** **

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSIONWASHINGTON, DC 20549**

 

**FORM 10-Q**

** **

**ý****        QUARTERLY REPORTPURSUANT TO SECTION 13 OR 15(d)**

**OF THE SECURITIES EXCHANGE ACT OF 1934**

 

**For the quarterly period ended March 31, 2004**

 

**OR**

 

**o****        TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THESECURITIES EXCHANGE ACT OF 1934**

 

**Commission File Number 1-15319**

 

**SENIOR HOUSING PROPERTIES TRUST**

 

| **Maryland**                                        |   | **04-3445278**                    |
|-----------------------------------------------------|--------|-----------------------------------|
| (State of Organization)                             |   | (IRS Employer Identification No.) |
|                                                |   |                              |
| **400 Centre Street, Newton, Massachusetts  02458** |
|                                                |
| **617-796-8350**                                    |

 

Indicate by check markwhether the registrant:  (1) has filedall reports required to be filed by Section 13 or 15(d) of the SecuritiesExchange Act of 1934 during the preceding 12 months, and (2) has been subject tosuch filing requirements for the past 90 days. Yes  ý No  o

 

Indicate by check mark whetherthe registrant is an accelerated filer (as defined in Rule 12b-2 of theExchange Act).    Yes  ý  No  o

 

Number of registrant’s commonshares outstanding as of May 4, 2004: 63,468,909

 

 

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SENIOR HOUSING PROPERTIES TRUST

 

FORM 10-Q

 

March 31, 2004

 

INDEX

 
| PART I  | Financial Information                                                                          |   |
|---------|------------------------------------------------------------------------------------------------|--------|
|    |                                                                                           |   |
| Item 1. | Financial Statements (unaudited)                                                               |   |
|    |                                                                                           |   |
|    | Consolidated Balance Sheet – March 31, 2004 and December 31, 2003                         |   |
|    |                                                                                           |   |
|    | Consolidated Statement of Income – Three  Months Ended March 31, 2004 and 2003            |   |
|    |                                                                                           |   |
|    | Consolidated Statement of Cash Flows –  Three Months Ended March 31, 2004  and  2003 |   |
|    |                                                                                           |   |
|    | Notes to Consolidated Financial Statements                                                     |   |
|    |                                                                                           |   |
| Item 2. | Management’s Discussion and Analysis of  Financial Condition and Results of Operations    |   |
|    |                                                                                           |   |
| Item 3. | Quantitative and Qualitative Disclosures  About Market Risk                                    |   |
|    |                                                                                           |   |
| Item 4. | Controls and Procedures                                                                        |   |
|    |                                                                                           |   |
|    | Warning Concerning Forward Looking  Statements                                                 |   |
|    | Statement Concerning Limited Liability                                                         |   |
|    |                                                                                           |   |
| PART II | Other Information                                                                              |   |
|    |                                                                                           |   |
| Item 2. | Changes in Securities and Use of Proceeds  and Issuer Purchases of Equity Securities           |   |
|    |                                                                                           |   |
| Item 6. | Exhibits and Reports on Form 8-K                                                               |   |
|    |                                                                                           |   |
|    | Signatures                                                                                     |   |

 

*References in this Quarterly Reporton Form 10-Q to “the Company”, “we”, “us”, “our” and “Senior Housing” refer toSenior Housing Properties Trust and its consolidated subsidiaries, unlessotherwise noted.*

 

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SENIOR HOUSING PROPERTIES TRUST

 

**PART I.  Financial Information**

 

**Item 1.     Financial Statements**

 

CONSOLIDATEDBALANCE SHEET

(in thousands, except share amounts)

 
|                                                                                                 |   | **March 31,  2004** |      | **December  31,  2003** |   |
|------------------------------------------------------------------------------------------------------|--------|---------------------|-----------|-------------------------|--------|
|                                                                                                 |   | **(unaudited)**     |      |                    |   |
|                                                                                                 |   |                |      |                    |   |
| ASSETS                                                                                               |   |                |      |                    |   |
| Real estate properties, at cost:                                                                     |   |                |      |                    |   |
| Land                                                                                                 |   | $                   | 163,921   |                    | $      | 162,512 |   |
| Buildings and improvements                                                                           |   | 1,278,786           |      | 1,255,729               |   |
|                                                                                                 |   | 1,442,707           |      | 1,418,241               |   |
| Less accumulated depreciation                                                                        |   | 170,011             |      | 160,426                 |   |
|                                                                                                 |   | 1,272,696           |      | 1,257,815               |   |
|                                                                                                 |   |                |      |                    |   |
| Cash and cash equivalents                                                                            |   | 3,799               |      | 3,530                   |   |
| Restricted cash                                                                                      |   | 10,110              |      | 10,108                  |   |
| Deferred financing fees, net                                                                         |   | 10,825              |      | 11,311                  |   |
| Other assets                                                                                         |   | 21,374              |      | 21,336                  |   |
| Total assets                                                                                         |   | $                   | 1,318,804 |                    | $      | 1,304,100 |   |
|                                                                                                 |   |                |      |                    |   |
| LIABILITIES AND SHAREHOLDERS’ EQUITY                                                            |   |                |      |                    |   |
| Unsecured revolving bank credit facility                                                             |   | $                   | 34,000    |                    | $      | 102,000 |   |
| Senior unsecured notes due 2012 and 2015,  net of discount                                           |   | 393,652             |      | 393,612                 |   |
| Junior subordinated debentures due 2041                                                              |   | 28,241              |      | 27,394                  |   |
| Secured debt and capital leases                                                                      |   | 31,625              |      | 31,817                  |   |
| Security deposits                                                                                    |   | 2,185               |      | 2,185                   |   |
| Accrued interest                                                                                     |   | 10,373              |      | 12,468                  |   |
| Other liabilities                                                                                    |   | 8,338               |      | 6,718                   |   |
| Total liabilities                                                                                    |   | 508,414             |      | 576,194                 |   |
|                                                                                                 |   |                |      |                    |   |
| Commitments and contingencies                                                                        |   |                |      |                    |   |
|                                                                                                 |   |                |      |                    |   |
| Shareholders’ equity:                                                                           |   |                |      |                    |   |
| Common shares of beneficial interest, $0.01  par value:                                              |   |                |      |                    |   |
| 80,000,000 shares authorized, 63,453,338  and 58,453,338 shares issued and outstanding, respectively |   | 635                 |      | 585                     |   |
| Additional paid-in capital                                                                           |   | 939,952             |      | 853,858                 |   |
| Cumulative net income                                                                                |   | 165,018             |      | 151,749                 |   |
| Cumulative distributions                                                                             |   | (299,897            | )         | (281,776                | )      |
| Unrealized gain on investments                                                                       |   | 4,682               |      | 3,490                   |   |
| Total shareholders’ equity                                                                      |   | 810,390             |      | 727,906                 |   |
| Total liabilities and shareholders’ equity                                                      |   | $                   | 1,318,804 |                    | $      | 1,304,100 |   |

 

