- Reported Normalized FFO of $1.09 Per
Diluted Share; 7 Percent Growth on a Comparable Basis
- Portfolio Same Store Cash Net
Operating Income Growth Exceeds 4 Percent
- Company Completes $1.3 Billion of
Investments and Care Capital Properties Spin-Off
- 2015 Normalized FFO Guidance Range
Increased to $4.43 to $4.46 Per Diluted Share
Ventas, Inc. (NYSE: VTR) (“Ventas” or the “Company”) today
announced that reported normalized Funds From Operations (“FFO”)
for the quarter ended September 30, 2015 was $365.5 million,
compared to $332.8 million for the 2014 period. Reported normalized
FFO per diluted common share was $1.09 for the quarter ended
September 30, 2015. Weighted average diluted shares outstanding for
the third quarter of 2015 increased to 336.3 million, compared to
296.5 million in the third quarter of 2014.
These current and prior period reported results include in
discontinued operations normalized FFO from the 355 properties that
are now owned by Care Capital Properties, Inc. (“CCP”) (NYSE:CCP).
The spin-off of CCP as an independent, publicly traded company (the
“Spin-Off”) was successfully completed on August 17, 2015. Ventas’s
third quarter 2015 reported results include normalized FFO from
those properties for the period July 1 - August 17, 2015.
On a comparable basis (“Comparable”), adjusting all current and
prior periods for the effects of the Spin-Off as if the Spin-Off
were completed January 1, 2014, normalized FFO for the quarter
ended September 30, 2015 totaled $330.1 million or $0.98 cents per
diluted share, representing a Comparable per share growth rate of 7
percent compared to the third quarter 2014.
Strong Results and Innovative
Transactions Completed
“We drove strong results, including over four percent same-store
cash NOI growth, and completed our innovative and value creating
spin-off of Care Capital Properties and the Ardent hospital
acquisition, during the quarter,” Ventas Chairman and Chief
Executive Officer Debra A. Cafaro said. “We have a terrific
portfolio, enhanced growth prospects, leading operating partners
and excellent liquidity. With our positive momentum, we are pleased
to increase our full year 2015 guidance range for same-store cash
flow growth and normalized FFO per share.”
Third Quarter Net Income and NAREIT
FFO
Reported net income attributable to common stockholders for the
quarter ended September 30, 2015 was $22.9 million, or $0.07 per
diluted common share. Reported net income attributable to common
stockholders for the quarter ended September 30, 2014 was $109.1
million, or $0.37 per diluted common share.
The decrease in third quarter 2015 reported net income per share
from 2014 net income per share is principally due to the inclusion
in the third quarter of 2014 of a full quarter’s results from the
properties that were spun off to CCP; higher depreciation expense;
and separation and transaction costs in the current period
principally relating to the CCP Spin-Off and the Ardent
transactions. These factors were partially offset by higher net
operating income (“NOI”) due to accretive investments and improved
property performance in the third quarter 2015.
Reported FFO, as defined by the National Association of Real
Estate Investment Trusts (“NAREIT”), for the third quarter of 2015
was $260.7 million, or $0.78 per diluted common share. Reported
NAREIT FFO for the third quarter of 2014 was $304.1 million, or
$1.03 per diluted common share.
Portfolio Performance
- Same-store cash NOI growth for the
Company’s total portfolio (1,024 assets) was 4.3 percent, expressed
in constant currency, for the quarter ended September 30, 2015
compared to the same period in 2014. Year-to-date, same-store cash
NOI growth for the Company’s total portfolio (1,015 assets) was 4.4
percent.
- Total seniors housing operating
portfolio (“SHOP”) NOI was $150.3 million in the third quarter, an
increase of 15 percent over the respective 2014 period. Same-store
SHOP NOI grew 3.2 percent, expressed in constant currency, for the
239 same-store properties over third quarter 2014 results.
Third Quarter
Developments
- The Company completed its acquisition
of Ardent Health Services and simultaneously sold its hospital
operating company (“Ardent”) to a consortium composed of Equity
Group Investments, Ardent’s management team and Ventas. Ventas now
has approximately $1.3 billion invested in high quality 100% owned
hospital real estate operated by Ardent, a top ten US hospital
company, as its tenant under long-term triple-net leases at a
going-in cash yield approximating 7.5 percent after all costs and
expenses and 8 percent before such costs and expenses. Ventas
invested $26 million for its 9.9 percent share of Ardent
equity.
- The Company successfully completed its
Spin-Off of most of its skilled nursing facility portfolio into
CCP, a pure-play skilled nursing REIT, on August 17, 2015.
- The Company made $28 million in
development and redevelopment funding during the third
quarter.
- Ventas paid its shareholders a dividend
of $0.73 per share in the third quarter, representing a reported
FFO payout ratio of 67 percent. As previously communicated,
Ventas’s third quarter 2015 dividend to shareholders, combined with
CCP’s third quarter dividend, delivered a 10 percent increase for
shareholders compared to the third quarter 2014.
Balance Sheet and
Liquidity
- During the third quarter of 2015,
Ventas issued and sold a total of 1 million shares of common stock
for aggregate proceeds of approximately $67 million (before sales
commissions) under its “at the market” equity offering program, of
which approximately 580,000 were previously reported; and issued
$500 million of 4.125 percent senior notes due 2026.
- The Company completed a $900 million
five year term loan with a variable interest rate of LIBOR plus
97.5 basis points in August.
- In August, in connection with the
Spin-Off, the Company received a dividend from CCP of $1.3
billion.
- During and following the quarter,
Ventas sold assets generating proceeds of $92 million and gains
exceeding $9 million.
- During the quarter, Ventas repaid $1.0
billion of debt in addition to payments that reduced its
outstanding balance under the Company’s Revolving Credit Facility.
This $1.0 billion of repaid debt had a weighted average maturity of
1.5 years and weighted average interest rate approximating 3.3
percent.
- The Company has a strong liquidity
position and credit profile, including:
- $2 billion availability under its
Revolving Credit Facility and $65 million of cash;
- Debt maturities totaling only $667
million through 2016;
- A weighted average debt maturity
exceeding seven years;
- Net Debt to Adjusted Pro Forma EBITDA
at September 30, 2015 of 6.1x; and
- Current debt-to-enterprise value at 36
percent.
2015 Normalized FFO Per Share and Same
Store Cash Flow Guidance Increased from Previously Provided
Range
Ventas currently expects its 2015 reported normalized FFO per
diluted share to increase to a range between $4.43 and $4.46,
compared to its previously provided guidance range of $4.39 to
$4.45. If achieved, this would represent 7 to 8 percent growth in
normalized FFO per share over 2014 on a Comparable basis. Ventas
currently expects its 2015 NAREIT reported FFO per diluted share to
be between $4.03 and $4.07.
