EX-99.1 2 dex991.htm PRESS RELEASE Press Release

Exhibit 99.1

LOGO

Ventas, Inc.

   111 South Wacker Drive, Suite 4800           Chicago, Illinois 60606   (877) 4-VENTAS   www.ventasreit.com

 

Contact:   David J. Smith
  (877) 4-VENTAS

 

VENTAS REPORTS $0.69 PER DILUTED SHARE THIRD QUARTER NORMALIZED FFO

Normalized FFO Per Share Increases 4.5 Percent in Third Quarter Versus Prior Year

Balance Sheet and Liquidity Strong; $730 Million Liquidity Available

Company Adjusts Full Year 2008 Normalized FFO Per Share Guidance to $2.71 to $2.74

 

 

CHICAGO, IL (November 4, 2008) – Ventas, Inc. (NYSE: VTR) (“Ventas” or the “Company”) said today that third quarter 2008 normalized Funds from Operations (“FFO”) increased 9.6 percent to $97.2 million, from $88.7 million in the third quarter of 2007. Normalized FFO per diluted common share increased 4.5 percent, to $0.69 in the third quarter of 2008, compared to $0.66 in the third quarter of 2007.

Third quarter normalized FFO benefited from rental increases from the Company’s triple-net lease portfolio, higher revenues at the Company’s senior living and medical office building (“MOB”) operating portfolio, accretive investments and lower interest expense, offset in part by increased general and administrative expenses and higher expenses at the Company’s operating portfolio. Higher weighted average diluted shares outstanding of 141.1 million in the third quarter of 2008, compared to 133.5 million in the third quarter of 2007, impacted per share amounts. Normalized FFO for the three months ended September 30, 2008 excludes the net benefit (totaling $16.7 million) principally from the reversal of a $23.3 million previously recorded contingent liability, partially offset by a $6.0 million valuation allowance on real estate mortgage loans receivable and merger-related and other costs.

“We are pleased with 4.5 percent growth in normalized FFO per diluted share this quarter, which demonstrates the strength of our portfolio. Importantly, our balance sheet and liquidity are strong and our diverse portfolio of triple-net leases and operating assets continues to deliver reliable cash flows and positive results,” Ventas Chairman, President and Chief Executive Officer Debra A. Cafaro said. “We are operating from a position of safety that is paramount in today’s challenging capital and economic environment.”

Normalized FFO for the nine months ended September 30, 2008 increased 18.7 percent to $288.2 million, or $2.08 per diluted common share, from $242.9 million, or $2.03 per diluted common share, for the comparable 2007 period. Normalized FFO for the nine months ended September 30, 2008 excludes the net benefit (totaling $29.3 million) from income taxes and the previously recorded contingent liability reversal, offset by the valuation allowance on real estate mortgage loans receivable and merger-related and other costs.

- MORE -

Ventas Reports Third Quarter Results

November 4, 2008

Page 2

 

 

FFO, as defined by the National Association of Real Estate Investment Trusts (“NAREIT”), in the third quarter of 2008 increased 17.3 percent, to $113.9 million from $97.1 million from the prior year. NAREIT FFO per diluted common share rose 11.0 percent to $0.81, from $0.73 per diluted common share a year earlier. This increase in FFO is principally due to the benefit of the previously recorded contingent liability reversal, offset in part by the valuation allowance on real estate mortgage loans receivable and lower income tax benefit compared to the third quarter of 2007. Higher weighted average diluted shares outstanding in the third quarter of 2008 over the prior year impacted per share amounts.

NAREIT FFO for the nine months ended September 30, 2008 increased 14.5 percent to $317.5 million, or $2.29 per diluted common share, from $277.3 million, or $2.32 per diluted common share, for the comparable 2007 period. The decrease in NAREIT FFO per diluted common share is principally due to a $24.3 million gain from foreign currency hedges in 2007 and higher weighted average diluted shares outstanding in 2008.

UPDATED NORMALIZED FFO GUIDANCE FOR 2008

Ventas currently expects its 2008 normalized FFO per diluted share to be between $2.71 and $2.74, as compared to previous 2008 guidance of $2.75 to $2.82 per diluted share. This change is primarily the result of the Company’s proactive steps to increase its liquidity; economic factors; dead deal costs; the impact of foreign currency changes; and higher weighted average shares outstanding.

“We are committed to preserving the Company’s financial strength and increasing long-term value for shareholders,” Cafaro said. “We believe that, to be successful in today’s environment, companies must have low leverage, limited near term maturities and continued access to capital. As a result of our efforts during the last few years, Ventas has all three. While our actions may affect near term earnings at the margin, they are the right thing to do to ensure that Ventas remains strong through this extremely challenging time in the markets and our economy.”

The Company’s normalized FFO guidance for all periods assumes that all of the Company’s tenants and borrowers continue to meet all of their obligations to the Company. In addition, the Company’s normalized FFO guidance (and related U.S. generally accepted accounting principals (“GAAP”) earnings projections) excludes (a) gains and losses on the sales of assets, (b) the impact of future, unannounced acquisitions, divestitures (including pursuant to tenant options to purchase) and capital transactions, (c) merger-related costs and expenses that are not capitalized under GAAP, including transitional and severance expenses, amortization of fees related to acquisition financing and costs, gains and losses for foreign currency hedge agreements, (d) 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 or premiums incurred as a result of early retirement or payment of the Company’s debt, (e) dilution resulting from the Company’s convertible notes, (f) the non-cash effect of income tax benefits, and (g) the reversal or incurrence of contingent liabilities.

The Company’s guidance is based on a number of other assumptions, which 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.

A reconciliation of the Company’s guidance to the Company’s projected GAAP earnings is provided on a schedule attached to this press release. The Company may from time to time update its publicly announced guidance, but it is not obligated to do so.

 

- MORE -

Ventas Reports Third Quarter Results

November 4, 2008

Page 3

 

 

SUNRISE PORTFOLIO

Total Portfolio

The Company’s operating portfolio contains 79 seniors housing communities in North America that are managed by Sunrise Senior Living, Inc. (NYSE: SRZ) (“Sunrise”). Ventas owns 100 percent of 18 of these communities and has a partnership share of between 75 percent and 85 percent in the remaining 61 communities, with Sunrise owning the minority interest in those 61 communities.

Net Operating Income after management fees (“NOI”) for those 79 communities was $35.2 million for the three months ended September 30, 2008, compared to $34.0 million for 78 communities during the three months ended September 30, 2007. For the 78 communities Ventas owned in the third quarter of 2008 and 2007, NOI increased four percent, average daily rate increased three percent and occupancy was stable at 91 percent.