See accompanying notes

 

1

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SENIOR HOUSING PROPERTIES TRUST

 

CONSOLIDATEDSTATEMENT OF INCOME

(in thousands, except per share amounts)

(unaudited)

 
|                                   |   | **Three  Months Ended  March 31,** |   |
|----------------------------------------|--------|------------------------------------|--------|
|                                   |   | **2004**                           |   | **2003** |   |
|                                   |   |                               |   |   |   |
| Revenues:                              |   |                               |   |   |   |
| Rental income                          |   | $                                  | 34,829 |   | $ | 30,274 |   |
| Interest and other income              |   | 1,714                              |   | 1,076 |   |
| Total revenues                         |   | 36,543                             |   | 31,350 |   |
|                                   |   |                               |   |   |   |
| Expenses:                              |   |                               |   |   |   |
| Interest                               |   | 10,370                             |   | 7,849 |   |
| Depreciation                           |   | 9,585                              |   | 8,653 |   |
| General and administrative             |   | 3,319                              |   | 2,789 |   |
| Total expenses                         |   | 23,274                             |   | 19,291 |   |
| Net income                             |   | $                                  | 13,269 |   | $ | 12,059 |   |
|                                   |   |                               |   |   |   |
| Weighted average shares outstanding    |   | 62,354                             |   | 58,437 |   |
|                                   |   |                               |   |   |   |
| Basic and diluted net income per share |   | $                                  | 0.21   |   | $ | 0.21 |   |

 

See accompanying notes

 

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SENIOR HOUSING PROPERTIES TRUST

 

CONSOLIDATED STATEMENT OF CASH FLOWS

(in thousands)

(unaudited)

 
|                                                                           |   | **Three  Months Ended March 31,** |   |
|--------------------------------------------------------------------------------|--------|-----------------------------------|--------|
|                                                                           |   | **2004**                          |   | **2003** |   |
| Cash flows from operating activities:                                          |   |                              |   |   |   |
| Net income                                                                     |   | $                                 | 13,269 |   | $ | 12,059 |   |
| Adjustments to reconcile net income to cash  provided by operating activities: |   |                              |   |   |   |
| Depreciation                                                                   |   | 9,585                             |   | 8,653 |   |
| Amortization of deferred finance fees and  debt discounts                      |   | 526                               |   | 450 |   |
| Changes in assets and liabilities:                                             |   |                              |   |   |   |
| Restricted cash                                                                |   | (2                                | )      | — |   |
| Other assets                                                                   |   | 2,001                             |   | 3,020 |   |
| Accrued interest                                                               |   | (2,095                            | )      | 1,045 |   |
| Other liabilities                                                              |   | 1,620                             |   | (11,409 | ) |
| Cash provided by operating activities                                          |   | 24,904                            |   | 13,818 |   |
|                                                                           |   |                              |   |   |   |
| Cash flows from investing activities:                                          |   |                              |   |   |   |
| Real estate acquisitions                                                       |   | (24,466                           | )      | (61,000 | ) |
| Mortgage financing provided                                                    |   | —                            |   | (6,900 | ) |
| Mortgage financing repaid by mortgagor                                         |   | —                            |   | 849 |   |
| Cash used for investing activities                                             |   | (24,466                           | )      | (67,051 | ) |
|                                                                           |   |                              |   |   |   |
| Cash flows from financing activities:                                          |   |                              |   |   |   |
| Proceeds from issuance of common shares,  net                                  |   | 86,144                            |   | — |   |
| Proceeds from borrowings on revolving bank  credit facility                    |   | 29,000                            |   | 82,000 |   |
| Repayments of borrowings on revolving bank  credit facility                    |   | (97,000                           | )      | (5,000 | ) |
| Repayment of debt                                                              |   | (192                              | )      | (19 | ) |
| Distributions to shareholders                                                  |   | (18,121                           | )      | (18,116 | ) |
| Cash (used for) provided by financing  activities                              |   | (169                              | )      | 58,865 |   |
|                                                                           |   |                              |   |   |   |
| Increase in cash and cash equivalents                                          |   | 269                               |   | 5,632 |   |
| Cash and cash equivalents at beginning of  period                              |   | 3,530                             |   | 8,654 |   |
| Cash and cash equivalents at end of period                                     |   | $                                 | 3,799  |   | $ | 14,286 |   |
|                                                                           |   |                              |   |   |   |
| Supplemental cash flow information:                                            |   |                              |   |   |   |
| Interest paid                                                                  |   | $                                 | 11,939 |   | $ | 11,994 |   |
|                                                                           |   |                              |   |   |   |
| Non-cash investing and financing  activities:                                  |   |                              |   |   |   |
| Purchases of fixed assets with FF&E  reserve                               |   | —                            |   | (1,346 | ) |

 

See accompanying notes

 

3

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SENIOR HOUSING PROPERTIES TRUST

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

**Note1.  Basis of Presentation**

 

The accompanying consolidated financial statements ofSenior Housing Properties Trust and our subsidiaries have been prepared withoutaudit.  Certain information and footnotedisclosures required by accounting principles generally accepted in the UnitedStates for complete financial statements have been condensed or omitted.  We believe the disclosures made are adequateto make the information presented not misleading.  However, the accompanying financial statements should be read inconjunction with the financial statements and notes contained in our AnnualReport on Form 10-K for the year ended December 31, 2003.  In the opinion of management, alladjustments, which include only normal recurring adjustments considerednecessary for a fair presentation, have been included.  All intercompany transactions and balancesbetween us and our subsidiaries have been eliminated.  Operating results for interim periods are not necessarilyindicative of the results that may be expected for the full year.  Reclassifications have been made to priorperiod financial statements to conform to the current period presentation.

 

DEFERRED PERCENTAGE RENTS.  We are generally required to recognize percentage rental incomereceived for the first, second and third quarters in the fourth quarter.  Percentage rent deferred for the threemonths ended March 31, 2004 and 2003, was $840,000 and $760,000, respectively.

 

**Note 2.  Summary of New Accounting Pronouncements**

 

During the first quarter of2004, we adopted Revised Financial Accounting Standards Board, or FASB,Interpretation No. 46, “Consolidation of Variable Interest Entities” that wasissued by the FASB in December 2003.  Asa result, we no longer consolidate our wholly owned subsidiary that issued ourtrust preferred securities, or the trust preferred subsidiary, and we no longerpresent the trust preferred securities on our Consolidated Balance Sheet.  Instead, we present our junior subordinateddebentures held by the trust preferred subsidiary as debt.  These debentures had previously beeneliminated in our consolidated financial statements.  In addition, distributions on the trust preferred securities areno longer presented in our Consolidated Statement of Income, but interest onthe debentures, which is equal to the distributions on the trust preferredsecurities, is included in interest expense.

 

**Note3.  Real Estate Properties**

 

At March 31, 2004, we owned 151 properties located in31 states.