Same-store cash NOI is forecast to grow 3.5 to 4 percent in
2015, an improvement from the Company’s prior range of 2.5 to 3.5
percent, driven by enhancement of our high-quality portfolio
following the CCP Spin-Off. SHOP same-store cash NOI is now
forecast to grow 2 to 3 percent, while triple-net same-store NOI is
estimated to grow 5.5 to 6 percent in 2015.
The Company’s current expectations do not include any material
additional investments, dispositions or capital activity. A
reconciliation of the Company’s guidance to the Company’s projected
GAAP earnings is included in this press release.
The Company’s guidance is based on a number of other assumptions
that are subject to change and many of which are outside the
control of the Company. If actual results vary from these
assumptions, the Company’s expectations may change. There can be no
assurance that the Company will achieve these results.
THIRD QUARTER CONFERENCE CALL
Ventas will hold a conference call to discuss this earnings
release today at 10:00 a.m. Eastern Time (9:00 a.m. Central Time).
The dial-in number for the conference call is (800) 706-7741 (or
(617) 614-3471 for international callers). The participant passcode
is “Ventas.” The conference call is being webcast live by NASDAQ
OMX and can be accessed at the Company’s website at
www.ventasreit.com. A replay of the
webcast will be available following the call online, or by calling
(888) 286-8010 (or (617) 801-6888 for international callers),
passcode 23997249, beginning at approximately 2:00 p.m. Eastern
Time and will remain for 35 days.
Ventas, Inc., an S&P 500 company, is a leading real estate
investment trust. Its diverse portfolio of nearly 1,300 assets in
the United States, Canada and the United Kingdom consists of
seniors housing communities, medical office buildings, skilled
nursing facilities, hospitals and other properties. Through its
Lillibridge subsidiary, Ventas provides management, leasing,
marketing, facility development and advisory services to highly
rated hospitals and health systems throughout the United States.
More information about Ventas and Lillibridge can be found at
www.ventasreit.com and www.lillibridge.com.
Supplemental information regarding the Company can be found on
the Company’s website under the “Investor Relations” section or at
www.ventasreit.com/investor-relations/financial-information/supplemental-information.
A comprehensive listing of the Company’s properties is available at
www.ventasreit.com/our-portfolio/properties-by-location.
This press release includes forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. All statements regarding the Company’s or its tenants’,
operators’, borrowers’ or managers’ expected future financial
condition, results of operations, cash flows, funds from
operations, dividends and dividend plans, financing opportunities
and plans, capital markets transactions, business strategy,
budgets, projected costs, operating metrics, capital expenditures,
competitive positions, acquisitions, investment opportunities,
dispositions, merger or acquisition integration, growth
opportunities, expected lease income, continued qualification as a
real estate investment trust (“REIT”), plans and objectives of
management for future operations and statements that include words
such as “anticipate,” “if,” “believe,” “plan,” “estimate,”
“expect,” “intend,” “may,” “could,” “should,” “will” and other
similar expressions are forward-looking statements. These
forward-looking statements are inherently uncertain, and actual
results may differ from the Company’s expectations. The Company
does not undertake a duty to update these forward-looking
statements, which speak only as of the date on which they are
made.
The Company’s actual future results and trends may differ
materially from expectations depending on a variety of factors
discussed in the Company’s filings with the Securities and Exchange
Commission. These factors include without limitation: (a) the
ability and willingness of the Company’s tenants, operators,
borrowers, managers and other third parties to satisfy their
obligations under their respective contractual arrangements with
the Company, including, in some cases, their obligations to
indemnify, defend and hold harmless the Company from and against
various claims, litigation and liabilities; (b) the ability of the
Company’s tenants, operators, borrowers and managers to maintain
the financial strength and liquidity necessary to satisfy their
respective obligations and liabilities to third parties, including
without limitation obligations under their existing credit
facilities and other indebtedness; (c) the Company’s success in
implementing its business strategy and the Company’s ability to
identify, underwrite, finance, consummate and integrate
diversifying acquisitions and investments, including investments in
different asset types and outside the United States; (d)
macroeconomic conditions such as a disruption of or lack of access
to the capital markets, changes in the debt rating on U.S.
government securities, default or delay in payment by the United
States of its obligations, and changes in the federal or state
budgets resulting in the reduction or nonpayment of Medicare or
Medicaid reimbursement rates; (e) the nature and extent of future
competition, including new construction in the markets in which the
Company’s seniors housing communities and medical office buildings
(“MOBs”) are located; (f) the extent of future or pending
healthcare reform and regulation, including cost containment
measures and changes in reimbursement policies, procedures and
rates; (g) increases in the Company’s borrowing costs as a result
of changes in interest rates and other factors; (h) the ability of
the Company’s operators and managers, as applicable, to comply with
laws, rules and regulations in the operation of the Company’s
properties, to deliver high-quality services, to attract and retain
qualified personnel and to attract residents and patients; (i)
changes in general economic conditions or economic conditions in
the markets in which the Company may, from time to time, compete,
and the effect of those changes on the Company’s revenues, earnings
and funding sources; (j) the Company’s ability to pay down,
refinance, restructure or extend its indebtedness as it becomes
due; (k) the Company’s ability and willingness to maintain its
qualification as a REIT in light of economic, market, legal, tax
and other considerations; (l) final determination of the Company’s
taxable net income for the year ending December 31, 2015; (m) the
ability and willingness of the Company’s tenants to renew their
leases with the Company upon expiration of the leases, the
Company’s ability to reposition its properties on the same or
better terms in the event of nonrenewal or in the event the Company
exercises its right to replace an existing tenant or manager, and
obligations, including indemnification obligations, the Company may
incur in connection with the replacement of an existing tenant or
manager; (n) risks associated with the Company’s senior living
operating portfolio, such as factors that can cause volatility in
the Company’s operating income and earnings generated by those
properties, including without limitation national and regional
economic conditions, costs of food, materials, energy, labor and
services, employee benefit costs, insurance costs and professional
and general liability claims, and the timely delivery of accurate
property-level financial results for those properties; (o) changes
in exchange rates for any foreign currency in which the Company
may, from time to time, conduct business; (p) year-over-year
changes in the Consumer Price Index or the UK Retail Price Index
and the effect of those changes on the rent escalators contained in
the Company’s leases and the Company’s earnings; (q) the Company’s
ability and the ability of its tenants, operators, borrowers and
managers to obtain and maintain adequate property, liability and
other insurance from reputable, financially stable providers; (r)
the impact of increased operating costs and uninsured professional
liability claims on the Company’s liquidity, financial condition
and results of operations or that of the Company’s tenants,
operators, borrowers and managers, and the ability of the Company
and the Company’s tenants, operators, borrowers and managers to
accurately estimate the magnitude of those claims; (s) risks
associated with the Company’s MOB portfolio and operations,
including the Company’s ability to successfully design, develop and
manage MOBs, to accurately estimate its costs in fixed
fee-for-service projects and to retain key personnel; (t) the
ability of the hospitals on or near whose campuses the Company’s
MOBs are located and their affiliated health systems to remain
competitive and financially viable and to attract physicians and
physician groups; (u) the Company’s ability to build, maintain and
expand its relationships with existing and prospective hospital and
health system clients; (v) risks associated with the Company’s
investments in joint ventures and unconsolidated entities,
including its lack of sole decision-making authority and its
reliance on its joint venture partners’ financial condition; (w)
the impact of market or issuer events on the liquidity or value of
the Company’s investments in marketable securities; (x) merger and
acquisition activity in the seniors housing and healthcare
industries resulting in a change of control of, or a competitor’s
investment in, one or more of the Company’s tenants, operators,
borrowers or managers or significant changes in the senior
management of the Company’s tenants, operators, borrowers or
managers; (y) the impact of litigation or any financial,
accounting, legal or regulatory issues that may affect the Company
or its tenants, operators, borrowers or managers; and (z) changes
in accounting principles, or their application or interpretation,
and the Company’s ability to make estimates and the assumptions
underlying the estimates, which could have an effect on the
Company’s earnings. Many of these factors are beyond the control of
the Company and its management.