72 Same Store Stabilized Community Results

For the 72 Sunrise communities that were stabilized in both the third quarter of 2008 and the third quarter of 2007, total community NOI was $33.3 million in 2008 versus $33.0 million for the comparable 2007 period. Average daily rate in these same store stabilized communities increased three percent versus the third quarter of 2007. These same store stabilized communities averaged 92 percent occupancy during the third quarter of 2008, compared to 91 percent in the second quarter of 2008 and 93 percent in the third quarter of 2007.

Three Communities in Lease-up

Ventas’s Sunrise portfolio also contains three recently developed communities that are in lease-up. Total community NOI for the three lease-up communities was $0.3 million during the third quarter of 2008, which was unchanged from the second quarter of 2008.

Average occupancy in this three community pool increased from 54 percent to 59 percent. The occupancy increase is partially due to a four percentage point sequential quarterly increase in occupancy, to 70 percent, for the two “mansion” assisted living communities included in the lease-up portfolio. Average occupancy for the 229-unit independent living community located in Ontario and acquired by the Company in December 2007 (“Steeles”) increased to 52 percent in the third quarter of 2008 from 46 percent in the second quarter of 2008.

During the third quarter of 2008, two communities were reclassified from lease-up to stabilized.

GAAP NET INCOME

Net income applicable to common shares for the quarter ended September 30, 2008 was $64.7 million, or $0.46 per diluted common share, after discontinued operations of $0.6 million, compared with net income applicable to common shares for the quarter ended September 30, 2007 of $28.0 million, or $0.21 per diluted common share, after discontinued operations of $0.8 million.

Net income applicable to common shares for the nine months ended September 30, 2008 was $167.8 million, or $1.21 per diluted common share, after discontinued operations of $29.7 million, compared with net income applicable to common shares for the nine months ended September 30, 2007 of $247.7 million, or $2.07 per diluted common share, after discontinued operations of $138.0 million.

 

- MORE -

Ventas Reports Third Quarter Results

November 4, 2008

Page 4

 

 

THIRD QUARTER HIGHLIGHTS AND OTHER RECENT DEVELOPMENTS

Portfolio, Performance and Balance Sheet Highlights

Liquidity & Balance Sheet

 

  •  

Ventas’s $850 million unsecured revolving credit facilities (the “Credit Facilities”) are due April 2010. The Company has exercised its option to extend the term. Borrowings under the Credit Facilities are currently priced at either LIBOR plus 75 basis points or the Prime Rate.

 

  •  

At November 4, 2008, the Company has $223 million outstanding under its Credit Facilities, and $623 million of undrawn availability.

 

  •  

At November 4, 2008, the Company has $106 million of cash and short-term cash investments primarily invested in United States treasury money market funds.

 

 

•

  

Year to date, Ventas has purchased at a net discount in open market transactions $138.6 million aggregate principal amount of its 8 3/4% senior notes due 2009 and its 6 3/4% senior notes due 2010.

 

  •  

Year to date, Ventas has repaid $118.8 million of its mortgage debt obligations.

 

  •  

As of November 4, 2008: The Company has no remaining 2008 principal debt maturities. Its 2009 principal debt maturities total $219 million (excluding in each case normal monthly amortization payments). Net of the Company’s $106 million in cash and short-term investments, the Company’s debt maturities approximate $113 million through December 31, 2009. Additional detail on the Company’s debt maturities can be found in an attachment to this press release and is available on the Company’s website under the “For Investors” section or at www.ventasreit.com/investors/supplemental.asp.

 

  •  

In August 2008, Ventas raised $217.2 million through the issuance and sale of 4.8 million shares of its common stock, after deducting the underwriter’s discount.

 

  •  

The Company’s debt to total capitalization at September 30, 2008 was approximately 31 percent. Its net debt to pro forma EBITDA was 4.7x.

 

  •  

The Company benefited in the third quarter from the reversal of a previously recorded contingent liability in the amount of $23.3 million. The Company no longer expects to make any payments relating to that contingent liability and, therefore, the liability was removed from its balance sheet and included in its income for the quarter.

 

  •  

Lehman Commercial Paper, Inc. (“Lehman”) is a named lender under the Credit Facilities and has a $20 million funding commitment (approximately 2% of the aggregate borrowing capacity under the Credit Facilities) to the Company. Lehman has defaulted on its obligations to fund the Company’s borrowing requests, and the Company is seeking an assignment of this portion of its Credit Facilities, through Lehman’s Chapter 11 proceeding, to a third party investor who the Company believes represents the economic interest in such obligation.

 

- MORE -

Ventas Reports Third Quarter Results

November 4, 2008

Page 5

 

 

Investments

 

  •  

In August 2008, Ventas purchased two fully leased MOBs, containing 176,000 square feet, for an aggregate purchase price of $40 million. The seller, a new MOB relationship for Ventas, is an experienced, private developer and manager of MOBs based in the southeast United States. These MOBs, located outside of Atlanta, Georgia, are on the campus of and attached to a full-service acute care hospital. The Company expects to receive a first year NOI (net operating income) yield of over seven percent on its investment. The seller will continue to provide management and leasing services for these MOBs.

 

  •  

In September and October 2008, as part of its previously announced option to invest in certain pre-leased MOB developments, Ventas funded $3.9 million as an initial investment in a joint venture (“JV”) that has commenced development of a 98,000 square foot MOB in Greenville, South Carolina, affiliated with an A-rated hospital system, that is approximately 88 percent pre-leased. The MOB is expected to be completed in the second half of 2009 at a total development cost to Ventas of approximately $25 million. Ventas has a 95 percent ownership interest in the JV. Ventas’s JV partner, a nationally recognized private developer of MOBs and healthcare facilities, will also provide management and leasing services for the MOB.

 

  •  

In October 2008, as part of the same option arrangement, Ventas funded $3.2 million as an initial investment in a JV to develop a 75,000 square foot MOB located on a hospital campus, affiliated with an A-rated hospital system, in suburban Denver, Colorado that is approximately 58 percent pre-leased. The project is under construction and is expected to be completed in the second half of 2009 at a total development cost to Ventas of approximately $20 million.