 

OnMarch 1, 2004, we purchased from Five Star Quality Care, Inc., or Five Star,one independent and assisted living facility with 229 units located inMaryland.  The purchase price was $24.1million, the appraised value of the property. Simultaneous with this purchase, our existing leases with Five Star weremodified as follows:

 

•                  the lease for 53 nursing homes andthe lease for 13 independent and assisted living facilities were combined intoone lease with the property acquired on March 1, 2004;

•                  the combined lease maturity date waschanged to December 31, 2020 from December 31, 2018 and 2019 for the separateleases;

•                  the minimum rent for the combinedlease of 53 nursing homes and 14 independent living facilities was increased by$2.4 million; and

•                  for all of our leases with Five Star,the amount of additional rent to be paid to us was changed to 4% of theincrease in revenues at the leased properties beginning in 2006.

 

Allother lease terms remained substantially unchanged.

 

4

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During 2003, we agreed to sellto Five Star two nursing homes in Michigan that we leased to Five Star.  The purchase price is $10.5 million, theappraised value of the properties. These two properties are leased on a combined basis with 65 otherproperties leased to Five Star.  Underthe terms of our lease with Five Star, upon consummation of the sale, theannual rent payable under the combined lease will be reduced by 10% of the netproceeds that we receive from the sale. On April 19, 2004, we sold one of these properties to Five Star for $5.9million.  We expect the sale of thesecond property to occur later in 2004. However, this sale is contingent upon Five Star’s obtaining Departmentof Housing and Urban Development, or HUD, insured financing for its purchase.This sale may not close because of a failure of this condition or for someother reason.

 

**Note4.  Comprehensive Income**

 

The following is a reconciliation of net income tocomprehensive income for the three months ended March 31, 2004 and 2003(dollars in thousands):

 
|                                     |   | **Three  Months Ended March 31,** |   |
|------------------------------------------|--------|-----------------------------------|--------|
|                                     |   | **2004**                          |   | **2003** |   |
|                                     |   |                              |   |   |   |
| Net income                               |   | $                                 | 13,269 |   | $ | 12,059 |   |
| Other comprehensive income:              |   |                              |   |   |   |
| Change in unrealized gain on investments |   | 1,192                             |   | 265 |   |
| Comprehensive income                     |   | $                                 | 14,461 |   | $ | 12,324 |   |

 

#### **Note 5. Unrealized Gain on Investments**

 

On March 31, 2004, we owned onemillion common shares of HRPT Properties Trust, or HRPT, and 35,000 commonshares of Five Star, which are carried at fair market value in Other Assets onour Consolidated Balance Sheet.  TheUnrealized Gain On Investments shown on our Consolidated Balance Sheetrepresents the difference between the market value of these shares of HRPT andFive Star, calculated by using quoted market prices, on the date they were acquired($6.50 and $7.26 per share, respectively) and on March 31, 2004 ($11.30 and$3.89 per share, respectively).

 

**Note 6. Indebtedness**

 

We have a $250.0 million,interest only, unsecured revolving bank credit facility.  Our revolving bank credit facility maturesin November 2005 and may be extended at our option to November 2006 upon ourpayment of an extension fee.  Theinterest rate (2.65% at March 31, 2004) is LIBOR plus a spread.  As of March 31, 2004, $34.0 million wasoutstanding and $216.0 million was available for acquisitions, working capitaland for general business purposes.

 

As discussed in Note 3,we sold a property on April 19, 2004. Simultaneous with this sale, we repaid the $4.9 million mortgage thatwas secured by this property.  In addition,$4.9 million of our restricted cash that also secured this mortgage wasreleased to us.

 

5

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**Note7.  Shareholders’ Equity**

 

In January and February2004, we completed a public offering of 5 million of our common shares.  Simultaneously, HRPT sold 3,148,500 of ourshares it owned and as of March 31, 2004, HRPT owned 9,660,738 of our shares,or 15.2% of our total outstanding shares. We raised net proceeds of $86.1 million, which were used to repay borrowingsoutstanding under our revolving bank credit facility.  We andHRPT were parties to a joint underwriting agreement in connection with thisoffering.  We did not receive anyproceeds from the sale of our shares by HRPT, but HRPT paid its pro-rata shareof the expenses of this offering.

 

## **OnFebruary 20, 2004, we paid a $0.31 per share, or $18.1 million, distribution toour common shareholders for the quarter ended December 31, 2003.  On April 1, 2004, we declared a distributionof $0.31 per share, or $19.7 million, to be paid to common shareholders ofrecord on April 20, 2004.  Thisdistribution will be paid on or about May 20, 2004.**

 

#### **Note 8.  Commitments and Contingencies**

 

During 2002, about the time MarriottInternational, Inc, or Marriott, determined to sell its senior living division,or MSLS, to Sunrise Senior Living, Inc, or Sunrise, we and Five Star becameinvolved in litigation with Marriott and MSLS. This litigation remained pending throughout 2003.  On January 7, 2004, we and Five Star settledthis litigation.  Under the terms of thesettlement, we and Five Star, and Marriott and MSLS, agreed to dismiss allclaims and counterclaims asserted in the litigation.  Also under the terms of the settlement, Marriott paid $1.25million each to us and Five Star. The $1.25 million paid to us is included inInterest and Other Income in our Consolidated Statement of Income for the threemonths ended March 31, 2004.  Thesettlement was a compromise of the parties’ disputes entered into to avoid theexpense and inconvenience of litigation and none of us or Five Star, norMarriott or MSLS, has admitted any liability, violation of law or wrongdoing inconnection with the matters in the litigation. We believe it settles all our litigation with Marriott.  This settlement does not affect our or FiveStar’s rights vis-à-vis Sunrise which arise by reason of events occurring afterSunrise purchased MSLS.

 

As more fully described in our 2003 AnnualReport on Form 10-K, on April 16, 2003, we filed a complaint in the Land Courtof the Commonwealth of Massachusetts, seeking that our lease with HEALTHSOUTHCorporation, or HEALTHSOUTH, be reformed to change the rent under this lease to$10.3 million per year effective January 1, 2002, and to change the lease termto expire on January 1, 2006, among other matters.  In March 2004, we amended the complaint to seek additional formsof remedies.  This litigation remainspending and no trial date has been set. HEALTHSOUTH has continued to pay us rent at the rate of $8.7 million peryear during the pendency of this litigation.

 

In December 2003, we agreed topurchase four properties from NewSeasons Assisted Living Communities, Inc., orNewSeasons, subject to certain conditions. These four properties are currently encumbered by mortgage debts.  We intend to purchase three of theproperties if and when their respective mortgage debts are prepaid or assumedon terms mutually acceptable to us, NewSeasons, Independence Blue Cross, orIBC, the guarantor of the NewSeasons lease, and the lenders.  If we purchase all three of theseproperties, our purchase price for these properties will be $21.2 million.

 

As discussed in Note 3, we soldto Five Star one of the two properties we agreed during 2003 to sell.

 

6

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**Item 2. Management’s Discussion and Analysis of Financial Condition and Resultsof Operations**

 

The following discussion should be read in conjunctionwith our consolidated financial statements and notes thereto included in thisquarterly report and our 2003 Annual Report on Form 10-K.

