Ventas Third Quarter Normalized FFO Rises 24 Percent to $39.8
Million; Per Share Normalized FFO Increases 18 Percent to $0.47 Per
Share Company Updates 2004 Normalized FFO Guidance to $1.78 to
$1.80 Per Share LOUISVILLE, Ky., Oct. 27 /PRNewswire-FirstCall/ --
Ventas, Inc. (NYSE:VTR) ("Ventas" or the "Company") said today that
third quarter 2004 normalized Funds from Operations ("FFO") rose 24
percent to $39.8 million, compared with $32.2 million in the third
quarter 2003. Normalized FFO per diluted share in the third quarter
2004 increased 18 percent to $0.47 from $0.40 per diluted share for
the comparable 2003 period. In the third quarter ended September
30, 2004, the Company had 84.9 million weighted average diluted
shares outstanding, compared to 80.3 million weighted average
diluted shares outstanding a year earlier. Normalized FFO for the
nine months ended September 30, 2004 was $111.6 million, or $1.33
per diluted share, a 22 percent increase from $91.3 million, or
$1.14 per diluted share, for the comparable 2003 period. Normalized
FFO for all periods excludes the benefit of a $20.2 million
reversal of a previously recorded contingent liability, which
increased operating income in the first quarter of 2003, an $8.1
million and a $9.0 million gain on sales of common stock of the
Company's primary tenant, Kindred Healthcare, Inc. (NYSE:KND)
("Kindred"), which the Company realized during the three and nine
months ended September 30, 2003, respectively, and a $1.4 million
loss on extinguishment of debt recognized during the third quarter
of 2004 due to the Company's refinancing of its credit facility.
The third quarter and first nine months of 2004 benefited from the
Company's recent acquisition activity and increased rent from its
master lease agreements with Kindred. "Our shareholders will
benefit from another quarter of excellent growth. Normalized FFO
rose 18 percent per share and we improved our future earnings power
by completing two important capital markets transactions,"
Chairman, President and CEO Debra A. Cafaro said. "With our new
bank facility and senior note offering completed on attractive
terms, Ventas has a strong platform to support its further
investment in healthcare and senior housing assets and enhance its
ability to create long-term value for shareholders." GAAP NET
INCOME Ventas reported third quarter 2004 net income of $25.3
million, or $0.30 per diluted share. In the third quarter of 2003,
Ventas reported net income of $32.2 million, or $0.40 per diluted
share, after discontinued operations of $1.8 million, or $0.02 per
diluted share, related to the sale of 27 facilities. Net income for
the nine months ended September 30, 2004 was $74.2 million, or
$0.88 per diluted share, compared with net income for the nine
months ended September 30, 2003 of $85.6 million, or $1.07 per
diluted share, after discontinued operations of $4.2 million, or
$0.05 per diluted share. THIRD QUARTER HIGHLIGHTS AND OTHER RECENT
DEVELOPMENTS -- Two of Ventas's wholly owned subsidiaries issued
$125 million of 6-5/8 percent unsecured senior notes, maturing on
October 15, 2014, locking in the Company's long-term debt costs and
giving it greater capacity to continue its growth and
diversification plan. Proceeds were used to pay down borrowings
under the Company's revolving credit facility. -- Ventas closed its
new $300 million secured revolving credit facility initially priced
at 125 basis points over LIBOR, significantly better than its
previous revolving credit facility which was initially priced at
275 basis points over LIBOR. The improvement reflects upgrades in
the Company's credit ratings, the success of its diversification
program, increased cash flows and profits, and lower leverage.
Ventas currently has $36.0 million drawn under this facility. --
Ventas entered into a sale/leaseback transaction with Summerville
Senior Living, Inc. on two assisted living facilities located in
Ohio and Connecticut containing 166 units. The purchase price was
$26.8 million, and cash rent on these investments approximates 9.15
percent, increasing annually by approximately 2.5 percent over the
term of the lease. -- Ventas also invested $15.7 million in the
acquisition of five medical office buildings (MOBs), one in Texas
and four in Florida. The MOBs are projected to produce a yield in
excess of 9 percent. One of these assets was acquired on October 7,
2004. -- With the completed acquisitions, annualized expected rent
from Kindred represents approximately 79 percent of the Company's
annualized expected revenue, assuming a full quarter effect of all
acquisitions. Annualized rent from market rate, non-government
reimbursed assets in the Company's portfolio represents 14 percent
of the Company's annualized expected revenue, on the same basis.