 

  •  

In October 2008, the Company entered into an agreement with a nationally recognized developer of medical office properties to acquire, subject to certain conditions, up to a 90 percent interest in a 77,000 square foot MOB, currently under construction by the developer, on a hospital campus, with investment grade rated bonds, outside of Baltimore, Maryland. The transaction with this developer represents a new MOB relationship for Ventas. If Ventas acquires an interest in the MOB under its agreement, the price to Ventas should approximate $21 million. The MOB is 63 percent pre-leased and is expected to be completed in late 2009 or early 2010.

 

  •  

Ventas’s MOB portfolio now consists of 1.5 million square feet. The Company now has existing partnerships with six quality MOB developer-operators, including five of the top 20 MOB developers in the U.S.

 

  •  

On September 30, 2008, Ventas purchased at a discount $20 million aggregate principal amount of unsecured corporate debt issued by three premier publicly traded hospital operators. These debt instruments have effective interest rates of 9.5 percent to maturity.

Dispositions

 

  •  

As previously announced, Ventas entered into an agreement to sell five seniors housing assets to the current tenant for an aggregate sale price of $62.5 million. The contract price represents $145,000 per unit and a capitalization rate of approximately 6.5 percent on rent and EBITDAR (earnings before interest, taxes, depreciation, amortization and rent) at the assets. Although there can be no assurances, the Company expects to close the sale in the fourth quarter of 2008 and record a gain.

 

- MORE -

Ventas Reports Third Quarter Results

November 4, 2008

Page 6

 

 

Portfolio

 

  •  

Average occupancy for the Company’s 72 same store stabilized portfolio of private-pay seniors housing communities managed by Sunrise increased to 92 percent in the third quarter of 2008 from 91 percent in the second quarter of 2008.

 

  •  

NOI for the 78 senior living communities managed by Sunrise and owned by Ventas in the third quarter of 2008 and 2007 increased four percent, average daily rate increased three percent and occupancy was stable at 91 percent.

 

  •  

The 203 skilled nursing facilities (“SNFs”) and hospitals (“LTACs”) leased by the Company to Kindred produced EBITDARM (earnings before interest, taxes, depreciation, amortization, rent and management fees) to actual cash rent coverage of 2.2 times for the trailing twelve-month period ended June 30, 2008 (the latest date available).

 

  •  

The borrowers under three related first mortgage loans (the “Sunwest Loans”) totaling $20 million have defaulted on their obligations to pay monthly principal and interest to Ventas. The Sunwest Loans were made in 2005 to affiliates of Sunwest Management, Inc. (“Sunwest”). The Sunwest Loans are secured by four seniors housing communities containing approximately 300 units and are guaranteed by Sunwest and personally by two of the principals of Sunwest (the “Sunwest Guaranty”). The Company has initiated foreclosure action on each asset. At the Company’s request, a receiver has been appointed at two of the assets and should be appointed at two of the assets shortly. The receivers will operate the assets for the benefit of the Company and other claimants. The Company has also initiated a collection and enforcement action on the Sunwest Guaranty. The Company intends to vigorously pursue all of its rights and remedies and take all appropriate actions to recover all amounts due to it under the Sunwest Loans and the Sunwest Guaranty. However, due to the current capital markets and economic environment, the Company has recorded a valuation allowance of $6 million respecting the Sunwest Loans in the quarter.

 

  •  

Supplemental information regarding Ventas’s portfolio of 518 seniors housing and healthcare assets, including two MOBs under development, is available on the Company’s website under the “For Investors” section or at www.ventasreit.com/investors/supplemental.asp.

Additional Information

 

  •  

The Company’s third quarter 2008 dividend of $0.5125 per share represents a payout ratio of approximately 75 percent of the Company’s third quarter normalized FFO per diluted share.

 

  •  

The Company confirmed that none of its executive officers have pledged any of their Ventas equity securities to secure “margin loans.”

THIRD QUARTER CONFERENCE CALL

Ventas will hold a conference call to discuss this earnings release on November 5, 2008, at 10:00 a.m. Eastern Time (9:00 a.m. Central Time). The dial-in number for the conference call is (617) 801-9715. The participant passcode is “Ventas.” The conference call is being webcast live by CCBN and can be accessed at the Company’s website at www.ventasreit.com or www.earnings.com. An online replay of the webcast will be available at approximately 12:00 p.m. Eastern Time and will be archived for 30 days.

Ventas, Inc. is a leading healthcare real estate investment trust. At the date of this press release, Ventas owns 518 seniors housing and healthcare-related properties located in 43 states and two Canadian provinces. Its

 

- MORE -

Ventas Reports Third Quarter Results

November 4, 2008

Page 7

 

 

diverse portfolio includes 253 seniors housing communities, 192 skilled nursing facilities, 41 hospitals, 32 medical office and other properties. More information about Ventas can be found on its website at www.ventasreit.com.

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 Ventas, Inc.’s (“Ventas” or the “Company”) and its subsidiaries’ expected future financial position, results of operations, cash flows, funds from operations, dividends and dividend plans, financing plans, business strategy, budgets, projected costs, capital expenditures, competitive positions, acquisitions, investment opportunities, merger 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 security holders must recognize that 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 depending on a variety of factors discussed in the Company’s filings with the Securities and Exchange Commission. Factors that may affect the Company’s plans or results include without limitation: (a) the ability and willingness of the Company’s operators, tenants, borrowers, managers and other third parties, as applicable, to meet and/or perform the obligations under their various contractual arrangements with the Company; (b) the ability and willingness of Kindred Healthcare, Inc. (together with its subsidiaries, “Kindred”), Brookdale Living Communities, Inc. (together with its subsidiaries, “Brookdale”) and Alterra Healthcare Corporation (together with its subsidiaries, “Alterra”) to meet and/or perform their obligations to indemnify, defend and hold the Company harmless from and against various claims, litigation and liabilities under the Company’s respective contractual arrangements with Kindred, Brookdale and Alterra; (c) the ability of the Company’s operators, tenants, borrowers and managers, as applicable, 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; (d) the Company’s success in implementing its business strategy and the Company’s ability to identify, underwrite, finance, consummate and integrate diversifying acquisitions or investments, including those in different asset types and outside the United States; (e) the nature and extent of future competition; (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 cost of borrowing; (h) the ability of the Company’s operators and managers, as applicable, to deliver high quality services, to attract and retain qualified personnel and to attract residents and patients; (i) the results of litigation affecting the Company; (j) changes in general economic conditions and/or economic conditions in the markets in which the Company may, from time to time, compete; (k) the Company’s ability to pay down, refinance, restructure and/or extend its indebtedness as it becomes due; (l) the Company’s ability and willingness to maintain its qualification as a REIT due to economic, market, legal, tax or other considerations; (m) final determination of the Company’s taxable net income for the year ending December 31, 2008; (n) the ability and willingness of the Company’s tenants to renew their leases with the Company upon expiration of the leases and the Company’s ability to relet its properties on the same or better terms in the event such leases expire and are not renewed by the existing tenants; (o) risks associated with the Company’s seniors housing communities managed by Sunrise Senior Living, Inc. (together with its subsidiaries, “Sunrise”), including the timely delivery of accurate property-level financial results for the Company’s properties; (p) factors causing volatility in the Company’s revenues generated by its seniors housing communities managed by Sunrise, including without limitation national and regional economic conditions, costs of materials, energy, labor and services, employee benefit costs and professional and general liability claims; (q) the movement of U.S. and Canadian exchange rates; (r) year-over-year changes in the Consumer Price Index and the effect of those changes on the rent escalators, including the rent escalator for Master Lease 2 with Kindred, and the Company’s earnings; (s) the impact on the liquidity, financial condition and results of operations of the Company’s operators, tenants, borrowers and managers, as applicable, resulting from increased operating costs and uninsured liabilities for professional liability claims, and the ability of the Company’s operators, tenants, borrowers and managers to accurately estimate the magnitude of these liabilities; (t) the ability and willingness of the lenders under the Company’s unsecured revolving credit facilities to fund, in whole or in part, borrowing requests made by the Company from time to time; (u) the impact of market or issuer events on the liquidity or value of the Company’s investments in marketable securities; and (v) the impact of the Sunrise strategic review process and accounting, legal and regulatory issues. Many of these factors are beyond the control of the Company and its management.

