Nationwide Health Properties Inc
Nationwide Health Properties — NAREIT: REIT Week 2011
40 slides from Nationwide Health Properties's conference presentation, Jun 7, 2011
Slide 1: Ventas, Inc. June 2011 NAREIT: REIT Week 2011
Ventas, Inc. June 2011 NAREIT: REIT Week 2011
Slide 2: Forward-Looking Statements
2 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
Slide 3: Additional Information about the Proposed Transaction and Where to Find It
3 Additional Information about the Proposed Transaction and Where to Find It In connection with the proposed transaction, Ventas has filed with the SEC a registration statement on Form S-4 that includes a joint proxy statement of Ventas and NHP and that also constitutes a prospectus for Ventas. INVE
Slide 4: Table of Contents
4 Table of Contents Ventas Overview (5-8) How Ventas's Recent Transactions Create Value (9-10) Diversification and Portfolio Balance (11-12) Growth Opportunities (13-17) Excellent, Diverse and Growing Enterprise (18-29) Major Tenant Overview (18) Seniors Housing Operating Assets (19-24) Atria Senior
Slide 5: Ventas Overview
Ventas Overview Largest, Most Diverse Healthcare REIT (NYSE: VTR) - Cash Flowing, Profitable S&P 500 Company ~$23bn Enterprise Value / >$1.3bn NOI / <30% Debt to Enterprise Value Secure and growing cash dividend Strong and improving credit profile and liquidity $3.1bn Atria acquisition closed in May
Slide 6: Investment Rationale
Investment Rationale 1Q2011 Operating Cash Flow and Same Store Cash NOI up 13% and 4%, respectively Normalized FFO Growth of 15%; Per Share Growth of 12% Increased Dividend by 7.5% to $2.30/share Access to Low-Cost Capital and Strong Liquidity $800mm term loan at L + 150 (NHP) 4.75% 10-year unsecure
Slide 7: Long History of Profitability & Growing Dividend
Long History of Profitability & Growing Dividend 20% annual growth in Total Company Normalized FFO1 '04 - '11E 8% annual growth in dividends per share '04 - '11E 2011E Normalized FFO/Share1 of $3.06 - $3.14 (excluding NHP) 7.5%+ YoY Growth Includes impact of Atria transaction Q2 Accelerates $3+mm Ma
Slide 8: Growing Cash Flows, Reducing Risk Through Diversification and Balance Sheet Management
8 Growing Cash Flows, Reducing Risk Through Diversification and Balance Sheet Management Creates Value for Shareholders Ventas has Consistently Created Shareholder Value Through Constructing a Real Estate Portfolio with Growing Cash Flows, Low Leverage and Diverse Tenants Debt / Enterprise Value 44%
Slide 9: Recent Transactions Make Ventas a Stronger Enterprise
Recent Transactions Make Ventas a Stronger Enterprise 9 $3.1 billion Acquisition of the Real Estate Assets of Atria Senior Living Group - Increased Operating Asset Exposure High-quality Seniors Housing assets in high-net worth zip-codes of major metropolitan areas Projected high single-digit NOI gro
Slide 10: Large Diversified Enterprise with Significant Growth Potential
10 Large Diversified Enterprise with Significant Growth Potential Best In Class Balance Sheet Scale and Liquidity S&P 500 Company with $23 billion enterprise value and $17 billion equity value $1.3 billion of Net Operating Income <30% Debt to Enterprise Value and Debt / EBITDA of ~5.0x Lower Cost De
Slide 11: Ventas Business Model Provides Balance Among Tenants, Operating Model and Asset Class
Ventas Business Model Provides Balance Among Tenants, Operating Model and Asset Class 11 Most Diversified Healthcare REIT Asset Class $1.3 Billion NOI1 with 70% Private Pay and Increased MOB Presence 11 Pay Source Based on 2011 underwriting for Atria and NHP. Operating Model Tenant
Slide 12: Geographically Diversified Portfolio
Geographically Diversified Portfolio Over 1,300 Facilities Located in 48 States and 2 Provinces1 Balances Single State Regulatory, Reimbursement, Climate and Economic Changes 384 47 235 644 8 12 As of 3/31/11. Pro forma for Atria and NHP transactions. 48 states including the District of Columbia. In
Slide 13: Ventas Will Continue to Execute on its Strategic Growth & Diversification Plan
Ventas Will Continue to Execute on its Strategic Growth & Diversification Plan Enhances Ventas's Ability to Consummate Large Transactions and Take Advantage of Operator Consolidation 1. Grow and Invest in Existing Relationships - Ventas Tenant Base Grows by 6x 2. Acquire More High-Quality, High-Grow
