Ventas, Inc. (NYSE: VTR) today reported record profitability for the third quarter ended September 30, 2013, as funds from operations (FFO) increased 8% to $307.2 million, or $1.04 per diluted share, compared to the same period in 2012.
Net income attributable to common stockholders for the third quarter was $118.3 million, or $0.40 per diluted common share, an increase of 6% compared to $111.9 million, or $0.38 per diluted common share, for the third quarter of 2012.
The company’s third quarter growth was driven primarily by 2012 and 2013 investments in senior housing and healthcare assets, particularly relating to the company’s portfolio that includes Atria Senior Living, Sunrise Senior Living (NYSE: SRZ) and Kindred Healthcare (NYSE: KND), company executives said in an analyst call following the earnings announcement, also noting an improved outlook for 2014 based on its operating results.
At September 30, 2013, Ventas’ senior housing operating portfolio included 235 communities managed by Atria (140) and Sunrise (95). Of these communities, seven were acquired during the third quarter of 2013. The third quarter net operating income (NOI) for this portfolio totaled $114.7 million.
On October 1, 2013, Ventas announced it had entered into favorable agreements with Kindred Healthcare to extend the leases of 48 properties comprising transitional care hospitals and nursing centers that were scheduled to expire on April 30, 2015.
“Ventas delivered another quarter of record results by accretively investing capital, raising capital and managing our diverse, high-quality portfolio of seniors housing and healthcare assets,” said Chairman and CEO Deb A. Cafaro.
Revenues totaled approximately $712.4 million during the third quarter, an increase of 11.5% compared to the same quarter in 2013. For the nine months ended September 30, 2013, revenues amassed $2.1 billion.
Since July 1, 2013, Ventas has invested $1.3 billion, principally in private pay senior housing communities and medical office buildings (MOBs). Of that amount, approximately $360 million was invested in senior housing operating investments and approximately $120 million was invested in MOBs.
Ventas also invested just under $800 million in independent living triple-net leases with Holiday Retirement.
Ventas currently expects its 2013 normalized FFO per diluted share to range between $4.12 and $4.14, improving its previously announced 2013 guidance of between $4.06 and $4.10 per diluted share.
The company also expects full-year NOI from its Atria- and Sunrise-managed senior housing communities, including the 15 communities acquired year to date, to range between $447 million to $451 million.
“We also positioned Ventas to succeed in the future by maintaining strong liquidity through a highly successful bond issuance, by acquiring over a billion dollars in higher growth private pay assets, and by completing favorable lease extensions with our valued tenant Kindred Healthcare,” said Cafaro. “We are pleased to increase our full-year outlook, reflecting the strength of our business model and execution.”
Written by Jason Oliva