Exhibit 99.1
Ventas Reports Record 2014 Fourth Quarter and Full Year Results
- Record 2014 Normalized FFO Grows Eight Percent to $4.48 Per Diluted Share
- Total 2014 Investments of $2.4 Billion
- Targeting 2015 Normalized FFO Range of $4.63 to $4.71 Per Diluted Share
CHICAGO--(BUSINESS WIRE)--February 13, 2015--Ventas, Inc. (NYSE: VTR) (“Ventas” or the “Company”) today reported that normalized Funds From Operations (“FFO”) for the year ended December 31, 2014 increased nine percent to $1.3 billion, from $1.2 billion for the comparable 2013 period. Normalized FFO per diluted common share grew eight percent to $4.48 for the year ended December 31, 2014, as compared to $4.14 for the comparable 2013 period. Weighted average diluted shares outstanding for the full year increased to 296.7 million compared to 295.1 million in 2013.
Fourth quarter 2014 normalized FFO increased nine percent to $342.2 million, from $313.6 million for the comparable 2013 period. Normalized FFO per diluted common share of $1.15 grew 8.5 percent in the fourth quarter of 2014 versus $1.06 in the fourth quarter of 2013.
Record Results with Strong Performance in All Three Segments
“Our 2014 record results reflect the strength of our diversified business, with excellent results in our medical office, triple-net lease and seniors housing operating segments, and the positive impact of our value creating investments. We continue to focus on making accretive investments, raising capital efficiently and managing our assets productively, to enhance our leading position in healthcare and senior living real estate,” Ventas Chairman and Chief Executive Officer Debra A. Cafaro said. “We enter 2015 with confidence in our team, business model and momentum. We continue to see and capture opportunities to create additional wealth and value for our shareholders. Our long track record of stewardship of capital, expertise in capital markets and experience in asset management positions us well to continue our long track record of earnings and dividend growth in 2015.”
Net income attributable to common stockholders for the year ended December 31, 2014 was $475.8 million, or $1.60 per diluted common share, including discontinued operations. Net income attributable to common stockholders for the year ended December 31, 2013 was $453.5 million, or $1.54 per diluted common share, including discontinued operations. Net income attributable to common stockholders for the quarter ended December 31, 2014 was $107.2 million, or $0.36 per diluted common share, including discontinued operations. Net income attributable to common stockholders for the quarter ended December 31, 2013 was $108.4 million, or $0.37 per diluted common share, including discontinued operations.
FFO, as defined by the National Association of Real Estate Investment Trusts (NAREIT), for the full-year 2014 was $1.274 billion, or $4.29 per diluted common share. NAREIT FFO for the full-year 2013 was $1.208 billion, or $4.09 per diluted common share. NAREIT FFO per share growth was lower than normalized FFO per share growth for the same period due principally to the exclusion of transaction and re-audit related costs in both periods in normalized FFO, consistent with the Company’s guidance and historical practice.
First Quarter Dividend
Ventas’s Board of Directors declared the second installment of the first quarter 2015 dividend on the Company’s common stock in the amount of $0.5793 per share, payable in cash on March 31, 2015 to stockholders of record on March 6, 2015. On January 27, 2015, Ventas paid the first installment of its first quarter 2015 dividend in the amount of $0.2107 to stockholders of record on January 15, 2015, in connection with the Company’s acquisition of HCT. Together, these two installments total to the Company’s regular quarterly dividend of $0.79 per share and represent a nine percent increase from the dividend in the first quarter of 2014.
2014 Highlights
- Same-store cash net operating income (NOI) growth for the Company’s total portfolio (1,307 assets) was 3.9 percent, expressed in constant currency, for the year ended December 31, 2014 compared to 2013.
- Total seniors housing operating portfolio (SHOP) NOI was $516.2 million, an increase of 15 percent over the comparable 2013 period. Same-store SHOP NOI grew 4.5 percent, expressed in constant currency, for the 217 properties over 2013 results.
- Ventas closed on investments totaling $2.4 billion during 2014, including development and redevelopment investments exceeding $100 million. The first-year average NOI yield for these investments is expected to be over seven percent. The majority of the acquisitions were in seniors housing, loans and medical office buildings (MOBs).
- During 2014, Ventas issued and sold $1.3 billion aggregate principal amount of senior notes with a weighted average interest rate of 3.0 percent and a weighted average maturity of 7.0 years. The issuances were composed of $700 million aggregate principal amount of USD senior notes and CAD notes of 650 million. Ventas issued and sold a total of 3.4 million shares of common stock for aggregate proceeds of $246 million under its “at the market” (ATM) equity offering program in 2014.
- Ventas sold 22 properties and received final repayment on loans receivable for approximately $176 million in aggregate proceeds, representing a yield of ten percent.
- Ventas delivered total shareholder return of 31 percent, and delivered compound annual return to shareholders of 15.4 percent for the ten years ended December 31, 2014.
- Ventas increased its dividend by nine percent, and its dividend has grown at a compound annual growth rate of nine percent over the last ten years.
- The Company made its first investment in the United Kingdom, expanded its presence in the Canadian senior living market, and completed its inaugural senior notes issuance in Canada.
- The Company successfully re-leased or sold (or entered into contracts for sale of) the 108 post-acute assets whose leases with Kindred Healthcare, Inc. expired in 2014. In addition, Ventas and Kindred reached a mutually beneficial agreement on nine assets and on changes to existing leases, which included payment to the Company of $37 million in January 2015.
Recent Developments
- In January 2015, the Company completed its acquisition of 152 healthcare and senior living assets owned by American Realty Capital Healthcare Trust, Inc. (“HCT”) in a stock and cash transaction. The transaction was funded with 28.4 million shares of Ventas common stock, 1.1 million units redeemable for shares of Ventas common stock, cash and the assumption of debt.
- Ventas also closed on additional acquisitions exceeding $300 million year to date at a first year yield of over 7.5 percent.
- In January 2015, Ventas issued and sold $1.1 billion of senior notes with a weighted average interest rate below 3.7 percent and a weighted average maturity of 15 years. The issuances were composed of $900 million aggregate principal amount of USD senior notes and CAD notes of 250 million.
- The Company also issued and sold 3.75 million shares of common stock under its ATM program for aggregate proceeds of $290 million in January.
- The Company’s net debt to Adjusted Pro Forma EBITDA (as defined herein) is expected to approximate 5.7x at the end of the first quarter 2015.
- The Company currently has a strong liquidity position, with approximately $1.5 billion available under its revolving credit facility, as well as $88 million of cash on hand. Ventas’s debt to total capitalization now stands at 31 percent.
2015 Guidance
Ventas currently expects its 2015 NAREIT FFO per diluted share to range between $4.55 and $4.66 and normalized FFO per diluted share to range between $4.63 and $4.71. The Company’s investments closed year to date, including HCT, are included in the guidance.
Same-store cash NOI is forecast to grow 2.5 to 3.5 percent in 2015. The Company’s guidance assumes over $600 million in property dispositions and receipt of loan repayments, expected mostly in the first quarter of 2015, with later year reinvestment of net proceeds. No further investment or disposition activity, other than the capital recycling forecast in the prior sentence, is included in this targeted range. A reconciliation of the Company’s guidance to the Company’s projected GAAP earnings is included in this press release.
FOURTH 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 (866) 318-8616 (or (617) 399-5135 for international callers). The participant passcode is “Ventas.” The conference call is being webcast live by NASDAQ OMX and can be accessed at the Company’s website at www.ventasreit.com. A replay of the webcast will be available following the call online, or by calling (888) 286-8010 (or (617) 801-6888 for international callers), passcode 55461845, beginning at approximately 2:00 p.m. Eastern Time and will remain for 35 days.
Ventas, Inc., an S&P 500 company, is a leading real estate investment trust. Its diverse portfolio of more than 1,600 assets in the United States, Canada and the United Kingdom consists of seniors housing communities, medical office buildings, skilled nursing facilities, hospitals and other properties. Through its Lillibridge subsidiary, Ventas provides management, leasing, marketing, facility development and advisory services to highly rated hospitals and health systems throughout the United States. More information about Ventas and Lillibridge can be found at www.ventasreit.com and www.lillibridge.com.
