Ventas, Inc. · NYSE:VTR
Ventas — Q2 2023 Earnings Presentation
35 slides from Ventas's earnings presentation, Aug 4, 2023
Slide 1: Earnings Presentation: Second Quarter 2023
Earnings Presentation: Second Quarter 2023 August 3, 2023
Slide 2: Non-GAAP Financial Measures & Cautionary Statements
Non-GAAP Financial Measures & Cautionary Statements Certain of the information contained herein, including certain operating and clinical information, such as patient and resident pricing and rate information, lead and move-in data and number of confirmed cases of COVID-19, has been provided by our
Slide 3: Table of Contents
Table of Contents Executive Summary & Recent Developments 5–8 Financial Strength & Flexibility 10 – 11 SHOP Results, Guidance & Opportunity 13 – 20 Outpatient Medical and Research Portfolio 22 – 24 Appendix 26 – 35 3
Slide 4: Executive Summary & Recent Developments
Executive Summary & Recent Developments
Slide 5: Executive Summary
Executive Summary Key Highlights ▪ Ventas reported strong second quarter enterprise results, with Normalized FFO1 per share of $0.75 and YoY Total Company Same-Store Cash NOI1 growth of 7.0%, which reflects broad-based property NOI growth across our diversified portfolio led by SHOP and complemented
Slide 6: Full-Year 2023 Outlook
Full-Year 2023 Outlook1 2023 Guidance Ranges & Midpoints Key Guidance Commentary ▪ Confirming and narrowing range of Attributable Net Income per share at As of 5/8/23 As of 8/3/23 the previous guidance midpoint ▪ Confirming and narrowing range of Normalized FFO per share at the Attributable Net Inco
Slide 7: Notable Second Quarter Earnings Impacts
Notable Second Quarter Earnings Impacts Equitization of Santerre Mezzanine Loan Ardent Equity Sale ▪ In May 2023, Ventas sold approximately 24% of its successful investment ~$1.566B +$12M Reversal of previously recorded CECL allowance in Ardent OpCo to a third-party investor for approximately $50 mi
Slide 8: Equitized Loan Portfolio Key Metrics
Equitized Loan Portfolio Key Metrics Equitized Loan Portfolio Valuation Increased Annualized NOI Guidance ▪ Ventas’s cash investment basis is $1.50B comprised of its prior $486M ▪ Strong start in 2Q23 results in Annualized NOI guidance increase to mezzanine loan and assumed $1.017B senior secured lo
Slide 9: Financial Strength & Flexibility
Financial Strength & Flexibility
Slide 10: Access to Diverse Sources of Capital
Access to Diverse Sources of Capital Capital Raising Activity +$3.0B Proactive capital markets activities $0.6B $2.4B year-to-date totaling ~$2.4 billion at line of sight $0.4B $0.4B mortgage attractive ~4.6% cash rate with line of mortgage loan in July sight to ~$3.0 billion of capital loan in July
Slide 11: Robust Liquidity & Access to Capital Helps Manage Rising Interest Rates
Robust Liquidity & Access to Capital Helps Manage Rising Interest Rates Liquidity & Maturity Profile Robust line of sight liquidity of $3.3B and significantly improved near-term maturity profile Initial Maturities Credit Facility Capacity $2.75B $0.5B $2.7B2 As of YE22 Drawn Amount ($0.19B) Credit F
Slide 12: SHOP Results, Guidance & Opportunity
SHOP Results, Guidance & Opportunity
Slide 13: Senior Housing Spotlight
Senior Housing Spotlight1,2 +32% U.S. AL OpEx Successful NOI-Generating Strong NOI Growth Moderation Transitions Capex Projects RevPOR 2Q23 SHOP Capex projects Same-Store Cash YoY operating Regional operators delivered Continued rate NOI growth YoY, expense growth driving outsized accelerated growth
Slide 14: SHOP Trends – 2Q23 SS YoY Assets
