Care Investment Trust Inc. Announces Third Quarter 2012 Results

NEW YORK, Nov. 8, 2012 /PRNewswire/ --

2012 Third Quarter Highlights

• Announced FFO and AFFO per common share, basic and diluted, for the third quarter of 2012 of $0.09 and $0.07, respectively 
• Declared cash dividend of $0.135 per common share
• Ended third quarter 2012 with cash and cash equivalents of approximately $46.6 million

Care Investment Trust Inc. (OTCQX: CVTR) ("Care" or the "Company"), a real estate investment company that invests in healthcare-related real estate, today reported financial results for its third quarter ended September 30, 2012, and announced that it has declared a quarterly cash dividend of $0.135 per common share for the quarter. 

The Company reported a net loss of approximately $0.1 million, or $0.01 per basic and diluted common share for the three months ended September 30, 2012.  Net loss was impacted by a non-cash depreciation charge from the Company's real estate investments of approximately $1.0 million, or $0.10 per basic and diluted common share.

Funds From Operations (FFO) for the third quarter of 2012 was approximately $0.9 million, or $0.09 per basic and diluted common share.  Adjusted Funds From Operations (AFFO) amounted to approximately $0.7 million, or $0.07 per basic and diluted common share.  FFO is computed by adding back to net income (loss) the depreciation and amortization of real estate related to Care's investment in the properties purchased from affiliates of Bickford Senior Living Group, L.L.C. ("Bickford") and Greenfield Senior Living, Inc. ("Greenfield").  AFFO for the three months ended September 30, 2012 reflects additional adjustments for other non-cash and related income and expense items including amortization of above-market leases, amortization of deferred financing costs, stock-based compensation and straight-lining of lease revenue.  These adjustments are detailed in the attached reconciliation of Non-GAAP Financial Measures. 

Portfolio Activity

Wholly-owned and Partially-owned Real Estate

Wholly-owned real estate totaled approximately $119.7 million at September 30, 2012, consisting of investments in 17 assisted living, independent living and memory care facilities acquired in the Bickford and Greenfield transactions, all of which are triple-net leased.  In addition, Care had real estate investments in partially-owned entities of approximately $2.5 million as of September 30, 2012, through its joint venture interest in one independent / assisted living facility with Senior Management Concepts, LLC ("SMC").

Loan Portfolio

The carrying value of Care's loan investment was approximately $5.5 million as of September 30, 2012.  The weighted average spread on the loan investment, which is floating-rate, was 6.00% over the 30-day London Interbank Offered Rate ("Libor") and had an effective interest rate of 7.20% as of September 30, 2012.  The loan investment is part of a syndicated loan, in which the Company has an approximately one-third interest, and is secured by skilled nursing facilities, as well as collateral relating to assisted living facilities and a multi-family property.

Operating Activities

Care generated total revenue of approximately $4.0 million during the 2012 third quarter which consisted primarily of rental revenue of approximately $3.4 million and interest income from investments in loans of approximately $0.2 million.  The Company also recognized approximately $0.4 million of reimbursable income on its Bickford and Greenfield properties during the three months ended September 30, 2012.  Reimbursable income includes real estate taxes and certain other escrows that Care collects on behalf of its Bickford and Greenfield properties which are used to pay such expense as they come due.   

The Company incurred approximately $2.6 million in operating expenses during the three months ended September 30, 2012, which included approximately $0.1 million in base services fees payable to its advisor TREIT Management LLC and approximately $1.1 million in marketing, general and administrative expenses.  General and administrative expenses include fees for professional services, including audit, legal, investor relations and directors & officers insurance; general overhead costs for the Company; employee salaries and benefits; fees paid to its directors; rent for its corporate offices and transaction costs.  Care also incurred approximately $1.0 million of depreciation and amortization expense relating to its investment in the Bickford and Greenfield properties.  For the three months ended September 30, 2012, the Company also recognized $0.4 million in reimbursable property expenses, which include real estate taxes and other escrows that the Company collects and disburses on behalf of its tenants in its owned properties.     

Care recognized income from investments in partially-owned entities of approximately $0.1 million for the three months ended September 30, 2012 which consisted of its equity income from the Company's SMC joint venture.

Interest expense totaled approximately $1.6 million for the three months ended September 30, 2012, which related primarily to the mortgage debt incurred to finance the acquisition of the Bickford and Greenfield properties.  The effective interest rates for the third quarter of 2012 on these mortgage debt borrowings were 6.88% and 4.76%, respectively.

Liquidity and Funding

At September 30, 2012, Care had approximately $46.6 million in cash and cash equivalents. 

