALS' OPERATIONS WITH APPROPRIATE REGULATORY APPROVALS, BUT WE MAY BE UNABLE TO COLLECT SUCH DAMAGES FROM HEALTHSOUTH OR TO CONTINUE THE HOSPITALS' OPERATIONS.

  • THIS PRESS RELEASE REFERS TO A SECOND LITIGATION IN WHICH WE ARE SEEKING TO COLLECT INCREASED RENT FROM HEALTHSOUTH SINCE JANUARY 2002. THE FACT THAT WE HAVE RECEIVED A FAVORABLE RULING IN A SEPARATE LITIGATION MAY IMPLY THAT WE WILL ALSO SUCCEED IN THIS INCREASED RENT LITIGATION. HOWEVER, THE ISSUES IN THESE TWO LITIGATIONS ARE SOMEWHAT DIFFERENT AND ARE PENDING IN DIFFERENT COURTS. WE BELIEVE ALL OF OUR CLAIMS ARE VALID. HOWEVER, NOT ALL OF OUR CLAIMS HAVE BEEN FINALLY DETERMINED AND THE FACT THAT WE HAVE RECEIVED FAVORABLE RULINGS IN ONE CASE DOES NOT MEAN WE WILL SUCCEED IN THE OTHER CASE.

  • THE IMPLICATION OF THE FORWARD LOOKING STATEMENTS IN THIS PRESS RELEASE REGARDING OUR LITIGATIONS WITH HEALTHSOUTH MAY BE THAT WE WILL EVENTUALLY RECOGNIZE MORE INCOME FROM OUR OWNERSHIP OF THE TWO HOSPITALS THAN $725,000 PER MONTH. HOWEVER, THIS IMPLICATION MAY NOT BE REALIZED FOR MANY DIFFERENT REASONS: OUR REVIEW OF HEALTHSOUTH'S CALCULATIONS OF AMOUNTS DUE TO US MAY RESULT IN ADJUSTMENTS THAT DECREASE OR INCREASE THE FINAL AMOUNTS DUE TO US. HEALTHSOUTH MAY BECOME UNABLE TO PAY THE INCREASED AMOUNTS, IF ANY, DUE TO US. WE MAY BE UNABLE TO IDENTIFY A NEW TENANT FOR THESE HOSPITALS WHO OBTAINS APPROPRIATE LICENSES AND WHO IS WILLING OR ABLE TO PAY INCREASED RENTS. HEALTHSOUTH'S APPEAL MAY BE SUCCESSFUL AND ITS LEASE MAY BE REINSTATED. THE FINANCIAL RESULTS OF THE HOSPITALS' OPERATIONS MAY DECLINE AND THIS DECLINE MAY BE MATERIAL. IN FACT, HEALTHSOUTH MAY CEASE PAYING AMOUNTS DUE TO US UNTIL A NEW TENANT IS INSTALLED AT THE HOSPITALS.

  • LITIGATION IS EXPENSIVE. SINCE THE CURRENT LITIGATIONS BETWEEN US AND HEALTHSOUTH BEGAN IN APRIL 2003, WE HAVE SPENT APPROXIMATELY $2.7 MILLION IN LITIGATION COSTS. WE EXPECT THAT THESE EXPENSES WILL CONTINUE AND MAY INCREASE SO LONG AS THE LITIGATIONS CONTINUE. MOREOVER, WE ARE UNABLE TO PROVIDE ANY PROJECTIONS AS TO WHEN THESE LITIGATIONS MAY END OR THE AMOUNTS OF FUTURE LITIGATION COSTS. WE HAVE REQUESTED THAT THE COURT ORDER HEALTHSOUTH TO PAY SOME OF OUR LITIGATION COSTS. HEALTHSOUTH HAS OPPOSED THIS REQUEST AND WE DO NOT KNOW HOW THE COURTS WILL RULE, OR WHETHER HEALTHSOUTH WILL BE WILLING OR ABLE TO HONOR ANY AWARD WHICH MAY BE MADE.

YOU SHOULD NOT PLACE UNDUE RELIANCE UPON FORWARD LOOKING STATEMENTS. EXCEPT AS MAY BE REQUIRED BY APPLICABLE LAW, WE UNDERTAKE NO OBLIGATION TO UPDATE OR REVISE ANY FORWARD LOOKING STATEMENTS AS A RESULT OF NEW INFORMATION, FUTURE EVENTS OR OTHERWISE.

A Maryland Real Estate Trust with transferable shares of beneficial interest listed on the New York Stock Exchange. No shareholder, Trustee or officer is personally liable for any act or obligation of the Trust.

Senior Housing Properties Trust
Timothy A. Bonang
617-796-8149
Manager of Investor Relations
www.snhreit.com

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