Ventas, Inc. (NYSE: VTR) (“Ventas” or the “Company”) today
reported results for the first quarter ended March 31, 2024.
CEO Remarks
“2024 is off to a strong start, led by continued organic growth
in our advantaged senior housing operating portfolio (“SHOP”), as
we execute against our strategy. Demand-driven accelerating
occupancy in SHOP drove our performance in the quarter, as the
unprecedented multiyear growth opportunity in senior housing
continues to build,” said Debra A. Cafaro, Ventas Chairman and
CEO.
“Our business is well positioned to create value as we enable
exceptional environments that serve the needs of a large and
growing aging population. As a result of the durable strength of
our enterprise and strong start to the year, we are updating and
improving our guidance for the full year,” Cafaro concluded.
First Quarter and Other 2024
Highlights
- Net Loss Attributable to Common Stockholders (“Net Loss”) per
share of ($0.04)
- Normalized Funds From Operations* (“Normalized FFO”) per share
of $0.78, an increase of over 5% compared to the prior year
- Total Company Net Operating Income* (“NOI”) year-over-year
growth of 8.2% and Total Company Same-Store Cash NOI*
year-over-year growth of 6.7%
- On a Same-Store Cash NOI* basis, SHOP grew more than 15%
year-over-year led by the U.S. which grew approximately 18%
year-over-year. SHOP Same-Store average occupancy growth
accelerated to +240 basis points year-over-year and, combined with
RevPOR growth, delivered year-over-year NOI margin expansion
- Year to date, the Company completed several successful capital
markets refinancing transactions. In March, Ventas raised Cdn$650
million 5.10% Senior Notes due 2029 and, in April, Ventas extended
to 2028 its $2.75 billion unsecured revolving credit facility at
improved pricing
- Year to date, the Company closed or is under contract on
approximately $350 million of investments focused on senior
housing, meeting its previously stated full year investment
expectations
- Year to date, the Company issued 2.1 million shares of common
stock under its at-the-market program for gross proceeds of $94
million. Proceeds have match funded the senior housing investments
completed year to date
*Some of the financial measures throughout
this press release are non-GAAP measures. Refer to the Non-GAAP
Financial Measures Reconciliation tables at the end of this press
release for additional information and a reconciliation to the most
directly comparable GAAP measure.
First Quarter 2024 Enterprise
Results
For the First Quarter 2024, reported per share results were:
Quarter Ended March
31,
2024
2023
$ Change
% Change
Attributable Net (Loss) Income
($0.04)
$0.04
($0.08)
n/a
Nareit FFO*
$0.72
$0.73
($0.01)
(1%)
Normalized FFO*
$0.78
$0.74
$0.04
5%
* Some of the financial measures
throughout this press release are non-GAAP measures. Refer to the
Non-GAAP Financial Measures Reconciliation tables at the end of
this press release for additional information and a reconciliation
to the most directly comparable GAAP measure.
Delivering Profitable Organic Growth in
Senior Housing
First quarter average occupancy in the SHOP Same-Store portfolio
grew 240 basis points year-over-year, accelerating from growth of
170 basis points in the fourth quarter of 2023 and 120 basis points
in full year 2023. Strong demand resulted in elevated move-ins, and
first quarter average occupancy outperformed normal seasonal
patterns. Tour volumes throughout the first quarter and in April
were consistently above prior year levels.
External Growth Opportunities Focused
on Senior Housing
Ventas has closed or is under contract on its previously stated
full year investment expectations of approximately $350 million
focused on senior housing. These senior housing investments exhibit
attractive going-in NOI yields with significant NOI growth
potential, and priced at below replacement cost, in line with the
Company’s investment criteria.
Financial Strength and
Flexibility
Ventas’s long-term success is supported by its scale, strong
liquidity and access to multiple sources of attractive capital. As
of March 31, 2024, the Company had $3.4 billion in liquidity,
including availability under its unsecured revolving credit
facility and cash and cash equivalents on hand, with no borrowings
outstanding under its commercial paper program.
Sustainability
Leadership
Ventas received the 2024 ENERGY STAR Partner of the Year
Sustained Excellence in Energy Management Award from the U.S.
Environmental Protection Agency (EPA), continuing the Company’s
strong track record of recognition for its industry-leading
corporate sustainability practices that support long-term value
creation. This recognition marks Ventas’s second consecutive year
earning ENERGY STAR’s highest honor and its fourth consecutive year
winning the Partner of the Year Award. More than 175 Ventas-owned
buildings received ENERGY STAR certification in 2023, the most
certified properties of any healthcare REIT.
