Ventas, Inc. (NYSE: VTR) (“Ventas”) announced last week that normalized Funds From Operations (“FFO”) for the year ended December 31, 2009 increased 7.8 percent to $409.0 million, from $379.5 million for the comparable 2008 period. The normalized FFO excludes net expense from merger-related expenses and deal costs, including fees and expenses incurred to obtain the Ventas’s favorable $101.6 million jury verdict against HCP, Inc. (“HCP”), and loss on extinguishment of debt, offset by income tax benefit. Ventas’s net income fell to $54.1 million for Q4 2009 from $57.3 million in Q4 2008 and $266 million for FY 2009 versus $222 million in 2008. Ventas saw average occupancy for its 78 stabilized communities increase to 88.8 percent in the fourth quarter, versus 88.1 percent in the third quarter. NOI for these 78 communities was $32.7 million in the fourth quarter of 2009, compared to $33.0 million in the third quarter of 2009.
“2009 was a remarkable year for Ventas. Our cash flows from operations grew over ten percent because our high-quality, diversified healthcare and seniors housing assets demonstrated strength and reliability despite a challenging economic environment,” Ventas Chairman, President and Chief Executive Officer Debra A. Cafaro said. “And we are very pleased to announce that we culminated the decade as the best performing publicly-traded REIT, with a compound annual total shareholder return exceeding 35 percent.
Ventas’s operating portfolio contains 79 seniors housing communities in North America that are managed by Sunrise Senior Living, Inc. (NYSE: SRZ) (“Sunrise”). NOI for these 79 communities was $33.3 million for the quarter ended December 31, 2009, compared to $32.2 million for the comparable 2008 period. Total 2009 NOI for the portfolio was $131.0 million, compared to $138.8 for the comparable 2008 period. These facilities showed an average daily rate that rose 3.6 percent, while expenses increased 0.7 percent. Average occupancy decreased 190 basis points year-over-year, from 90.7 percent to 88.8 percent but same-store occupancy at communities managed by Sunrise rose to 88.8% in Q4, compared with 88.1% in the third quarter.
“Our portfolio of mansion-style, need-driven seniors housing managed by Sunrise continued to gain traction in the fourth quarter, with occupancy increasing to 88.8 percent in the 78 stabilized communities,” Ventas Executive Vice President and Chief Investment Officer Raymond J. Lewis said. “We expect 2010 NOI from our portfolio to grow due to the excellent locations and desirable appearance of our communities, an improving economy and Sunrise management’s renewed focus on operations.”
For the full earnings release, visit: http://www.ventasreit.com/news/2010/pr20100218.pdf
For the conference call transcript, visit: http://seekingalpha.com/article/189386-ventas-q4-2009-earnings-call-transcript