FORM 8-K
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): November 5, 2009
MEDICAL PROPERTIES TRUST, INC.
(Exact Name of Registrant as Specified in Charter)
Commission File Number 001-32559
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|
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Maryland
(State or other jurisdiction
of incorporation or organization)
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20-0191742
(I. R. S. Employer
Identification No.) |
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1000 Urban Center Drive, Suite 501
Birmingham, AL
(Address of principal executive offices)
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35242
(Zip Code) |
Registrants telephone number, including area code
(205) 969-3755
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the Registrant under any of the following provisions:
o Written communications pursuant to Rule425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Item 2.02. |
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Results of Operations and Financial Condition. |
On November 5, 2009, Medical Properties Trust, Inc. issued a press release announcing its financial
results for the three and nine months ended September 30, 2009. A copy of the press release is
attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by
reference. The information in this Current Report on Form 8-K, including the information set forth
in Exhibit 99.1 attached hereto, shall not be deemed filed for purposes of Section 18 of the
Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section
or Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended. In addition, this
information shall not be deemed incorporated by reference in any filing of Medical Properties
Trust, Inc. with the Securities and Exchange Commission, except as expressly set forth by specific
reference in any such filing.
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Item 9.01. |
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Financial Statements and Exhibits. |
(d) Exhibits.
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Exhibit Number |
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Description |
99.1
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|
Press release dated November 5, 2009 reporting
financial results for the three and nine months ended
September 30, 2009 |
2
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned hereunto duly authorized.
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MEDICAL PROPERTIES TRUST, INC.
(Registrant)
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By: |
/s/ R. Steven Hamner
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R. Steven Hamner |
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Executive Vice President
and Chief Financial Officer
(Principal Financial and Accounting Officer) |
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Date: November 5, 2009
3
INDEX TO EXHIBITS
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Exhibit Number |
|
Description |
99.1
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|
Press release dated November 5, 2009 reporting
financial results for the three and nine months ended
September 30, 2009 |
4
EX-99.1
Contact: Charles Lambert
Finance Director
Medical Properties Trust, Inc.
(205) 397-8897
clambert@medicalpropertiestrust.com
MEDICAL PROPERTIES TRUST, INC.
REPORTS THIRD QUARTER 2009 RESULTS
Birmingham, AL November 5, 2009 Medical Properties Trust, Inc. (NYSE: MPW) today
announced financial and operating results for the quarter ended September 30, 2009.
HIGHLIGHTS
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|
Delivered third quarter 2009 normalized Funds from Operations (FFO) of approximately
$16.4 million, or $0.21 per share, and Adjusted FFO (AFFO) of $16.0 million, or $0.20 per
share, in line with previous guidance as adjusted for certain non-routine expenses; |
|
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|
Achieved profitability at Shasta Regional Medical Center less than one year from
bankruptcy of prior operator; |
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|
Commenced surgical operations and patient care at newly reopened Bucks County Specialty
Hospital; |
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|
Paid third quarter cash dividend of $0.20 per share on October 15, 2009. |
Our performance continues to improve on a quarterly basis in spite of global economic
conditions that remain uncertain, said Edward K. Aldag, Jr., Chairman, President and Chief
Executive Officer of Medical Properties Trust, Inc. A key focus during the quarter was the
effective repositioning of selected assets within our portfolio. Our Shasta Regional Medical
Center Hospital in Redding, California, which is operated by an affiliate of Prime Healthcare under
a new lease that began only last November, reported strongly profitable operations. Medical
Properties Trust is entitled to receive additional rent and profits participation income of up to
$20 million over the term of the lease with the Prime affiliate.
Aldag added, In addition, just six weeks after we leased our Bucks County Specialty Hospital,
the new operator has spent more than $4.0 million on equipment and property improvements, and has
begun performing surgeries and treating patients. Results such as these prove that our strategy of
creating value over and above what is attributable to real estate is working effectively.