SHOP Trends – 2Q23 SS YoY 508 Assets1 U.S. SHOP NOI Key Commentary 2Q23 Same-Store YoY Assets U.S. Only ▪ 2Q23 SHOP Same-Store Cash NOI grew +14.0% as expected driven by strong RevPOR growth 18.5% 125.3M o U.S. communities led NOI growth with +18.5% YoY ▪ AL in the U.S. posted strong growth of +32.2
Slide 15: Senior Housing Operating Expense Trends
Senior Housing Operating Expense Trends1 2Q23 SS SHOP Operating Results Composition Key Commentary (2Q23 SS YoY pool of 508 assets) Revenue Composition1 ▪ Moderating operating expense growth approximating ~4% Other OpEx YoY, better than 2Q23 expectations Utilities Cash NOI ▪ Labor expenses better th
Slide 16: Independent Living Active Asset Management
Independent Living Active Asset Management U.S. SHOP Decisive Action Plans ▪ 2Q23 U.S. Independent Living occupancy lagged Deploying a full active asset management and Ventas OI™ expectations playbook to drive performance in the U.S. Independent Living portfolio, particularly in 38 U.S. IL communiti
Slide 17: Successful Execution of Ventas OI Playbook: Case Study
Successful Execution of Ventas OITM Playbook Case Study: Transition 90 Aligned NOI- Identify Ventas OITM Right Portfolio Value Management Generating Opportunity Playbook Operator Actions Creation Agreements Capex National Operator Disaggregation Transition Completion: Jan 2022 Net MIMO Occupancy Rev
Slide 18: SHOP Guidance
SHOP Guidance Initial 2023 Full Year YoY Updated 2023 Full Year YoY Guidance1 Guidance1 Same-Store 15% to 21% 15% to 21% Cash NOI Occupancy 130 bps to 170 bps 80 bps to 120 bps RevPOR ~6% ~6% Revenue ~8% ~7.5% OpEx ~5% ~4.5% Reflects exclusion of 38 assets subject to planned operator transitions and
Slide 19: Unprecedented Organic Growth Opportunity
Unprecedented Organic Growth Opportunity U.S. 80+ Population Anticipated to Grow by 24%+ Through 2028 1 Incremental 80+ Population to Accelerate Through This Decade1 25M 5-Years Post Next 5 Years +906K p.a Financial 20M Crisis +24% growth 15M +525K p.a +7% growth 10M +215K p.a 5M M '12-'22 '23-'26 '
Slide 20: Senior Housing NOI Opportunity
Senior Housing NOI Opportunity Illustrative SHOP NOI Recovery Opportunity1 Incremental growth potential from favorable supply / demand trends could cause NOI to exceed pre-COVID levels 2Q23 Annualized Total Illustrative SHOP Total Portfolio SHOP Cash NOI at Cash NOI Recovery Annualized SHOP 81% Occu
Slide 21: Outpatient Medical and Research Portfolio
Outpatient Medical and Research Portfolio
Slide 22: Outpatient Medical Operating Platform Delivers Consistent, Compounding Growth
Outpatient Medical Operating Platform Delivers Consistent, Compounding Growth Same-Store Occupancy Growth1 Same-Store Cash NOI Growth1 Eight Consecutive Quarters of YoY Same-Store Occupancy Growth Seven Out of Eight Quarters of >3% YoY Same-Store Cash NOI Growth 92.5% 92.3% 92.0% 92.0% 91.7% 91.8% 9
Slide 23: Excellent University-Based Research Portfolio Credit
Excellent University-Based Research Portfolio Credit1,2 High Quality Research Tenant Base Pharma / Biotech Tenants by Development Stage % Annualized Base Rent % Annualized Base Rent Science, Tech, Healthcare 5% Flexible Innovation Space 6% Other 9% Commercial - Pre-Commercial Other 20% Other IG or C
Slide 24: Top Tier University Partners with Leading NIH Funding
Top Tier University Partners with Leading NIH Funding Ventas partners with high credit universities with strong endowments that consistently receive NIH funding above the 90 th percentile Percentile of 2022 NIH Funding1 Ventas’s University Partners Pitt Wash U Duke UPenn >99th Johns Hopkins 100% Yal
Slide 25: Appendix
Appendix
Slide 26: Non-GAAP Reconciliation: Adjusted EBITDA and Further Adjusted EBITDA
