Ventas, Inc. (NYSE: VTR) (“Ventas” or the “Company”) said today that
normalized Funds From Operations (“FFO”) for the quarter ended September
30, 2013 increased eight percent to $307.2 million, from $284.9 million
for the comparable 2012 period. Normalized FFO per diluted common share
was a record $1.04 for the quarter ended September 30, 2013, an eight
percent increase from $0.96 for the comparable 2012 period. Weighted
average diluted shares outstanding for the quarter decreased by one
percent to 295.2 million from 297.4 million in the third quarter of 2012.
“Ventas delivered another quarter of record results by accretively
investing capital, raising capital and managing our diverse,
high-quality portfolio of seniors housing and healthcare assets,” Ventas
Chairman and Chief Executive Officer Debra A. Cafaro said. “We also
positioned Ventas to succeed in the future by maintaining strong
liquidity through a highly successful bond issuance, by acquiring over a
billion dollars in higher growth private pay assets, and by completing
favorable lease extensions with our valued tenant Kindred Healthcare,”
she added. “We are pleased to increase our full-year outlook, reflecting
the strength of our business model and execution.”
The growth in third quarter 2013 normalized FFO per diluted common share
compared to the third quarter of 2012 is due primarily to the Company’s
2012 and 2013 investments; net operating income increases in its
high-quality private pay seniors housing communities managed by Atria
Senior Living, Inc. (“Atria”) and Sunrise Senior Living, LLC
(“Sunrise”), its triple-net lease portfolio and its medical office
building (“MOB”) segment; lower weighted average interest rates; and a
decrease in weighted average diluted shares outstanding. These benefits
were partially offset by higher debt balances, asset sales and receipt
of loan repayments.
Normalized FFO for the quarter ended September 30, 2013 excludes the net
expense (totaling $3.5 million, or $0.01 per diluted share) from
merger-related expenses and deal costs (including integration costs) and
amortization of other intangibles, partially offset by an income tax
benefit and net gains on extinguishment of debt. Normalized FFO for the
quarter ended September 30, 2012 excluded the net benefit (totaling $4.8
million, or $0.01 per diluted share) from an income tax benefit and net
gains on extinguishment of debt, partially offset by merger-related
expenses and deal costs (including integration costs) and amortization
of other intangibles.
Normalized FFO for the nine months ended September 30, 2013 increased
ten percent to $907.1 million, from $826.6 million for the comparable
2012 period. Normalized FFO per diluted common share was $3.08 for the
nine months ended September 30, 2013, a nine percent increase from $2.82
for the comparable 2012 period. Normalized FFO for the nine months ended
September 30, 2013 excludes the net expense (totaling $3.7 million, or
$0.01 per diluted share) from merger-related expenses and deal costs
(including integration costs) and amortization of other intangibles,
offset by an income tax benefit and net gains on extinguishment of debt.
Normalized FFO for the nine months ended September 30, 2012 excluded the
net expense (totaling $86.1 million, or $0.30 per diluted share) from
merger-related expenses and deal costs (including integration costs),
loss on extinguishment of debt and amortization of other intangibles,
offset by an income tax benefit.
Net income attributable to common stockholders for the quarter ended
September 30, 2013 was $118.3 million, or $0.40 per diluted common
share, including discontinued operations of $(9.1) million. Net income
attributable to common stockholders for the quarter ended September 30,
2012 was $111.9 million, or $0.38 per diluted common share, including
discontinued operations of $(3.7) million. This $6.4 million increase in
net income attributable to common stockholders in the third quarter of
2013 over the comparable prior-year period is primarily the result of
the increases described above for normalized FFO and decreases in
merger-related expenses and deal costs (including integration costs),
offset by year-over-year decreases in income tax benefits, gains on
extinguishment of debt and discontinued operations.
Net income attributable to common stockholders for the nine months ended
September 30, 2013 was $345.1 million, or $1.17 per diluted common
share, including discontinued operations of $(33.7) million. Net income
attributable to common stockholders for the nine months ended September
30, 2012 was $276.5 million, or $0.94 per diluted common share,
including discontinued operations of $70.1 million. This $68.5 million
increase in net income attributable to common stockholders for the nine
months ended September 30, 2013 over the comparable prior-year
nine-month period is primarily the result of the increases described
above for normalized FFO, decreases in merger-related expenses and deal
costs (including integration costs), income tax benefit increases and
net gains on extinguishment of debt in 2013 compared to net losses in
2012, partially offset by year-over-year changes in discontinued
operations.
FFO, as defined by the National Association of Real Estate Investment
Trusts (“NAREIT”), for the quarter ended September 30, 2013 increased
five percent to $303.7 million, from $289.7 million in the comparable
2012 period. NAREIT FFO per diluted common share for the quarter ended
September 30, 2013 increased six percent to $1.03, from $0.97 in the
third quarter of 2012.
NAREIT FFO for the nine months ended September 30, 2013 increased 22
percent to $903.4 million, from $740.6 million in the comparable 2012
period. NAREIT FFO per diluted common share for the nine months ended
September 30, 2013 increased 21 percent to $3.06, from $2.52 in the nine
months ended September 30, 2012.
PRIVATE PAY SENIORS HOUSING OPERATING PORTFOLIO
Third Quarter 2013 Same-Store Occupancy Rises 110 Basis Points and
NOI Grows 6.2 Percent Year over Year Excluding 2012 Non-Recurring Item,
4.4 Percent As Reported
At September 30, 2013, the Company’s seniors housing operating portfolio
included 235 communities managed by Sunrise and Atria, seven of which
were acquired in the third quarter of 2013: 140 seniors housing
communities managed by Atria and 95 seniors housing communities managed
by Sunrise. Third quarter 2013 Net Operating Income (“NOI”) after
management fees for this portfolio totaled $114.7 million.
For the 212 private pay seniors housing communities owned by the Company
for the full third quarters of 2013 and 2012 (“same-store”), average
unit occupancy rose 110 basis points to 91.5 percent, NOI after
management fees grew 4.4 percent and REVPOR (revenue per occupied room)
grew 3.6 percent in the third quarter of 2013 compared to the third
quarter of 2012. Same-store NOI grew 6.2 percent in the third quarter of
2013 excluding a $1.7 million real estate tax credit recorded in the
third quarter of 2012.
THIRD QUARTER HIGHLIGHTS AND OTHER RECENT DEVELOPMENTS
Investments and Dispositions
-
Since July 1, 2013, Ventas invested $1.3 billion, principally in
private pay seniors housing communities and MOBs. Highlights of the
investments are:
(1) The expected first-year NOI yield is 7.3 percent.
(2) Of the $1.3 billion invested, approximately $360 million was
invested in seniors housing operating investments, transitioned to Atria
at the time of closing; just under $800 million was invested in
independent living triple-net leases with a new tenant; and
approximately $120 million was invested in MOBs.
(3) The eight Atria-managed senior living communities contain 940
independent and assisted living units, are 91 percent occupied and are
located primarily in the top 31 Metropolitan Statistical Areas (MSAs).
(4) The triple-net independent living portfolio consists of 26
communities with 3,138 apartment-like units and is 94 percent occupied.
(5) The eight MOBs contain 427,870 square feet, are located on the
campuses of A-rated hospital systems and are 90 percent occupied.
-
During the quarter, Ventas sold assets and received final repayments
on outstanding loans totaling $81.5 million.
Liquidity, Capital Raising, Ratings and
Balance Sheet
-
In September 2013, Ventas issued and sold $850 million aggregate
principal amount of senior notes with a weighted average interest rate
of 3.0 percent and a weighted average initial maturity of 12.5 years
and used the proceeds to repay amounts outstanding under the Company’s
unsecured revolving credit facility bearing interest at LIBOR plus 110
basis points. These transactions took advantage of low interest rates,
expanded the Company’s liquidity, improved its ratio of fixed to
floating rate debt, and extended its weighted average maturity.
-
Since July 1, 2013, the Company received aggregate proceeds of
approximately $51.6 million from sales of its common stock under its
previously established “at-the-market” equity offering program (ATM).
Of that amount, $27.9 million was raised in the fourth quarter.
-
Moody’s Investors Service (“Moody’s”) raised its rating on the
Company’s senior unsecured debt to Baa1 (stable) in August 2013.
Ventas’s senior unsecured debt is currently rated BBB+ (stable) by
Fitch Ratings, Baa1 (stable) by Moody’s and BBB (positive) by Standard
& Poor’s Rating Services.
-
The Company’s current debt to total capitalization is 32 percent. The
Company’s fixed charge coverage ratio was 4.3x in the third quarter of
2013 and net debt to Adjusted Pro Forma EBITDA at September 30, 2013
was 5.6x.
-
At September 30, 2013, the Company had $448.0 million of borrowings
outstanding under its $2 billion unsecured revolving credit facility
and $54.7 million of cash and cash equivalents. Currently, it has $429
million in borrowings outstanding under its unsecured revolving credit
facility and approximately $62.8 million of cash and cash equivalents.
PORTFOLIO UPDATE AND ADDITIONAL INFORMATION
-
The Company owned 1,300 properties for the full third quarters of 2013
and 2012 (“same-store”). Cash NOI growth for the Company’s total
same-store portfolio equaled 4.2 percent in the third quarter of 2013
compared to the third quarter of 2012, excluding $4.5 million of out
of period cash receipts in the 2012 period, and 2.8 percent on an
as-reported basis.
