2003 FFO Per Share Increases 13 Percent to $1.54
Ventas Increases First Quarter 2004 Dividend 21.5 Percent to $0.325 Per Share
LOUISVILLE, KY (February 26, 2004) - Ventas, Inc. (NYSE:VTR) ("Ventas" or the "Company") said today that normalized Funds From Operations ("FFO") for the 2003 fourth quarter rose 33 percent to $32.3 million, compared with $24.2 million in the comparable 2002 period. Normalized FFO per diluted share increased 18 percent to $0.40 from $0.34 per diluted share for the comparable 2002 period. In the fourth quarter ended December 31, 2003, the Company had 81.2 million weighted average diluted shares outstanding, compared to 71.2 million weighted average diluted shares outstanding a year earlier.
The quarter benefited from increased rents resulting from Ventas's annual lease escalations, income from the Company's 2002 investments with Trans Healthcare, Inc. ("THI"), decreased interest expense due to lower debt balances and the early pay-off of the United States Settlement.
Normalized FFO per diluted share for the year ended December 31, 2003 was $1.54, a 13 percent increase from the year ended December 31, 2002 level of $1.36 per diluted share. Normalized FFO for 2003 grew 29 percent year-over- year, to $123.5 million in 2003 from $95.6 million in 2002.
Normalized FFO for all periods excludes (a) gains on sales of common stock in the Company's primary tenant, Kindred Healthcare, Inc. (Nasdaq:KIND) ("Kindred"), (b) the benefit of a $20.2 million reversal of a previously recorded contingent liability, which was recorded as income in the first quarter of 2003, (c) losses from early extinguishment of debt and (d) a one-time swap breakage expense incurred in connection with the Company's debt refinancing in April 2002.
"In the fourth quarter, Ventas was hitting on all cylinders," Ventas Chairman, President and CEO Debra A. Cafaro said. "Our strategic diversification program moved forward with our announcement of the acquisition of ElderTrust (NYSE:ETT), which closed February 5, 2004. We also completed the sale of ten underperforming facilities to Kindred, generating $85 million in proceeds," she added. "Our shareholders are benefiting from our double-digit FFO per share growth. We will continue to manage the Company to deliver consistent, superior total shareholder return while we broaden the Company's tenant and asset base."
GAAP NET INCOME
After discontinued operations of $61.8 million, or $0.76 per diluted share, Ventas reported fourth quarter 2003 net income of $77.1 million, or $0.95 per diluted share. After discontinued operations of $1.2 million, or $0.01 per diluted share, net income for the fourth quarter ended December 31, 2002 was $9.4 million, or $0.13 per diluted share. A breakdown of discontinued operations is included in a schedule attached to this Press Release.
After discontinued operations of $66.0 million, or $0.82 per diluted share, net income for the year ended December 31, 2003 was $162.8 million, or $2.03 per diluted share. Net income for the year ended 2002 was $65.7 million, or $0.93 per diluted share, after discontinued operations of $28.4 million, or $0.40 per diluted share.
DIVIDEND INCREASE
Ventas also said its Board of Directors voted to increase the Company's first quarter 2004 dividend to $0.325 per share, an increase of 21.5 percent from the quarterly dividend of $0.2675 it paid for 2003. The first quarter 2004 dividend is payable on March 25, 2004 to stockholders of record on March 15, 2004.
"We are delighted to begin the year by increasing our dividend by over 21 percent," Cafaro said. "We want to share the benefits of our cash flow growth with our shareholders and at the same time maintain a conservative, secure dividend payout ratio of approximately 75 percent of anticipated 2004 FFO."
FOURTH QUARTER HIGHLIGHTS AND OTHER RECENT DEVELOPMENTS
-- Ventas announced the acquisition of ElderTrust for $184 million,
adding 18 new properties including nine assisted living facilities,
one independent living facility, five skilled nursing facilities,
two medical office buildings and one financial building to the
Company's extensive portfolio. The acquisition was completed
February 5, 2004. At the closing of the transaction, ElderTrust had
approximately $33.5 million in unrestricted and restricted cash on
hand, effectively reducing the net purchase price.
