Ventas, Inc. · NYSE:VTR
Ventas — Banc of America High Yield Conference 2002
29 slides from Ventas's conference presentation, May 24, 2002
Slide 1: Ventas, Inc. – Banc of America High Yield Conference
Ventas, Inc. Banc of America High Yield Conference May 2002 A Ventas
Slide 2: Forward Looking Statements
Forward Looking Statements ‘his presertatan contains "orwart ooking tetements" whinthe mearing of te teozral Secutles laws. These {orn iooting setemerts include, amore ethers, statements of expectations, bees, ture plans end strates, ticipated resuts ‘rom cpatctions and deveicpmanis ara cther matter
Slide 3: Ventas Overview
Ventas Overview Presented by: Debra A. Cafaro President & CEO
Slide 4: Senior Notes Summary
Senior Notes Summary Issuer: Ventas Realty Limited Partnership Ventas Capital Corporation Guarantor: Ventas, Inc. Issue: $400 million Senior Notes Pricing & Maturity: $175 million - 2009 - 8.75% n= 2012 = 9.00% Ratings: Optional Redemption: NC/Life Dated: April 17, 2002 AVentas »
Slide 5: Ventas Overview
Ventas Overview Il Second largest Healthcare REIT — Fiscal 2001 recurring EBITDA = $174 8 milion — 1t Quarter 2002 EBITDA = $43.9 milion [ll Large, diversified portfolio of properties — 44 hospitals with 4,083 neds in 20 states — 215 SNF with 27,827 beds in 32 states — Bpersonal care facities with 1
Slide 6: Summary Capitalization
Summary Capitalization As of March 31,2002 Pro Formal {s000s) Actusl Corsordcted _ Resticled Group™ Cash and Cash Equivalents 7281 Fiza 51281 Kindred Cammen Stock 43,751 43751 43751 Bank Credit Facility 607 106 S 2 Revolving Credit Facilty = 227,787 227787 MBS 224,498 224,498 = Senior Notes 5 400,00
Slide 7: Summary Capitalization (continued)
Summary Capitalization (continued) [il Debt Balance: $830 Million AVentas «
Slide 8: Staggered Debt Maturities
Staggered Debt Maturities Ventas Debt Maturity Schedule” = cay 20a, om 2 ans wn i enon faa} Tien xo wc vem 0 « ‘aoo2 2003 2004 200 2005 ©2007 | 2008 ©3009 201001122013 + Bechuding de minimis annual amortization A Funded Y ‘Undearmn é jt Bae Y sonny Hil Improving Credit Statistics Restricted Group =
Slide 9: Historical Financial Data
Historical Financial Data 1° Quarter (8000s) 2000 2001 2002 ‘Operating Data: Net Rental income $184513 $185,162 $46,397 G&A Expense 20,781 14,902 2876 Interest Expense 95319 87.032 19,860 Pro Forina interest Expense" 19,219 Other Data: EBITDA 173.213 174.254 43,863, Normatized FFO. 76479 70,077__—22
Slide 10: Funds From Operations Per Share
Funds From Operations Per Share ¥* Quarter Guidance 2000 2001 2002 2002 FFO per Share $112 sia! g.82_gt.98- $1.80 fisss 7% Dividend Yield 21% S113 2001 Projected 2002 Notes: 41 Excluding gain en cale of Kindad stock, $1.35 including gain AVentas «
Slide 11: Ventas Rental Revenue Mix
Ventas Rental Revenue Mix Twelve Months Ended December 31, 2001 By Tenant 18 tr eon Total: $185.2 million Total: $185.2 million Note: 1. 4.5% of revenues comprised of SNF revenue By State oss, aa 508 SPE oa aan Total: 36 States A Ventas «
Slide 12: Diversified Portfolio of Properties
Diversified Portfolio of Properties ll Ventas owns properties in 36 states, reducing its exposure to single state regulatory and reimbursement changes ee WA e © Nursing Faciities (Total: 215) y a ]@) 1 Hosptats rota 44) J Personal Care Facies Total 8) Total: 267 Facilities A Ventas «
Slide 13: Positive Supply/Demand Fundamentals
Positive Supply/Demand Fundamentals Constrained Supply: [Ell The majority of revenues generated in CON States i) SNFs Hos pitals Total CON 725 ‘AT 86.0 Non-CON 25 453 0 TOTAL 700.0 7100.0 7100.0 Increasing Demand: 85+ population is fastest growing segment (25% utilization) Baby Boomers 65+ in 2010 $
Slide 14: Positive Supply/Demand Fundamentals
Positive Supply/Demand Fundamentals Certified Nursing Home Beds in US per Person over 85 Bed:/Parson ovar 85 Souros 0.50 ow ows oa kaa oa oae ow | 1993 199419951996. «19971998 1999-2000 (EMS, AHCA, US Bureau ofthe Concus, Wal Srost ox nataz A Ventas »