Updated and Improved Full Year 2024
Guidance
The Company is updating and improving its guidance for the full
year. The Company’s guidance contains forward-looking statements
and is based on a number of assumptions; including select
assumptions identified later in this press release. Actual results
may differ materially.
As of 2/14/24
As of 5/1/2024
Attributable Net Income Per Share
Range
$0.00 - $0.11
$0.03 - $0.11
Attributable Net Income Per Share
Midpoint
$0.06
$0.07
Nareit FFO Per Share Range*
$2.94 - $3.05
$2.98 - $3.06
Nareit FFO Per Share Midpoint*
$3.00
$3.02
Normalized Per Share FFO Range*
$3.07 - $3.18
$3.10 - $3.18
Normalized Per Share FFO Midpoint*
$3.125
$3.14
* Some of the financial measures
throughout this press release are non-GAAP measures. Refer to the
Non-GAAP Financial Measures Reconciliation tables at the end of
this press release for additional information and a reconciliation
to the most directly comparable GAAP measure.
Investor Presentation
A first quarter Earnings Presentation is posted to the Events
& Presentations section of Ventas’s website at
ir.ventasreit.com/events-and-presentations. Additional information
regarding the Company can be found in its first quarter 2024
Supplemental posted at ir.ventasreit.com. The information contained
on, or that may be accessed through, our website, including the
information contained in the aforementioned Earnings Presentation
and Supplemental, is not incorporated by reference into, and is not
part of, this document.
First Quarter 2024 Results Conference
Call
Ventas will hold a conference call to discuss this earnings
release on Thursday, May 2, 2024 at 10:00 a.m. Eastern Time (9:00
a.m. Central Time).
The dial-in number for the conference call is (888) 330-3576 (or
+1 (646) 960-0672 for international callers), and the participant
passcode is 7655497. A live webcast can be accessed from the
Investor Relations section of www.ventasreit.com.
A telephonic replay will be available at (800) 770-2030 (or +1
(609) 800-9909 for international callers), passcode 7655497, after
the earnings call and will remain available for 30 days. The
webcast replay will be posted in the Investor Relations section of
www.ventasreit.com.
About Ventas
Ventas, Inc. (NYSE: VTR) is a leading S&P 500 real estate
investment trust focused on delivering strong, sustainable
shareholder returns by enabling exceptional environments that
benefit a large and growing aging population. The Company’s growth
is fueled by its senior housing communities, which provide valuable
services to residents and enable them to thrive in supported
environments. Ventas leverages its unmatched operational expertise,
data-driven insights from its Ventas Operational InsightsTM
platform, extensive relationships and strong financial position to
achieve its goal of delivering outsized performance across
approximately 1,400 properties. The Ventas portfolio is composed of
senior housing communities, outpatient medical buildings, research
centers and healthcare facilities in North America and the United
Kingdom. The Company benefits from a seasoned team of talented
professionals who share a commitment to excellence, integrity and a
common purpose of helping people live longer, healthier, happier
lives.
Non-GAAP Financial
Measures
This press release includes certain financial performance
measures not defined by generally accepted accounting principles in
the United States (“GAAP”), such as Nareit FFO, Normalized FFO, NOI
and Same-Store Cash NOI. Reconciliations of these non-GAAP
financial measures to the most directly comparable GAAP measures
are included in this press release. Our definitions and
calculations of these non-GAAP measures may not be the same as
similar measures reported by other REITs.
These non-GAAP financial measures should not be considered as
alternatives for, or superior to, financial measures calculated in
accordance with GAAP.
Cautionary Statements
Certain of the information contained herein, including
intra-quarter operating information, has been provided by our
operators and we have not verified this information through an
independent investigation or otherwise. We have no reason to
believe that this information is inaccurate in any material
respect, but we cannot assure you of its accuracy.
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. These forward-looking statements include, among others,
statements of expectations, beliefs, future plans and strategies,
anticipated results from operations and developments and other
matters that are not historical facts. Forward-looking statements
include, among other things, statements regarding our and our
officers’ intent, belief or expectation as identified by the use of
words such as “assume,” “may,” “will,” “project,” “expect,”
“believe,” “intend,” “anticipate,” “seek,” “target,” “forecast,”
“plan,” “potential,” “opportunity,” “estimate,” “could,” “would,”
“should” and other comparable and derivative terms or the negatives
thereof.