 

- MORE -

Ventas Reports Third Quarter Results

November 4, 2008

Page 8

 

 

CONSOLIDATED BALANCE SHEETS

As of September 30, 2008, June 30, 2008, March 31, 2008, December 31, 2007 and September 30, 2007

(In thousands, except per share amounts)

 

     September 30,
2008		     June 30,
2008		     March 31,
2008		     December 31,
2007		     September 30,
2007		  

Assets

           

Real estate investments:

           

Land

    $ 567,474     $ 569,711     $ 567,523     $ 572,092     $ 564,462  

Buildings and improvements

      5,703,731       5,702,197       5,669,237       5,720,089       5,548,808  
                                        
     6,271,205       6,271,908       6,236,760       6,292,181       6,113,270  

Accumulated depreciation

      (951,523 )     (905,608 )     (855,148 )     (816,352 )     (765,598 )
                                        

Net real estate property

      5,319,682       5,366,300       5,381,612       5,475,829       5,347,672  

Loans receivable, net

      113,606       118,565       19,945       19,998       35,556  
                                        

Net real estate investments

      5,433,288       5,484,865       5,401,557       5,495,827       5,383,228  

Cash and cash equivalents

      115,923       29,268       51,347       28,334       28,573  

Escrow deposits and restricted cash

      43,841       40,038       52,621       54,077       89,807  

Deferred financing costs, net

      19,292       20,742       21,978       22,836       22,280  

Notes receivable-related parties

      1,769       1,752       2,109       2,092       2,144  

Other

      200,735       140,396       122,176       113,462       135,588  
                                        

Total assets

    $ 5,814,848     $ 5,717,061     $ 5,651,788     $ 5,716,628     $ 5,661,620  
                                        

Liabilities and stockholders’ equity

           

Liabilities:

           

Senior notes payable and other debt

    $ 3,135,350     $ 3,251,418     $ 3,157,111     $ 3,360,499     $ 3,267,705  

Deferred revenue

      7,564       8,050       8,700       9,065       9,665  

Accrued interest

      46,255       20,261       46,748       20,790       46,752  

Accounts payable and other accrued liabilities

      152,666       142,399       142,386       173,576       152,753  

Deferred income taxes

      256,525       282,080       286,153       297,590       313,987  
                                        

Total liabilities

      3,598,360       3,704,208       3,641,098       3,861,520       3,790,862  

Minority interest

      28,901       30,957       32,316       31,454       26,781  

Commitments and contingencies

           

Stockholders’ equity:

           

Preferred stock, $1.00 par value; 10,000 shares authorized, unissued

      —         —         —         —         —    

Common stock, $0.25 par value; 143,293, 138,477, 138,369, 133,665 and 133,451 shares issued at September 30, 2008, June 30, 2008, March 31, 2008, December 31, 2007 and September 30, 2007, respectively

      35,823       34,619       34,592       33,416       33,371  

Capital in excess of par value

      2,242,345       2,021,074       2,015,661       1,821,294       1,817,809  

Accumulated other comprehensive income

      4,835       12,831       14,819       17,416       6,652  

Retained earnings (deficit)

      (95,414 )     (86,610 )     (86,698 )     (47,846 )     (13,761 )

Treasury stock, 0, 0, 0, 14 and 3 shares at September 30, 2008, June 30, 2008, March 31, 2008, December 31, 2007 and September 30, 2007, respectively

      (2 )     (18 )     —         (626 )     (94 )
                                        

Total stockholders’ equity

      2,187,587       1,981,896       1,978,374       1,823,654       1,843,977  
                                        

Total liabilities and stockholders’ equity

    $ 5,814,848     $ 5,717,061     $ 5,651,788     $ 5,716,628     $ 5,661,620  
                                        

 

- MORE -

Ventas Reports Third Quarter Results

November 4, 2008

Page 9

 

 

CONSOLIDATED STATEMENTS OF INCOME

For the Three and Nine Months Ended September 30, 2008 and 2007

(In thousands, except per share amounts)

 

     For the Three Months
Ended September 30,		     For the Nine Months
Ended September 30,		  
     2008     2007     2008     2007  

Revenues:

         

Rental income

    $ 124,581     $ 118,365     $ 369,156     $ 350,970  

Resident fees and services

      108,610       103,938       323,648       175,338  

Income from loans and investments

      3,426       477       5,373       2,115  

Interest and other income

      1,937       712       3,633       2,411  
                                

Total revenues

      238,554       223,492       701,810       530,834  

Expenses:

         

Interest

      51,344       52,961       155,842       145,355  

Depreciation and amortization

      50,969       69,833       179,892       158,867  

Property-level operating expenses

      81,698       71,382       230,497       122,730  

General, administrative and professional fees (including non-cash stock-based compensation expense of $3,326 and $1,768 for the three months ended 2008 and 2007, respectively, and $7,816 and $5,602 for the nine months ended 2008 and 2007, respectively)

