Senior Housing Properties Trust Earnings Call Insights: G&A Calculations and the NOI Margin

Senior Housing Properties Trust (NYSE:SNH) recently reported its fourth quarter earnings and discussed the following topics in its earnings conference call.

G&A Calculations

James Milam – Sandler O’Neill: First question for you on the G&A, can you maybe just help me out with the math as to either – I guess I thought that G&A was based on a percentage of assets and went down sequentially. I’m just curious if there was something else in that number or if I’m thinking about the way it’s calculated incorrectly?

David J. Hegarty – President and COO: Yes, SG&A actually grew year-over-year from third quarter 2012 to the fourth quarter 2012. It went down and we incurred some expenses in the third quarter. There’s professional expenses and other expenses that go through our G&A and not just the acquisitions and we incurred some expenses on the third quarter that we didn’t in the fourth quarter. Also in the fourth quarter, we closed on a lot of our properties there, the last week of the quarter. So, the fourth quarter doesn’t take an effective full quarter G&A of the acquisitions. So, modeling for the first quarter, you really have to take the last week of acquisitions in the year, and calculate a full quarter of those and we’ve also closed about $60 million already in 2013 that you would have to model in there too, but basically to answer your question, quarter-over-quarter did decrease because of some expenses we incurred on third quarter that we did in the fourth quarter.

James Milam – Sandler O’Neill: So, then I guess, another way to think about it is probably $30 million for the full year of ’13 plus a little bit more for acquisitions, should be about the right number.