Forward-looking statements are based on management’s beliefs as
well as on a number of assumptions concerning future events. You
should not put undue reliance on these forward-looking statements,
which are not a guarantee of performance and are subject to a
number of uncertainties and other factors that could cause actual
events or results to differ materially from those expressed or
implied by the forward-looking statements. We do not undertake a
duty to update these forward-looking statements, which speak only
as of the date on which they are made. We urge you to carefully
review the disclosures we make concerning risks and uncertainties
that may affect our business and future financial performance,
including those made below and in our filings with the Securities
and Exchange Commission, such as in the sections titled “Cautionary
Statements — Summary Risk Factors,” “Risk Factors” and
“Management’s Discussion and Analysis of Financial Condition and
Results of Operations” in our Annual Report on Form 10-K for the
year ended December 31, 2023 and our subsequent Quarterly Reports
on Form 10-Q.
Certain factors that could affect our future results and our
ability to achieve our stated goals include, but are not limited
to: (a) our ability to achieve the anticipated benefits and
synergies from, and effectively integrate, our completed or
anticipated acquisitions and investments of properties, including
our ownership of the properties included in our equitized loan
portfolio; (b) our exposure and the exposure of our tenants,
managers and borrowers to complex healthcare and other regulation,
including evolving laws and regulations regarding data privacy and
cybersecurity and environmental matters, and the challenges and
expense associated with complying with such regulation; (c) the
potential for significant general and commercial claims, legal
actions, regulatory proceedings or enforcement actions that could
subject us or our tenants, managers or borrowers to increased
operating costs, uninsured liabilities, fines or significant
operational limitations, including the loss or suspension of or
moratoriums on accreditations, licenses or certificates of need,
suspension of or nonpayment for new admissions, denial of
reimbursement, suspension, decertification or exclusion from
federal, state or foreign healthcare programs or the closure of
facilities or communities; (d) the impact of market and general
economic conditions on us, our tenants, managers and borrowers and
in areas in which our properties are geographically concentrated,
including macroeconomic trends and financial market events, such as
bank failures and other events affecting financial institutions,
market volatility, increases in inflation, changes in or elevated
interest and exchange rates, tightening of lending standards and
reduced availability of credit or capital, geopolitical conditions,
supply chain pressures, rising labor costs and historically low
unemployment, events that affect consumer confidence, our occupancy
rates and resident fee revenues, and the actual and perceived state
of the real estate markets, labor markets and public and private
capital markets; (e) our reliance and the reliance of our tenants,
managers and borrowers on the financial, credit and capital markets
and the risk that those markets may be disrupted or become
constrained, including as a result of bank failures or concerns or
rumors about such events, tightening of lending standards and
reduced availability of credit or capital; (f) the secondary and
tertiary effects of the COVID-19 pandemic on our business,
financial condition and results of operations and the
implementation and impact of regulations related to the Coronavirus
Aid, Relief and Economic Security Act (the “CARES Act”) and other
stimulus legislation, including the risk that some or all of the
CARES Act or other COVID-19 relief payments we or our tenants,
managers or borrowers received could be recouped; (g) our ability,
and the ability of our tenants, managers and borrowers, to navigate
the trends impacting our or their businesses and the industries in
which we or they operate, and the financial condition or business
prospect of our tenants, managers and borrowers; (h) the risk of
bankruptcy, inability to obtain benefits from governmental
programs, insolvency or financial deterioration of our tenants,
managers, borrowers and other obligors which may, among other
things, have an adverse impact on the ability of such parties to
make payments or meet their other obligations to us, which could
have an adverse impact on our results of operations and financial
condition; (i) the risk that the borrowers under our loans or other
investments default or that, to the extent we are able to foreclose
or otherwise acquire the collateral securing our loans or other
investments, we will be required to incur additional expense or
indebtedness in connection therewith, that the assets will
underperform expectations or that we may not be able to
subsequently dispose of all or part of such assets on favorable
terms; (j) our current and future amount of outstanding
indebtedness, and our ability to access capital and to incur
additional debt which is subject to our compliance with covenants
in instruments governing our and our subsidiaries’ existing
indebtedness; (k) the recognition of reserves, allowances, credit
losses or impairment charges are inherently uncertain, may increase
or decrease in the future and may not represent or reflect the
