VENTAS, INC. REPORTS 1998 RESULTS
LOUISVILLE, Ky. (Feb. 25, 1999) Ventas, Inc. (NYSE:VTR) announced today the results of its operations for the fourth quarter and eight months ending December 31, 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 three months ended December 31, 1998 totaled $24.6 million, or $0.36 per diluted share. Pro forma FFO for the three-month period was $32.8 million, or $0.48 per diluted share. Pro forma results assume that the Company qualified to be taxed as a real estate investment trust ("REIT") on May 1, 1998, and the provision for income taxes was therefore excluded.
Rental income for the fourth quarter was $56.4 million and income from operations was $13.7 million, or $0.20 per diluted share.
For the eight months ended December 31, 1998, FFO totaled $63.6 million, or $0.94 per diluted share. Pro forma FFO for the eight-month period was $84.8 million, or $1.25 per diluted share. Rental income for the eight-month period was $149.9 million and income from operations was $34.8 million, or $0.51 per diluted share. The Company incurred an extraordinary loss for the eight months of $8.1 million, or $0.12 per share, net of income taxes, related to the extinguishment of debt.
Ventas reported that it invested $14.5 million during 1998 to acquire healthcare-related properties. The properties purchased included two skilled nursing centers and eight personal care facilities for individuals with acquired/traumatic brain injuries. Ventas also announced that in February 1999 it borrowed an additional $125 million under the revolver portion of its credit facility and utilized the proceeds to pay down the term loan due October 30, 1999. As of February 23, 1999, Ventas had total debt under its credit facility of $935 million. This included borrowings of $165 million under the revolver, leaving $85 million available to borrow. The Company indicated that it is continuing to evaluate alternatives to pay off the remaining term loan due October 30, 1999, including utilization of existing borrowing capacity under the revolver, sale of selected assets and secured financing options.
Ventas, Inc. is a REIT whose properties include 219 nursing centers, 46 hospitals and eight personal care facilities in 36 states.
VENTAS, INC.
Financial Highlights
(Unaudited)
(In thousands, except per share amounts and statistics)
Three Months Ended Eight Months Ended
December 31, 1998 December 31, 1998
Historical Pro Forma(a) Historical Pro Forma(a)
Rental income $ 56,409 $ 56,409 $ 149,933 $ 149,933
--------- --------- --------- ---------
Income from operations
$ 13,653 $ 21,836 $ 34,809 $ 55,960
Extraordinary loss on extinguishment of debt
- - (8,051) (12,986)
--------- --------- --------- ---------
Net income $ 13,653 $ 21,836 $ 26,758 $ 42,974
========= ========= ========= =========
Earnings per common share:
Basic:
Income from operations
$ 0.20 $ 0.32 $ 0.51 $ 0.82
Extraordinary loss on extinguishment of debt
- - (0.12) (0.19)
--------- --------- --------- ---------
Net income $ 0.20 $ 0.32 $ 0.39 $ 0.63
========= ========= ========= =========
Diluted:
Income from operations
$ 0.20 $ 0.32 $ 0.51 $ 0.82
Extraordinary loss on extinguishment of debt
- - (0.12) (0.19)
--------- --------- --------- ---------
Net income $ 0.20 $ 0.32 $ 0.39 $ 0.63
========= ========= ========= =========
Funds from operations
$ 24,628 $ 32,811 $ 63,648 $ 84,799
Funds from operations per common share:
Basic $ 0.36 $ 0.48 $ 0.94 $ 1.25
Diluted 0.36 0.48 0.94 1.25
Shares used in computing earnings and funds from
operations per common share:
Basic 67,848 67,848 67,819 67,819
Diluted 67,883 67,883 67,865 67,865
Number of real estate properties:
Nursing centers 219 n/a
Personal care facilities 8 n/a
Hospitals 46 n/a
-------- ---------
273 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)
Three Months Eight Months
Ended Ended
December 31, 1998 December 31,1998
Rental income $ 56,409 $ 149,933
---------- -----------
General and administrative 2,538 6,046
Depreciation 10,836 28,700
Interest expense 21,199 59,227
---------- -----------
34,573 93,973
---------- -----------
Income before income taxes 21,836 55,960
Provision for income taxes 8,183 21,151
---------- -----------
Income from operations 13,653 34,809
Extraordinary loss on extinguishment of debt,
net of income tax benefit - (8,051)
---------- -----------
Net income $ 13,653 $ 26,758
========== ===========
Earnings per common share:
Basic:
Income from operations $ 0.20 $ 0.51
Extraordinary loss on
extinguishment of debt - (0.12)
---------- -----------
Net income $ 0.20 $ 0.39
========== ===========
Diluted:
Income from operations $ 0.20 $ 0.51
Extraordinary loss on
extinguishment of debt - (0.12)
---------- -----------
Net income $ 0.20 $ 0.39
========== ===========
Funds from operations $ 24,628 $ 63,648
Funds from operations per common share:
Basic $ 0.36 $ 0.94
Diluted 0.36 0.94
Shares used in computing earnings and funds from
operations per common share:
Basic 67,848 67,819
Diluted 67,883 67,865
VENTAS, INC.
