), a real estate investment trust (REIT), reported second quarter
2012 funds from operations (FFO) of $236.0 million or 81 cents per
share compared with $100.6 million or 57 cents in the year-earlier
Excluding the non-recurring items, FFO in the reported quarter
stood at $277.8 million or 95 cents per share, compared with $141.5
million or 80 cents in the year-ago quarter. Recurring FFO
per share in the quarter beat the Zacks Consensus Estimate by 3
The massive 135% year-over-year upside in FFO was primarily
on the back of accretive acquisitions like Nationwide Health
Properties Inc., Atria Senior Living Group, Inc., Cogdell
Spencer , and rental increases from the company's triple lease
portfolio, partially offset by higher administrative expenses
and high weighted average diluted shares outstanding during the
Total revenue during the quarter was $616.4 million
compared with $359.5 million in the year-earlier quarter. Total
revenue also beat the Zacks Consensus Estimate of $592.0
As of June 30, 2012, Ventas had an operating portfolio of 95
private pay seniors housing communities managed by Sunrise and 119
private pay seniors housing communities managed by Atria.
During the second quarter of 2012, total net operating income
(NOI) before management fees for the same-store communities
increased 2.0% sequentially to $107.9 million. Same-store
occupancy increased 80 basis points to 89.2 %.
Ventas completed acquisitions worth $1.2 billion in the
reported quarter and has commitments to acquire additional
assets worth more than $300 million in the second half of 2012.
During the quarter, Ventas completed the acquisition of 72 high
quality medical office buildings (MOBs) from Cogdell Spencer Inc.
(Cogdell) to emerge as the largest owner of MOBs in the U.S. with
over 21 million square feet of owned properties. Additionally, the
company also acquired 16 premium quality, private pay senior living
communities managed by Sunrise for $362 million.
Ventas invested over $98 million during the reported quarter,
including an assumption of $18.2 million debt in senior housing
communities. Also, Ventas sold 13 assets for $121.9 million. To
further increase its liquidity, Ventas sold approximately 6 million
shares generating proceeds of $342.5 million.
As of June 30, 2012, the company had $367 million of debt under
its unsecured revolving credit facility, $500 million under its
unsecured term loan facility, and $52.8 million in cash and cash
At quarter end, debt to total capitalization stood at 28% and
net-debt-to-adjusted-pro-forma-EBITDA (earnings before interest,
tax, depreciation and amortization) was 4.9x.
With superior quarterly results, Ventas increased its recurring
FFO guidance from the range of $3.63-$3.69 to $3.70-$3.74 per share
Ventas currently retains a Zacks #3 Rank, which translates into
a short-term Hold rating. We are also maintaining our long-term
Neutral recommendation on the stock. One of its competitors,
, Inc. (
holds a Zacks#2 Rank, which implies a short-term Buy
Note: FFO, a widely used metric to gauge the performance of
REITs, is obtained after adding depreciation and amortization and
other non-cash expenses to net income.
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VENTAS INC (VTR): Free Stock Analysis Report
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