ultimate value of, or loss that we ultimately realize with respect
to, the relevant assets, which could have an adverse impact on our
results of operations and financial condition; (l) the non-renewal
of any leases or management agreement or defaults by tenants or
managers thereunder and the risk of our inability to replace those
tenants or managers on a timely basis or on favorable terms, if at
all; (m) our ability to identify and consummate future investments
in or dispositions of healthcare assets and effectively manage our
portfolio opportunities and our investments in co-investment
vehicles, joint ventures and minority interests, including our
ability to dispose of such assets on favorable terms as a result of
rights of first offer or rights of first refusal in favor of third
parties; (n) risks related to development, redevelopment and
construction projects, including costs associated with inflation,
rising or elevated interest rates, labor conditions and supply
chain pressures, and risks related to increased construction and
development in markets in which our properties are located,
including adverse effect on our future occupancy rates; (o) our
ability to attract and retain talented employees; (p) the
limitations and significant requirements imposed upon our business
as a result of our status as a REIT and the adverse consequences
(including the possible loss of our status as a REIT) that would
result if we are not able to comply with such requirements; (q) the
ownership limits contained in our certificate of incorporation with
respect to our capital stock in order to preserve our qualification
as a REIT, which may delay, defer or prevent a change of control of
our company; (r) the risk of changes in healthcare law or
regulation or in tax laws, guidance and interpretations,
particularly as applied to REITs, that could adversely affect us or
our tenants, managers or borrowers; (s) increases in our borrowing
costs as a result of becoming more leveraged, including in
connection with acquisitions or other investment activity and
rising or elevated interest rates; (t) our reliance on third-party
managers and tenants to operate or exert substantial control over
properties they manage for or rent from us, which limits our
control and influence over such operations and results; (u) our
exposure to various operational risks, liabilities and claims from
our operating assets; (v) our dependency on a limited number of
tenants and managers for a significant portion of our revenues and
operating income; (w) our exposure to particular risks due to our
specific asset classes and operating markets, such as adverse
changes affecting our specific asset classes and the real estate
industry, the competitiveness or financial viability of hospitals
on or near the campuses where our outpatient medical buildings are
located, our relationships with universities, the level of expense
and uncertainty of our research tenants, and the limitation of our
uses of some properties we own that are subject to ground lease,
air rights or other restrictive agreements; (x) the risk of damage
to our reputation; (y) the availability, adequacy and pricing of
insurance coverage provided by our policies and policies maintained
by our tenants, managers or other counterparties; (z) the risk of
exposure to unknown liabilities from our investments in properties
or businesses; (aa) the occurrence of cybersecurity threats and
incidents that could disrupt our or our tenants’, managers’ or
borrower’s operations, result in the loss of confidential or
personal information or damage our business relationships and
reputation; (bb) the failure to maintain effective internal
controls, which could harm our business, results of operations and
financial condition; (cc) the impact of merger, acquisition and
investment activity in the healthcare industry or otherwise
affecting our tenants, managers or borrowers; (dd) disruptions to
the management and operations of our business and the uncertainties
caused by activist investors; (ee) the risk of catastrophic or
extreme weather and other natural events and the physical effects
of climate change; (ff) the risk of potential dilution resulting
from future sales or issuances of our equity securities; and (gg)
the other factors set forth in our periodic filings with the
Securities and Exchange Commission.
CONSOLIDATED BALANCE
SHEETS
(In thousands, except per
share amounts; dollars in USD; unaudited)
As of March 31, 2024
As of December 31,
2023
Assets
Real estate investments:
Land and improvements
$
2,573,598
$
2,596,274
Buildings and improvements
27,201,303
27,201,381
Construction in progress
416,206
368,143
Acquired lease intangibles
1,440,122
1,448,146
Operating lease assets
318,825
312,142
31,950,054
31,926,086
Accumulated depreciation and
amortization
(10,399,248
)
(10,177,136
)
Net real estate property
21,550,806
21,748,950
Secured loans receivable and investments,
net
29,819
27,986
Investments in unconsolidated real estate
entities
601,406
598,206
Net real estate investments
22,182,031
22,375,142
Cash and cash equivalents
632,443
508,794
Escrow deposits and restricted cash
55,966
54,668
Goodwill
1,045,048
1,045,176
Assets held for sale
41,317
56,489
Deferred income tax assets, net
1,767
1,754
Other assets
714,014
683,410
Total assets
$
24,672,586
$
24,725,433
Liabilities and equity
Liabilities:
Senior notes payable and other debt
$
13,555,194
$
13,490,896
Accrued interest
123,157
117,403
Operating lease liabilities
202,197