1
OPERATING RESULTS
The Company reported third quarter normalized FFO and AFFO of $0.21 and $0.20, respectively,
per diluted share. Adjusting for $2.1 million ($0.03 per share) of property related expenses and
litigation costs ($1.4 million and $0.7 million, respectively) that were excluded from the
Companys previous annual guidance estimate, third quarter normalized FFO and AFFO per share
amounts were $0.24 and $0.23, respectively, in-line with those previous annual estimates of $0.89
to $0.93 per share. Normalized FFO and AFFO per share for the comparable third quarter of 2008
were $0.29 and $0.29, respectively.
The Company reported total revenues of $34.1 million and $98.0 million, respectively, for the
three and nine month periods ended September 30, 2009 compared with total revenues of $33.1 million
and $87.6 million, respectively, for the same periods one year ago. Net income for the three and
nine month periods ended September 30, 2009 were $10.4 million and approximately $29.0 million,
respectively, compared to net income of $7.0 million and $31.3 million, respectively, for the same
periods one year ago. A reconciliation of normalized FFO and AFFO to net income is included in the
financial tables accompanying this press release.
PORTFOLIO UPDATE AND FUTURE OPERATIONS
At September 30, 2009, the Company had total real estate portfolio assets of approximately
$1.3 billion. The Companys portfolio is comprised of 52 healthcare properties in 21 states leased
to 14 hospital operating companies. Three of the investments are in the form of mortgage loans to
two separate operating companies.
The Company continues to believe that its existing portfolio of assets will generate
normalized FFO of between approximately $0.89 and $0.93 per diluted share on an annualized basis,
taking into account the effects of the new lease agreement for Bucks County Hospital and changes in
accounting for convertible debt and participating securities. This estimate does not include the
effects, if any, of costs and litigation related to discontinued operations, real estate operating
costs, write-offs of straight-line rent, or other non-recurring or unplanned transactions. In
addition, this estimate will change if market interest rates change, assets are sold or acquired,
the Sharpstown and River Oaks properties are sold or leased, other operating expenses vary or
existing leases do not perform in accordance with their terms.
LIQUIDITY
As of September 30, 2009, the Company had approximately $13.1 million in cash and cash
equivalents and $68 million available under its existing credit facilities.
The Companys outstanding debt as of September 30, 2009 consists of fixed-rate debt of $344.7
million and variable rate debt of $221.5 million. The earliest non-extendable maturity of the
Companys debt is November 2010, at which time approximately $30.0 million will be
due. In addition, $86 million of amounts outstanding under the Companys revolving credit
facilities
2
due in November 2010 may be extended until November 2011. The Company has approximately
$8.0 million in unfunded commitments to complete additions and refurbishments of existing
facilities and no commitments for new acquisitions or developments.
CONFERENCE CALL AND WEBCAST
The Company has scheduled a conference call and webcast for Thursday, November 5, 2009 at
11:00 a.m. Eastern Time to present the Companys financial and operating results for the quarter
ended September 30, 2009. The dial-in telephone numbers for the conference call are 800-561-2601
(U.S.) and 617-614-3518 (International) using passcode 67640168. The conference call will also be
available via webcast in the Investor Relations section of the Companys website,
www.medicalpropertiestrust.com. A telephone and webcast replay of the call will be available from
shortly after the completion through November 20, 2009. Telephone numbers for the replay are
888-286-8010 and 617-801-6888 for U.S. and International callers, respectively. The replay
passcode is 52797587.
About Medical Properties Trust, Inc.
Medical Properties Trust, Inc. is a Birmingham, Alabama based self-advised real estate
investment trust formed to capitalize on the changing trends in healthcare delivery by acquiring
and developing net-leased healthcare facilities. These facilities include inpatient rehabilitation
hospitals, long-term acute care hospitals, regional acute care hospitals, ambulatory surgery
centers and other single-discipline healthcare facilities, such as heart hospitals and orthopedic
hospitals. For more information, please visit the Companys website at
www.medicalpropertiestrust.com.
