Sunrise Senior Living, Inc. News
VENTAS REPORTS FIRST QUARTER NORMALIZED FFO OF $92.4 MILLION AND FAD OF $87.8 MILLION
FFO per diluted common share, as defined by the National Association of Real Estate Investment Trusts ("NAREIT"), in the first quarter of 2008 increased to
First quarter results benefited from increased revenue from the Company's senior living operations and rental increases from the Company's triple-net lease portfolio. The Company did not own its 79 high-quality, private-pay seniors housing assets managed by Sunrise Senior Living, Inc. (NYSE: SRZ) ("Sunrise") in the first quarter of 2007. Normalized FFO for the three months ended
"We are pleased with our results and believe Ventas is poised to enjoy an outstanding 2008," Ventas Chairman, President and Chief Executive Officer
SUNRISE PORTFOLIO
Total Portfolio
The Company's operating portfolio contains 79 seniors housing communities in
Net Operating Income after management fees ("NOI") for the Sunrise portfolio was in line with the Company's expectations. Total community NOI for those 79 communities was
73 Stabilized Communities
For the 73 stabilized Sunrise communities, total community NOI was
Six Communities in Lease-up
Ventas's Sunrise portfolio also contains six recently developed communities that are in lease-up. Ventas's share of NOI at the development assets was
Community NOI increased 57 percent for the five Sunrise development communities (excluding Steeles) in the first quarter of 2008 compared to fourth quarter 2007 results. These five assets also enjoyed a six percentage point sequential quarterly increase in occupancy, to 72 percent. The newly constructed and acquired Steeles community represents the sixth asset currently included in the lease-up portfolio. It continues to increase occupancy, which currently is 43 percent.
GAAP NET INCOME
Net income applicable to common shares for the quarter ended
FIRST QUARTER HIGHLIGHTS AND OTHER RECENT DEVELOPMENTS Portfolio and Performance Highlights — As previously announced, Ventas purchased a 47-unit seniors housing community located in Texas for $5.1 million and leased it to an affiliate of Capital Senior Living Corporation (NYSE: CSU). The lease provides Ventas with an expected unlevered yield over the life of the lease of approximately 8.6 percent. — In April 2008, Ventas sold seven healthcare assets for approximately $68 million. Ventas expects to recognize a gain from the sale of approximately $24 million in the second quarter. Proceeds will be used to pay down debt and for general corporate purposes. Annual rent for these assets, acquired in 2002, was $7.2 million. — In May 2008, Ventas entered into an agreement giving it the exclusive right, as part of a joint venture, to develop up to ten identified medical office buildings (\"MOBs\") on hospital campuses in eight states. This joint venture represents an important new partnership with a nationally recognized private developer of MOBs and healthcare facilities. The expected development cost of these projects could total up to $150 million. — With this acquisition and divestiture activity: — annualized revenue from Kindred Healthcare, Inc. (NYSE: KND) (\"Kindred\") represents approximately 28 percent of the Company's annualized total revenues; — annualized revenue from private-pay, non-government-reimbursed assets represents 69 percent of the Company's annualized total revenues, computed on the same pro forma basis; — annualized revenue from the Company's operating assets, where rent is paid directly from residents of the Company's operating seniors housing communities and MOB tenants, constitutes approximately 45 percent of its annualized total revenues, computed on the same pro forma basis; — assets leased to Kindred represent approximately 15 percent of the Company's total real estate assets (measured on a gross book value basis) on its consolidated balance sheet; and — annualized revenue for the above computations is determined by excluding the Company's partner's share in revenue in the numerator and the denominator. — The 203 skilled nursing facilities (\"SNFs\") and hospitals (\"LTACs\") leased by the Company to Kindred produced EBITDARM (earnings before interest, taxes, depreciation, amortization, rent and