01—Abstract
Summary
Summary of the 8-K filed August 1, 2024. Cited figures are marked; the original filing is the authoritative source.
Ventas, Inc. (NYSE: VTR) reported second quarter 2024 results for the quarter ended June 30, 2024, in a press release furnished as Exhibit 99.1 to this Form 8-K.
Attributable Net Income was $0.05a per share, compared with $0.26 in the prior-year quarter, while Normalized FFO per share was $0.80, up 7% from $0.75. Total Company NOI grew 6.9% year-over-year and Same-Store Cash NOI grew 7.8%, with SHOP Same-Store Cash NOI up 15.2% led by 320 basis points of occupancy growth. The company stated it closed approximately $350 million of senior housing investments year to date at going-in NOI yields approximating 8%, fully funded by roughly $500 million of equity issued under its at-the-market program (10.4 million shares).
Management cited a line of sight to about $400 millionb of additional senior housing investments. As of June 30, 2024, liquidity was $3.3 billion, including $550 million of cash and cash equivalents, and Net Debt to Further Adjusted EBITDA improved to 6.4x from 6.7x in the prior quarter and 6.9x at year-end 2023. Ventas raised its full-year 2024 guidance: Attributable Net Income per share midpoint rose to $0.10 from $0.07, Nareit FFO per share midpoint to $3.05 from $3.02, and Normalized FFO per share midpoint to $3.15 from $3.14.
The guidance range for Normalized FFO per share is now $3.12 to $3.18c, versus $3.10 to $3.18 previously. The company will hold a conference call on August 2, 2024.
02—Key points
Key Highlights
- Normalized FFO per share of $0.80 for Q2 2024, up 7% from $0.75 a year earlier; Nareit FFO per share fell to $0.77 from $1.02
- Attributable Net Income per share of $0.05 versus $0.26 in Q2 2023
- SHOP Same-Store Cash NOI grew 15.2% year-over-year, led by 320 basis points of occupancy growth; total Same-Store Cash NOI grew 7.8%
- Approximately $350 million of senior housing investments closed year to date at going-in NOI yields approximating 8%, fully funded by about $500 million of equity issuance
- Full-year 2024 Normalized FFO per share guidance midpoint raised to $3.15 from $3.14; Attributable Net Income per share midpoint raised to $0.10 from $0.07
- Net Debt to Further Adjusted EBITDA improved to 6.4x from 6.7x in Q1 2024 and 6.9x at December 31, 2023
- Liquidity of $3.3 billion as of June 30, 2024, including $550 million of cash and cash equivalents
03—Questions
Frequently Asked Questions
Why did Attributable Net Income per share fall so sharply while Normalized FFO rose?
Attributable Net Income per share was $0.05 versus $0.26 a year earlier, largely reflecting the prior-year quarter's $29.1 million gain on foreclosure of real estate and lower income from unconsolidated entities and loans. Normalized FFO excludes items such as gains, derivative losses, transaction costs and non-cash income tax items, and rose to $0.80 per share from $0.75.
How is Ventas growing its senior housing portfolio?
Ventas closed approximately $350 million of senior housing investments year to date, with going-in NOI yields approximating 8% and priced below replacement cost. The company said these were fully funded by about $500 million of equity issued under its at-the-market program, and it has a line of sight to about $400 million of additional senior housing investments.
What drove the improvement in SHOP performance?
SHOP Same-Store Cash NOI grew 15.2% year-over-year. Management attributed this to average occupancy growth of 320 basis points and rate growth, with total SHOP Same-Store revenue growing 8.0%. In the U.S., occupancy grew 380 basis points, and Canada occupancy grew 170 basis points to approach 96%.
How did Ventas change its full-year 2024 guidance?
As of August 1, 2024, Attributable Net Income per share guidance was $0.07 to $0.13 (midpoint $0.10), up from $0.03 to $0.11. Nareit FFO per share guidance was $3.02 to $3.08 (midpoint $3.05), and Normalized FFO per share guidance was $3.12 to $3.18 (midpoint $3.15), up from $3.10 to $3.18.
How strong is Ventas's balance sheet?
Net Debt to Further Adjusted EBITDA was 6.4x at June 30, 2024, improved from 6.7x at March 31, 2024 and 6.9x at December 31, 2023. Total debt was $13.18 billion and liquidity was $3.3 billion, including $550 million of cash and cash equivalents.
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