These assets include independent living facilities, assisted living
facilities and medical/office buildings. -- In addition, assets
leased to Kindred now represent 68 percent of the Company's total
assets, measured on a gross book value basis. -- Ventas said its
acquisition pipeline remains active, with approximately $100
million of additional senior housing and healthcare assets under
contract and/or nonbinding letters of intent. The anticipated yield
on these investments is at least 9 percent. While the Company
expects these acquisitions to close, there can be no assurances
that these transactions will be completed, or if they are
completed, when they might occur. -- The Company maintained a
strong balance sheet at September 30, 2004, with a third quarter
pro forma annualized net debt-to-EBITDA ratio of 3.7 times. --
Ventas appointed Christopher T. Hannon, Senior Vice President and
Chief Financial Officer of Province Healthcare Company (NYSE:PRV),
to its Board of Directors, where he will serve on the Company's
Audit and Compliance Committee. Hannon's election underscores
Ventas's ongoing commitment to an independent, experienced Board of
Directors and best practices in corporate governance. -- The 227
skilled nursing facilities and hospitals leased by the Company to
its primary tenant, Kindred, produced EBITDAR to rent coverage of
1.7 times (after management fees) for the trailing twelve month
period ended June 30, 2004 (the latest date available). Further
information detailing these rent coverages is contained on a
schedule attached to this Press Release. -- Ventas obtained a
disbursement of $750,000 from its joint tax escrow with Kindred,
which contains proceeds of various refunds for the pre-1999 tax
periods. THIRD QUARTER 2004 RESULTS Rental revenue for the quarter
ended September 30, 2004 was $60.7 million, of which $49.0 million
(or 80.7 percent) resulted from leases with Kindred. Third quarter
expenses totaled $36.3 million, and included $13.3 million of
depreciation expense and $16.9 million of interest expense. General
and administrative and professional expenses for the 2004 third
quarter totaled $4.0 million. Property level operating expenses for
the period were $0.4 million. NINE MONTH 2004 RESULTS Rental
revenue for the nine months ended September 30, 2004 was $172.6
million, of which $144.8 million (or 83.9 percent) resulted from
leases with Kindred. Expenses for the nine months ended September
30, 2004 totaled $101.4 million and included $36.2 million of
depreciation expense, $49.3 million of interest expense and $12.8
million of general and administrative and professional expenses.
Property level operating expenses for the period were $0.9 million.
VENTAS UPDATES 2004 NORMALIZED FFO GUIDANCE AND ISSUES 2005
GUIDANCE Ventas also stated that it expects 2004 normalized FFO to
be between $1.78 and $1.80 per diluted share, updated from the
previous guidance of $1.75 to $1.79 per diluted share. The Company
also said it expects to achieve 2005 normalized FFO of between
$1.89 and $1.93 per diluted share. The Company's normalized FFO
guidance assumes that all of the Company's tenants and borrowers
continue to meet all of their obligations to the Company and that
the Company closes all acquisitions currently subject to contract
and/or non-binding letters of intent by March 31, 2005. There can
be no assurance that these transactions will occur or when they
will occur. Any failure or delay in completing these transactions
could reduce the amount of 2004 and 2005 FFO that Ventas actually
achieves. In addition to the previously stated assumptions, the
Company's normalized FFO guidance (and related GAAP earnings
projections) for all periods exclude gains and losses on the sales
of assets, and the impact of additional, unannounced future
acquisitions, divestitures and capital transactions. Its guidance
also excludes the future impact of (a) any expense the Company
records for non-cash "swap ineffectiveness," and (b) any expenses
related to asset impairment, the write-off of unamortized deferred
financing fees or additional costs, expenses or premiums incurred
as a result of early debt retirement. The Company's normalized FFO
guidance is based on a number of other assumptions, which are
subject to change and many of which are outside the control of the
Company. If actual results vary from these assumptions, the
Company's expectations may change. There can be no assurance that
the Company will achieve these results. Reconciliation of the
Company's normalized FFO guidance to the Company's projected GAAP
earnings is provided on a schedule attached to this Press Release.