The statements in this press release that are forward looking are based on current expectations and
actual results or future events may differ materially. Words such as expects, believes,
anticipates, intends, will, should and variations of such words and similar expressions are
intended to identify such forward-looking statements. Forward-looking statements involve known and
unknown risks, uncertainties and other factors that may cause the actual results of the Company or
future events to differ materially from those expressed in or underlying such forward-looking
statements, including without limitation: the capacity of the Companys tenants to meet the terms
of their agreements; annual normalized FFO per share; the level of unfunded commitments; the
repayment of debt arrangements; statements concerning the additional income to the Company as a
result of ownership interests in certain hospital operations and the timing of such income; the
restructuring of the Companys investments in non-revenue producing properties; the payment of
future dividends, if any; acquisition of healthcare real estate; completion of additional debt
arrangements; and additional investments; national and economic, business, real estate and other
market conditions; the competitive environment in which the Company operates; the execution of the
Companys business plan; financing risks; the Companys ability to maintain its status as a REIT
for federal income tax purposes; acquisition and development risks; potential environmental and
other liabilities; and other factors affecting the real estate industry generally or healthcare
real estate in particular. For further discussion
of the facts that could affect outcomes, please refer to the Risk factors section of the
Companys Form 10-K for the year ended December 31, 2008 as updated by our subsequently filed
Quarterly Reports on Form 10-Q and our other SEC filings. Except as otherwise required by the
federal securities laws, the Company undertakes no obligation to update the information in this
press release.
# # #
3
MEDICAL PROPERTIES TRUST, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
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September 30, 2009 |
|
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December 31, 2008 |
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|
(Unaudited) |
|
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(A) |
|
Assets |
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Real estate assets |
|
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|
|
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Land, buildings and improvements, and intangible lease assets |
|
$ |
995,227,868 |
|
|
$ |
996,964,710 |
|
Mortgage loans |
|
|
185,000,000 |
|
|
|
185,000,000 |
|
|
|
|
|
|
|
|
Gross investment in real estate assets |
|
|
1,180,227,868 |
|
|
|
1,181,964,710 |
|
Accumulated depreciation and amortization |
|
|
(54,176,752 |
) |
|
|
(40,333,974 |
) |
|
|
|
|
|
|
|
Net investment in real estate assets |
|
|
1,126,051,116 |
|
|
|
1,141,630,736 |
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
|
13,094,072 |
|
|
|
11,747,894 |
|
Interest and rent receivable |
|
|
19,457,788 |
|
|
|
13,836,775 |
|
Straight-line rent receivable |
|
|
24,946,090 |
|
|
|
19,003,110 |
|
Other loans |
|
|
109,921,463 |
|
|
|
108,522,933 |
|
Assets of discontinued operations |
|
|
1,184,808 |
|
|
|
2,384,808 |
|
Other assets |
|
|
13,143,458 |
|
|
|
14,246,975 |
|
|
|
|
|
|
|
|
Total Assets |
|
$ |
1,307,798,795 |
|
|
$ |
1,311,373,231 |
|
|
|
|
|
|
|
|
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|
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|
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|
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Liabilities and Equity |
|
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Liabilities |
|
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|
|
|
|
|
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Debt |
|
$ |
566,184,629 |
|
|
$ |
630,556,564 |
|
Accounts payable and accrued expenses |
|
|
33,043,730 |
|
|
|
24,718,097 |
|
Deferred revenue |
|
|
12,770,977 |
|
|
|
16,110,241 |
|
Lease deposits and other obligations to tenants |
|
|
16,792,047 |
|
|
|
13,645,259 |
|
|
|
|
|
|
|
|
Total liabilities |
|
|
628,791,383 |
|
|
|
685,030,161 |
|
|
|
|
|
|
|
|
|
|
Medical Properties Trust, Inc. stockholders equity |
|
|
|
|
|
|
|
|
Preferred stock, $0.001 par value. Authorized 10,000,000
shares; no shares outstanding |
|
|
|
|
|
|
|
|
Common stock, $0.001 par value. Authorized 150,000,000 shares;
issued and outstanding - 78,658,206 at September 30,
2009, and 65,056,387 shares at December 31, 2008 |
|
|
78,658 |
|
|
|
65,056 |
|
Additional paid in capital |
|
|
758,354,442 |
|
|
|
686,238,117 |
|
Distributions in excess of net income |
|
|
(79,382,621 |
) |
|
|
(59,941,011 |
) |
Treasury shares, at cost |
|
|
(262,343 |
) |
|
|
(262,343 |
) |
|
|
|
|
|
|
|
Total Medical Properties Trust, Inc. stockholders equity |
|
|
678,788,136 |
|
|
|
626,099,819 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-controlling interests |
|
|
219,276 |
|
|
|
243,251 |
|
|
|
|
|
|
|
|
Total Equity |
|
|
679,007,412 |
|
|
|
626,343,070 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities and Equity |
|
$ |
1,307,798,795 |
|
|
$ |
1,311,373,231 |
|
|
|
|
|
|
|
|
|
|
|
(A) |
|
Financials have been derived from the prior year audited financials; however, we have restated certain line items to reflect
