Senior Housing Properties Trust (NYSE:SNH) Q3 2017 Earnings Conference Call Transcript

Nov 09, 2017 • 01:00 pm ET

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Senior Housing Properties Trust (NYSE:SNH) Q3 2017 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Good afternoon, good morning, and welcome to the Senior Housing Properties Trust Third Quarter 2017 Financial Results Conference Call. (Operator Instructions) Please also note, today's event is being recorded.

At this time, I'd like to turn the conference call over to Mr. Brad Shepherd, Director of IR. Sir, you may begin.

Executive
Brad Shepherd

Thank you. Welcome to Senior Housing Properties Trust call covering the third quarter 2017 results. Joining me on today's call are David Hegarty, President and COO; and Rick Siedel, CFO and Treasurer. Today's call includes a presentation by management followed by a question-and-answer session. I would like to note that the transcription, recording and retransmission of today's conference call are strictly prohibited without the prior written consent of Senior Housing.

(Forward-Looking Cautionary Statements)

In addition, this call may contain non-GAAP numbers, including normalized funds from operations, or normalized FFO, and cash-based net operating income, or cash NOI. Reconciliations of net income attributable to common shareholders to these non-GAAP figures and the components to calculate AFFO, CAD or FAD are available in our supplemental operating and financial data package found on our website at www.snhreit.com.

(Forward-Looking Cautionary Statements)

I'd now like to turn the call over to Dave.

Executive
David Hegarty

Thank you, Brad. And good afternoon to our shareholders, analysts and other interested parties joining this call. We're pleased to report and discuss our third quarter 2017 results. Today, we reported normalized funds from operations, or normalized FFO per share, of $0.44 per share, which was $0.01 shy of the third quarter 2016 normalized FFO per share. We've noted previously that on a temporary basis, the joint venture we completed in the first quarter of 2017 would reduce our quarterly FFO by up to $0.03 per share per quarter until we can accretively reinvest the proceeds. We were able to partially mitigate some of this dilution by refinancing a large amount of expensive mortgage debt prior to the third quarter.

Additionally, our cash same-store operations stabilized sequentially and produced year-over-year growth, despite the challenges presented by Hurricanes Harvey and Irma. In regard to the hurricanes, we were fortunate that we experienced very minimal damage to our properties. In fact, we incurred less than $1 million of hurricane-related costs at our managed senior living communities and medical office buildings.

Now specific highlights of the third quarter, where we grew consolidated cash NOI by 1.2% and consolidated same-store cash NOI by 50 basis points; achieved MOB occupancy greater than 95% for the 14th consecutive quarter; continued to generate over 97% of our revenues from private pay properties; amended our $1 billion revolving credit facility, extending its maturity to 2022 and lowering the interest rate; amended our $200 million unsecured term loan due in 2022, lowering the interest rate; invested $14.7 million of CapEx in our triple net senior living portfolio that will generate $1.2 million of additional rent under the terms of our lease agreements; acquired one life science MOB located in Maryland for $16.2 million; received BOMA 360 awards for operational best practices at