      11,626       9,315       29,493       24,919  

Foreign currency (gain) loss

      (45 )     116       (151 )     (24,245 )

Merger-related expenses

      1,248       1,535       3,128       2,327  

Loss (gain) on extinguishment of debt

      344       (88 )     460       (88 )
                                

Total expenses

      197,184       205,054       599,161       429,865  
                                

Income before reversal of contingent liability, income taxes, minority interest and discontinued operations

      41,370       18,438       102,649       100,969  

Reversal of contingent liability

      23,328       —         23,328       —    

Income tax benefit, net of minority interest

      415       9,463       14,165       15,074  
                                

Income before minority interest and discontinued operations

      65,113       27,901       140,142       116,043  

Minority interest, net of tax

      1,040       675       2,063       1,088  
                                

Income from continuing operations

      64,073       27,226       138,079       114,955  

Discontinued operations

      622       788       29,734       137,962  
                                

Net income

      64,695       28,014       167,813       252,917  

Preferred stock dividends and issuance costs

      —         —         —         5,199  
                                

Net income applicable to common shares

    $ 64,695     $ 28,014     $ 167,813     $ 247,718  
                                

Earnings per common share:

         

Basic:

         

Income from continuing operations applicable to common shares

    $ 0.46     $ 0.20     $ 1.00     $ 0.92  

Discontinued operations

      0.00       0.01       0.21       1.16  
                                

Net income applicable to common shares

    $ 0.46     $ 0.21     $ 1.21     $ 2.08  
                                

Diluted:

         

Income from continuing operations applicable to common shares

    $ 0.46     $ 0.20     $ 1.00     $ 0.92  

Discontinued operations

      0.00       0.01       0.21       1.15  
                                

Net income applicable to common shares

    $ 0.46     $ 0.21     $ 1.21     $ 2.07  
                                

Weighted average shares used in computing earnings per common share:

         

Basic

      140,759       133,205       138,433       118,989  

Diluted

      141,141       133,503       138,859       119,422  

Dividends declared per common share

    $ 0.5125     $ 0.475     $ 1.5375     $ 1.425  

 

- MORE -

Ventas Reports Third Quarter Results

November 4, 2008

Page 10

 

 

QUARTERLY CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share amounts)

 

     2008 Quarters     2007 Quarters  
     Third     Second     First     Fourth     Third  

Revenues:

           

Rental income

    $ 124,581     $ 122,878     $ 121,697     $ 121,795     $ 118,365  

Resident fees and services

      108,610       107,312       107,726       106,888       103,938  

Income from loans and investments

      3,426       1,480       467       471       477  

Interest and other income

      1,937       832       864       583       712  
                                        

Total revenues

      238,554       232,502       230,754       229,737       223,492  

Expenses:

           

Interest

      51,344       52,040       52,458       54,304       52,961  

Depreciation and amortization

      50,969       57,619       71,304       71,661       69,833  

Property-level operating expenses

      81,698       71,842       76,957       75,395       71,382  

General, administrative and professional fees (including non-cash stock-based compensation expense of $3,326, $2,541, $1,949, $1,891 and $1,768, respectively)

      11,626       9,610       8,257       11,506       9,315  

Foreign currency (gain) loss

      (45 )     (27 )     (79 )     (35 )     116  

Merger-related expenses

      1,248       1,234       646       652       1,535  

Loss (gain) on extinguishment of debt

      344       195       (79 )     —         (88 )
                                        

Total expenses

      197,184       192,513       209,464       213,483       205,054  
                                        

Income before reversal of contingent liability, income taxes, minority interest and discontinued operations

      41,370       39,989       21,290       16,254       18,438  

Reversal of contingent liability

      23,328       —         —         —         —    

Income tax benefit, net of minority interest

      415       3,712       10,038       12,968       9,463  
                                        

Income before minority interest and discontinued operations

      65,113       43,701       31,328       29,222       27,901  

Minority interest, net of tax

      1,040       545       478       610       675  
                                        

Income from continuing operations

      64,073       43,156       30,850       28,612       27,226  

Discontinued operations

      622       27,910       1,202       789       788  
                                        

Net income applicable to common shares

    $ 64,695     $ 71,066     $ 32,052     $ 29,401     $ 28,014  
                                        

Earnings per common share:

           

Basic:

           

Income from continuing operations applicable to common shares

    $ 0.46     $ 0.31     $ 0.23     $ 0.21     $ 0.20  

Discontinued operations

      0.00       0.20       0.01       0.01       0.01  
                                        

Net income applicable to common shares

    $ 0.46     $ 0.51     $ 0.24     $ 0.22     $ 0.21  
                                        

Diluted:

           

Income from continuing operations applicable to common shares

    $ 0.46     $ 0.31     $ 0.22     $ 0.21     $ 0.20  

Discontinued operations

      0.00       0.20       0.01       0.01       0.01  
                                        

Net income applicable to common shares

    $ 0.46     $ 0.51     $ 0.23     $ 0.22     $ 0.21  
                                        

Shares used in computing earnings per common share:

           

Basic

      140,759       138,133       136,381       133,300       133,205  

Diluted

      141,141       138,737       136,673       133,685       133,503  

Dividends declared per common share

    $ 0.5125     $ 0.5125     $ 0.5125     $ 0.475     $ 0.475  

 

- MORE -

Ventas Reports Third Quarter Results

November 4, 2008

Page 11

 

 

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Nine Months Ended September 30, 2008 and 2007

(In thousands)

 

     For the Nine Months
Ended September 30,		  
     2008     2007  

Cash flows from operating activities:

     

Net income

    $ 167,813     $ 252,917  

Adjustments to reconcile net income to net cash provided by operating activities:

     

Depreciation and amortization (including amounts in discontinued operations)

      180,780       162,501  

Amortization of deferred revenue and lease intangibles, net

      (7,202 )     (6,629 )

Other amortization expenses

      878       1,981  

Stock-based compensation

      7,816       5,602  

Straight-lining of rental income

      (11,215 )     (12,932 )

Gain on extinguishment of debt

      (63 )     —    

Gain on sale of real estate assets (including amounts in discontinued operations)

      (25,869 )     (129,478 )

Income tax benefit

      (14,165 )     (15,074 )

Loss on bridge financing

      —         2,550  

Reversal of contingent liability

      (23,328 )     —    

Provision for loan losses

      5,994       —    

Other

      2,767       (378 )

Changes in operating assets and liabilities:

     