Supplemental information regarding the Company can be found on the Company’s website under the “Investor Relations” section or at www.ventasreit.com/investor-relations/financial-information/supplemental-information.
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 or state budgets resulting in the reduction or nonpayment of Medicare or Medicaid reimbursement rates; (e) the nature and extent of future competition, including new construction in the markets in which the Company’s seniors housing communities and MOBs are located; (f) the extent of future or pending healthcare reform and regulation, including cost containment measures and changes in reimbursement policies, procedures and rates; (g) increases in the Company’s borrowing costs as a result of changes in interest rates and other factors; (h) the ability of the Company’s operators and managers, as applicable, to comply with laws, rules and regulations in the operation of the Company’s properties, to deliver high-quality services, to attract and retain qualified personnel and to attract residents and patients; (i) changes in general economic conditions or economic conditions in the markets in which the Company may, from time to time, compete, and the effect of those changes on the Company’s revenues, earnings and funding sources; (j) the Company’s ability to pay down, refinance, restructure or extend its indebtedness as it becomes due; (k) the Company’s ability and willingness to maintain its qualification as a REIT in light of economic, market, legal, tax and other considerations; (l) final determination of the Company’s taxable net income for the year ended December 31, 2014 and for the year ending December 31, 2015; (m) the ability and willingness of the Company’s tenants to renew their leases with the Company upon expiration of the leases, the Company’s ability to reposition its properties on the same or better terms in the event of nonrenewal or in the event the Company exercises its right to replace an existing tenant or manager, and obligations, including indemnification obligations, the Company may incur in connection with the replacement of an existing tenant or manager; (n) risks associated with the Company’s senior living operating portfolio, such as factors that can cause volatility in the Company’s operating income and earnings generated by those properties, including without limitation national and regional economic conditions, costs of food, materials, energy, labor and services, employee benefit costs, insurance costs and professional and general liability claims, and the timely delivery of accurate property-level financial results for those properties; (o) changes in exchange rates for any foreign currency in which the Company may, from time to time, conduct business; (p) year-over-year changes in the Consumer Price Index or the UK Retail Price Index and the effect of those changes on the rent escalators contained in the Company’s leases and the Company’s earnings; (q) the Company’s ability and the ability of its tenants, operators, borrowers and managers to obtain and maintain adequate property, liability and other insurance from reputable, financially stable providers; (r) the impact of increased operating costs and uninsured professional liability claims on the Company’s liquidity, financial condition and results of operations or that of the Company’s tenants, operators, borrowers and managers, and the ability of the Company and the Company’s tenants, operators, borrowers and managers to accurately estimate the magnitude of those claims; (s) risks associated with the Company’s MOB portfolio and operations, including the Company’s ability to successfully design, develop and manage MOBs, to accurately estimate its costs in fixed fee-for-service projects and to retain key personnel; (t) the ability of the hospitals on or near whose campuses the Company’s MOBs are located and their affiliated health systems to remain competitive and financially viable and to attract physicians and physician groups; (u) the Company’s ability to build, maintain and expand its relationships with existing and prospective hospital and health system clients; (v) risks associated with the Company’s investments in joint ventures and unconsolidated entities, including its lack of sole decision-making authority and its reliance on its joint venture partners’ financial condition; (w) the impact of market or issuer events on the liquidity or value of the Company’s investments in marketable securities; (x) merger and acquisition activity in the seniors housing and healthcare industries resulting in a change of control of, or a competitor’s investment in, one or more of the Company’s tenants, operators, borrowers or managers or significant changes in the senior management of the Company’s tenants, operators, borrowers or managers; (y) the impact of litigation or any financial, accounting, legal or regulatory issues that may affect the Company or its tenants, operators, borrowers or managers; and (z) changes in accounting principles, or their application or interpretation, and the Company’s ability to make estimates and the assumptions underlying the estimates, which could have an effect on the Company’s earnings. Many of these factors are beyond the control of the Company and its management.
| CONSOLIDATED BALANCE SHEETS | ||||||||||||||||||||
| As of December 31, 2014, September 30, 2014, June 30, 2014, March 31, 2014 and December 31, 2013 | ||||||||||||||||||||
| (In thousands, except per share amounts) | ||||||||||||||||||||
| December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||||||||
| 2014 | 2014 | 2014 | 2014 | 2013 | ||||||||||||||||
| Assets | ||||||||||||||||||||
| Real estate investments: | ||||||||||||||||||||
| Land and improvements | $ | 1,956,128 | $ | 1,937,888 | $ | 1,848,922 | $ | 1,867,146 | $ | 1,855,968 | ||||||||||
| Buildings and improvements | 19,895,043 | 19,664,973 | 18,591,786 | 18,658,616 | 18,457,028 | |||||||||||||||
| Construction in progress | 120,123 | 116,975 | 93,629 | 71,862 | 80,415 | |||||||||||||||
| Acquired lease intangibles | 1,039,651 | 1,039,949 | 1,009,474 | 1,014,711 | 1,010,181 | |||||||||||||||
| 23,010,945 | 22,759,785 | 21,543,811 | 21,612,335 | 21,403,592 | ||||||||||||||||
| Accumulated depreciation and amortization | (4,025,386 | ) | (3,833,974 | ) | (3,657,541 | ) | (3,515,868 | ) | (3,328,006 | ) | ||||||||||
| Net real estate property | 18,985,559 | 18,925,811 | 17,886,270 | 18,096,467 | 18,075,586 | |||||||||||||||
| Secured loans receivable and investments, net | 829,756 | 407,551 | 414,051 | 376,074 | 376,229 | |||||||||||||||
| Investments in unconsolidated entities | 91,872 | 88,175 | 89,423 | 90,929 | 91,656 | |||||||||||||||