-
As previously announced, Ventas entered into favorable agreements with
Kindred Healthcare, Inc. (NYSE: KND) (“Kindred”) to extend the leases
with respect to 48 of the 108 licensed healthcare assets whose current
lease term was scheduled to expire on April 30, 2015 (the “2015
Renewal Assets”). Annual rent on those 48 healthcare assets leased to
Kindred will increase by $15 million on the then current escalated
rent on October 1, 2014. Including that increase, 67 percent of the
total current rent on the 108 healthcare assets has been replaced. In
addition, (1) the expiration date of the lease for the 60 remaining
healthcare assets was accelerated to September 30, 2014, and Ventas
has already launched the re-marketing process for those assets; and
(2) Ventas received a payment of $20 million from Kindred that will be
recognized as rent over the life of the new and renewed leases. The
2015 Renewal Assets consist of 86 skilled nursing facilities (“SNFs”)
and 22 long-term acute care hospitals (“LTACs”).
|
|
|
|
|
|
|
|
|
|
|
|
Contractual
|
|
(dollars in millions)
|
|
Cash Rent
|
|
Rent Increase
|
|
|
|
|
|
|
|
|
Facilities
|
|
2013
|
|
October 1, 2014
|
|
|
|
|
|
|
|
|
Renewed (26 SNFs and 22 LTACs)
|
|
$
|
78
|
|
|
$
|
15
|
|
|
60 SNFs
|
|
60
|
|
|
N/A
|
|
|
Total
|
|
$
|
138
|
|
|
N/A
|
|
|
Total Rent Renewed as a Percentage of Total 2013 Cash Rent
|
|
|
|
67
|
%
|
VENTAS RAISES 2013 NORMALIZED FFO PER DILUTED SHARE GUIDANCE TO $4.12
TO $4.14
Ventas currently expects its 2013 normalized FFO per diluted share to
range between $4.12 and $4.14, improving its previously announced 2013
guidance of between $4.06 and $4.10 per diluted share, assuming that the
Company’s weighted average diluted shares outstanding for the year
approximate 295.2 million. The midpoint of the Company’s improved
guidance range constitutes approximately eleven percent per share growth
in 2013, excluding non-cash items from normalized FFO (projected to be
$0.14 per diluted share), computed consistent with prior periods, and
nearly nine percent on an as-reported basis. A reconciliation of the
Company’s guidance, and the non-cash items, to the Company’s projected
GAAP earnings is included elsewhere in this press release.
The Company expects full year 2013 NOI from its 236 Atria- and
Sunrise-managed seniors housing communities, including 15 communities
acquired year to date, to range between $447 million to $451 million.
For the 195 communities owned by the Company for both the full year 2013
and 2012, the Company expects same-store NOI growth to range from five
to six percent.
The Company’s normalized FFO guidance (and related GAAP earnings
projections) for all periods assumes, with certain immaterial
exceptions, 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 excludes, other than as specifically stated, (a)
net gains on the sales of real property assets, including gain on
re-measurement of equity method investments, (b) merger-related costs
and expenses, including amortization of intangibles and transition and
integration expenses, and deal costs and expenses, (c) 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, (d)
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, and (e) the impact of future unannounced acquisitions
or divestitures (including pursuant to tenant options to purchase) and
capital transactions.
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 assurances that the Company
will achieve these results. The Company may from time to time update its
publicly announced guidance, but it is not obligated to do so.
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 (877) 415-3177. 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 call will be available at the Company’s website, or by
calling (888) 286-8010, passcode 61761463, beginning at approximately
2:00 p.m. Eastern Time and will remain for 28 days.
Ventas, Inc., an S&P 500 company, is a leading real estate investment
trust. Its diverse portfolio of nearly 1,500 assets in 47 states
(including the District of Columbia) and two Canadian provinces consists
of seniors housing communities, skilled nursing facilities, hospitals,
medical office buildings 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.
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 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 budget resulting in the
reduction or nonpayment of Medicare or Medicaid reimbursement rates; (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 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, 2013; (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, and obligations, including indemnification obligations,
the Company may incur in connection with the replacement of an existing
tenant; (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 U.S. and Canadian currency exchange rates;
(p) year-over-year changes in the Consumer Price Index and the effect of
those changes on the rent escalators contained in the Company’s leases,
including the rent escalators for two of the Company’s master lease
agreements with Kindred, 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 healthcare industry resulting in a
change of control of 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; and (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. Many of these factors are beyond the control of the
Company and its management.
|
|
|
CONSOLIDATED BALANCE SHEETS
|
|
As of September 30, 2013, June 30, 2013, March 31, 2013, December
31, 2012 and September 30, 2012
|
|
(In thousands, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30,
|
|
June 30,
|
|
March 31,
|
|
December 31,
|
|
September 30,
|
|
|
|
2013
|
|
2013
|
|
2013
|
|
2012
|
|
2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
Real estate investments:
|
|
|
|
|
|
|
|
|
|
|
|
Land and improvements
|
|
$
|
1,856,739
|
|
|
$
|
1,783,664
|
|
|
$
|
1,764,208
|
|
|
$
|
1,772,417
|
|
|
$
|
1,754,826
|
|
|
Buildings and improvements
|
|
18,383,075
|
|
|
17,238,843
|
|
|
16,977,860
|
|
|
16,920,821
|
|
|
16,552,534
|
|
|
Construction in progress
|
|
79,172
|
|
|
99,947
|
|
|
72,714
|
|
|
70,665
|
|
|
93,992
|
|
|
Acquired lease intangibles
|
|
1,012,163
|
|
|
990,548
|
|
|
984,023
|
|
|
981,704
|
|
|
965,500
|
|
|
|
|
21,331,149
|
|
|
20,113,002
|
|
|
19,798,805
|
|
|
19,745,607
|
|
|
19,366,852
|
|
|
Accumulated depreciation and amortization
|
|
(3,156,206
|
)
|
|
(2,977,154
|
)
|
|
(2,803,068
|
)
|
|
(2,634,075
|
)
|
|
(2,447,175
|
)
|
|
Net real estate property
|
|
18,174,943
|
|
|
17,135,848
|
|
|
16,995,737
|
|
|
17,111,532
|
|
|
16,919,677
|
|
|
Secured loans receivable and investments, net
|
|
400,889
|
|
|
470,441
|
|
|
490,107
|
|
|
635,002
|
|
|
215,775
|
|
|
Investments in unconsolidated entities
|
|
91,531
|
|
|
93,155
|
|
|
94,257
|
|
|
95,409
|
|
|
90,992
|
|
|
Net real estate investments
|
|
18,667,363
|
|
|
17,699,444
|
|
|
17,580,101
|
|
|
17,841,943
|
|
|
17,226,444
|
|
|
Cash and cash equivalents
|
|
54,672
|
|
|
62,421
|
|
|
57,690
|
|
|
67,908
|
|
|
58,530
|
|
|
Escrow deposits and restricted cash
|
|
98,200
|
|
|
94,492
|
|
|
99,225
|
|
|
105,913
|
|
|
76,908
|
|
|
Deferred financing costs, net