 

#### **PORTFOLIO OVERVIEW**

 

The following tables present anoverview of our portfolio as of March 31, 2004 (dollars in thousands).

 
|                               |   | **# of  Properties** |   | **# of  Units/Beds** |   | **Investment** |      | **% of  Investment** |   | **Current  Annual Rent  Revenues** |   | **% of  Current  Annual Rent  Revenues** |   |
|------------------------------------|--------|----------------------|--------|----------------------|--------|----------------|-----------|----------------------|--------|------------------------------------|--------|------------------------------------------|--------|
| Facility Type                      |   |                 |   |                 |   |           |      |                 |   |                               |   |                                     |   |
| Independent living communities (1) |   | 36                   |   | 10,485               |   | $              | 980,619   |                 | 68.0   | %                                  | $      | 84,813                                   |   | 58.9 | % |
| Assisted living facilities         |   | 50                   |   | 3,835                |   | 172,348        |      | 11.9                 | %      | 29,826                             |   | 20.7                                     | %      |
| Skilled nursing facilities         |   | 63                   |   | 6,571                |   | 246,187        |      | 17.1                 | %      | 20,768                             |   | 14.4                                     | %      |
| Hospitals                          |   | 2                    |   | 364                  |   | 43,553         |      | 3.0                  | %      | 8,700                              |   | 6.0                                      | %      |
| Total                              |   | 151                  |   | 21,255               |   | $              | 1,442,707 |                 | 100.0  | %                                  | $      | 144,107                                  |   | 100.0 | % |
|                               |   |                 |   |                 |   |           |      |                 |   |                               |   |                                     |   |
| Tenant/Operator                    |   |                 |   |                 |   |           |      |                 |   |                               |   |                                     |   |
| Five Star/Sunrise (2)              |   | 31                   |   | 7,491                |   | $              | 619,942   |                 | 42.9   | %                                  | $      | 63,674                                   |   | 44.2 | % |
| Sunrise/Marriott (3)               |   | 14                   |   | 4,091                |   | 325,473        |      | 22.6                 | %      | 30,975                             |   | 21.5                                     | %      |
| Five Star (4)                      |   | 67                   |   | 6,151                |   | 254,643        |      | 17.6                 | %      | 18,290                             |   | 12.7                                     | %      |
| NewSeasons/IBC (5)                 |   | 10                   |   | 1,019                |   | 87,627         |      | 6.1                  | %      | 9,287                              |   | 6.4                                      | %      |
| HEALTHSOUTH                        |   | 2                    |   | 364                  |   | 43,553         |      | 3.0                  | %      | 8,700                              |   | 6.0                                      | %      |
| Alterra Healthcare                 |   | 18                   |   | 894                  |   | 61,126         |      | 4.2                  | %      | 7,015                              |   | 4.9                                      | %      |
| Genesis HealthCare                 |   | 1                    |   | 156                  |   | 13,007         |      | 1.0                  | %      | 1,509                              |   | 1.1                                      | %      |
| 5 private companies (combined)     |   | 8                    |   | 1,089                |   | 37,336         |      | 2.6                  | %      | 4,657                              |   | 3.2                                      | %      |
| Total                              |   | 151                  |   | 21,255               |   | $              | 1,442,707 |                 | 100.0  | %                                  | $      | 144,107                                  |   | 100.0 | % |

 

 

 

 
| **Quarter  Ended March 31,**        |   |
|-------------------------------------|--------|
|                                |   |   |   |   |   |   |   |   |   | **Percentage  of Operating Revenue Sources** |   |
|                                |   | **Rent  Coverage** |   | **Occupancy** |   | **Private  Pay** |   | **Medicare** |   | **Medicaid** |   |
| **Tenant Operating Statistics (6)** |   | **2004** |   | **2003** |   | **2004** |   | **2003** |   | **2004** |   | **2003** |   | **2004** |   | **2003** |   | **2004** |   | **2003** |   |
| Five Star/Sunrise (2)               |   | 1.1 | x | 1.0 | x | 90 | % | 91 | % | 85 | % | 86 | % | 11 | % | 10 | % | 4 | % | 3 | % |
| Sunrise/Marriott (3)                |   | 1.3 | x | 1.3 | x | 88 | % | 87 | % | 82 | % | 82 | % | 13 | % | 13 | % | 5 | % | 5 | % |
| Five Star (4) (7)                   |   | 1.7 | x | 1.6 | x | 89 | % | 90 | % | 31 | % | 32 | % | 21 | % | 18 | % | 48 | % | 50 | % |
| NewSeasons/IBC (5) (7)              |   | 1.0 | x | 1.0 | x | 79 | % | 78 | % | 100 | % | 100 | % | 0 | % | 0 | % | 0 | % | 0 | % |
| HEALTHSOUTH (8)                     |   | NA |   | NA |   | NA |   | NA |   | NA |   | NA |   | NA |   | NA |   | NA |   | NA |   |
| Alterra Healthcare (7)              |   | 1.6 | x | 1.6 | x | 83 | % | 88 | % | 99 | % | 98 | % | 0 | % | 0 | % | 1 | % | 2 | % |
| Genesis HealthCare                  |   | 1.6 | x | 1.0 | x | 96 | % | 96 | % | 22 | % | 19 | % | 33 | % | 38 | % | 45 | % | 43 | % |
| 5 private companies (combined)      |   | 2.2 | x | 2.2 | x | 87 | % | 89 | % | 22 | % | 17 | % | 25 | % | 20 | % | 53 | % | 63 | % |

 

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**(1)**    Properties where the majority of units areindependent living apartments are classified as independent living communities.

 

**(2)**    The 31 properties leased to Five Star are managed bySunrise.  Sunrise does not guaranty ourlease with Five Star.  Rent coverage isafter non-subordinated management fees of $4.6 million and $4.2 million in thequarter ended March 31, 2004 and 2003, respectively.

 

**(3)**    Marriott guarantees the lease for the 14 independentand assisted living properties leased to Sunrise.

 

**(4)**    On March 1, 2004 our leases with Five Star for 14properties and for 53 nursing homes were combined into one lease.

 

**(5)**    Independence Blue Cross, a Pennsylvania healthinsurer, guarantees the lease for the 10 properties leased to NewSeasons.

 

**(6)**    All tenant operating data presented are based uponthe operating results provided by our tenants for the indicated periods endingMarch 31, 2004, or the most recent prior period tenant operating resultsavailable to us from our tenants.  Rentcoverage is calculated as operating cash flow from our tenants’ facilityoperations, before subordinated charges and capital expenditure reserves,divided by rent payable to us.   We havenot independently verified our tenants’ operating data.

 

**(7)**    Includes data for periods prior to our ownership ofthese properties.

 

**(8)**    During 2003, HEALTHSOUTH issued a press releasestating that its historical financial information should not be reliedupon.  In 2004, HEALTHSOUTH issued apress release stating that audited financial information would not be availableuntil 2005.  Because we have reason todoubt the financial information we have from HEALTHSOUTH we do not disclose anyoperating data for this tenant.