| Net real estate investments | 19,907,187 | 19,421,537 | 18,389,744 | 18,563,470 | 18,543,471 | |||||||||||||||
| Cash and cash equivalents | 55,348 | 64,595 | 86,635 | 59,791 | 94,816 | |||||||||||||||
| Escrow deposits and restricted cash | 71,771 | 78,746 | 75,514 | 76,110 | 84,657 | |||||||||||||||
| Deferred financing costs, net | 60,328 | 64,898 | 63,399 | 59,726 | 62,215 | |||||||||||||||
| Other assets | 1,131,537 | 1,021,389 | 1,175,494 | 943,671 | 946,335 | |||||||||||||||
| Total assets | $ | 21,226,171 | $ | 20,651,165 | $ | 19,790,786 | $ | 19,702,768 | $ | 19,731,494 | ||||||||||
| Liabilities and equity | ||||||||||||||||||||
| Liabilities: | ||||||||||||||||||||
| Senior notes payable and other debt | $ | 10,888,092 | $ | 10,469,106 | $ | 9,602,439 | $ | 9,481,051 | $ | 9,364,992 | ||||||||||
| Accrued interest | 62,097 | 69,112 | 56,722 | 61,083 | 54,349 | |||||||||||||||
| Accounts payable and other liabilities | 1,005,232 | 965,240 | 975,282 | 938,098 | 1,001,515 | |||||||||||||||
| Deferred income taxes | 344,337 | 361,454 | 256,392 | 252,499 | 250,167 | |||||||||||||||
| Total liabilities | 12,299,758 | 11,864,912 | 10,890,835 | 10,732,731 | 10,671,023 | |||||||||||||||
| Redeemable OP unitholder and noncontrolling interests | 172,016 | 163,080 | 169,292 | 160,115 | 156,660 | |||||||||||||||
| Commitments and contingencies | ||||||||||||||||||||
| Equity: | ||||||||||||||||||||
| Ventas stockholders' equity: | ||||||||||||||||||||
| Preferred stock, $1.00 par value; 10,000 shares authorized, unissued | — | — | — | — | — | |||||||||||||||
| Common stock, $0.25 par value; 298,478; 294,359; 294,358; 294,346; and 297,901 shares issued at December 31, 2014, September 30, 2014, June 30, 2014, March 31, 2014 and December 31, 2013, respectively | 74,656 | 73,603 | 73,602 | 73,599 | 74,488 | |||||||||||||||
| Capital in excess of par value | 10,119,306 | 9,859,490 | 9,849,301 | 9,858,733 | 10,078,592 | |||||||||||||||
| Accumulated other comprehensive income | 13,121 | 16,156 | 26,255 | 18,464 | 19,659 | |||||||||||||||
| Retained earnings (deficit) | (1,526,388 | ) | (1,398,378 | ) | (1,294,048 | ) | (1,218,967 | ) | (1,126,541 | ) | ||||||||||
| Treasury stock, 7; 32; 0; 3; and 3,712 shares at December 31, 2014, September 30, 2014, June 30, 2014, March 31, 2014 and December 31, 2013, respectively | (511 | ) | (2,075 | ) | — | (162 | ) | (221,917 | ) | |||||||||||
| Total Ventas stockholders' equity | 8,680,184 | 8,548,796 | 8,655,110 | 8,731,667 | 8,824,281 | |||||||||||||||
| Noncontrolling interest | 74,213 | 74,377 | 75,549 | 78,255 | 79,530 | |||||||||||||||
| Total equity | 8,754,397 | 8,623,173 | 8,730,659 | 8,809,922 | 8,903,811 | |||||||||||||||
| Total liabilities and equity | $ | 21,226,171 | $ | 20,651,165 | $ | 19,790,786 | $ | 19,702,768 | $ | 19,731,494 | ||||||||||
| CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||||||
| For the three months and years ended December 31, 2014 and 2013 | ||||||||||||||||
| (In thousands, except per share amounts) | ||||||||||||||||
| For the Three Months Ended | For the Year Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2014 | 2013 | 2014 | 2013 | |||||||||||||
| Revenues: | ||||||||||||||||
| Rental income: | ||||||||||||||||
| Triple-net leased | $ | 245,599 | $ | 232,873 | $ | 970,377 | $ | 877,276 | ||||||||
| Medical office buildings | 116,907 | 114,635 | 463,618 | 450,107 | ||||||||||||
| 362,506 | 347,508 | 1,433,995 | 1,327,383 | |||||||||||||
| Resident fees and services | 411,170 | 366,129 | 1,552,951 | 1,406,005 | ||||||||||||
| Medical office building and other services revenue | 11,124 | 6,478 | 29,364 | 17,809 | ||||||||||||
| Income from loans and investments | 15,734 | 12,924 | 55,169 | 58,208 | ||||||||||||
| Interest and other income | 3,453 | 146 | 4,267 | 2,047 | ||||||||||||
| Total revenues | 803,987 | 733,185 | 3,075,746 | 2,811,452 | ||||||||||||
| Expenses: | ||||||||||||||||
| Interest | 99,031 | 90,274 | 376,842 | 334,909 | ||||||||||||
| Depreciation and amortization | 241,275 | 198,042 | 826,911 | 722,075 | ||||||||||||
| Property-level operating expenses: | ||||||||||||||||
| Senior living | 273,563 | 250,123 | 1,036,556 | 956,684 | ||||||||||||
| Medical office buildings | 38,715 | 37,938 | 158,542 | 152,948 | ||||||||||||
| 312,278 | 288,061 | 1,195,098 | 1,109,632 | |||||||||||||
| Medical office building services costs | 7,527 | 3,358 | 17,092 | 8,315 | ||||||||||||
| General, administrative and professional fees | 28,108 | 30,349 | 121,746 | 115,106 | ||||||||||||
| Loss on extinguishment of debt, net | 485 | 2,110 | 5,564 | 1,201 | ||||||||||||
| Merger-related expenses and deal costs | 7,943 | 4,497 | 45,051 | 21,634 | ||||||||||||
| Other | 13,604 | 5,407 | 38,925 | 18,732 | ||||||||||||
| Total expenses | 710,251 | 622,098 | 2,627,229 | 2,331,604 | ||||||||||||
| Income before loss from unconsolidated entities, income taxes, discontinued operations, real estate dispositions and noncontrolling interest | 93,736 | 111,087 | 448,517 | 479,848 | ||||||||||||
| Loss from unconsolidated entities | (688 | ) | (1,041 | ) | (139 | ) | (508 | ) | ||||||||
| Income tax benefit (expense) | 13,552 | (1,272 | ) | 8,732 | 11,828 | |||||||||||
| Income from continuing operations | 106,600 | 108,774 | 457,110 | 491,168 | ||||||||||||
| Discontinued operations | (411 | ) | (115 | ) | 2,106 | (36,279 | ) | |||||||||
| Gain on real estate dispositions | 1,456 | — | 17,970 | — | ||||||||||||
| Net income | 107,645 | 108,659 | 477,186 | 454,889 | ||||||||||||
| Net income attributable to noncontrolling interest | 455 | 219 | 1,419 | 1,380 | ||||||||||||
| Net income attributable to common stockholders | $ | 107,190 | $ | 108,440 | $ | 475,767 | $ | 453,509 | ||||||||
| Earnings per common share: | ||||||||||||||||
| Basic: | ||||||||||||||||
| Income from continuing operations attributable to common stockholders, including real estate dispositions | $ | 0.36 | $ | 0.37 | $ | 1.61 | $ | 1.67 | ||||||||
| Discontinued operations | (0.00 | ) | (0.00 | ) | 0.01 | (0.12 | ) | |||||||||
| Net income attributable to common stockholders | $ | 0.36 | $ | 0.37 | $ | 1.62 | $ | 1.55 | ||||||||
| Diluted: | ||||||||||||||||
| Income from continuing operations attributable to common stockholders, including real estate dispositions | $ | 0.36 | $ | 0.37 | $ | 1.59 | $ | 1.66 | ||||||||
| Discontinued operations | (0.00 | ) | (0.00 | ) | 0.01 | (0.12 | ) | |||||||||
| Net income attributable to common stockholders | $ | 0.36 | $ | 0.37 | $ | 1.60 | $ | 1.54 | ||||||||
| Weighted average shares used in computing earnings per common share: | ||||||||||||||||
| Basic | 294,810 | 293,674 | 294,175 | 292,654 | ||||||||||||
| Diluted | 297,480 | 296,047 | 296,677 | 295,110 | ||||||||||||
| Dividends declared per common share | $ | 0.79 | $ | 0.725 | $ | 2.965 | $ | 2.735 | ||||||||