|
|
55,242
|
|
|
50,821
|
|
|
54,079
|
|
|
42,551
|
|
|
25,426
|
|
|
Other assets
|
|
1,003,881
|
|
|
889,404
|
|
|
915,826
|
|
|
921,685
|
|
|
1,053,591
|
|
|
Total assets
|
|
$
|
19,879,358
|
|
|
$
|
18,796,582
|
|
|
$
|
18,706,921
|
|
|
$
|
18,980,000
|
|
|
$
|
18,440,899
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and equity
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
Senior notes payable and other debt
|
|
$
|
9,413,318
|
|
|
$
|
8,420,073
|
|
|
$
|
8,295,908
|
|
|
$
|
8,413,646
|
|
|
$
|
7,494,774
|
|
|
Accrued interest
|
|
62,176
|
|
|
50,860
|
|
|
58,086
|
|
|
47,565
|
|
|
56,326
|
|
|
Accounts payable and other liabilities
|
|
1,019,166
|
|
|
887,314
|
|
|
910,692
|
|
|
995,156
|
|
|
1,049,043
|
|
|
Deferred income taxes
|
|
248,369
|
|
|
247,591
|
|
|
261,122
|
|
|
259,715
|
|
|
265,116
|
|
|
Total liabilities
|
|
10,743,029
|
|
|
9,605,838
|
|
|
9,525,808
|
|
|
9,716,082
|
|
|
8,865,259
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Redeemable OP unitholder and noncontrolling interests
|
|
171,921
|
|
|
184,217
|
|
|
194,302
|
|
|
174,555
|
|
|
113,908
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
|
|
|
|
|
|
Ventas stockholders' equity:
|
|
|
|
|
|
|
|
|
|
|
|
Preferred stock, $1.00 par value; 10,000 shares authorized,
unissued
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Common stock, $0.25 par value; 297,328; 296,940; 295,823; 295,565
and 295,534 shares issued at September 30, 2013, June 30, 2013,
March 31, 2013, December 31, 2012 and September 30, 2012,
respectively
|
|
74,345
|
|
|
74,248
|
|
|
73,969
|
|
|
73,904
|
|
|
73,896
|
|
|
Capital in excess of par value
|
|
10,032,285
|
|
|
9,996,095
|
|
|
9,904,694
|
|
|
9,920,962
|
|
|
9,941,030
|
|
|
Accumulated other comprehensive income
|
|
21,293
|
|
|
19,752
|
|
|
21,828
|
|
|
23,354
|
|
|
23,626
|
|
|
Retained earnings (deficit)
|
|
(1,021,628
|
)
|
|
(943,384
|
)
|
|
(861,434
|
)
|
|
(777,927
|
)
|
|
(680,888
|
)
|
|
Treasury stock, 3,699; 3,698; 3,736; 3,699 and 0 shares at
September 30, 2013, June 30, 2013, March 31, 2013, December 31,
2012, and September 30, 2012, respectively
|
|
(221,203
|
)
|
|
(221,129
|
)
|
|
(223,709
|
)
|
|
(221,165
|
)
|
|
—
|
|
|
Total Ventas stockholders' equity
|
|
8,885,092
|
|
|
8,925,582
|
|
|
8,915,348
|
|
|
9,019,128
|
|
|
9,357,664
|
|
|
Noncontrolling interest
|
|
79,316
|
|
|
80,945
|
|
|
71,463
|
|
|
70,235
|
|
|
104,068
|
|
|
Total equity
|
|
8,964,408
|
|
|
9,006,527
|
|
|
8,986,811
|
|
|
9,089,363
|
|
|
9,461,732
|
|
|
Total liabilities and equity
|
|
$
|
19,879,358
|
|
|
$
|
18,796,582
|
|
|
$
|
18,706,921
|
|
|
$
|
18,980,000
|
|
|
$
|
18,440,899
|
|
|
|
|
CONSOLIDATED STATEMENTS OF INCOME
|
|
For the three and nine months ended September 30, 2013 and 2012
|
|
(In thousands, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months
|
|
For the Nine Months
|
|
|
|
Ended September 30,
|
|
Ended September 30,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
Rental income:
|
|
|
|
|
|
|
|
|
|
Triple-net leased
|
|
$
|
219,170
|
|
|
$
|
207,372
|
|
|
$
|
645,719
|
|
|
$
|
613,939
|
|
|
Medical office buildings
|
|
115,444
|
|
|
100,814
|
|
|
337,536
|
|
|
253,889
|
|
|
|
|
334,614
|
|
|
308,186
|
|
|
983,255
|
|
|
867,828
|
|
|
Resident fees and services
|
|
359,112
|
|
|
316,560
|
|
|
1,039,876
|
|
|
905,190
|
|
|
Medical office building and other services revenue
|
|
4,146
|
|
|
4,544
|
|
|
11,331
|
|
|
16,791
|
|
|
Income from loans and investments
|
|
14,448
|
|
|
9,035
|
|
|
45,284
|
|
|
25,223
|
|
|
Interest and other income
|
|
66
|
|
|
330
|
|
|
1,901
|
|
|
442
|
|
|
Total revenues
|
|
712,386
|
|
|
638,655
|
|
|
2,081,647
|
|
|
1,815,474
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
Interest
|
|
84,089
|
|
|
74,037
|
|
|
245,622
|
|
|
214,028
|
|
|
Depreciation and amortization
|
|
177,710
|
|
|
188,540
|
|
|
528,180
|
|
|
534,792
|
|
|
Property-level operating expenses:
|
|
|
|
|
|
|
|
|
|
Senior living
|
|
244,316
|
|
|
216,306
|
|
|
706,561
|
|
|
618,471
|
|
|
Medical office buildings
|
|
40,796
|
|
|
36,144
|
|
|
115,738
|
|
|
86,468
|
|
|
|
|
285,112
|
|
|
252,450
|
|
|
822,299
|
|
|
704,939
|
|
|
Medical office building services costs
|
|
1,651
|
|
|
1,487
|
|
|
4,957
|
|
|
8,314
|
|
|
General, administrative and professional fees
|
|
28,659
|
|
|
26,867
|
|
|
84,760
|
|
|
75,488
|
|
|
(Gain) loss on extinguishment of debt, net
|
|
(189
|
)
|
|
(1,194
|
)
|
|
(909
|
)
|
|
38,339
|
|
|
Merger-related expenses and deal costs
|
|
6,208
|
|
|
4,917
|
|
|
17,137
|
|
|
49,566
|
|
|
Other
|
|
4,353
|
|
|
1,966
|
|
|
13,325
|
|
|
5,052
|
|
|
Total expenses
|
|
587,593
|
|
|
549,070
|
|
|
1,715,371
|
|
|
1,630,518
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income/loss from unconsolidated entities, income
taxes, discontinued operations and noncontrolling interest
|
|
124,793
|
|
|
89,585
|
|
|
366,276
|
|
|
184,956
|
|
|
Income from unconsolidated entities
|
|
110
|
|
|
17,074
|
|
|
533
|
|
|
17,905
|
|
|
Income tax benefit
|
|
2,780
|
|
|
8,886
|
|
|
13,100
|
|
|
2,727
|
|
|
Income from continuing operations
|
|
127,683
|
|
|
115,545
|
|
|
379,909
|
|
|
205,588
|
|
|
Discontinued operations
|
|
(9,084
|
)
|
|
(3,724
|
)
|
|
(33,679
|
)
|
|
70,061
|
|
|
Net income
|
|
118,599
|
|
|
111,821
|
|
|
346,230
|
|
|
275,649
|
|
|
Net income (loss) attributable to noncontrolling interest
|
|
303
|
|
|
(61
|
)
|
|
1,161
|
|
|
(884
|
)
|
|
Net income attributable to common stockholders
|
|
$
|
118,296
|
|
|
$
|
111,882
|
|
|
$
|
345,069
|
|
|
$
|
276,533
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common share:
|
|
|
|
|
|
|
|
|
|
Basic:
|
|
|
|
|
|
|
|
|
|
Income from continuing operations attributable to
|
|
|
|
|
|
|
|
|
|
common stockholders
|
|
$
|
0.43
|
|
|
$
|
0.39
|
|
|
$
|
1.30
|
|
|
$
|
0.71
|
|
|
Discontinued operations
|
|
(0.03
|
)
|
|
(0.01
|
)
|
|
(0.12
|
)
|
|
0.24
|
|
|
Net income attributable to common stockholders
|
|
$
|
0.40
|
|
|
$
|
0.38
|
|
|
$
|
1.18
|
|
|
$
|
0.95
|
|
|
Diluted:
|
|
|
|
|
|
|
|
|
|
Income from continuing operations attributable to
|
|
|
|
|
|
|
|
|
|
common stockholders
|
|
$
|
0.43
|
|
|
$
|
0.39
|
|
|
$
|
1.28
|
|
|
$
|
0.70
|
|
|
Discontinued operations
|
|
(0.03
|
)
|
|
(0.01
|
)
|
|
(0.11
|
)
|
|
0.24
|
|
|
Net income attributable to common stockholders
|
|
$
|
0.40
|
|
|
$
|
0.38
|
|
|
$
|
1.17
|
|
|
$
|
0.94
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares used in computing earnings per common
share:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
292,818
|
|
|
294,928
|
|
|
292,308
|
|
|
291,177
|
|
|
Diluted
|
|
295,190
|
|
|
297,407
|
|
|
294,788
|
|
|
293,622
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends declared per common share
|
|
$
|
0.67
|
|
|
$
|
0.62
|
|
|
$
|
2.01
|
|
|
$
|
1.86
|
|
|
|
|
QUARTERLY CONSOLIDATED STATEMENTS OF INCOME
|
|
(In thousands, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2013 Quarters
|
|
2012 Quarters
|
|
|
|
Third
|
|
Second
|
|
First
|
|
Fourth
|
|
Third
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
Rental income:
|
|
|
|
|
|
|
|
|
|
|
|
Triple-net leased
|
|
$
|
219,170
|
|
|
$
|
213,634
|
|
|
$
|
212,915
|
|
|
$
|
206,966
|