Condensed Consolidated Balance Sheet
(Unaudited)
(In thousands)
December 31,
1998
ASSETS
Real estate properties:
Land $ 120,928
Buildings and improvements 1,065,037
Furniture and equipment 15
-------------
1,185,980
Accumulated depreciation (246,509)
-------------
939,471
-------------
Cash and cash equivalents 338
Deferred financing costs 8,816
Due from Vencor, Inc. 6,967
Advances to employees 4,027
Other 87
-------------
$ 959,706
=============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Liabilities:
Bank credit facility and other debt $ 931,127
Accrued salaries, wages and other compensation 552
Accrued interest 3,556
Other accrued liabilities 1,974
Deferred incomes taxes 31,506
------------
968,715
------------
Stockholders' equity (deficit):
Common stock, par value 18,402
Capital in excess of par value 140,103
Unearned compensation on restricted stock (1,962)
Accumulated deficit (9,637)
------------
146,906
Treasury stock (155,915)
------------
(9,009)
------------
$ 959,706
============
VENTAS, INC.
QUARTERLY FINANCIAL SUPPLEMENT-FOURTH QUARTER 1998
(Unaudited)
Portfolio Overview
# of 4th Quarter
# of Beds/ Revenue
Portfolio by Type Properties Units ($000) Percentage
Skilled Nursing Facilities 219 28,477 $ 33,621 59.6 %
Personal Care Facilities 8 136 152 0.3
Hospitals 46 4,209 22,636 40.1
----- ------ --------- -----
Total 273 32,822 $ 56,409 100.0 %
===== ====== ========= =====
Investment Investment
($000) Percentage Per Bed
Skilled Nursing Facilities $ 834,032 70.3 % $ 29,288
Personal Care Facilities 7,133 0.6 52,448
Hospitals 344,800 29.1 81,920
---------- ------- ---------
Total $1,185,965 100.0 % $ 36,133
========== ======== =========
4th Quarter
Revenue
Portfolio by Operator/Tenant ($000) Percentage
Vencor $ 55,540 98.5 %
Other 869 1.5
--------- -------
Total $ 56,409 100.0 %
========= =======
# of EBITDAR/ Occupancy
Selected Operator Statistics (A) Beds Rent %
Vencor Hospitals 4,209 1.71 49.3 %
Vencor Skilled Nursing Facilities 26,565 1.15 86.5
Combined (B) 30,774 1.38 81.4 %
(A) Data to prepare this summary, which was provided by
Vencor, represents the third quarter of 1998 and
excludes two skilled nursing facilities which were
either not operational for the full quarter or are
in the process of being transferred to another operator.
If these two facilities had been included, EBITDAR/Rent
for the Vencor Skilled Nursing Facilities for the quarter
would have been 1.08.
(B) Excluding three hospitals and 11 nursing centers with
combined allocated annual rent of $12.2 million and
negative EBITDAR for the quarter, the EBITDAR/Rent
ratio would have been 1.91 for the hospitals and 1.19
for the nursing centers, or 1.48 on a combined basis.
VENTAS, INC.
QUARTERLY FINANCIAL SUPPLEMENT-FOURTH QUARTER 1998 (Continued)
(Unaudited)
4th Quarter
Revenue
Portfolio by State ($000) Percentage
1 Florida $ 5,465 9.7 %
2 Massachusetts 4,630 8.2
3 California 4,144 7.3
4 North Carolina 3,856 6.8
5 Indiana 3,818 6.8
6 Wisconsin 3,495 6.2
7 Illinois 2,980 5.3
8 Kentucky 2,864 5.1
9 Texas 2,828 5.0
10 Ohio 2,140 3.8
Other (26 states) 20,189 35.8
-------- ----------
$ 56,409 100.0 %
======== ==========
Certificate of Need States Revenue Percentage
SNFs Hospitals
States with CON Requirement 73.3 % 58.1 %
States without CON Requirement 26.7 41.9
---------- ----------
100.0 % 100.0 %
========== ==========
Annual
Revenue
Renewal Information (**) ($000) Percentage
1999 $ 0 0.0 %
2000 0 0.0
2001 462 0.2
2002 0 0.0
2003 592 0.3
Thereafter 224,687 99.5
-------- ---------
$ 225,741 100.0 %
======== =========
(**) Excludes future rent escalations.
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