management fees) to actual cash rent coverage of 2.2 times for the trailing twelve-month period ended December 31, 2007 (the latest date available). — Supplemental information regarding Ventas's portfolio of 513 seniors housing and healthcare assets is available on the Company's website under the \"For Investors\" section or at http://www.ventasreit.com/investors/supplemental.asp. Balance Sheet, Financing & Capital Markets — In March 2008, Ventas increased its borrowing capacity under its unsecured revolving credit facilities to $850 million, of which $150 million is available in either U.S. or Canadian dollars. The credit facilities mature in April 2009, and the Company has the option to extend their maturity to April 2010 upon satisfaction of customary conditions. Pricing under the facilities remains LIBOR plus 75 basis points. At May 6, 2008, these facilities had $780 million in undrawn credit availability, and the Company held approximately $124 million in unrestricted cash and marketable securities. — As previously announced, Ventas raised $192 million in February 2008 through the issuance and sale of 4.5 million shares of its common stock. — The Company's debt to total capitalization at March 31, 2008 was approximately 34 percent. Medicare Reimbursement — On May 2, 2008, the Centers for Medicare & Medicaid Services (\"CMS\") announced its final Medicare reimbursement update for LTACs for Reimbursement Year (\"RY\") 2009, commencing July 1, 2008 and ending September 30, 2009. The net Medicare reimbursement for LTACs is expected to increase by approximately 2.5 percent for RY 2009. — On May 1, 2008, CMS issued its proposed Medicare reimbursement update for SNFs for RY 2009, commencing October 1, 2008 and ending September 30, 2009. Under the proposed rule, for RY 2009 SNFs will receive: (1) a \"market basket\" increase of 3.1 percent; and (2) reduced reimbursement of approximately 3.3 percent due to administrative changes. The proposed rule is subject to a 60-day comment period. Additional News — The Wall Street Journal Shareholder Scoreboard cited Ventas as the best performing real estate stock for the five-year period ended December 31, 2007. Additionally, the Company was cited as the best performing healthcare REIT for the one-year, three-year and ten-year periods then ended. — As previously announced, James \"Denny\" Shelton and Robert D. Reed, two nationally respected hospital executives, have been appointed to Ventas's Board of Directors. — The Company has announced that its Chicago, Illinois office will be designated as its headquarters, effective at the Company's Annual Meeting of Stockholders on May 19, 2008. The Company is simultaneously expanding its Louisville, Kentucky office. — In the Company's litigation against HCP, Inc. (\"HCP\") regarding HCP's improper offers to acquire Sunrise Senior Living Real Estate Investment Trust, the United States District Court for the Western District of Kentucky set a trial date of August 18, 2009 and ordered that discovery in the case be completed by December 31, 2008.
VENTAS REAFFIRMS 2008 NORMALIZED FFO AND FAD GUIDANCE
Ventas reaffirmed that it expects its 2008 normalized FFO to be between
FIRST QUARTER CONFERENCE CALL
Ventas will hold a conference call to discuss this earnings release on
Ventas, Inc. is a leading healthcare real estate investment trust. At the date of this press release, Ventas owns 513 seniors housing and healthcare- related properties located in 43 states and two Canadian provinces. Its diverse portfolio includes 253 seniors housing communities, 192 skilled nursing facilities, 41 hospitals and 27 medical office and other properties. More information about Ventas can be found on its website at http://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, acquisitions, investment opportunities, 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 security holders must recognize that 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 depending on a variety of factors discussed in the Company's filings with the Securities and Exchange Commission. Factors that may affect the Company's plans or results include without limitation: (a) the ability and willingness of the Company's operators, tenants, borrowers, managers and other third parties, as applicable, to meet and/or perform the obligations under their various contractual arrangements with the Company; (b) the ability and willingness of Kindred Healthcare, Inc. (together with its subsidiaries, "Kindred"), Brookdale Living Communities, Inc. (together with its subsidiaries, "Brookdale") and Alterra Healthcare Corporation (together with its subsidiaries, "Alterra") to meet and/or perform their obligations to indemnify, defend and hold the Company harmless from and against various claims, litigation and liabilities under the Company's respective contractual arrangements with Kindred,