CONSOLIDATED BALANCE SHEETS As of September 30, 2015,
June 30, 2015, March 31, 2015, December 31, 2014 and September 30,
2014 (In thousands, except per share amounts)
September 30, June 30,
March 31, December 31, September 30,
2015 2015 2015 2014 2014
Assets Real estate investments: Land and improvements $
2,065,664 $ 2,013,478 $ 1,971,210 $ 1,708,851 $ 1,690,085 Buildings
and improvements 20,203,784 19,231,061 19,032,505 17,403,552
17,182,025 Construction in progress 124,377 129,186 118,483 109,689
100,445 Acquired lease intangibles 1,344,708 1,211,917
1,194,783 952,251 952,487 23,738,533
22,585,642 22,316,981 20,174,343 19,925,042 Accumulated
depreciation and amortization (3,966,947 ) (3,774,841 ) (3,564,277
) (3,420,089 ) (3,249,081 ) Net real estate property 19,771,586
18,810,801 18,752,704 16,754,254 16,675,961 Secured loans
receivable and investments, net 766,707 762,312 746,793 802,881
380,792 Investments in unconsolidated real estate entities 96,208
85,461 95,147 91,872 88,175 Net
real estate investments 20,634,501 19,658,574 19,594,644 17,649,007
17,144,928 Cash and cash equivalents 65,231 60,532 120,225 55,348
64,595 Escrow deposits and restricted cash 74,491 193,960 223,772
71,771 78,746 Goodwill 1,052,321 1,058,607 947,386 363,971 358,672
Assets held for sale 168,931 2,839,453 3,030,030 2,574,174
2,581,040 Other assets 418,502 395,752 452,428
451,642 358,356
Total assets $ 22,413,977
$ 24,206,878 $ 24,368,485 $ 21,165,913
$ 20,586,337
Liabilities and equity
Liabilities: Senior notes payable and other debt $ 11,268,560 $
11,439,577 $ 11,532,539 $ 10,827,764 $ 10,404,208 Accrued interest
67,358 77,631 77,359 62,097 69,112 Accounts payable and other
liabilities 791,430 784,465 777,517 750,622 720,601 Liabilities
related to assets held for sale 65,465 241,894 239,075 254,680
244,709 Deferred income taxes 352,658 370,161 371,785
344,337 361,454 Total liabilities 12,545,471
12,913,728 12,998,275 12,239,500 11,800,084 Redeemable OP
unitholder and noncontrolling interests 198,832 199,404 257,246
172,016 163,080 Commitments and contingencies Equity:
Ventas stockholders' equity: Preferred stock, $1.00 par value;
10,000 shares authorized, unissued — — — — — Common stock, $0.25
par value; 333,027; 331,965; 330,913; 298,478 and 294,359 shares
issued at September 30, 2015, June 30, 2015, March 31, 2015,
December 31, 2014 and September 30, 2014, respectively 83,238
82,982 82,718 74,656 73,603 Capital in excess of par value
11,523,312 12,708,898 12,616,056 10,119,306 9,859,490 Accumulated
other comprehensive income (592 ) 10,180 4,357 13,121 16,156
Retained earnings (deficit) (1,992,848 ) (1,772,529 ) (1,660,856 )
(1,526,388 ) (1,398,378 ) Treasury stock, 61; 28; 32; 7 and 32
shares at September 30, 2015, June 30, 2015, March 31, 2015,
December 31, 2014 and September 30, 2014, respectively (3,675 )
(2,048 ) (2,385 ) (511 ) (2,075 ) Total Ventas stockholders' equity
9,609,435 11,027,483 11,039,890 8,680,184 8,548,796 Noncontrolling
interest 60,239 66,263 73,074 74,213
74,377 Total equity 9,669,674 11,093,746
11,112,964 8,754,397 8,623,173
Total
liabilities and equity $ 22,413,977 $ 24,206,878
$ 24,368,485 $ 21,165,913 $ 20,586,337
CONSOLIDATED STATEMENTS OF INCOME For the three and nine
months ended September 30, 2015 and 2014 (In thousands,
except per share amounts) For
the Three Months Ended For the Nine Months Ended
September 30, September 30, 2015 2014
2015 2014 Revenues: Rental income: Triple-net
leased $ 201,028 $ 170,873 $ 571,591 $ 500,047 Medical office
buildings 142,755 116,686 420,287 346,942
343,783 287,559 991,878 846,989 Resident fees and services
454,825 396,247 1,356,384 1,141,781 Medical office building and
other services revenue 10,000 7,573 29,951 18,240 Income from loans
and investments 18,924 13,186 66,192 36,902 Interest and other
income 74 367 719 811 Total revenues
827,606 704,932 2,445,124 2,044,723
Expenses: Interest
97,135 77,325 263,422 214,117 Depreciation and amortization 226,332
173,006 657,262 507,167 Property-level operating expenses: Senior
living 304,540 265,274 902,154 762,993 Medical office buildings
43,305 41,262 129,152 120,021 347,845
306,536 1,031,306 883,014 Medical office building services costs
6,416 4,568 19,098 9,565 General, administrative and professional
fees 32,114 29,464 100,399 93,632 Loss on extinguishment of debt,
net 15,331 2,414 14,897 5,079 Merger-related expenses and deal
costs 62,145 16,188 105,023 35,944 Other 4,795 9,413
13,948 18,070 Total expenses 792,113 618,914
2,205,355 1,766,588 Income before (loss)
income from unconsolidated entities, income taxes, discontinued
operations, real estate dispositions and noncontrolling interest
35,493 86,018 239,769 278,135 (Loss) income from unconsolidated
entities (955 ) (47 ) (1,197 ) 549 Income tax benefit (expense)
10,697 1,887 27,736 (4,820 ) Income from
continuing operations 45,235 87,858 266,308 273,864 Discontinued
operations (22,383 ) 18,171 13,434 79,026 Gain on real estate
dispositions 265 3,625 14,420 16,514
Net income 23,117 109,654 294,162 369,404 Net income attributable
to noncontrolling interest 265 522 1,047 827
Net income attributable to common stockholders $ 22,852
$ 109,132 $ 293,115 $ 368,577
Earnings per common share: Basic: Income from continuing
operations attributable to common stockholders, including real
estate dispositions $ 0.14 $ 0.31 $ 0.85 $ 0.98 Discontinued
operations (0.07 ) 0.06 0.04 0.27 Net income
attributable to common stockholders $ 0.07 $ 0.37 $
0.89 $ 1.25 Diluted: Income from continuing
operations attributable to common stockholders, including real
estate dispositions $ 0.14 $ 0.31 $
0.85
$ 0.97 Discontinued operations (0.07 ) 0.06 0.03 0.27
Net income attributable to common stockholders $ 0.07
$ 0.37 $
0.88
$ 1.24