194,734
Accounts payable and other liabilities
1,020,307
1,041,616
Liabilities related to assets held for
sale
7,605
9,243
Deferred income tax liabilities
20,249
24,500
Total liabilities
14,928,709
14,878,392
Redeemable OP unitholder and
noncontrolling interests
285,044
302,636
Commitments and contingencies
Equity:
Ventas stockholders’ equity:
Preferred stock, $1.00 par value; 10,000
shares authorized, unissued
—
—
Common stock, $0.25 par value; 600,000
shares authorized, 404,433 and 402,380 shares outstanding at March
31, 2024 and December 31, 2023, respectively
101,094
100,648
Capital in excess of par value
15,756,414
15,650,734
Accumulated other comprehensive loss
(19,554
)
(35,757
)
Retained earnings (deficit)
(6,410,144
)
(6,213,803
)
Treasury stock, 0 and 279 shares issued at
March 31, 2024 and December 31, 2023, respectively
(24,970
)
(13,764
)
Total Ventas stockholders’ equity
9,402,840
9,488,058
Noncontrolling interests
55,993
56,347
Total equity
9,458,833
9,544,405
Total liabilities and equity
$
24,672,586
$
24,725,433
CONSOLIDATED STATEMENTS OF
INCOME
(In thousands, except per
share amounts; dollars in USD; unaudited)
For the Three Months Ended
March 31,
2024
2023
Revenues
Rental income:
Triple-net leased
$
155,368
$
149,739
Outpatient medical and research
portfolio
218,877
203,004
374,245
352,743
Resident fees and services
813,304
704,993
Third party capital management
revenues
4,296
4,177
Income from loans and investments
1,289
13,589
Interest and other income
6,780
1,743
Total revenues
1,199,914
1,077,245
Expenses
Interest
149,933
128,075
Depreciation and amortization
300,255
282,119
Property-level operating expenses:
Senior housing
609,821
537,222
Outpatient medical and research
portfolio
73,938
66,913
Triple-net leased
3,738
3,796
687,497
607,931
Third party capital management
expenses
1,753
1,706
General, administrative and professional
fees
48,737
44,798
Loss on extinguishment of debt, net
252
—
Transaction, transition and restructuring
costs
4,677
1,386
Allowance on loans receivable and
investments
(68
)
(8,064
)
Shareholder relations matters
15,714
—
Other (income) expense
(1,334
)
7,762
Total expenses
1,207,416
1,065,713
(Loss) income before unconsolidated
entities, real estate dispositions, income taxes and noncontrolling
interests
(7,502
)
11,532
Loss from unconsolidated entities
(8,383
)
(5,623
)
Gain on real estate dispositions
341
10,201
Income tax benefit
3,004
2,802
(Loss) income from continuing
operations
(12,540
)
18,912
Net (loss) income
(12,540
)
18,912
Net income attributable to noncontrolling
interests
1,772
1,395
Net (loss) income attributable to common
stockholders
$
(14,312
)
$
17,517
Earnings per common share
Basic:
(Loss) income from continuing
operations
$
(0.03
)
$
0.05
Net (loss) income attributable to common
stockholders
(0.04
)
0.04
Diluted:1
(Loss) income from continuing
operations
$
(0.03
)
$
0.05
Net (loss) income attributable to common
stockholders
(0.04
)
0.04
Weighted average shares used in
computing earnings per common share
Basic
403,365
399,989
Diluted
407,227
403,792
1 Potential common shares are not included
in the computation of diluted earnings per share when a loss from
continuing operations exists as the effect would be an antidilutive
per share amount.
NON-GAAP FINANCIAL MEASURES
RECONCILIATION
Funds From Operations
Attributable to Common Stockholders (FFO)
(In thousands, except per
share amounts; dollars in USD; totals may not sum due to rounding;
unaudited)
Q1 YoY
2024
2023
Change
Q1
Q1
’24-’23
Net (loss) income attributable to
common stockholders
$
(14,312
)
$
17,517
n/a
Net (loss) income attributable to
common stockholders per share1
$
(0.04
)
$
0.04
n/a
Adjustments:
Depreciation and amortization on real
estate assets
299,614
281,477
Depreciation on real estate assets related
to noncontrolling interests
(3,871
)
(4,377
)
Depreciation on real estate assets related
to unconsolidated entities
11,805
10,177
Gain on real estate dispositions
(341
)
(10,201
)
Gain (loss) on real estate dispositions
related to noncontrolling interests
9
(5
)
Gain on real estate dispositions and other
related to unconsolidated entities
—
(180
)
Subtotal: Nareit FFO adjustments
307,216
276,891
Subtotal: Nareit FFO adjustments per
share
$
0.75
$
0.69
Nareit FFO attributable to common
stockholders
$
292,904
$
294,408
(1
%)
Nareit FFO attributable to common
stockholders per share
$
0.72
$
0.73
(1
%)
Adjustments:
Change in fair value of financial
instruments
(9,339
)
(583
)
Non-cash income tax benefit
(4,696
)
(4,299
)
Loss on extinguishment of debt, net
252
—
Transaction, transition and restructuring
costs
4,677
1,386
Amortization of other intangibles
96
96
Non-cash impact of changes to equity
plan
7,561
7,222
Materially disruptive events, net
1,160
4,107
Allowance on loans receivable and
investments
(68
)
(8,064
)
Shareholder relations matters
15,714
—
Other normalizing items2
2,357
—
Normalizing items related to
noncontrolling interests and unconsolidated entities, net
5,955
2,598
Subtotal: Normalized FFO adjustments
23,669
2,463
Subtotal: Normalized FFO adjustments per
share
$
0.06
$
0.01
Normalized FFO attributable to common
stockholders
$
316,573
$
296,871
7
%
Normalized FFO attributable to common
stockholders per share
$
0.78
$
0.74
5
%
Weighted average diluted shares
407,227
403,792
1
Potential common shares are not
included in the computation of diluted earnings per share when a
loss from continuing operations exists as the effect would be an
antidilutive per share amount.