The Company may from time to time update its publicly announced
normalized FFO guidance, but it is not obligated to do so. THIRD
QUARTER CONFERENCE CALL Ventas will hold a conference call to
discuss this earnings release on Thursday, October 28, 2004, at
10:00 a.m. Eastern Time (9:00 a.m. Central Time). The conference
call is being web cast by CCBN and can be accessed at the Ventas
website at http://www.ventasreit.com/ or
http://www.fulldisclosure.com/ . An online replay of the web cast
will be available at approximately 11:00 a.m. Eastern Time and will
be archived for thirty (30) days. Ventas, Inc. is a leading
healthcare real estate investment trust that owns healthcare and
senior housing assets in 39 states. Its properties include 42
hospitals, 201 skilled nursing facilities, 29 assisted and
independent living facilities, 8 medical/office buildings and 8
other healthcare assets. More information about Ventas can be found
on its website at http://www.ventasreit.com/ . 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. All statements
regarding Ventas, Inc.'s ("Ventas" or the "Company") and its
subsidiaries' expected future financial position, results of
operations, cash flows, funds from operations, dividends and
dividend plans, financing plans, business strategy, budgets,
projected costs, capital expenditures, competitive positions,
growth opportunities, expected lease income, continued
qualification as a real estate investment trust ("REIT"), plans and
objectives of management for future operations and statements that
include words such as "anticipate," "if," "believe," "plan,"
"estimate," "expect," "intend," "may," "could," "should," "will"
and other similar expressions are forward-looking statements. Such
forward-looking statements are inherently uncertain, and security
holders must recognize that actual results may differ from the
Company's expectations. The Company does not undertake a duty to
update such forward-looking statements. Actual future results and
trends for the Company may differ materially depending on a variety
of factors discussed in the Company's filings with the Securities
and Exchange Commission (the "Commission"). Factors that may affect
the plans or results of the Company include, without limitation,
(a) the ability and willingness of Kindred Healthcare, Inc.
("Kindred") and certain of its affiliates to continue to meet
and/or perform their obligations under their contractual
arrangements with the Company and the Company's subsidiaries,
including without limitation the lease agreements and various
agreements entered into by the Company and Kindred at the time of
the Company's spin off of Kindred on May 1, 1998 (the "1998 Spin
Off"), as such agreements may have been amended and restated in
connection with Kindred's emergence from bankruptcy on April 20,
2001, (b) the ability and willingness of Kindred to continue to
meet and/or perform its obligation to indemnify and defend the
Company for all litigation and other claims relating to the
healthcare operations and other assets and liabilities transferred
to Kindred in the 1998 Spin Off, (c) the ability of Kindred and the
Company's other operators, tenants and borrowers to maintain the
financial strength and liquidity necessary to satisfy their
respective obligations and duties under the leases and other
agreements with the Company, and their existing credit agreements,
(d) the Company's success in implementing its business strategy and
the Company's ability to identify, underwrite, consummate and
integrate diversifying acquisitions or investments, (e) the nature
and extent of future competition, (f) the extent of future
healthcare reform and regulation, including cost containment
measures and changes in reimbursement policies, procedures and
rates, (g) increases in the cost of borrowing for the Company, (h)
the ability of the Company's operators to deliver high quality care
and to attract patients, (i) the results of litigation affecting