| QUARTERLY CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||||||||||
| (In thousands, except per share amounts) | ||||||||||||||||||||
| 2014 Quarters | 2013 Fourth | |||||||||||||||||||
| Fourth | Third | Second | First | Quarter | ||||||||||||||||
| Revenues: | ||||||||||||||||||||
| Rental income: | ||||||||||||||||||||
| Triple-net leased | $ | 245,599 | $ | 244,206 | $ | 242,726 | $ | 237,846 | $ | 232,873 | ||||||||||
| Medical office buildings | 116,907 | 116,598 | 114,890 | 115,223 | 114,635 | |||||||||||||||
| 362,506 | 360,804 | 357,616 | 353,069 | 347,508 | ||||||||||||||||
| Resident fees and services | 411,170 | 396,247 | 374,473 | 371,061 | 366,129 | |||||||||||||||
| Medical office building and other services revenue | 11,124 | 7,573 | 4,367 | 6,300 | 6,478 | |||||||||||||||
| Income from loans and investments | 15,734 | 14,043 | 14,625 | 10,767 | 12,924 | |||||||||||||||
| Interest and other income | 3,453 | 368 | 173 | 273 | 146 | |||||||||||||||
| Total revenues | 803,987 | 779,035 | 751,254 | 741,470 | 733,185 | |||||||||||||||
| Expenses: | ||||||||||||||||||||
| Interest | 99,031 | 98,469 | 91,501 | 87,841 | 90,274 | |||||||||||||||
| Depreciation and amortization | 241,275 | 201,224 | 190,818 | 193,594 | 198,042 | |||||||||||||||
| Property-level operating expenses: | ||||||||||||||||||||
| Senior living | 273,563 | 265,274 | 249,424 | 248,295 | 250,123 | |||||||||||||||
| Medical office buildings | 38,715 | 41,147 | 39,335 | 39,345 | 37,938 | |||||||||||||||
| 312,278 | 306,421 | 288,759 | 287,640 | 288,061 | ||||||||||||||||
| Medical office building services costs | 7,527 | 4,568 | 1,626 | 3,371 | 3,358 | |||||||||||||||
| General, administrative and professional fees | 28,108 | 29,466 | 31,306 | 32,866 | 30,349 | |||||||||||||||
| Loss (gain) on extinguishment of debt, net | 485 | 2,414 | 2,924 | (259 | ) | 2,110 | ||||||||||||||
| Merger-related expenses and deal costs | 7,943 | 16,749 | 9,599 | 10,760 | 4,497 | |||||||||||||||
| Other | 13,604 | 15,229 | 4,863 | 5,229 | 5,407 | |||||||||||||||
| Total expenses | 710,251 | 674,540 | 621,396 | 621,042 | 622,098 | |||||||||||||||
| Income before (loss) income from unconsolidated entities, income taxes, discontinued operations, real estate dispositions and noncontrolling interest | 93,736 | 104,495 | 129,858 | 120,428 | 111,087 | |||||||||||||||
| (Loss) income from unconsolidated entities | (688 | ) | (47 | ) | 348 | 248 | (1,041 | ) | ||||||||||||
| Income tax benefit (expense) | 13,552 | 1,887 | (3,274 | ) | (3,433 | ) | (1,272 | ) | ||||||||||||
| Income from continuing operations | 106,600 | 106,335 | 126,932 | 117,243 | 108,774 | |||||||||||||||
| Discontinued operations | (411 | ) | (259 | ) | (255 | ) | 3,031 | (115 | ) | |||||||||||
| Gain on real estate dispositions | 1,456 | 3,625 | 11,889 | 1,000 | — | |||||||||||||||
| Net income | 107,645 | 109,701 | 138,566 | 121,274 | 108,659 | |||||||||||||||
| Net income attributable to noncontrolling interest | 455 | 569 | 168 | 227 | 219 | |||||||||||||||
| Net income attributable to common stockholders | $ | 107,190 | $ | 109,132 | $ | 138,398 | $ | 121,047 | $ | 108,440 | ||||||||||
| Earnings per common share: | ||||||||||||||||||||
| Basic: | ||||||||||||||||||||
| Income from continuing operations attributable to common stockholders, including real estate dispositions | $ | 0.36 | $ | 0.37 | $ | 0.47 | $ | 0.40 | $ | 0.37 | ||||||||||
| Discontinued operations | (0.00 | ) | (0.00 | ) | (0.00 | ) | 0.01 | (0.00 | ) | |||||||||||
| Net income attributable to common stockholders | $ | 0.36 | $ | 0.37 | $ | 0.47 | $ | 0.41 | $ | 0.37 | ||||||||||
| Diluted: | ||||||||||||||||||||
| Income from continuing operations attributable to common stockholders, including real estate dispositions | $ | 0.36 | $ | 0.37 | $ | 0.47 | $ | 0.40 | $ | 0.37 | ||||||||||
| Discontinued operations | (0.00 | ) | (0.00 | ) | (0.00 | ) | 0.01 | (0.00 | ) | |||||||||||
| Net income attributable to common stockholders | $ | 0.36 | $ | 0.37 | $ | 0.47 | $ | 0.41 | $ | 0.37 | ||||||||||
| Weighted average shares used in computing earnings per common share: | ||||||||||||||||||||
| Basic | 294,810 | 294,030 | 293,988 | 293,875 | 293,674 | |||||||||||||||
| Diluted | 297,480 | 296,495 | 296,504 | 296,245 | 296,047 | |||||||||||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
| For the years ended December 31, 2014 and 2013 | ||||||||
| (In thousands) | ||||||||
| 2014 | 2013 | |||||||
| Cash flows from operating activities: | ||||||||
| Net income | $ | 477,186 | $ | 454,889 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Depreciation and amortization (including amounts in discontinued operations) | 828,467 | 769,881 | ||||||
| Amortization of deferred revenue and lease intangibles, net | (18,871 | ) | (15,793 | ) | ||||
| Other non-cash amortization | (312 | ) | (16,745 | ) | ||||
| Stock-based compensation | 20,994 | 20,653 | ||||||
| Straight-lining of rental income, net | (38,687 | ) | (30,540 | ) | ||||
| Loss on extinguishment of debt, net | 5,564 | 1,048 | ||||||
| Gain on real estate dispositions (including amounts in discontinued operations) | (19,183 | ) | (3,617 | ) | ||||
| Gain on real estate loan investments | (1,455 | ) | (5,056 | ) | ||||
| Gain on sale of marketable securities | — | (856 | ) | |||||
| Income tax benefit | (9,431 | ) | (11,828 | ) | ||||
| Loss from unconsolidated entities | 139 | 1,748 | ||||||
| Gain on re-measurement of equity interest upon acquisition, net | — | (1,241 | ) | |||||
| Other | 15,739 | 8,407 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Decrease (increase) in other assets | 5,317 | (690 | ) | |||||
| Increase in accrued interest | 7,958 | 6,806 | ||||||
| (Decrease) increase in accounts payable and other liabilities | (18,580 | ) | 17,689 | |||||
| Net cash provided by operating activities | 1,254,845 | 1,194,755 | ||||||
| Cash flows from investing activities: | ||||||||
| Net investment in real estate property | (1,468,286 | ) | (1,437,002 | ) | ||||
| Purchase of noncontrolling interest | (9,115 | ) | (14,331 | ) | ||||
| Investment in loans receivable and other | (498,992 | ) | (37,963 | ) | ||||
| Proceeds from real estate disposals | 118,246 | 35,591 | ||||||
| Proceeds from loans receivable | 73,557 | 325,518 | ||||||
| Purchase of marketable securities | (96,689 | ) | — | |||||
| Proceeds from sale or maturity of marketable securities | 21,689 | 5,493 | ||||||
| Funds held in escrow for future development expenditures | 4,590 | 19,458 | ||||||
| Development project expenditures | (106,988 | ) | (95,741 | ) | ||||
| Capital expenditures | (87,454 | ) | (81,614 | ) | ||||
| Other | (5,598 | ) | (2,169 | ) | ||||
