How much of Ventas's revenue depends on Kindred and Brookdale Senior Living?

For 2005, Kindred accounted for approximately 59.8 percent of total revenues ($199.1 million) and Brookdale Senior Living for 22.9 percent ($76.2 million). The filing states that the financial condition of these two operators will largely determine rental revenues and the ability to make distributions to stockholders.

What is the Reset Right and when can it be exercised?

The Reset Right is a one-time right under each Kindred Master Lease to increase rent to a then fair market rental rate for a fee of $4.6 million in total, exercisable by notice given on or after January 20, 2006 and on or before July 19, 2007. The company says its value is highly speculative and depends on factors including CMS's proposed 2007 long-term acute care hospital payment rule, and it had not yet given Reset Notices as of the filing date.

How did the Provident acquisition change the company?

The company acquired Provident Senior Living Trust on June 7, 2005 in a transaction valued at approximately $1.2 billion, adding 68 independent and assisted living facilities in nineteen states, all leased to Brookdale and Alterra. It funded the approximately $231.0 million cash portion using $350.0 million of senior notes and revolver borrowings, issued about 15.0 million shares, and assumed approximately $459.4 million of property-level mortgage debt.

How much debt does Ventas carry and what are the key maturities?

Total senior notes payable and other debt was $1.80 billion at December 31, 2005, including $89.2 million under the $300.0 million revolving credit facility, senior notes totaling about $1.11 billion, and $622.3 million of other mortgage loans. Scheduled principal maturities total $15.7 million in 2006, $104.8 million in 2007, $32.98 million in 2008, $315.6 million in 2009 and $265.8 million in 2010.

Is the dividend expected to continue?

The company declared a first-quarter 2006 dividend of $0.395 per share payable March 30, 2006, and expects to distribute 100 percent or more of its taxable net income for 2006. The filing notes that the Board makes dividend decisions quarterly, so the company cannot assure that this policy will be maintained.

VTR 10-K FY2005 Annual Report — Revenue, Net Income, EPS

01—Abstract

Summary

Summary of the 10-K filed February 28, 2006. Cited figures are marked; the original filing is the authoritative source.

Ventas, Inc. (VTR), a healthcare REIT incorporated in Delaware in 1985, owned 200 skilled nursing facilities, 41 hospitals and 139 seniors housing and other facilities in 42 states as of December 31, 2005, with real estate investments at cost of $3.03 billion^a and total assets of $2.64 billion.

Total revenues rose to $332,988 thousand^b in 2005 from $236,021 thousand in 2004, and net income was $130,583 thousand ($1.36 diluted EPS), compared with $120,900 thousand in 2004. Growth was driven largely by the June 2005 acquisition of Provident Senior Living Trust for a transaction valued at about $1.2 billion, which added 68 seniors housing facilities leased to Brookdale and Alterra. Concentration remains high.

Kindred Healthcare accounted for 59.8%^c of 2005 total revenues and Brookdale Senior Living for 22.9%, so the financial condition of these two operators largely determines Ventas's rental income and distribution capacity. The filing also highlights a one-time Reset Right under the Kindred Master Leases, exercisable between January 20, 2006 and July 19, 2007, which the company describes as highly speculative in value and not yet exercised as of the filing date, pending analysis of CMS's proposed 2007 long-term acute care hospital payment rule. Balance sheet leverage increased substantially.

Senior notes payable and other debt rose to $1.80 billion^d from $843.2 million, and stockholders' equity increased to $667.3 million from $160.2 million, largely reflecting share issuances. Dividends declared were $1.44 per share for 2005, and the company declared a first-quarter 2006 dividend of $0.395 per share and expects to distribute 100 percent or more of taxable net income for 2006. Management's report and Ernst & Young's audit opinion both state that internal control over financial reporting was effective as of December 31, 2005.

02—Key points

Key Highlights

Revenue and earnings growth: total revenues of $332.99 million in 2005 vs. $236.02 million in 2004; net income of $130.58 million vs. $120.90 million, with diluted EPS of $1.36 vs. $1.43.
Provident acquisition: completed June 7, 2005 in a transaction valued at approximately $1.2 billion, adding 68 seniors housing facilities leased to Brookdale and Alterra under triple-net leases.
Tenant concentration: Kindred accounted for 59.8% and Brookdale Senior Living for 22.9% of 2005 total revenues; Kindred leased 225 of the company's facilities.
Kindred Reset Right: a one-time right to reset Kindred Master Lease rents to fair market rates, exercisable from January 20, 2006 to July 19, 2007; the company calls its value highly speculative and has not yet delivered Reset Notices.
Leverage increase: senior notes payable and other debt of $1.80 billion at year-end 2005 vs. $843.2 million a year earlier, with approximately $600.0 million of senior notes issued in 2005.
Dividends: 2005 dividends declared of $1.44 per share vs. $1.30 in 2004; first-quarter 2006 dividend declared at $0.395 per share.
Funds from operations: FFO of $213.2 million in 2005 vs. $150.3 million in 2004.

03—Questions

Frequently Asked Questions

How much of Ventas's revenue depends on Kindred and Brookdale Senior Living?
For 2005, Kindred accounted for approximately 59.8 percent of total revenues ($199.1 million) and Brookdale Senior Living for 22.9 percent ($76.2 million). The filing states that the financial condition of these two operators will largely determine rental revenues and the ability to make distributions to stockholders.
What is the Reset Right and when can it be exercised?
The Reset Right is a one-time right under each Kindred Master Lease to increase rent to a then fair market rental rate for a fee of $4.6 million in total, exercisable by notice given on or after January 20, 2006 and on or before July 19, 2007. The company says its value is highly speculative and depends on factors including CMS's proposed 2007 long-term acute care hospital payment rule, and it had not yet given Reset Notices as of the filing date.
How did the Provident acquisition change the company?
The company acquired Provident Senior Living Trust on June 7, 2005 in a transaction valued at approximately $1.2 billion, adding 68 independent and assisted living facilities in nineteen states, all leased to Brookdale and Alterra. It funded the approximately $231.0 million cash portion using $350.0 million of senior notes and revolver borrowings, issued about 15.0 million shares, and assumed approximately $459.4 million of property-level mortgage debt.
How much debt does Ventas carry and what are the key maturities?
Total senior notes payable and other debt was $1.80 billion at December 31, 2005, including $89.2 million under the $300.0 million revolving credit facility, senior notes totaling about $1.11 billion, and $622.3 million of other mortgage loans. Scheduled principal maturities total $15.7 million in 2006, $104.8 million in 2007, $32.98 million in 2008, $315.6 million in 2009 and $265.8 million in 2010.
Is the dividend expected to continue?
The company declared a first-quarter 2006 dividend of $0.395 per share payable March 30, 2006, and expects to distribute 100 percent or more of its taxable net income for 2006. The filing notes that the Board makes dividend decisions quarterly, so the company cannot assure that this policy will be maintained.

04—Continue

← View all 10-K filings