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Q3 2012 Earnings Call
October 26, 2012 10:00 am ET
Debra A. Cafaro - Chairman, Chief Executive Officer, Member of Executive Committee, and Member of Investment Committee
Raymond J. Lewis - President
Richard A. Schweinhart - Chief Financial Officer and Executive Vice President
Jana Galan - BofA Merrill Lynch, Research Division
James Milam - Sandler O'Neill + Partners, L.P., Research Division
Richard C. Anderson - BMO Capital Markets U.S.
Ross T. Nussbaum - UBS Investment Bank, Research Division
Michael Carroll - RBC Capital Markets, LLC, Research Division
Michael Bilerman - Citigroup Inc, Research Division
Daniel M. Bernstein - Stifel, Nicolaus & Co., Inc., Research Division
Omotayo T. Okusanya - Jefferies & Company, Inc., Research Division
Jeff Theiler - Green Street Advisors, Inc., Research Division
Philip J. Martin - Morningstar Inc., Research Division
Nicholas Yulico - Macquarie Research
Todd Stender - Wells Fargo Securities, LLC, Research Division
Previous Statements by VTR
» Ventas Management Discusses Q2 2012 Results - Earnings Call Transcript
» Ventas' CEO Discusses Q4 2011 Results - Earnings Call Transcript
» Ventas' CEO Discusses Q3 2011 Results - Earnings Call Transcript
Thank you very much. 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, 2012.
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 the 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, 2011, 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 the 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 and CEO of the company.
Debra A. Cafaro
Thanks, Lori, and good morning to all of our shareholders and other participants. Welcome Ventas' third quarter 2012 earnings call. Today, I'm pleased to share an overview of our excellent results, investment activities and outlook for the balance of the year, Ray Lewis will discuss our portfolio performance and Rich Schweinhart will review our financial results. We'll be delighted to answer your questions following our remarks.
The Ventas business continues to thrive, demonstrating our ability to grow because of our high-performing diverse portfolio driven by demographic demand and our robust disciplined investment activities. We are executing on our 3 pillars of excellence: Capital raising, capital allocation and asset management, which are producing consistent superior results. Quarter-after-quarter, year-after-year, we have put great numbers on the board with minimal volatility.
Ventas posted outstanding third quarter results. Normalized FFO this quarter with $0.96 per share, up 9% from last year and total FFO grew 12%. Year-to-date cash flow from operations grew 60%. Our growth rate is especially impressive because this is the first quarter of year-over-year comparisons that include the NHP and Atria acquisitions in the prior period. Internal and external growth drove our superior result. We enjoyed fantastic performance in our Sunrise and Atria assets, which grew NOI 10% and occupancy 300 basis points, as well as robust accretive investment activity.
Since the beginning of 2011, we have completed about $13 billion of acquisitions, including $1.7 billion year-to-date. Our unlevered yield on these high-quality year-to-date acquisition exceeds an outstanding 7.5%. In addition, our average cash debt costs continue to improve. We issued $275 million and 10-year bonds at 3/4. And just yesterday, closed a new $180-million 5-year funded term loan with the current rate of under 1.5%.
Since the second quarter call, we've closed over $400 million of investments in mostly private pay assets, including 36 high-quality medical office buildings or MOBs, on-campus or affiliated with AA-rated hospital system. With access to an outstanding combination of internal and external sources, we are well-positioned to take advantage of opportunities in the highly fragmented and growing $1 trillion healthcare real estate market.
Our acquisition pipeline is very active with potential deals emanating from Ventas, Lillibridge and NHP legacy relationship, as well as from new sellers eager to enter a market that can produce win-win outcomes for buyers and sellers. We began our acquisition charge 2 years ago, and the benefits of our strategy are clear today. Our focus is, as it always has been, on creating shareholder value. The strategy we articulated over a decade ago to become a leading player in our consolidating, dynamic sector with a disciplined approach to building a diversified portfolio with a private pay focus is serving us and our shareholders well. Ventas' need-based business continues to generate reliable demographic demand, furthered by policy shifts to lower-cost setting. These benefits translate into property performance that is the most positive and least volatile of all real estate asset classes.