 

7

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**Item 2. Management’s Discussion and Analysis of Financial Condition and Resultsof Operations (Continued)**

 

**RESULTSOF OPERATIONS**

 

#### **Three Months Ended March 31, 2004, Compared to ThreeMonths Ended March 31, 2003**

 

Rental income for the threemonths ended March 31, 2004, was $34.8 million compared to rental income of$30.3 million for the three months ended March 31, 2003, an increase of $4.5million, or 14.9%.  This increase is theresult of our acquisition and lease of 32 properties during 2003 and oneproperty during the first quarter of 2004.

 

Interest and other income forthe three months ended March 31, 2004 and 2003, each include $200,000 ofdividend income from one million shares of HRPT that we own.  For the three months ended March 31, 2004,it also includes the $1.25 million settlement payment we received from Marriottin January 2004. For the three months ended March 31, 2003, it includes$750,000 of proceeds from the sale of a mortgage note.

 

Interest expense for the threemonths ended March 31, 2004, was $10.4 million compared to interest expense forthe three months ended March 31, 2003, of $7.8 million, an increase of $2.6million, or 33.3%.  The increase wascaused by our issuance of $150.0 million of 7 7/8% senior unsecured notes inApril 2003, partially offset by interest on reduced amounts outstanding underour revolving bank credit facility during the three months ended March 31,2004.

 

Depreciation expense for the three months ended March31, 2004, was $9.6 million compared to depreciation expense for the threemonths ended March 31, 2003, of $8.7 million, an increase of $900,000, or10.3%.  General and administrativeexpense for the three months ended March 31, 2004, was $3.3 million compared togeneral and administrative expense for the three months ended March 31, 2003,of $2.8 million, an increase of $500,000 or 17.9%.  These increases were primarily due to our investment in 32properties in 2003 and one property in the first quarter of 2004, and werepartially offset by lower legal expenses as a result of our settlement of theMarriott litigation in January 2004.  During the three months ended March 31, 2004,we incurred $775,000 of due diligence costs in connection with a potentialacquisition.  We were unable to reach anagreement with the seller and we are no longer pursuing this acquisition.  As a result we have expensed these costs andincluded them in General and Administrative Expenses in our Consolidated Statementof Income for the three months ended March 31, 2004.

 

Net income was $13.3 million,or $0.21 per share, for the three months ended March 31, 2004, compared to$12.1 million, or $0.21 per share, for the three months ended March 31, 2003,an increase of $1.2 million.  Thischange is primarily the result of the changes described above in revenues andexpenses resulting from our acquisitions in 2003 and in 2004, our debt issuancein April 2003 and the 3.9 million share increase in the weighted average numberof shares outstanding between the 2004 and 2003 periods which resulted from oursale of our common shares in January 2004.

 

8

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**Item 2. Management’s Discussion and Analysis of Financial Condition and Resultsof Operations (Continued)**

 

**LIQUIDITYAND CAPITAL RESOURCES**

 

Our Operating Liquidity and Resources

 

Our principal sources of funds for current expensesand distributions to shareholders are rents from our properties.  Minimum rents are generally received monthlyor quarterly from our tenants and percentage rents are received monthly,quarterly or annually.  This flow offunds has historically been sufficient for us to pay our operating expenses,debt service and distributions.  Webelieve that our operating cash flow will be sufficient to meet our operatingexpenses, debt service and distributions payments for the foreseeable future.

 

Our Investment and Financing Liquidity and Resources

 

## **In orderto fund acquisitions and to accommodate cash needs that may result from timingdifferences between our receipt of rents and the need to make distributions orpay operating expenses, we maintain a revolving bank credit facility with agroup of commercial banks.  Our revolvingbank credit facility matures in November 2005 but we are permitted to extend itto November 2006 upon payment of an extension fee.  Borrowings under the revolving bank credit facility can be up to$250.0 million and the revolving bank credit facility includes a feature underwhich the maximum borrowing may be expanded to $500.0 million, in certaincircumstances.  Borrowings under ourrevolving bank credit facility are unsecured. Funds may be borrowed, repaid and reborrowed until maturity, and noprincipal repayment is due until maturity. Interest on borrowings under the revolving bank credit facility ispayable at a spread above LIBOR.**

 

In January 2004, weissued five million of our common shares in a public offering.  We used the net proceeds of $86.2 million torepay borrowings outstanding on our revolving bank credit facility.

 

In connection with our December2003 acquisition of 10 assisted living facilities, we agreed to purchase up toan additional four assisted living facilities, subject to certainconditions.  These four properties arecurrently encumbered by mortgage debts. We intend to purchase three of the properties if and when these mortgagedebts are prepaid or assumed on terms mutually acceptable to us, the seller andthe lenders. If we purchase all three of these properties, our purchase pricefor these additional properties will be $21.2 million.  Funding required to complete thistransaction is expected to be provided by assuming the debt on the properties,borrowing under our revolving bank credit facility and cash on hand.

 

At March 31, 2004, we had $3.8 million of cash andcash equivalents and $216.0 million available under our revolving bank creditfacility.  We expect to use cashbalances, borrowings under our revolving bank credit facility and net proceedsof offerings of equity or debt securities to fund future property acquisitions,including the future funding for expenditures related to the repair,maintenance or renovation of our properties.

 

When amounts areoutstanding on our revolving bank credit facility and as the maturity dates ofour revolving bank credit facility and term debts approach, we will explorealternatives for the repayment of amounts due. Such alternatives may include incurring additional long term debt and issuingnew equity securities.  As of March 31,2004, we had $1.6 billion available on an effective shelf registrationstatement.  An effective shelfregistration statement allows us to issue public securities on an expeditedbasis, but it does not assure that there will be buyers for such securities.  Although there can be no assurance that wewill consummate any debt or equity offerings or other financings, we believe wewill have access to various types of financing, including debt or equityofferings, with which to finance future acquisitions and to pay our debts andother obligations.

 

On February 20, 2004, wepaid a $0.31 per share, or $18.1 million, distribution to our commonshareholders for the quarter ended December 31, 2003.  On April 1, 2004, we declared a distribution of $0.31 per commonshare with respect to our 2004 first quarter results.  This distribution will be paid to shareholders on or about  May 20, 2004, using cash on hand andborrowings under our revolving bank credit facility.

