Ventas Reports Record 2013 Normalized FFO of $4.14 Per Diluted Share

  Ventas Reports Record 2013 Normalized FFO of $4.14 Per Diluted Share

                 2013 Total Normalized FFO Tops $1.2 Billion

   2014 Normalized FFO Guidance of $4.31 to $4.37 Per Diluted Share Without
                                 Acquisitions

 Guidance Represents 5.5 Percent to Seven Percent Per Share Growth Excluding
                                Non-Cash Items

Business Wire

CHICAGO -- February 14, 2014

Ventas, Inc. (NYSE: VTR) (“Ventas” or the “Company”) said today that
normalized Funds From Operations (“FFO”) for the year ended December 31, 2013
increased nine percent to $1.2 billion, from $1.1 billion for the comparable
2012 period. Normalized FFO per diluted common share was $4.14 for the year
ended December 31, 2013, a nine percent increase from $3.80 for the comparable
2012 period. Normalized FFO per share grew 11 percent in 2013, excluding
non-cash items computed consistent with prior periods. Weighted average
diluted shares outstanding for the full year increased to 295.1 million,
compared to 294.5 million in 2012.

Ventas’s continued growth in normalized FFO per diluted common share is due
primarily to the Company’s $1.8 billion of investments in 2013, the full-year
benefit of its 2012 acquisitions, strong same-store growth in its seniors
housing communities managed by Atria Senior Living, Inc. (“Atria”) and Sunrise
Senior Living, LLC (“Sunrise”), rental increases from its triple-net lease
portfolio and lower weighted average interest rates. These benefits were
partially offset by higher debt balances, increases in general and
administrative expenses and asset sales and loan repayments in 2012 and 2013.

“Ventas had another outstanding year of investing accretively and driving cash
flows to a record level of $1.2 billion, growing normalized FFO per share at a
superior rate, increasing dividends by ten percent, maintaining financial
strength and flexibility and executing our strategy consistently,” Ventas
Chairman and Chief Executive Officer Debra A. Cafaro said. “Our productive and
growing portfolio, the increasing demand for our healthcare and senior living
assets and services, and our team’s commitment to sustained excellence enable
us to consistently grow and deliver superior value to our shareholders.”

Normalized FFO for the years ended December 31, 2013 and 2012 excludes the net
expense (totaling $12.3 million, or $0.04 per diluted share, in 2013 and $95.7
million, or $0.32 per diluted share, in 2012) from merger-related expenses and
deal costs (including integration costs), loss on extinguishment of debt and
amortization of other intangibles, partially offset by income tax benefit. Net
income attributable to common stockholders for the year ended December 31,
2013 was $453.5 million, or $1.54 per diluted common share, including expense
associated with discontinued operations of $35.4 million. Net income
attributable to common stockholders for the year ended December 31, 2012 was
$362.8 million, or $1.23 per diluted common share, including discontinued
operations of $55.0 million. This $90.7 million increase in net income
attributable to common stockholders in 2013 over the prior year is primarily
the result of the continued growth of the Company as described above.

FFO, as defined by the National Association of Real Estate Investment Trusts
(“NAREIT”), for the year ended December 31, 2013 increased 18 percent to $1.2
billion, from $1.0 billion in the comparable 2012 period. This increase in
NAREIT FFO is due primarily to the factors described above for normalized FFO,
as well as significantly lower merger-related expenses and deal costs
(including integration costs) and losses on extinguishment of debt than in
2012. NAREIT FFO per diluted common share for the year ended December 31, 2013
also increased 18 percent to $4.09, from $3.48 in 2012.

2013 FOURTH QUARTER

Fourth quarter 2013 normalized FFO increased seven percent to $313.6 million,
from $293.6 million for the comparable 2012 period. Normalized FFO per diluted
common share was $1.06 for the quarter ended December 31, 2013, an increase of
seven percent from $0.99 for the comparable 2012 period. Normalized FFO per
share grew ten percent in the fourth quarter of 2013, excluding non-cash items
computed consistent with prior periods. This increase is due to the Company’s
2013 and 2012 investment activity, strong same-store cash flow growth in its
seniors housing communities managed by Atria and Sunrise, rental increases
from its triple-net lease portfolio and lower weighted average interest rates.
These benefits were partially offset by higher debt balances, increases in
general and administrative expenses and asset sales and loan repayments in
2012 and 2013. Weighted average diluted shares outstanding for the fourth
quarter decreased to 296.0 million, compared to 297.1 million in 2012.

Net income attributable to common stockholders for the quarter ended December
31, 2013 was $108.4 million, or $0.37 per diluted common share, including
discontinued operations of $0.1 million. Net income attributable to common
stockholders for the quarter ended December 31, 2012 was $86.3 million, or
$0.29 per diluted common share, including expense associated with discontinued
operations of $15.2 million.

