Ventas Q2 2010 FFO Up 6.4% to $119 Million; Looks For More Opportunities in MOBs, Senior Living

Ventas, Inc. (NYSE: VTR) announced results for Q2 2010 that show an increase of 6.4% in its normalized Funds From Operations (“FFO”).  The companies net income for the quarter ended June 30, 2010 was $58.1 million, or $0.37 per diluted common share, after discontinued operations of $5.5 million, compared with net income attributable to common stockholders for the quarter ended June 30, 2009 of $88.4 million, or $0.57 per diluted common share, after discontinued operations of $42.4 million.

The normalized FFO excludes the net expense (totaling $5.6 million, or $0.04 per diluted share) from merger-related expenses and deal costs and loss on extinguishment of debt, including certain fees and expenses incurred to acquire Lillibridge and to obtain the Company’s favorable $101.6 million jury verdict against HCP, Inc. (“HCP”), offset by a $5.0 million gain on sale and income tax benefit.


Ventas’s holding include a senior living operating portfolio of 79 communities in North America that are managed by Sunrise Senior Living.  The Net Operating Income for these communities was $38.8 million for the quarter ended June 30, 2010, compared to $33.9 million for the comparable 2009 period. This 14.6 percent improvement in NOI was due to a 3.5 percent increase in average daily rate, a 190 basis point increase in occupancy and a $3 million cash payment from Sunrise for expense overages. Favorable movements in the Canadian dollar exchange rate had a positive impact on NOI of $1.0 million for the second quarter of 2010 compared to the second quarter of 2009.  The average daily rate during the second quarter 2010 at its stabilized communities was $178 per day and a stable occupancy at 88.4%.

“Ventas delivered another quarter of strong and growing cash flows, from contractual escalations in our triple-net lease business and improving fundamentals in our portfolio of seniors housing assets,” Ventas Chairman, President and Chief Executive Officer Debra A. Cafaro said. “We continue to execute our successful growth and diversification strategy with the recent acquisition of Lillibridge Healthcare Services expanding our owned and managed medical office building portfolio to 8.6 million square feet, making us the national leader in medical office buildings.”

See the full earnings release for Q2 2010 or the 8-K or for the earnings conference call transcript.