Slide 14: Incremental NHP Growth Opportunities
Incremental NHP Growth Opportunities Interest Expense Savings 40bps to 50bps spread improvement ~$6bn of debt outstanding 14 Potential Annual Impact ($mm) Potential Annual Impact ($ / Share) $24mm - $30mm $0.08 / Share - $0.10 / Share 2. Seniors Housing Redevelopment $50mm to $100mm per annum Return
Slide 15: Liquidity and Balance Sheet Position Lead to Powerful Earnings Growth Driver
Liquidity and Balance Sheet Position Lead to Powerful Earnings Growth Driver and Attractive Investment Opportunities are Increasing 15 Investment Focus on Strategic Growth and Risk Adjusted Unlevered Returns Positive Investment Outlook: Large Volume of Opportunities Seniors Housing $3.1bn acquisitio
Slide 16: Expanded Relationships Create Unique Deal Sourcing Opportunities
Expanded Relationships Create Unique Deal Sourcing Opportunities 16 Health Systems and Hospital Relationships Seniors Housing and Skilled Nursing Customers Over 100 embedded relationships
Slide 17: Massive Long-Term External Growth Opportunities
Massive Long-Term External Growth Opportunities 17 Trends in Healthcare Real Estate have Generated Opportunities for Further Investment and Created Value for Investors Combined Company Positioned to Thrive A $1 Trillion Real Estate Market and Growing Strong Supply & Demand Fundamentals 85+ age cohor
Slide 18: Industry-Leading Tenant/Operators Provide Transparency and Credibility
Industry-Leading Tenant/Operators Provide Transparency and Credibility Ventas Tenant/Operators Have Experience and Scale Excellent Tenant/Operators Sunrise, Inc. (NYSE: SRZ) High quality, high acuity, mission-driven leader Globally recognized senior living brand Significant stock momentum: >$500 mil
Slide 19: Portfolio Composition: Seniors Housing Operating Portfolio
Portfolio Composition: Seniors Housing Operating Portfolio Provides Higher Growth Potential 19 Granularity and Shorter Tenor Leases From ~18,000 Individual Seniors Seniors Housing Operating Assets Provide "Lift" in Up Economy and Resiliency in Down Economy Based on 2011 underwriting for Atria and NH
Slide 20: Favorable Seniors Housing Fundamentals
Limited New Seniors Housing Development2 Excellent Supply and Demand Fundamentals Make Seniors Housing Attractive Favorable Seniors Housing Fundamentals 20 Source: U.S. Census Bureau Source: NIC-MAP 1Q2011Construction Monitor Source: Green Street Advisors. June 2011 Population of 85+ Seniors Growing
Slide 21: Atria Portfolio: High-Quality High-Growth Assets in Great Markets
Atria Portfolio: High-Quality High-Growth Assets in Great Markets Financial Metrics $3.1 billion purchase price 2011 NOI(E) at $186 - $196 million $230,000 per unit purchase price 118 Private Pay Seniors Housing Assets Located in Major Metropolitan Markets - Managed by Atria Enables Ventas to Captur
Slide 22: Sunrise Portfolio: Best-in-Class, Need-Driven Assisted Living Communities
Sunrise Portfolio: Best-in-Class, Need-Driven Assisted Living Communities High-Quality Senior Living Communities Managed by Sunrise - Higher Growth Potential 79 high-quality private pay Assisted Living communities High barrier-to-entry locations - major metro markets Highly productive: >$5,000 per m
Slide 23: Sunrise Portfolio: Occupancy and Rate Trends
Sunrise Portfolio: Best-in-Class, Need-Driven Assisted Living Communities Need-Driven, Assisted Living Communities Show Strong, Positive Trends in Both Occupancy and Rate 23 Sunrise Managed Communities Have Shown Strength & Positive Trends Total stabilized communities; includes Company's partner's s
Slide 24: Best-in-Class Managed Communities in Major Metro Markets
24 Best-in-Class Managed Communities in Major Metro Markets Sunrise Assisted Living Community Chicago, IL Sunrise Independent Living Community Toronto, ON Atria Seniors Housing Community Darien, CT Atria Seniors Housing Community Bay Shore (Long Island), NY
Slide 25: Portfolio Composition: MOBs Provide Reliable Cash Flows
Portfolio Composition: MOBs Provide Reliable Cash Flows 25 On-Campus MOB Portfolio Provides Stable Cash Flows to Ventas: Over 230 MOBs with ~14mm Square Feet1 89% MOB Portfolio1 Other VTR NOI1 Strong Occupancy in Stabilized MOB Portfolio Provides Stable Cash Flows to Ventas 11% ~$140 Million of NOI
Slide 26: MOB Supply and Demand are in Balance