NAREIT FFO for the quarter ended December 31, 2013 was $305.1 million, an
increase of seven percent from $284.0 million in the comparable 2012 period.
NAREIT FFO per diluted common share for the quarter ended December 31, 2013
increased seven percent to $1.03, from $0.96 in 2012. This increase is due
primarily to the factors described above for fourth quarter normalized FFO and
lower merger-related expenses and deal costs (including integration costs)
during the fourth quarter of 2013 compared to the same period in 2012.

VENTAS BOARD DECLARES FIRST QUARTER DIVIDEND OF $0.725 PER SHARE

The Company said today that its Board of Directors declared a dividend for the
first quarter of $0.725 per share. This dividend represents an eight percent
increase from the dividend in the first quarter of 2013. The dividend is
payable in cash on March 28, 2014 to stockholders of record on March 7, 2014.

“Our quarterly dividend reflects our consistent growth and our confidence in
Ventas’s business and team,” Ventas Chairman and Chief Executive Officer Debra
A. Cafaro said. “We are pleased to share our success with our investors.”

PRIVATE PAY SENIORS HOUSING OPERATING PORTFOLIO

2013 Total Portfolio NOI of $449 Million; Annual Same-Store NOI Grows 5.6
Percent and Occupancy Rises 130 Basis Points

At December 31, 2013, the Company’s seniors housing operating portfolio
included 237 communities, two of which were acquired in the fourth quarter of
2013: Atria manages 142 seniors housing communities and Sunrise manages 95
seniors housing communities.

Full year and fourth quarter 2013 Net Operating Income (“NOI”) after
management fees for this portfolio totaled $449.0 million and $115.9 million,
respectively.

For the 195 same-store private pay seniors housing communities owned by the
Company during all of 2012 and 2013, average unit occupancy rose 130 basis
points to 91.3 percent, NOI after management fees grew 5.6 percent and REVPOR
(revenue per occupied room) grew 3.5 percent.

2013 RECAP

Investments and Dispositions

  *Ventas invested $1.9 billion in 2013, including development and
    redevelopment projects.

  *The $1.8 billion of acquisitions have an expected first-year NOI yield
    exceeding seven percent and the acquisitions were divided as follows:

               Property Type        Dollars in  Percentage of
                                                    Millions     Total
                              Triple-Net Leased     $853         47%
                              Assets
                              Seniors Housing
                              Operating             $772         43%
                              Communities Managed
                              by Atria
                              Medical Office        $181         10%
                              Buildings (“MOBs”)

  *The Company invested $96 million in development and redevelopment during
    2013 and included completions of one ground up Atria-managed seniors
    housing operating community on Cape Cod and an award-winning renovation of
    the Hallmark, an asset triple-net leased by Brookdale Senior Living, Inc.

  *Ventas sold 22 properties and received final repayment on loans receivable
    for approximately $358 million in aggregate proceeds, a yield of 8.6
    percent.

Cash Flow Growth

  *Cash flows from operations were approximately $1.2 billion, an increase of
    more than 20 percent over the prior year. The Company generated over $300
    million in cash flows from operations after capital expenditures and
    dividends.
  *Same-store cash NOI growth for the Company’s total portfolio (1,203
    assets) was 5.0 percent in 2013 compared to 2012, including a $20 million
    rent prepayment received in the fourth quarter of 2013; without such
    payment, year-over-year same-store cash flow growth totaled 3.4 percent.

Liquidity, Capital Raising, Ratings and Balance Sheet

  *Ventas received rating upgrades from both Moody’s Investors Service
    (“Moody’s”) and Standard & Poor’s Rating Services (“S&P”). Ventas’s senior
    unsecured debt is currently rated BBB+ (stable) by Fitch Ratings, Baa1
    (stable) by Moody’s and BBB+ (stable) by S&P.
  *Ventas issued and sold $1.6 billion aggregate principal amount of senior
    notes at a weighted average stated interest rate of 3.3 percent and a
    weighted average maturity at the time of issuance of 13.6 years.
  *Ventas issued and sold a total of 2.1 million shares for aggregate
    proceeds of $143.6 million under its “at the market” equity offering
    program.
  *Ventas closed a new $3 billion unsecured credit facility, including a $2
    billion revolving credit facility (“Revolver”) and $1 billion in term
    loans, all maturing in 2018 and 2019 including extensions.
  *The Company repaid approximately $764 million aggregate principal amount
    of senior notes and mortgages that had a weighted average interest rate of
    5.9 percent (cash) and 3.25 percent (GAAP).
  *The Company’s net debt to Adjusted Pro Forma EBITDA (as defined herein) at
    December 31, 2013 was 5.5x.
  *Currently the Company has $1.8 billion of liquidity under its Revolver and
    debt to total capitalization of 33 percent.

