Ventas, Inc. · NYSE:VTR
Ventas — Investor Presentation (February 2006)
26 slides from Ventas's investor presentation, Feb 13, 2006
Slide 1: Ventas, Inc.
Ventas, Inc. AVENTAS”
Slide 2: Forward Looking Statements
Forward Looking Statements This presentation contains “forward-looking statements” within the meaning of the federal securities laws. These forward-looking statements include, among others, statements of expectations, beliefs, future plans and strategies, anticipated results from operations and deve
Slide 3: Ventas Overview
Ventas Overview Largest owner of LTC and Senior Housing in the U.S. $5 billion Enterprise Value $366 million EBITDA – 2005 (Q3 2005 pro forma annualized) Owns 381 healthcare facilities in 42 states at 10/28/2005 Triple-net leases to providers of healthcare and senior housing Approximatel
Slide 4: Ventas Goals and Accomplishments: Strategic Diversification and FFO Growth
Ventas Goals and Accomplishments Strategic $1.2bn acquisition of Provident Diversification $336 million closed through 10/28/2005 $400+ million acquisitions closed 2004 Excellent FFO Normalized FFO/Share: Growth 2006 (E): $2.20 - $2.23 without reset or acquisitions 2005 (E): $2.06 -
Slide 5: Ventas Goals and Accomplishments: Dividend Growth, Performance, Balance Sheet
Ventas Goals and Accomplishments Dividend Growth 2005: $1.44 11% year-over-year growth Low payout ratio → future growth Equity Out- 5-year ending 12/31/2005 > 51% TSR Performance 1 Best performing REIT over 5 years ending 12/31/2005 Strong Balance 35% Debt/Enterprise Value Sheet
Slide 6: Ventas Goals and Accomplishments: Primary Tenants and Governance
Ventas Goals and Accomplishments Excellent Primary Kindred Tenants Largest provider of LTC Brookdale/Alterra – IPO $2 billion equity market cap largest provider of senior/Alzheimer care “ Best Practices” Independent Board Corporate 99th percentile Institutional Governance Sharehold
Slide 7: Extraordinary Performance
Extraordinary Performance $100 Investment in Ventas Stock at December 31, 2000 = $786 at December 31, 2005 1 $900 $800 $700 $600 $500 $400 $300 $200 $100 $0 2000 2001 2002 2003 2004 2005 Ventas REIT Index (RMZ) Healthcare REIT Sector S&P 500 Index (1) Assumes reinvestment of dividends 7
Slide 8: Ventas Outperformance
Ventas Outperformance VTR Total Shareholder Return 1 Through 12/31/2005 Ventas REIT Index (RMZ) Healthcare REIT Sector S&P 500 Total Return Index 60.0% 51.2% 48.9% 50.0% 40.0% 29.9% 28.5% 30.0% 26.4% 22.7% 18.7% 20.0% 14.4% 12.1% 10.0% 4.9% 3.0% 0.5% 0.0% 5-Y ear Ann. 3-Y ear Ann. 1-Y ear (1) Source
Slide 9: High Quality Assets
High Quality Assets Brookdale Properties Alterra Properties Independent Living Facility Assisted Living Facility 9
Slide 10: Mergers & Acquisitions Achieve VTR Objectives
Mergers & Acquisitions Achieve VTR Provident AcquisitionObjectives – Closed Other 2005 Acquisitions Through 6/7/05 Provident Senior Living Trust - $1.2 10/28/05 $336 million in other acquisitions billion 27 facilities, 2,900 units 68 high end private pay facilities 23 ALFs/ILFs – 100% priv
Slide 11: Diversified Portfolio of Owned Properties
Diversified Portfolio of Owned Properties As of October 28, 2005 9 3 2 10 2 5 1 1 2 11 6 2 8 3 1 6 9 2 27 8 1 4 4 5 2 1 16 1 6 3 2 1 1 4 1 1 7 1 1 5 10 2 1 4 9 15 4 3 5 11 3 2 2 1 1 1 11 2 2 6 1 19 1 4 5 1 2 1 1 2 1 7 1 5 5 3 8 6 1 1 Nursing Facilities (Total: 200) 3 6 Hospitals (Total: 41) 13 Assis
Slide 12: Acquisition Improves Diversification
Acquisition Improves Diversification Tenant Mix (% of Revenues) – Asset Class Mix (% of Revenues) – 10/28/2005 1 10/28/2005 1 Prime. Other Summer. 1% MOBs/Personal Care 7% 4% 2% Bench. 1% Genesis 2% THI K indred SNF 2% 52% 37% ALF/ILF 42% Brookdale/Alterra 31% Hospitals 19% (1) Assumes full year eff
Slide 13: Growth and Diversification Strategy
Growth and Diversification Strategy Property types: Senior Housing and Healthcare related real estate Senior Housing and Skilled Nursing Hospitals and Specialty Care Facilities NNN Healthcare properties and Medical Office Buildings Possible strategic disposition of select Kindred assets