MOB Supply and Demand are in Balance 26 MOB Supply and Demand Balance will Create Continued NOI Growth MOB Vacancy1,2 Source: Green Street Advisors. June 2011. Source: Marcus and Millichap. Historical and Projected NOI Growth1 Medical Office Building Vacancy Rates Suggest that Supply / Demand Equili
Slide 27: Complementary Fit Between Two Leading MOB Platforms
Complementary Fit Between Two Leading MOB Platforms 27 Lillibridge MOB Platform Leading national brand name: Largest fully integrated private owner, manager and developer of MOBs Strong relationships with A/AA-rated hospitals and health systems 25+ years experience with over 250 hospitals and health
Slide 28: Portfolio Composition: NNN
Portfolio Composition: NNN Steady Contractual Growth with Downside Protection 28 Based on 2011 underwriting for Atria and NHP. Operating asset NOI reflects Ventas's portion only for joint venture assets. Totals may not add due to rounding. (2) Pro Forma for NHP Acquisition. EBITDARM to Cash Rent usi
Slide 29: Ventas's Kindred Rent is Reliable
29 Ventas's Kindred Rent is Reliable Kindred Positive Credit Profile, Scale, Quality, Access to Capital and Cash Flow Coverage Make Ventas Rent Reliable Largest diversified post-acute provider in the U.S. 32% YTD return (NYSE: KND) 1Q 2011 strong performance Revenues up 9% to $1.2bn Operating cash f
Slide 30: Reimbursement Outlook
Medicare for SNFs Rugs IV Positive For Operators FY2012: 10/1/11 - 9/30/12 Proposed 1.5% net increase or 11.3% reduction Subject to 60-day Comment Period & final rule expected in July / August Stable 2011 Medicaid for SNFs Flat +/- Rates Expected in FY 2012 Medicare for LTACs FY2012: 10/1/11 - 9/30/
Slide 31: Cohesive Experienced Management Team Dedicated to Stakeholders
Cohesive Experienced Management Team Dedicated to Stakeholders 31 Name Title Tenure Debra A. Cafaro Chairman of the Board and Chief Executive Officer 11 Raymond J. Lewis President 8 Todd W. Lillibridge Executive Vice President, Medical Office Properties; President and Chief Executive Officer, Lillib
Slide 32: Investment Rationale
32 Largest, Most Diversified Healthcare REIT - 70% Private Pay Balanced Portfolio Provides Upside with Resiliency Cash Flowing Profitable S&P 500 Company with Excellent Track Record of Value Creation Through Increasing Cash Flows and Managing Risk Excellent Liquidity and Credit Profile / Lower Cost
Slide 33: Appendix A: SEC Reg. G Compliance
33 Appendix A: SEC Reg. G Compliance For further information, please see http://www.ventasreit.com/investors/supplemental.asp.
Slide 34: Non-GAAP Financial Measures
34 Non-GAAP Financial Measures The Company's normalized FFO guidance (and related GAAP earnings projections) for all periods assumes that all of the Company's tenants and borrowers continue to meet all of their obligations to the Company. In addition, the Company's normalized FFO guidance excludes (
Slide 35: Quarterly Normalized Funds From Operations (FFO)
35 Quarterly Normalized Funds From Operations (FFO) ($ in '000s, except per share amounts) Non-GAAP Financial Measures
Slide 36: Funds from Operations (FFO)
36 Non-GAAP Financial Measures For the Year Ended December 31, 2010 and December 31, 2009 Funds from Operations (FFO) ($ in '000s, except per share amounts)
Slide 37: Adjusted Pro Forma EBITDA and Net Debt to Adjusted Pro Forma EBITDA
37 Non-GAAP Financial Measures Adjusted EBITDA is defined as: Earnings before interest, taxes, depreciation and amortization (including non-cash stock-based compensation expense), excluding merger-related expenses and deal costs and gains or losses on real estate disposals. Adjusted Pro Forma EBITDA
Slide 38: Adjusted EBITDA and Fixed Charge Coverage Ratio
38 Non-GAAP Financial Measures Adjusted EBITDA is defined as: Earnings before interest, taxes, depreciation and amortization (including non-cash stock-based compensation expense), excluding merger-related expenses and deal costs and gains or losses on real estate disposals. Adjusted EBITDA 1 and Fix
Slide 39: Debt / Total Enterprise Value
39 Non-GAAP Financial Measures Debt balances are net of discounts and fair market value. Net debt plus total equity. Debt / Total Enterprise Value ($ in '000s, except per share amounts)
Slide 40: Ventas, Inc. June 2011
AVENTAS” Ventas, Inc. June 2011
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