the Company, (j) changes in general economic conditions and/or
economic conditions in the markets in which the Company may, from
time to time, compete, (k) the ability of the Company to pay down,
refinance, restructure, and/or extend its indebtedness as it
becomes due, (l) the movement of interest rates and the resulting
impact on the value of and the accounting for the Company's
interest rate swap agreement, (m) the ability and willingness of
the Company to maintain its qualification as a REIT due to
economic, market, legal, tax or other considerations, (n) final
determination of the Company's taxable net income for the year
ending December 31, 2004, (o) the ability and willingness of the
Company's tenants to renew their leases with the Company upon
expiration of the leases and the Company's ability to relet its
properties on the same or better terms in the event such leases
expire and are not renewed by the existing tenants, and (p) the
impact on the liquidity, financial condition and results of
operations of Kindred and the Company's other operators resulting
from increased operating costs and uninsured liabilities for
professional liability claims, and the ability of Kindred and the
Company's other operators to accurately estimate the magnitude of
such liabilities. Many of such factors are beyond the control of
the Company and its management. CONDENSED CONSOLIDATED BALANCE
SHEETS As of September 30, 2004, June 30, 2004, March 31, 2004 and
December 31, 2003 (In thousands) September 30, June 30, March 31,
December 31, 2004 2004 2004 2003 (Unaudited) (Unaudited)
(Unaudited) (Audited) Assets Real estate investments: Land $
140,969 $ 136,634 $ 132,433 $ 104,300 Building and improvements
1,333,310 1,299,660 1,233,827 985,881 1,474,279 1,436,294 1,366,260
1,090,181 Accumulated depreciation (444,859) (431,707) (419,664)
(408,891) Total net real estate property 1,029,420 1,004,587
946,596 681,290 Loan receivable, net 16,309 16,423 16,437 16,455
Total net real estate investments 1,045,729 1,021,010 963,033
697,745 Cash and cash equivalents 3,805 8,880 1,723 82,104
Restricted cash 16,757 18,358 18,984 7,575 Deferred financing
costs, net 11,738 11,423 12,443 13,465 Notes receivable from
employees 3,269 3,251 3,609 3,772 Other 10,047 10,081 7,527 8,189
Total assets $ 1,091,345 $ 1,073,003 $ 1,007,319 $ 812,850
Liabilities and stockholders' equity Liabilities: Senior Notes
payable and other debt $ 853,774 $ 851,675 $ 782,362 $ 640,562
Deferred revenue 13,536 14,204 14,718 15,308 Interest rate swap
agreements 21,133 18,251 32,041 27,868 Accrued dividend - - -
21,614 Accrued interest 15,261 6,718 14,525 5,821 Accounts payable
and other accrued liabilities 27,074 22,133 19,386 14,968 Deferred
income taxes 30,394 30,394 30,394 30,394 Total liabilities 961,172
943,375 893,426 756,535 Commitments and contingencies Stockholders'
equity: Preferred stock, 10,000 shares authorized, unissued - - - -
Common stock, $0.25 par value; authorized 180,000 shares; 84,934
shares issued at September 30, 2004 21,233 21,190 21,157 20,652
Capital in excess of par value 204,393 201,482 199,945 162,466
Unearned compensation on restricted stock (968) (1,235) (1,339)
(748) Accumulated other comprehensive loss (13,588) (10,129)
(23,341) (18,294) Retained earnings (deficit) (64,473) (62,377)
(60,740) (56,790) 146,597 148,931 135,682 107,286 Treasury stock,
586 shares at September 30, 2004 (16,424) (19,303) (21,789)
(50,971) Total stockholders' equity 130,173 129,628 113,893 56,315
Total liabilities and stockholders' equity $ 1,091,345 $ 1,073,003
$ 1,007,319 $ 812,850 CONDENSED CONSOLIDATED STATEMENTS OF INCOME
For the Three and Nine Months Ended September 30, 2004 and 2003 (In
thousands, except per share amounts) (Unaudited) Three Months Ended
Nine Months Ended September 30, September 30, 2004 2003 2004 2003
Revenues: Rental income $60,656 $49,355 $172,606 $141,824 Interest
income from loan receivable 763 766 2,274 2,271 Interest and other
