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Ventas, Inc. (VTR) SEC Filing 8-K Material Event for the period ending Thursday, February 17, 2022

Ventas Inc

CIK: 740260 Ticker: VTR
Exhibit 99.1

Ventas Reports 2021 Fourth Quarter and Full Year Results

CHICAGO--(BUSINESS WIRE)--February 17, 2022--Ventas, Inc. (NYSE: VTR) (“Ventas” or the “Company”) today reported results for the fourth quarter and full year ended December 31, 2021.

“We are proud of our company and team in 2021. With a relentless focus on execution, we drove the business forward amid continuing waves of COVID-19 and generated fourth quarter results ahead of our expectations. During the year we positioned Ventas to capture the upside in the multi-year senior housing recovery, delivered strong organic growth in our Office and healthcare triple-net businesses and enhanced the Company’s portfolio and financial strength. We also extended our long track record of value-creating external growth with $3.7 billion in new investments focused on our strategic priorities of senior housing and life science,” said Debra A. Cafaro, Ventas Chairman and CEO.

“As we look into 2022, the senior housing recovery is underway, with accelerating demand, strong rate increases and rapidly improving clinical conditions in our communities. In the first quarter of 2022, we are projecting ten percent revenue growth in our SHOP business supported by record high leads. Further supported by favorable market supply demand fundamentals, we expect sustained improvement in SHOP NOI through 2022.

“Sustained strength in our attractive Medical Office and growing Life Science, Research & Innovation businesses, investment accretion and receipt of HHS Grants also contribute to our positive outlook in the first quarter.

“We remain committed to enhancing value for our shareholders and other stakeholders in 2022 and beyond by capitalizing on organic growth from our high-quality diversified portfolio, robust external growth and our outstanding ESG profile,” Cafaro concluded.

Fourth Quarter 2021 Financial Results:

  • Net Income (Loss) Attributable to Common Stockholders (“Attributable Net Income (Loss)”) per share of ($0.10)
  • Nareit Funds from Operations (“FFO”)* per share of $0.63
  • Normalized FFO* per share of $0.73
  • The above earnings measures include $6 million ($0.015 per share) benefit of HHS Grants (defined below), the majority of which were attributable to the Company’s unconsolidated joint venture investments and the balance to the Company’s SHOP portfolio.

*This is a non-GAAP financial measure. Refer to the Non-GAAP Financial Measures Reconciliation tables at the end of this press release and our fourth quarter 2021 supplemental for additional information and a reconciliation to the most directly comparable GAAP measure.


2021 Company Highlights and Recent Developments:

Senior Housing Highlights and Recent Actions:

Fourth Quarter 2021 SHOP Performance Highlights:

  • Total SHOP portfolio NOI achieved the high end of our expectations in the fourth quarter 2021.
  • Same-store average occupancy grew by 200 basis points to 83.4% in the fourth quarter 2021 versus fourth quarter 2020.
  • Rate and revenue grew for the first time since the start of the pandemic. Same-store revenue increased 3.3% in the fourth quarter 2021 versus the fourth quarter 2020 on higher occupancy and stronger pricing.
  • Same-store net operating income (“NOI”)* declined 3.6% (excluding HHS Grants) in the fourth quarter 2021 versus the fourth quarter 2020 driven by elevated labor costs resulting from the pandemic.
  • Same-store NOI in the fourth quarter versus the third quarter 2021 was stable, incorporating anticipated elevated labor expenses.

Recent Actions:

The Company has taken a series of actions in its senior housing portfolio with the objective of capturing meaningful upside in the expected cyclical industry recovery. Continuing its strategy of the “right asset, in the right market, with the right operator,” the Company has acted upon nearly two-thirds of its senior housing portfolio via acquisition, disposition, development, lease resolution or operator transition since 2020. Specific actions in 2021 include the following:

  • Acquired nearly $2.6 billion of higher margin, independent living communities with favorable market characteristics, relatively low labor requirements and a three-year average length of stay.
  • Expanded the Company’s high performing Canadian portfolio through an acquisition of five independent living and one assisted living communities and leased up three recently opened communities in our Class A Le Groupe Maurice portfolio to 92% occupancy.
  • Enhanced portfolio quality via disposition of 29 non-core senior housing properties resulting in approximately $400 million gross proceeds to Ventas at an approximate 2.5% cash yield.
  • Added six new senior housing operating partner relationships, increasing Ventas’s distinct operator relationships to 37.
  • Transitioned 90 senior living communities to seven new experienced operators that will provide strong local market focus and oversight for the communities and take advantage of the expected industry recovery.
  • Leveraged deep senior housing operating experience to enhance our performance, management and insights platform enabling the Company to add further value to its operating partners, and leading to greater foresight into industry trends, including recent labor trends witnessed in the industry.
  • Drove largest effective rate increases in recent history while at the same time reducing the financial move-out rate – a testament to the quality of our operators and our precision approach to pricing strategy.

*This is a non-GAAP financial measure. Refer to the Non-GAAP Financial Measures Reconciliation tables at the end of this press release and our fourth quarter 2021 supplemental for additional information and a reconciliation to the most directly comparable GAAP measure.


Office Highlights and Recent Actions:

Fourth Quarter 2021 Office Performance Highlights:

  • Medical Office Building (“MOB”) fourth quarter same-store cash NOI* grew 3.4% year-over-year, the second consecutive quarterly same-store growth rate exceeding 3%.
  • MOB same-store occupancy increased sequentially in the fourth quarter for the fifth consecutive quarter, with tenant retention of 92% and new leasing up 54% in the fourth quarter 2021 compared to the prior year.
  • Life Science, Research & Innovation (“R&I”) fourth quarter 2021 occupancy ended at 94% due to continued strong demand for life science space.
  • The previously announced $1 billion Life Science, R&I development pipeline, comprising 1.4 million square feet across five buildings affiliated with University of Pennsylvania, Drexel University, University of Pittsburgh and Arizona State University, which have been recently completed or are currently under construction, are 85% leased or committed.

Recent Actions:

Strong performance in the Office business, which now represents a third of Ventas’s portfolio, has been driven by operational initiatives generating organic growth combined with new investments that enhance the Life Science, R&I and MOB portfolios.

