Ventas Inc. (VTR), a leading healthcare real estate investment trust (REIT), reported fourth quarter 2009 funds from operations (FFO) of $104.0 million or $0.66 per share compared to $97.6 million or $0.68 per share in the year-earlier quarter.
Funds from operations, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and other non-cash expenses to net income. For full year 2009, Ventas reported FFO of $393.4 million or $2.58 per share, compared to $412.4 million or $2.95 per share in the previous year. The year-over-year decrease in FFO was primarily due to the reversal of a $23.3 million previously recorded contingent liability.
Ventas currently has an operating portfolio of 79 senior housing communities in North America that are managed by Sunrise Senior Living Inc. (SRZ). In about 19 of these, Ventas has 100% ownership stake, while in the remaining 60 communities Ventas has a partnership share of 75% to 85% with the balance being owned by Sunrise.
During the quarter, net operating income (NOI) from all 79 properties was $33.3 million compared to $32.2 million in the year-ago period. For full year 2009, total portfolio NOI was $131.0 million compared to $138.8 in 2008. Average occupancy in the same-store portfolio increased sequentially to 88.8% during the quarter from 88.1% in the third quarter.
Ventas purchased and opened six medical office buildings (MOBs) during 2009 worth $77.7 million, which increased its MOB portfolio to over 1.7 million square feet. The company also made additional equity and debt investments in healthcare or senior housing assets totaling $21.5 million. For full year 2009, Ventas sold 14 healthcare and seniors housing assets for $153.0 million, realizing a gain of $67.3 million.
During the year, Ventas raised $172.6 million in first mortgage financing with a weighted average interest rate of 6.3%. The company also raised $312.2 million through the issuance and sale of 13.1 million common shares. Ventas reduced its mortgage debt by $148.7 million during 2009. Cash flow from operations at year-end 2009 totaled $422.1 million, an increase of 11.1% over 2008.
During the quarter, Ventas increased its revolving credit facility to $1 billion. The first portion of the credit facility, which contains $765 million of borrowing capacity, is scheduled to mature in April 2012, while the balance would mature in April 2010.
At year-end 2009, Ventas had $8.5 million outstanding under its revolving credit facilities, $988.4 million available under its other credit facilities, and $107.4 million of cash and short-term cash investments. The debt to total capitalization was approximately 28% and net debt to pro forma earnings before interest, tax, depreciation and amortization (EBITDA) was 4.1x.
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