Weighted average shares used in
computing earnings per common share: Basic 332,491 294,030
329,440 293,965 Diluted 336,338 296,495 333,210 296,411
Dividends declared per common share $ 0.73 $ 0.725 $ 2.31 $ 2.175
QUARTERLY CONSOLIDATED STATEMENTS OF INCOME (In
thousands, except per share amounts)
2015 Quarters 2014 Quarters
Third Second First Fourth Third
Revenues: Rental income: Triple-net leased $ 201,028
$ 182,006 $ 188,557 $ 174,500 $ 170,873 Medical office buildings
142,755 140,472 137,060 116,968 116,686
343,783 322,478 325,617 291,468 287,559 Resident fees and
services 454,825 454,645 446,914 411,170 396,247 Medical office
building and other services revenue 10,000 9,408 10,543 11,124
7,573 Income from loans and investments 18,924 25,215 22,053 14,876
13,186 Interest and other income 74 174 471
3,452 367 Total revenues 827,606 811,920 805,598
732,090 704,932
Expenses: Interest 97,135 83,959
82,328 77,948 77,325 Depreciation and amortization 226,332 214,711
216,219 218,049 173,006 Property-level operating expenses: Senior
living 304,540 299,252 298,362 273,563 265,274 Medical office
buildings 43,305 43,410 42,437 38,811
41,262 347,845 342,662 340,799 312,374 306,536 Medical
office building services costs 6,416 5,764 6,918 7,527 4,568
General, administrative and professional fees 32,114 33,959 34,326
28,106 29,464 Loss (gain) on extinguishment of debt, net 15,331
(455 ) 21 485 2,414 Merger-related expenses and deal costs 62,145
12,265 30,613 7,360 16,188 Other 4,795 4,279 4,874
7,673 9,413 Total expenses 792,113
697,144 716,098 659,522 618,914
Income before (loss) income from unconsolidated entities, income
taxes, discontinued operations, real estate dispositions and
noncontrolling interest 35,493 114,776 89,500 72,568 86,018 (Loss)
income from unconsolidated entities (955 ) 9 (251 ) (688 ) (47 )
Income tax benefit 10,697 9,789 7,250 13,552
1,887 Income from continuing operations 45,235
124,574 96,499 85,432 87,858 Discontinued operations (22,383 )
18,243 17,574 20,709 18,171 Gain on real estate dispositions 265
7,469 6,686 1,456 3,625 Net
income 23,117 150,286 120,759 107,597 109,654 Net income
attributable to noncontrolling interest 265 465 317
407 522 Net income attributable to common
stockholders $ 22,852 $ 149,821 $ 120,442 $
107,190 $ 109,132
Earnings per common
share: Basic: Income from continuing operations attributable to
common stockholders, including real estate dispositions $ 0.14 $
0.39 $ 0.32 $ 0.29 $ 0.31 Discontinued operations (0.07 ) 0.06
0.05 0.07 0.06 Net income attributable
to common stockholders $ 0.07 $ 0.45 $ 0.37 $
0.36 $ 0.37 Diluted: Income from continuing
operations attributable to common stockholders, including real
estate dispositions $ 0.14 $ 0.40 $ 0.32 $ 0.29 $ 0.31 Discontinued
operations (0.07 ) 0.05 0.05 0.07 0.06
Net income attributable to common stockholders $ 0.07 $ 0.45
$ 0.37 $ 0.36 $ 0.37
Weighted
average shares used in computing earnings per common share:
Basic 332,491 330,715 325,454 294,810 294,030 Diluted 336,338
334,026 329,203 297,480 296,495
CONSOLIDATED STATEMENTS
OF CASH FLOWS For the nine months ended September 30, 2015
and 2014 (In thousands) 2015
2014 Cash flows from operating activities: Net income $
294,162 $ 369,404 Adjustments to reconcile net income to net cash
provided by operating activities: Depreciation and amortization
(including amounts in discontinued operations) 736,870 587,176
Amortization of deferred revenue and lease intangibles, net (19,312
) (14,775 ) Other non-cash amortization 3,051 (616 ) Stock-based
compensation 16,061 16,792 Straight-lining of rental income, net
(25,118 ) (29,644 ) Loss on extinguishment of debt, net 14,897
5,079 Gain on real estate dispositions (including amounts in
discontinued operations) (14,649 ) (17,726 ) Gain on real estate
loan investments — (249 ) Gain on sale of marketable securities
(5,800 ) — Income tax (benefit) expense (30,717 ) 4,420 Loss
(income) from unconsolidated entities 1,197 (549 ) Other 23,826
13,736 Changes in operating assets and liabilities: Decrease
(increase) in other assets 11,164 (3,306 ) Increase in accrued
interest 6,338 14,835 Increase (decrease) in accounts payable and
other liabilities 10,075 (24,605 ) Net cash provided by
operating activities 1,022,045 919,972 Cash flows from investing
activities: Net investment in real estate property (2,556,988 )
(1,184,036 ) Investment in loans receivable and other (74,386 )
(66,436 ) Proceeds from real estate disposals 409,633 112,746
Proceeds from loans receivable 106,909 55,573 Purchase of
marketable securities — (46,689 ) Proceeds from sale or maturity of
marketable securities 76,800 21,689 Funds held in escrow for future
development expenditures 4,003 2,602 Development project
expenditures (90,458 ) (71,375 ) Capital expenditures (75,812 )
(56,235 ) Investment in unconsolidated operating entity (26,282 ) —
Other (27,984 ) (4,009 ) Net cash used in investing activities
(2,254,565 ) (1,236,170 ) Cash flows from financing activities: Net
change in borrowings under credit facility (790,406 ) (153,684 )
Net cash impact of CCP Spin-off (128,749 ) — Proceeds from debt
2,511,061 2,007,707 Proceeds from debt related to CCP Spin-off
1,400,000 — Repayment of debt (1,329,070 ) (905,117 ) Purchase of
noncontrolling interest (3,819 ) — Payment of deferred financing
costs (23,893 ) (14,946 ) Issuance of common stock, net 417,818 —
Cash distribution to common stockholders (759,575 ) (640,414 ) Cash
distribution to redeemable OP unitholders (12,776 ) (4,214 )
Purchases of redeemable OP units (33,188 ) — Distributions to
noncontrolling interest (11,250 ) (6,760 ) Other 6,489 (551
)
Net cash provided by financing
activities
1,242,642 282,021 Net increase (decrease) in cash and