  • Since 2020, Ventas has created a centralized leasing center of excellence, built a technical engineering team, expanded our tenant satisfaction programs and established a digital marketing program focused on local market awareness and virtual touring of vacant suites.
  • For the second year in a row, Ventas ranked in the top quartile of its peers for tenant satisfaction as measured by Kingsley Associates. Rankings for 2021 increased for each major key performance indicator compared to 2020, including renewal intentions in the top decile when compared to Ventas peers.
  • Enhanced portfolio quality via disposition of over 30 non-core MOBs resulting in approximately $440 million gross proceeds to Ventas at an approximate 5% cash yield. These transactions increased occupancy by approximately 250 basis points and Ventas’s on-campus share of MOBs by approximately 325 basis points.
  • The Company acquired or announced over $1 billion of Office investments in 2021 focused on high quality Medical Office and Life Science, R&I. The Company also funded and progressed the ground-up Life Science, R&I developments that were already underway.
  • Ventas delivered the Assembly, anchored by the world-renowned University of Pittsburgh in collaboration with University of Pittsburgh Medical Center researchers under a long-term lease. The Assembly, which is over 90% leased or committed, is a meticulously rendered life science and innovation center focused on cutting-edge immunotherapy and transplantation research. The iconic campus, containing 350,000 square feet, is expected to achieve an 8% GAAP yield upon stabilization with total project costs of $278 million.

*This is a non-GAAP financial measure. Refer to the Non-GAAP Financial Measures Reconciliation tables at the end of this press release and our fourth quarter 2021 supplemental for additional information and a reconciliation to the most directly comparable GAAP measure.


External Growth and New Investments:

In 2021, Ventas completed or announced $3.7 billion in strategic investments focused on expanding our portfolio of high-quality senior housing assets, growing its advantaged Life Science, R&I portfolio and selectively expanding its Medical Office footprint. Since 2010, the Company has averaged over $3 billion in new investments annually, including single asset deals, portfolio transactions, public mergers and new development commitments.

In February 2022:

  • Ventas closed on the previously announced acquisition of 18 MOBs comprising 732,000 square feet from Ardent Health Services for $204 million. The portfolio is located in Ardent’s existing markets, is over 90% on campus and 100% leased to Ardent with an expected GAAP yield of 5.8%.
  • Ventas completed the acquisition of Mangrove Bay, a Class A senior housing community in the highly sought-after Jupiter, Florida market for $107 million at an attractive in-place yield of 5.6%. Favorable local market dynamics, including attractive demographics and limited existing or new competition, underpin Mangrove Bay’s strong occupancy and financial performance.

Ensured Financial Strength and Flexibility:

In 2021, the Company enhanced its portfolio and strengthened its balance sheet through $1.2 billion in asset dispositions and loan repayments. Non-core senior housing and MOB asset sales comprised approximately $850 million of proceeds at a below 4% cap rate and the repayment of several well-structured loans generated $350 million at an average yield exceeding 9%. Proceeds were principally used to pay down $1.1 billion in near-term debt maturities. To manage interest rate risk, the Company raised over $1.1 billion in new bonds in the US and Canada, including a 10-year offering with a coupon of 2.5%, the best 10-year healthcare REIT issuance in 2021. Key financial statistics at year-end include:

  • $2.5 billion year-end liquidity
  • 36% year-end Total Indebtedness to Gross Asset Value
  • Average cost of debt of 3.4% with a total weighted average maturity of over 6 years
  • Of the total debt outstanding, 91% is at fixed interest rates, an increase of 4 percentage points versus prior year
  • 7.2x Fourth Quarter 2021 Net Debt to Adjusted Pro Forma EBITDA

Corporate Governance, Sustainability and Other Initiatives:

  • Refreshed the Ventas Board of Directors with the appointment of Maurice Smith, President and Chief Executive Officer of Health Care Service Corporation, on February 1, 2021. The Ventas Board currently comprises 11 directors, 10 of whom are independent.
  • Continued recognition as an Environmental, Social and Governance (“ESG”) industry leader, receiving Nareit’s Leader in the Light Award for the sixth time, recognized in the Bloomberg Gender Equality Index for the third consecutive year, achieving the GRESB Real Estate Sector Leader, and inclusion in the S&P DJSI World and North America indices.
  • Accelerated growth in Ventas Investment Management (“VIM”), Ventas’s institutional third-party capital business, in 2021. VIM provides a growth platform for Ventas and leverages its brand, industry knowledge, infrastructure and team. VIM currently has over $4.5 billion in Assets Under Management, including unfunded commitments, development projects underway and gross asset value. The Ventas Life Science & Healthcare Real Estate Fund, a perpetual life vehicle, obtained over $730 million in new capital commitments from third party institutional investors during the year.

Full Year and Fourth Quarter 2021 Enterprise Results

(per share)

 

Year Ended December 31,

 

2021

2020

$ Change

% Change

Attributable Net Income (Loss)

$0.13

$1.17

($1.04)

(89%)

Nareit FFO*

$2.65

$3.37

($0.72)

(21%)

Normalized FFO*

$2.90

$3.32

($0.42)

(13%)

 

 

 

 

 

 

Quarter Ended December 31,

 

2021

2020

$ Change

% Change

Attributable Net Income (Loss)

($0.10)

$0.29

($0.39)

(134%)

Nareit FFO*

$0.63

$0.92

($0.29)

(32%)

Normalized FFO*

$0.73

$0.83

($0.10)

(12%)

 

 

 

 

 

*This is a non-GAAP financial measure. Refer to the Non-GAAP Financial Measures Reconciliation tables at the end of this press release and our fourth quarter 2021 supplemental for additional information and a reconciliation to the most directly comparable GAAP measure.

Fourth Quarter 2021 Property Results

 

 

 

4Q21 (Quarterly Pools)
Year-Over-Year
Same-Store Cash
NOI* Growth

 

 

Assets

% Change

SHOP1

 

311

(21.3%)

Triple-Net

 

330

0.1%

Office

 

332

2.6%

Total Company

 

973

(6.5%)

 

 

 

4Q21 (Sequential Pools)
Sequential
Same-Store Cash
NOI* Growth

 

 

Assets

% Change

SHOP1

 

322

0.8%

Triple-Net

 

331

0.0%

Office

 

333

(0.1%)

Total Company

 

986

0.2%

* This is a non-GAAP financial measure. Refer to the Non-GAAP Financial Measures Reconciliation tables at the end of this press release and our fourth quarter 2021 supplemental for additional information and a reconciliation to the most directly comparable GAAP measure.