our adoption of the new accounting pronouncements involving (i) convertible bonds, (ii) participating securities,
and (iii) non-controlling interests. |
4
MEDICAL PROPERTIES TRUST, INC. AND SUBSIDIARIES
Consolidated Statements of Income
(Unaudited)
|
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For the Three Months Ended |
|
|
For the Nine Months Ended |
|
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|
September 30, 2009 |
|
|
September 30, 2008 |
|
|
September 30, 2009 |
|
|
September 30, 2008 |
|
|
|
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|
(A) |
|
|
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|
(A) |
|
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rent billed |
|
$ |
23,636,344 |
|
|
$ |
24,332,020 |
|
|
$ |
70,320,709 |
|
|
$ |
60,649,047 |
|
Straight-line rent |
|
|
3,244,258 |
|
|
|
767,587 |
|
|
|
5,856,049 |
|
|
|
4,707,365 |
|
Interest and fee income |
|
|
7,212,750 |
|
|
|
8,017,794 |
|
|
|
21,804,025 |
|
|
|
22,272,371 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues |
|
|
34,093,352 |
|
|
|
33,117,401 |
|
|
|
97,980,783 |
|
|
|
87,628,783 |
|
Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate depreciation and amortization |
|
|
6,465,359 |
|
|
|
10,624,796 |
|
|
|
19,419,300 |
|
|
|
19,489,813 |
|
Property-related |
|
|
2,251,585 |
|
|
|
338,471 |
|
|
|
4,361,475 |
|
|
|
545,392 |
|
General and administrative |
|
|
4,859,412 |
|
|
|
4,652,355 |
|
|
|
16,336,926 |
|
|
|
13,631,885 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses |
|
|
13,576,356 |
|
|
|
15,615,622 |
|
|
|
40,117,701 |
|
|
|
33,667,090 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income |
|
|
20,516,996 |
|
|
|
17,501,779 |
|
|
|
57,863,082 |
|
|
|
53,961,693 |
|
Other income (expense) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and other income |
|
|
(6,397 |
) |
|
|
(37,177 |
) |
|
|
48,135 |
|
|
|
80,310 |
|
Interest expense |
|
|
(9,390,069 |
) |
|
|
(10,838,235 |
) |
|
|
(28,284,390 |
) |
|
|
(31,172,094 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net other expense |
|
|
(9,396,466 |
) |
|
|
(10,875,412 |
) |
|
|
(28,236,255 |
) |
|
|
(31,091,784 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations |
|
|
11,120,530 |
|
|
|
6,626,367 |
|
|
|
29,626,827 |
|
|
|
22,869,909 |
|
Income (loss) from discontinued operations |
|
|
(736,174 |
) |
|
|
410,097 |
|
|
|
(666,824 |
) |
|
|
8,449,947 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
|
10,384,356 |
|
|
|
7,036,464 |
|
|
|
28,960,003 |
|
|
|
31,319,856 |
|
Net income attributable to non-controlling interests |
|
|
(10,417 |
) |
|
|
(16,813 |
) |
|
|
(29,597 |
) |
|
|
(36,068 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to MPT common stockholders |
|
$ |
10,373,939 |
|
|
$ |
7,019,651 |
|
|
$ |
28,930,406 |
|
|
$ |
31,283,788 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income per common share basic: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations |
|
$ |
0.14 |
|
|
$ |
0.09 |
|
|
$ |
0.37 |
|
|
$ |
0.35 |
|
Income (loss) from discontinued operations |
|
|
(0.01 |
) |
|
|
0.01 |
|
|
|
(0.01 |
) |
|
|
0.14 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to MPT common stockholders |
|
$ |
0.13 |
|
|
$ |
0.10 |
|
|
$ |
0.36 |
|
|
$ |
0.49 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income per share diluted: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations |
|
$ |
0.14 |
|
|
$ |
0.09 |
|
|
$ |
0.37 |
|
|
$ |
0.35 |
|
Income (loss) from discontinued operations |
|
|
(0.01 |
) |
|
|
0.01 |
|
|
|
(0.01 |
) |
|
|
0.14 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to MPT common stockholders |
|
$ |
0.13 |
|
|
$ |
0.10 |
|
|
$ |
0.36 |
|
|
$ |
0.49 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends declared per common share |
|
$ |
0.20 |
|
|
$ |
0.27 |
|
|
$ |
0.60 |
|
|
$ |
0.81 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding basic |
|
|
78,665,187 |
|
|
|
65,059,401 |
|
|
|
77,904,467 |
|
|
|
61,015,737 |
|
Weighted average shares outstanding diluted |
|
|
78,665,187 |
|
|
|
65,065,973 |
|
|
|
77,904,467 |
|
|
|
61,025,656 |
|
|
|
|
(A) |
|
Financials have been restated to reflect our adoption of the new accounting pronouncements involving
(i) convertible bonds, (ii) participating securities, and (iii) non-controlling interests. |
5
MEDICAL PROPERTIES TRUST, INC. AND SUBSIDIARIES
Reconciliation of Net Income to Funds From Operations
(Unaudited)
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For the Three Months Ended |
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For the Nine Months Ended |
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September 30, 2009 |
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September 30, 2008 |
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September 30, 2009 |
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September 30, 2008 |
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(A) |
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(A) |
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FFO information: |
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Net income attributable to MPT common stockholders |
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$ |
10,373,939 |
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$ |
7,019,651 |
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$ |
28,930,406 |
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$ |
31,283,788 |
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Participating securities share in earnings |
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(371,547 |