CONSOLIDATED BALANCE SHEETS As of March 31, 2008, December 31, 2007, September 30, 2007, June 30, 2007 and
March 31, 2007 (In thousands, except per share amounts) March December September June March 31, 31, 30, 30, 31, 2008 2007 2007 2007 2007 Assets Real estate investments: Land $567,523 $572,092 $564,462 $551,463 $359,104 Buildings and improvements 5,668,239 5,718,273 5,548,290 5,500,868 3,386,697 6,235,762 6,290,365 6,112,752 6,052,331 3,745,801 Accumulated depreciation (855,148) (816,352) (765,598) (718,342) (692,402) Net real estate property 5,380,614 5,474,013 5,347,154 5,333,989 3,053,399 Loans receivable, net 19,945 19,998 35,556 34,792 35,554 Net real estate investments 5,400,559 5,494,011 5,382,710 5,368,781 3,088,953 Cash and cash equivalents 51,347 28,334 28,573 30,138 - Escrow deposits and restricted cash 52,621 54,077 89,807 99,058 80,039 Deferred financing costs, net 21,978 22,836 22,280 23,202 17,984 Notes receivable- related parties 2,109 2,092 2,144 2,126 2,484 Other 123,174 115,278 136,106 148,148 96,707 Total assets $5,651,788 $5,716,628 $5,661,620 $5,671,453 $3,286,167 Liabilities and stockholders' equity Liabilities: Senior notes payable and other debt $3,157,111 $3,360,499 $3,267,705 $3,284,642 $2,370,418 Deferred revenue 8,700 9,065 9,665 10,219 7,607 Accrued interest 46,748 20,790 46,752 21,157 45,696 Accounts payable and other accrued liabilities 142,386 173,576 152,753 140,493 122,155 Deferred income taxes 286,153 297,590 313,987 309,215 30,394 Total liabilities 3,641,098 3,861,520 3,790,862 3,765,726 2,576,270 Minority interest 32,316 31,454 26,781 26,622 983 Commitments and contingencies Stockholders' equity: Preferred stock, 10,000 shares authorized, unissued - - - - - Common stock, $0.25 par value; 138,369, 133,665, 133,451, 133,366 and 106,314 shares issued at March 31, 2008, December 31, 2007, September 30, 2007, June 30, 2007 and March 31, 2007, respectively 34,592 33,416 33,371 33,350 26,587 Capital in excess of par value 2,015,661 1,821,294 1,817,809 1,814,637 771,004 Accumulated other comprehensive income 14,819 17,416 6,652 9,482 914 Retained earnings (deficit) (86,698) (47,846) (13,761) 21,636 (89,591) Treasury stock, 0, 14, 3, 0 and 0 shares at March 31, 2008, December 31, 2007, September 30, 2007, June 30, 2007 and March 31, 2007, respectively - (626) (94) - - Total stockholders' equity 1,978,374 1,823,654 1,843,977 1,879,105 708,914 Total liabilities and stockholders' equity $5,651,788 $5,716,628 $5,661,620 $5,671,453 $3,286,167 CONSOLIDATED STATEMENTS OF INCOME For the Three Months Ended March 31, 2008 and 2007 (In thousands, except per share amounts) For the Three Months Ended March 31, 2008 2007 Revenues: Rental income $122,707 $116,345 Resident fees and services 107,726 - Interest income from loans receivable 467 823 Interest and other income 864 249 Total revenues 231,764 117,417 Expenses: Interest 52,864 38,809 Depreciation and amortization 71,660 32,279 Property-level operating expenses 76,957 941 General, administrative and professional fees (including non-cash stock-based compensation expense of $1,949 and $2,014 for the three months ended March 31, 2008 and 2007, respectively) 8,257 7,581 Foreign currency gain (79) (5,786) Merger-related expenses 646 - Gain on extinguishment of debt (79) - Total expenses 210,226 73,824 Income before income taxes, minority interest and discontinued operations 21,538 43,593 Income tax benefit 10,038 - Income before minority interest and discontinued operations 31,576 43,593 Minority interest, net of tax 478 5 Income from continuing operations 31,098 43,588 Discontinued operations 954 1,518 