-- Early in 2004, Ventas announced the acquisition of 14 assisted and
independent living facilities for $115 million that will be leased
to nationally recognized Brookdale Living Communities, Inc.
("Brookdale"). The facilities are located in ten states, contain
about 2,000 private pay units and have an average occupancy of
93 percent. Ventas has closed on seven of the properties, and
expects to complete the remaining transactions shortly.
-- Ventas sold 10 underperforming properties to its primary tenant,
Kindred, for total consideration of $85 million. The transaction
resulted in a gain of $54.9 million. Included in the sale were two
hospitals and eight skilled nursing facilities. Proceeds from the
sale were redeployed into Ventas's strategic diversification
program, including the acquisition of ElderTrust.
-- On a pro forma basis for 2004, assuming the completion of the
ElderTrust and Brookdale transactions on January 1, 2004, Kindred
rent would represent 83 percent of the Company's expected revenue in
2004.
-- At December 31, 2003, the Company's net debt: EBITDA ratio stood at
2.8x, as a result of the Company's consistent efforts to strengthen
its balance sheet.
-- Each of Moody's and Standard and Poor's rating agencies raised its
outlook for Ventas to positive in the fourth quarter.
-- The 227 skilled nursing facilities and hospitals leased to Kindred
produced EBITDAR to rent coverage of 1.7 times (after management
fees) for the trailing twelve month period ended September 30, 2003
(the latest date available).
-- On October 1, 2003, Medicare reimbursement for skilled nursing
facilities increased by 6.26 percent.
-- Ventas reduced the notional amount of its swap to $330 million from
$450 million in December 2003.
-- Ventas finished 2003 with Total Shareholder Return ("TSR") of
106 percent, and 70 percent compound annual TSR for the three years
ended December 31, 2003, making it the top performing Real Estate
Investment Trust ("REIT") in the Morgan Stanley REIT Index for both
periods.
-- The Company opened its Distribution Reinvestment and Stock Purchase
Plan ("DRIP") to permit shareholders to invest in Ventas stock
directly and through dividend reinvestment, with a two percent
discount.
-- Consistent with the Company's focus on sound corporate governance,
the Company terminated its Shareholders Rights Plan (which had an
anti-takeover effect) in 2003.
FOURTH QUARTER 2003 RESULTS
Revenue for the quarter ended December 31, 2003 was $50.5 million, of which $47.4 million (or 93.7 percent) resulted from leases with Kindred. Fourth quarter expenses totaled $35.3 million, and included $9.9 million of depreciation expense, $15.9 million of interest expense on debt financing and $5.2 million loss on swap breakage. General, administrative and professional expenses for the 2003 fourth quarter totaled $3.9 million.
2003 RESULTS
Revenue for 2003 was $205.0 million, of which $183.2 million (or 89.4 percent) resulted from leases with Kindred. Expenses of $108.3 million for the year were reduced by the $20.2 million reversal of a contingent liability and included $39.7 million of depreciation expense, $61.8 million of interest expense and $4.9 million of interest expense on the United States Settlement, which was paid in full in June 2003 without prepayment penalty or premium. General and administrative and professional expenses for the year totaled $15.2 million.
VENTAS AFFIRMS 2004 NORMALIZED FFO GUIDANCE
Ventas affirmed its 2004 normalized FFO guidance of between $1.70 and $1.74 per diluted share. If achieved, these results would represent approximately 12 percent per share growth in normalized FFO in 2004. The Company's guidance includes the impact of the recently completed merger with ElderTrust and the acquisition and leasing of the remaining seven Brookdale properties that are currently under contract for purchase. There can be no assurance that the remaining Brookdale transactions will occur or when they will occur. Any failure or delay in completing these transactions will reduce the amount of 2004 FFO Ventas expects to achieve. Consistent with its practice, Ventas's FFO guidance (and related GAAP earnings projections) for 2004 exclude the impact of additional acquisitions and divestitures, gains and losses on the sales of assets, and capital transactions. Its guidance also excludes the future impact of (a) any expense the Company records for non-cash "swap ineffectiveness," and (b) any expenses related to the write-off of unamortized deferred financing fees or additional costs, expenses or premiums incurred as a result of early debt retirement.