cash equivalents 10,122 (34,177 ) Effect of foreign currency
translation on cash and cash equivalents (239 ) 3,956 Cash and cash
equivalents at beginning of period 55,348 94,816 Cash
and cash equivalents at end of period $ 65,231 $ 64,595
Supplemental schedule of non-cash activities: Assets
and liabilities assumed from acquisitions: Real estate investments
$ 2,558,239 $ 353,995 Other assets acquired 20,221 3,683 Debt
assumed 177,857 228,150 Other liabilities 57,937 19,441 Deferred
income tax liability 50,836 110,087 Noncontrolling interests 87,245
— Equity issued 2,204,585 —
QUARTERLY CONSOLIDATED
STATEMENTS OF CASH FLOWS (In thousands)
2015 Quarters 2014 Quarters
Third Second First Fourth Third
Cash flows from operating activities: Net income $ 23,117 $ 150,286
$ 120,759 $ 107,597 $ 109,654 Adjustments to reconcile net income
to net cash provided by operating activities: Depreciation and
amortization (including amounts in discontinued operations) 240,210
249,207 247,453 241,291 201,236 Amortization of deferred revenue
and lease intangibles, net (5,682 ) (7,027 ) (6,603 ) (4,096 )
(4,896 ) Other non-cash amortization 2,142 1,428 (519 ) 304 2,312
Stock-based compensation 4,869 4,885 6,307 4,202 5,381
Straight-lining of rental income, net (8,357 ) (8,082 ) (8,679 )
(9,043 ) (12,413 ) (Gain) loss on extinguishment of debt, net
15,331 (455 ) 21 485 2,414 Gain on real estate dispositions
(including amounts in discontinued operations) (217 ) (7,746 )
(6,686 ) (1,457 ) (3,584 ) Gain on real estate loan investments — —
— (1,206 ) (249 ) Gain on sale of marketable securities — (5,800 )
— — — Income tax (benefit) expense (12,477 ) (10,390 ) (7,850 )
(13,851 ) (1,987 ) (Income) loss from unconsolidated entities 955
(9 ) 251 688 47 Other 5,747 15,171 2,908 2,188 7,152 Changes in
operating assets and liabilities: (Increase) decrease in other
assets 20,875 (14,326 ) 4,615 8,623 (14,514 ) Increase (decrease)
in accrued interest (9,770 ) 316 15,792 (6,877 ) 12,461 Increase
(decrease) in accounts payable and other liabilities 27,578
6,097 (23,600 ) 6,025 21,256 Net cash provided
by operating activities 304,321 373,555 344,169 334,873 324,270
Cash flows from investing activities: Net investment in real estate
property (1,303,078 ) (181,371 ) (1,072,539 ) (284,250 ) (912,510 )
Investment in loans receivable and other (18,727 ) (16,086 )
(39,573 ) (432,556 ) (21,948 ) Proceeds from real estate disposals
136,442 106,850 166,341 5,500 60,396 Proceeds from loans receivable
13,634 1,219 92,056 17,984 49,593 Purchase of marketable securities
— — — (50,000 ) — Proceeds from sale or maturity of marketable
securities 19,575 57,225 — — 21,689 Funds held in escrow for future
development expenditures — — 4,003 1,988 — Development project
expenditures (27,828 ) (29,163 ) (33,467 ) (35,613 ) (26,952 )
Capital expenditures (32,383 ) (22,258 ) (21,171 ) (31,219 )
(20,709 ) Investment in unconsolidated operating entity (26,282 ) —
— — — Other (19,171 ) (4,633 ) (4,180 ) (10,704 ) (296 ) Net cash
used in investing activities (1,257,818 ) (88,217 ) (908,530 )
(818,870 ) (850,737 ) Cash flows from financing activities: Net
change in borrowings under credit facility (469,072 ) 131,563
(452,897 ) 693,887 46,267 Net cash impact of CCP Spin-off (128,749
) — — — — Proceeds from debt 1,403,090 15,138 1,092,833 — 1,311,046
Proceeds from debt related to CCP Spin-off 1,400,000 — — —
Repayment of debt (1,050,628 ) (253,795 ) (24,647 ) (246,278 )
(632,391 ) Purchase of noncontrolling interest (3 ) (1,156 ) (2,660
) — — Payment of deferred financing costs (9,285 ) (173 ) (14,435 )
726 (8,100 ) Issuance of common stock, net 65,651 66,840 285,327
242,107 — Cash distribution to common stockholders (243,171 )
(261,494 ) (254,910 ) (235,200 ) (213,462 ) Cash distribution to
redeemable OP unitholders (8,079 ) (2,332 ) (2,365 ) (1,548 )
(1,452 ) Purchases of redeemable OP units — (32,619 ) (569 ) (503 )
— Contributions from noncontrolling interest — — — 491 —
Distributions to noncontrolling interest (1,783 ) (7,645 ) (1,822 )
(2,799 ) (1,852 ) Other 561 238 5,690 25,153
23 Net cash (used in) provided by financing
activities 958,532 (345,435 ) 629,545 476,036
500,079 Net (decrease) increase in cash and cash equivalents
5,035 (60,097 ) 65,184 (7,961 ) (26,388 ) Effect of foreign
currency translation on cash and cash equivalents (336 ) 404 (307 )
(1,286 ) 4,348 Cash and cash equivalents at beginning of period
60,532 120,225 55,348 64,595 86,635
Cash and cash equivalents at end of period $ 65,231 $
60,532 $ 120,225 $ 55,348 $ 64,595
QUARTERLY CONSOLIDATED STATEMENTS OF CASH FLOWS
(continued) (In thousands)
2015 Quarters 2014 Quarters Third
Second First Fourth Third Supplemental
schedule of non-cash activities: Assets and liabilities assumed
from acquisitions: Real estate investments $ 3,649 $ 11,761 $
2,542,829 $ 16,746 $ 299,713 Investment in unconsolidated operating
entity — — — — — Other assets acquired 3,716 (206 ) 16,711 11,597
2,049 Debt assumed — — 177,857 12,926 177,035 Other liabilities
8,149 4,052 45,736 4,598 15,766 Deferred income tax liability (784
) 7,503 44,117 641 108,961 Noncontrolling interests — — 87,245 — —
Equity issued — — 2,204,585 10,178 —
NON-GAAP FINANCIAL
MEASURES RECONCILIATION
Funds From Operations (FFO) and Funds
Available for Distribution (FAD)1
(Dollars in thousands, except per share amounts)
Tentative Estimates Preliminary and Midpoint
YOY Subject to Change YOY 2014
2015 Growth FY2015 -
Guidance Growth Q3 Q4
FY Q1 Q2 Q3
YTD '14-'15 Low
High '14-'15E Net income attributable to
common stockholders 2 $ 109,132 $
107,190 $ 475,767 $ 120,442
$ 149,821 $ 22,852 $
293,115 $ 413,165 $
417,186 Net income attributable to common stockholders
per share 2 $ 0.37 $ 0.36
$ 1.60 $ 0.37 $ 0.45
$ 0.07 $ 0.88 $ 1.24