PORTFOLIO UPDATE AND ADDITIONAL INFORMATION

  *As announced on October 1, 2013, Ventas entered into favorable agreements
    with Kindred Healthcare, Inc. (NYSE: KND) (“Kindred”) to extend the leases
    at a higher rental rate with respect to 48 of the 108 licensed healthcare
    assets whose current lease term expires September 30, 2014 (the “2014
    Renewal Assets”). The 2014 Renewal Assets consist of 86 skilled nursing
    facilities (“SNFs”) and 22 long-term acute care hospitals (“LTACs”). The
    Company is currently in the process of marketing principally for lease 60
    SNFs that were not re-leased by Kindred. Ventas continues to expect the
    net impact of its agreements with Kindred and prospective new leases and
    sales for the 60 SNFs on its 2015 normalized FFO to range from $3 million
    to ($9 million), or $0.01 to ($0.03) per share based on current share
    count. Although the Company expects to successfully re-tenant and/or
    dispose of all of the 60 SNFs by the fourth quarter of 2014, there can be
    no assurance that the Company will be able to do so on a timely basis, if
    at all, or that expected normalized FFO and NOI results will be achieved.
  *Supplemental information regarding the Company can be found on the
    Company’s website under the “Investor Relations” section or at
    www.ventasreit.com/investor-relations/financial-information/supplemental-information.

VENTAS ISSUES 2014 NORMALIZED FFO GUIDANCE OF $4.31 TO $4.37 PER DILUTED SHARE
WITHOUT UNANNOUNCED INVESTMENTS

Ventas said it currently expects its 2014 normalized FFO per diluted share,
excluding the impact of unannounced acquisitions, divestitures and capital
transactions, to range between $4.31 and $4.37. The Company’s guidance range
represents approximately 5.5 percent to seven percent per share growth in
normalized FFO, excluding non-cash items (projected to be $0.10 per diluted
share), computed consistent with prior periods. A reconciliation of the
Company’s guidance, and the non-cash items, to the Company’s projected GAAP
earnings is attached to this press release at page 12.

The Company expects 2014 NOI for its total Atria- and Sunrise-managed seniors
housing operating portfolio to be between $488 million and $500 million,
representing approximately four to six percent same-store NOI growth. Its
normalized FFO guidance further assumes no material changes in the current
U.S. Dollar-Canadian Dollar foreign exchange rate; and the disposal of an
asset pursuant to a pre-existing purchase option for $34.4 million (an 11.2
percent NOI yield) and reinvestment of proceeds at market yields.

The Company’s normalized FFO guidance (and related GAAP earnings projections)
for all periods assumes, with certain immaterial exceptions, that all of the
Company’s tenants and borrowers continue to meet all of their obligations to
the Company. In addition, the Company’s normalized FFO guidance excludes,
other than as specifically stated, (a) net gains on the sales of real property
assets, including gain on re-measurement of equity method investments, (b)
merger-related costs and expenses, including amortization of intangibles,
transition and integration/severance expenses, and deal costs and expenses,
(c) the impact of any expenses related to asset impairment and valuation
allowances, the write-off of unamortized deferred financing fees, or
additional costs, expenses, discounts, make-whole payments, fees, penalties or
premiums, (d) the non-cash effect of income tax benefits or expenses and
derivative transactions that have non-cash mark-to-market impacts on the
Company’s income statement, and (e) the impact of future unannounced
acquisitions or divestitures (including pursuant to tenant options to
purchase) and capital transactions.

The Company’s guidance is based on a number of other assumptions that 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.
The Company may from time to time update its publicly announced guidance, but
it is not obligated to do so.

FOURTH QUARTER CONFERENCE CALL

Ventas will hold a conference call to discuss this earnings release today at
10:00 a.m. Eastern Time (9:00 a.m. Central Time). The dial-in number for the
conference call is (877) 474-9506. The participant passcode is “Ventas.” The
conference call is being webcast live by Thomson Reuters and can be accessed
at the Company’s website at www.ventasreit.com or www.earnings.com. A replay
of the webcast will be available today online, or by calling (888) 286-8010,
passcode 85125582, beginning at approximately 2:00 p.m. Eastern Time and will
be archived for 28 days.

Ventas, Inc., an S&P 500 company, is a leading real estate investment trust.
Its diverse portfolio of nearly 1,500 assets in 47 states (including the
District of Columbia) and two Canadian provinces consists of seniors housing
communities, medical office buildings, skilled nursing facilities, hospitals
and other properties. Through its Lillibridge subsidiary, Ventas provides
management, leasing, marketing, facility development and advisory services to
highly rated hospitals and health systems throughout the United States. More
information about Ventas and Lillibridge can be found at www.ventasreit.com
and www.lillibridge.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 the
Company’s or its tenants’, operators’, borrowers’ or managers’ expected future
financial condition, results of operations, cash flows, funds from operations,
dividends and dividend plans, financing opportunities and plans, capital
markets transactions, business strategy, budgets, projected costs, operating
metrics, capital expenditures, competitive positions, acquisitions, investment
opportunities, dispositions, merger integration, 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. These forward-looking
statements are inherently uncertain, and actual results may differ from the
Company’s expectations. The Company does not undertake a duty to update these
forward-looking statements, which speak only as of the date on which they are
made.