Reconciliation of the Company's normalized FFO guidance to the Company's projected GAAP earnings is provided on a schedule attached to this Press Release. The Company may from time to time update its publicly announced FFO guidance, but it is not obligated to do so.
ASSUMPTIONS AND QUALIFICATIONS
The declaration and payment of future dividends remains subject to the oversight and approval of the Company's Board of Directors and is generally reviewed quarterly. The Company may from time to time update its publicly announced expectations regarding future dividends but it is not obligated to do so.
The Company's FFO guidance and expectation regarding future dividends are based on a number of assumptions, which are subject to change and many of which are outside the control of the Company. If actual results vary from these assumptions, the Company's expectations may change. There can be no assurance that the Company will achieve the projected FFO results or the timing or amount of future dividends.
FOURTH QUARTER CONFERENCE CALL
Ventas will hold a conference call to discuss this earnings release on Friday morning, February 27, 2004, at 10:00 a.m. Eastern Time (9:00 a.m. Central Time). The conference call is being web cast by CCBN and can be accessed at the Ventas website at www.ventasreit.com or www.fulldisclosure.com. An online replay of the web cast will be available at approximately 12:00 p.m. Eastern Time and will be archived for thirty (30) days.
Ventas, Inc. is a healthcare real estate investment trust that owns 42 hospitals, 199 nursing facilities, 18 senior housing facilities and 11 other facilities in 38 states. The Company also has investments in 25 additional healthcare and senior housing facilities. More information about Ventas can be found on its website at www.ventasreit.com.
This Press Release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements regarding Ventas, Inc.'s ("Ventas" or the "Company") and its subsidiaries' expected future financial position, results of operations, cash flows, funds from operations, dividends and dividend plans, financing plans, business strategy, budgets, projected costs, capital expenditures, competitive positions, 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. Such forward-looking statements are inherently uncertain, and security holders must recognize that actual results may differ from the Company's expectations. The Company does not undertake a duty to update such forward-looking statements.
Actual future results and trends for the Company may differ materially depending on a variety of factors discussed in the Company's filings with the Securities and Exchange Commission (the "Commission"). Factors that may affect the plans or results of the Company include, without limitation, (a) the ability and willingness of Kindred Healthcare, Inc. ("Kindred") and certain of its affiliates to continue to meet and/or perform their obligations under their contractual arrangements with the Company and the Company's subsidiaries, including without limitation the lease agreements and various agreements entered into by the Company and Kindred at the time of the Company's spin off of Kindred on May 1, 1998 (the "1998 Spin Off"), as such agreements may have been amended and restated in connection with Kindred's emergence from bankruptcy on April 20, 2001, (b) the ability and willingness of Kindred to continue to meet and/or perform its obligation to indemnify and defend the Company for all litigation and other claims relating to the healthcare operations and other assets and liabilities transferred to Kindred in the 1998 Spin Off, (c) the ability of Kindred and the Company's other operators to maintain the financial strength and liquidity necessary to satisfy their respective obligations and duties under the leases and other agreements with the Company, and their existing credit agreements, (d) the Company's success in implementing its business strategy and the Company's ability to identify and consummate diversifying acquisitions or investments, (e) the nature and extent of future competition, (f) the extent of future healthcare reform and regulation, including cost containment measures and changes in reimbursement policies, procedures and rates, (g) increases in the cost of borrowing for the Company, (h) the ability of the Company's operators to deliver high quality care and to attract patients, (i) the results of litigation affecting the Company, (j) changes in general economic conditions and/or economic conditions in the markets in which the Company may, from time to time, compete, (k) the ability of the Company to pay down, refinance, restructure, and/or extend its indebtedness as it becomes due, (l) the movement of interest rates and the resulting impact on the value of and the accounting for the Company's interest rate swap agreement, (m) the ability and willingness of the Company to maintain its qualification as a REIT due to economic, market, legal, tax or other considerations, (n) final determination of the Company's taxable net income for the year ending December 31, 2003, (o) the ability and willingness of the Company's tenants to renew their leases with the Company upon expiration of the leases and the Company's ability to relet its properties on the same or better terms in the event such leases expire and are not renewed by the existing tenants, and (p) the impact on the liquidity, financial condition and results of operations of Kindred and the Company's other operators resulting from increased operating costs and uninsured liabilities for professional liability claims, and the ability of Kindred and the Company's other operators to accurately estimate the magnitude of such liabilities. Many of such factors are beyond the control of the Company and its management.