$ 1.25 Adjustments: Depreciation and
amortization on real estate assets 171,399
216,239 718,649 214,429 212,908
224,688 652,025 878,000 888,000
Depreciation on real estate assets related to noncontrolling
interest (2,503 ) (2,506 )
(10,314 ) (2,052 ) (1,964
) (1,964 ) (5,980 )
(7,900 ) (8,000 ) Depreciation on
real estate assets related to unconsolidated entities
1,471 1,332 5,792 1,462 1,464
1,445 4,371 5,775 5,875 Gain on real
estate dispositions (3,625 ) (1,456
) (17,970 ) (6,686 )
(7,469 ) (265 ) (14,420 )
(22,000 ) (22,500 ) Discontinued
operations: Loss (gain) on real estate dispositions
41 (52 ) (1,494 ) —
(277 ) 48 (229 ) (229
) (229 ) Depreciation and amortization on
real estate assets 28,230 23,241
103,250 31,234
34,496 13,878
79,608 79,608
79,608 Subtotal: FFO add-backs
195,013 236,798 797,913 238,387
239,158 237,830 715,375 933,254
942,754 Subtotal: FFO add-backs per share
$ 0.66 $ 0.80
$ 2.69 $ 0.72
$ 0.72 $
0.71 $ 2.15
$ 2.79 $ 2.82
FFO (NAREIT) attributable to common
stockholders $ 304,145 $ 343,988
$ 1,273,680 $ 358,829 $
388,979 $ 260,682 $ 1,008,490
(14
%) $ 1,346,419 $ 1,359,940
6 % FFO (NAREIT) attributable to common
stockholders per share $ 1.03
$ 1.16 $ 4.29
$ 1.09 $
1.16 $ 0.78
$ 3.03
(24
%) $ 4.03 $
4.07 (6 %)
Adjustments: Change in fair value of financial
instruments 4,595 485 5,121 (46
) 70 (18 ) 6 50
(50 ) Non-cash income tax (benefit) expense
(1,987 ) (13,851 ) (9,431
) (7,850 ) (10,389 )
(12,477 ) (30,716 ) (40,000
) (42,000 ) Loss (gain) on extinguishment
of debt, net 2,414 485 5,013 21
(39 ) 16,301 16,283 16,283
16,783 Merger-related expenses, deal costs and re-audit
costs 23,401 10,625 54,389 36,002
15,135 100,548 151,685 155,000
153,000 Amortization of other intangibles 255
480 1,246
591 591 438
1,620 2,000
2,100 Subtotal: normalized FFO
add-backs 28,678 (1,776 ) 56,338
28,718 5,368 104,792 138,878
133,333 129,833 Subtotal: normalized FFO add-backs
per share $ 0.10 $
(0.01 ) $ 0.19
$ 0.09 $ 0.02
$ 0.31 $ 0.42
$ 0.40
$ 0.39 Normalized FFO
attributable to common stockholders $ 332,823
$ 342,212 $ 1,330,018 $
387,547 $ 394,347 $ 365,474
$ 1,147,368
10
% $ 1,479,752 $ 1,489,773
12 % Normalized FFO attributable to common
stockholders per share $ 1.12 $
1.15 $ 4.48 $ 1.18 $
1.18 $ 1.09 $ 3.44
(3
%) $ 4.43 $ 4.46 (1%)
Less: Normalized FFO from CCP spin-off (59,398
) (57,051 ) (250,100 )
(68,701 ) (69,306 ) (35,393
) (173,400 ) (173,400 )
(173,400 ) Less: Normalized FFO from CCP spin-off
per share $ (0.20 ) $ (0.19
) $ (0.84 ) $ (0.21
) $ (0.21 ) $ (0.11
) $ (0.52 ) $ (0.52
) $ (0.52 ) Comparable Normalized
FFO attributable to common stockholders $ 273,425
$ 285,161 $ 1,079,918 $
318,846 $ 325,041 $ 330,081
$ 973,968
21
% $ 1,306,352 $ 1,316,373
21 % Comparable Normalized FFO attributable to
common stockholders per share $ 0.92
$ 0.96 $
3.64 $ 0.97
$ 0.97 $ 0.98
$ 2.92
7
% $ 3.91 $
3.94 8 % Non-cash
items included in normalized FFO: Amortization of deferred
revenue and lease intangibles, net (4,896 )
(4,096 ) (18,871 ) (6,603
) (7,027 ) (5,682 )
(19,312 ) (23,750 ) (24,250
) Other non-cash amortization, including fair market
value of debt 2,312 304 (312 )
(519 ) 1,428 2,142 3,051
5,150 5,650 Stock-based compensation
5,381 4,202 20,994 6,307 4,885
4,869 16,061 19,600 21,300
Straight-lining of rental income, net (12,413
) (9,043 ) (38,687
) (8,679 ) (8,082
) (8,357 ) (25,118
) (31,750 )
(32,250 ) Subtotal: non-cash items included in
normalized FFO (9,616 ) (8,633 )
(36,876 ) (9,494 ) (8,796
) (7,028 ) (25,318 )
(30,750 ) (29,550 ) Capital
expenditures (21,822 )
(32,527 ) (92,928 )
(22,148 ) (23,520 )
(33,536 ) (79,204 )
(114,000 ) (112,000
) Normalized FAD attributable to common
stockholders $ 301,385 $ 301,052
$ 1,200,214 $ 355,905 $
362,031 $ 324,910 $ 1,042,846
8
% $ 1,335,002 $ 1,348,223
12 % Normalized FAD attributable to common
stockholders per share $ 1.02 $
1.01 $ 4.05 $ 1.08 $
1.08 $ 0.97 $ 3.13
(5
%) $ 4.00 $ 4.04 (1
%) Less: Normalized FAD from CCP spin-off
(55,015 ) (51,535 ) (230,477
) (61,014 ) (64,080 )
(29,987 ) (155,081 ) (155,081
) (155,081 ) Less: Normalized FAD from CCP
spin-off per share $ (0.19 ) $
(0.17 ) $ (0.78 ) $
(0.19 ) $ (0.19 ) $
(0.09 ) $ (0.47 ) $
(0.46 ) $ (0.46 ) Comparable
Normalized FAD attributable to common stockholders $
246,370 $ 249,517 $ 969,737
$ 294,891 $ 297,951 $
294,923 $ 887,765
20
% $ 1,179,921 $ 1,193,142
22 % Comparable Normalized FAD attributable to
common stockholders per share $ 0.83
$ 0.84 $
3.27 $ 0.90
$ 0.89 $ 0.88
$ 2.66
6
% $ 3.53 $
3.57 9 % Merger-related
expenses, deal costs and re-audit costs (23,401
) (10,625 ) (54,389
) (36,002 ) (15,135
) (100,548 ) (151,685
) (155,000 )
(153,000 ) FAD attributable to
common stockholders $ 277,984 $
290,427 $ 1,145,825 $ 319,903
$ 346,896 $ 224,362 $
891,161
(19
%) $ 1,180,002 $ 1,195,223
4 % FAD attributable to common stockholders per
share $ 0.94 $ 0.98 $
3.86 $ 0.97 $ 1.04 $
0.67 $ 2.67
(29
%) $ 3.53 $ 3.58 (8
%) Less: FAD from CCP spin-off (54,454
) (50,952 ) (228,730 )
(56,454 ) (61,760 ) 7,204
(111,010 ) (111,010 ) (111,010
) Less: FAD from CCP spin-off per share $
(0.18 ) $ (0.17 ) $
(0.77 ) $ (0.17 ) $
(0.18 ) $ 0.02 $ (0.33
) $ (0.33 ) $ (0.33
) Comparable FAD attributable to common stockholders
$ 223,530 $ 239,475 $
917,095 $ 263,449 $ 285,136
$ 231,566 $ 780,151
(4
%) $ 1,068,992 $ 1,084,213
17 % Comparable FAD attributable to common
stockholders per share $ 0.75
$ 0.81 $ 3.09
$ 0.80 $
0.85 $ 0.69
$ 2.34
(8
%) $ 3.20 $
3.25 4 % Weighted average
diluted shares 296,495 297,480 296,677
329,203 334,026 336,338 333,210
334,030 334,030 1
Totals and per share amounts may not add due to rounding. Per
share quarterly amounts may not add to annual per share amounts due
to material changes in the Company’s weighted average diluted share
count, if any.