Slide 15: Kindred Rent
Kindred Rent Hl Rent escalator increases cash flow $6-7 million per year fl Ventas has one way, one time right to increase rents to “market” - 2006 3.5% Annual Escalators = 190 g 160 » aoe Ss ” a ee SS SF KM MS A Ventas «
Slide 16: Portfolio Rent Coverage
Portfolio Rent Coverage’ Gl 2.14x EBITDARM/Rent coverage [ll 1.72x EBITDAR/Rent coverage Coverage by Master Lease EBIIDARM/ Actual Rent EBITDAR®/ Rent FairValue’ Status c ®) in millions Master Lease 1 228 1.82 149.2 Master Lease 2 unencumbered 2.18 473 403.1 Master Lease 3 unencumbered 2.13 1.69 799
Slide 17: Ventas Accomplishments
Ventas Accomplishments Bl Consistent financial performance Bll Reduced Leverage by $142 million Long-Term Debt Sia mallions 1,000.00 oe 9060.00, <4 $900.00 oD = $248 $950.00 ees) 800.00 9750.00 121329 128100 12/8101 an 2002 Bf Highest Internal Growth Rate in Sector A Ventas »
Slide 18: Ventas Accomplishments (continued)
Ventas Accomplishments (continued) Hl Recapitalized Balance Sheet - WACD (Weighted Average Cost of Debt) < 8.5% Nov- 01 May-02 Ell Solidified Independent Board of Directors [ll Expanded Management Team [i $900+ million Equity Market Cap AVentas »
Slide 19: Ventas Stock Price Performance
Ventas Stock Price Performance 2000 2001 [ll 80% Total Shareholder Return fl]. 123% Total Shareholder Return Til Top 5 REITs Hl Top 5 REITs [ll Best Performing Healthcare REIT [J Top 4% NYSE Companies 2002 Bl 2002 YTD - 14% 2002 YTD 2-Year Indexed Price Performance sia 912 Ape aneee 8 B 8 osneeo —tm
Slide 20: Kindred Healthcare Overview
Kindred Healthcare Overview
Slide 21: Overview
Overview Kindred is the fourth largest provider ($3.1 billion revenues) of long-term healthcare services in the US — Health Services Division (58% of revenues) provides long-term care services by operating nursing centers and rehabilitation therapy business — Hospital Division provides (42% of reven
Slide 22: Overview (continued)
Overview (continued) Hl Kindred reported fiscal 2001 results of: — Revenue’ $3.1 bilan (versus $2. bilion in 2000) — EBITDAR: — $445.5 milion (versus $391.0 milion in 2000) - 14.6% marain = EBITDA: $184 8 milion (with the pre-reorgantzation first quarter adjusted to give etfectto the restructuring)
Slide 23: Overview (continued)
Overview (continued) [ll Kindred reported 1st Quarter 2002 results of: — Reventie $811 milion (versus $752 milion in 2001) — EBITDAR: $118 million (versus $104 milion in 2021) = EBITDA $60 milion (versus $38 million in 2001 adjusted to give effect to the restructuring) — 2002 EBITDAR of $460-470 rea
Slide 24: Reimbursement Update
Reimbursement Update SNF Reimbursement Update: 1998 SNF PPS implementation 2000 BBRA 2001 BIPA FY 2003 - BBRA + BIPA “sunset” BBRA extended through FY 2004 Congress debating BIPA Givebacks LTAG Reimbursement Update: Ell Implementation of a budget-neutral PPS system for LTAC hospitals - October 2002
Slide 25: Cushion Analysis
Cushion Analysis 500.0 400.0 Cushion $185.5 300.0 200.0 100.0 As Projected = Kindred Estimated 2002 EBITDAR = Kindred Estimated 2002 Fixed Charges A Ventas »
Slide 26: Ventas Growth & Diversification Strategy
Ventas Growth & Diversification Strategy
Slide 27: Growth and Diversification Strategy
Growth and Diversification Strategy Remain focused on healthcare and senior housing assets Tenant diversification by acquiring assets operated by high quality operators Structure and finance acquisitions to further the Company’s stated financial goals of — reduced leverage = imited secured financing
Slide 28: Financial Goals
Financial Goals Ventas financial goals are to: Ell Manage EBITDA/Fixed Charge Coverage to 2.5x to 3.0x fl Manage Debt/EBITDA to 3.5x to 4.0x [i Monetize 1.1 million shares of Kindred equity ($40-70mm value) to reduce debt levels and strengthen the balance sheet [ll Become an investment grade rated h
Slide 29: Ventas, Inc.
Ventas, Inc. Banc of America High Yield Conference May 2002 A Ventas