Ventas, Inc. · NYSE:VTR
Ventas — NAREIT REITWeek 2015
41 slides from Ventas's conference presentation, June 2015
Slide 1: NAREIT REITWeek June 2015
/\ VENTAS NAREIT REITWeek June 2015 Excellence. Sustained.”
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: Table of Contents
Table of Contents Ventas Investment Thesis (4) Ventas Fast Facts (5) Ventas Overview (6 – 14) Pending Transactions (15 – 21) Portfolio Overview (22 – 29) Appendices: Leadership Team (31) Industry Demographic & Demand Fundamentals (32 – 34) Financial Results & Information (35 – 40) 3
Slide 4: Ventas Investment Thesis
Ventas Investment Thesis Strong, Cohesive and Experienced Leadership Team Delivers: Growth: Normalized FFO Accretive Investments Same-Store NOI Cash Flows Dividends Tenant / Operators Strength: Balance Sheet with Excellent Liquidity Leadership and Decision Making Performance: Outstanding Long-Term T
Slide 5: Ventas Fast Facts
Ventas Fast Facts Debt / Total Capitalization Weighted Average Cost of Growing Diversified Leading S&P 500 Company Debt Portfolio 32% 3.6% 1,632 $36B Assets Enterprise Value Credit Rating 2014 GRESB Global Sector 10-Years of Strong Annual Acquisitions Since 20112 Leader1 Dividend Growth BBB+ #1 9% $
Slide 6: Ventas Overview
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Slide 7: Ventas Today
Ventas Today1 Seniors International Housing Loans / NNN Other (Domestic) Specialty Hospitals Skilled Nursing Seniors Medical Housing Office Operating (Domestic) Balanced, Diversified Enterprise with $2.1B NOI Note: Data as of the quarter ended 3/31/2015, unless otherwise noted. 1. Totals may not add
Slide 8: Delivering Consistent Superior Long-Term Total Shareholder Returns
Delivering Consistent Superior Long-Term Total Shareholder Returns Compelling Demographics Accretive Investments Consistent Over $7B Since 01/01/20141 Superior Low Cost of Capital 3.6% Q1’15 Weighted Average Cost of Debt Long-Term Prudent Balance Sheet Strategy Total 5.7x Q1’15 Net Debt to Adj. PF E
Slide 9: Strong Internal & External Growth
Strong Internal & External Growth Over a Decade of Strong Performance • 10% FFO / Share CAGR since 2000 • +5% 2015E Norm. FFO / Share Guidance1 Increased • $23B of Acquisitions Since 20112 2015 Guidance3 $4.67 – 4.75 Normalized FFO Growth 1. Value assumes midpoint of 2015 guidance. 2. Closed plus pe
Slide 10: Superior Cash Flow and Dividend Growth While Maintaining Financial Strength
Superior Cash Flow and Dividend Growth While Maintaining Financial Strength Cash Flow From Operations Superior Dividend Growth and Payout Ratio Projected >10% Increase4 Dividend / Share Payout Ratio 9% Dividend/Share CAGR Over 10 Years1, 20% Cash Flow From Operations CAGR Since 2005 Top 5 REIT Divid
Slide 11: Building on Our Legacy of Outperformance and Superior Execution
Building on Our Legacy of Outperformance and Superior Execution1 2015 Normalized FFO Guidance: $4.67–$4.75 Portfolio NOI Focus on Financial Internal & External Dispositions Growth Flexibility Investment Growth +2.5%–3.5% Strong, Growing $5B ~$600M in Annual 20152 2015E, Cash Partially Flows Funding
Slide 12: Immense Healthcare Real Estate Market
Immense Healthcare Real Estate Market External Growth $1 Trillion U.S. Healthcare Real Estate Environment Positive Outpatient Life Science / Biotech Facilities / Facilities Dynamic, Consolidating and MOBs Fragmented Market with 5% Post-Acute Significant Capital Needs Facilities 10% 39% Massive
Slide 13: Strong Demand Drivers Continue to Drive Our Business Success
Strong Demand Drivers Continue to Drive Our Business Success Strong Senior Population Fundamentals Economic and Policy Drivers 75+ Growing 8x Faster Than Rest of Population Median Single-Family Home Prices +5.8% in 2014, from 2015 - 2060 Highest Levels Since 20074 75+ Cohort Has $678K Average
Slide 14: Leadership in Corporate Responsibility
Leadership in Corporate Responsibility Sound & Effective Sustainability Practices NAREIT Leader in the Light GRESB Global Sector Leader GRESB Green Star Company Ventas Charitable Foundation Over $2M in Charitable Contributions Since Inception $12M Total Endowment $1M Partnership with the
Slide 15: Pending Transactions
