Ventas, Inc. (VTR)

VTR 
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Call Start: 10:00

Call End: 11:02

Ventas, Inc. (VTR)

Q4 2009 Earnings Call

February 18, 2010 10:00 am ET

Executives

David Smith - IR

Debra A. Cafaro - Chairman, President and CEO

Raymond J. Lewis - EVP and CIO

Richard A. Schweinhart - EVP and CFO

Analysts

David Toti and Michael Bilerman – Citi

Jerry Doctrow - Stifel Nicolaus

Karen Ford - Keybanc

Craig Schmidt - Bank of America/Merrill Lynch

Rich Anderson - BMO Capital Markets

Bryan Sekino - Barclays Capital

Rob Mains - Morgan Keegan

Tayo Okusanya - Jefferies

Presentation

Operator

Good day, ladies and gentlemen and welcome to the fourth quarter Ventas earnings conference call. My name is Jennifer and I will be your coordinator for today. (Operator Instructions)

I would now like to turn the presentation over to your host for today's conference, Mr. David Smith of the company. Please proceed Mr. Smith

David Smith

Good morning and welcome to the Ventas conference call to review the company's announcement today regarding its results for the year and quarter ended December 31, 2009.

As we start, let me express that all projections and predictions and certain other statements to be made during this conference call maybe considered forward-looking statements within the meaning of the Federal Securities laws.

These projections, predictions and statements are based on Management's current beliefs, as well as on a number of assumptions concerning future events. The forward-looking statements are subject to many risks, uncertainties, and contingencies, and stockholders and others should recognize that actual results may differ materially from the company's expectations, whether expressed or implied.

We refer you to the company's reports filed with the Securities and Exchange Commission, including the company's Annual Report on Form 10-K for the year ended December 31, 2008 and the company's other reports filed periodically with the SEC for a discussion of these forward-looking statements and other factors that could affect these forward-looking statements. Many of these factors are beyond the control of the company and its management.

The information being provided today is as of this date only and Ventas expressly disclaims any obligation to release publicly, any updates or revisions to any forward-looking statements to reflect any changes in expectations.

Please note that quantitative reconciliations between each non-GAAP financial measure contained in this presentation and its most directly comparable GAAP measure, as well as the company's supplemental disclosure schedule are available in the Investor Relations section of our website at www.ventasreit.com.

I will now turn the call over to Debra A. Cafaro, Chairman, President and CEO of the company.

Debra A. Cafaro

Thanks, David. Good morning to all of our shareholders and participants and welcome to the Ventas’ 2009 year-end earnings call. My colleagues and I are pleased to be joining you today from our Louisville office.

Today, I'll provide a company overview, Ray Lewis will discuss our portfolio performance and investment outlook, and Rick Schweinhart will address financial results in detail. After that, we will be happy to answer your questions.

Ventas had an excellent and highly productive 2009, overcoming the severely negative conditions that challenged our economy and capital markets during the year. I’d like to quickly recap some of the Ventas highlights of 2009.

Normalized FFO per share was $2.68, exceeding our guidance of $2.62-$2.65 per share. Notably, 2009 normalized FFO per share compressed only 1% from 2008, despite 9% more shares outstanding, meaning that our entity level FFO grows considerably during the year.

Our cash flow from operations was $422 million, an increase of over 11% from 2008, the passed the data to the S&P 500. We were also named the top financial stock of the decade, providing over 2000% total returns to shareholders during the period. In this regard we led all bank, insurance companies, REITs and diversified financials, total shareholder returns for 2009 alone was 39%.

We purchased or repaid during the year $560 million of bonds and mortgage debts. In 2009 we received an upgrade from Fitch to BBB-, one of only five total upgrades in the REIT sector from all three rating agencies during the year.

We extended our revolver to 2012 and our revolver has total current capacity of $1 billion. We raised $312 million of equity and $341 million of debt financing, we also sold 14 assets and recognized the net gain of over $66 million.

We opened or acquired 6 high quality on-campus medical office buildings all affiliated with highly rated not-for-profit hospital systems. This expanded our MOB portfolio to $1.7 million square feet. We extended the lease term on 108 healthcare assets operated by Kindred, had escalated rent levels of $126 million per year, the lease term for those assets would have expired on April 30, 2010, but was extended until 2015.

We received a unanimous jury verdict in our favor of $102 million in our law suit against HCP for tortuous interference with our 2007 acquisition of Sunrise REIT.

And we ended the year with an excellent balance sheet and liquidity position. Net debt to EBIDTA was 4.1 time, at year end we held over $100 million in cash-on-hand and our revolver capacity approximated $1 billion.

In sum, we have managed the company in a prudent manner that protected the downside and preserved the upside for our stakeholders. We finished the year and the decade consistent with our objectives, as a cash flowing, productive enterprise delivering consistent, superior value for all our stakeholders. Well positioned to drive in a variety of economic capital markets and reimbursing environment and ready to execute our growth and diversification plans.

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