1. Excluding the effect of the HHS Grants in all periods, Senior Housing Operating Portfolio (“SHOP”) year over year same store cash NOI growth was (3.6%) and sequentially was (0.9%). SHOP Same-Store cash NOI reflects grants received in 4Q21 and 4Q20 under the Provider Relief Fund administered by the Department of Health and Human Services (the “HHS Grants”). The HHS Grants are recorded as a contra expense within SHOP operating expenses. The Quarterly Pools include ~$1.9 million in HHS Grants received in 4Q21 and ~$26.1 million in HHS Grants received in 4Q20. The Sequential Pools include ~$1.9 million in HHS Grants received in 4Q21.


First Quarter 2022 Guidance

The Company currently expects to report first quarter 2022 Net Income (Loss) Attributable to Common Stockholders, Nareit FFO and Normalized FFO per share and same-store Cash NOI growth within the following ranges, which include $33 million (or $0.08 per share) of net HHS Grants received to date in the first quarter 2022:

 

 

1Q22 Guidance

 

 

Per Share

 

 

Low

 

High

 

 

 

 

 

Net Income (Loss) Attributable to Common Stockholders

 

$0.07

-

$0.11

Nareit FFO*

 

$0.74

-

$0.78

Normalized FFO*

 

$0.76

-

$0.80

 

 

1Q22 Guidance: Same-Store Cash NOI Growth

 

 

(vs. 1Q21, Quarterly Pools)

 

 

Percentage Change

Dollars ($, in millions)

 

 

Low

 

High

Low – 1Q22

 

High – 1Q22

1Q21

SHOP1

 

18.0%

-

26.0%

$126

 

$135

$107

NNN

 

(1.5%)

-

0.0%

$130

 

$132

$132

Office

 

4.0%

-

5.0%

$124

 

$125

$119

Total Company

 

6.0%

-

9.0%

$380

 

$391

$358

* This is a non-GAAP financial measure. Refer to the Non-GAAP Financial Measures Reconciliation tables at the end of this press release and our fourth quarter 2021 supplemental for additional information and a reconciliation to the most directly comparable GAAP measure.

1 Excluding the effect of the HHS Grants in all periods, the projected growth rate is expected to range from 6-15%. Senior Housing Operating Portfolio (“SHOP”) Same-Store Cash NOI reflects HHS Grants received in 1Q22, to date, and in 1Q21 under the Provider Relief Fund. The HHS Grants are recorded as a contra expense within SHOP operating expenses, net of any applicable fees to SHOP operators. The anticipated 1Q22 Quarterly Pool includes ~$21 million in net HHS Grants received in 1Q22, to date, and ~$8 million in HHS Grants received in 1Q21.


Key assumptions underlying the first quarter 2022 guidance include:

  • SHOP NOI Expectations: At the midpoint of the guidance, Ventas expects first quarter 2022 year-over-year same-store SHOP revenue to increase approximately 10% versus first quarter 2021. SHOP NOI is expected to grow in the range of 6% to 15% in the first quarter 2022, excluding net HHS Grants in all periods, with the range principally a function of operating expense assumptions.
    • Clinical Trends: Consistent with broader US trends, COVID-19 resident and staff confirmed cases increased sharply in January and into early February in Ventas’s SHOP communities but have recently declined dramatically.
    • Leading Indicators: Demand for senior housing continues to be robust. Leads have consistently trended at over 100% of pre-pandemic levels for nine consecutive months including January 2022, when leads reached their highest number since the onset of the pandemic.
    • Occupancy: Average occupancy for the first quarter 2022 in the same-store year-over-year SHOP business of 321 assets is expected to increase approximately 410 basis points at the midpoint of the Company’s expectations versus first quarter 2021. SHOP average occupancy for the first quarter 2022 in the same-store sequential SHOP business of 436 assets, is expected to decline by 20 basis points at the midpoint of the Company’s expectations, versus the fourth quarter 2021, outperforming normal seasonal trends and tempered by COVID-19 related impacts.
    • Revenue for the same-store SHOP business is expected to grow 10% at the midpoint of the Company’s expectations in the first quarter 2022 as compared to the first quarter 2021 principally through strong in-place rate increases implemented in the first quarter 2022 and improving re-leasing spreads.
    • Operating Expenses: A tight labor market, and increased staff absences due to COVID-19 protocols, have driven elevated labor and agency costs in the first quarter 2022 to date. At the guidance midpoint, Ventas expects operating costs to remain elevated through the first quarter even as COVID-19 clinical conditions moderate.
    • In the first quarter 2022, to date, the Company has received approximately $33 million of HHS Grants, net of fees to SHOP operators. The Company’s guidance assumes that no additional HHS Grants are received during the quarter.
  • The Office business year-over-year same-store cash NOI is expected to increase approximately 4.5% at the midpoint of the Company’s expectations versus first quarter 2021 due to occupancy growth in MOB and strong expense controls.
  • The guidance does not assume any new or unannounced material acquisitions or capital markets activities.
  • The guidance assumes a fully diluted share count of 403 million shares.
  • The guidance assumes no material changes in the impact of COVID-19 on the Company’s business. The trajectory and future impact of the COVID-19 pandemic, including the impact of any variant, on various aspects of our business, remain highly uncertain and may change rapidly. The extent of the pandemic’s continuing and ultimate effect on our operational and financial performance will depend on a variety of factors, including the speed at which clinical conditions improve, regulatory restrictions are loosened, and behavioral changes occur. Our guidance assumes continued improvement in these factors.

Investor Presentation

A presentation outlining the Company’s fourth quarter results and business update is posted to the Events & Presentations section of Ventas’s website at ir.ventasreit.com/events-and-presentations. Additional information regarding the Company can be found in its fourth quarter 2021 supplemental posted at ir.ventasreit.com. The information contained on, or that may be accessed through, our website is not incorporated by any reference into, and is not part of, this document.