CONSOLIDATED BALANCE SHEETS
(In thousands)
December 31, December 31,
2003 2002
Assets
Real estate investments:
Land $104,300 $119,559
Building and improvements 985,881 1,101,847
1,090,181 1,221,406
Accumulated depreciation (408,891) (409,132)
Total net real estate property 681,290 812,274
Loan receivable, net 16,455 16,528
Total net real estate investments 697,745 828,802
Cash and cash equivalents 82,104 2,455
Restricted cash 7,575 19,953
Investment in Kindred common stock - 16,713
Deferred financing costs, net 13,465 17,704
Notes receivable from employees,
former employees and accrued interest 3,772 4,139
Other assets 8,189 6,014
Total assets $812,850 $895,780
Liabilities and stockholders'
equity (deficit)
Liabilities:
Senior Notes payable and other debt $640,562 $707,709
United States Settlement - 43,992
Securities settlement due
(purchase of Senior Notes) - 37,366
Deferred revenue 15,308 18,883
Interest rate swap agreements 27,868 47,672
Accrued dividend 21,614 16,596
Accrued interest 5,821 7,237
Accounts payable and other
accrued liabilities 14,562 25,402
Other liabilities - disputed
refunds and accumulated interest 406 14,156
Deferred income taxes 30,394 30,394
Total liabilities 756,535 949,407
Commitments and contingencies
Stockholders' equity (deficit):
Preferred stock, unissued - -
Common stock 20,652 20,652
Capital in excess of par value 162,466 191,779
Unearned compensation
on restricted stock (748) (793)
Accumulated other comprehensive loss (18,294) (26,116)
Retained earnings (deficit) (56,790) (134,279)
107,286 51,243
Treasury stock (50,971) (104,870)
Total stockholders' equity (deficit) 56,315 (53,627)
Total liabilities and
stockholders' equity (deficit) $812,850 $895,780
CONSOLIDATED STATEMENTS OF INCOME
For the Years Ended December 31, 2003, 2002 and 2001
(In thousands, except per share amounts)
2003 2002
Revenues:
Rental income $191,232 $175,950
Interest income from loan receivable 3,036 995
Gain on sale of Kindred common stock 9,039 5,014
Interest and other income 1,696 1,178
Total revenues 205,003 183,137
Expenses:
General and administrative 12,724 9,763
Professional fees 2,434 3,150
Amortization of restricted stock grants 1,274 1,853
Depreciation 39,720 38,459
Net loss on swap breakage 5,168 5,407
Swap ineffectiveness 296 1,850
Loss on extinguishment of debt 84 11,077
Interest 61,790 71,027
Interest on United States Settlement 4,943 5,461
Reversal of contingent liability (20,164) -
Total expenses 108,269 148,047
Income before provision (benefit)
for income taxes, gain on disposal
of real estate assets and
discontinued operations 96,734 35,090
Provision (benefit) for income taxes - (2,200)
Income before gain on disposal of
real estate assets and
discontinued operations 96,734 37,290
Net gain on real estate disposals - 64
Income before discontinued operations 96,734 37,354
Discontinued operations (including
gain/loss on sale of assets) 66,019 28,352
Net income $162,753 $65,706
Earnings per common share:
Basic:
Income before discontinued operations $1.22 $0.54
Net income $2.05 $0.95
Diluted:
Income before discontinued operations $1.21 $0.53
Net income $2.03 $0.93
Weighted average number of
shares outstanding, basic 79,340 69,336
Weighted average number of
shares outstanding, diluted 80,094 70,290
Dividend declared per common share $1.07 $0.95
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years Ended December 31, 2003 and 2002
(In thousands)
2003 2002
Cash flows from operating activities:
Net income $162,753 $65,706
Adjustments to reconcile net income
to net cash provided by
operating activities:
Depreciation (including amounts
in discontinued operations) 41,943 42,107
Amortization of deferred
financing costs 4,095 3,706
Amortization of restricted
stock grants 1,274 1,853
