NEW YORK, Nov. 9 /PRNewswire-FirstCall/ -- Care Investment Trust Inc. (NYSE: CRE) ("Care" or the "Company"), a real estate investment and finance company formed to invest in healthcare-related real estate and commercial mortgage debt, today reported financial results for the third quarter ended September 30, 2009 and announced it is nearing completion of its review of strategic alternatives.
The Company reported a net loss as calculated in accordance with GAAP of $0.4 million, or $0.02 per basic and diluted share. Net income was impacted by a non-cash depreciation charge from the Company's real estate investments of $3.3 million.
Funds From Operations (FFO) for the third quarter of 2009 were $2.8 million, or $0.14 per basic and diluted share. Adjusted Funds From Operations (AFFO) amounted to $1.2 million, or $0.06 per basic and diluted share. FFO is the result of adding back to net income the Company's share of depreciation and amortization of real estate related to Care's investment in the Cambridge properties and its investment in the Bickford properties. AFFO reflects additional adjustments for other non-cash income and expense items including stock-based compensation, straight-lining of lease revenue, the unrealized gain or loss on the revaluation of partnership units in relation to the Company's investment in the Cambridge properties, excess cash distributions from the Company's equity method investments, gain on sale of mortgage loans and the unrealized gain or loss recognized on loans carried at the lower of cost or market. These adjustments are detailed on the Reconciliation of Non-GAAP Financial Measures attached hereto.
Wholly-owned real estate totaled $102.3 million at September 30, 2009, consisting of investments in 14 assisted and independent living and alzheimers' facilities, all of which were net leased. In addition, Care had real estate investments in partially-owned entities of $58.0 million at the end of the third quarter 2009, consisting of investments in equity interests in limited liability entities owning nine medical office buildings as well as a joint venture acquisition of four assisted and independent living facilities.
Net investments in loans were $57.6 million as of September 30, 2009, all of which were floating rate. The weighted average spread on the portfolio at September 30, 2009 was 5.15 percent over one-month LIBOR and the average maturity of the portfolio was approximately 1.3 years. The effective yield on the portfolio was 5.39 percent for the quarter ended September 30, 2009.
Care generated total revenue of $5.0 million during the 2009 third quarter which included interest income from investments in loans of $1.8 million, rental revenue of $3.2 million and other income of $21,000. Other income included interest earned on invested cash balances and miscellaneous fee income.
The Company incurred $2.8 million in operating expenses during the three months ended September 30, 2009, which included $0.6 million in management fees and $3.1 million in marketing, general and administrative expenses, of which $1.2 million was attributable to legal and advisory fees incurred in connection with the ongoing review of the Company's strategic direction. Care also incurred $0.8 million of depreciation and amortization expense relating to its investment in the Bickford properties as well as a favorable adjustment of $1.7 million recognized on its loans carried at the lower of cost or market.
Care's net loss from investments in partially-owned entities amounted to $1.2 million for the three months ended September 30, 2009 and consisted of a $1.5 million non-cash operating loss, after depreciation charges of $2.4 million, related to the Company's investment in the Cambridge properties as well as equity income of $0.3 million from Care's investment in the Senior Management Concepts properties.
Interest expense totaled $1.5 million for the three months ended September 30, 2009, which related primarily to the mortgage debt incurred to finance the acquisition of the Bickford properties. The effective interest rate for the quarter on the Company's mortgage debt borrowings incurred to finance the acquisition of the Bickford properties was 6.88 percent.
At September 30, 2009, Care had $94.7 million in cash and cash equivalents. During the third quarter 2009 Care received $2.3 million from the sale of a mortgage investment in August 2009 and $42.2 million from the sale of five mortgage investments in September 2009. Primarily as the result of the sale of a mortgage loan in October 2009 which generated cash proceeds of $8.5 million, we had $103.7 million in cash and cash equivalents as of October 31, 2009.
Care announced today that it is nearing completion of its review of strategic alternatives and expects to make an announcement regarding the future direction of the Company over the next several weeks. For the past several quarters, the Company's Board of Directors, in consultation with its legal and financial advisors, has been actively considering a range of strategic alternatives for the Company. Credit Suisse Securities (USA) LLC has been assisting the Company with various aspects of this process.
Included among the strategic alternatives being considered by the Board of Directors are a sale or merger of the entire company and an orderly liquidation of the Company's assets, accompanied by one or more special cash distributions to the Company's shareholders.
Flint Besecker, Care's Chairman of the Board, commented, "The Board of Directors is committed to completing this process and returning value to our shareholders."
There can be no assurance that the Company's review of strategic alternatives will result in any specific transaction or action within the timeframe currently contemplated by the Company or at all. The Company does not expect to disclose any further developments with respect to its exploration of strategic alternatives until its Board of Directors has concluded its review.
Care will host a conference call on Monday, November 9, 2009, at 8:30 a.m. Eastern Time to discuss the third quarter results. The call may be accessed live by dialing (800) 762-8795 or by visiting the Company's website at www.carereit.com.
Investors may access a replay by dialing (800) 406-7325, passcode 4180309, which will be available through November 16, 2009. The webcast replay will also be archived in the "Investor Relations" section of the Company's website.
Adjusted Funds From Operations, or AFFO, is a non-GAAP financial measure. We calculate AFFO as net income (loss) (computed in accordance with GAAP), excluding gains (losses) from debt restructuring and gains (losses) from sales of property, plus the expenses associated with depreciation and amortization on real estate assets, non-cash equity compensation expenses, the effects of straight lining lease revenue, 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.
Contact: Scott Kellman, President & Chief Executive Officer of Care Investment Trust Inc., +1-212-771-9360, scott.kellman@carereit.com; or Analysts/Investors, Leslie Loyet of Financial Relations Board, +1-312-640-6672, lloyet@mww.com, for Care Investment Trust Inc.