Ventas, Inc. (NYSE: VTR) ("Ventas" or the "Company") said today that normalized Funds From Operations ("FFO") for the year ended December 31, 2011 increased approximately 71.1 percent to $777.0 million, from $454.0 million for the comparable 2010 period. Normalized FFO per diluted common share was $3.37 for the year ended December 31, 2011, an increase of 17.0 percent from $2.88 for the comparable 2010 period. Weighted average diluted shares outstanding for the full year rose by 46.4 percent to 230.8 million, compared to 157.7 million in 2010.
“Ventas delivered excellent results in 2011, as our portfolio performed well while we successfully integrated over $11 billion of accretive acquisitions”
The substantial growth in 2011 normalized FFO per diluted common share from 2010 is due to the Company's acquisitions of Nationwide Health Properties, Inc. ("NHP") and 117 properties managed by Atria Senior Living, Inc. ("Atria"), the full year benefit of 2010 acquisitions, including the medical office building ("MOB") portfolio acquired with the Company's Lillibridge Healthcare Services subsidiary ("Lillibridge"), increased net operating income from the Company's seniors housing communities managed by Sunrise Senior Living, Inc. (NYSE: SRZ) ("Sunrise"), and rental increases from the Company's triple-net lease portfolio, partially offset by increases in general and administrative expenses (including stock-based compensation), higher interest expense and higher weighted average diluted shares outstanding.
"Ventas delivered excellent results in 2011, as our portfolio performed well while we successfully integrated over $11 billion of accretive acquisitions," Ventas Chairman and CEO Debra A. Cafaro said. "We have a highly diversified portfolio approaching 1,400 properties, with nearly 80 percent of our annualized revenues derived from private pay sources, an outstanding balance sheet and an attractive cost of capital. We have positioned Ventas to be a leader in the $1 trillion healthcare real estate market as it consolidates," she said. "Our proven and dedicated management team will use these powerful attributes to deliver consistent superior total returns to our shareholders."
Normalized FFO for the year ended December 31, 2011 excludes the net benefit (totaling $47.9 million, or $0.21 per diluted share) from net litigation proceeds and income tax benefit, partially offset by merger-related expenses and deal costs (including integration costs), mark-to-market adjustment for derivatives, loss on extinguishment of debt and amortization of other intangibles. Normalized FFO for the year ended December 31, 2010 excluded the net expense (totaling $32.5 million, or $0.21 per diluted share) from merger-related expenses and deal costs (including integration costs), loss on extinguishment of debt, amortization of other intangibles and non-cash income tax expense.
Net income attributable to common stockholders for the year ended December 31, 2011 was $364.5 million, or $1.58 per diluted common share, including discontinued operations of $1.7 million, compared with net income attributable to common stockholders for the year ended December 31, 2010 of $246.2 million, or $1.56 per diluted common share, including discontinued operations of $30.8 million. This increase in net income attributable to common stockholders is primarily the result of the NHP acquisition, a full year benefit of the Company's 2010 acquisitions, including its Lillibridge MOBs, and a net benefit of $47.9 million comprised principally of net litigation proceeds and income tax benefit, partially offset by merger-related expenses and deal costs (including integration costs), mark-to-market adjustment for derivatives, loss on extinguishment of debt and amortization of other intangibles.
FFO, as defined by the National Association of Real Estate Investment Trusts ("NAREIT"), for the year ended December 31, 2011 increased 95.7 percent to $824.9 million, from $421.5 million in the comparable 2010 period. NAREIT FFO per diluted common share for the year ended December 31, 2011 increased 33.7 percent to $3.57, from $2.67 in 2010. This increase is primarily due to the factors described above for net income.
FOURTH QUARTER 2011
Fourth quarter 2011 normalized FFO increased 114 percent to $259.3 million, from $121.4 million for the comparable 2010 period. Normalized FFO per diluted common share was $0.89 for the quarter ended December 31, 2011, an increase of 15.6 percent from $0.77 for the comparable 2010 period. Fourth quarter 2011 normalized FFO per diluted common share versus the comparable period in 2010 benefited from the Company's acquisitions of NHP and the Atria-managed communities and rental increases from the Company's triple-net lease portfolio, partially offset by increases in general and administrative expenses (including stock-based compensation), higher interest expense and a greater number of weighted average diluted shares outstanding, which rose by 83.7 percent to 290.6 million, compared to 158.2 million in 2010.
Normalized FFO for the quarter ended December 31, 2011 excludes the net benefit (totaling $99.7 million, or $0.34 per diluted share) from net litigation proceeds and income tax benefit, partially offset by merger-related expenses and deal costs (including integration costs), loss on extinguishment of debt, mark-to-market adjustment for derivatives and amortization of other intangibles.
Net income attributable to common stockholders for the quarter ended December 31, 2011 was $192.9 million, or $0.66 per diluted common share, compared with net income attributable to common stockholders for the quarter ended December 31, 2010 of $77.6 million, or $0.49 per diluted common share. This increase in net income attributable to common stockholders is primarily the result of the NHP acquisition and a net benefit of $99.7 million from net litigation proceeds and income tax benefit, partially offset by merger-related expenses and deal costs (including integration costs), loss on extinguishment of debt, mark-to-market adjustment for derivatives and amortization of other intangibles.
NAREIT FFO for the quarter ended December 31, 2011 increased 232 percent to $359.1 million, from $108.3 million in the comparable 2010 period. Fourth quarter 2011 NAREIT FFO per diluted common share increased 82.4 percent to $1.24, from $0.68 in the fourth quarter of 2010. This increase is primarily due to the factors described above for net income.
FIRST QUARTER DIVIDEND INCREASES 8 PERCENT TO $0.62 PER COMMON SHARE
Ventas also said today that its Board of Directors increased the Company's first quarter 2012 dividend by eight percent to $0.62 per share. The dividend is payable in cash on March 29, 2012 to stockholders of record on March 9, 2012.
"Dividends and dividend growth are important components of the total return proposition we offer to our shareholders. Because of our significant growth and reliable cash flows, we are pleased to increase our dividend by eight percent, which enables us to share our success with shareholders and still maintain an attractive, strong payout ratio," Cafaro said.
PRIVATE PAY SENIORS HOUSING OPERATING PORTFOLIO
Fourth Quarter 2011 Total Portfolio NOI Grows 2.4 Percent Versus Third Quarter to $89.5 Million and Fourth Quarter Average Occupancy Trending Positively
At December 31, 2011, the Company's seniors housing operating portfolio included 79 private pay seniors housing communities managed by Sunrise and 118 private pay seniors housing communities managed by Atria.
Net Operating Income after management fees ("NOI") for all communities increased 2.4 percent to $89.5 million in the fourth quarter of 2011 compared to the third quarter of 2011, the Company's first full quarter of ownership of the Atria-managed portfolio. Stabilized unit occupancy for the fourth quarter of 2011 increased 100 basis points.
NOI for the Sunrise-managed communities increased to $156.7 million for the year ended December 31, 2011, compared to $154.3 million for the comparable 2010 period. The comparable 2010 period included the benefit to NOI of a $5 million cash payment from Sunrise for expense overages. Excluding this 2010 payment, 2011 NOI for the Sunrise-managed communities increased 5.0 percent compared to 2010. Average daily resident occupancy for the year increased 120 basis points to 90.3 percent versus 2010, and the average daily rate increased year over year by 3.6 percent to $183.
2011 RECAP