Non-GAAP Financial Measures Reconciliation Adjusted EBITDA and Further Adjusted EBITDA Dollars in thousands USD, totals may not sum due to rounding, unaudited For the Three Months Ended June 30, 2023 March 31, 2023 Net income attributable to common stockholders $ 103,453 $ 17,517 Adjustments: Intere
Slide 27: Net Income to NOI – Trailing Quarters Reconciliation
Net Income to NOI – Trailing 5 Quarters Reconciliation Dollars in thousands USD, unless otherwise noted, totals may not sum due to rounding, unaudited For the Three Months Ended June 30, 2022 September 30, 2022 December 31, 2022 March 31, 2023 June 30, 2023 Net (loss) income attributable to common s
Slide 28: SHOP Same-Store Cash Operating Revenue & Cash NOI Reconciliations
Senior Housing Operating Portfolio Same-Store Cash Operating Revenue & Same-Store Cash NOI Reconciliations Dollars in thousands USD, unless otherwise noted, totals may not sum due to rounding, unaudited Trailing 5-Quarters 2Q22 3Q22 4Q22 1Q23 2Q23 Total revenues $ 658,056 $ 668,583 $ 674,126 $ 704,9
Slide 29: Outpatient Medical and Research Same-Store Reconciliations
Outpatient Medical and Research Portfolio Same-Store Cash Operating Revenue & Same-Store Cash NOI Reconciliations Dollars in thousands USD, unless otherwise noted, totals may not sum due to rounding, unaudited Trailing 5-Quarters 2Q22 3Q22 4Q22 1Q23 2Q23 Total revenues $ 199,911 $ 201,414 $ 201,125
Slide 30: Sequential Same-Store Cash Operating Revenue by Segment
Non-GAAP Financial Measures Reconciliation Second Quarter 2023 Sequential Same-Store Cash Operating Revenue by Segment Dollars in thousands USD, unless otherwise noted, totals may not sum due to rounding, unaudited For the Three Months Ended June 30, 2023 For the Three Months Ended March 31, 2023 SH
Slide 31: Second Quarter 2023 Same-Store Cash NOI by Segment
Non-GAAP Financial Measures Reconciliation Second Quarter 2023 Same-Store Cash NOI by Segment Dollars in thousands USD, unless otherwise noted, totals may not sum due to rounding, unaudited For the Three Months Ended June 30, 2023 For the Three Months Ended June 30, 2022 SHOP OM&R Triple-Net Non-Seg
Slide 32: Second Quarter 2023 Sequential Same-Store Cash NOI by Segment
Non-GAAP Financial Measures Reconciliation Second Quarter 2023 Sequential Same-Store Cash NOI by Segment Dollars in thousands USD, unless otherwise noted, totals may not sum due to rounding, unaudited For the Three Months Ended June 30, 2023 For the Three Months Ended March 31, 2023 SHOP OM&R Triple
Slide 33: 2023 Guidance: Year-Over-Year Same-Store Cash NOI by Segment
Non-GAAP Financial Measures Reconciliation 2023 Guidance: Year-Over-Year Same-Store Cash NOI by Segment1,2,3 Dollars in millions USD, unless otherwise noted, totals may not sum due to rounding, unaudited For the Year Ended December 31, 2023 SHOP OM&R Triple-Net Non-Segment Total High End Net income
Slide 34: FFO and FAD Reconciliation
FFO and FAD Reconciliation Dollars in thousands USD, except per share amounts, totals may not sum due to rounding, unaudited Q2 YoY 2022 2023 Change Q2 Q3 Q4 Q1 Q2 ’22-’23 YTD 2Q22 YTD 2Q23 Net (loss) income attributable to common stockholders $ (42,416) $ 1,256 $ (45,019) $ 17,517 $ 103,453 n/a $ (
Slide 35: Same-Store Cash NOI – Trailing 8 Quarters Reconciliation
Outpatient Medical and Research Same-Store Cash NOI – Trailing 8 Quarters Reconciliation Dollars in thousands USD, unless otherwise noted, totals may not sum due to rounding, unaudited 2Q23 1Q23 4Q22 3Q22 2Q22 1Q22 4Q21 3Q21 2Q23 2Q22 1Q23 1Q22 4Q22 4Q21 3Q22 3Q21 2Q22 2Q21 1Q22 1Q21 4Q21 4Q20 3Q21