) |
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(454,739 |
) |
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(1,142,294 |
) |
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(1,415,194 |
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Net income, less participating
securities share in earnings |
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$ |
10,002,392 |
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$ |
6,564,912 |
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$ |
27,788,112 |
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$ |
29,868,594 |
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Depreciation and amortization |
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Continuing operations |
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6,465,359 |
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10,624,796 |
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19,419,300 |
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19,489,813 |
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Discontinued operations |
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758,454 |
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Loss (gain) on sale of real estate |
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1,644 |
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(9,326,291 |
) |
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Funds from operations |
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$ |
16,467,751 |
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$ |
17,191,352 |
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$ |
47,207,412 |
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$ |
40,790,570 |
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Write-off/reserve of straight-line rent |
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(32,738 |
) |
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1,530,230 |
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1,078,838 |
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11,078,789 |
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Write-off of deferred financing costs |
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3,185,250 |
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Write-off of discontinued operations receivable |
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2,099,027 |
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Normalized funds from operations |
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$ |
16,435,013 |
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$ |
18,721,582 |
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$ |
48,286,250 |
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$ |
57,153,636 |
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Share-based compensation |
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1,386,195 |
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1,461,691 |
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4,282,551 |
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5,131,641 |
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Debt costs amortization |
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1,472,757 |
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1,297,557 |
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4,225,378 |
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3,378,851 |
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Straight-line rent revenue |
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(3,244,258 |
) |
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(2,297,817 |
) |
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(6,934,887 |
) |
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(6,237,595 |
) |
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Adjusted funds from operations |
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$ |
16,049,707 |
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$ |
19,183,013 |
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$ |
49,859,292 |
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$ |
59,426,533 |
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Per diluted share data: |
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Net income, less participating securities share in earnings |
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$ |
0.13 |
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$ |
0.10 |
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$ |
0.36 |
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$ |
0.49 |
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Depreciation and amortization |
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Continuing operations |
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0.08 |
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0.16 |
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0.25 |
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0.32 |
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Discontinued operations |
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0.01 |
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Loss (gain) on sale of real estate |
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(0.15 |
) |
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Funds from operations |
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$ |
0.21 |
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$ |