(Increase) decrease in other assets

      (1,294 )     16,844  

Increase in accrued interest

      25,424       22,628  

(Decrease) increase in other liabilities

      (11,860 )     47,959  
                

Net cash provided by operating activities

      296,476       348,491  

Cash flows from investing activities:

     

Net investment in real estate property

      (47,287 )     (1,310,186 )

Investment in loans receivable

      (98,826 )     —    

Purchase of marketable debt securities

      (63,680 )     —    

Proceeds from sale of assets

      58,379       157,400  

Proceeds from sale of securities

      —         7,773  

Proceeds from loans receivable

      122       23,764  

Capital expenditures

      (12,174 )     (3,962 )

Escrow funds returned from an Internal Revenue Code Section 1031 exchange

      —         9,000  

Other

      322       322  
                

Net cash used in investing activities

      (163,144 )     (1,115,889 )

Cash flows from financing activities:

     

Net change in borrowings under revolving credit facilities

      (172,216 )     130,559  

Issuance of bridge financing

      —         1,230,000  

Repayment of bridge financing

      —         (1,230,000 )

Proceeds from debt

      10,359       9,410  

Repayment of debt

      (83,146 )     (143,775 )

Debt and preferred stock issuance costs

      —         (4,300 )

Payment of deferred financing costs

      (655 )     (5,534 )

Issuance of common stock, net

      408,540       1,045,729  

Cash distribution to preferred stockholders

      —         (3,449 )

Cash distribution to common stockholders

      (215,381 )     (219,253 )

Other

      6,952       (295 )
                

Net cash (used in) provided by financing activities

      (45,547 )     809,092  
                

Net increase in cash and cash equivalents

      87,785       41,694  

Effect of foreign currency translation on cash and cash equivalents

      (196 )     (14,367 )

Cash and cash equivalents at beginning of period

      28,334       1,246  
                

Cash and cash equivalents at end of period

    $ 115,923     $ 28,573  
                

 

- MORE -

Ventas Reports Third Quarter Results

November 4, 2008

Page 12

 

 

QUARTERLY CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

 

     2008 Quarters     2007 Quarters  
     Third     Second     First     Fourth     Third  

Cash flows from operating activities:

           

Net income

    $ 64,695     $ 71,066     $ 32,052     $ 29,401     $ 28,014  

Adjustments to reconcile net income to net cash provided by operating activities:

           

Depreciation and amortization (including amounts in discontinued operations)

      50,969       57,975       71,836       72,544       70,716  

Amortization of deferred revenue and lease intangibles, net

      (1,819 )     (2,272 )     (3,111 )     (3,190 )     (3,027 )

Other amortization expenses

      (251 )     491       638       475       322  

Stock-based compensation

      3,326       2,541       1,949       1,891       1,768  

Straight-lining of rental income

      (3,786 )     (3,670 )     (3,759 )     (4,379 )     (4,326 )

Loss (gain) on extinguishment of debt

      28       17       (108 )     —         —    

Gain on sale of real estate assets (including amounts in discontinued operations)

      —         (25,869 )     —         —         —    

Income tax benefit

      (415 )     (3,712 )     (10,038 )     (12,968 )     (9,463 )

Reversal of contingent liability

      (23,328 )     —         —         —         —    

Provision for loan losses

      5,994       —         —         —         —    

Other

      1,030       936       801       (264 )     463  

Changes in operating assets and liabilities:

           

(Increase) decrease in other assets

      (7,388 )     (9,634 )     15,728       30,683       25,972  

Increase (decrease) in accrued interest

      25,994       (26,528 )     25,958       (27,534 )     25,125  

Increase (decrease) in other liabilities

      9,601       5,859       (27,320 )     (33,525 )     46,570  
                                        

Net cash provided by operating activities

      124,650       67,200       104,626       53,134       182,134  

Cash flows from investing activities:

           

Net investment in real estate property

      (40,927 )     (389 )     (5,971 )     (54,604 )     (81,835 )

Investment in loans receivable

      —         (98,826 )     —         —         —    

Purchase of marketable debt securities

      (18,900 )     (44,780 )     —         —         —    

Proceeds from real estate disposals

      —         58,379       —         —         —    

Proceeds from loans receivable

      (166 )     226       62       (525 )     643  

Capital expenditures

      (7,694 )     (3,548 )     (932 )     (4,225 )     (2,242 )

Escrow funds returned from an Internal Revenue Code Section 1031 exchange

      —         —         —         —         9,000  

Other

      (18 )     357       (17 )     52       (18 )
                                        

Net cash used in investing activities

      (67,705 )     (88,581 )     (6,858 )     (59,302 )     (74,452 )

Cash flows from financing activities:

           

Net change in borrowings under revolving credit facilities

      (88,800 )     88,800       (172,216 )     46,027       (25,641 )

Proceeds from debt

      4,005       1,353       5,001       44,422       1,095  

Repayment of debt

      (30,529 )     (23,413 )     (29,204 )     (40,838 )     (12,059 )

Payment of deferred financing costs

      34       (14 )     (675 )     (2,322 )     (131 )

Issuance of common stock, net

      216,872       —         191,668       1,589       (250 )

Cash distribution to common stockholders

      (73,499 )     (70,976 )     (70,906 )     (63,486 )     (63,411 )

Other

      1,695       3,391       1,866       11,165       2,099  
                                        

Net cash provided by (used in) financing activities

      29,778       (859 )     (74,466 )     (3,443 )     (98,298 )
                                        

Net increase (decrease) in cash and cash equivalents

      86,723       (22,240 )     23,302       (9,611 )     9,384  

Effect of foreign currency translation on cash and cash equivalents

      (68 )     161       (289 )     9,372       (10,949 )

Cash and cash equivalents at beginning of period

      29,268       51,347       28,334       28,573       30,138  
                                        

Cash and cash equivalents at end of period

    $ 115,923     $ 29,268     $ 51,347     $ 28,334     $ 28,573  
                                        

 

- MORE -

Ventas Reports Third Quarter Results

November 4, 2008

Page 13

 

 

FUNDS FROM OPERATIONS, NORMALIZED FFO AND FUNDS AVAILABLE

FOR DISTRIBUTION

(In thousands, except per share amounts)

 

     2008 Quarters     2007 Quarters  
     Third     Second     First     Fourth     Third  

Net income applicable to common shares

    $ 64,695     $ 71,066     $ 32,052     $ 29,401     $ 28,014  

Adjustments:

           

Depreciation and amortization on real estate assets

      50,783       57,435       71,124       71,483       69,666  

Depreciation on real estate assets related to minority interest

      (1,590 )     (1,578 )     (1,501 )     (1,391 )     (1,420 )