Reversal of contingent liability (20,164) -
Normalized rents (108) (188)
Gain on sale of assets (including
amounts in discontinued operations) (60,820) (28,528)
Loss on impairment of assets
(included in discontinued operations) 845 -
Loss on extinguishment of debt 84 11,077
Amortization of deferred revenue (3,707) (2,711)
Net loss on swap breakage 5,168 5,407
Swap ineffectiveness 296 1,850
Other (508) 174
Changes in operating assets
and liabilities:
Decrease in restricted cash 12,378 820
Increase in accounts receivable
and other assets (1,892) (1,338)
Increase (decrease) in accounts
payable and accrued and
other liabilities (4,271) 16,450
Net cash provided by
operating activities 137,366 116,385
Cash flows from investing activities:
Purchase of furniture and equipment (258) (308)
Investment in real estate property - (53,000)
Investment in loan receivable - (64,931)
Proceeds from sale of loan
receivable, net - 49,033
Sale of real estate properties 139,164 28,620
Proceeds from sale of Kindred
Healthcare, Inc. common stock 20,223 6,950
Proceeds from loan receivable 205 -
Repayment (issuance) of notes
receivable from employees 367 (504)
Net cash provided by (used in)
investing activities 159,701 (34,140)
Cash flows from financing activities:
Net change in borrowings under
revolving line of credit (59,900) (101,301)
Proceeds from debt - 620,300
Purchase of senior notes (37,366) -
Repayment of debt (7,247) (18,590)
Repayment of debt through refinancing - (607,106)
Payment of swap breakage fee (8,575) (12,837)
Payment of deferred financing costs (40) (15,127)
Payment on the United
States Settlement (46,647) (10,755)
Issuance of common stock 22,604 97,155
Cash distribution to stockholders (80,247) (50,125)
Net cash used in
financing activities (217,418) (98,386)
Net increase (decrease) in cash
and cash equivalents 79,649 (16,141)
Cash and cash equivalents
at beginning of year 2,455 18,596
Cash and cash equivalents
at end of year $82,104 $2,455
Supplemental disclosure of
cash flow information:
Interest paid including swap
payments and receipts $70,342 $60,790
Supplemental disclosure of
non cash activity:
Dividend distribution of
Kindred common stock $- $17,086
SUPPLEMENTAL DATA
Funds from Operations
FFO and Normalized FFO for the four quarters and year ended December 31, 2003 (in thousands, except per share amounts):
First Second Third Fourth Year
Net income $37,288 $16,129 $32,212 $77,124 $162,753
Adjustments:
Depreciation
on real
estate
assets 9,864 9,861 9,878 9,833 39,436
Other items:
Discontinued
operations:
Real estate
depreciation -
discontinued 873 873 286 191 2,223
(Gain) loss on
sale of real
estate - 5,254 (2,065) (54,970) (51,781)
FFO 48,025 32,117 40,311 32,178 152,631
Realized gain on
sale of Kindred
common stock - (922) (8,117) - (9,039)
Reversal of
contingent
liability (20,164) - - - (20,164)
Loss on
extinguishment
of debt - - - 84 84
Normalized
FFO $27,861 $31,195 $32,194 $32,262 $123,512
Per diluted
share:
Net income $0.47 $0.20 $0.40 $0.95 $2.03
Adjustments:
Depreciation
on real
estate
assets 0.12 0.12 0.12 0.12 0.49
Other items:
Discontinued
operations:
Real estate
depreciation -
discontinued 0.02 0.01 0.00 0.00 0.03
(Gain) loss
on sale of
real estate - 0.07 (0.02) (0.67) (0.64)
FFO 0.61 0.40 0.50 0.40 1.91
Realized gain
on sale of
Kindred common
stock - (0.01) (0.10) - (0.11)
Reversal of
contingent
liability (0.26) - - - (0.26)
Loss on
extinguishment
of debt - - - 0.00 0.00
Normalized FFO $0.35 $0.39 $0.40 $0.40 $1.54
Projected FFO per diluted share for the year ended December 31, 2004:
2004 Projected
Per diluted share:
Net income $1.14 - $1.18
Adjustments:
Depreciation on real
estate assets 0.56 - 0.56
FFO $1.70 - $1.74
Adjustments: - -
Normalized FFO $1.70 - $1.74