The Company’s actual future results and trends may differ materially from
expectations depending on a variety of factors discussed in the Company’s
filings with the Securities and Exchange Commission. These factors include
without limitation: (a) the ability and willingness of the Company’s tenants,
operators, borrowers, managers and other third parties to satisfy their
obligations under their respective contractual arrangements with the Company,
including, in some cases, their obligations to indemnify, defend and hold
harmless the Company from and against various claims, litigation and
liabilities; (b) the ability of the Company’s tenants, operators, borrowers
and managers to maintain the financial strength and liquidity necessary to
satisfy their respective obligations and liabilities to third parties,
including without limitation obligations under their existing credit
facilities and other indebtedness; (c) the Company’s success in implementing
its business strategy and the Company’s ability to identify, underwrite,
finance, consummate and integrate diversifying acquisitions and investments,
including investments in different asset types and outside the United States;
(d) macroeconomic conditions such as a disruption of or lack of access to the
capital markets, changes in the debt rating on U.S. government securities,
default or delay in payment by the United States of its obligations, and
changes in the federal or state budgets resulting in the reduction or
nonpayment of Medicare or Medicaid reimbursement rates; (e) the nature and
extent of future competition, including new construction in the markets in
which the Company’s seniors housing communities and MOBs are located; (f) the
extent of future or pending healthcare reform and regulation, including cost
containment measures and changes in reimbursement policies, procedures and
rates; (g) increases in the Company’s borrowing costs as a result of changes
in interest rates and other factors; (h) the ability of the Company’s
operators and managers, as applicable, to comply with laws, rules and
regulations in the operation of the Company’s properties, to deliver
high-quality services, to attract and retain qualified personnel and to
attract residents and patients; (i) changes in general economic conditions or
economic conditions in the markets in which the Company may, from time to
time, compete, and the effect of those changes on the Company’s revenues,
earnings and funding sources; (j) the Company’s ability to pay down,
refinance, restructure or extend its indebtedness as it becomes due; (k) the
Company’s ability and willingness to maintain its qualification as a REIT in
light of economic, market, legal, tax and other considerations; (l) final
determination of the Company’s taxable net income for the year ended December
31, 2013 and for the year ending December 31, 2014; (m) the ability and
willingness of the Company’s tenants to renew their leases with the Company
upon expiration of the leases, the Company’s ability to reposition its
properties on the same or better terms in the event of nonrenewal or in the
event the Company exercises its right to replace an existing tenant, and
obligations, including indemnification obligations, the Company may incur in
connection with the replacement of an existing tenant; (n) risks associated
with the Company’s senior living operating portfolio, such as factors that can
cause volatility in the Company’s operating income and earnings generated by
those properties, including without limitation national and regional economic
conditions, costs of food, materials, energy, labor and services, employee
benefit costs, insurance costs and professional and general liability claims,
and the timely delivery of accurate property-level financial results for those
properties; (o) changes in currency exchange rates for U.S. or Canadian
dollars or any other currency in which the Company may, from time to time,
conduct business; (p) year-over-year changes in the Consumer Price Index and
the effect of those changes on the rent escalators contained in the Company’s
leases, and on the Company’s earnings; (q) the Company’s ability and the
ability of its tenants, operators, borrowers and managers to obtain and
maintain adequate property, liability and other insurance from reputable,
financially stable providers; (r) the impact of increased operating costs and
uninsured professional liability claims on the Company’s liquidity, financial
condition and results of operations or that of the Company’s tenants,
operators, borrowers and managers, and the ability of the Company and the
Company’s tenants, operators, borrowers and managers to accurately estimate
the magnitude of those claims; (s) risks associated with the Company’s MOB
portfolio and operations, including the Company’s ability to successfully
design, develop and manage MOBs, to accurately estimate its costs in fixed
fee-for-service projects and to retain key personnel; (t) the ability of the
hospitals on or near whose campuses the Company’s MOBs are located and their
affiliated health systems to remain competitive and financially viable and to
attract physicians and physician groups; (u) the Company’s ability to build,
maintain and expand its relationships with existing and prospective hospital
and health system clients; (v) risks associated with the Company’s investments
in joint ventures and unconsolidated entities, including its lack of sole
decision-making authority and its reliance on its joint venture partners’
financial condition; (w) the impact of market or issuer events on the
liquidity or value of the Company’s investments in marketable securities; (x)
merger and acquisition activity in the healthcare and seniors housing
industries resulting in a change of control of, or a competitor’s investment
in, one or more of the Company’s tenants, operators, borrowers or managers or
significant changes in the senior management of the Company’s tenants,
operators, borrowers or managers; and (y) the impact of litigation or any
financial, accounting, legal or regulatory issues that may affect the Company
or its tenants, operators, borrowers or managers. Many of these factors are
beyond the control of the Company and its management.