Pending Transactions 15
Slide 16: Strategic Transactions
Strategic Transactions Ventas (Pre-Ardent & Spin-Off) Ventas (Post-Ardent & Spin-Off) International International Loans / Loans / Other Seniors Other Seniors Specialty Housing Specialty Housing Hospitals NNN Hospitals NNN Hospitals 1,2 Asset Mix NOI % Skilled NOI % Skilled Nursing Nursing Seniors Se
Slide 17: Ventas Growing with Leading Tenants and Operators
Ventas Growing with Leading Tenants and Operators Post-Acute Care Seniors Housing Medical Office Hospitals Partnerships with Top 20 Operating Partners in the Industry % Segment NOI From Top 20 93% ~80% ~70%1 100% Ranked Operators % Total VTR NOI2 12% 58% 20% 6% 1. Includes only Lillibridge and Pacif
Slide 18: Acquisition of Ardent Real Estate Assets
Acquisition of Ardent Real Estate Assets Ardent transaction(E): closing Q3 2015 at net real estate investment of ~$1.4B and 7%+ yield Fee simple ownership (no purchase options) 2.9x initial cash coverage1 Long-term master leases 2.5% annual rent escalators >7% initial expected lease yield Strong ope
Slide 19: Hospital Sector Opportunity
Hospital Sector Opportunity Continued Growth in U.S. Hospital Expenditures Coupled with Increasing Emergency Room Visits Strong Performance in the Hospital Sector1 Increasing Q4 2014 Same Store Adjusted Admissions Growth U.S. Hospital Expenditures +5.1% MedPac Recommended Rate Increase for FY 2016 I
Slide 20: Taking Ventas to the Next Level of Excellence
Taking Ventas to the Next Level of Excellence Spin-Off and Ardent Transactions Will Serve to Solidify Ventas’s Leading Position Spin-Off of Post-Acute / SNF Portfolio Acquisition of Ardent > Enhanced strategic focus at Ventas > Strategic acquisition in attractive and large U.S. Hospitals segment > I
Slide 21: Compelling S&P 500 Company
Compelling S&P 500 Company Increased NOI and FFO per share Best MOB Platform/Franchise expected growth rates 89% NOI from Assets with Investment Grade Systems and HCA Dividend Increase — >10% Projected at Spin Top Quality SHOP Portfolio Best Dividend Payout Ratio Among Big 3 — Excellent Markets with
Slide 22: Portfolio Overview
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Slide 23: Top Quality Seniors Housing Operating Portfolio
Top Quality Seniors Housing Operating Portfolio • Outstanding care providers • Excellent, high-barrier to entry markets (NY, LA, Boston and San Francisco) • Need driven business with compelling demographics Excellent Markets Compelling U.S. Demographics 25M 10% $72.5K 11.3% $387.9K 9% 20M 20M 19M 19
Slide 24: Continued SHOP Strength – High Quality, Private Pay
Continued SHOP Strength – High Quality, Private Pay • 305 Private Pay Seniors Housing Communities with 31,572 Units1 • Q1 2015 Same-Store Occupancy 91.2%, +60bps YoY • Q1 2015 Same-Store REVPOR +3% YoY • 2015 Same-Store NOI Growth Expected at Lower End of Previous Guidance Range – Modest Q2 Same-Sto
Slide 25: Growth from Development Activity
Growth from Development Activity $86M Ground-Up Seniors Housing Development Project with Atria • Location: Infill barrier-to-entry market in Northern California with superior demographics • Structure: Ventas will contribute 25% of the equity capital and state pension fund JV partner will contribute
Slide 26: Best-in-Class Medical Office Building Franchise
Best-in-Class Medical Office Building Franchise • 18% NOI ($371M)1 – scalable platform – 89% NOI with MOBs affiliated with investment grade systems + HCA – Affiliations with leading hospital systems with high market share • 449 properties2 in 32 states / D.C. – 23M sq. ft.2 • Strong consistent perfo
Slide 27: Well Structured and Well Covered NNN Leases
Well Structured and Well Covered NNN Leases Stable, Secure Cash Flow with Compounding Growth • 2% – 3% Annual Estimated Same-Store Cash Growth for FY2015 • Approximately 70% Variable vs. 30% Fixed Escalators Long Term NNN Leases Same-Store Portfolio 50% NOI (952 Assets)1 Operator Cash Flow: Rent Cov
Slide 28: High-Quality Post-Acute Portfolio
High-Quality Post-Acute Portfolio FY 2016: Fourth Consecutive Ventas Post-Acute Quality Mix1 Year-Over-Year Rate Increases2 Medicare SNFs +1.4% Other LTACHs +1.2% 35% IRFs +1.7% Private Pay & Medicare 65% Medicaid +/- 1% Permanent Doc Fix Positive for Improving to >78% Post-Spin Providers Note: Data