2 CCP impacts calculated based
on net income related to discontinued operations, less the de
minimis share of discontinued operations net income not related to
CCP assets, assuming (1) G&A of $2.5 million in both Q3’14 and
Q4’14 ($0.01 per share per quarter), $10.0 million for the
full-year of 2014 ($0.03 per share), $2.5 million in Q1’15 and
Q2’15 ($0.01 per share per quarter), and $1.3 million in Q3’15
($0.00 per share) and (2) interest expense of $6.5 million in Q3’14
and Q4’14 ($0.02 per share per quarter), $26.1 million for the
full-year 2014 ($0.09 per share), $6.9 million in Q1’15 and Q2’15
($0.02 per share per quarter), and $4.3 million in Q3’15 ($0.01 per
share); these adjustments differ from the respective amounts found
in discontinued operations.
Historical cost accounting for real estate assets implicitly
assumes that the value of real estate assets diminishes predictably
over time. However, since real estate values have historically
risen or fallen with market conditions, many industry investors
deem presentations of operating results for real estate companies
that use historical cost accounting to be insufficient by
themselves. For that reason, the Company considers FFO, normalized
FFO, FAD and normalized FAD to be appropriate measures of operating
performance of an equity REIT. In particular, the Company believes
that normalized FFO is useful because it allows investors, analysts
and Company management to compare the Company’s operating
performance to the operating performance of other real estate
companies and between periods on a consistent basis without having
to account for differences caused by unanticipated items and other
events such as transactions and litigation. In some cases, the
Company provides information about identified non-cash components
of FFO and normalized FFO because it allows investors, analysts and
Company management to assess the impact of those items on the
Company’s financial results.
The Company uses the NAREIT definition of FFO. NAREIT defines
FFO as net income attributable to common stockholders (computed in
accordance with GAAP) excluding gains (or losses) from sales of
real estate property, including gain on re-measurement of equity
method investments, and impairment write-downs of depreciable real
estate, plus real estate depreciation and amortization, and after
adjustments for unconsolidated partnerships and joint ventures.
Adjustments for unconsolidated partnerships and joint ventures will
be calculated to reflect FFO on the same basis. The Company defines
normalized FFO as FFO excluding the following income and expense
items (which may be recurring in nature): (a) merger-related costs
and expenses, including amortization of intangibles, transition and
integration expenses, and deal costs and expenses, including
expenses and recoveries relating to acquisition lawsuits; (b) the
impact of any expenses related to asset impairment and valuation
allowances, the write-off of unamortized deferred financing fees,
or additional costs, expenses, discounts, make-whole payments,
penalties or premiums incurred as a result of early retirement or
payment of the Company’s debt; (c) the non-cash effect of income
tax benefits or expenses and derivative transactions that have
non-cash mark-to-market impacts on the Company’s income statement;
(d) except as specifically stated in the case of guidance, the
impact of future acquisitions or divestitures (including pursuant
to tenant options to purchase) and capital transactions; (e) the
financial impact of contingent consideration, charitable donations
made to the Ventas Charitable Foundation, gains and losses for
non-operational foreign currency hedge agreements and changes in
the fair value of financial instruments; and (f) expenses related
to the re-audit and re-review in 2014 of the Company’s historical
financial statements and related matters. Normalized FAD represents
normalized FFO excluding non-cash components, straight-line rental
adjustments and deducting capital expenditures, including tenant
allowances and leasing commissions. FAD represents normalized FAD
after subtracting merger-related expenses, deal costs and re-audit
costs.
FFO, normalized FFO, FAD and normalized FAD presented herein may
not be comparable to similar measures presented by other real
estate companies due to the fact that not all real estate companies
use the same definitions. FFO, normalized FFO, FAD and normalized
FAD should not be considered as alternatives to net income
(determined in accordance with GAAP) as indicators of the Company’s
financial performance or as alternatives to cash flow from
operating activities (determined in accordance with GAAP) as
measures of the Company’s liquidity, nor are they necessarily
indicative of sufficient cash flow to fund all of the Company’s
needs. The Company believes that in order to facilitate a clear
understanding of the consolidated historical operating results of
the Company, FFO, normalized FFO, FAD and normalized FAD should be
examined in conjunction with net income as presented elsewhere
herein.