Quarterly Dividend

On November 7, 2012, the Company's Board of Directors declared a quarterly cash dividend of $0.135 per common share for the quarter ended on September 30, 2012 payable on December 5, 2012 to stockholders of record as of November 21, 2012.       

About Care Investment Trust

Care Investment Trust Inc. is a real estate investment company that invests in healthcare-related real estate. 

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995

This release contains "forward-looking statements" which involve risks, uncertainties and contingencies, many of which are beyond Care Investment Trust Inc.'s control, which may cause actual results, performance, or achievements to differ materially from anticipated results, performance, or achievements.  All statements contained in this release that are not clearly historical in nature are forward-looking, and the words "anticipate," "believe," "estimate," "expect," "plan," "target," and similar expressions are generally intended to identify forward-looking statements.  Such risks are set forth under the captions "Forward-Looking Statements" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" (or similar captions) in Care's most recent Annual Report on Form 10-K and 10-K/A and its quarterly reports on Form 10-Q, and as described in the Company's other filings with the Securities and Exchange Commission.  Economic, business, funding market, competitive and/or regulatory factors, among others, affecting Care Investment Trust Inc.'s businesses are examples of factors that could cause actual results to differ materially from those described in the forward-looking statements in addition to those factors specified in Care Investment Trust Inc.'s Annual Report on Form 10-K and 10-K/A, as well as Care Investment Trust Inc.'s Quarterly Reports on Form 10-Q.  Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as to the date of this press release.  We cannot guarantee the accuracy of any such forward-looking statements contained in this press release, and Care Investment Trust Inc. is under no obligation to (and expressly disclaims any such obligation to) update or alter its forward-looking statements, whether as a result of new information, future events or otherwise.

Funds from Operations and Adjusted Funds from Operations

Funds From Operations, or FFO, which is a non-GAAP financial measure, is a widely recognized measure of REIT performance.  The Company computes FFO in accordance with standards established by the National Association of Real Estate Investment Trusts, or NAREIT, which may not be comparable to FFO reported by other REITs that do not compute FFO in accordance with the NAREIT definition, or that interpret the NAREIT definition differently.

The revised White Paper on FFO, approved by the Board of Governors of NAREIT in April 2002, defines FFO as net income (loss) (computed in accordance with GAAP), excluding gains (or losses) from sales of property, plus real estate related depreciation and amortization and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures are calculated to reflect funds from operations on the same basis.

Adjusted Funds from Operations

Adjusted Funds From Operations, or AFFO, is a non-GAAP financial measure.  The Company calculates AFFO as net income (loss) (computed in accordance with GAAP), excluding gains (losses) from debt restructuring and gains (losses) from sales of property, the effects of straight lining lease revenue, the expenses associated with depreciation and amortization on real estate assets, certain expenses associated with real estate acquisitions, non-cash equity compensation expenses, amortization of deferred financing costs and excess cash distributions from the Company's equity method investments and one-time events pursuant to changes in GAAP and other non-cash charges.  Proportionate adjustments for unconsolidated partnerships and joint ventures will also be taken when calculating the Company's AFFO.

The Company believes that FFO and AFFO provide additional measures of its core operating performance by eliminating the impact of certain noncash and capitalized expenses and facilitating a comparison of its financial results to those of other comparable REITs with fewer or no non-cash charges and comparison of the Company's own operating results from period to period.  The Company uses FFO and AFFO in this way and also uses AFFO as one performance metric in its executive compensation program as well as a variation of AFFO in calculating the Incentive Fee payable to its advisor, TREIT (as adjusted pursuant to the Services Agreement).  Additionally, the Company believes that its investors also use FFO and AFFO to evaluate and compare the performance of the Company and its peers, and as such, the Company believes that the disclosure of FFO and AFFO is useful to (and expected by) its investors.

However, the Company cautions that neither FFO nor AFFO represent cash generated from operating activities in accordance with GAAP and they should not be considered as an alternative to net income (determined in accordance with GAAP), or an indication of the Company's cash flow from operating activities (determined in accordance with GAAP), as a measure of its liquidity, or an indication of funds available to fund the Company's cash needs, including its ability to make cash distributions.  In addition, the Company's methodology for calculating FFO and/or AFFO may differ from the methodologies employed by other REITs to calculate the same or similar supplemental performance measures, and accordingly, the Company's reported FFO and/or AFFO may not be comparable to the FFO and AFFO reported by other REITs.

For more information on the Company, please visit the Company's website at www.carereit.com

-Financial Tables to Follow-

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SOURCE Care Investment Trust Inc.

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