Fourth Quarter and Full Year 2021 Results Conference Call and Investor Presentation

Ventas will hold a conference call to discuss this earnings release on Friday, February 18, 2022 at 10:00 a.m. Eastern Time (9:00 a.m. Central Time).

The dial-in number for the conference call is (888) 330-3576 (or +1 (646) 960-0672 for international callers), and the participant passcode is 7655497. A live webcast can be accessed from the Investor Relations section of www.ventasreit.com.

A telephonic replay will be available at (800) 770-2030 (or +1 (647) 362-9199 for international callers), passcode 7655497, after the earnings call and will remain available for 30 days. The webcast replay will be posted in the Investor Relations section of www.ventasreit.com.


About Ventas

Ventas Inc., an S&P 500 company, operates at the intersection of two large and dynamic industries – healthcare and real estate. Fueled by powerful demographic demand from growth in the aging population, Ventas owns a diversified portfolio of over 1,200 properties in the United States, Canada, and the United Kingdom. Ventas uses the power of its capital to unlock the value of senior living communities; life science, research & innovation properties; medical office & outpatient facilities, hospitals and other healthcare real estate. A globally-recognized real estate investment trust, Ventas follows a successful long-term strategy, proven over more than 20 years, built on diversification of property types, capital sources and industry leading partners, financial strength and flexibility, consistent and reliable growth and industry leading ESG achievements, managed by a collaborative and experienced team dedicated to its stakeholders.

Non-GAAP Financial Measures

This press release includes certain financial performance measures not defined by generally accepted accounting principles in the Unites States (“GAAP”). Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measures are included in this press release. We believe such measures provide investors with additional information concerning our operating performance and a basis to compare our performance with the performance of other REITs. Our definitions and calculations of these non-GAAP measures may not be the same as similar measures reported by other REITs.

These non-GAAP financial measures should not be considered as alternatives to net income attributable to common stockholders (determined in accordance with GAAP) as indicators of our financial performance or as alternatives to cash flow from operating activities (determined in accordance with GAAP) as measures of our liquidity, nor are these measures necessarily indicative of sufficient cash flow to fund all of our needs.

Cautionary Statements

Certain of the information contained herein, including intra-quarter operating information and number of confirmed cases of COVID-19, has been provided by our operators and we have not verified this information through an independent investigation or otherwise. We have no reason to believe that this information is inaccurate in any material respect, but we cannot assure you of its accuracy.

This press release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements include, among others, statements of expectations, beliefs, future plans and strategies, anticipated results from operations and developments and other matters that are not historical facts. Forward-looking statements include, among other things, statements regarding our and our officers’ intent, belief or expectation as identified by the use of words such as “may,” “will,” “project,” “expect,” “believe,” “intend,” “anticipate,” “seek,” “target,” “forecast,” “plan,” “potential,” “estimate,” “could,” “would,” “should” and other comparable and derivative terms or the negatives thereof.

Forward-looking statements are based on management’s beliefs as well as on a number of assumptions concerning future events. You should not put undue reliance on these forward-looking statements, which are not a guarantee of performance and are subject to a number of uncertainties and other factors that could cause actual events or results to differ materially from those expressed or implied by the forward-looking statements. We do not undertake a duty to update these forward-looking statements, which speak only as of the date on which they are made. You are urged to carefully review the disclosures we make concerning risks and uncertainties that may affect our business and future financial performance in our filings with the Securities and Exchange Commission, including those made in the “Summary Risk Factors” section, “Risk Factors” section and “Management’s Discussion & Analysis of Financial Condition and Results of Operations” section of our most recently filed Annual Report on Form 10-K.


Certain factors that could affect our future results and our ability to achieve our stated goals include, but are not limited to: (a) the impact of the ongoing COVID-19 pandemic and its extended consequences, including of the Delta, Omicron or any other variant, on our revenue, level of profitability, liquidity and overall risk exposure and the implementation and impact of regulations related to the CARES Act and other stimulus legislation and any future COVID-19 relief measures; (b) our ability to achieve the anticipated benefits and synergies from the acquisition of, and the risk of greater than expected costs or other difficulties related to the integration of, New Senior Investment Group Inc; (c) our exposure and the exposure of our tenants, managers and borrowers to complex healthcare and other regulation and the challenges and expense associated with complying with such regulation; (d) the potential for significant general and commercial claims, legal actions, regulatory proceedings or enforcement actions that could subject us or our tenants, managers or borrowers to increased operating costs and uninsured liabilities; (e) the impact of market and general economic conditions, including economic and financial market events, inflation, changes in interest rates, supply chain pressures, events that affect consumer confidence, our occupancy rates and resident fee revenues, and the actual and perceived state of the real estate markets, labor markets and public capital markets; (f) our ability, and the ability of our tenants, managers and borrowers, to navigate the trends impacting our or their businesses and the industries in which we or they operate; (g) the risk of bankruptcy, insolvency or financial deterioration of our tenants, managers, borrowers and other obligors and our ability to foreclose successfully on the collateral securing our loans and other investments in the event of a borrower default; (h) our ability to identify and consummate future investments in or dispositions of healthcare assets and effectively manage our portfolio opportunities and our investments in co-investment vehicles; (i) our ability to attract and retain talented employees; (j) the risk of investments in co-investment vehicles, joint ventures and minority interests; (k) risks related to development, redevelopment and construction projects; (l) the limitations and significant requirements imposed upon our business as a result of our status as a REIT and the adverse consequences (including the possible loss of our status as a REIT) that would result if we are not able to comply; (m) the risk of changes in healthcare law or regulation or in tax laws, guidance and interpretations, particularly as applied to REITs, that could adversely affect us or our tenants, managers or borrowers; (n) increases in our borrowing costs as a result of becoming more leveraged or as a result of changes in interest rates and phasing out of LIBOR rates; (o) our reliance on third parties to operate a majority of our assets and our limited control and influence over such operations and results; (p) our dependency on a limited number of tenants and managers for a significant portion of our revenues and operating income; (q) the adequacy of insurance coverage provided by our policies and policies maintained by our tenants, managers or other counterparties; (r) the occurrence of cyber incidents that could disrupt our operations, result in the loss of confidential information or damage our business relationships and reputation; (s) the impact of merger, acquisition and investment activity in the healthcare industry or otherwise affecting our tenants, managers or borrowers; and (t) the risk of catastrophic or extreme weather and other natural events and the physical effects of climate change.


