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Ventas Inc. Reports Operating Results (10-Q)

July 27, 2012 | About:
10qk

10qk

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Ventas Inc. (VTR) filed Quarterly Report for the period ended 2012-06-30.

Ventas, Inc. has a market cap of $19.24 billion; its shares were traded at around $66.66 with a P/E ratio of 18.8 and P/S ratio of 10.9. The dividend yield of Ventas, Inc. stocks is 3.8%. Ventas, Inc. had an annual average earning growth of 6.1% over the past 10 years. GuruFocus rated Ventas, Inc. the business predictability rank of 3.5-star.

Highlight of Business Operations:

communities pursuant to long-term management agreements. The Sunrise management agreements have terms ranging from 25 to 30 years, commencing as early as 2004 and as recently as 2012. Management fees, including incentive fees, under the Sunrise management agreements can range from 5% to 7% of revenues generated by the applicable properties and, for the six months ended June 30, 2012, were 6.25% of revenues including incentive fees. Our management agreements with Atria, affecting 119 seniors housing communities during the six months ended June 30, 2012, have terms of ten years commencing as early as 2011, with successive automatic ten-year renewal periods. The management fee under the Atria management agreements is currently 5% of revenues generated by the applicable properties.

(1)Total revenues include medical office building and other services revenue, revenue from loans and investments and interest and other income. Revenues from properties sold or held for sale as of the reporting date are included in this presentation. (2)Amounts attributable to senior living operations for the three and six months ended June 30, 2011 include operations related to our Atria-managed assets only for the period from May 12, 2011 (the date of acquisition) through June 30, 2011. Amounts attributable to senior living operations for the three and six months ended June 30, 2012 include operations related to the sixteen seniors housing communities managed by Sunrise that we acquired in May 2012 (the "Sunrise-Managed Sixteen Communities") only for the period from May 1, 2012 (the date of acquisition) through June 30, 2012. (3)"Adjusted EBITDA" is defined as earnings before interest, taxes, depreciation and amortization (including non-cash stock-based compensation expense), excluding loss on extinguishment of debt, net litigation proceeds, merger-related expenses and deal costs, gains or losses on sales of real property assets and changes in the fair value of financial instruments (including amounts in discontinued operations). (4)"NOI" represents net operating income, which is defined as total revenues, less interest and other income, property-level operating expenses and medical office building services costs (including amounts in discontinued operations). (5)Ratios are based on total revenues for each period presented.

Property-level operating expenses related to the segment include labor, food, utilities, marketing, management and other costs of operating the properties. Property-level operating expenses increased for the three months ended June 30, 2012 over the same period in 2011 primarily due to the acquired properties described above and higher management fees at the Original Sunrise-Managed Communities. Under our management agreements relating to the Original Sunrise-Managed Communities, the management fee was temporarily reduced to 3.75% of revenues generated by the applicable properties for 2011, but reverted to its contractual level of 6% of revenues generated by the applicable properties (with a range of 5% to 7%) for 2012 and subsequent years.

Discontinued operations increased $30.3 million during the three months ended June 30, 2012 compared to the same period in 2011 due primarily to gains recognized on the sales of 13 assets during the second quarter of 2012 and the recognition of a deferred gain from the sale of nine assets during the first quarter of 2012. See "Note 5Dispositions" of the Notes to Consolidated Financial Statements included in Part I of this Quarterly Report on Form 10-Q.

Discontinued operations increased $72.0 million during the six months ended June 30, 2012 compared to the same period in 2011 due primarily to gains recognized on the sales of 22 assets during 2012. See "Note 5Dispositions" of the Notes to Consolidated Financial Statements included in Part I of this Quarterly Report on Form 10-Q.

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