|
|
$
|
207,372
|
|
|
Medical office buildings
|
|
115,444
|
|
|
110,946
|
|
|
111,146
|
|
|
108,951
|
|
|
100,814
|
|
|
|
|
334,614
|
|
|
324,580
|
|
|
324,061
|
|
|
315,917
|
|
|
308,186
|
|
|
Resident fees and services
|
|
359,112
|
|
|
341,594
|
|
|
339,170
|
|
|
321,933
|
|
|
316,560
|
|
|
Medical office building and other services revenue
|
|
4,146
|
|
|
3,537
|
|
|
3,648
|
|
|
3,950
|
|
|
4,544
|
|
|
Income from loans and investments
|
|
14,448
|
|
|
14,733
|
|
|
16,103
|
|
|
14,690
|
|
|
9,035
|
|
|
Interest and other income
|
|
66
|
|
|
797
|
|
|
1,038
|
|
|
665
|
|
|
330
|
|
|
Total revenues
|
|
712,386
|
|
|
685,241
|
|
|
684,020
|
|
|
657,155
|
|
|
638,655
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
Interest
|
|
84,089
|
|
|
82,568
|
|
|
78,965
|
|
|
75,850
|
|
|
74,037
|
|
|
Depreciation and amortization
|
|
177,710
|
|
|
172,192
|
|
|
178,278
|
|
|
182,157
|
|
|
188,540
|
|
|
Property-level operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
Senior living
|
|
244,316
|
|
|
231,337
|
|
|
230,908
|
|
|
222,551
|
|
|
216,306
|
|
|
Medical office buildings
|
|
40,796
|
|
|
38,401
|
|
|
36,541
|
|
|
39,684
|
|
|
36,144
|
|
|
|
|
285,112
|
|
|
269,738
|
|
|
267,449
|
|
|
262,235
|
|
|
252,450
|
|
|
Medical office building services costs
|
|
1,651
|
|
|
1,667
|
|
|
1,639
|
|
|
1,569
|
|
|
1,487
|
|
|
General, administrative and professional fees
|
|
28,659
|
|
|
27,327
|
|
|
28,774
|
|
|
23,022
|
|
|
26,867
|
|
|
Gain on extinguishment of debt, net
|
|
(189
|
)
|
|
(720
|
)
|
|
—
|
|
|
(699
|
)
|
|
(1,194
|
)
|
|
Merger-related expenses and deal costs
|
|
6,208
|
|
|
6,667
|
|
|
4,262
|
|
|
13,617
|
|
|
4,917
|
|
|
Other
|
|
4,353
|
|
|
4,385
|
|
|
4,587
|
|
|
1,887
|
|
|
1,966
|
|
|
Total expenses
|
|
587,593
|
|
|
563,824
|
|
|
563,954
|
|
|
559,638
|
|
|
549,070
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income/loss from unconsolidated entities, income
taxes, discontinued operations and noncontrolling interest
|
|
124,793
|
|
|
121,417
|
|
|
120,066
|
|
|
97,517
|
|
|
89,585
|
|
|
Income (loss) from unconsolidated entities
|
|
110
|
|
|
(506
|
)
|
|
929
|
|
|
249
|
|
|
17,074
|
|
|
Income tax benefit (expense)
|
|
2,780
|
|
|
12,064
|
|
|
(1,744
|
)
|
|
3,555
|
|
|
8,886
|
|
|
Income from continuing operations
|
|
127,683
|
|
|
132,975
|
|
|
119,251
|
|
|
101,321
|
|
|
115,545
|
|
|
Discontinued operations
|
|
(9,084
|
)
|
|
(18,442
|
)
|
|
(6,153
|
)
|
|
(15,195
|
)
|
|
(3,724
|
)
|
|
Net income
|
|
118,599
|
|
|
114,533
|
|
|
113,098
|
|
|
86,126
|
|
|
111,821
|
|
|
Net income (loss) attributable to noncontrolling interest
|
|
303
|
|
|
(47
|
)
|
|
905
|
|
|
(141
|
)
|
|
(61
|
)
|
|
Net income attributable to common stockholders
|
|
$
|
118,296
|
|
|
$
|
114,580
|
|
|
$
|
112,193
|
|
|
$
|
86,267
|
|
|
$
|
111,882
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common share:
|
|
|
|
|
|
|
|
|
|
|
|
Basic:
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations attributable to
|
|
|
|
|
|
|
|
|
|
|
|
common stockholders
|
|
$
|
0.43
|
|
|
$
|
0.45
|
|
|
$
|
0.40
|
|
|
$
|
0.34
|
|
|
$
|
0.39
|
|
|
Discontinued operations
|
|
(0.03
|
)
|
|
(0.06
|
)
|
|
(0.02
|
)
|
|
(0.05
|
)
|
|
(0.01
|
)
|
|
Net income attributable to common stockholders
|
|
$
|
0.40
|
|
|
$
|
0.39
|
|
|
$
|
0.38
|
|
|
$
|
0.29
|
|
|
$
|
0.38
|
|
|
Diluted:
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations attributable to
|
|
|
|
|
|
|
|
|
|
|
|
common stockholders
|
|
$
|
0.43
|
|
|
$
|
0.45
|
|
|
$
|
0.40
|
|
|
$
|
0.34
|
|
|
$
|
0.39
|
|
|
Discontinued operations
|
|
(0.03
|
)
|
|
(0.06
|
)
|
|
(0.02
|
)
|
|
(0.05
|
)
|
|
(0.01
|
)
|
|
Net income attributable to common stockholders
|
|
$
|
0.40
|
|
|
$
|
0.39
|
|
|
$
|
0.38
|
|
|
$
|
0.29
|
|
|
$
|
0.38
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares used in computing earnings per
|
|
|
|
|
|
|
|
|
|
|
|
common share:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
292,818
|
|
|
292,635
|
|
|
291,455
|
|
|
294,704
|
|
|
294,928
|
|
|
Diluted
|
|
295,190
|
|
|
295,123
|
|
|
293,924
|
|
|
297,089
|
|
|
297,407
|
|
|
|
|
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
For the nine months ended September 30, 2013 and 2012
|
|
(In thousands)
|
|
|
|
2013
|
|
2012
|
|
Cash flows from operating activities:
|
|
|
|
|
|
Net income
|
|
$
|
346,230
|
|
|
$
|
275,649
|
|
|
Adjustments to reconcile net income to net cash provided by
operating activities:
|
|
|
|
|
|
Depreciation and amortization (including amounts in discontinued
operations)
|
|
569,325
|
|
|
563,027
|
|
|
Amortization of deferred revenue and lease intangibles, net
|
|
(11,159
|
)
|
|
(12,965
|
)
|
|
Other non-cash amortization
|
|
(13,376
|
)
|
|
(31,326
|
)
|
|
Stock-based compensation
|
|
15,010
|
|
|
16,529
|
|
|
Straight-lining of rental income, net
|
|
(21,165
|
)
|
|
(16,712
|
)
|
|
(Gain) loss on extinguishment of debt, net
|
|
(1,062
|
)
|
|
38,339
|
|
|
Gain on real estate dispositions, net (including amounts in
discontinued operations)
|
|
(2,241
|
)
|
|
(79,148
|
)
|
|
(Gain) loss on real estate loan investments
|
|
(3,598
|
)
|
|
559
|
|
|
Gain on sale of marketable debt securities
|
|
(856
|
)
|
|
—
|
|
|
Income tax benefit (including amounts in discontinued operations)
|
|
(13,100
|
)
|
|
(2,731
|
)
|
|
Loss (income) from unconsolidated entities
|
|
707
|
|
|
(1,260
|
)
|
|
Gain on re-measurement of equity interest upon acquisition, net
|
|
(1,241
|
)
|
|
(16,645
|
)
|
|
Other
|
|
6,133
|
|
|
6,472
|
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
Increase in other assets
|
|
(28,132
|
)
|
|
(11,930
|
)
|
|
Increase in accrued interest
|
|
14,624
|
|
|
18,730
|
|
|
Decrease in accounts payable and other liabilities
|
|
(20,670
|
)
|
|
(37,269
|
)
|
|
Net cash provided by operating activities
|
|
835,429
|
|
|
709,319
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
Net investment in real estate property
|
|
(1,358,766
|
)
|
|
(1,154,912
|
)
|
|
Purchase of noncontrolling interest
|
|
(7,895
|
)
|
|
(3,934
|
)
|
|
Investment in loans receivable and other
|
|
(34,717
|
)
|
|
(30,523
|
)
|
|
Proceeds from real estate disposals
|
|
29,191
|
|
|
75,145
|
|
|
Proceeds from loans receivable
|
|
299,156
|
|
|
34,817
|
|
|
Proceeds from sale or maturity of marketable securities
|
|
5,493
|
|
|
—
|
|
|
Funds held in escrow for future development expenditures
|
|
15,189
|
|
|
—
|
|
|
Development project expenditures
|
|
(74,707
|
)
|
|
(90,119
|
)
|
|
Capital expenditures
|
|
(50,634
|
)
|
|
(42,270
|
)
|
|
Other
|
|
(411
|
)
|
|
(2,110
|
)
|
|
Net cash used in investing activities
|
|
(1,178,101
|
)
|
|
(1,213,906
|
)
|
|
Cash flows from financing activities:
|
|
|
|
|
|
Net change in borrowings under revolving credit facility
|
|
(92,586
|
)
|
|
248,921
|
|
|
Proceeds from debt
|
|
1,766,844
|
|
|
1,568,382
|
|
|
Repayment of debt
|
|
(840,532
|
)
|
|
(1,103,000
|
)
|
|
Payment of deferred financing costs
|
|
(19,977
|
)
|
|
(4,257
|
)
|
|
Issuance of common stock, net
|
|
106,002
|
|
|
342,469
|
|
|
Cash distribution to common stockholders
|
|
(588,770
|
)
|
|
(545,240
|
)
|
|
Cash distribution to redeemable OP unitholders
|
|
(3,479
|
)
|
|
(3,358
|
)
|
|