CONSOLIDATED BALANCE SHEETS

(In thousands, except per share amounts; dollars in USD)

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

December 31,

 

September 30,

 

June 30,

 

March 31,

 

December 31,

 

2021

 

2021

 

2021

 

2021

 

2020

Assets

 

 

 

 

 

 

 

 

 

Real estate investments:

 

 

 

 

 

 

 

 

 

Land and improvements

$

2,432,065

 

 

$

2,395,751

 

 

$

2,231,836

 

 

$

2,235,773

 

 

$

2,261,415

 

Buildings and improvements

 

25,778,490

 

 

 

25,519,840

 

 

 

24,269,450

 

 

 

24,250,630

 

 

 

24,323,279

 

Construction in progress

 

269,315

 

 

 

298,982

 

 

 

288,910

 

 

 

310,547

 

 

 

265,748

 

Acquired lease intangibles

 

1,369,747

 

 

 

1,372,462

 

 

 

1,200,574

 

 

 

1,212,263

 

 

 

1,230,886

 

Operating lease assets

 

317,858

 

 

 

323,950

 

 

 

328,707

 

 

 

343,072

 

 

 

346,372

 

 

 

30,167,475

 

 

 

29,910,985

 

 

 

28,319,477

 

 

 

28,352,285

 

 

 

28,427,700

 

Accumulated depreciation and amortization

 

(8,350,637

)

 

 

(8,118,990

)

 

 

(8,189,447

)

 

 

(8,030,524

)

 

 

(7,877,665

)

Net real estate property

 

21,816,838

 

 

 

21,791,995

 

 

 

20,130,030

 

 

 

20,321,761

 

 

 

20,550,035

 

Secured loans receivable and investments, net

 

530,126

 

 

 

530,439

 

 

 

596,171

 

 

 

615,037

 

 

 

605,567

 

Investments in unconsolidated real estate entities

 

523,465

 

 

 

507,880

 

 

 

494,239

 

 

 

471,243

 

 

 

443,688

 

Net real estate investments

 

22,870,429

 

 

 

22,830,314

 

 

 

21,220,440

 

 

 

21,408,041

 

 

 

21,599,290

 

Cash and cash equivalents

 

149,725

 

 

 

143,770

 

 

 

233,837

 

 

 

169,661

 

 

 

413,327

 

Escrow deposits and restricted cash

 

46,872

 

 

 

52,752

 

 

 

40,931

 

 

 

40,551

 

 

 

38,313

 

Goodwill

 

1,046,140

 

 

 

1,046,070

 

 

 

1,051,832

 

 

 

1,051,780

 

 

 

1,051,650

 

Assets held for sale

 

28,399

 

 

 

316,769

 

 

 

90,002

 

 

 

59,860

 

 

 

9,608

 

Deferred income tax assets, net

 

11,152

 

 

 

11,496

 

 

 

11,486

 

 

 

11,610

 

 

 

9,987

 

Other assets

 

565,069

 

 

 

643,253

 

 

 

855,786

 

 

 

810,760

 

 

 

807,229

 

Total assets

$

24,717,786

 

 

$

25,044,424

 

 

$

23,504,314

 

 

$

23,552,263

 

 

$

23,929,404

 

Liabilities and equity

 

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

 

Senior notes payable and other debt

$

12,027,544

 

 

$

12,078,835

 

 

$

11,761,545

 

 

$

11,759,299

 

 

$

11,895,412

 

Accrued interest

 

106,602

 

 

 

90,013

 

 

 

105,883

 

 

 

91,390

 

 

 

111,444

 

Operating lease liabilities

 

197,234

 

 

 

199,551

 

 

 

205,484

 

 

 

206,426

 

 

 

209,917

 

Accounts payable and other liabilities

 

1,090,254

 

 

 

1,142,822

 

 

 

1,122,171

 

 

 

1,109,279

 

 

 

1,133,066

 

Liabilities related to assets held for sale

 

10,850

 

 

 

20,518

 

 

 

4,568

 

 

 

3,853

 

 

 

3,246

 

Deferred income tax liabilities

 

59,259

 

 

 

65,196

 

 

 

68,097

 

 

 

65,777

 

 

 

62,638

 

Total liabilities

 

13,491,743

 

 

 

13,596,935

 

 

 

13,267,748

 

 

 

13,236,024

 

 

 

13,415,723

 

Redeemable OP unitholder and noncontrolling interests

 

280,283

 

 

 

280,344

 

 

 

252,662

 

 

 

244,619

 

 

 

235,490

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

Equity:

 

 

 

 

 

 

 

 

 

Ventas stockholders’ equity:

 

 

 

 

 

 

 

 

 

Preferred stock, $1.00 par value; 10,000 shares authorized, unissued

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock, $0.25 par value; 399,420; 399,177; 375,204; 375,068 and 374,609 shares issued at December 31, 2021, September 30, 2021, June 30, 2021, March 31, 2021 and December 31, 2020, respectively

 

99,838

 

 

 

99,777

 

 

 

93,784

 

 

 

93,750

 

 

 

93,635

 

Capital in excess of par value

 

15,498,956

 

 

 

15,504,210

 

 

 

14,187,577

 

 

 

14,186,692

 

 

 

14,171,262

 

Accumulated other comprehensive loss

 

(64,520

)

 

 

(67,601

)

 

 

(58,290

)

 

 

(52,497

)

 

 

(54,354

)

Retained earnings (deficit)

 

(4,679,889

)

 

 

(4,459,630

)

 

 

(4,340,052

)

 

 

(4,257,001

)

 

 

(4,030,376

)

Treasury stock, 0; 1; 6; 14 and 0 shares at December 31, 2021, September 30, 2021, June 30, 2021, March 31, 2021 and December 31, 2020, respectively

 

 

 

 

(40

)

 

 

(320

)

 

 

(789

)

 

 

 

Total Ventas stockholders’ equity

 

10,854,385

 

 

 

11,076,716

 

 