2
Includes adjustments for unusual
items, including approximately $2.4 million primarily related to
the settlement by one of our operators of class action litigation
in our SHOP segment.
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 Nareit FFO and
Normalized FFO to be appropriate supplemental measures of operating
performance of an equity REIT. The Company believes that the
presentation of FFO, combined with the presentation of required
GAAP financial measures, has improved the understanding of
operating results of REITs among the investing public and has
helped make comparisons of REIT operating results more meaningful.
Management generally considers Nareit FFO to be a useful measure
for understanding and comparing our operating results because, by
excluding gains and losses related to sales of previously
depreciated operating real estate assets, impairment losses on
depreciable real estate and real estate asset depreciation and
amortization (which can differ across owners of similar assets in
similar condition based on historical cost accounting and useful
life estimates), Nareit FFO can help investors compare the
operating performance of a company’s real estate across reporting
periods and to the operating performance of other companies. 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 across periods on a consistent basis without
having to account for differences caused by non-recurring items and
other non-operational events such as transactions and litigation.
In some cases, the Company provides information about identified
non-cash components of Nareit 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.
Nareit Funds From Operations Attributable to Common
Stockholders (“Nareit FFO”)
The Company uses the National Association of Real Estate
Investment Trusts (“Nareit”) definition of FFO. Nareit defines FFO
as net income attributable to common stockholders (computed in
accordance with GAAP) excluding gains (or losses) from sales of
real estate property, including gain (or loss) 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 entities and noncontrolling
interests. Adjustments for unconsolidated entities and
noncontrolling interests will be calculated to reflect FFO on the
same basis.
Normalized FFO
The Company defines Normalized FFO as Nareit FFO excluding the
following income and expense items, without duplication: (a)
transaction, transition and restructuring costs, including
transaction, integration and restructuring-related costs and
expenses, and amortization of intangibles, in each case net of
noncontrolling interests’ share of these items and including
Ventas’ share of these items from unconsolidated entities; (b) the
impact of 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, the non-cash impact of changes to the
Company’s executive equity compensation plan, derivative
transactions that have non-cash mark-to-market impacts on the
Company’s income statement and non-cash charges related to leases;
(d) the financial impact of contingent consideration; (e) gains and
losses for non-operational foreign currency hedge agreements and
changes in the fair value of financial instruments; (f) gains and
losses on non-real estate dispositions and other items related to
unconsolidated entities and noncontrolling interests; (g) net
expenses or recoveries related to materially disruptive events; and
(h) other items set forth in the Normalized FFO reconciliation
included herein.
Nareit FFO and Normalized FFO presented herein may not be
comparable to those presented by other real estate companies due to
the fact that not all real estate companies use the same
definitions. Nareit FFO and Normalized FFO should not be considered
as alternatives to net income attributable to common stockholders
(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, Nareit FFO and Normalized FFO should be examined in
conjunction with net income attributable to common stockholders as
presented elsewhere herein.
NON-GAAP FINANCIAL MEASURES
RECONCILIATION
Full Year 2024 Guidance as of
May 1, 20241
Net Income and FFO
Attributable to Common Stockholders2
(In millions, except per share
amounts; dollars in USD; totals may not sum due to rounding;
unaudited)
FY 2024
FY 2024 - Per Share
Low
High
Low
High
Net income attributable to common
stockholders
$11
$45
$0.03
$0.11
Depreciation and amortization
adjustments
1,214
1,214
2.95
2.95
Nareit FFO attributable to common
stockholders
$1,225
$1,258
$2.98
$3.06
Other adjustments3
51
51
0.12
0.12
Normalized FFO attributable to common
stockholders
$1,276
$1,309
$3.10
$3.18
% Year-over-year growth
4%
6%
Weighted average diluted shares (in
millions)
411
411
1 The Company’s guidance constitutes
forward-looking statements within the meaning of the federal
securities laws and is based on a number of assumptions that are
subject to change and many of which are outside the control of the
Company. Actual results may differ materially from the Company’s
expectations depending on factors discussed herein and in the
Company’s filings with the Securities and Exchange Commission.
