Ventas, Inc. · NYSE:VTR
Ventas — Investor Presentation (February 2009)
38 slides from Ventas's investor presentation, Feb 2, 2009
Slide 1: Ventas, Inc. February 2009
Exhibit 99.1 Ventas, Inc. February 2009
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements include, among others, statements of ex
Slide 3: Ventas Overview
Ventas Overview A Leading Healthcare REIT (NYSE: VTR) $7 billion Enterprise Value $4 billion Equity Value Investment Grade Balance Sheet and Strong Liquidity -- No Net Debt Maturities Until 2010 Powerful Demand Drivers: Healthcare and Senior Demographic 500+ Diversified Healthcare and Seniors Housin
Slide 4: Investment Rationale
Investment Rationale Commitment to Investment Grade Rating BBB- (S&P and Fitch) Positive Outlook (Fitch) – 8/08 Investment Grade Balance Sheet and Strong Liquidity Low Leverage and Good Liquidity Position Ventas Well for Protracted Downturn or Investment Opportunities Strategically Diversified Portf
Slide 5: Recent Initiatives to Strengthen Ventas
Recent Initiatives to Strengthen Ventas Proactive Approach to Enhance Liquidity Raise Equity/Repay Debt/Buy Bonds/Reduce Fixed Charges/Hold Cash on Hand Q408: $126mm Freddie Mac refinancing 2008: Repaid $143mm mortgage debt 2008: Bought $176mm ’09/’10 Bonds at a Discount $1.5B of equity raised since
Slide 6: Recent Initiatives to Strengthen Ventas
Recent Initiatives to Strengthen Ventas Proactive Approach to Enhance Liquidity Sell Assets $400mm ’07/’08: $300mm in asset sales January 2009: $59mm asset sale 1Q09: $35mm pending asset sale Diversification through Acquisitions $5+ billion of acquisitions since 1/1/04 $200mm of MOB acquisitions in
Slide 7: Focus on Liquidity & Balance Sheet Strength
Focus on Liquidity & Balance Sheet Strength 1 Ventas Strong Liquidity Position – No Net Debt Maturities Until 2010 $500 $400 $300 $200 $100 $0 Net 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 2012 2013 2014 2015 2016 2017 Thereafter Revolver Balance Credit Facility Mortgage Debt
Slide 8: Focus on Liquidity and Balance Sheet
Focus on Liquidity and Balance Sheet 1 Ventas Remains Well Positioned With Limited Forward Commitments (1) Source: Green Street Advisors research dated December 15, 2008 8
Slide 9: Focus on Liquidity & Balance Sheet Strength
Focus on Liquidity & Balance Sheet Strength ($ in millions) $850 Million $1,000 "Accordion Feature" $150 Unsecured Revolver with Ample Undrawn Capacity $800 ($ in millions) at 12/4/08 $600 Remaining Capacity $730 $400 $200 Net Revolver Balance $120 $0 Balances as of 12/4/2008 $120mm Net Revolver Bal
Slide 10: Focus on Liquidity and Balance Sheet
Focus on Liquidity and Balance Sheet Excellent Credit Statistics Debt Covenant Ratios: '02 Bonds Required 2008(E) Incurrence of Debt Less than 60% 41% Incurrence of Secured Debt Less than 40% 10% Total Unencumbered Asset Greater than 150% 249% Consolidated Income Avail. for Debt Service to Debt Serv
Slide 11: Focus on Liquidity and Balance Sheet
Focus on Liquidity and Balance Sheet Secured Debt Leverage Ratio Unsecured Leverage Ratio 40% 70% 35% 60% Maximum 30% Maximum 50% 25% 40% 40% 40% 36% 19% 19% 19% 34% 34% 20% 18% 17% 30% 15% 20% 10% 10% 5% Covenants Show 0% Financial Flexibility 0% 4Q07 1Q08 2Q08 3Q08 4Q08(E) and Improving 4Q07 1Q08
Slide 12: Dimensions of Diversification Lead to Enhanced Revenue Reliability
4 Dimensions of Diversification Lead to Enhanced Revenue Reliability NNN / Operating / Debt Asset Type / Revenue Source Geographic Tenant / Operator / Borrower 12
Slide 13: Portfolio Composition: Steady Contractual Growth With Downside Protection
Portfolio Composition: Steady Contractual Growth With Downside Protection Long Term NNN Leases Provide Steady Cash 1 Flow Growth and Tenant Credit Support Operating Assets 23% Long Term Corporate Credit Anchors Ventas Cash Flows NNN Portfolio 77% Average Remaining NNN Lease Term of 7 Years Provides
Slide 14: Excellent Tenant and Asset Class Portfolio Coverage