CONSOLIDATED BALANCE SHEETS
As of December 31, 2013, September 30, 2013, June 30, 2013, March 31, 2013 and December 31, 2012
(In thousands, except per share amounts)
                                                                               
                 December 31,     September 30,    June 30,         March 31,        December 31,
                 2013             2013             2013             2013             2012
Assets
Real estate
investments:
Land and         $ 1,855,968      $ 1,856,739      $ 1,783,664      $ 1,764,208      $ 1,772,417
improvements
Buildings and    18,457,028       18,383,075       17,238,843       16,977,860       16,920,821
improvements
Construction     80,415           79,172           99,947           72,714           70,665
in progress
Acquired lease   1,010,181       1,012,163       990,548         984,023         981,704      
intangibles
                 21,403,592       21,331,149       20,113,002       19,798,805       19,745,607
Accumulated
depreciation     (3,328,006   )   (3,156,206   )   (2,977,154   )   (2,803,068   )   (2,634,075   )
and
amortization
Net real
estate           18,075,586       18,174,943       17,135,848       16,995,737       17,111,532
property
Secured loans
receivable and   376,229          400,889          470,441          490,107          635,002
investments,
net
Investments in
unconsolidated   91,656          91,531          93,155          94,257          95,409       
entities
Net real
estate           18,543,471       18,667,363       17,699,444       17,580,101       17,841,943
investments
Cash and cash    94,816           54,672           62,421           57,690           67,908
equivalents
Escrow
deposits and     84,657           98,200           94,492           99,225           105,913
restricted
cash
Deferred
financing        62,215           55,242           50,821           54,079           42,551
costs, net
Other assets     946,335         1,003,881       889,404         915,826         921,685      
Total assets     $ 19,731,494    $ 19,879,358    $ 18,796,582    $ 18,706,921    $ 18,980,000 
                                                                                     
Liabilities
and equity
Liabilities:
Senior notes
payable and      $ 9,364,992      $ 9,413,318      $ 8,420,073      $ 8,295,908      $ 8,413,646
other debt
Accrued          54,349           62,176           50,860           58,086           47,565
interest
Accounts
payable and      1,001,515        1,019,166        887,314          910,692          995,156
other
liabilities
Deferred         250,167         248,369         247,591         261,122         259,715      
income taxes
Total            10,671,023       10,743,029       9,605,838        9,525,808        9,716,082
liabilities
                                                                                     
Redeemable OP
unitholder and   156,660          171,921          184,217          194,302          174,555
noncontrolling
interests
                                                                                     
Commitments
and
contingencies
                                                                                     
Equity:
Ventas
stockholders'
equity:
Preferred
stock, $1.00
par value;       —                —                —                —                —
10,000 shares
authorized,
unissued
Common stock,
$0.25 par
value;
297,901;
297,328;
296,940;
295,823 and
295,565 shares
issued at        74,488           74,345           74,248           73,969           73,904
December 31,
2013,
September 30,
2013, June 30,
2013, March
31, 2013 and
December 31,
2012,
respectively
Capital in
excess of par    10,078,592       10,032,285       9,996,095        9,904,694        9,920,962
value
Accumulated
other            19,659           21,293           19,752           21,828           23,354
comprehensive
income
Retained
earnings         (1,126,541   )   (1,021,628   )   (943,384     )   (861,434     )   (777,927     )
(deficit)
Treasury
stock, 3,712;
3,699; 3,698;
3,736 and
3,699 shares
at December
31, 2013,        (221,917     )   (221,203     )   (221,129     )   (223,709     )   (221,165     )
September 30,
2013, June 30,
2013, March
31, 2013 and
December 31,
2012,
respectively
Total Ventas
stockholders'    8,824,281        8,885,092        8,925,582        8,915,348        9,019,128
equity
Noncontrolling   79,530          79,316          80,945          71,463          70,235       
interest
Total equity     8,903,811       8,964,408       9,006,527       8,986,811       9,089,363    
Total
liabilities      $ 19,731,494    $ 19,879,358    $ 18,796,582    $ 18,706,921    $ 18,980,000 
and equity


CONSOLIDATED STATEMENTS OF INCOME
For the three months and years ended December 31, 2013 and 2012
(In thousands, except per share amounts)
                                                              
                         For the Three Months        For the Year
                         Ended December 31,          Ended December 31,
                                                                   
                         2013          2012          2013          2012
Revenues:
Rental income:
Triple-net leased        $ 232,544     $ 206,188     $ 875,877     $ 818,000
Medical office           114,635      108,303      450,107      360,849   
buildings
                         347,179       314,491       1,325,984     1,178,849
Resident fees and        366,129       321,935       1,406,005     1,227,124
services
Medical office
building and other       6,478         3,950         17,809        20,741
services revenue
Income from loans and    12,924        14,690        58,208        39,913
investments
Interest and other       146          664          2,047        1,106     
income
Total revenues           732,856       655,730       2,810,053     2,467,733
                                                                   