income 189 280 772 1,325 Total revenues 61,608 50,401 175,652
145,420 Expenses: Property level operating expenses 372 - 869 -
General and administrative 3,563 3,136 10,947 9,356 Professional
fees 484 416 1,854 1,878 Reversal of contingent liability - - -
(20,164) Amortization of restricted stock grants 321 309 871 910
Depreciation 13,255 9,952 36,249 29,805 Interest 16,946 14,313
49,266 45,907 Loss on extinguishment of debt 1,370 - 1,370 - Swap
ineffectiveness - - - 369 Interest on United States Settlement - -
- 4,943 Total expenses 36,311 28,126 101,426 73,004 Operating
income 25,297 22,275 74,226 72,416 Gain on sale of Kindred common
stock - 8,117 - 9,039 Income before discontinued operations 25,297
30,392 74,226 81,455 Discontinued operations - 1,820 - 4,174 Net
income $ 25,297 $ 32,212 $ 74,226 $ 85,629 Earnings per common
share: Basic: Income before discontinued operations $0.30 $0.38
$0.89 $1.03 Net income $0.30 $0.41 $0.89 $1.08 Diluted: Income
before discontinued operations $0.30 $0.38 $0.88 $1.02 Net income
$0.30 $0.40 $0.88 $1.07 Shares used in computing earnings per
common share: Basic 84,073 79,389 83,202 79,055 Diluted 84,889
80,258 84,074 79,711 Dividend declared per common share $0.3250
$0.2675 $0.9750 $0.8025 CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS For the Nine Months Ended September 30, 2004 and 2003 (In
thousands) (Unaudited) Nine Months Ended September 30, 2004 2003
Cash flows from operating activities: Net income $74,226 $85,629
Adjustments to reconcile net income to net cash provided by
operating activities: Depreciation (including discontinued
operations) 36,249 31,837 Amortization of deferred financing costs
3,016 3,068 Amortization of restricted stock grants 871 910
Reversal of contingent liability - (20,164) Normalized rents
(1,728) (115) Gain on sale of Kindred common stock - (9,039) Loss
on extinguishment of debt 1,370 - Loss on sale of real estate
assets (included in discontinued operations) - 3,189 Loss on
impairment of asset (included in discontinued operations) - 845
Amortization of deferred revenue (1,886) (2,671) Non-cash interest
on the United States Settlement - 2,655 Other (1,907) (2,437)
Changes in operating assets and liabilities: (Increase) decrease in
restricted cash (12) 11,923 Increase in other assets (829) (586)
Increase in accrued interest 9,440 6,718 Increase (decrease) in
accounts payable and accrued and other Liabilities 5,745 (3,914)
Net cash provided by operating activities 124,555 107,848 Cash
flows from investing activities: Net investment in real estate
property (280,666) - Net proceeds from sale of real estate - 61,159
Proceeds from sale of Kindred common stock - 20,223 Proceeds from
loan receivable 260 151 Purchase of furniture and equipment (170)
(258) Decrease in proceeds from notes receivable from employees 503
317 Net cash (used in) provided by investing activities (280,073)
81,592 Cash flows from financing activities: Net change in
borrowings under revolving line of credit facility 173,500 (26,450)
Purchase of Senior Notes - (37,366) Repayment of debt (65,915)
(1,897) Payment on the United States Settlement - (46,647) Payment
of deferred financing costs (2,659) (40) Issuance of common stock
58,903 10,847 Proceeds from stock option exercises 16,913 - Cash
dividends to stockholders (103,523) (80,247) Net cash provided by
(used in) financing activities 77,219 (181,800) Net (decrease)
increase in cash and cash equivalents (78,299) 7,640 Cash and cash
equivalents at beginning of period 82,104 2,455 Cash and cash
equivalents at end of period $3,805 $10,095 Supplemental schedule
of noncash activities: Assets and liabilities assumed from
acquisitions: Real estate investments $ 103,432 $- Restricted cash
9,170 - Other assets acquired 206 - Debt 105,627 - Other
liabilities assumed 7,181 - SUPPLEMENTAL DATA Funds from Operations
FFO and normalized FFO for the three and nine months ended