Historical cost accounting for real estate assets implicitly assumes that the value of real estate assets diminishes predictably over time. Since real estate values instead have historically risen or fallen with market conditions, many industry investors have considered presentations of operating results for real estate companies that use historical cost accounting to be insufficient by themselves. To overcome this problem, the Company considers FFO an appropriate measure of performance of an equity REIT and uses the National Association of Real Estate Investment Trusts ("NAREIT") definition of FFO. NAREIT defines FFO as net income (computed in accordance with generally accepted accounting principles), excluding gains (or losses) from sales of property, plus depreciation and amortization and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures will be calculated to reflect funds from operations on the same basis.
FFO presented herein is not necessarily comparable to FFO presented by other real estate companies due to the fact that not all real estate companies use the same definition. FFO should not be considered as an alternative to net income (determined in accordance with accounting principles generally accepted in the United States ("GAAP")), as an indicator of the Company's financial performance, as an alternative to cash flow from operating activities (determined in accordance with GAAP), as a measure of the Company's liquidity, nor is FFO necessarily indicative of sufficient cash flow to fund all of the Company's needs. The Company believes that in order to facilitate a clear understanding of the consolidated historical operating results of the Company, FFO should be examined in conjunction with net income as presented elsewhere in this Press Release.
Net Debt to EBITDA
Earnings before interest, income taxes, depreciation and amortization ("EBITDA") and Normalized EBITDA for the years ended December 31, 2003 and 2002 (dollars in thousands):
Year Ended Year Ended
December 31, 2003 December 31, 2002
Net income $162,753 $65,706
Add Back:
Interest 61,790 71,027
Interest on United States Settlement 4,943 5,461
Depreciation 39,720 38,459
Swap ineffectiveness 296 1,850
Amortization of restricted
stock grants 1,274 1,853
Benefit for income taxes - (2,200)
Net loss on swap breakage 5,168 5,407
Loss on extinguishment of debt 84 11,077
Discontinued Operations add back:
Depreciation 2,223 3,648
Interest 3,075 5,732
EBITDA 281,326 208,020
Adjustments:
Gain on sale of Kindred
common stock (9,039) (5,014)
Reversal of contingent liability (20,164) -
Discontinued operations:
(Gain) loss on sale of
real estate (51,781) (23,450)
Loss on impairment of asset 845 -
Normalized EBITDA $201,187 $179,556
Debt $640,562 $707,709
Kindred common stock - (16,713)
Cash (82,104) (2,455)
Net debt $558,458 $688,541
Net debt to EBITDA 2.8x 3.8x
The Company considers EBITDA a profitability measure which indicates the Company's ability to service debt. Normalized EBITDA excludes income and expense items that are nonrecurring in the Company's core business. The Company considers the Net Debt to EBITDA ratio a useful measure to evaluate the Company's ability to pay its indebtedness. EBITDA presented herein is not necessarily comparable to EBITDA presented by other companies due to the fact that not all companies use the same definition. EBITDA should not be considered as an alternative to net income (determined in accordance with GAAP), as an indicator of the Company's financial performance, as an alternative to cash flow from operating activities (determined in accordance with GAAP), as a measure of the Company's liquidity, nor is EBITDA 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, EBITDA should be examined in conjunction with net income as presented elsewhere in this Press Release.
