LOUISVILLE, Ky. (July 29, 1998) Ventas, Inc. (NYSE:VTR) announced today the results of its operations for the two month period from May 1, 1998 through June 30, 1998. As a result of a corporate reorganization effective April 30, 1998, Ventas, Inc. is deemed to have commenced operations on May 1, 1998 and does not have comparable financial results for prior periods.
Funds from operations ("FFO") for the period totaled $15.3 million, or $0.23 per diluted share. Pro forma FFO for the period was $20.4 million or $0.30 per diluted share. Pro forma results assume that the Company qualified to be taxed as a real estate investment trust on May 1, 1998 and therefore the provision for income taxes was excluded. The Company defines FFO in accordance with the definition prescribed by the National Association of Real Estate Investment Trusts.
Rental income for the period was $37.4 million and income from operations was $8.2 million or $0.12 per diluted share. The Company incurred an extraordinary loss, net of income taxes, of $8.0 million or $0.12 per diluted share, related to the extinguishment of debt during the corporate reorganization.
Ventas, Inc. is a real estate company which owns 218 nursing centers and 46 hospitals in 36 states. Upon qualification for income tax purposes as a real estate investment trust, anticipated on January 1, 1999, Ventas will be one of the largest healthcare REITs in the United States.
VENTAS, INC.
Financial Highlights
(Unaudited)
(In thousands, except per share amounts and statistics)
Two Months Ended
June 30, 1998
Historical Pro forma(a)
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Rental income $ 37,356 $ 37,356
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Income from operations $ 8,198 $ 13,223
Extraordinary loss on
extinguishment of debt (7,970) (12,855)
---------- ----------
Net income $ 228 $ 368
========== ==========
Earnings per common share:
Basic:
Income from operations $ 0.12 $ 0.20
Extraordinary loss on
extinguishment of debt (0.12) (0.19)
---------- ----------
Net income $ - $ 0.01
========== ==========
Diluted:
Income from operations $ 0.12 $ 0.20
Extraordinary loss on
extinguishment of debt (0.12) (0.19)
---------- ----------
Net income $ - $ 0.01
========== ==========
Funds from operations $ 15,333 $ 20,358
Funds from operations per common share:
Basic $ 0.23 $ 0.30
Diluted 0.23 0.30
Shares used in computing earnings and funds from
operations per common share:
Basic 67,772 67,772
Diluted 68,021 68,021
Number of real estate properties:
Hospitals 46 n/a
Nursing centers 218 n/a
---------- ----------
264 n/a
----------
(a) Assumes that the Company qualified to be taxed as a
real estate investment trust on May 1, 1998 and
therefore the provision for income taxes was excluded.
VENTAS, INC.
Condensed Consolidated Statement of Income
(Unaudited)
(In thousands, except per share amounts)
Two Months Ended
June 30, 1998
-------------
Rental income $ 37,356
----------
General and administrative 1,619
Depreciation 7,135
Interest expense 15,379
----------
24,133
----------
Income before income taxes 13,223
Provision for income taxes 5,025
----------
Income from operations 8,198
Extraordinary loss on extinguishment
of debt, net of income tax benefit (7,970)
----------
Net income $ 228
Earnings per common share:
Basic:
Income from operations $ 0.12
Extraordinary loss on
extinguishment of debt (0.12)
-----------
Net income $ -
Diluted:
Income from operations $ 0.12
Extraordinary loss on
extinguishment of debt (0.12)
-----------
Net income $ -
Funds from operations $ 15,333
Funds from operations per common share:
Basic $ 0.23
Diluted 0.23
Shares used in computing earnings and funds from
operations per common share:
Basic 67,772
Diluted 68,021
VENTAS, INC.
Condensed Consolidated Balance Sheet
(Unaudited)
(In thousands)
June 30, 1998
ASSETS
Real estate properties:
Land $ 120,765
Buildings and improvements 1,064,676
------------
1,185,441
Accumulated depreciation (239,899)
------------
945,542
------------
Deferred financing costs 11,339
Other 4,308
------------
$ 961,189
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Liabilities:
Bank credit facility and other debt $ 978,330
Accounts payable 800
Accrued salaries, wages and
other compensation 177
Accrued interest 3,765
Other accrued liabilities 2,576
Deferred incomes taxes 14,957
-----------
1,000,605
Stockholders' equity (deficit):
Common stock, par value 18,400
Capital in excess of par value 138,185
Accumulated deficit (39,772)
-----------
116,813
Treasury stock (156,229)
-----------
(39,416)
-----------
$ 961,189
VENTAS, INC.
Condensed Consolidated Statement of Cash Flows
(Unaudited)
(In thousands)
Two Months Ended
June 30, 1998
---------------
Cash flows from operating activities:
Net income $ 228
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 7,135
Extraordinary loss on
extinguishment of debt 12,855
Increase in other assets (419)
Increase in accounts payable
and accrued liabilities 5,006
Other 882
---------
Net cash provided by
operating activities 25,687
---------
Cash flows from investing activities:
Purchase of real estate properties (1,184)
Advances to employees (3,890)
Sale of Vencor, Inc. preferred stock in
connection with corporate
reorganization 17,700
---------
Net cash provided by
investing activities 12,626
---------
Cash flows from financing activities:
Net change in borrowings under
revolving line of credit 27,400
Issuance of long-term debt 950,000
Repayment of long-term debt (5,034)
Repayment of Vencor, Inc. long-term debt
in connection with
corporate reorganization (1,000,171)
Payment of deferred financing costs (10,657)
Issuances of common stock 149
----------
Net cash used in financing activities (38,313)
----------
Change in cash and cash equivalents -
Cash and cash equivalents at beginning
of period -
----------
Cash and cash equivalents at end of period $ -
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