Excellent Tenant and Asset Class Portfolio Coverage Ventas Properties Have Strong Cash Flow:Rent Coverage 4.9x 5.0 4.0 3.0 2.6x 2.0x 1.8x 2.0 1.3x 1.0 0.0 Hospitals SNFs Senoir Housing Other Total 1,2 EBITDARM:Rent Coverage of Triple Net Leased Assets (1) Trailing Twelve Months EBITDARM to Cash Rent
Slide 15: Portfolio Composition: Operating Portfolio Provides Higher Growth Potential
Portfolio Composition: Operating Portfolio Provides Higher Growth Potential Granularity and Shorter Tenor Leases From ~7,000 Individual Seniors and 200+ MOB Tenants 23% 77% Senior Housing + MOB Operating Assets Other VTR NOI 15
Slide 16: Geographically Diversified Portfolio
Geographically Diversified Portfolio 516 Facilities Located in 43 States and 2 Provinces Balances Single State Regulatory, Reimbursement and Economic Changes Seniors Housing 253 Skilled Nursing Facilities 192 Hospitals 41 Medical Office and Other Facilities30 Total Owned Facilities 516 16
Slide 17: Diversification by Asset Type and Tenant/Payor
Diversification by Asset Type and Tenant/Payor 1 1 Asset Class Mix by NOI Tenant/Payor Mix by NOI Loan Loan CSL MOBs Investments Emeritus Investments 2% 2% 3% 2% Formation 3% Other 1% SNF 3% Seniors 29% Housing SeniorCare Operating 8% Assets 19% MOBs Brookdale 3% 20% Seniors Housing 51% Hospitals 15
Slide 18: Tenant/Operators Have Experience and Scale
Tenant/Operators Have Experience and Scale Excellent Operators/Tenants Kindred (NYSE: KND) Quality SNF, LTAC and Rehab Largest post-acute provider Brookdale (NYSE: BKD) 4Q08 occupancy flat vs. 3Q08 Diversified Assets Sunrise, Inc. (NYSE: SRZ) High quality, high acuity, mission-driven leader Public C
Slide 19: Sunrise Portfolio – Best-in-Class
Sunrise Portfolio – Best-in-Class 79 new, high-quality private pay Assisted & Independent Living communities Managed by Sunrise Senior Living, Inc. (NYSE: SRZ) High barrier-to-entry locations – major metro markets Highly productive: >$5,000 per month Q3 NOI of $35.2mm 2008(E) NOI of $137-140mm Q3 Re
Slide 20: High Quality Assets – Sunrise
High Quality Assets – Sunrise Assisted Living Facility Sunrise of Exton Exton, PA Assisted Living Facility (lease- up) Sunrise of Staten Island Staten Island, NY Assisted Living Facility Sunrise of Lincoln Park Chicago, IL Assisted Living Facility Sunrise of Aurora Aurora, ON 20
Slide 21: Strong Kindred Portfolio – Reliable Cash Flow
Strong Kindred Portfolio – Reliable Cash Flow 1 Strong Master Leases Create Value 2008 Pro Forma Kindred Corporate Coverage and Opportunities Kindred corporate credit ($500mm equity value) stands $800 behind pooled, multi-facility Master Leases - Largest provider of LTC in U.S. - Operates 82 hospita
Slide 22: Positive Medicare/Medicaid Outlook
Positive Medicare/Medicaid Outlook Reimbursement Outlook Medicare for SNFs FY2009: 10/1/08 – 9/30/09 3.4% cost of living increase Proposed reduction for “administrative” revisions delayed indefinitely FY2010: MedPAC proposes flat rates Medicaid for SNFs Medicaid rates up YoY Some states are beginnin
Slide 23: MOB Initiative Continues to Accelerate
MOB Initiative Continues to Accelerate Relationships With Regional Partners Expanding – 1.5mm sf Owned/Under Development $200 million of MOB Acquisitions in 2007/08 On-Campus August ’08: $40mm Acquisition at 7+% yield 3 Pre-leased MOB Developments Stabilized yields of 7.5%-8.5% $66mm / $51mm committ
Slide 24: MOBs Are an Attractive Asset Class
MOBs Are an Attractive Asset Class Why Ventas Likes MOBs: Large, highly-fragmented market: $150 - $250 billion Long-term, stable cash flows/high retention rates Capital needs of hospitals Monetization of MOB real estate Medicare regulations favor independent ownership 2011 – Baby boom demographic Me
Slide 25: Ventas Builds Equity Value
Ventas Builds Equity Value Ventas Outperformance $300 Ventas 14.2% Compound 5-Year Annual Total Return NAREIT Healthcare Versus RMS 0.7% REIT Index $250 2008 Total Shareholder Return of (21.9%) NYSE Comp. Index Versus RMS (38.0%) $200 Composite REIT Index Russell 1000 Index $150 $100 $50 $0 12/31/20