| Net cash used in investing activities | (2,055,040 | ) | (1,282,760 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Net change in borrowings under credit facilities | 540,203 | (164,029 | ) | |||||
| Proceeds from debt | 2,007,707 | 2,767,546 | ||||||
| Repayment of debt | (1,151,395 | ) | (1,792,492 | ) | ||||
| Payment of deferred financing costs | (14,220 | ) | (31,277 | ) | ||||
| Issuance of common stock, net | 242,107 | 141,343 | ||||||
| Cash distribution to common stockholders | (875,614 | ) | (802,123 | ) | ||||
| Cash distribution to redeemable OP unitholders | (5,762 | ) | (5,040 | ) | ||||
| Purchases of redeemable OP units | (503 | ) | (659 | ) | ||||
| Contributions from noncontrolling interest | 491 | 2,395 | ||||||
| Distributions to noncontrolling interest | (9,559 | ) | (9,286 | ) | ||||
| Other | 24,602 | 8,618 | ||||||
| Net cash provided by financing activities | 758,057 | 114,996 | ||||||
| Net (decrease) increase in cash and cash equivalents | (42,138 | ) | 26,991 | |||||
| Effect of foreign currency translation on cash and cash equivalents | 2,670 | (83 | ) | |||||
| Cash and cash equivalents at beginning of period | 94,816 | 67,908 | ||||||
| Cash and cash equivalents at end of period | $ | 55,348 | $ | 94,816 | ||||
| Supplemental schedule of non-cash activities: | ||||||||
| Assets and liabilities assumed from acquisitions: | ||||||||
| Real estate investments | $ | 370,741 | $ | 223,955 | ||||
| Other assets acquired | 15,280 | 6,635 | ||||||
| Debt assumed | 241,076 | 183,848 | ||||||
| Other liabilities | 24,039 | 29,868 | ||||||
| Deferred income tax liability | 110,728 | 5,181 | ||||||
| Noncontrolling interests | — | 11,693 | ||||||
| Equity issued | 10,178 | — | ||||||
| QUARTERLY CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||||||||||||
| (In thousands) | ||||||||||||||||||||
| 2014 Quarters | 2013 Fourth | |||||||||||||||||||
| Fourth | Third | Second | First | Quarter | ||||||||||||||||
| Cash flows from operating activities: | ||||||||||||||||||||
| Net income | $ | 107,645 | $ | 109,701 | $ | 138,566 | $ | 121,274 | $ | 108,659 | ||||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||||||||
| Depreciation and amortization (including amounts in discontinued operations) | 241,291 | 201,236 | 192,064 | 193,876 | 200,556 | |||||||||||||||
| Amortization of deferred revenue and lease intangibles, net | (4,096 | ) | (4,896 | ) | (4,496 | ) | (5,383 | ) | (4,634 | ) | ||||||||||
| Other non-cash amortization | 304 | 2,312 | (963 | ) | (1,965 | ) | (3,369 | ) | ||||||||||||
| Stock-based compensation | 4,202 | 5,381 | 5,367 | 6,044 | 5,643 | |||||||||||||||
| Straight-lining of rental income, net | (9,043 | ) | (12,413 | ) | (9,317 | ) | (7,914 | ) | (9,375 | ) | ||||||||||
| Loss (gain) on extinguishment of debt, net | 485 | 2,414 | 2,924 | (259 | ) | 2,110 | ||||||||||||||
| Gain on real estate dispositions (including amounts in discontinued operations) | (1,457 | ) | (3,584 | ) | (11,705 | ) | (2,437 | ) | (1,376 | ) | ||||||||||
| Gain on real estate loan investments | (1,206 | ) | (249 | ) | — | — | (1,458 | ) | ||||||||||||
| Income tax (benefit) expense | (13,851 | ) | (1,987 | ) | 2,974 | 3,433 | 1,272 | |||||||||||||
| Loss (income) from unconsolidated entities | 688 | 47 | (348 | ) | (248 | ) | 1,041 | |||||||||||||
| Other | 2,140 | 7,105 | 3,418 | 3,076 | 2,274 | |||||||||||||||
| Changes in operating assets and liabilities: | ||||||||||||||||||||
| Decrease (increase) in other assets | 8,623 | (14,514 | ) | 4,967 | 6,241 | 27,442 | ||||||||||||||
| (Decrease) increase in accrued interest | (6,877 | ) | 12,461 | (4,379 | ) | 6,753 | (7,818 | ) | ||||||||||||
| Increase (decrease) in accounts payable and other liabilities | 6,025 | 21,256 | (7,791 | ) | (38,070 | ) | 38,359 | |||||||||||||
| Net cash provided by operating activities | 334,873 | 324,270 | 311,281 | 284,421 | 359,326 | |||||||||||||||
| Cash flows from investing activities: | ||||||||||||||||||||
| Net investment in real estate property | (284,250 | ) | (912,510 | ) | (89,660 | ) | (181,866 | ) | (78,236 | ) | ||||||||||
| Purchase of noncontrolling interest | (5,527 | ) | — | (3,588 | ) | — | (6,436 | ) | ||||||||||||
| Investment in loans receivable and other | (432,556 | ) | (21,948 | ) | (43,296 | ) | (1,192 | ) | (3,246 | ) | ||||||||||
| Proceeds from real estate disposals | 5,500 | 60,396 | 26,200 | 26,150 | 6,400 | |||||||||||||||
| Proceeds from loans receivable | 17,984 | 49,593 | 4,817 | 1,163 | 26,362 | |||||||||||||||
| Purchase of marketable securities | (50,000 | ) | — | (21,689 | ) | (25,000 | ) | — | ||||||||||||
| Proceeds from sale or maturity of marketable securities | — | 21,689 | — | — | — | |||||||||||||||
| Funds held in escrow for future development expenditures | 1,988 | — | — | 2,602 | 4,269 | |||||||||||||||
| Development project expenditures | (35,613 | ) | (26,952 | ) | (20,475 | ) | (23,948 | ) | (21,034 | ) | ||||||||||
| Capital expenditures | (31,219 | ) | (20,709 | ) | (19,392 | ) | (16,134 | ) | (30,980 | ) | ||||||||||
| Other | (5,177 | ) | (296 | ) | — | (125 | ) | (1,758 | ) | |||||||||||
| Net cash used in investing activities | (818,870 | ) | (850,737 | ) | (167,083 | ) | (218,350 | ) | (104,659 | ) | ||||||||||
| Cash flows from financing activities: | ||||||||||||||||||||
| Net change in borrowings under credit facilities | 693,887 | 46,267 | (381,705 | ) | 181,754 | (71,443 | ) | |||||||||||||
| Proceeds from debt | — | 1,311,046 | 696,661 | — | 1,000,702 | |||||||||||||||
| Repayment of debt | (246,278 | ) | (632,391 | ) | (204,953 | ) | (67,773 | ) | (951,960 | ) | ||||||||||
| Payment of deferred financing costs | 726 | (8,100 | ) | (6,679 | ) | (167 | ) | (11,300 | ) | |||||||||||
| Issuance of common stock, net | 242,107 | — | — | — | 35,341 | |||||||||||||||
| Cash distribution to common stockholders | (235,200 | ) | (213,462 | ) | (213,479 | ) | (213,473 | ) | (213,353 | ) | ||||||||||
| Cash distribution to redeemable OP unitholders | (1,548 | ) | (1,452 | ) | (1,360 | ) | (1,402 | ) | (1,561 | ) | ||||||||||
| Purchases of redeemable OP units | (503 | ) | — | — | — | (342 | ) | |||||||||||||
| Contributions from noncontrolling interest | 491 | — | — | — | 301 | |||||||||||||||
| Distributions to noncontrolling interest | (2,799 | ) | (1,852 | ) | (2,671 | ) | (2,237 | ) | (1,672 | ) | ||||||||||
| Other | 25,153 | 23 | (2,215 | ) | 1,641 | 788 | ||||||||||||||
| Net cash provided by (used in) financing activities | 476,036 | 500,079 | (116,401 | ) | (101,657 | ) | (214,499 | ) | ||||||||||||
| Net (decrease) increase in cash and cash equivalents | (7,961 | ) | (26,388 | ) | 27,797 | (35,586 | ) | 40,168 | ||||||||||||
| Effect of foreign currency translation on cash and cash equivalents | (1,286 | ) | 4,348 | (953 | ) | 561 | (24 | ) | ||||||||||||
| Cash and cash equivalents at beginning of period | 64,595 | 86,635 | 59,791 | 94,816 | 54,672 | |||||||||||||||