Discontinued operations:

           

Gain on sale of real estate assets

      —         (25,869 )     —         —         —    

Depreciation and amortization on real estate assets

      —         356       532       884       883  
                                        

FFO

      113,888       101,410       102,207       100,377       97,143  

Gain on foreign currency hedge

      —         —         —         —         —    

Preferred stock issuance costs

      —         —         —         —         —    

Bridge loan fee

      —         —         —         —         —    

Merger-related expenses

      1,248       1,234       646       652       1,535  

Reversal of contingent liability

      (23,328 )     —         —         —         —    

Provision for loan losses

      5,994       —         —         —         —    

Income tax benefit

      (982 )     (4,171 )     (10,404 )     (13,342 )     (9,897 )

Loss (gain) on extinguishment of debt

      344       195       (79 )     —         (88 )
                                        

Normalized FFO

      97,164       98,668       92,370       87,687       88,693  

Straight-lining of rental income

      (3,786 )     (3,670 )     (3,759 )     (4,379 )     (4,326 )

Routine capital expenditures

      (2,512 )     (1,133 )     (823 )     (2,927 )     (2,243 )
                                        

FAD

    $ 90,866     $ 93,865     $ 87,788     $ 80,381     $ 82,124  
                                        

Per diluted share (1):

           

Net income applicable to common shares

    $ 0.46     $ 0.51     $ 0.23     $ 0.22     $ 0.21  

Adjustments:

           

Depreciation and amortization on real estate assets

      0.36       0.41       0.52       0.54       0.53  

Depreciation on real estate assets related to minority interest

      (0.01 )     (0.01 )     (0.01 )     (0.01 )     (0.01 )

Discontinued operations:

           

Gain on sale of real estate assets

      —         (0.19 )     —         —         —    

Depreciation and amortization on real estate assets

      —         —         0.00       0.00       0.00  
                                        

FFO

      0.81       0.73       0.75       0.75       0.73  

Gain on foreign currency hedge

      —         —         —         —         —    

Preferred stock issuance costs

      —         —         —         —         —    

Bridge loan fee

      —         —         —         —         —    

Merger-related expenses

      0.01       0.01       0.01       0.00       0.01  

Reversal of contingent liability

      (0.16 )     —         —         —         —    

Provision for loan losses

      0.04       —         —         —         —    

Income tax benefit

      (0.01 )     (0.03 )     (0.08 )     (0.10 )     (0.07 )

Loss (gain) on extinguishment of debt

      0.00       0.00       (0.00 )     —         (0.00 )
                                        

Normalized FFO

      0.69       0.71       0.68       0.66       0.66  

Straight-lining of rental income

      (0.03 )     (0.03 )     (0.03 )     (0.03 )     (0.03 )

Routine capital expenditures

      (0.02 )     (0.01 )     (0.01 )     (0.02 )     (0.02 )
                                        

FAD

    $ 0.64     $ 0.68     $ 0.64     $ 0.60     $ 0.62  
                                        

 

(1)

Per share amounts may not add due to rounding.

 

- MORE -

Ventas Reports Third Quarter Results

November 4, 2008

Page 14

 

 

Historical cost accounting for real estate assets implicitly assumes that the value of real estate assets diminishes predictably over time. Since real estate values instead have historically risen or fallen with market conditions, many industry investors have considered presentations of operating results for real estate companies that use historical cost accounting to be insufficient by themselves. To overcome this problem, the Company considers FFO and FAD appropriate measures of performance of an equity REIT. The Company uses the NAREIT definition of FFO. NAREIT defines FFO as net income, computed in accordance with GAAP, excluding gains (or losses) from sales of property, 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. FAD represents normalized FFO excluding straight-line rental adjustments and routine capital expenditures.

FFO and FAD presented herein are not necessarily comparable to FFO and FAD presented by other real estate companies due to the fact that not all real estate companies use the same definitions. Neither FFO nor FAD should be considered as an alternative to net income (determined in accordance with GAAP) as an indicator of the Company’s financial performance or as an alternative to cash flow from operating activities (determined in accordance with GAAP) as a measure of the Company’s liquidity, nor is FFO or FAD 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 and FAD should be examined in conjunction with net income as presented elsewhere in this press release.

The Company’s normalized FFO excludes (a) gains and losses on the sales of assets, (b) merger-related benefits, costs and expenses that are not capitalized under GAAP, including transitional expenses, amortization of fees related to acquisition financing and costs, gains and losses for foreign currency hedge agreements, and expenses relating to the Company’s lawsuit against HCP, Inc., (c) the impact of any expenses related to real estate asset impairment and valuation allowances, the write-off of unamortized deferred financing fees, or additional costs, expenses or premiums incurred as a result of early debt retirement, (d) the non-cash effect of income tax benefits, (e) dilution, if any, resulting from the Company’s convertible notes, and (f) the reversal of contingent liabilities.

 

- MORE -

Ventas Reports Third Quarter Results

November 4, 2008

Page 15

 

 

Normalized FFO and FAD Guidance for the Year Ending December 31, 2008

The following table illustrates the Company’s normalized FFO and FAD per diluted common share guidance for the year ending December 31, 2008:

 

     UPDATED
GUIDANCE
For the Year
Ending
December 31, 2008		  

Net income applicable to common shares

    $ 1.68     –    $ 1.71  

Adjustments:

        

Depreciation and amortization on real estate assets, depreciation related to minority interest and gain on sale of real estate assets, net

     1.23     –      1.23  
                   

FFO

      2.91     –      2.94  

Adjustments:

        

Income tax benefit, gain/loss on extinguishment of debt, reversal of contingent liability, provision for loan losses and merger-related expenses, net

      (0.20 )   –      (0.20 )
                   

Normalized FFO

      2.71     –      2.74  

Straight-lining of rental income and routine capital expenditures

      (0.19 )   –      (0.19 )
                   

FAD

    $ 2.52     –    $ 2.55  
                   

 

- MORE -

Ventas Reports Third Quarter Results

November 4, 2008

Page 16

 

 

Net Debt to Pro Forma EBITDA

The following pro forma information considers the effect on net income, interest and depreciation of the Company’s investments and other capital transactions that were completed during the trailing twelve months ended September 30, 2008, 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 (“EBITDA”) (dollars in thousands):

 

Pro forma net income for the twelve months ended September 30, 2008

    $ 205,728  

Add back:

   

Pro forma interest (including discontinued operations)