Expenses:
Interest                 90,168        75,415        334,484       288,276
Depreciation and         198,036       181,426       721,959       714,505
amortization
Property-level
operating expenses:
Senior living            250,123       222,553       956,684       841,022
Medical office           37,938       39,445       152,948      125,400   
buildings
                         288,061       261,998       1,109,632     966,422
Medical office
building services        3,358         1,569         8,315         9,883
costs
General,
administrative and       30,349        23,022        115,106       98,510
professional fees
Loss (gain) on
extinguishment of        2,110         (699      )   1,201         37,640
debt, net
Merger-related
expenses and deal        4,497         13,617        21,634        63,183
costs
Other                    5,407        1,888        18,732       6,940     
Total expenses           621,986      558,236      2,331,063    2,185,359 
                                                                   
Income before (loss)
income from
unconsolidated
entities, income         110,870       97,494        478,990       282,374
taxes, discontinued
operations and
noncontrolling
interest
(Loss) income from
unconsolidated           (1,041    )   249           (508      )   18,154
entities
Income tax (expense)     (1,272    )   3,555        11,828       6,282     
benefit
Income from continuing   108,557       101,298       490,310       306,810
operations
Discontinued             102          (15,172   )   (35,421   )   54,965    
operations
Net income               108,659       86,126        454,889       361,775
Net income (loss)
attributable to          219          (141      )   1,380        (1,025    )
noncontrolling
interest
Net income
attributable to common   $ 108,440    $ 86,267     $ 453,509    $ 362,800 
stockholders
                                                                   
Earnings per common
share:
Basic:
Income from continuing
operations               $ 0.37        $ 0.34        $ 1.67        $ 1.05
attributable to common
stockholders
Discontinued             —            (0.05     )   (0.12     )   0.19      
operations
Net income
attributable to common   $ 0.37       $ 0.29       $ 1.55       $ 1.24    
stockholders
Diluted:
Income from continuing
operations               $ 0.37        $ 0.34        $ 1.66        $ 1.04
attributable to common
stockholders
Discontinued             —            (0.05     )   (0.12     )   0.19      
operations
Net income
attributable to common   $ 0.37       $ 0.29       $ 1.54       $ 1.23    
stockholders
                                                                   
Weighted average
shares used in
computing earnings per
common share:
Basic                    293,674       294,704       292,654       292,064
Diluted                  296,047       297,089       295,110       294,488
                                                                   
Dividends declared per   $ 0.725       $ 0.62        $ 2.735       $ 2.48
common share


QUARTERLY CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
                                                                   
                 2013 Quarters                                           2012 Fourth
                 Fourth        Third         Second        First         Quarter
Revenues:
Rental income:
Triple-net       $ 232,544     $ 218,373     $ 212,826     $ 212,134     $ 206,188
leased
Medical office   114,635      114,779      110,277      110,416      108,303   
buildings
                 347,179       333,152       323,103       322,550       314,491
Resident fees    366,129       359,112       341,594       339,170       321,935
and services
Medical office
building and     6,478         4,146         3,537         3,648         3,950
other services
revenue
Income from
loans and        12,924        14,448        14,733        16,103        14,690
investments
Interest and     146          66           797          1,038        664       
other income
Total revenues   732,856       710,924       683,764       682,509       655,730
                                                                         
Expenses:
Interest         90,168        83,647        82,141        78,528        75,415
Depreciation
and              198,036       177,032       171,522       175,369       181,426
amortization
Property-level
operating
expenses:
Senior living    250,123       244,316       231,337       230,908       222,553
Medical office   37,938       40,566       38,151       36,293       39,445    
buildings
                 288,061       284,882       269,488       267,201       261,998
Medical office
building         3,358         1,651         1,667         1,639         1,569
services costs
General,
administrative
and              30,349        28,659        27,324        28,774        23,022
professional
fees
Loss (gain) on
extinguishment   2,110         (189      )   (720      )   —             (699      )
of debt, net
Merger-related
expenses and     4,497         6,208         6,667         4,262         13,617
deal costs
Other            5,407        4,353        4,385        4,587        1,888     
Total expenses   621,986      586,243      562,474      560,360      558,236   
                                                                         
Income before
(loss) income
from
unconsolidated
entities,        110,870       124,681       121,290       122,149       97,494
income taxes,
discontinued
operations and
noncontrolling
interest
(Loss) income
from             (1,041    )   110           (506      )   929           249
unconsolidated
entities
Income tax
(expense)        (1,272    )   2,780        12,064       (1,744    )   3,555     
benefit
Income from
continuing       108,557       127,571       132,848       121,334       101,298
operations
Discontinued     102          (8,972    )   (18,315   )   (8,236    )   (15,172   )
operations
Net income       108,659       118,599       114,533       113,098       86,126
Net income
(loss)
attributable     219          303          (47       )   905          (141      )
to
noncontrolling
interest
Net income
attributable     $ 108,440    $ 118,296    $ 114,580    $ 112,193    $ 86,267  
to common
stockholders
                                                                         