Purchases of redeemable OP units
|
|
(317
|
)
|
|
(1,760
|
)
|
|
Contributions from noncontrolling interest
|
|
2,094
|
|
|
—
|
|
|
Distributions to noncontrolling interest
|
|
(7,614
|
)
|
|
(4,035
|
)
|
|
Other
|
|
7,830
|
|
|
19,130
|
|
|
Net cash provided by financing activities
|
|
329,495
|
|
|
517,252
|
|
|
Net (decrease) increase in cash and cash equivalents
|
|
(13,177
|
)
|
|
12,665
|
|
|
Effect of foreign currency translation on cash and cash equivalents
|
|
(59
|
)
|
|
58
|
|
|
Cash and cash equivalents at beginning of period
|
|
67,908
|
|
|
45,807
|
|
|
Cash and cash equivalents at end of period
|
|
$
|
54,672
|
|
|
$
|
58,530
|
|
|
|
|
|
|
|
|
Supplemental schedule of non-cash activities:
|
|
|
|
|
|
Assets and liabilities assumed from acquisitions:
|
|
|
|
|
|
Real estate investments
|
|
$
|
221,447
|
|
|
$
|
497,755
|
|
|
Utilization of funds held for an Internal Revenue Code Section 1031
exchange
|
|
—
|
|
|
(134,003
|
)
|
|
Other assets acquired
|
|
6,526
|
|
|
99,889
|
|
|
Debt assumed
|
|
183,848
|
|
|
367,902
|
|
|
Other liabilities
|
|
27,583
|
|
|
60,684
|
|
|
Deferred income tax liability
|
|
4,849
|
|
|
4,299
|
|
|
Noncontrolling interests
|
|
11,693
|
|
|
26,430
|
|
|
Equity issued
|
|
—
|
|
|
4,326
|
|
|
Debt transferred on the sale of assets
|
|
—
|
|
|
14,535
|
|
|
|
|
QUARTERLY CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2013 Quarters
|
|
2012 Quarters
|
|
|
|
Third
|
|
Second
|
|
First
|
|
Fourth
|
|
Third
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
118,599
|
|
|
$
|
114,533
|
|
|
$
|
113,098
|
|
|
$
|
86,126
|
|
|
$
|
111,821
|
|
|
Adjustments to reconcile net income to net cash provided by
operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization (including amounts in discontinued
operations)
|
|
188,393
|
|
|
193,989
|
|
|
186,943
|
|
|
201,748
|
|
|
196,622
|
|
|
Amortization of deferred revenue and lease intangibles, net
|
|
(4,156
|
)
|
|
(3,693
|
)
|
|
(3,310
|
)
|
|
(4,153
|
)
|
|
(4,136
|
)
|
|
Other non-cash amortization
|
|
(3,975
|
)
|
|
(4,072
|
)
|
|
(5,329
|
)
|
|
(8,617
|
)
|
|
(10,141
|
)
|
|
Stock-based compensation
|
|
4,210
|
|
|
5,138
|
|
|
5,662
|
|
|
4,255
|
|
|
5,443
|
|
|
Straight-lining of rental income, net
|
|
(6,835
|
)
|
|
(6,465
|
)
|
|
(7,865
|
)
|
|
(7,330
|
)
|
|
(6,242
|
)
|
|
Gain on extinguishment of debt, net
|
|
(189
|
)
|
|
(873
|
)
|
|
—
|
|
|
(699
|
)
|
|
(1,194
|
)
|
|
Gain on real estate dispositions, net (including amounts in
discontinued operations)
|
|
(46
|
)
|
|
(1,718
|
)
|
|
(477
|
)
|
|
(1,804
|
)
|
|
(357
|
)
|
|
Gain on real estate loan investments
|
|
(2,499
|
)
|
|
(759
|
)
|
|
(340
|
)
|
|
(5,789
|
)
|
|
—
|
|
|
Gain on sale of marketable debt securities
|
|
—
|
|
|
(856
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Income tax (benefit) expense (including amounts in discontinued
operations)
|
|
(2,780
|
)
|
|
(12,064
|
)
|
|
1,744
|
|
|
(3,555
|
)
|
|
(8,869
|
)
|
|
(Income) loss from unconsolidated entities
|
|
(111
|
)
|
|
506
|
|
|
312
|
|
|
(249
|
)
|
|
(429
|
)
|
|
Gain on re-measurement of equity interest upon acquisition, net
|
|
—
|
|
|
—
|
|
|
(1,241
|
)
|
|
—
|
|
|
(16,645
|
)
|
|
Other
|
|
2,261
|
|
|
967
|
|
|
2,905
|
|
|
3,942
|
|
|
482
|
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
(Increase) decrease in other assets
|
|
(11,717
|
)
|
|
(5,956
|
)
|
|
(10,459
|
)
|
|
15,686
|
|
|
(12,791
|
)
|
|
Increase (decrease) in accrued interest
|
|
11,309
|
|
|
(7,215
|
)
|
|
10,530
|
|
|
(8,761
|
)
|
|
8,471
|
|
|
Increase (decrease) in accounts payable and other liabilities
|
|
35,277
|
|
|
5,921
|
|
|
(61,868
|
)
|
|
12,697
|
|
|
(13,524
|
)
|
|
Net cash provided by operating activities
|
|
327,741
|
|
|
277,383
|
|
|
230,305
|
|
|
283,497
|
|
|
248,511
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
Net investment in real estate property
|
|
(1,075,144
|
)
|
|
(227,447
|
)
|
|
(56,175
|
)
|
|
(298,153
|
)
|
|
(255,508
|
)
|
|
Purchase of private investment funds
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(276,419
|
)
|
|
—
|
|
|
Purchase of noncontrolling interest
|
|
(1,771
|
)
|
|
(2,938
|
)
|
|
(3,186
|
)
|
|
—
|
|
|
—
|
|
|
Investment in loans receivable and other
|
|
(2,385
|
)
|
|
(29,543
|
)
|
|
(2,789
|
)
|
|
(422,035
|
)
|
|
(3,263
|
)
|
|
Proceeds from real estate disposals
|
|
4,901
|
|
|
13,040
|
|
|
11,250
|
|
|
73,900
|
|
|
66,298
|
|
|
Proceeds from loans receivable
|
|
81,113
|
|
|
71,649
|
|
|
146,394
|
|
|
8,402
|
|
|
1,594
|
|
|
Proceeds from sale or maturity of marketable securities
|
|
—
|
|
|
5,493
|
|
|
—
|
|
|
37,500
|
|
|
—
|
|
|
Funds held in escrow for future development expenditures
|
|
3,373
|
|
|
6,376
|
|
|
5,440
|
|
|
(28,050
|
)
|
|
—
|
|
|
Development project expenditures
|
|
(26,423
|
)
|
|
(26,696
|
)
|
|
(21,588
|
)
|
|
(23,883
|
)
|
|
(29,558
|
)
|
|
Capital expenditures
|
|
(18,175
|
)
|
|
(12,664
|
)
|
|
(19,795
|
)
|
|
(27,160
|
)
|
|
(18,458
|
)
|
|
Other
|
|
—
|
|
|
(333
|
)
|
|
(78
|
)
|
|
115
|
|
|
40
|
|
|
Net cash (used in) provided by investing activities
|
|
(1,034,511
|
)
|
|
(203,063
|
)
|
|
59,473
|
|
|
(955,783
|
)
|
|
(238,855
|
)
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
Net change in borrowings under revolving credit facility
|
|
188,340
|
|
|
94,990
|
|
|
(375,916
|
)
|
|
(163,983
|
)
|
|
337,575
|
|
|
Proceeds from debt
|
|
848,389
|
|
|
1,584
|
|
|
916,871
|
|
|
1,142,023
|
|
|
299,067
|
|
|
Repayment of debt
|
|
(155,014
|
)
|
|
(49,725
|
)
|
|
(635,793
|
)
|
|
(90,023
|
)
|
|
(457,278
|
)
|
|
Payment of deferred financing costs
|
|
(6,980
|
)
|
|
811
|
|
|
(13,808
|
)
|
|
(19,513
|
)
|
|
(1,277
|
)
|
|
Issuance of common stock, net
|
|
23,618
|
|
|
77,334
|
|
|
5,050
|
|
|
—
|
|
|
—
|
|
|
Cash distribution to common stockholders
|
|
(196,540
|
)
|
|
(196,530
|
)
|
|
(195,700
|
)
|
|
(183,306
|
)
|
|
(183,283
|
)
|
|
Cash distribution to redeemable OP unitholders
|
|
(1,166
|
)
|
|
(1,162
|
)
|
|
(1,151
|
)
|
|
(1,088
|
)
|
|
(1,117
|
)
|
|
Purchases of redeemable OP units
|
|
(109
|
)
|
|
(100
|
)
|
|
(108
|
)
|
|
(2,841
|
)
|
|
(1,149
|
)
|
|
Contributions from noncontrolling interest
|
|
—
|
|
|
2,094
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Distributions to noncontrolling interest
|
|
(2,569
|
)
|
|
(3,595
|
)
|
|
(1,450
|
)
|
|
(1,180
|
)
|
|
(1,128
|
)
|
|
Other
|
|
1,022
|
|
|
4,750
|
|
|
2,058
|
|
|
1,573
|
|
|
4,621
|
|
|
Net cash provided by (used in) financing activities
|
|
698,991
|
|
|
(69,549
|
)
|
|
(299,947
|
)
|
|
681,662
|
|
|
(3,969
|
)
|
|
Net (decrease) increase in cash and cash equivalents
|
|
(7,779
|
)
|
|
4,771
|
|
|
(10,169
|
)
|
|
9,376
|
|
|
5,687
|
|
|
Effect of foreign currency translation on cash and cash equivalents
|
|
30
|
|
|
(40
|
)
|
|
(49
|
)
|
|
2
|
|
|
40
|
|
|
Cash and cash equivalents at beginning of period
|
|
62,421
|
|
|
57,690
|
|
|
67,908
|
|
|
58,530
|
|
|
52,803
|
|
|
Cash and cash equivalents at end of period
|
|
$
|
54,672
|
|
|
$
|
62,421
|
|
|
$
|
57,690
|
|
|
$
|
67,908
|
|
|
$
|
58,530
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental schedule of non-cash activities:
|
|
|
|
|
|
|
|
|
|
|
|
Assets and liabilities assumed from acquisitions:
|
|
|
|
|
|
|
|
|
|
|
|
Real estate investments
|
|
$
|
131,427
|
|
|
$
|
81,181
|
|
|
$
|
8,839
|
|
|
$
|
84,939
|
|
|
$
|
132,872
|
|
|
Other assets acquired
|
|
3,964
|
|
|
1,894
|
|
|
668
|
|
|
(22,159
|
)
|
|
18,380
|
|
|
Debt assumed
|
|
115,246
|
|
|
68,602
|
|
|
—
|
|
|
44,923
|
|
|
117,539
|
|
|
Other liabilities
|
|
17,090
|
|
|
4,071
|
|
|
6,422
|
|
|
9,707
|
|
|
34,045
|
|
|
Deferred income tax liability
|
|
3,055
|
|
|
262
|
|
|
1,532
|
|
|
—
|
|
|
(1,596
|
)
|
|
Noncontrolling interests
|
|
—
|
|
|
10,140
|
|
|
1,553
|
|
|
8,150
|
|
|
1,264
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NON-GAAP FINANCIAL MEASURES RECONCILIATION
|
|
Funds From Operations (FFO) Including and Excluding Non-Cash
Items1
|
|
(Dollars in thousands, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tentative Estimates
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preliminary and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subject to Change
|
|
YOY
|
|
|
|
2012
|
|
2013
|
|
FY2013 - Guidance
|
|
Growth 2
|
|
|
|
Q3
|
|
Q4
|
|
FY
|
|
Q1
|
|
Q2
|
|
Q3
|
|
Low
|
|
High
|
|
'12-'13E
|
|
Net income attributable to common stockholders
|
|
$
|
111,882
|
|
|
$
|
86,267
|
|
|
$
|
362,800
|
|
|
$
|
112,193
|
|
|
$
|
114,580
|
|
|
$
|
118,296
|
|
|
$
|
449,088
|
|
|
$
|
460,091
|
|
|
|
|
Net income attributable to common stockholders per share
|
|
$
|
0.38
|
|
|
$
|
0.29
|
|
|
$
|
1.23
|
|
|
$
|
0.38
|
|
|
$
|
0.39
|
|
|
$
|
0.40
|
|
|
$
|
1.52
|
|
|
$
|
1.56
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization on real estate assets
|
|
187,288
|
|
|
180,889
|
|
|
712,526
|
|
|
177,000
|
|
|
170,776
|
|
|
176,263
|
|
|
726,540
|
|
|
721,540
|
|
|
|
|
Depreciation on real estate assets related to
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
noncontrolling interest
|
|
(2,221
|
)
|
|
(2,435
|
)
|
|
(8,503
|
)
|
|
(2,502
|
)
|
|
(2,617
|
)
|
|
(2,719
|
)
|
|
(10,015
|
)
|
|
(11,015
|
)
|
|
|
|
Depreciation on real estate assets related to
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
unconsolidated entities
|
|
1,700
|
|
|
1,510
|
|
|
7,516
|
|
|
1,646
|
|
|
1,622
|
|
|
1,634
|
|
|
6,652
|
|
|
6,152
|
|
|
|
|
Gain on re-measurement of equity interest upon
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
acquisition, net
|
|
(16,645
|
)
|
|
—
|
|
|
(16,645
|
)
|
|
(1,241
|
)
|
|
—
|
|
|
—
|
|
|
(1,241
|
)
|
|
(1,241
|
)
|
|
|
|
Discontinued operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on real estate dispositions, net
|
|
(357
|
)
|
|
(1,804
|
)
|
|
(80,952
|
)
|
|
(477
|
)
|
|
(1,718
|
)
|
|
(488
|
)
|
|
(3,184
|
)
|
|
(2,184
|
)
|
|
|
|
Depreciation and amortization on real estate assets
|
|
8,082
|
|
|
19,590
|
|
|
47,825
|
|
|
8,665
|
|
|
21,798
|
|
|
10,682
|
|
|
41,145
|
|
|
41,145
|
|
|
|
|
Subtotal: FFO add-backs
|
|
177,847
|
|
|
197,750
|
|
|
661,767
|
|
|
183,091
|
|
|
189,861
|
|
|
185,372
|
|
|
759,897
|
|
|
754,397
|
|
|
|
|
Subtotal: FFO add-backs per share
|
|
$
|
0.60
|
|
|
$
|
0.67
|
|
|
$
|
2.25
|
|
|
$
|
0.62
|
|
|
$
|
0.64
|
|
|
$
|
0.63
|
|
|
$
|
2.57
|
|
|
$
|
2.56
|
|
|
|
|
FFO
|
|
$
|
289,729
|
|
|
$
|
284,017
|
|
|
$
|
1,024,567
|
|
|
$
|
295,284
|
|
|
$
|
304,441
|
|
|
$
|
303,668
|
|
|
$
|
1,208,985
|
|
|
$
|
1,214,488
|
|
|
18
|
%
|
|
FFO per share
|
|
$
|
0.97
|
|
|
$
|
0.96
|
|
|
$
|
3.48
|
|
|
$
|
1.00
|
|
|
$
|
1.03
|
|
|
$
|
1.03
|
|
|
$
|
4.10
|
|
|
$
|
4.11
|
|
|
18
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Merger-related expenses and deal costs
|
|
4,917
|
|
|
13,617
|
|
|
63,183
|
|
|
4,262
|
|
|
6,592
|
|
|
6,209
|
|
|
17,200
|
|
|
21,200
|
|
|
|
|
Income tax (benefit) expense
|
|
(8,870
|
)
|
|
(3,555
|
)
|
|
(6,286
|
)
|
|
1,744
|
|
|
(12,064
|
)
|
|
(2,780
|
)
|
|
(11,000
|
)
|
|
(13,000
|
)
|
|
|
|
(Gain) loss on extinguishment of debt
|
|
(1,194
|
)
|
|
(699
|
)
|
|
37,640
|
|
|
—
|
|
|
(873
|
)
|
|
(189
|
)
|
|
—
|
|
|
(2,000
|
)
|
|
|
|
Change in fair value of financial instruments
|
|
58
|
|
|
(52
|
)
|
|
99
|
|
|
25
|
|
|
—
|
|
|
—
|
|
|
25
|
|
|
25
|
|
|
|
|
Amortization of other intangibles
|
|
256
|
|
|
255
|
|
|
1,022
|
|
|
256
|
|
|
255
|
|
|
256
|
|
|
822
|
|
|
1,222
|
|
|
|
|
Subtotal: normalized FFO add-backs
|
|
(4,833
|
)
|
|
9,566
|
|
|
95,658
|
|
|
6,287
|
|
|
(6,090
|
)
|
|
3,496
|
|
|
7,047
|
|
|
7,447
|
|
|
|
|
Subtotal: normalized FFO add-backs per share
|
|
$
|
(0.02
|
)
|
|
$
|
0.03
|
|
|
$
|
0.32
|
|
|
$
|
0.02
|
|
|
$
|
(0.02
|
)
|
|
$
|
0.01
|
|
|
$
|
0.02
|
|
|
$
|
0.03
|
|
|
|
|
Normalized FFO
|
|
$
|
284,896
|
|
|
$
|
293,583
|
|
|
$
|
1,120,225
|
|
|
$
|
301,571
|
|
|
$
|
298,351
|
|
|
$
|
307,164
|
|
|
$
|
1,216,032
|
|
|
$
|
1,221,935
|
|
|
9
|
%
|
|
Normalized FFO per share
|
|
$
|
0.96
|
|
|
$
|
0.99
|
|
|
$
|
3.80
|
|
|
$
|
1.03
|
|
|
$
|
1.01
|
|
|
$
|
1.04
|
|
|
$
|
4.12
|
|
|
$
|
4.14
|
|
|
9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-cash items included in normalized FFO:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of deferred revenue and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
lease intangibles, net
|
|
(4,136
|
)
|
|
(4,153
|
)
|
|
(17,118
|
)
|
|
(3,310
|
)
|
|
(3,693
|
)
|
|
(4,156
|
)
|
|
(15,590
|
)
|
|
(15,590
|
)
|
|
|
|
Other non-cash amortization, including fair market
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
value of debt
|
|
(10,141
|
)
|
|
(8,617
|
)
|
|
(39,943
|
)
|
|
(5,329
|
)
|
|
(4,072
|
)
|
|
(3,975
|
)
|
|
(16,274
|
)
|
|
(17,274
|
)
|
|
|
|
Stock-based compensation
|
|
5,443
|
|
|
4,255
|
|
|
20,784
|
|
|
5,662
|
|
|
5,138
|
|
|
4,210
|
|
|
19,797
|
|
|
21,797
|
|
|
|
|
Straight-lining of rental income, net
|
|
(6,242
|
)
|
|
(7,330
|
)
|
|
(24,042
|
)
|
|
(7,865
|
)
|
|
(6,465
|
)
|
|
(6,835
|
)
|
|
(30,363
|
)
|
|
(30,863
|
)
|
|
|
|
Subtotal: non-cash items included in normalized FFO
|
|
(15,076
|
)
|
|
(15,845
|
)
|
|
(60,319
|
)
|
|
(10,842
|
)
|
|
(9,092
|
)
|
|
(10,756
|
)
|
|
(42,430
|
)
|
|
(41,930
|
)
|
|
|
|
Subtotal: normalized FFO add-backs per share
|
|
$
|
(0.05
|
)
|
|
$
|
(0.05
|
)
|
|
$
|
(0.20
|
)
|
|
$
|
(0.04
|
)
|
|
$
|
(0.03
|
)
|
|
$
|
(0.04
|
)
|
|
$
|
(0.14
|
)
|
|
$
|
(0.14
|
)
|
|
|
|
Normalized FFO, excluding non-cash items
|
|
$
|
269,820
|
|
|
$
|
277,738
|
|
|
$
|
1,059,906
|
|
|
$
|
290,729
|
|
|
$
|
289,259
|
|
|
$
|
296,408
|
|
|
$
|
1,173,602
|
|
|
$
|
1,180,005
|
|
|
11
|
%
|
|
Normalized FFO, excluding non-cash items per share
|
|
$
|
0.91
|
|
|
$
|
0.93
|
|
|
$
|
3.60
|
|
|
$
|
0.99
|
|
|
$
|
0.98
|
|
|
$
|
1.00
|
|
|
$
|
3.98
|
|
|
$
|
4.00
|
|
|
11
|
%
|
|
Weighted average diluted shares
|
|
297,407
|
|
|
297,089
|
|
|
294,488
|
|
|
293,924
|
|
|
295,123
|
|
|
295,190
|
|
|
295,154
|
|
|
295,154
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 changes in the Company’s weighted average
diluted share count, if any.
|
|
2 2012-2013E growth assumes the midpoint of 2013 guidance.
|
|
|
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 normalized FFO appropriate measures of
operating performance of an equity REIT. Moreover, the Company believes
that normalized FFO provides useful information 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 such as
transactions and litigation.