Slide 14: Positive Supply / Demand Fundamentals
Positive Supply / Demand Fundamentals – Limited Supply SNFs 16,000+ SNFs in US 106 average beds/facility 82% median occupancy Limits on new nursing home construction CON states High cost and long payback period limit new SNF construction Growing Demand 85+ population is fastest growing
Slide 15: Long Term Acute Care Industry Overview
Long Term Acute Care Industry Overview Overview $2.5 billion niche market Ventas is the largest owner of freestanding LTACs Total Ventas Market Ventas Owned Non-Ventas LTACs Owned LTACs 24% LTAC within Freestanding 76% Hospitals 47% 53% Total = 339 160 Freestanding Facilities 1 LTACs 1 (1) Sourc
Slide 16: Strength in Private Pay Seniors Housing
Strength in Private Pay Seniors Housing 1 Overview Approximately $65 billion spent annually in U.S. on private pay seniors housing Since 1999, ALF development down 80% and ILF development down 50% Occupancy and average daily rates increasing Current occupancy approximately 90% Improved mar
Slide 17: Attractive Growth Profile
Attractive Growth Profile Overview Rental revenues increase $7+ million per year Includes all acquisitions through 10/28/2005 Excludes Reset Right and future acquisitions $389 $396 $400.0 ($ in millions) $350.0 $325 $300.0 $250.0 $233 $201 $200.0 $150.0 2003 2004 2005E 2006E 2007E Total Rental
Slide 18: Kindred Reset Right "In the Money"
Kindred Reset Right “In the Money” Ventas option to increase Kindred’s rent to “market” Upside to Ventas Maximum flexibility: 1/20/2006 – 7/18/2007 notice Ventas reviewing LTAC FY 2007 reimbursement Ventas owns 39/73 Kindred LTACs Appraisal vs. Negotiated solution Ventas intends to max
Slide 19: Ventas Rent is Reliable
Ventas Rent is Reliable Performance Summary of Master Leases 1 Pooled multi-facility Master Leases: Best structure (1) Trailing Twelve Months EBITDARM and EBITDAR for the period ended September 30, 2005 (the latest available data provided by Kindred) to the Company’s Trailing Twelve Months cash re
Slide 20: Kindred Overview
Kindred Overview Principal Tenant is Financially Healthy (NYSE: KND) Excellent “Quality Mix” Higher Margin Hospital Business SNF Payor Mix 2 LTAC Payor Mix 2 Private and Other Private and 18% Medicare Other 32% 28% Medicaid Medicare 7% 65% Medicaid 50% (1) Includes nursing home, hospital, and pharma
Slide 21: Stable Reimbursement Outlook
Stable Reimbursement Outlook Medicare for SNFs Flat Medicare dollars for FY 2006 RUGs refinement effective 1/1/2006 FY 2007 budget proposal - Stable Medicaid for SNFs Kindred Medicaid rates up YoY with provider taxes Operators predict no increase for 2H 2005; 2% -3% in 2006 $10 billion M
Slide 22: Ventas Accomplishments and Highlights
Ventas Accomplishments and Highlights Growth and Diversification strategy underway Provident acquisition 15% FFO/share growth estimated - 2005 vs. 2004 normalized 2006 (E) - 7% projected core growth without acquisitions or reset rent Dividend growth Diversified portfolio of high quality p
Slide 23: SEC Reg. G Compliance
SEC Reg. G Compliance AVENTAS”
Slide 24: Non-GAAP Financial Measures: Yearly FFO per Share
Non-GAAP Financial Measures Yearly Funds from Operations (FFO) per Share 2006E 2005E 2004 2003 2002 2001 Guidance Guidance Net Income per Diluted Share $1.11 - $1.14 $1.19 - $1.21 $1.43 $2.03 $0.93 $0.73 Excluding Depreciation on Real Estate Assets 1.09 - 1.09 0.87 - 0.87 0.58 0.52 0.60 0.60 Realize
Slide 25: Non-GAAP Financial Measures: Quarterly EBITDA
Non-GAAP Financial Measures Quarterly EBITDA 1 ($ in ’000s) For the Quarter Ended 9/30/2005 Pro Forma Net Income $28,426 Add Back: Pro Forma Interest 34,051 Pro Forma Depreciation 28,573 Restricted Stock Amortization 471 Pro Forma EBITDA 91,521 Pro Forma Annualized EBITDA $366,084 Net Debt / EBITDA
Slide 26: Ventas, Inc.
Ventas, Inc. AVENTAS”