Earnings per
common share:
Basic:
Income from
continuing
operations       $ 0.37        $ 0.43        $ 0.45        $ 0.41        $ 0.34
attributable
to common
stockholders
Discontinued     —            (0.03     )   (0.06     )   (0.03     )   (0.05     )
operations
Net income
attributable     $ 0.37       $ 0.40       $ 0.39       $ 0.38       $ 0.29    
to common
stockholders
Diluted:
Income from
continuing
operations       $ 0.37        $ 0.43        $ 0.45        $ 0.41        $ 0.34
attributable
to common
stockholders
Discontinued     —            (0.03     )   (0.06     )   (0.03     )   (0.05     )
operations
Net income
attributable     $ 0.37       $ 0.40       $ 0.39       $ 0.38       $ 0.29    
to common
stockholders
                                                                         
Weighted
average shares
used in
computing
earnings per
common share:
Basic            293,674       292,818       292,635       291,455       294,704
Diluted          296,047       295,190       295,123       293,924       297,089


CONSOLIDATED STATEMENTS OF CASH FLOWS
For the years ended December 31, 2013 and 2012
(In thousands)
                                                  2013          2012
Cash flows from operating activities:
Net income                                         $  454,889     $  361,775
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization (including amounts   769,881        764,775
in discontinued operations)
Amortization of deferred revenue and lease         (15,793    )   (17,118    )
intangibles, net
Other non-cash amortization                        (16,745    )   (39,943    )
Stock-based compensation                           20,653         20,784
Straight-lining of rental income, net              (30,540    )   (24,042    )
Loss on extinguishment of debt, net                1,048          37,640
Gain on real estate dispositions, net (including   (3,617     )   (80,952    )
amounts in discontinued operations)
Gain on real estate loan investments               (5,056     )   (5,230     )
Gain on sale of marketable debt securities         (856       )   —
Income tax benefit (including amounts in           (11,828    )   (6,286     )
discontinued operations)
Loss (income) from unconsolidated entities         1,748          (1,509     )
Gain on re-measurement of equity interest upon     (1,241     )   (16,645    )
acquisition, net
Other                                              8,407          10,414
Changes in operating assets and liabilities:
(Increase) decrease in other assets                (690       )   3,756
Increase in accrued interest                       6,806          9,969
Increase (decrease) in accounts payable and        17,689        (24,572    )
other liabilities
Net cash provided by operating activities          1,194,755      992,816
Cash flows from investing activities:
Net investment in real estate property             (1,437,002 )   (1,453,065 )
Purchase of private investment funds               —              (276,419   )
Purchase of noncontrolling interest                (14,331    )   (3,934     )
Investment in loans receivable and other           (37,963    )   (452,558   )
Proceeds from real estate disposals                35,591         149,045
Proceeds from loans receivable                     325,518        43,219
Proceeds from sale or maturity of marketable       5,493          37,500
securities
Funds held in escrow for future development        19,458         (28,050    )
expenditures
Development project expenditures                   (95,741    )   (114,002   )
Capital expenditures                               (81,614    )   (69,430    )
Other                                              (2,169     )   (1,995     )
Net cash used in investing activities              (1,282,760 )   (2,169,689 )
Cash flows from financing activities:
Net change in borrowings under revolving credit    (164,029   )   84,938
facilities
Proceeds from debt                                 2,767,546      2,710,405
Repayment of debt                                  (1,792,492 )   (1,193,023 )
Payment of deferred financing costs                (31,277    )   (23,770    )
Issuance of common stock, net                      141,343        342,469
Cash distribution to common stockholders           (802,123   )   (728,546   )
Cash distribution to redeemable OP unitholders     (5,040     )   (4,446     )
Purchases of redeemable OP units                   (659       )   (4,601     )
Contributions from noncontrolling interest         2,395          38
Distributions to noncontrolling interest           (9,286     )   (5,215     )
Other                                              8,618         20,665     
Net cash provided by financing activities          114,996       1,198,914  
Net increase in cash and cash equivalents          26,991         22,041
Effect of foreign currency translation on cash     (83        )   60
and cash equivalents
Cash and cash equivalents at beginning of period   67,908        45,807     
Cash and cash equivalents at end of period         $  94,816     $  67,908  
                                                                  