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 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) net gains on the sales of real
property assets, including gain on re-measurement of equity method
investments; (b) merger-related costs and expenses, including
amortization of intangibles and transition and integration expenses, and
deal costs and expenses, including expenses and recoveries relating to
acquisition lawsuits; (c) 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; (d) 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; (e)
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; (f) the financial impact
of contingent consideration; (g) charitable donations made to the Ventas
Charitable Foundation; and (h) gains and losses for non-operational
foreign currency hedge agreements and changes in the fair value of
financial instruments.
FFO and normalized FFO presented herein may not be identical to FFO and
normalized FFO presented by other real estate companies due to the fact
that not all real estate companies use the same definitions. FFO and
normalized FFO 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 FFO and normalized FFO 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
normalized FFO 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,
interest and depreciation of the Company’s investments and other capital
transactions that were completed during the three months ended September
30, 2013, 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, merger-related expenses and deal
costs, 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
|
$
|
118,296
|
|
|
|
Pro forma adjustments for current period investments, capital
|
|
|
|
transactions and dispositions
|
10,893
|
|
|
|
Pro forma net income for the three months ended September 30, 2013
|
129,189
|
|
|
|
Add back:
|
|
|
|
Pro forma interest
|
91,375
|
|
|
|
Pro forma depreciation and amortization
|
190,139
|
|
|
|
Stock-based compensation
|
4,210
|
|
|
|
Gain on real estate dispositions, net
|
(488
|
)
|
|
|
Gain on extinguishment of debt, net
|
(189
|
)
|
|
|
Income tax benefit
|
(2,780
|
)
|
|
|
Other taxes
|
1,318
|
|
|
|
Pro forma merger-related expenses and deal costs
|
3,466
|
|
|
|
Adjusted Pro Forma EBITDA
|
$
|
416,240
|
|
|
|
|
|
|
|
Adjusted Pro Forma EBITDA annualized
|
$
|
1,664,960
|
|
|
|
|
|
|
|
|
|
|
|
As of September 30, 2013:
|
|
|
|
Debt
|
$
|
9,413,318
|
|
|
|
Cash, including cash escrows pertaining to debt
|
(86,352
|
)
|
|
|
Net debt
|
$
|
9,326,966
|
|
|
|
|
|
|
|
Net debt to Adjusted Pro Forma EBITDA
|
5.6
|
|
x
|
|
|
|
|
|
NON-GAAP FINANCIAL MEASURES RECONCILIATION
Adjusted Pro
Forma EBITDA and Fixed Charge Coverage Ratio
The following information considers the pro forma 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, 2013, as if the transactions had been consummated as of
the beginning of the period. The following table illustrates Adjusted
Pro Forma EBITDA and fixed charge coverage ratio (dollars in thousands):
|
Net income attributable to common stockholders
|
|
$
|
431,336
|
|
|
|
Pro forma adjustments for current period investments, capital
|
|
|
|
|
transactions and dispositions
|
|
92,475
|
|
|
|
Pro forma net income
|
|
523,811
|
|
|
|
Add back:
|
|
|
|
|
Pro forma interest
|
|
326,628
|
|
|
|
Pro forma depreciation and amortization
|
|
771,042
|
|
|
|
Stock-based compensation
|
|
19,265
|
|
|
|
Gain on real estate dispositions, net
|
|
(4,487
|
)
|
|
|
Gain on extinguishment of debt, net
|
|
(1,761
|
)
|
|
|
Gain on re-measurement of equity interest upon acquisition, net
|
|
(1,241
|
)
|
|
|
Income tax benefit
|
|
(16,655
|
)
|
|
|
Other taxes
|
|
4,455
|
|
|
|
Pro forma merger-related expenses and deal costs
|
|
25,776
|
|
|
|
Adjusted Pro Forma EBITDA
|
|
$
|
1,646,833
|
|
|
|
|
|
|
|
|
Adjusted Pro Forma Fixed Charges:
|
|
|
|
|
Adjusted interest
|
|
$
|
305,193
|
|
|
|
Scheduled principal debt payments
|
|
52,061
|
|
|
|
Non-cash amortization and pro forma adjustments
|
|
26,349
|
|
|
|
Total pro forma fixed charges
|
|
$
|
383,603
|
|
|
|
|
|
|
|
|
Adjusted Pro Forma Fixed Charge Coverage Ratio
|
|
4.3
|
|
x
|
|
|
|
NON-GAAP FINANCIAL MEASURES RECONCILIATION
|
|
FFO and Normalized FFO
|
|
(In thousands, except per share amounts)
|
|
|
|
|
|
|
|
|
|
For the Nine Months
|
|
|
|
Ended September 30,
|
|
|
|
2013
|
|
2012
|
|
|
|
|
|
|
|
Net income attributable to common stockholders
|
|
$
|
345,069
|
|
|
$
|
276,533
|
|
|
Adjustments:
|
|
|
|
|
|
Depreciation and amortization on real estate assets
|
|
524,039
|
|
|
531,637
|
|
|
Depreciation on real estate assets related to noncontrolling interest
|
|
(7,838
|
)
|
|
(6,068
|
)
|
|
Depreciation on real estate assets related to unconsolidated entities
|
|
4,902
|
|
|
6,006
|
|
|
Gain on re-measurement of equity interest upon acquisition, net
|
|
(1,241
|
)
|
|
(16,645
|
)
|
|
Discontinued operations:
|
|
|
|
|
|
Gain on real estate dispositions, net
|
|
(2,683
|
)
|
|
(79,148
|
)
|
|
Depreciation and amortization on real estate assets
|
|
41,145
|
|
|
28,235
|
|
|
FFO
|
|
903,393
|
|
|
740,550
|
|
|
Merger-related expenses and deal costs
|
|
17,063
|
|
|
49,566
|
|
|
Income tax benefit
|
|
(13,100
|
)
|
|
(2,731
|
)
|
|
(Gain) loss on extinguishment of debt, net
|
|
(1,062
|
)
|
|
38,339
|
|
|
Change in fair value of financial instruments
|
|
25
|
|
|
151
|
|
|
Amortization of other intangibles
|
|
767
|
|
|
767
|
|
|
Normalized FFO
|
|
$
|
907,086
|
|
|
$
|
826,642
|
|
|
|
|
|
|
|
|
Per diluted share 1:
|
|
|
|
|
|
Net income attributable to common stockholders
|
|
$
|
1.17
|
|
|
$
|
0.94
|
|
|
Adjustments:
|
|
|
|
|
|
Depreciation and amortization on real estate assets
|
|
1.78
|
|
|
1.81
|
|
|
Depreciation on real estate assets related to noncontrolling interest
|
|
(0.03
|
)
|
|
(0.02
|
)
|
|
Depreciation on real estate assets related to unconsolidated entities
|
|
0.02
|
|
|
0.02
|
|
|
Gain on re-measurement of equity interest upon acquisition, net
|
|
0.00
|
|
|
(0.06
|
)
|
|
Discontinued operations:
|
|
|
|
|
|
Gain on real estate dispositions, net
|
|
(0.01
|
)
|
|
(0.27
|
)
|
|
Depreciation and amortization on real estate assets
|
|
0.14
|
|
|
0.10
|
|
|
FFO
|
|
3.06
|
|
|
2.52
|
|
|
Merger-related expenses and deal costs
|
|
0.06
|
|
|
0.17
|
|
|
Income tax benefit
|
|
(0.04
|
)
|
|
(0.01
|
)
|
|
(Gain) loss on extinguishment of debt, net
|
|
(0.00
|
)