Net income applicable to common shares $32,052 $45,106 Earnings per common share: Basic: Income from continuing operations applicable to common shares $0.23 $0.41 Discontinued operations 0.01 0.02 Net income applicable to common shares $0.24 $0.43 Diluted: Income from continuing operations applicable to common shares $0.22 $0.41 Discontinued operations 0.01 0.01 Net income applicable to common shares $0.23 $0.42 Weighted average shares used in computing earnings per common share: Basic 136,381 106,044 Diluted 136,673 106,775 Dividends declared per common share $0.5125 $0.475 QUARTERLY CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share amounts) 2008 First 2007 Quarters Quarter Fourth Third Second First Revenues: Rental income $122,707 $122,806 $119,362 $118,252 $116,345 Resident fees and services 107,726 106,888 103,938 71,400 - Interest income from loans receivable 467 471 477 815 823 Interest and other income 864 583 712 1,450 249 Total revenues 231,764 230,748 224,489 191,917 117,417 Expenses: Interest 52,864 54,723 53,373 54,414 38,809 Depreciation and amortization 71,660 72,018 70,189 57,467 32,279 Property-level operating expenses 76,957 75,395 71,382 50,407 941 General, administrative and professional fees (including non-cash stock-based compensation expense of $1,949, $1,891, $1,768, $1,820 and $2,014, respectively) 8,257 11,506 9,315 8,023 7,581 Foreign currency (gain) loss (79) (35) 116 (18,575) (5,786) Merger-related expenses 646 652 1,535 792 - Gain on extinguishment of debt (79) - (88) - - Total expenses 210,226 214,259 205,822 152,528 73,824 Income before income taxes, minority interest and discontinued operations 21,538 16,489 18,667 39,389 43,593 Income tax benefit 10,038 12,968 9,463 5,611 - Income before minority interest and discontinued operations 31,576 29,457 28,130 45,000 43,593 Minority interest, net of tax 478 610 675 408 5 Income from continuing operations 31,098 28,847 27,455 44,592 43,588 Discontinued operations 954 554 559 135,205 1,518 Net income 32,052 29,401 28,014 179,797 45,106 Preferred stock dividends and issuance costs - - - 5,199 - Net income applicable to common shares $32,052 $29,401 $28,014 $174,598 $45,106 Earnings per common share: Basic: Income from continuing operations applicable to common shares $0.23 $0.22 $0.21 $0.34 $0.41 Discontinued operations 0.01 0.00 0.00 1.15 0.02 Net income applicable to common shares $0.24 $0.22 $0.21 $1.49 $0.43 Diluted: Income from continuing operations applicable to common shares $0.22 $0.22 $0.21 $0.33 $0.41 Discontinued operations 0.01 0.00 0.00 1.15 0.01 Net income applicable to common shares $0.23 $0.22 $0.21 $1.48 $0.42 Shares used in computing earnings per common share: Basic 136,381 133,300 133,205 117,419 106,044 Diluted 136,673 133,685 133,503 117,825 106,775 Dividends declared per common share $0.5125 $0.475 $0.475 $0.475 $0.475 CONSOLIDATED STATEMENTS OF CASH FLOWS For the Three Months Ended March 31, 2008 and 2007 (In thousands) For the Three Months Ended March 31, 2008 2007 Cash flows from operating activities: Net income applicable to common shares $32,052 $45,106 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization (including amounts in discontinued operations) 71,836 33,433 Amortization of deferred revenue and lease intangibles, net (3,111) (604) Other amortization expenses 638 1,110 Stock-based compensation 1,949 2,014 Straight-lining of rental income (3,759) (4,269) Gain on extinguishment of debt (108) - Unrealized gain on foreign currency hedge - (5,786) Income tax benefit (10,038) - Other 801 34 Changes in operating assets and liabilities: Decrease (increase) in other assets 15,728 (16,577) Increase in accrued interest 25,958 25,748 (Decrease) increase in other liabilities (27,320) 7,931 Net cash provided by operating activities 104,626 88,140 Cash flows from investing activities: Net investment in real estate property (5,971) (30,351) Proceeds from sale of securities - 5,072 Proceeds from loans receivable 62 110 Capital expenditures (932) (36) Other (17) (18) Net cash used in investing activities (6,858) (25,223) Cash flows from financing activities: Net change in borrowings under revolving credit facilities (172,216) 151,500 Proceeds from debt 5,001 - Repayment of debt (29,204) (117,270) Payment of deferred financing costs (675) (412) Issuance of common stock 191,668 - Cash distribution to common stockholders (70,906) (92,471) Other 1,866 (5,510) Net cash used in financing activities (74,466) (64,163) Net increase (decrease) in cash and cash equivalents 23,302 (1,246) Effect of foreign currency translation on cash and cash equivalents (289) - Cash and cash equivalents at beginning of period 28,334 1,246 Cash and cash equivalents at end of period $51,347 $- QUARTERLY CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) 2008 First 2007 Quarters Quarter Fourth Third Second First Cash flows from operating activities: Net income applicable to common shares $32,052 $29,401 $28,014 $179,797 $45,106 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization (including amounts in discontinued operations) 71,836 72,544 70,716 58,352 33,433 Amortization of deferred revenue and lease intangibles, net (3,111) (3,190) (3,027) (2,998) (604) Other amortization expenses 638 475 322 549 1,110 Stock-based compensation 1,949 1,891 1,768 1,820 2,014 Straight-lining of rental income (3,759) (4,379) (4,326) (4,337) (4,269) Gain on extinguishment of debt (108) - - - - Gain on sale of assets (including amounts in discontinued operations) - - - (129,478) - Net gain on sale of marketable equity securities - - - (864) - Loss on bridge financing - - - 2,550 - Income tax benefit (10,038) (12,968) (9,463) (5,611) - Realized gain on foreign currency hedge - - - 5,786 - Unrealized gain on foreign currency hedge - - - - (5,786) Other 801 (264) 463 (11) 34 Changes in operating assets and liabilities: Decrease (increase) in other assets 15,728 29,386 25,972 6,931 (16,577) Increase (decrease) in accrued interest 25,958 (27,534) 25,125 (28,245) 25,748 (Decrease) increase in other liabilities (27,320) (33,525) 46,570 (6,542) 7,931 Net cash provided by operating activities 104,626 51,837 182,134 77,699 88,140 Cash flows from investing activities: Net investment in real estate property (5,971) (54,604) (72,835) (1,190,564) (30,351) Proceeds from real estate disposals - - - 157,400 - Proceeds from sale of securities - - - 2,701 5,072 Proceeds from loans receivable 62 (525) 643 15,575 110 Capital expenditures (932) (2,928) (2,242) (1,166) (36) Other (17) 52 (18) 358 (18) Net cash used in investing activities (6,858) (58,005) (74,452) (1,015,696) (25,223) Cash flows from financing activities: Net change in borrowings under revolving credit facilities (172,216) 46,027 (25,641) 4,700 151,500 Issuance of bridge financing - - - 1,230,000 - Repayment of bridge financing - - - (1,230,000) - Proceeds from debt 5,001 44,422 1,095 8,315 - Repayment of debt (29,204) (40,838) (12,059) (14,446) (117,270) Debt and preferred stock issuance costs - - - (4,300) - Payment of deferred financing costs (675) (2,322) (131) (4,991) (412) Issuance of common stock 191,668 1,589 (250) 1,045,979 - Cash distributions to preferred stockholders - - - (3,449) - Cash distributions to common stockholders (70,906) (63,486) (63,411) (63,371) (92,471) Other 1,866 11,165 2,099 3,116 (5,510) Net cash (used in) provided by financing activities (74,466) (3,443) (98,298) 971,553 (64,163) Net increase (decrease) in cash and cash equivalents 23,302 (9,611) 9,384 33,556 (1,246) Effect of foreign currency translation on cash and cash equivalents (289) 9,372 (10,949) (3,418) - Cash and cash equivalents at beginning of period 28,334 28,573 30,138 - 1,246 Cash and cash equivalents at end of period $51,347 $28,334 $28,573 $30,138 $- FUNDS FROM OPERATIONS, NORMALIZED FFO AND FUNDS AVAILABLE FOR DISTRIBUTION (In thousands, except per share amounts) 2008 First 2007 Quarters Quarter Fourth Third Second First Net income applicable to common shares $32,052 $29,401 $28,014 $174,598 $45,106 Adjustments: Depreciation and amortization on real estate assets 71,480 71,840 70,022 57,300 31,682 Depreciation on real estate assets related to minority interest (1,501) (1,391) (1,420) (938) - Discontinued operations: Gain on sale of real estate assets - - - (129,478) - Depreciation and amortization on real estate assets 176 527 527 730 1,136 FFO 102,207 100,377 97,143 102,212 77,924 Gain on foreign currency hedge - - - (18,528) (5,786) Preferred stock issuance costs - - - 1,750 - Bridge loan fee - - - 2,550 - Merger-related expenses 646 652 1,535 792 - Gain on sale of securities - - - (864) - Income tax benefit (10,404) (13,342) (9,897) (5,856) - Gain on extinguishment of debt (79) - (88) - - Normalized FFO 92,370 87,687 88,693 82,056 72,138 Straight-lining of rental income (3,759) (4,379) (4,326) (4,337) (4,269) Routine capital expenditures (823) (2,927) (2,243) (1,166) (36) FAD $87,788 $80,381 $82,124 $76,553 $67,833 Per diluted share: Net income applicable to common shares $0.23 $0.22 $0.21 $1.48 $0.42 Adjustments: Depreciation and amortization on real estate assets 0.52 0.54 0.53 0.49 0.31 Depreciation on real estate assets related to minority interest (0.01) (0.01) (0.01) (0.01) - Discontinued operations: Gain on sale of real estate assets - - - (1.10) - Depreciation and amortization on real estate assets 0.00 0.00 0.00 0.01 0.01 FFO 0.75 0.75 0.73 0.87 0.73 Gain on foreign currency hedge - - - (0.16) (0.05) Preferred stock issuance costs - - - 0.01 - Bridge loan fee - - - 0.02 - Merger-related expenses 0.01 0.00 0.01 0.01 - Gain on sale of securities - - - (0.01) - Income tax benefit (0.08) (0.10) (0.07) (0.05) - Gain on extinguishment of debt (0.00) - (0.00) - - Normalized FFO 0.68 0.66 0.66 0.70 0.68 Straight-lining of rental income (0.03) (0.03) (0.03) (0.04) (0.04) Routine capital expenditures (0.01) (0.02) (0.02) (0.01) (0.00) FAD $0.64 $0.60 $0.62 $0.65 $0.64
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 and FAD appropriate measures of performance of an equity REIT. 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 property, 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. FAD represents normalized FFO excluding straight-line rental adjustments and routine capital expenditures.
FFO and FAD presented herein are not necessarily comparable to FFO and FAD presented by other real estate companies due to the fact that not all real estate companies use the same definitions. Neither FFO nor FAD should be considered as an alternative to net income (determined in accordance with GAAP) as an indicator of the Company's financial performance or 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 or FAD 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 and FAD should be examined in conjunction with net income as presented elsewhere in this press release.
Normalized FFO and FAD Guidance for the Year Ending
The following table illustrates the Company's normalized FFO and FAD per diluted common share guidance for the year ending
GUIDANCE For the Year Ending December 31, 2008 Net income applicable to common shares $1.36 - $1.43 Adjustments: Depreciation and amortization on real estate assets and depreciation related to minority interest 1.70 - 1.70 FFO 3.06 - 3.13 Adjustments: Income tax benefit, gain/loss on foreign currency, and merger-related expenses, net (0.31)- (0.31) Normalized FFO 2.75 - 2.82 Straight-lining of rental income and routine capital expenditures (0.19)- (0.19) FAD $2.56 - $2.63
Net Debt to Pro Forma EBITDA
The following pro forma information considers the effect on net income, interest and depreciation of the Company's investments and other capital transactions that were completed during the trailing twelve months ended
Pro forma net income for the twelve months ended March 31, 2008 $262,868 Add back: Pro forma interest (including discontinued operations) 219,854 Pro forma depreciation and amortization (including discontinued operations) 289,031 Stock-based compensation 7,428 Gain on extinguishment of debt (167) Income tax benefit (41,230) Minority interest 1,972 Net gain on real estate disposals (129,478) Other taxes 1,626 Pro forma EBITDA $611,904 As of March 31, 2008: Debt $3,157,111 Cash (60,320) Net debt $3,096,791 Net debt to pro forma EBITDA 5.1 x
The Company considers EBITDA a profitability measure which indicates the Company's ability to service debt. The Company considers the net debt to pro forma 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 or 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.
Contacts: Debra A. Cafaro Chairman, President and CEO or Richard A. Schweinhart Executive Vice President and CFO 1-877-4VENTAS
SOURCE Ventas, Inc.
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