Ventas, Inc.
2003 QUARTERLY STATEMENTS OF INCOME
($000, except per share amounts)
First Second Third Fourth Year
Revenues:
Rental income $45,764 $46,705 $49,355 $49,408 $191,232
Interest income
from loan
receivable 747 758 766 765 3,036
Gain on sale of
Kindred common
stock - 922 8,117 - 9,039
Interest and
other income 492 553 280 371 1,696
Total
revenues 47,003 48,938 58,518 50,544 205,003
Expenses:
General and
administrative 3,140 3,080 3,136 3,368 12,724
Professional fees 760 702 416 556 2,434
Amortization of
restricted stock
grants 291 310 309 364 1,274
Depreciation 9,928 9,925 9,952 9,915 39,720
Net loss on
swap breakage - - - 5,168 5,168
Swap
ineffectiveness - 369 - (73) 296
Loss on
extinguishment
of debt - - - 84 84
Interest 15,932 15,662 14,313 15,883 61,790
Interest on
United States
Settlement 1,182 3,761 - - 4,943
Reversal of
contingent
liability (20,164) - - - (20,164)
Total
expenses 11,069 33,809 28,126 35,265 108,269
Income before
discontinued
operations 35,934 15,129 30,392 15,279 96,734
Discontinued
operations 1,354 1,000 1,820 61,845 66,019
Net income $37,288 $16,129 $32,212 $77,124 $162,753
Weighted average
number of shares
outstanding,
basic 78,834 78,935 79,389 80,187 79,340
Weighted average
number of shares
outstanding,
diluted 79,296 79,575 80,258 81,232 80,094
Earnings per
common share:
Basic:
Income before
discontinued
operations $0.46 $0.19 $0.38 $0.19 $1.22
Discontinued
operations 0.01 0.01 0.03 0.77 0.83
Net income $0.47 $0.20 $0.41 $0.96 $2.05
Diluted:
Income before
discontinued
operations $0.45 $0.19 $0.38 $0.19 $1.21
Discontinued
operations 0.02 0.01 0.02 0.76 0.82
Net income $0.47 $0.20 $0.40 $0.95 $2.03
Discontinued
Operations
Revenues $3,420 $4,195 $1,261 $1,389 $10,265
Interest and
other income - 4,116 - 6,000 10,116
Interest 1,193 1,184 375 323 3,075
Depreciation 873 873 286 191 2,223
Loss on
impairment of
asset held
for sale - - 845 - 845
Income before
gain on sale
of real estate 1,354 6,254 (245) 6,875 14,238
Gain on sale
of real estate - (5,254) 2,065 54,970 51,781
Discontinued
operations $1,354 $1,000 $1,820 $61,845 $66,019
Ventas, Inc.