NON-GAAP FINANCIAL MEASURES
RECONCILIATION
Net Debt to Adjusted Pro Forma
EBITDA
The following information considers the pro forma effect on
net income of the Company’s investments and other capital
transactions that were completed during the three months ended
September 30, 2015, as if the transactions had been consummated as
of the beginning of the period. The following table illustrates net
debt to pro forma earnings before interest, taxes, depreciation and
amortization (including non-cash stock-based compensation expense),
excluding gains or losses on extinguishment of debt, income or loss
from noncontrolling interest and unconsolidated entities (excluding
cash distributions), merger-related expenses and deal costs,
expenses related to the re-audit and re-review in 2014 of the
Company’s historical financial statements, net gains on real estate
activity and changes in the fair value of financial instruments
(including amounts in discontinued operations) (“Adjusted Pro Forma
EBITDA”) (dollars in thousands): Net income attributable to
common stockholders $ 22,852 Pro forma adjustments for current
period investments, capital transactions and dispositions 5,217
Pro forma net income for the three months ended September
30, 2015 28,069 Add back: Pro forma interest 92,887 Pro forma
depreciation and amortization 229,383 Stock-based compensation
4,869 Gain on real estate dispositions (217 ) Loss on
extinguishment of debt, net 15,331 Pro forma income from
unconsolidated entities (2,143 ) Pro forma noncontrolling interest
265 Income tax benefit (10,697 ) Change in fair value of financial
instruments (18 ) Other taxes 644 Merger-related expenses, deal
costs and re-audit costs 99,802 Adjusted Pro Forma EBITDA
458,175 Adjusted Pro Forma EBITDA annualized $ 1,832,700
As of September 30, 2015: Debt $ 11,268,560
Cash, adjusted for cash escrows pertaining to debt (84,835 ) Net
debt $ 11,183,725 Net debt to Adjusted Pro Forma
EBITDA 6.1 x
NON-GAAP FINANCIAL MEASURES
RECONCILIATION 1, 2 NOI by Segment (In
thousands) 2015
Quarters 2014 Quarters Third Second
First Fourth Third Revenues
Triple-Net Triple-Net Rental Income $ 201,028 $ 182,006 $ 188,557 $
174,500 $ 170,873 Medical Office Buildings Medical Office -
Stabilized 130,573 129,145 123,210 104,170 103,780 Medical Office -
Lease up 8,611 8,129 8,429 6,675 6,767 Medical Office - Other 3,571
3,198 5,421 6,123 6,139 Total Medical
Office Buildings - Rental Income 142,755 140,472
137,060 116,968 116,686 Total Rental Income 343,783
322,478 325,617 291,468 287,559 Medical Office Building
Services Revenue 8,459 7,749 8,858 9,218
5,937 Total Medical Office Buildings - Revenue 151,214
148,221 145,918 126,186 122,623 Triple-Net Services Revenue
1,011 1,139 1,136 1,136 1,136 Non-Segment Services Revenue 530
520 549 770 500 Total Medical Office
Building and Other Services Revenue 10,000 9,408 10,543 11,124
7,573 Seniors Housing Operating Seniors Housing - Stabilized
437,816 438,110 431,890 398,855 385,511 Seniors Housing - Lease up
17,009 16,535 15,024 12,083 10,109 Seniors Housing - Other —
— — 232 627 Total Resident Fees and Services
454,825 454,645 446,914 411,170 396,247 Non-Segment Income
from Loans and Investments 18,924 25,215 22,053
14,876 13,186 Total Revenues, excluding Interest and
Other Income 827,532 811,746 805,127 728,638 704,565
Property-Level Operating Expenses Medical Office
Buildings Medical Office - Stabilized 38,593 38,490 36,808 33,332
34,807 Medical Office - Lease up 3,013 3,087 3,242 2,509 2,738
Medical Office - Other 1,699 1,833 2,387 2,970
3,717 Total Medical Office Buildings 43,305 43,410 42,437
38,811 41,262 Seniors Housing Operating Seniors Housing -
Stabilized 290,619 286,321 286,277 262,915 256,702 Seniors Housing
- Lease up 13,921 12,931 12,085 10,421 7,972 Seniors Housing -
Other — — — 227 600 Total Seniors
Housing 304,540 299,252 298,362 273,563
265,274 Total Property-Level Operating Expenses 347,845 342,662
340,799 312,374 306,536
Medical Office Building Services
Costs 6,416 5,764 6,918 7,527 4,568
Net Operating
Income Triple-Net Triple-Net Properties 201,028 182,006
188,557 174,500 170,873 Triple-Net Services Revenue 1,011
1,139 1,136 1,136 1,136 Total Triple-Net
202,039 183,145 189,693 175,636 172,009 Medical Office
Buildings Medical Office - Stabilized 91,980 90,655 86,402 70,838
68,973 Medical Office - Lease up 5,598 5,042 5,187 4,166 4,029
Medical Office - Other 1,872 1,365 3,034 3,153 2,422 Medical Office
Building Services 2,043 1,985 1,940 1,691
1,369 Total Medical Office Buildings 101,493 99,047 96,563
79,848 76,793 Seniors Housing Operating Seniors Housing -
Stabilized 147,197 151,789 145,613 135,940 128,809 Seniors Housing
- Lease up 3,088 3,604 2,939 1,662 2,137 Seniors Housing - Other —
— — 5 27 Total Seniors Housing 150,285
155,393 148,552 137,607 130,973 Non-Segment 19,454 25,735
22,602 15,646 13,686
Net Operating
Income $ 473,271 $ 463,320 $ 457,410 $
408,737 $ 393,461 1 Amounts above are adjusted to
exclude discontinued operations for all periods presented. 2
Amounts above are not restated for changes between categories from
quarter to quarter.
NON-GAAP FINANCIAL MEASURES
RECONCILIATION (Dollars in thousands) Total
Portfolio Same-Store Constant Currency Cash NOI For
the Three Months Ended September 30, 2015
2014 Net Operating Income $
473,271 $ 393,461 Adjustments: NOI Not
Included in Same-Store (85,282 ) (22,699 ) Straight-Lining of
Rental Income (8,342 ) (12,376 ) Non-Cash Rental Income (3,879 )
(1,776 ) Non-Segment NOI (19,453 ) (13,686 ) Constant Currency
Adjustment — (1,296 ) (116,956 ) (51,833 ) Constant
Currency NOI as Reported $ 356,315 $ 341,628
Percentage Increase
4.3 % NON-GAAP
FINANCIAL MEASURES RECONCILIATION (Dollars in thousands)
Total Portfolio Same-Store Constant Currency Cash NOI
For the Nine Months Ended September 30,
2015 2014 Net Operating Income
$ 1,394,001 $ 1,151,333
Adjustments: Lease Modification Fee 5,200 — NOI Not Included in
Same-Store (239,385 ) (66,491 ) Straight-Lining of Rental Income
(25,047 ) (29,545 ) Non-Cash Rental Income (11,292 ) (3,727 )
Non-Segment NOI (67,791 ) (38,402 ) Constant Currency Adjustment —
(2,316 ) (338,315 ) (140,481 ) Constant Currency NOI
as Reported $ 1,055,686 $ 1,010,852 Percentage
Increase
4.4 % NON-GAAP FINANCIAL MEASURES
RECONCILIATION (Dollars in thousands) Senior
Housing Operating Portfolio Same-Store Constant Currency NOI
For the Three Months Ended September 30,
2015 2014 Net Operating Income
$ 150,285 $ 130,973 Less: NOI
Not Included in Same-Store (24,571 ) (8,122 ) Constant Currency
Adjustment — (1,076 ) (24,571 ) (9,198 ) Constant
Currency NOI as Reported $ 125,714 $ 121,775
Percentage Increase
3.2 %
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Ventas, Inc.Ryan K. Shannon(877) 4-VENTAS
Ventas (NYSE:VTR)
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Ventas (NYSE:VTR)
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