0.26 |
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$ |
0.61 |
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$ |
0.67 |
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Write-off/reserve of straight-line rent |
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0.03 |
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0.01 |
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0.18 |
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Write-off of deferred financing costs |
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0.05 |
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Write-off of discontinued operations receivable |
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0.03 |
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Normalized funds from operations |
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$ |
0.21 |
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$ |
0.29 |
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$ |
0.62 |
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$ |
0.93 |
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Share-based compensation |
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0.02 |
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0.02 |
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0.05 |
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0.08 |
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Debt costs amortization |
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0.02 |
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0.02 |
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0.05 |
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0.05 |
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Straight-line rent revenue |
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(0.05 |
) |
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(0.04 |
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(0.08 |
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(0.09 |
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Adjusted funds from operations |
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$ |
0.20 |
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$ |
0.29 |
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$ |
0.64 |
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$ |
0.97 |
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Funds from operations, or FFO, represents net income (computed in accordance with GAAP), excluding
gains (or losses) from sales of property, plus real estate related depreciation and amortization
(excluding amortization of loan origination costs) and after adjustments for unconsolidated
partnerships and joint ventures. Management considers funds from operations a useful additional
measure of performance for an equity REIT because it facilitates an understanding of the operating
performance of our properties without giving effect to real estate depreciation and amortization,
which assumes that the value of real estate assets diminishes predictably over time. Since real
estate values have historically risen or fallen with market conditions, we believe that funds from
operations provides a meaningful supplemental indication of our performance. We compute funds from
operations in accordance with standards established by the Board of Governors of the National
Association of Real Estate Investment Trusts, or NAREIT, in its March 1995 White Paper (as amended
in November 1999 and April 2002), which may differ from the methodology for calculating funds
from operations utilized by other equity REITs and, accordingly, may not be comparable to such
other REITs. FFO does not represent amounts available for managements discretionary use because
of needed capital replacement or expansion, debt service obligations, or other commitments and
uncertainties, nor is it indicative of funds available to fund our cash needs, including our
ability to make distributions. Funds from operations should not be considered as an alternative to
net income (loss) (computed in accordance with GAAP) as indicators of our financial performance or
to cash flow from operating activities (computed in accordance with GAAP) as an indicator of our
liquidity.
We calculate adjusted funds from operations, or AFFO, by subtracting from or adding to normalized
FFO (i) straight-line rent revenue, (ii) non-cash share-based compensation expense, and (iii)
amortization of deferred financing costs. AFFO is an operating measurement that we use to analyze
our results of operations based on the receipt, rather than the accrual, of our rental revenue and
on certain other adjustments. We believe that this is an important measurement because our leases
generally have significant contractual escalations of base rents and therefore result in
recognition of rental income that is not collected until future periods, and costs that are
deferred or are non-cash charges. Our calculation of AFFO may not be comparable to AFFO or
similarly titled measures reported by other REITs. AFFO should not be considered as an alternative
to net income (calculated pursuant to GAAP) as an indicator of our results of operations or to cash
flow from operating activities (calculated pursuant to GAAP) as an indicator of our liquidity.
|
|
|
(A) |
|
Financials have been restated to reflect our adoption of the new accounting pronouncements involving (i) convertible bonds, (ii) participating securities
and (iii) non-controlling interests. |
6