Ventas, Inc. (VTR)

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Ventas, Inc. (VTR)

Q3 2010 Earnings Call Transcript

November 5, 2010 11:00 am ET


David Smith – IR

Debra A Cafaro – Chairman and CEO

Ray Lewis – Chief Investment Officer

Rick Schweinhart – CFO

Todd Lillibridge – CEO, Lillibridge


Clinton Valleli – Citi

Rick Anderson – BMO Capital Markets

Jerry Doctrow – Stifel Nicolaus

Bryan Sekino – Barclays Capital

Rob Mains – Morgan Keegan

Tayo Okusanya – Jefferies & Company



Good day, ladies and gentlemen and welcome to the Ventas third quarter 2010 earnings conference call. My name is Alika [ph] and I will be your operator for today. At this time, all participants are in listen-only mode. We will have a question-and-answer session at the end of the conference. (Operator Instructions).

At this time, I would now like to turn the call over to Mr. David Smith. Please proceed.

David Smith

Good morning. And welcome to the Ventas conference call to review the company's announcement today regarding its results for the quarter ended September 30, 2010. As we start, let me express that all projections and predictions and certain other statements to be made during this conference call may be 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, 2009 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

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

Debra Cafaro

Thanks, David. And good morning to all of our shareholders and other participants. And welcome to the Ventas 2010 third quarter earnings call. My colleagues and I are pleased to join you today from our Chicago office.

I'd like to address our recent acquisition activity and this quarter's excellent earnings. Ray Lewis will cover operations and investments. And after Rick Schweinhart reviews our financial results in detail we'll be happy to take your questions. Ventas has been very active since the beginning of the third quarter. We closed our Lillibridge acquisition, announced a mutually beneficial deal with Sunrise Senior Living, we agreed to acquire the real estate assets of Atria Senior Living Group and we made important organizational moves.

First, we closed the acquisition of Lillibridge Healthcare Services, adding 96 medical office buildings to our portfolio and becoming the national leader in integrated medical office building ownership, development, property management and advisory work. Both the MOBs and the Lillibridge service businesses are performing well, slightly ahead of our expectations and the combination of our firms is complete. We are enjoying our new relationship with Todd Lillibridge and his organization and we look forward to building our businesses together.

Second, we were very pleased to announce an attractive transaction with Sunrise Senior Living to purchase all of its real estate interest in our Sunrise managed high quality assisted living portfolio and amend our management contracts with Sunrise. Our collaboration with Sunrise and its management resulted in a multi-faceted transaction that benefits both companies and we are working together to close that deal in the coming weeks. We are really starting to see the benefits of the focused efforts of the Sunrise team and the quality of our Sunrise managed assets as our NOIs and occupancies in our Sunrise portfolio continue to improve.

Third, we recently agreed to acquire the real estate assets of Atria Senior Living Group for $3.1 billion. This exciting and transformational investment will add 118 high quality private pay seniors housing assets to Ventas' portfolio and will make us the largest donor of seniors housing in the U.S. We are acquiring high quality assets in superior locations with excellent growth prospects.

As structured, the transaction will increase the amount of Ventas NOI derived from private pay sources to fully two-thirds, improve our tenant operator diversification, expand our scale to over 700 assets and a $14 billion enterprise value and last, keep us in a strong and safe balance sheet position.

Finally, Atria is a fantastic operator of seniors housing with a robust scalable infrastructure and an excellent team committed to high quality care for seniors. Atria will be owned by Lazard and the management team as an independent private company, following the closing. Supply demand fundamentals in the senior housing sector are extremely favorable and Ventas is well-positioned to enjoy the benefits of these powerful demographic trends through our ownership of over 35,000 units of independent and assisted living.

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