2002 QUARTERLY STATEMENTS OF INCOME
(In thousands, except per share amounts)
First Second Third Fourth Year
Revenues:
Rental Income $42,786 $43,759 $44,221 $45,184 $175,950
Interest income
from loan
receivable - - - 995 995
Gain on sale of
Kindred common
stock - 3,822 1,192 - 5,014
Interest and
other income 342 373 237 226 1,178
Total
revenues 43,128 47,954 45,650 46,405 183,137
Expenses:
General and
administrative 2,311 2,601 2,410 2,441 9,763
Professional fees 565 936 900 749 3,150
Amortization of
restricted stock
grants 422 715 354 362 1,853
Depreciation 9,518 9,527 9,527 9,887 38,459
Loss on
extinguishment
of debt - 6,919 - 4,158 11,077
Net loss on swap
breakage - 5,407 - - 5,407
Swap
ineffectiveness - 180 118 1,552 1,850
Interest 18,331 17,594 17,322 17,780 71,027
Interest on
United States
Settlement 1,471 1,402 1,331 1,257 5,461
Total
expenses 32,618 45,281 31,962 38,186 148,047
Income before
benefit for
income taxes,
gain on disposal
of real estate
assets and
discontinued
operations 10,510 2,673 13,688 8,219 35,090
Benefit for
income taxes - - (2,200) - (2,200)
Income before
gain on disposal
of real estate
assets and
discontinued
operations 10,510 2,673 15,888 8,219 37,290
Net gain on
real estate
disposals - - - 64 64
Income before
discontinued
operations 10,510 2,673 15,888 8,283 37,354
Discontinued
operations 2,191 23,795 1,205 1,161 28,352
Net income $12,701 $26,468 $17,093 $9,444 $65,706
Weighted average
number of shares
outstanding,
basic 68,698 68,850 69,098 70,637 69,336
Weighted average
number of shares
outstanding,
diluted 69,844 70,002 70,047 71,204 70,290
Earnings per
common share:
Basic:
Income before
discontinued
operations $0.15 $0.04 $0.23 $0.12 $0.54
Discontinued
operations 0.03 0.34 0.02 0.01 0.41
Net income $0.18 $0.38 $0.25 $0.13 $0.95
Diluted:
Income before
discontinued
operations $0.15 $0.04 $0.23 $0.12 $0.53
Discontinued
operations 0.03 0.34 0.01 0.01 0.40
Net income $0.18 $0.38 $0.24 $0.13 $0.93
Discontinued
Operations
Revenues $3,611 $3,812 $3,429 $3,430 $14,282
Interest 1,529 1,485 1,337 1,381 5,732
Depreciation 948 925 887 888 3,648
Income before
gain on sale
of real estate 1,134 1,402 1,205 1,161 4,902
Gain on sale
of real estate 1,057 22,393 - - 23,450
Discontinued
operations $2,191 $23,795 $1,205 $1,161 $28,352
Portfolio of Properties
The following information provides an overview of the Company's portfolio of healthcare properties as of and for the year ended December 31, 2003, excluding discontinued operations ($'s in thousands):
As of and for the Year Ended December 31, 2003 (1)
Percent
Portfolio # of # of of Rental # of
by Type Properties Beds Revenue Revenue States
Healthcare
Property
Skilled Nursing
Facilities 194 24,399 $124,628 65% 30
Hospitals 42 3,629 65,493 34% 19
Other Facilities 9 181 1,111 1% 2
Total 245 28,209 $191,232 100% 37
Other Real Estate
Investments
Loan Receivable 25 1,983 $3,036
Kindred Coverage Ratios
The following is based on data provided by Kindred to the Company or obtained from Kindred's public filings. This information reflects Kindred's EBITDAR coverage by Master Lease after management fees and excluding the 26 facilities sold to Kindred in 2003:
TTM (1)
Master EBITDAR
Lease Coverage (2)
1 2.0
2 1.9
3 1.4
4 1.5
5 1.3
Portfolio 1.7
- (1) Trailing Twelve Months EBITDAR ended September 30, 2003 (the latest available data provided by Kindred) to the sum of (a) the Company's Trailing Twelve Months cash rental revenue, plus (b) the $8.6 million in annual rental revenue added by the June 30, 2003 Master Lease amendments.
- (2) Coverage reflects the ratio of Kindred's EBITDAR to rent. EBITDAR is defined as earnings before interest, income taxes, depreciation, amortization and rent but after deducting a 5 percent management fee. EBITDAR is adjusted by $4.4 million in order to normalize certain of Kindred's professional liability insurance expenses.
Scheduled Maturities of Borrowing Arrangements
The Company's indebtedness has the following maturities (in thousands):
2004 $3,412
2005 3,690
2006 210,122
2007 57,300
2008 -
Thereafter 366,038
Total $640,562
- END -
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