Slide 29: Meeting Healthcare Real Estate Needs Globally
Meeting Healthcare Real Estate Needs Globally * 1,632 Total Owned Properties Seniors Housing Communities: 803 Skilled Nursing Facilities: 390 Medical Office Buildings: 375 US Hospitals: 53 Other: 11 * Represents Q1 2015 reported asset count. 29
Slide 30: Appendices
Appendices: Supplemental Seniors Housing and MOB Industry Information; FFO Reconciliation, Including Non-Cash Items & Reg. G Compliance Note: For further information, please see www.ventasreit.com/investor-relations
Slide 31: Depth of Management Team with Institutional Experience
Depth of Management Team with Institutional Experience Name Title Tenure “Deep Bench” with Extensive Debra A. Cafaro Chairman of the Board and 16 Industry Expertise CEO 16-year CEO tenure, >2x S&P 500 average EVP, Medical Property and >10x healthcare REIT peers Todd W. Lillibridge Operations; Pres
Slide 32: Strong Demographic Trends & Fundamentals Support Growth for Seniors Housing & MOBs
Strong Demographic Trends & Fundamentals Support Growth for Seniors Housing & MOBs Seniors Housing IL Supply & Demand Forecast1 IL Construction vs. Inventory Forecast1 (Primary Markets: Q1 2006 – Q1 2016P) (Primary Markets: Q4 2005 – Q1 2015) Seniors Housing AL Supply & Demand Forecast1 AL Construct
Slide 33: Strong Demographic Trends & Fundamentals (Cont'd)
Strong Demographic Trends & Fundamentals Support Growth for Seniors Housing & MOBs (Cont’d) Number of Individuals 65+ Will Grow 5x Faster Than Total Population1 There are roughly 79M baby boomers in the U.S today that just recently began reaching the age of 65 in 2011. As such, between 2010 and 2030
Slide 34: Strong Demographic Trends & Fundamentals (Cont'd)
Strong Demographic Trends & Fundamentals Support Growth for Seniors Housing & MOBs (Cont’d) Americans are Spending Over $3T on Healthcare; Equivalent to 18%of Total GDP 1 The healthcare sector is now the fastest growing segment of the U.S. economy with expenditures expected to grow 6% per annum and
Slide 35: Non-GAAP Financial Measures
Non-GAAP Financial Measures Funds From Operations (FFO) and Funds Available for Distribution (FAD) Reconciliation1,2 ($ in 000s, except per share amounts) Note: Totals and per share amounts may not add due to rounding. Per share quarterly amounts may not add to annual per share amounts due to materi
Slide 36: Non-GAAP Financial Measures
Non-GAAP Financial Measures For the Three Months Ended March 31, 2015 and 2014 Normalized Funds from Operations (FFO) ($ in 000s, except per share amounts) 1. Per share amounts may not add due to rounding. 36
Slide 37: Non-GAAP Financial Measures
Non-GAAP Financial Measures Adjusted Pro Forma1 EBITDA and Net Debt to Adjusted Pro Forma1 EBITDA ($ in 000s, except per share amounts) 1. The following information considers the pro forma effect on net income, interest, depreciation and income taxes of the Company’s investments and other capital tr
Slide 38: Non-GAAP Financial Measures
Non-GAAP Financial Measures Adjusted Pro Forma1 EBITDA and Fixed Charge Coverage Ratio ($ in 000s, except per share amounts) 1. The following information considers the pro forma effect on net income, interest and depreciation of the Company’s investments and other capital transactions that were comp
Slide 39: Non-GAAP Financial Measures
Non-GAAP Financial Measures NOI Reconciliation by Segment1,2 ($ in 000s, except per share amounts) 1. Amounts above are adjusted to exclude discontinued operations for all periods presented. 2. Amounts above are not restated for changes between categories from quarter to quarter. 39
Slide 40: Non-GAAP Financial Measures
Non-GAAP Financial Measures NOI Reconciliation by Segment1,2 (Cont’d) ($ in 000s, except per share amounts) 1. Amounts above are adjusted to exclude discontinued operations for all periods presented. 2. Amounts above are not restated for changes between categories from quarter to quarter. 40
Slide 41: NAREIT REITWeek June 2015
/\ VENTAS NAREIT REITWeek June 2015 Excellence. Sustained.”