September 30, 2004 and 2003 (in thousands, except per share
amounts): Three Months Ended Nine Months Ended September 30,
September 30, 2004 2003 2004 2003 Net income $ 25,297 $ 32,212
$74,226 $85,629 Adjustments: Depreciation on real estate assets
13,153 9,878 35,968 29,603 Other items: Discontinued operations:
Depreciation on real estate assets - 286 - 2,032 (Gain) loss on
sale of real estate - (2,065) - 3,189 FFO 38,450 40,311 110,194
120,453 Realized gain on sale of Kindred common stock - (8,117) -
(9,039) Reversal of contingent liability - - - (20,164) Loss on
extinguishment of debt 1,370 - 1,370 - Normalized FFO $ 39,820 $
32,194 $ 111,564 $91,250 Per diluted share: Net income $0.30 $0.40
$0.88 $1.07 Adjustments: Depreciation on real estate assets 0.15
0.12 0.43 0.37 Other items: Discontinued operations: Depreciation
on real estate assets - 0.01 - 0.03 (Gain) loss on sale of real
estate - (0.03) - 0.04 FFO 0.45 0.50 1.31 1.51 Realized gain on
sale of Kindred common stock - (0.10) - (0.11) Reversal of
contingent liability - - - (0.26) Loss on extinguishment of debt
0.02 - 0.02 - Normalized FFO $0.47 $0.40 $1.33 $1.14 Projected FFO
per diluted share for the year ended: NEW GUIDANCE PRIOR GUIDANCE
GUIDANCE December 31, December 31, December 31, 2004 2004 2005 Net
income $ 1.18 - $ 1.20 $ 1.18 - $1.22 $1.25 - $1.28 Adjustments:
Depreciation on real estate assets 0.58 - 0.58 0.57 - 0.57 0.64 -
0.65 FFO 1.76 - 1.78 1.75 - 1.79 1.89 - 1.93 Loss on extinguishment
of debt 0.02 - 0.02 - - - - - - Normalized FFO $ 1.78 - $ 1.80 $
1.75 - $1.79 $1.89 - $1.93 Historical cost accounting for real
estate assets implicitly assumes that the value of real estate
assets diminishes predictably over time. Since real estate values
instead have historically risen or fallen with market conditions,
many industry investors have considered presentations of operating
results for real estate companies that use historical cost
accounting to be insufficient by themselves. To overcome this
problem, the Company considers FFO an appropriate measure of
performance of an equity REIT and uses the National Association of
Real Estate Investment Trusts ("NAREIT") definition of FFO. NAREIT
defines FFO as net income, computed in accordance with accounting
principles generally accepted in the United States ("GAAP"),
excluding gains (or losses) from sales of property, plus
depreciation and amortization and after adjustments for
unconsolidated partnerships and joint ventures. Adjustments for
unconsolidated partnerships and joint ventures will be calculated
to reflect FFO on the same basis. FFO presented herein is not
necessarily comparable to FFO presented by other real estate
companies due to the fact that not all real estate companies use
the same definition. FFO should not be considered as an alternative
to net income (determined in accordance with GAAP), as an indicator
of the Company's financial performance, as an alternative to cash
flow from operating activities (determined in accordance with GAAP)
or as a measure of the Company's liquidity, nor is FFO necessarily
indicative of sufficient cash flow to fund all of the Company's
needs. The Company believes that in order to facilitate a clear
understanding of the consolidated historical operating results of
the Company, FFO should be examined in conjunction with net income
as presented elsewhere in this Press Release. Pro Forma Net Debt to
EBITDA The following pro forma information considers the effect on
net income, interest and depreciation as if the Company had
consummated the acquisition of the six properties during the third
quarter 2004 as of the beginning of the three month period ended
September 30, 2004. The following table illustrates net debt to pro
forma earnings before interest, income taxes, depreciation and
amortization ("EBITDA") for the three months ended September 30,
2004 (dollars in thousands): Three Months Ended September 30, 2004
Pro forma net income $25,663 Add back: Pro forma interest 17,264