| Cash and cash equivalents at end of period | $ | 55,348 | $ | 64,595 | $ | 86,635 | $ | 59,791 | $ | 94,816 | ||||||||||
| Supplemental schedule of non-cash activities: | ||||||||||||||||||||
| Assets and liabilities assumed from acquisitions: | ||||||||||||||||||||
| Real estate investments | $ | 16,746 | $ | 299,713 | $ | 51,330 | $ | 2,952 | $ | 2,508 | ||||||||||
| Other assets acquired | 11,597 | 2,049 | 1,634 | — | 109 | |||||||||||||||
| Debt assumed | 12,926 | 177,035 | 51,115 | — | — | |||||||||||||||
| Other liabilities | 4,598 | 15,766 | 723 | 2,952 | 2,285 | |||||||||||||||
| Deferred income tax liability | 641 | 108,961 | 1,126 | — | 332 | |||||||||||||||
| Equity issued | 10,178 | — | — | — | — | |||||||||||||||
| NON-GAAP FINANCIAL MEASURES RECONCILIATION | ||||||||||||||||||||||||||||||||||||||||||
Funds From Operations (FFO) and Funds Available for Distribution (FAD)1 | ||||||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands, except per share amounts) | ||||||||||||||||||||||||||||||||||||||||||
| Tentative Estimates | ||||||||||||||||||||||||||||||||||||||||||
| Preliminary and | Midpoint | |||||||||||||||||||||||||||||||||||||||||
| YOY | Subject to Change | YOY | ||||||||||||||||||||||||||||||||||||||||
| 2013 | 2014 | Growth | FY2015 - Guidance | Growth | ||||||||||||||||||||||||||||||||||||||
| Q4 | FY | Q1 | Q2 | Q3 | Q4 | FY | '13-'14 | Low | High | '14-'15E | ||||||||||||||||||||||||||||||||
| Net income attributable to common stockholders | $ | 108,440 | $ | 453,509 | $ | 121,047 | $ | 138,398 | $ | 109,132 | $ | 107,190 | $ | 475,767 | $ | 628,032 | $ | 635,452 | ||||||||||||||||||||||||
| Net income attributable to common stockholders per share | $ | 0.37 | $ | 1.54 | $ | 0.41 | $ | 0.47 | $ | 0.37 | $ | 0.36 | $ | 1.60 | $ | 1.87 | $ | 1.90 | ||||||||||||||||||||||||
| Adjustments: | ||||||||||||||||||||||||||||||||||||||||||
| Depreciation and amortization on real estate assets | 196,520 | 716,412 | 192,043 | 189,219 | 199,617 | 239,465 | 820,344 | 910,000 | 950,000 | |||||||||||||||||||||||||||||||||
| Depreciation on real estate assets related to noncontrolling interest | (2,674 | ) | (10,512 | ) | (2,644 | ) | (2,661 | ) | (2,503 | ) | (2,506 | ) | (10,314 | ) | (8,450 | ) | (8,950 | ) | ||||||||||||||||||||||||
| Depreciation on real estate assets related to unconsolidated entities | 1,641 | 6,543 | 1,494 | 1,495 | 1,471 | 1,332 | 5,792 | 5,150 | 5,650 | |||||||||||||||||||||||||||||||||
| Gain on re-measurement of equity interest upon acquisition, net | — | (1,241 | ) | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
| Gain on real estate dispositions | — | — | (1,000 | ) | (11,889 | ) | (3,625 | ) | (1,456 | ) | (17,970 | ) | (9,100 | ) | (19,100 | ) | ||||||||||||||||||||||||||
| Discontinued operations: | ||||||||||||||||||||||||||||||||||||||||||
| (Gain) loss on real estate dispositions | (1,376 | ) | (4,059 | ) | (1,438 | ) | (45 | ) | 41 | (52 | ) | (1,494 | ) | (90 | ) | (190 | ) | |||||||||||||||||||||||||
| Depreciation and amortization on real estate assets | 2,514 | 47,806 | 281 | 1,247 | 12 | 15 | 1,555 | 20 | 20 | |||||||||||||||||||||||||||||||||
| Subtotal: FFO add-backs | 196,625 | 754,949 | 188,736 | 177,366 | 195,013 | 236,798 | 797,913 | 897,530 | 927,430 | |||||||||||||||||||||||||||||||||
| Subtotal: FFO add-backs per share | $ | 0.66 | $ | 2.56 | $ | 0.64 | $ | 0.60 | $ | 0.66 | $ | 0.80 | $ | 2.69 | $ | 2.68 | $ | 2.77 | ||||||||||||||||||||||||
FFO (NAREIT) | $ | 305,065 | $ | 1,208,458 | $ | 309,783 | $ | 315,764 | $ | 304,145 | $ | 343,988 | $ | 1,273,680 | 5 | % | $ | 1,525,562 | $ | 1,562,882 | 21 | % | ||||||||||||||||||||
FFO (NAREIT) per share | $ | 1.03 | $ | 4.09 | $ | 1.05 | $ | 1.07 | $ | 1.03 | $ | 1.16 | $ | 4.29 | 5 | % | $ | 4.55 | $ | 4.66 | 7 | % | ||||||||||||||||||||
| Adjustments: | ||||||||||||||||||||||||||||||||||||||||||
| Change in fair value of financial instruments | 424 | 449 | (68 | ) | 109 | 4,595 | 485 | 5,121 | 500 | (500 | ) | |||||||||||||||||||||||||||||||
| Non-cash income tax expense (benefit) | 1,272 | (11,828 | ) | 3,433 | 2,974 | (1,987 | ) | (13,851 | ) | (9,431 | ) | (22,000 | ) | (28,000 | ) | |||||||||||||||||||||||||||
| Loss (gain) on extinguishment of debt, net | 2,110 | 1,048 | (810 | ) | 2,924 | 2,414 | 485 | 5,013 | 1,000 | 2,000 | ||||||||||||||||||||||||||||||||
| Merger-related expenses, deal costs and re-audit costs | 4,497 | 21,560 | 10,761 | 9,602 | 23,401 | 10,625 | 54,389 | 45,000 | 40,000 | |||||||||||||||||||||||||||||||||
| Amortization of other intangibles | 255 | 1,022 | 256 | 255 | 255 | 480 | 1,246 | 2,150 | 2,650 | |||||||||||||||||||||||||||||||||
| Subtotal: normalized FFO add-backs | 8,558 | 12,251 | 13,572 | 15,864 | 28,678 | (1,776 | ) | 56,338 | 26,650 | 16,150 | ||||||||||||||||||||||||||||||||
| Subtotal: normalized FFO add-backs per share | $ | 0.03 | $ | 0.04 | $ | 0.05 | $ | 0.05 | $ | 0.10 | $ | (0.01 | ) | $ | 0.19 | $ | 0.08 | $ | 0.05 | |||||||||||||||||||||||
| Normalized FFO | $ | 313,623 | $ | 1,220,709 | $ | 323,355 | $ | 331,628 | $ | 332,823 | $ | 342,212 | $ | 1,330,018 | 9 | % | $ | 1,552,212 | $ | 1,579,032 | 18 | % | ||||||||||||||||||||
| Normalized FFO per share | $ | 1.06 | $ | 4.14 | $ | 1.09 | $ | 1.12 | $ | 1.12 | $ | 1.15 | $ | 4.48 | 8 | % | $ | 4.63 | $ | 4.71 | 4 | % | ||||||||||||||||||||
| Non-cash items included in normalized FFO: | ||||||||||||||||||||||||||||||||||||||||||
| Amortization of deferred revenue and lease intangibles, net | (4,634 | ) | (15,793 | ) | (5,383 | ) | (4,496 | ) | (4,896 | ) | (4,096 | ) | (18,871 | ) | (24,900 | ) | (29,900 | ) | ||||||||||||||||||||||||
| Other non-cash amortization, including fair market value of debt | (3,369 | ) | (16,745 | ) | (1,965 | ) | (963 | ) | 2,312 | 304 | (312 | ) | 3,300 | 5,300 | ||||||||||||||||||||||||||||
| Stock-based compensation | 5,643 | 20,653 | 6,044 | 5,367 | 5,381 | 4,202 | 20,994 | 20,000 | 24,000 | |||||||||||||||||||||||||||||||||
| Straight-lining of rental income, net | (9,375 | ) | (30,540 | ) | (7,914 | ) | (9,317 | ) | (12,413 | ) | (9,043 | ) | (38,687 | ) | (33,800 | ) | (35,800 | ) | ||||||||||||||||||||||||
| Subtotal: non-cash items included in normalized FFO | (11,735 | ) | (42,425 | ) | (9,218 | ) | (9,409 | ) | (9,616 | ) | (8,633 | ) | (36,876 | ) | (35,400 | ) | (36,400 | ) | ||||||||||||||||||||||||
| Capital expenditures | (32,410 | ) | (87,654 | ) | (17,134 | ) | (21,445 | ) | (21,822 | ) | (32,527 | ) | (92,928 | ) | (110,000 | ) | (120,000 | ) | ||||||||||||||||||||||||
| Normalized FAD | $ | 269,478 | $ | 1,090,630 | $ | 297,003 | $ | 300,774 | $ | 301,385 | $ | 301,052 | $ | 1,200,214 | 10 | % | $ | 1,406,812 | $ | 1,422,632 | 18 | % | ||||||||||||||||||||