2 Totals may not add due to minor
corporate-level adjustments.
3 Other adjustments include the categories
of adjustments presented in our “Non-GAAP Financial Measures
Reconciliation – Funds From Operations Attributable to Common
Stockholders (FFO)”.
Select Guidance
Assumptions
- Close ~$350M of investments focused on senior housing (no
further investment activity assumed)
- Dispose of assets for $300M in net proceeds
- FAD capital expenditures of ~$250M
- General and administrative expenses expected to approximate
$155M at the guidance midpoint
- Interest expense expected to range from $604M to $614M
NON-GAAP FINANCIAL MEASURES
RECONCILIATION
Full Year 2024 Guidance as of
February 14, 20241
Net Income and FFO
Attributable to Common Stockholders2
(In millions, except per share
amounts; dollars in USD; totals may not sum due to rounding;
unaudited)
FY 2024
FY 2024 - Per Share
Low
High
Low
High
Net income attributable to common
stockholders
$0
$47
$0.00
$0.11
Depreciation and amortization
adjustments
1,209
1,209
2.94
2.94
Nareit FFO attributable to common
stockholders
$1,209
$1,256
$2.94
$3.05
Other adjustments3
53
53
0.13
0.13
Normalized FFO attributable to common
stockholders
$1,262
$1,309
$3.07
$3.18
% Year-over-year growth
3%
6%
Weighted average diluted shares (in
millions)
411
411
1 The Company’s guidance constitutes
forward-looking statements within the meaning of the federal
securities laws and is based on a number of assumptions that are
subject to change and many of which are outside the control of the
Company. Actual results may differ materially from the Company’s
expectations depending on factors discussed herein and in the
Company’s filings with the Securities and Exchange Commission.
2 Totals may not add due to minor
corporate-level adjustments.
3 Other adjustments include the categories
of adjustments presented in our “Non-GAAP Financial Measures
Reconciliation – Funds From Operations Attributable to Common
Stockholders (FFO)”.
NON-GAAP FINANCIAL MEASURES
RECONCILIATION
First Quarter 2024 Same-Store
Cash NOI by Segment
(In thousands, unless
otherwise noted; dollars in USD; totals may not sum due to
rounding; unaudited)
For the Three Months Ended
March 31, 2024
SHOP
Outpatient Medical &
Research Portfolio
Triple-Net Leased
Properties
Non- Segment
Total
Net loss attributable to common
stockholders
$
(14,312
)
Adjustments:
Interest and other income
(6,780
)
Interest expense
149,933
Depreciation and amortization
300,255
General, administrative and professional
fees
48,737
Loss on extinguishment of debt, net
252
Transaction, transition and restructuring
costs
4,677
Allowance on loans receivable and
investments
(68
)
Shareholder relations matters
15,714
Other income
(1,334
)
Loss from unconsolidated entities
8,383
Gain on real estate dispositions
(341
)
Income tax benefit
(3,004
)
Net income attributable to noncontrolling
interests
1,772
NOI
$
203,483
$
145,570
$
151,630
$
3,201
$
503,884
Adjustments:
Straight-lining of rental income
—
(3,290
)
679
—
(2,611
)
Non-cash rental income
—
(2,136
)
(11,507
)
—
(13,643
)
Cash modification fees
—
2,500
—
—
2,500
NOI not included in cash NOI1
1,003
(344
)
(601
)
—
58
Non-segment NOI
—
—
—
(3,201
)
(3,201
)
Cash NOI
$
204,486
$
142,300
$
140,201
$
—
$
486,987
Adjustments:
Cash NOI not included in Same-Store
(21,056
)
(12,951
)
(11,575
)
—
(45,582
)
Same-Store Cash NOI
$
183,430
$
129,349
$
128,626
$
—
$
441,405
Percentage increase (decrease)
15.2
%
4.9
%
(2.0
%)
6.7
%
1 Excludes sold assets, assets held for
sale, development properties not yet operational, land parcels, and
third-party capital management revenues.