Pro forma depreciation 12,887 Loss on extinguishment of debt 1,370
Amortization of restricted stock grants 321 Pro forma EBITDA
$57,505 Pro forma annualized EBITDA $230,020 Debt $853,774 Cash
(3,805) Restricted cash pertaining to debt (6,992) Net debt
$842,977 Net debt to pro forma annualized EBITDA 3.7x The Company
considers EBITDA a profitability measure which indicates the
Company's ability to service debt. The Company considers the Net
Debt to EBITDA ratio a useful measure to evaluate the Company's
ability to pay its indebtedness. EBITDA presented herein is not
necessarily comparable to EBITDA presented by other companies due
to the fact that not all companies use the same definition. EBITDA
should not be considered as an alternative to net income
(determined in accordance with GAAP), as an indicator of the
Company's financial performance, as an alternative to cash flow
from operating activities (determined in accordance with GAAP), as
a measure of the Company's liquidity, nor is EBITDA necessarily
indicative of sufficient cash flow to fund all of the Company's
needs. The Company believes that in order to facilitate a clear
understanding of the consolidated historical operating results of
the Company, EBITDA should be examined in conjunction with net
income as presented elsewhere in this Press Release. Portfolio of
Properties The following information provides an overview of the
Company's portfolio of healthcare properties as of and for the nine
months ended September 30, 2004 (dollars in thousands): As of and
for the Nine Months Ended September 30, 2004 # of # of Percent of #
of Portfolio by Type Properties Beds/Units Revenue Revenue States
Healthcare properties: Skilled nursing facilities 201 25,551
$101,197 58.6% 31 Hospitals 42 3,635 53,713 31.1% 19 Senior housing
facilities 29 3,463 14,961 8.7% 13 Other facilities 15 122 2,735
1.6% 4 Total 287 32,771 $172,606 100.0% 39 Other real estate
investments: Loan receivable 25 1,983 $2,274 Kindred Coverage
Ratios The following is based on data provided by Kindred to the
Company or obtained from Kindred's public filings. This information
reflects Kindred's EBITDARM and EBITDAR coverage by Master Lease:
TTM (1) TTM (1) Master EBITDARM EBITDAR Lease Coverage (2) Coverage
(3) 1 2.9 2.2 2 2.7 2.1 3 2.1 1.4 4 1.9 1.3 5 1.9 1.4 Portfolio 2.3
1.7 (1) Trailing Twelve Months EBITDARM and EBITDAR for the period
ended June 30, 2004 (the latest available data provided by Kindred)
to the Company's Trailing Twelve Months cash rental revenue. (2)
Coverage reflects the ratio of Kindred's EBITDARM to rent. EBITDARM
is defined as earnings before interest, income taxes, depreciation,
amortization and rent. In the calculation of Trailing Twelve Months
EBITDARM, intercompany profit pertaining to Kindred's new
PeopleFirst Rehabilitation Division for the six months ended June
30, 2004 has been eliminated from purchased ancillary expenses
within the Ventas skilled nursing portfolio. (3) Coverage reflects
the ratio of Kindred's EBITDAR to rent. EBITDAR is defined as
earnings before interest, income taxes, depreciation, amortization
and rent but after deducting a five percent management fee. In the
calculation of Trailing Twelve Months EBITDAR, intercompany profit
pertaining to Kindred's new PeopleFirst Rehabilitation Division for
the six months ended June 30, 2004 has been eliminated from
purchased ancillary expenses within the Ventas skilled nursing
portfolio. Scheduled Maturities of Borrowing Arrangements The
Company's indebtedness has the following maturities as of September
30, 2004 (in thousands): 2004 $ 10,326 2005 4,623 2006 215,562 2007
175,179 2008 1,799 Thereafter 446,285 Total $ 853,774 DATASOURCE:
Ventas, Inc. CONTACT: Debra A. Cafaro, Chairman, President and CEO,
or Richard A. Schweinhart, Senior Vice President and CFO,
+1-502-357-9000, both of Ventas, Inc. Web site:
http://www.ventasreit.com/
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