|
|
0.13
|
|
|
Change in fair value of financial instruments
|
|
0.00
|
|
|
0.00
|
|
|
Amortization of other intangibles
|
|
0.00
|
|
|
0.00
|
|
|
Normalized FFO
|
|
$
|
3.08
|
|
|
$
|
2.82
|
|
|
|
|
|
|
|
|
1 Per share amounts may not add due to rounding.
|
|
|
|
NON-GAAP FINANCIAL MEASURES RECONCILIATION
|
|
NOI by Segment 1
|
|
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2013 Quarters
|
|
2012 Quarters
|
|
|
|
Third
|
|
Second
|
|
First
|
|
Fourth
|
|
Third
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Triple-Net
|
|
|
|
|
|
|
|
|
|
|
|
Triple-Net Rental Income
|
|
$
|
219,170
|
|
|
$
|
213,634
|
|
|
$
|
212,915
|
|
|
$
|
206,966
|
|
|
$
|
207,372
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Medical Office Buildings
|
|
|
|
|
|
|
|
|
|
|
|
Medical Office - Stabilized
|
|
108,083
|
|
|
104,889
|
|
|
105,167
|
|
|
102,895
|
|
|
95,314
|
|
Medical Office - Lease up
|
|
7,361
|
|
|
6,057
|
|
|
5,979
|
|
|
6,056
|
|
|
5,500
|
|
Total Medical Office Buildings - Rental Income
|
|
115,444
|
|
|
110,946
|
|
|
111,146
|
|
|
108,951
|
|
|
100,814
|
|
Total Rental Income
|
|
334,614
|
|
|
324,580
|
|
|
324,061
|
|
|
315,917
|
|
|
308,186
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Medical Office Building Services Revenue
|
|
2,530
|
|
|
2,159
|
|
|
2,537
|
|
|
2,840
|
|
|
3,434
|
|
Total Medical Office Buildings - Revenue
|
|
117,974
|
|
|
113,105
|
|
|
113,683
|
|
|
111,791
|
|
|
104,248
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Triple-Net Services Revenue
|
|
1,116
|
|
|
1,115
|
|
|
1,111
|
|
|
1,110
|
|
|
1,110
|
|
Non-Segment Services Revenue
|
|
500
|
|
|
263
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Total Medical Office Building and Other Services Revenue
|
|
4,146
|
|
|
4,146
|
|
|
3,648
|
|
|
3,950
|
|
|
4,544
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Seniors Housing Operating
|
|
|
|
|
|
|
|
|
|
|
|
Seniors Housing - Stabilized
|
|
355,294
|
|
|
338,244
|
|
|
335,873
|
|
|
318,761
|
|
|
313,289
|
|
Seniors Housing - Lease up
|
|
3,152
|
|
|
2,624
|
|
|
2,556
|
|
|
2,431
|
|
|
2,530
|
|
Seniors Housing - Other
|
|
666
|
|
|
726
|
|
|
741
|
|
|
741
|
|
|
741
|
|
Total Resident Fees and Services
|
|
359,112
|
|
|
341,594
|
|
|
339,170
|
|
|
321,933
|
|
|
316,560
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Segment Income from Loans and Investments
|
|
14,448
|
|
|
14,733
|
|
|
16,103
|
|
|
14,690
|
|
|
9,035
|
|
Total Revenues, excluding Interest and Other Income
|
|
712,320
|
|
|
684,444
|
|
|
682,982
|
|
|
656,490
|
|
|
638,325
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property-Level Operating Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Medical Office Buildings
|
|
|
|
|
|
|
|
|
|
|
|
Medical Office - Stabilized
|
|
37,902
|
|
|
36,177
|
|
|
34,620
|
|
|
37,446
|
|
|
33,978
|
|
Medical Office - Lease up
|
|
2,894
|
|
|
2,224
|
|
|
1,921
|
|
|
2,238
|
|
|
2,166
|
|
Total Medical Office Buildings
|
|
40,796
|
|
|
38,401
|
|
|
36,541
|
|
|
39,684
|
|
|
36,144
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Seniors Housing Operating
|
|
|
|
|
|
|
|
|
|
|
|
Seniors Housing - Stabilized
|
|
241,319
|
|
|
228,776
|
|
|
228,396
|
|
|
219,887
|
|
|
213,829
|
|
Seniors Housing - Lease up
|
|
2,392
|
|
|
1,946
|
|
|
1,898
|
|
|
2,084
|
|
|
1,848
|
|
Seniors Housing - Other
|
|
605
|
|
|
615
|
|
|
614
|
|
|
580
|
|
|
629
|
|
Total Seniors Housing
|
|
244,316
|
|
|
231,337
|
|
|
230,908
|
|
|
222,551
|
|
|
216,306
|
|
Total Property-Level Operating Expenses
|
|
285,112
|
|
|
269,738
|
|
|
267,449
|
|
|
262,235
|
|
|
252,450
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Medical Office Building Services Costs
|
|
1,651
|
|
|
1,667
|
|
|
1,639
|
|
|
1,569
|
|
|
1,487
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Operating Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Triple-Net
|
|
|
|
|
|
|
|
|
|
|
|
Triple-Net Properties
|
|
219,170
|
|
|
213,634
|
|
|
212,915
|
|
|
206,966
|
|
|
207,372
|
|
Triple-Net Services Revenue
|
|
1,116
|
|
|
1,115
|
|
|
1,111
|
|
|
1,110
|
|
|
1,110
|
|
Total Triple-Net
|
|
220,286
|
|
|
214,749
|
|
|
214,026
|
|
|
208,076
|
|
|
208,482
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Medical Office Buildings
|
|
|
|
|
|
|
|
|
|
|
|
Medical Office - Stabilized
|
|
70,181
|
|
|
68,712
|
|
|
70,547
|
|
|
65,449
|
|
|
61,336
|
|
Medical Office - Lease up
|
|
4,467
|
|
|
3,833
|
|
|
4,058
|
|
|
3,818
|
|
|
3,334
|
|
Medical Office Buildings Services
|
|
879
|
|
|
492
|
|
|
898
|
|
|
1,271
|
|
|
1,947
|
|
Total Medical Office Buildings
|
|
75,527
|
|
|
73,037
|
|
|
75,503
|
|
|
70,538
|
|
|
66,617
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Seniors Housing Operating
|
|
|
|
|
|
|
|
|
|
|
|
Seniors Housing - Stabilized
|
|
113,975
|
|
|
109,468
|
|
|
107,477
|
|
|
98,874
|
|
|
99,460
|
|
Seniors Housing - Lease up
|
|
760
|
|
|
678
|
|
|
658
|
|
|
347
|
|
|
682
|
|
Seniors Housing - Other
|
|
61
|
|
|
111
|
|
|
127
|
|
|
161
|
|
|
112
|
|
Total Seniors Housing
|
|
114,796
|
|
|
110,257
|
|
|
108,262
|
|
|
99,382
|
|
|
100,254
|
|
Non-Segment
|
|
14,948
|
|
|
14,996
|
|
|
16,103
|
|
|
14,690
|
|
|
9,035
|
|
Net Operating Income
|
|
$
|
425,557
|
|
|
$
|
413,039
|
|
|
$
|
413,894
|
|
|
$
|
392,686
|
|
|
$
|
384,388
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 Amounts above are adjusted to exclude discontinued
operations for all periods presented.
|
|
|
|
|
|
NON-GAAP FINANCIAL MEASURES RECONCILIATION
|
|
(Dollars in thousands)
|
|
|
|
|
|
|
|
Total Same-Store Portfolio NOI
|
|
|
|
For the Three Months Ended
|
|
|
|
September 30,
|
|
|
|
2013
|
|
2012
|
|
|
|
|
|
|
|
|
|
Net Operating Income
|
|
$
|
425,557
|
|
|
$
|
384,388
|
|
|
|
|
|
|
|
|
|
|
Less:
|
|
|
|
|
|
|
|
NOI Not Included in Same-Store
|
|
33,390
|
|
|
8,296
|
|
|
Straight-Lining of Rental Income, Excluding Discontinued Operations
|
|
6,842
|
|
|
6,135
|
|
|
Non-Cash Rental Income
|
|
3,170
|
|
|
3,810
|
|
|
|
|
|
|
|
|
|
|
Non-Segment NOI
|
|
14,947
|
|
|
9,035
|
|
|
|
|
58,349
|
|
|
27,276
|
|
|
Same-Store Cash NOI as Reported
|
|
$
|
367,208
|
|
|
$
|
357,112
|
|
|
|
|
|
|
|
|
|
|
Percentage Increase
|
|
|
|
|
2.8
|
%
|
|
|
|
|
|
|
|
|
|
Excluding Out of Period Cash Receipts
|
|
—
|
|
|
(4,544
|
)
|
|
|
|
|
|
|
|
|
|
Same-Store Cash NOI
|
|
$
|
367,208
|
|
|
$
|
352,568
|
|
|
|
|
|
|
|
|
|
|
Percentage Increase
|
|
|
|
|
4.2
|
%
|
|
|
|
|
|
|
|
|
|
Seniors Housing Operating Portfolio Same-Store NOI
|
|
|
|
For the Three Months Ended
|
|
|
|
September 30,
|
|
|
|
2013
|
|
2012
|
|
|
|
|
|
|
|
|
|
Net Operating Income
|
|
$
|
114,796
|
|
|
$
|
100,254
|
|
|
|
|
|
|
|
|
|
|
Less:
|
|
|
|
|
|
|
|
NOI Not Included in Same-Store
|
|
10,213
|
|
|
111
|
|
|
Same-Store NOI as Reported
|
|
$
|
104,583
|
|
|
$
|
100,143
|
|
|
|
|
|
|
|
|
|
|
Percentage Increase
|
|
|
|
|
4.4
|
%
|
|
|
|
|
|
|
|
|
|
Excluding Real Estate Tax Credit
|
|
—
|
|
|
(1,653
|
)
|
|
|
|
|
|
|
|
|
|
Same-Store NOI
|
|
$
|
104,583
|
|
|
$
|
98,490
|
|
|
|
|
|
|
|
|
|
|
Percentage Increase
|
|
|
|
|
6.2
|
%
|
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