      216,001  

Pro forma depreciation and amortization (including discontinued operations)

      254,699  

Stock-based compensation

      9,707  

Loss on extinguishment of debt

      460  

Income tax benefit

      (27,133 )

Minority interest

      3,076  

Net gain on real estate disposals

      (25,869 )

Other taxes

      1,652  
        

Pro forma EBITDA

    $ 638,321  
        

As of September 30, 2008:

   

Debt

    $ 3,135,350  

Cash

      (125,256 )
        

Net debt

    $ 3,010,094  
        

Net debt to pro forma EBITDA

      4.7 x
        

The Company considers EBITDA a profitability measure which indicates the Company’s ability to service debt. The Company considers the net debt to pro forma EBITDA ratio a useful measure to evaluate the Company’s ability to pay its indebtedness. EBITDA presented herein is not necessarily comparable to EBITDA presented by other companies due to the fact that not all companies use the same definition. EBITDA should not be considered as an alternative to net income (determined in accordance with GAAP) as an indicator of the Company’s financial performance or as an alternative to cash flow from operating activities (determined in accordance with GAAP) as a measure of the Company’s liquidity, nor is EBITDA 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, EBITDA should be examined in conjunction with net income as presented elsewhere in this press release.

 

- MORE -

Ventas Reports Third Quarter Results

November 4, 2008

Page 17

 

 

As of November 4, 2008: Scheduled Maturities of Borrowing Arrangements, Excluding Normal Monthly Principal Amortization *

As of November 4, 2008

(in thousands)

 

     Total     Credit Facilities    Senior Notes and
Convertible
Notes		    Construction
Debt (1) (2) 		   Mortgages (3)

2008

    $ —       $ —      $ —      $ —      $ —  

2009

      219,478 (4)     —        49,907      42,126      127,445

2010

      547,680       222,702      160,665      81,680      82,633

2011

      278,812       —        230,462      11,530      36,820

2012

      499,321       —        191,821      —        307,500

Thereafter

      1,356,584       —        770,000      —        586,584
                                   
   $ 2,901,875     $ 222,702    $ 1,402,855    $ 135,336    $ 1,140,982
                                   

 

* Canadian borrowings are valued at the November 4, 2008 spot rate.

 

(1)

The Company’s joint venture partners’ pro rata share of total maturities is approximately $21.3 million.

 

(2)

Ventas has the ability and intention to extend certain construction loans until 2010.

 

(3)

The Company’s joint venture partners’ pro rata share of total maturities is approximately $114.4 million.

 

(4)

Ventas holds cash and short-term cash investments of approximately $106 million and has $623 million of undrawn borrowing capacity available under its Credit Facilities.

 

- MORE -

Ventas Reports Third Quarter Results

November 4, 2008

Page 18

 

 

Scheduled Maturities of Borrowing Arrangements, Excluding Normal Monthly Principal Amortization *

As of September 30, 2008

(in thousands)

 

     Total    Credit Facilities    Senior Notes and
Convertible
Notes		    Construction
Debt (1) (2) 		   Mortgages (3)

2008

    $ —      $ —      $ —      $ —      $ —  

2009

      399,352      —        155,708      42,126      201,518

2010

      404,774      62,306      175,000      84,835      82,633

2011

      278,938      —        230,588      11,530      36,820

2012

      499,321      —        191,821      —        307,500

Thereafter

      1,362,462      —        770,000      —        592,462
                                  
   $ 2,944,847    $ 62,306    $ 1,523,117    $ 138,491    $ 1,220,933
                                  

 

* Canadian borrowings are valued at the September 30, 2008 spot rate.

 

(1)

The Company’s joint venture partners’ pro rata share of total maturities is approximately $21.9 million.

 

(2)

Ventas has the ability and intention to extend certain construction loans until 2010.

 

(3)

The Company’s joint venture partners’ pro rata share of total maturities is approximately $114.4 million.

 

- MORE -

Ventas Reports Third Quarter Results

November 4, 2008

Page 19

 

 

Non-GAAP Financial Measures Reconciliation (In thousands, except per share amounts)

 

     For the Nine Months
Ended September 30,		  
     2008     2007  

Net income applicable to common shares

    $ 167,813     $ 247,718  

Adjustments:

     

Depreciation and amortization on real estate assets

      179,342       157,936  

Depreciation on real estate assets related to minority interest

      (4,669 )     (2,358 )

Discontinued operations:

     

Gain on sale of real estate assets

      (25,869 )     (129,478 )

Depreciation and amortization on real estate assets

      888       3,461  
                

FFO

      317,505       277,279  

Gain on foreign currency hedge

      —         (24,314 )

Preferred stock issuance costs

      —         1,750  

Bridge loan fee

      —         2,550  

Merger-related expenses

      3,128       2,327  

Gain on sale of securities

      —         (864 )

Reversal of contingent liability

      (23,328 )     —    

Provision for loan losses

      5,994       —    

Income tax benefit

      (15,557 )     (15,753 )

Loss (gain) on extinguishment of debt

      460       (88 )
                

Normalized FFO

      288,202       242,887  

Straight-lining of rental income

      (11,215 )     (12,932 )

Routine capital expenditures

      (4,468 )     (3,445 )
                

FAD

    $ 272,519     $ 226,510  
                

Per diluted share (1):

     

Net income applicable to common shares

    $ 1.21     $ 2.07  

Adjustments:

     

Depreciation and amortization on real estate assets

      1.29       1.32  

Depreciation on real estate assets related to minority interest

      (0.03 )     (0.02 )

Discontinued operations:

     

Gain on sale of real estate assets

      (0.19 )     (1.08 )

Depreciation and amortization on real estate assets

      0.01       0.03  
                

FFO

      2.29       2.32  

Gain on foreign currency hedge

      —         (0.20 )

Preferred stock issuance costs

      —         0.01  

Bridge loan fee

      —         0.02  

Merger-related expenses

      0.02       0.02  

Gain on sale of securities

      —         (0.01 )

Reversal of contingent liability

      (0.17 )     —    

Provision for loan losses

      0.04       —    

Income tax benefit

      (0.11 )     (0.13 )

Loss (gain) on extinguishment of debt

      0.00       (0.00 )
                

Normalized FFO

      2.08       2.03  

Straight-lining of rental income

      (0.08 )     (0.11 )

Routine capital expenditures

      (0.03 )     (0.03 )
                

FAD

    $ 1.96     $ 1.90  
                

 

(1)

Per share amounts may not add due to rounding.

 

- END -