Slide 26: Strong and Reliable Financial Performance
Strong and Reliable Financial Performance Six Consecutive Years of Double Digit Superior Dividend Growth and Low Payout 1 FFO Per Share Growth and Positive Ratio Increases Reliability 2008(E) $3.00 $2.50 $2.69 $2.71-$2.74 $2.44 $2.05 $2.50 $1.90 $2.00 $2.09 $2.00 $1.58 $1.80 $1.44 $1.50 $1.54 $1.30
Slide 27: Strong and Experienced Management Team
Strong and Experienced Management Team Name Title Years at Company Chairman of the Board, Debra A. Cafaro 9 President and Chief Executive Officer Executive Vice President and Raymond J. Lewis 6 Chief Investment Officer Executive Vice President, T. Richard Riney Chief Administrative Officer, 10 Gener
Slide 28: Independent, Experienced Board of Directors
Independent, Experienced Board of Directors: Committed to Shareholder Value Name Director Since Background Chairman of the Board, CEO and President of Ventas Debra A. Cafaro 1999 Former President, director of Ambassador Apartments (NYSE: AAH) First Vice-Chair of NAREIT Former Vice Chairman of the Bo
Slide 29: Current Investment Focus
Current Investment Focus Buying Back ’09 and ’10 Bonds at a Discount Limited, Selective Investments with Existing Tenant/Operators – “Win Win” Medical Office Buildings and Strategic Platforms Debt Origination/Purchase Patient Approach Higher Yielding Opportunistic Transactions Hospitals, Specialty C
Slide 30: Healthcare Real Estate Market Opportunities
Healthcare Real Estate Market Opportunities Healthcare is 16% of GDP and is Expected to reach 20% by 2017 Healthcare as Healthcare expected to reach 20% Percentage of GDP of GDP by 2017 Healthcare is 16% of GDP in 2007 US GDP: $13T (2007) Est US GDP: . $22T (2017) Healthcare Real Estate is a $700B M
Slide 31: Healthcare Real Estate Market Opportunities
Healthcare Real Estate Market Opportunities $700B Healthcare Real Estate Market 20% 15% 12% $40B External Growth Opportunity 10% to Match REIT Industry Average Ownership Levels 6% 5% 0% Healthcare REIT REIT Ownership Ownership REITs Own Only 6% of the Healthcare Real Estate Market – Far Below the Ov
Slide 32: Ventas Accomplishments and Highlights
Ventas Accomplishments and Highlights Commitment to Investment Grade Rating Excellent Liquidity and Investment Grade Balance Sheet/Safety and Financial Strength Multi-Year Preparation for Credit Crisis $850mm Revolver with Undrawn Capacity No Net Debt Maturities Until 2010 Investment Grade Balance S
Slide 33: Appendix A: Q3 2008 Supplemental
Appendix A: 1 Q3 2008 Supplemental (1) For further information, please see http://www.ventasreit.com/investors/supplemental.asp 33
Slide 34: Appendix B: SEC Reg. G Compliance
Appendix B: SEC Reg. G Compliance (1) For further information, please see http://www.ventasreit.com/investors/supplemental.asp 34
Slide 35: Non-GAAP Financial Measures
Non-GAAP Financial Measures Per Share Yearly Funds from Operations (FFO) and Funds Available for Distribution (FAD) UPDATED GUIDANCE 2008 Net income applicable to common shares per diluted common share $1.68 - $1.71 Depreciation and amortization on real estate assets less depreciation related to min
Slide 36: Non-GAAP Financial Measures
Non-GAAP Financial Measures 2008 Quarters 2007 Quarters Third Second First Fourth Third Quarterly Funds from Operations (FFO) Net income applicable to common shares $ 64,695 $ 71,066 $ 32,052 $ 29,401 $ 28,014 and Funds Available for Distribution (FAD) Adjustments: ($ in ‘000s, except per share amou
Slide 37: Non-GAAP Financial Measures
Non-GAAP Financial Measures For the Twelve EBITDA1 ($ in ’000s) Months Ended Fixed Charge Coverage ($ in ‘000s) 9/30/2008 For the Twelve Months Ended Pro Forma Net Income $205,728 09/30/08 Add Back: Pro Forma Interest (including discontinued operations) 216,001 Pro forma EBITDA $ 638,321 Pro Forma D
Slide 38: Ventas, Inc. February 2009
AVENTAS” Ventas, Inc. February 2009