 

9,882,699

 

 

 

9,970,155

 

 

 

10,180,167

 

Noncontrolling interests

 

91,375

 

 

 

90,429

 

 

 

101,205

 

 

 

101,465

 

 

 

98,024

 

Total equity

 

10,945,760

 

 

 

11,167,145

 

 

 

9,983,904

 

 

 

10,071,620

 

 

 

10,278,191

 

Total liabilities and equity

$

24,717,786

 

 

$

25,044,424

 

 

$

23,504,314

 

 

$

23,552,263

 

 

$

23,929,404

 


CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share amounts; dollars in USD)

(unaudited)

 

 

 

 

 

 

 

 

 

For the Three Months Ended

 

For the Years Ended

 

December 31,

 

December 31,

 

2021

 

2020

 

2021

 

2020

Revenues

 

 

 

 

 

 

 

Rental income:

 

 

 

 

 

 

 

Triple-net leased

$

153,336

 

 

$

168,027

 

 

$

653,823

 

 

$

695,265

Office

 

194,781

 

 

 

199,931

 

 

 

794,297

 

 

 

799,627

 

 

348,117

 

 

 

367,958

 

 

 

1,448,120

 

 

 

1,494,892

Resident fees and services

 

647,360

 

 

 

529,739

 

 

 

2,270,001

 

 

 

2,197,160

Office building and other services revenue

 

3,924

 

 

 

4,522

 

 

 

20,096

 

 

 

15,191

Income from loans and investments

 

9,577

 

 

 

18,302

 

 

 

74,981

 

 

 

80,505

Interest and other income

 

13,466

 

 

 

644

 

 

 

14,809

 

 

 

7,609

Total revenues

 

1,022,444

 

 

 

921,165

 

 

 

3,828,007

 

 

 

3,795,357

Expenses

 

 

 

 

 

 

 

Interest

 

110,455

 

 

 

114,208

 

 

 

440,089

 

 

 

469,541

Depreciation and amortization

 

318,959

 

 

 

261,966

 

 

 

1,197,403

 

 

 

1,109,763

Property-level operating expenses:

 

 

 

 

 

 

 

Senior living

 

515,427

 

 

 

393,309

 

 

 

1,811,728

 

 

 

1,658,671

Office

 

61,704

 

 

 

64,420

 

 

 

257,001

 

 

 

256,612

Triple-net leased

 

2,810

 

 

 

5,156

 

 

 

15,335

 

 

 

22,160

 

 

579,941

 

 

 

462,885

 

 

 

2,084,064

 

 

 

1,937,443

Office building and other services costs

 

2,635

 

 

 

488

 

 

 

4,433

 

 

 

2,315

General, administrative and professional fees

 

28,602

 

 

 

29,537

 

 

 

129,758

 

 

 

130,158

Loss on extinguishment of debt, net

 

2,491

 

 

 

3,405

 

 

 

59,299

 

 

 

10,791

Transaction expenses and deal costs

 

19,318

 

 

 

3,683

 

 

 

47,318

 

 

 

29,812

Allowance on loans receivable and investments

 

(61

)

 

 

(10,416

)

 

 

(9,082

)

 

 

24,238

Other

 

26,355

 

 

 

(16,043

)

 

 

37,110

 

 

 

707

Total expenses

 

1,088,695

 

 

 

849,713

 

 

 

3,990,392

 

 

 

3,714,768

(Loss) income before unconsolidated entities, real estate dispositions, income taxes and noncontrolling interests

 

(66,251

)

 

 

71,452

 

 

 

(162,385

)

 

 

80,589

(Loss) income from unconsolidated entities

 

(2,306

)

 

 

17,705

 

 

 

4,983

 

 

 

1,844

Gain on real estate dispositions

 

24,705

 

 

 

22,117

 

 

 

218,788

 

 

 

262,218

Income tax benefit (expense)

 

4,747

 

 

 

679

 

 

 

(4,827

)

 

 

96,534

(Loss) income from continuing operations

 

(39,105

)

 

 

111,953

 

 

 

56,559

 

 

 

441,185

Net (loss) income

 

(39,105

)

 

 

111,953

 

 

 

56,559

 

 

 

441,185

Net income attributable to noncontrolling interests

 

1,749

 

 

 

1,502

 

 

 

7,551

 

 

 

2,036

Net (loss) income attributable to common stockholders

$

(40,854

)

 

$

110,451

 

 

$

49,008

 

 

$

439,149

Earnings per common share

 

 

 

 

 

 

 

Basic:

 

 

 

 

 

 

 

(Loss) income from continuing operations

$

(0.10

)

 

$

0.30

 

 

$

0.15

 

 

$

1.18

Net (loss) income attributable to common stockholders

 

(0.10

)

 

 

0.29

 

 

 

0.13

 

 

 

1.18

Diluted:1

 

 

 

 

 

 

 

(Loss) income from continuing operations

$

(0.10

)

 

$

0.30

 

 

$

0.15

 

 

$

1.17

Net (loss) income attributable to common stockholders

 

(0.10

)

 

 

0.29

 

 

 

0.13

 

 

 

1.17

Weighted average shares used in computing earnings per common share

 

 

 

 

 

 

 

Basic

 

399,142

 

 

 

374,473

 

 

 

382,785

 

 

 

373,368

Diluted

 

403,108

 

 

 

377,696

 

 

 

386,304

 

 

 

376,503















 

1 Potential common shares are not included in the computation of diluted earnings per share when a loss from continuing operations exists as the effect would be an antidilutive per share amount.