For the Three Months Ended
March 31, 2023
SHOP
Outpatient Medical &
Research Portfolio
Triple-Net Leased
Properties
Non- Segment
Total
Net income attributable to common
stockholders
$
17,517
Adjustments:
Interest and other income
(1,743
)
Interest expense
128,075
Depreciation and amortization
282,119
General, administrative and professional
fees
44,798
Transaction, transition and restructuring
costs
1,386
Allowance on loans receivable and
investments
(8,064
)
Other expense
7,762
Loss from unconsolidated entities
5,623
Gain on real estate dispositions
(10,201
)
Income tax benefit
(2,802
)
Net income attributable to noncontrolling
interests
1,395
NOI
$
167,771
$
136,719
$
145,943
$
15,432
$
465,865
Adjustments:
Straight-lining of rental income
—
(2,345
)
1,900
—
(445
)
Non-cash rental income
—
(2,573
)
(12,340
)
—
(14,913
)
NOI not included in cash NOI1
2,784
(6,218
)
(3,799
)
—
(7,233
)
Non-segment NOI
—
—
—
(15,432
)
(15,432
)
NOI impact from change in FX
128
—
289
—
417
Cash NOI
$
170,683
$
125,583
$
131,993
$
—
$
428,259
Adjustments:
Cash NOI not included in Same-Store
(11,491
)
(2,247
)
(695
)
—
(14,433
)
NOI impact from change in FX not in
Same-Store
—
—
—
—
—
Same-Store Cash NOI
$
159,192
$
123,336
$
131,298
$
—
$
413,826
1 Excludes sold assets, assets held for
sale, development properties not yet operational, land parcels, and
third-party capital management revenues.
The Company considers NOI and Cash NOI as important supplemental
measures because they allow investors, analysts and the Company’s
management to assess its unlevered property-level operating results
and to compare its operating results with those of other real
estate companies and between periods on a consistent basis.
NOI
The Company defines NOI as total revenues, less interest and
other income, property-level operating expenses and third party
capital management expenses.
Cash NOI
The Company defines Cash NOI as NOI for its reportable business
segments (i.e., SHOP, outpatient medical and research portfolio and
triple-net leased properties), determined on a Constant Currency
basis, excluding the impact of, without duplication (i) non-cash
items such as straight-line rent and the amortization of lease
intangibles, (ii) sold assets, assets held for sale, development
properties not yet operational and land parcels and (iii) other
items set forth in the Cash NOI reconciliation included herein. In
certain cases, results may be adjusted to reflect the receipt of
cash payments, fees, and other consideration that is not fully
recognized as NOI in the period.
Same-Store
The Company defines Same-Store as properties owned, consolidated
and operational for the full period in both comparison periods and
that are not otherwise excluded; provided, however, that the
Company may include selected properties that otherwise meet the
Same-Store criteria if they are included in substantially all of,
but not a full, period for one or both of the comparison periods,
and in the Company’s judgment such inclusion provides a more
meaningful presentation of its segment performance. Newly acquired
development properties and recently developed or redeveloped
properties in the Company’s SHOP reportable business segment will
be included in Same-Store once they are stabilized for the full
period in both periods presented. These properties are considered
stabilized upon the earlier of (a) the achievement of 80% sustained
occupancy or (b) 24 months from the date of acquisition or
substantial completion of work. Recently developed or redeveloped
properties in the outpatient medical and research portfolio and
triple-net leased properties reportable business segments will be
included in Same-Store once substantial completion of work has
occurred for the full period in both periods presented. Senior
housing operating portfolio and triple-net leased properties that
have undergone operator or business model transitions will be
included in Same-Store once operating under consistent operating
structures for the full period in both periods presented.
Properties are excluded from Same-Store if they are: (i) sold,
classified as held for sale or properties whose operations were
classified as discontinued operations in accordance with GAAP; (ii)
impacted by materially disruptive events such as flood or fire;
(iii) for SHOP, those properties that are currently undergoing a
materially disruptive redevelopment; (iv) for the outpatient
medical and research portfolio and triple-net leased properties
reportable business segments, those properties for which management
has an intention to institute, or has instituted, a redevelopment
plan because the properties may require major property-level
expenditures to maximize value, increase NOI, or maintain a
market-competitive position and/or achieve property stabilization,
most commonly as the result of an expected or actual material
change in occupancy or NOI; or (v) for SHOP and triple-net leased
properties reportable business segments, those properties that are
scheduled to undergo operator or business model transitions, or
have transitioned operators or business models after the start of
the prior comparison period.
Constant Currency
To eliminate the impact of exchange rate movements, all
portfolio performance-based disclosures assume constant exchange
rates across comparable periods, using the following methodology:
the current period’s results are shown in actual reported USD,
while prior comparison period’s results are adjusted and converted
to USD based on the average exchange rate for the current
period.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240501858456/en/
BJ Grant (877) 4-VENTAS
Ventas (NYSE:VTR)
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Ventas (NYSE:VTR)
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