 

9

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**Item 2. Management’s Discussion and Analysis of Financial Condition and Resultsof Operations (Continued)**

 

As of March 31, 2004, ourcontractual obligations were as follows (dollars in thousands):

 
|                          |   | **Payment  due by period** |    |
|-------------------------------|--------|----------------------------|---------|
| **Contractual Obligations**   |   | **Total**                  |    | **Less than  1  year** |   | **1-3 years** |   | **3-5 years** |   | **More than  5  years** |   |
| Long-Term Debt Obligations(1) |   | $                          | 447,041 |   | $ | 9,100 |   | $ | — |   | $ | — |   | $ | 437,941 |   |
| Capital Lease Obligations     |   | 7,825                      |    | 791 |   | 1,769 |   | 2,052 |   | 3,213 |   |
| Ground Lease Obligations      |   | 6,088                      |    | 426 |   | 852 |   | 852 |   | 3,958 |   |
| Purchase Obligations(2)       |   | 21,200                     |    | 21,200 |   | — |   | — |   | — |   |
| Total                         |   | $                          | 482,154 |   | $ | 31,517 |   | $ | 2,621 |   | $ | 2,904 |   | $ | 445,112 |   |

 

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(1)          Our term debt maturities are as follows:  $9.1 million in 2004; $245.0 million in2012; $150.0 million in 2015; $14.7 million in 2027; and $28.2 million in 2041.

 

(2)          This amount relates to three properties we agreed topurchase in connection with our December 2003 acquisition.

 

## **Debt Covenants**

 

Our principal debt obligations at March 31, 2004, wereour unsecured revolving bank credit facility, our $395.0 million of unsecuredsenior notes and our $28.2 million of junior subordinated debentures.  Our senior notes are governed by anindenture.  This indenture and relatedsupplements and our revolving bank credit facility contain a number offinancial ratio covenants which generally restrict our ability to incur debts,including debts secured by mortgages on our properties in excess of calculatedamounts, require us to maintain a minimum net worth, restrict our ability to makedistributions under certain circumstances and require us to maintain otherratios.  Our junior subordinateddebentures are governed by an indenture which is generally less restrictivethan the indenture governing our senior notes and the terms of our revolvingbank credit facility.  As of March 31,2004, we were in compliance with all of the covenants under our indentures andrelated supplements and our revolving bank credit facility.

 

None of our indentures andrelated supplements, our revolving bank credit facility or our other debtobligations contain provisions for acceleration which could be triggered by ourdebt ratings.  However, under ourrevolving bank credit facility, our senior debt rating is used to determine thefees and the interest rate payable.

 

Our public debt indenture andrelated supplements contain cross default provisions to any other debts of$10.0 million or more.  Similarly, adefault on our public debt or junior subordinated debentures indenture would bea default under our revolving bank credit facility.

 

As of March 31, 2004, we haveno commercial paper, derivatives, swaps, hedges, joint ventures orpartnerships.

 

**RelatedParty Transactions**

 

In2003, we entered into an agreement between us and HRPT, pursuant to which weagreed to file a registration statement with respect to our shares held by HRPTand use reasonable efforts to effect the registration of those shares.  HRPT paid the expenses of this registration.  The registration statement became effectiveOctober 24, 2003.  In January andFebruary 2004, we completed a public offering of five million of our commonshares.  In a simultaneous offering,HRPT sold 3,148,500 of our shares which it owned.  We and HRPT were parties to a joint underwriting agreement inconnection with this offering.  We didnot receive any proceeds from the sale of our shares by HRPT, but HRPT paid itspro-rata share of the expenses of this offering.  As of March 31, 2004, HRPT owned 9,660,738 of our shares, or15.2% of our total shares outstanding.

 

10

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**Item 2. Management’s Discussion and Analysis of Financial Condition and Resultsof Operations (Continued)**

 

OnMarch 1, 2004, we purchased from Five Star one independent and assisted livingfacility with 229 units located in Maryland. The purchase price was $24.1 million, the appraised value of theproperty.  Simultaneous with thispurchase, our existing leases with Five Star were modified as follows:

 

•                  the lease for 53 nursing homes andthe lease for 13 independent and assisted living facilities were combined intoone lease with the property acquired on March 1, 2004;

•                  the combined lease maturity date waschanged to December 31, 2020 from December 31, 2018 and 2019 for the separateleases;

•                  the minimum rent for the combinedlease of 53 nursing homes and 14 independent living facilities was increased by$2.4 million; and

•                  for all of our leases with Five Star,the amount of additional rent to be paid to us was changed to 4% of theincrease in revenues at the leased properties beginning in 2006.

 

All other lease terms remained substantiallyunchanged.

 

On April 19, 2004, we sold one of two properties weagreed during 2003 to sell to Five Star for net proceeds of $5.9 million.  The sale of the second property is expectedto occur later in 2004, but remains contingent upon Five Star obtaining HUDinsured financing for its purchase. Under the terms of our lease with Five Star, the annual rent payablewill be reduced by 10% of the net proceeds we receive from the sale.

 

11

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## **Item3.  Quantitative and QualitativeDisclosures About Market Risk**

 

We are exposed to risks associated with market changesin interest rates.  We manage ourexposure to this market risk by monitoring available financingalternatives.  Our strategy to manageexposure to changes in interest rates is unchanged since December 31,2003.  Other than as described below, wedo not foresee any significant changes in our exposure to fluctuations ininterest rates or in how we plan to manage this exposure in the future.

 

Our unsecured revolvingbank credit facility bears interest at floating rates and matures in November2005.  At March 31, 2004, we had $34.0million outstanding and $216.0 million available for borrowing under ourrevolving bank credit facility. Repayments under our revolving bank credit facility may be made at anytime without penalty.  We borrow in U.S.dollars and borrowings under our revolving bank credit facility requireinterest at LIBOR plus a spread. Accordingly, we are vulnerable to changes in U.S. dollar based shortterm interest rates, specifically LIBOR. A change in interest rates would not affect the value of this floatingrate debt but would affect our operating results.  For example, the interest rate payable on our outstandingindebtedness of $34.0 million at March 31, 2004, was 2.65% per annum.  The following table presents the impact a10% change in interest rates would have on our floating rate interest expenseat March 31, 2004 (dollars in thousands):

 
|              |   | **Impact of  Changes in Interest Rates** |   |
|-------------------|--------|------------------------------------------|--------|
|              |   | **Interest  Rate  Per Year**             |   | **Outstanding  Debt** |   | **Total  Interest  Expense Per  Year** |   |
| At March 31, 2004 |   | 2.65                                     | %      | $ | 34,000 |   | $ | 901 |   |
| 10% reduction     |   | 2.39                                     | %      | $ | 34,000 |   | $ | 813 |   |
| 10% increase      |   | 2.92                                     | %      | $ | 34,000 |   | $ | 993 |   |

 

The foregoing table shows the impact of an immediatechange in floating interest rates.  Ifinterest rates were to change gradually over time, the impact would be spreadover time.  Our exposure to fluctuationsin floating interest rates will increase or decrease in the future withincreases or decreases in the outstanding amount under our revolving bankcredit facility or other floating rate obligations.

 

## **Item 4.  Controls and Procedures**

 

As of the end of the period covered by this report,our management carried out an evaluation, under the supervision and with theparticipation of our managing trustees, President and Chief Operating Officerand Treasurer and Chief Financial Officer, of the effectiveness of ourdisclosure controls and procedures pursuant to Exchange Act Rules 13a-15 and15d-15.  Based upon that evaluation, ourmanaging trustees, President and Chief Operating Officer and Treasurer andChief Financial Officer concluded that our disclosure controls and proceduresare effective.