Normalized FAD per share | $ | 0.91 | $ | 3.70 | $ | 1.00 | $ | 1.01 | $ | 1.02 | $ | 1.01 | $ | 4.05 | 9 | % | $ | 4.20 | $ | 4.24 | 4 | % | ||||||||||||||||||||
| Merger-related expenses, deal costs and re-audit costs | (4,497 | ) | (21,560 | ) | (10,761 | ) | (9,602 | ) | (23,401 | ) | (10,625 | ) | (54,389 | ) | (45,000 | ) | (40,000 | ) | ||||||||||||||||||||||||
| FAD | $ | 264,981 | $ | 1,069,070 | $ | 286,242 | $ | 291,172 | $ | 277,984 | $ | 290,427 | $ | 1,145,825 | 7 | % | $ | 1,361,812 | $ | 1,382,632 | 20 | % | ||||||||||||||||||||
| FAD per share | $ | 0.90 | $ | 3.62 | $ | 0.97 | $ | 0.98 | $ | 0.94 | $ | 0.98 | $ | 3.86 | 7 | % | $ | 4.06 | $ | 4.12 | 6 | % | ||||||||||||||||||||
| Weighted average diluted shares | 296,047 | 295,110 | 296,245 | 296,504 | 296,495 | 297,480 | 296,677 | 335,251 | 335,251 | |||||||||||||||||||||||||||||||||
| 1 Totals and per share amounts may not add due to rounding. Per share quarterly amounts may not add to annual per share amounts due to material changes in the Company’s weighted average diluted share count, if any. | ||||||||||||||||||||||||||||||||||||||||||
Historical cost accounting for real estate assets implicitly assumes that the value of real estate assets diminishes predictably over time. However, since real estate values historically have risen or fallen with market conditions, many industry investors deem presentations of operating results for real estate companies that use historical cost accounting to be insufficient by themselves. For that reason, the Company considers FFO, normalized FFO and FAD to be appropriate measures of operating performance of an equity REIT. In particular, the Company believes that normalized FFO is useful because it allows investors, analysts and Company management to compare the Company’s operating performance to the operating performance of other real estate companies and between periods on a consistent basis without having to account for differences caused by unanticipated items and other events such as transactions and litigation. In some cases, the Company provides information about identified non-cash components of FFO and normalized FFO because it allows investors, analysts and Company management to assess the impact of those items on the Company’s financial results.
The Company uses the NAREIT definition of FFO. NAREIT defines FFO as net income (computed in accordance with GAAP) excluding gains (or losses) from sales of real estate property, including gain on re-measurement of equity method investments, and impairment write-downs of depreciable real estate, plus real estate depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures will be calculated to reflect FFO on the same basis. The Company defines normalized FFO as FFO excluding the following income and expense items (which may be recurring in nature): (a) merger-related costs and expenses, including amortization of intangibles, transition and integration expenses, and deal costs and expenses, including expenses and recoveries relating to acquisition lawsuits; (b) the impact of any expenses related to asset impairment and valuation allowances, the write-off of unamortized deferred financing fees, or additional costs, expenses, discounts, make-whole payments, penalties or premiums incurred as a result of early retirement or payment of the Company’s debt; (c) the non-cash effect of income tax benefits or expenses and derivative transactions that have non-cash mark-to-market impacts on the Company’s income statement; (d) except as specifically stated in the case of guidance, the impact of future acquisitions, divestitures (including pursuant to tenant options to purchase) and capital transactions; (e) the financial impact of contingent consideration, severance-related costs, charitable donations made to the Ventas Charitable Foundation, gains and losses for non-operational foreign currency hedge agreements and changes in the fair value of financial instruments; and (f) expenses related to the re-audit and re-review in 2014 of the Company’s historical financial statements and related matters. FAD represents normalized FFO excluding non-cash components, straight-line rental adjustments and capital expenditures, including tenant allowances and leasing commissions.
FFO, normalized FFO and FAD presented herein may not be comparable to similar measures presented by other real estate companies due to the fact that not all real estate companies use the same definitions. FFO, normalized FFO and FAD should not be considered as alternatives to net income (determined in accordance with GAAP) as indicators of the Company’s financial performance or as alternatives to cash flow from operating activities (determined in accordance with GAAP) as measures of the Company’s liquidity, nor are they necessarily indicative of sufficient cash flow to fund all of the Company’s needs. The Company believes that in order to facilitate a clear understanding of the consolidated historical operating results of the Company, FFO, normalized FFO and FAD should be examined in conjunction with net income as presented elsewhere herein.
NON-GAAP FINANCIAL MEASURES RECONCILIATION |
Net Debt to Adjusted Pro Forma EBITDA |
| The following information considers the pro forma effect on net income, interest, depreciation and merger-related expenses and deal costs of the Company’s investments and other capital transactions that were completed during the three months ended December 31, 2014, as if the transactions had been consummated as of the beginning of the period. The following table illustrates net debt to pro forma earnings before interest, taxes, depreciation and amortization (including non-cash stock-based compensation expense), excluding gains or losses on extinguishment of debt, income or loss from noncontrolling interest and unconsolidated entities, merger-related expenses and deal costs, expenses related to the re-audit and re-review of the Company’s historical financial statements, net gains on real estate activity and changes in the fair value of financial instruments (including amounts in discontinued operations) (“Adjusted Pro Forma EBITDA”) (dollars in thousands): |
| Net income attributable to common stockholders | $ | 107,190 | |||
| Pro forma adjustments for current period investments, capital transactions and dispositions | 6,802 | ||||
| Pro forma net income for the three months ended December 31, 2014 | 113,992 | ||||
| Add back: | |||||
| Pro forma interest | 100,675 | ||||
| Pro forma depreciation and amortization | 242,035 | ||||
| Stock-based compensation | 4,202 | ||||
| Gain on real estate dispositions | (1,457 | ) | |||
| Loss on extinguishment of debt, net | 485 | ||||
| Loss from unconsolidated entities | 688 | ||||
| Noncontrolling interest | 455 | ||||
| Income tax benefit | (13,552 | ) | |||