QUARTERLY CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share amounts; dollars in USD)

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended

 

December 31,

 

September 30,

 

June 30,

 

March 31,

 

December 31,

 

2021

 

2021

 

2021

 

2021

 

2020

Revenues

 

 

 

 

 

 

 

 

 

Rental income:

 

 

 

 

 

 

 

 

 

Triple-net leased

$

153,336

 

 

$

181,379

 

 

$

159,223

 

 

$

159,885

 

 

$

168,027

 

Office

 

194,781

 

 

 

201,673

 

 

 

200,388

 

 

 

197,455

 

 

 

199,931

 

 

 

348,117

 

 

 

383,052

 

 

 

359,611

 

 

 

357,340

 

 

 

367,958

 

Resident fees and services

 

647,360

 

 

 

558,039

 

 

 

535,952

 

 

 

528,650

 

 

 

529,739

 

Office building and other services revenue

 

3,924

 

 

 

5,841

 

 

 

5,381

 

 

 

4,950

 

 

 

4,522

 

Income from loans and investments

 

9,577

 

 

 

28,729

 

 

 

17,665

 

 

 

19,010

 

 

 

18,302

 

Interest and other income

 

13,466

 

 

 

417

 

 

 

585

 

 

 

341

 

 

 

644

 

Total revenues

 

1,022,444

 

 

 

976,078

 

 

 

919,194

 

 

 

910,291

 

 

 

921,165

 

Expenses

 

 

 

 

 

 

 

 

 

Interest

 

110,455

 

 

 

108,816

 

 

 

110,051

 

 

 

110,767

 

 

 

114,208

 

Depreciation and amortization

 

318,959

 

 

 

313,596

 

 

 

250,700

 

 

 

314,148

 

 

 

261,966

 

Property-level operating expenses:

 

 

 

 

 

 

 

 

 

Senior living

 

515,427

 

 

 

453,659

 

 

 

424,813

 

 

 

417,829

 

 

 

393,309

 

Office

 

61,704

 

 

 

66,401

 

 

 

64,950

 

 

 

63,946

 

 

 

64,420

 

Triple-net leased

 

2,810

 

 

 

3,268

 

 

 

4,432

 

 

 

4,825

 

 

 

5,156

 

 

 

579,941

 

 

 

523,328

 

 

 

494,195

 

 

 

486,600

 

 

 

462,885

 

Office building and other services costs

 

2,635

 

 

 

522

 

 

 

658

 

 

 

618

 

 

 

488

 

General, administrative and professional fees

 

28,602

 

 

 

30,259

 

 

 

30,588

 

 

 

40,309

 

 

 

29,537

 

Loss (gain) on extinguishment of debt, net

 

2,491

 

 

 

29,792

 

 

 

(74

)

 

 

27,090

 

 

 

3,405

 

Transaction expenses and deal costs

 

19,318

 

 

 

22,662

 

 

 

721

 

 

 

4,617

 

 

 

3,683

 

Allowance on loans receivable and investments

 

(61

)

 

 

(60

)

 

 

(59

)

 

 

(8,902

)

 

 

(10,416

)

Other

 

26,355

 

 

 

33,673

 

 

 

(13,490

)

 

 

(9,428

)

 

 

(16,043

)

Total expenses

 

1,088,695

 

 

 

1,062,588

 

 

 

873,290

 

 

 

965,819

 

 

 

849,713

 

(Loss) income before unconsolidated entities, real estate dispositions, income taxes and noncontrolling interests

 

(66,251

)

 

 

(86,510

)

 

 

45,904

 

 

 

(55,528

)

 

 

71,452

 

(Loss) income from unconsolidated entities

 

(2,306

)

 

 

2,772

 

 

 

4,767

 

 

 

(250

)

 

 

17,705

 

Gain on real estate dispositions

 

24,705

 

 

 

150,292

 

 

 

41,258

 

 

 

2,533

 

 

 

22,117

 

Income tax benefit (expense)

 

4,747

 

 

 

(3,780

)

 

 

(3,641

)

 

 

(2,153

)

 

 

679

 

(Loss) income from continuing operations

 

(39,105

)

 

 

62,774

 

 

 

88,288

 

 

 

(55,398

)

 

 

111,953

 

Net (loss) income

 

(39,105

)

 

 

62,774

 

 

 

88,288

 

 

 

(55,398

)

 

 

111,953

 

Net income attributable to noncontrolling interests

 

1,749

 

 

 

2,094

 

 

 

1,897

 

 

 

1,811

 

 

 

1,502

 

Net (loss) income attributable to common stockholders

$

(40,854

)

 

$

60,680

 

 

$

86,391

 

 

$

(57,209

)

 

$

110,451

 

Earnings per common share

 

 

 

 

 

 

 

 

 

Basic:

 

 

 

 

 

 

 

 

 

(Loss) income from continuing operations

$

(0.10

)

 

$

0.16

 

 

$

0.24

 

 

$

(0.15

)

 

$

0.30

 

Net (loss) income attributable to common stockholders

 

(0.10

)

 

 

0.16

 

 

 

0.23

 

 

 

(0.15

)

 

 

0.29

 

Diluted: 1

 

 

 

 

 

 

 

 

 

(Loss) income from continuing operations

$

(0.10

)

 

$

0.16

 

 

 

0.23

 

 

$

(0.15

)

 

$

0.30

 

Net (loss) income attributable to common stockholders

 

(0.10

)

 

 

0.16

 

 

 

0.23

 

 

 

(0.15

)

 

 

0.29

 

Weighted average shares used in computing earnings per common share

 

 

 

 

 

 

 

 

 

Basic

 

399,142

 

 

 

381,996

 

 

 

375,067

 

 

 

374,669

 

 

 

374,473

 

Diluted

 

403,108

 

 

 

385,523

 

 

 

378,408

 

 

 

377,922

 

 

 

377,696

 




















 

1 Potential common shares are not included in the computation of diluted earnings per share when a loss from continuing operations exists as the effect would be an antidilutive per share amount.


CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands USD)

 

 

 

 

 

For the Years Ended December 31,

 

2021

 

2020

Cash flows from operating activities:

 

 

 

Net income

$

56,559

 

 

$

441,185

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

Depreciation and amortization

 

1,197,403

 

 

 

1,109,763

 

Amortization of deferred revenue and lease intangibles, net

 

(88,795

)

 

 

(40,856

)

Other non-cash amortization

 

17,709

 

 

 

20,719

 

Allowance on loans receivable and investments

 

(9,082

)

 

 

24,238

 

Stock-based compensation

 

31,966

 

 

 

21,487

 

Straight-lining of rental income

 

(14,468

)

 

 

103,082

 

Loss on extinguishment of debt, net

 

59,299

 

 

 

10,791

 

Gain on real estate dispositions

 

(218,788

)

 

 

(262,218

)

Gain on real estate loan investments

 

(1,448

)

 

 

(167

)

Income tax benefit

 

(1,224

)

 

 

(101,985

)

Income from unconsolidated entities

 

(4,973

)

 

 

(1,832

)

Distributions from unconsolidated entities

 

19,326

 

 

 

4,920

 

Other

 

26,404

 

 

 

(779

)

Changes in operating assets and liabilities:

 

 

 

Increase in other assets

 

(54,571

)

 

 

(68,233

)

(Decrease) increase in accrued interest

 

(5,922

)

 

 

276

 

Increase in accounts payable and other liabilities

 

16,721

 

 

 

189,785

 

Net cash provided by operating activities

 

1,026,116

 

 

 

1,450,176

 

Cash flows from investing activities:

 

 

 

Net investment in real estate property

 

(1,369,052

)

 

 

(78,648

)

Investment in loans receivable

 

(489

)

 

 

(115,163

)

Proceeds from real estate disposals

 

840,438

 

 

 

1,044,357

 

Proceeds from loans receivable

 

348,091

 

 

 

119,011

 

Development project expenditures

 

(247,694

)

 

 

(380,413

)

Capital expenditures

 

(185,275

)

 

 

(148,234

)

Distributions from unconsolidated entities

 

17,847

 

 

 

 

Investment in unconsolidated entities

 

(129,291

)

 

 

(286,822

)

Insurance proceeds for property damage claims

 

1,285

 

 

 

207

 

Net cash (used in) provided by investing activities

 

(724,140

)

 

 

154,295

 

Cash flows from financing activities:

 

 

 

Net change in borrowings under revolving credit facilities

 

(125,399

)

 

 

(88,868

)

Net change in borrowings under commercial paper program

 

279,929

 

 

 

(565,524

)

Proceeds from debt

 

1,534,298

 

 

 

733,298

 

Repayments of debt

 

(2,109,617

)

 

 

(479,539

)

Purchase of noncontrolling interests

 

(24,224

)

 

 

(8,239

)

Payment of deferred financing costs

 

(27,166

)

 

 

(8,379

)

Issuance of common stock, net

 

617,438

 

 

 

55,362

 

Cash distribution to common stockholders

 

(686,888

)

 

 

(928,809

)

Cash distribution to redeemable OP unitholders

 

(6,761

)

 

 

(7,283

)

Cash issued for redemption of OP Units

 

(96

)

 

 

(575

)

Contributions from noncontrolling interests

 

1,731

 

 

 

1,314

 

Distributions to noncontrolling interests

 

(13,577

)

 

 

(12,946

)

Proceeds from stock option exercises

 

8,169

 

 

 

15,103

 

Other

 

(6,303

)

 

 

(4,936

)

Net cash used in financing activities

 

(558,466

)

 

 

(1,300,021

)

Net (decrease) increase in cash, cash equivalents and restricted cash

 

(256,490

)

 

 

304,450

 

Effect of foreign currency translation

 

1,447

 

 

 

1,088

 

Cash, cash equivalents and restricted cash at beginning of period

 

451,640

 

 

 

146,102

 

Cash, cash equivalents and restricted cash at end of period

$

196,597

 

 

$

451,640

 


CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)

(Dollars in thousands USD)

 

 

 

 

 

For the Years Ended December 31,

 

2021

 

2020

Supplemental schedule of non-cash activities:

 

 

 

Assets acquired and liabilities assumed from acquisitions and other:

 

 

 

Real estate investments

$

1,319,988

 

$

170,484

Other assets

 

16,913

 

 

1,224

Debt

 

482,482

 

 

55,368

Other liabilities

 

102,256

 

 

2,707

Deferred income tax liability

 

446

 

 

337

Noncontrolling interests

 

468

 

 

20,259

Equity issued

 

751,248

 

 

Equity issued for redemption of OP Units

 

76

 

 


QUARTERLY CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands USD)

(unaudited)

 

For the Three Months Ended

 

December 31,

 

September 30,

 

June 30,

 

March 31,

 

December 31,

 

2021

 

2021

 

2021

 

2021

 

2020

Cash flows from operating activities:

 

 

 

 

 

 

 

 

 

Net (loss) income

$

(39,107

)

 

$

62,774

 

 

$

88,288

 

 

$

(55,398

)

 

$

111,953

 

Adjustments to reconcile net (loss) income to net cash provided by operating activities:

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

318,959

 

 

 

313,596

 

 

 

250,700

 

 

 

314,148

 

 

 

261,966

 

Amortization of deferred revenue and lease intangibles, net

 

(17,175

)

 

 

(40,069

)

 

 

(16,785

)

 

 

(14,766

)

 

 

(15,513

)

Other non-cash amortization

 

3,023

 

 

 

4,567

 

 

 

4,847

 

 

 

5,272

 

 

 

5,508

 

Allowance on loans receivable and investments

 

(61

)

 

 

(60

)

 

 

(59

)

 

 

(8,902

)

 

 

(10,416

)

Stock-based compensation

 

5,801

 

 

 

4,700

 

 

 

5,393

 

 

 

16,072

 

 

 

4,165

 

Straight-lining of rental income

 

(4,302

)

 

 

(2,999

)

 

 

(3,304

)

 

 

(3,863

)

 

 

(4,052

)

Loss (gain) on extinguishment of debt, net

 

2,491

 

 

 

29,792

 

 

 

(74

)

 

 

27,090

 

 

 

3,405

 

Gain on real estate dispositions

 

(24,705

)

 

 

(150,292

)

 

 

(41,258

)

 

 

(2,533

)

 

 

(22,117

)

Loss (gain) on real estate loan investments

 

558

 

 

 

(1,932

)

 

 

 

 

 

(74

)

 

 

 

Income tax (benefit) expense

 

(5,880

)

 

 

2,146

 

 

 

2,007

 

 

 

503

 

 

 

(2,283

)

Loss (income) from unconsolidated entities

 

2,306

 

 

 

(2,767

)

 

 

(4,762

)

 

 

250

 

 

 

(17,701

)

Distributions from unconsolidated entities

 

9,860

 

 

 

2,986

 

 

 

2,583

 

 

 

3,897

 

 

 

1,960

 

Other

 

27,236

 

 

 

34,011