HCP HCP Inc

Ventas, Inc. (VTR), a real estate investment trust (REIT),r eported fourth 2011 funds from operations (FFO) of $359.1 million or $1.24 per share compared with $108.3 million or  68 cents in the year-earlier quarter. Funds from operations, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and other non-cash expenses to net income.

FFO for fiscal 2011 was $824.9 million or $3.57 per share compared with $421.5 million or $2.67 in fiscal 2010

Excluding the non-recurring items, FFO for fourth quarter 2011 was $259.3 million or  89 cents per share compared  with $121.4 million or  77 cents per share in the year-ago quarter. The recurring FFO per share in the quarter was at par with the Zacks Consensus Estimate.

Excluding the non-recurring items, FFO for fiscal 2011 was $777.0 million or $3.37 per share compared to $454.0 million or $2.88 in fiscal 2010.

The  year-over-year upside in FFO was primarily on the back of  accretive acquisitions like Nationwide Health Properties Inc. and Atria Senior Living Group, Inc., partially offset by higher weighted average diluted shares outstanding during the quarter.

Total revenue during the reported quarter was $571.4 million compared with $265.9 million in the year-earlier quarter. Total revenue during the fiscal 2011  was $1764.9 million compared  with $1008.7 million a year ago.

Total net operating income (NOI) increased 2.4% year over year during fourth quarter 2011. For the total portfolio, same-store cash NOI growth was 2.6% during 2011.

 As of December 30, 2011, Ventas has an operating portfolio of 79 private pay seniors housing communities managed by Sunrise and 118 private pay seniors housing communities managed by Atria. NOI for the Sunrise-managed communities increased to $156.7 million  in fiscal 2011, from  $154.3 million in fiscal 2010

Ventas closed over $11 billion in acquisitions during fiscal 2011, including NHP and substantially all of the real estate assets of Atria Senior Living Group, Inc.

For the full year, Ventas collected $22.8 million in cash from HCP, Inc. (HCP) in damages related to a lawsuit pertaining to the acquisition of Sunrise Senior Living REIT.

As of December 31, 2011, the company had $455.6 million in borrowings outstanding under its unsecured revolving credit facility, $500 million in borrowings outstanding under its new unsecured term loan facility, and $45.8 million in cash and cash equivalents.

At the year end debt to total capitalization stood at 29% and net-debt-to-adjusted-pro-forma-EBITDA (earnings before interest, tax, depreciation and amortization) of 4.7x.

 Ventas obtained a new unsecured revolving credit facility worth $2 billion. The new credit facility bears an interest rate at 110 basis points over LIBOR.

With superior quarterly results, Ventas expects its FFO guidance for full year 2012 to be in the range of $3.63-$3.69 per share. The company also announced that its board has increased the company’s first quarter 2012 dividend by 8.0% to 62 cents per share payable in cash on March 29, 2012 to stockholders of record as of March 9, 2012.

Ventas currently retains a Zacks #2 Rank, which translates into a short-term Buy rating. We are also maintaining our long-term Outperform recommendation on the stock. One of its competitors, HCP, Inc. holds a Zacks #3 Rank, which translates into a short-term Hold rating.

 
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