| Change in fair value of financial instruments | 485 | ||||
| Other taxes | 1,187 | ||||
| Pro forma merger-related expenses, deal costs and re-audit costs | 10,016 | ||||
| Adjusted Pro Forma EBITDA | 459,211 | ||||
| Adjusted Pro Forma EBITDA annualized | $ | 1,836,844 | |||
| As of December 31, 2014: | |||||
| Debt | $ | 10,888,092 | |||
| Cash, adjusted for cash escrows pertaining to debt and debt related to assets held for sale | (35,008 | ) | |||
| Net debt | $ | 10,853,084 | |||
| Net debt to Adjusted Pro Forma EBITDA | 5.9 | x | |||
| NON-GAAP FINANCIAL MEASURES RECONCILIATION 1, 2 | |||||||||||||||||||
| NOI by Segment | |||||||||||||||||||
| (In thousands) | |||||||||||||||||||
| 2014 Quarters | 2013 Fourth | ||||||||||||||||||
| Fourth | Third | Second | First | Quarter | |||||||||||||||
| Revenues | |||||||||||||||||||
| Triple-Net | |||||||||||||||||||
| Triple-Net Rental Income | $ | 245,599 | $ | 244,206 | $ | 242,726 | $ | 237,846 | $ | 232,873 | |||||||||
| Medical Office Buildings | |||||||||||||||||||
| Medical Office - Stabilized | 104,171 | 103,780 | 101,795 | 101,259 | 100,492 | ||||||||||||||
| Medical Office - Lease up | 6,675 | 6,767 | 6,839 | 7,324 | 7,529 | ||||||||||||||
| Medical Office - Other | 6,061 | 6,051 | 6,256 | 6,640 | 6,614 | ||||||||||||||
| Total Medical Office Buildings - Rental Income | 116,907 | 116,598 | 114,890 | 115,223 | 114,635 | ||||||||||||||
| Total Rental Income | 362,506 | 360,804 | 357,616 | 353,069 | 347,508 | ||||||||||||||
| Medical Office Building Services Revenue | 9,218 | 5,937 | 2,722 | 4,652 | 4,851 | ||||||||||||||
| Total Medical Office Buildings - Revenue | 126,125 | 122,535 | 117,612 | 119,875 | 119,486 | ||||||||||||||
| Triple-Net Services Revenue | 1,136 | 1,136 | 1,145 | 1,148 | 1,127 | ||||||||||||||
| Non-Segment Services Revenue | 770 | 500 | 500 | 500 | 500 | ||||||||||||||
| Total Medical Office Building and Other Services Revenue | 11,124 | 7,573 | 4,367 | 6,300 | 6,478 | ||||||||||||||
| Seniors Housing Operating | |||||||||||||||||||
| Seniors Housing - Stabilized | 398,855 | 385,511 | 363,618 | 361,404 | 360,064 | ||||||||||||||
| Seniors Housing - Lease up | 12,083 | 10,109 | 10,227 | 9,018 | 5,422 | ||||||||||||||
| Seniors Housing - Other | 232 | 627 | 628 | 639 | 643 | ||||||||||||||
| Total Resident Fees and Services | 411,170 | 396,247 | 374,473 | 371,061 | 366,129 | ||||||||||||||
| Non-Segment Income from Loans and Investments | 15,734 | 14,043 | 14,625 | 10,767 | 12,924 | ||||||||||||||
| Total Revenues, excluding Interest and Other Income | 800,534 | 778,667 | 751,081 | 741,197 | 733,039 | ||||||||||||||
| Property-Level Operating Expenses | |||||||||||||||||||
| Medical Office Buildings | |||||||||||||||||||
| Medical Office - Stabilized | 33,331 | 34,807 | 33,641 | 33,545 | 32,296 | ||||||||||||||
| Medical Office - Lease up | 2,509 | 2,738 | 2,733 | 2,783 | 2,620 | ||||||||||||||
| Medical Office - Other | 2,875 | 3,602 | 2,961 | 3,017 | 3,022 | ||||||||||||||
| Total Medical Office Buildings | 38,715 | 41,147 | 39,335 | 39,345 | 37,938 | ||||||||||||||
| Seniors Housing Operating | |||||||||||||||||||
| Seniors Housing - Stabilized | 262,915 | 256,702 | 241,380 | 241,298 | 245,404 | ||||||||||||||
| Seniors Housing - Lease up | 10,421 | 7,972 | 7,473 | 6,420 | 4,145 | ||||||||||||||
| Seniors Housing - Other | 227 | 600 | 571 | 577 | 574 | ||||||||||||||
| Total Seniors Housing | 273,563 | 265,274 | 249,424 | 248,295 | 250,123 | ||||||||||||||
| Total Property-Level Operating Expenses | 312,278 | 306,421 | 288,759 | 287,640 | 288,061 | ||||||||||||||
| Medical Office Building Services Costs | 7,527 | 4,568 | 1,626 | 3,371 | 3,358 | ||||||||||||||
| Net Operating Income | |||||||||||||||||||
| Triple-Net | |||||||||||||||||||
| Triple-Net Properties | 245,599 | 244,206 | 242,726 | 237,846 | 232,873 | ||||||||||||||
| Triple-Net Services Revenue | 1,136 | 1,136 | 1,145 | 1,148 | 1,127 | ||||||||||||||
| Total Triple-Net | 246,735 | 245,342 | 243,871 | 238,994 | 234,000 | ||||||||||||||
| Medical Office Buildings | |||||||||||||||||||
| Medical Office - Stabilized | 70,840 | 68,973 | 68,154 | 67,714 | 68,196 | ||||||||||||||
| Medical Office - Lease up | 4,166 | 4,029 | 4,106 | 4,541 | 4,909 | ||||||||||||||
| Medical Office - Other | 3,186 | 2,449 | 3,295 | 3,623 | 3,592 | ||||||||||||||
| Medical Office Buildings Services | 1,691 | 1,369 | 1,096 | 1,281 | 1,493 | ||||||||||||||
| Total Medical Office Buildings | 79,883 | 76,820 | 76,651 | 77,159 | 78,190 | ||||||||||||||
| Seniors Housing Operating | |||||||||||||||||||
| Seniors Housing - Stabilized | 135,940 | 128,809 | 122,238 | 120,106 | 114,660 | ||||||||||||||
| Seniors Housing - Lease up | 1,662 | 2,137 | 2,754 | 2,598 | 1,277 | ||||||||||||||
| Seniors Housing - Other | 5 | 27 | 57 | 62 | 69 | ||||||||||||||
| Total Seniors Housing | 137,607 | 130,973 | 125,049 | 122,766 | 116,006 | ||||||||||||||
| Non-Segment | 16,504 | 14,543 | 15,125 | 11,267 | 13,424 | ||||||||||||||
| Net Operating Income | $ | 480,729 | $ | 467,678 | $ | 460,696 | $ | 450,186 | $ | 441,620 | |||||||||
| 1 Amounts above are adjusted to exclude discontinued operations for all periods presented. | |||||||||||||||||||
| 2 Amounts above are not restated for changes between categories from quarter to quarter. | |||||||||||||||||||
| NON-GAAP FINANCIAL MEASURES RECONCILIATION | ||||||||
| (Dollars in thousands) | ||||||||
| Total Portfolio Same-Store Constant Currency Cash NOI | ||||||||
| For the Year Ended | ||||||||
| December 31, | ||||||||
| 2014 | 2013 | |||||||
| Net Operating Income | $ | 1,859,289 | $ | 1,691,458 | ||||
| Less: | ||||||||
| NOI Not Included in Same-Store | 179,182 | 77,508 | ||||||
| Straight-Lining of Rental Income | 38,670 | 30,554 | ||||||
| Non-Cash Rental Income | 15,821 | 13,089 | ||||||
| Non-Segment NOI | 57,439 | 59,471 | ||||||
| Foreign Currency Adjustment | — | 1,794 | ||||||
| 291,112 | 182,416 | |||||||
| Same-Store Constant Currency Cash NOI as Reported | $ | 1,568,177 | $ | 1,509,042 | ||||
| Percentage Increase | 3.9 | % | ||||||
| NON-GAAP FINANCIAL MEASURES RECONCILIATION | ||||||||
| (Dollars in thousands) | ||||||||
| Senior Housing Operating Portfolio Same-Store Constant Currency NOI | ||||||||
| For the Year Ended | ||||||||
| December 31, | ||||||||
| 2014 | 2013 | |||||||
| Net Operating Income | $ | 516,395 | $ | 449,321 | ||||
| Less: | ||||||||
| NOI Not Included in Same-Store | 69,483 | 19,870 | ||||||
| Foreign Currency Adjustment | — | 1,794 | ||||||
| 69,483 | 21,664 | |||||||
| Same-Store Constant Currency NOI as Reported | $ | 446,912 | $ | 427,657 | ||||
| Percentage Increase | 4.5 | % | ||||||
Click here to subscribe to Mobile Alerts for Ventas, Inc.
CONTACT:
Ventas, Inc.
Lori B. Wittman
(877) 4-VENTAS