 

There have been no changes in our internal controlover financial reporting during the quarter ended March 31, 2004, that havematerially affected, or are reasonably likely to materially affect, ourinternal control over financial reporting, including any corrective actionswith regard to significant deficiencies and material weaknesses.

 

12

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**WARNINGCONCERNING FORWARD LOOKING STATEMENTS**

 

THIS QUARTERLY REPORT ANDOUR ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2003, REFERREDTO HEREIN CONTAIN FORWARD LOOKING STATEMENTS WITHIN THE MEANING OF THE PRIVATESECURITIES LITIGATION REFORM ACT OF 1995 AND FEDERAL SECURITIES LAWS.  THESE STATEMENTS REGARD OUR INTENT, BELIEFOR EXPECTATIONS, OR THE INTENT, BELIEF OR EXPECTATIONS OF OUR TRUSTEES ANDOFFICERS CONCERNING:

 

•                       OUR TENANTS’ ABILITY TO PAY OUR RENTS,

•                       OUR ABILITY TO PURCHASE ADDITIONALPROPERTIES,

•                       OUR ABILITY TO MAKE INTEREST ANDPRINCIPAL PAYMENTS ON OUR DEBT,

•                       OUR ABILITY TO MAKE DISTRIBUTIONS ON OURSHARES,

•                       OUR POLICIES AND PLANS REGARDINGINVESTMENTS, FINANCING AND OTHER MATTERS,

•                       OUR TAX STATUS AS A REAL ESTATEINVESTMENT TRUST,

•                       OUR ABILITY TO APPROPRIATELY BALANCE THEUSE OF DEBT AND EQUITY,

•                       OUR ABILITY TO ACCESS CAPITAL MARKETS OROTHER SOURCES OF FUNDS,

•                       OUR LITIGATION WITH HEALTHSOUTH AND

•                       THE POSSIBLE EXPANSION OF OUR BUSINESSRELATIONSHIP WITH NEWSEASONS.

 

ALSO, WHENEVER WE USEWORDS SUCH AS “BELIEVE”, “EXPECT”, “ANTICIPATE”, “INTEND”, “PLAN”, “ESTIMATE”,“PREDICT” OR SIMILAR EXPRESSIONS, WE ARE MAKING FORWARD LOOKINGSTATEMENTS.  ACTUAL RESULTS MAY DIFFERMATERIALLY FROM THOSE CONTAINED IN OR IMPLIED BY OUR FORWARD LOOKING STATEMENTSAS A RESULT OF VARIOUS FACTORS.  SUCHFACTORS INCLUDE, WITHOUT LIMITATION:

 

•                       CHANGES IN THE ECONOMY AND THE CAPITALMARKETS (INCLUDING PREVAILING INTEREST RATES),

•                       COMPLIANCE WITH AND CHANGES TOREGULATIONS AND PAYMENT POLICIES WITHIN THE REAL ESTATE, SENIOR HOUSING ANDHEALTHCARE INDUSTRIES,

•                       CHANGES IN FINANCING TERMS,

•                       COMPETITION WITHIN THE REAL ESTATE,SENIOR HOUSING AND HEALTHCARE INDUSTRIES AND

•                       CHANGES IN FEDERAL, STATE AND LOCALLEGISLATION.

 

FOR EXAMPLE, OUR TENANTSMAY EXPERIENCE LOSSES AND BECOME UNABLE TO PAY OUR RENTS, WE MAY BE UNABLE TOIDENTIFY PROPERTIES WHICH WE WANT TO BUY OR TO NEGOTIATE ACCEPTABLE PURCHASEPRICES OR LEASE TERMS FOR THOSE PROPERTIES. THESE UNEXPECTED RESULTS COULDOCCUR DUE TO MANY DIFFERENT CIRCUMSTANCES, SOME OF WHICH, SUCH AS CHANGES INOUR TENANTS’ COSTS OR THEIR REVENUES INCLUDING MEDICARE AND MEDICAID REVENUESOR CHANGES IN THE CAPITAL MARKETS OR THE ECONOMY GENERALLY, ARE BEYOND OURCONTROL. ALSO, WE ARE UNABLE TO PREDICT WHAT EFFECT SUNRISE’S MANAGEMENT OF THE31 SENIOR LIVING COMMUNITIES LEASED TO FIVE STAR MAY HAVE UPON FIVE STAR’SABILITY TO PAY OUR RENT FOR THESE COMMUNITIES.

 

FORWARD LOOKINGSTATEMENTS ARE ONLY EXPRESSIONS OF OUR PRESENT EXPECTATIONS ANDINTENTIONS.  FORWARD LOOKING STATEMENTSARE NOT GUARANTEED TO OCCUR, AND THEY MAY NOT OCCUR.  YOU SHOULD NOT PLACE UNDUE RELIANCE UPON FORWARD LOOKINGSTATEMENTS.

 

13

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**STATEMENTCONCERNING LIMITED LIABILITY**

 

THE ARTICLES OF AMENDMENTAND RESTATEMENT ESTABLISHING SENIOR HOUSING PROPERTIES TRUST, DATED SEPTEMBER20, 1999, TOGETHER WITH ALL AMENDMENTS THERETO, AS DULY FILED IN THE OFFICE OFTHE STATE DEPARTMENT OF ASSESSMENTS AND TAXATION OF MARYLAND, PROVIDES THAT THENAME “SENIOR HOUSING PROPERTIES TRUST” REFERS TO THE TRUSTEES UNDER THEDECLARATION OF TRUST AS TRUSTEES, BUT NOT INDIVIDUALLY OR PERSONALLY, AND THATNO TRUSTEE, OFFICER, SHAREHOLDER, EMPLOYEE OR AGENT OF SENIOR HOUSINGPROPERTIES TRUST SHALL BE HELD TO ANY PERSONAL LIABILITY FOR ANY OBLIGATION OF,OR CLAIM AGAINST, SENIOR HOUSING PROPERTIES TRUST.  ALL PERSONS DEALING WITH SENIOR HOUSING PROPERTIES TRUST, IN ANYWAY, SHALL LOOK ONLY TO THE ASSETS OF SENIOR HOUSING PROPERTIES TRUST FOR THEPAYMENT OF ANY SUM OR THE PERFORMANCE OF ANY OBLIGATION.

 

14

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**PARTII.                Other Information**

 

**Item 2.    Changes in Securities and Use of Proceedsand Issuer Purchases of Equity Securities**

 

On March 10, 2004, our boardof trustees adopted a shareholder protection rights plan, or the Plan, pursuantto which our board of trustees created a class of authorized but unissuedjunior participating preferred shares, par value $.01 per share, and declared adividend of one preferred share purchase right per outstanding common share ofbeneficial interest. The terms of the junior participating preferred shares andthe Plan are described in our Current Report on Form 8-K dated March 10, 2004,which is hereby incorporated herein by reference.

