Ventas 4Q funds rise 13 percent on acquisitions

Ventas 4th-quarter funds from operations grow on Nationwide, Atria, and Sunrise deals

Associated Press

CHICAGO (AP) -- Ventas Inc. said Friday that its funds from operation grew 13 percent in the fourth quarter as the medical real estate company continued to expand.

Ventas is the largest health care real estate investment trust in the U.S. It invests in, manages, finances and leases real estate used by health care companies. Its holdings include hospitals, skilled nursing facilities and medical office buildings. At the end of 2012 Ventas managed almost $19 billion in assets.

The company said its funds from operations rose to $293.6 million, or 99 cents per share, from $259.3 million, or 89 cents per share, in the fourth quarter of 2011.

Ventas said it made $2.7 billion in investments in 2012 and its growth came from its 2011 acquisitions of Nationwide Health Partners and the real estate assets of Atria Senior Living. The company said senior housing communities run by Atria and by Sunrise Senior Living performed well during the fourth quarter.

Funds from operations, or FFO, adds such items as amortization and depreciation to net income, and it is considered a key measure of the strength of a real estate investment trust. Amortization and depreciation are accounting tools used to measure the value of a long-term asset over time. Analysts expected Ventas to report FFO of 97 cents per share.

Ventas shares rose $1.33, or 2 percent, to $69.11 in morning trading. Earlier the stock reached an all-time high of $69.27.

Ventas said net income fell to $86.3 million, or 29 cents per share. Ventas recorded a gain of $116.9 million from litigation proceeds in the year-ago quarter, and during that period net income totaled $192.9 million, or 66 cents per share.

Revenue rose 17 percent, to $660.7 million from $563.1 million.

In July 2011 Ventas paid $5.8 billion for Nationwide Health. It bought 16 senior living communities from Sunrise Senior Living Inc. in May 2012, and in December it took a stake in Atria Senior Living.

Ventas' FFO rose in 2012 to $1.12 billion, or $3.80 per share, from $777 million, or $3.37 per share, in 2011. The company expects normalized FFO of $3.99 to $4.07 per share, in 2013.

It also raised its quarterly dividend to 67 cents from 62 cents. The next dividend is payable March 28 to shareholders of record as of March 8.

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