 

Asfurther described in our 2003 Annual Report on Form 10-K, we have an agreementwith RMR whereby RMR provides investment, management and administrativeservices to us.  Under the terms of thisagreement, on April 1, 2004, we issued 15,571 common shares in payment of anincentive fee of $263,000 for services rendered by Reit Management &Research LLC, or RMR, during 2003 based upon a per common share price of$16.89.  These restricted securitieswere issued pursuant to an exemption from registration provided under Section4(2) of the Securities Act of 1933, as amended.

 

**Item 6.    Exhibits and Report on Form 8-K**

 
| (a)    |   |                                                                                                                                                                                                                                                                                                                                       | Exhibits: |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------|
|   |   |                                                                                                                                                                                                                                                                                                                                       |
| 3.1    |   | Composite  Copy of Amended and Restated Declaration of Trust, dated September 20, 1999,  as amended to date.  *(Incorporated by reference to the Company’s Current  Report on Form 8-K dated January 21, 2004.)*                                                                                                                 |
|   |   |                                                                                                                                                                                                                                                                                                                                       |
| 3.2    |   | Articles  Supplementary dated March 10, 2004. *(Incorporated  by reference to the Company’s Registration Statement on Form 8-A dated March  18, 2004.)*                                                                                                                                                                               |
|   |   |                                                                                                                                                                                                                                                                                                                                       |
| 3.3    |   | Certificate  of Correction dated March 29, 2004. *(filed  herewith.)*                                                                                                                                                                                                                                                                      |
|   |   |                                                                                                                                                                                                                                                                                                                                       |
| 3.4    |   | Composite Copy of Amended  and Restated Bylaws, dated March 14, 2003, as amended to date.  *(Incorporated by reference to the Company’s Current  Report on Form 8-K dated March 10, 2004.)*                                                                                                                                      |
|   |   |                                                                                                                                                                                                                                                                                                                                       |
| 4.1    |   | Rights  Agreement, dated as of March 10, 2004, by and between the Company and  EquiServe Trust Company, N.A.  *(Incorporated by reference to the Company’s Current Report  on Form 8-K dated March 10, 2004.)*                                                                                                                   |
|   |   |                                                                                                                                                                                                                                                                                                                                       |
| 10.1   |   | Amended and Restated  Master Lease Agreement by and among certain affiliates of the Company, as  Landlord, and Five Star Quality Care Trust, as Tenant, dated March 1, 2004.  *(Incorporated by reference to the Company’s Annual  Report on Form 10-K for the year ended December 31, 2003.)*                                   |
|   |   |                                                                                                                                                                                                                                                                                                                                       |
| 10.2   |   | Second  Amendment to Master  Lease Agreement by and among certain affiliates of the Company, as Landlord,  and FS Tenant Holding Company Trust and FS Tenant Pool III Trust as Tenants,  dated March 1, 2004.  *(Incorporated  by reference to the Company’s Annual Report on Form 10-K for the year ended  December 31, 2003.)* |
|   |   |                                                                                                                                                                                                                                                                                                                                       |
| 10.3   |   | Amendment  No. 1 to Advisory Agreement, dated as of March 10, 2004, by and between the  Company and Reit Management and Research LLC.  (+)  *(Incorporated by reference to the Company’s Current Report  on Form 8-K dated March 10, 2004.)*                                                                                |
|   |   |                                                                                                                                                                                                                                                                                                                                       |
| 10.4   |   | Form  of Indemnification Agreement.  *(Incorporated by reference to the Company’s Current Report  on Form 8-K dated March 10, 2004.)*                                                                                                                                                                                            |

 

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| 12.1      |   | Computation  of Ratio of Earnings to Fixed Charges.*(filed herewith.)*                                                                                                                                      |
|-----------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|      |   |                                                                                                                                                                                                        |
| 31.1      |   | Certification  Required by Rule 13a-14(a) / 15d — 14(a) of the Securities Exchange Act of  1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley  Act of 2002.*(filed herewith.)* |
|      |   |                                                                                                                                                                                                        |
| 31.2      |   | Certification  Required by Rule 13a-14(a) / 15d — 14(a) of the Securities Exchange Act of  1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley  Act of 2002.*(filed herewith.)* |
|      |   |                                                                                                                                                                                                        |
| 31.3      |   | Certification  Required by Rule 13a-14(a) / 15d — 14(a) of the Securities Exchange Act of  1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley  Act of 2002.*(filed herewith.)* |
|      |   |                                                                                                                                                                                                        |
| 31.4      |   | Certification  Required by Rule 13a-14(a) / 15d — 14(a) of the Securities Exchange Act of  1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley  Act of 2002.*(filed herewith.)* |
|      |   |                                                                                                                                                                                                        |
| 32        |   | Certification  Pursuant to 18 U.S.C. Sec 1350, as adopted pursuant to Section 906 of the  Sarbanes-Oxley Act of 2002.*(furnished  herewith.)*                                                               |
|      |   |                                                                                                                                                                                                        |
|           |
|      |   | (+) Management contract or  compensatory plan or arrangement.                                                                                                                                               |
|      |   |                                                                                                                                                                                                        |
| (b)  |   |  Reports on Form 8-K:                                                                                                                                                                                  |

 
| During the  first quarter of 2004, we filed or furnished the following Current Reports on  Form 8-K: |
|-----------------------------------------------------------------------------------------------------------|
|                                                                                                      |   |   |
| (i)                                                                                                       |   | Current  Report on Form 8-K dated January 21, 2004, filing information with respect to  (1) our public offering of 5,000,000 of our common shares of beneficial interest,  (2) the sale of 3,000,000 of our common shares of beneficial interest by HRPT  Properties Trust, and (3) an amendment of our Declaration of Trust (Items 5  and 7). |
|                                                                                                      |   |   |
| (ii)                                                                                                      |   | Current  Report on Form 8-K dated February 10, 2004 furnishing our press release  containing our results of operations and financial condition for the quarter  ended December 31, 2003 (Items 7 and 12). |
|                                                                                                      |   |   |
| (iii)                                                                                                     |   | Current  Report on Form 8-K dated March 10, 2004 filing information with respect to  the adoption of a shareholder protection rights plan and filing various  exhibits (Items 5 and 7). |

 

16

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SIGNATURES

 

Pursuant to the requirements ofthe Securities Exchange Act of 1934, the registrant has duly caused this reportto be signed on its behalf by the undersigned, thereunto duly authorized.

 
|   | SENIOR HOUSING PROPERTIES TRUST |
|--------|---------------------------------|
|   |                            |   |
|   |                            |   |
|   | By:                             | /s/ David J.  Hegarty |
|   |                            | David J.  Hegarty |
|   |                            | President  and Chief Operating Officer |
|   |                            | Dated:  May 5, 2004 |
|   |                            |   |
|   |                            |   |
|   | By:                             | /s/ John R.  Hoadley |
|   |                            | John R. Hoadley |
|   |                            | Treasurer  and Chief Financial Officer |
|   |                            | Dated:  May 5, 2004 |

 

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