Supplemental schedule of non-cash activities:
Assets and liabilities assumed from
acquisitions:
Real estate investments                            $  223,955     $  582,694
Utilization of escrow funds held for an Internal   —              (134,003   )
Revenue Code Section 1031 exchange
Other assets acquired                              6,635          77,730
Debt assumed                                       183,848        412,825
Other liabilities                                  29,868         70,391
Deferred income tax liability                      5,181          4,299
Noncontrolling interests                           11,693         34,580
Equity issued                                      —              4,326
Debt transferred on the sale of assets             —              14,535


QUARTERLY CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
                                                                     
                  2013 Quarters                                            2012 Fourth
                  Fourth        Third          Second        First         Quarter
Cash flows from
operating
activities:
Net income        $ 108,659     $  118,599     $ 114,533     $ 113,098     $  86,126
Adjustments to
reconcile net
income to net
cash provided
by operating
activities:
Depreciation
and
amortization
(including        200,556       188,393        193,989       186,943       201,748
amounts in
discontinued
operations)
Amortization of
deferred
revenue and       (4,634    )   (4,156     )   (3,693    )   (3,310    )   (4,153    )
lease
intangibles,
net
Other non-cash    (3,369    )   (3,975     )   (4,072    )   (5,329    )   (8,617    )
amortization
Stock-based       5,643         4,210          5,138         5,662         4,255
compensation
Straight-lining
of rental         (9,375    )   (6,835     )   (6,465    )   (7,865    )   (7,330    )
income, net
Loss (gain) on
extinguishment    2,110         (189       )   (873      )   —             (699      )
of debt
Gain on real
estate
dispositions,
net (including    (1,376    )   (46        )   (1,718    )   (477      )   (1,804    )
amounts in
discontinued
operations)
Gain on real
estate loan       (1,458    )   (2,499     )   (759      )   (340      )   (5,789    )
investments
Gain on sale of
marketable debt   —             —              (856      )   —             —
securities
Income tax
expense
(benefit)
(including        1,272         (2,780     )   (12,064   )   1,744         (3,555    )
amounts in
discontinued
operations)
Loss (income)
from              1,041         (111       )   506           312           (249      )
unconsolidated
entities
Gain on
re-measurement
of equity         —             —              —             (1,241    )   —
interest upon
acquisition,
net
Other             2,274         2,261          967           2,905         3,942
Changes in
operating
assets and
liabilities:
Decrease
(increase) in     27,442        (11,717    )   (5,956    )   (10,459   )   15,686
other assets
(Decrease)
increase in       (7,818    )   11,309         (7,215    )   10,530        (8,761    )
accrued
interest
Increase
(decrease) in
accounts          38,359       35,277        5,921        (61,868   )   12,697    
payable and
other
liabilities
Net cash
provided by       359,326       327,741        277,383       230,305       283,497
operating
activities
Cash flows from
investing
activities:
Net investment
in real estate    (78,236   )   (1,075,144 )   (227,447  )   (56,175   )   (298,153  )
property
Purchase of
private           —             —              —             —             (276,419  )
investment
funds
Purchase of
noncontrolling    (6,436    )   (1,771     )   (2,938    )   (3,186    )   —
interest
Investment in
loans             (3,246    )   (2,385     )   (29,543   )   (2,789    )   (422,035  )
receivable and
other
Proceeds from
real estate       6,400         4,901          13,040        11,250        73,900
disposals
Proceeds from
loans             26,362        81,113         71,649        146,394       8,402
receivable
Proceeds from
sale or
maturity of       —             —              5,493         —             37,500
marketable
securities
Funds held in
escrow for
future            4,269         3,373          6,376         5,440         (28,050   )
development
expenditures
Development
project           (21,034   )   (26,423    )   (26,696   )   (21,588   )   (23,883   )
expenditures
Capital           (30,980   )   (18,175    )   (12,664   )   (19,795   )   (27,160   )
expenditures
Other             (1,758    )   —             (333      )   (78       )   115       
Net cash (used
in) provided by   (104,659  )   (1,034,511 )   (203,063  )   59,473        (955,783  )
investing
activities
Cash flows from
financing
activities:
Net change in
borrowings
under revolving   (71,443   )   188,340        94,990        (375,916  )   (163,983  )
credit
facilities
Proceeds from     1,000,702     848,389        1,584         916,871       1,142,023
debt
Repayment of      (951,960  )   (155,014   )   (49,725   )   (635,793  )   (90,023   )
debt
Payment of
deferred          (11,300   )   (6,980     )   811           (13,808   )   (19,513   )
financing costs
Issuance of
common stock,     35,341        23,618         77,334        5,050         —
net
Cash
distribution to   (213,353  )   (196,540   )   (196,530  )   (195,700  )   (183,306  )
common
stockholders
Cash
distribution to   (1,561    )   (1,166     )   (1,162    )   (1,151    )   (1,088    )
redeemable OP
unitholders
Purchases of
redeemable OP     (342      )   (109       )   (100      )   (108      )   (2,841    )
units
Contributions
from              301           —              2,094         —             38
noncontrolling
interest
Distributions
to                (1,672    )   (2,569     )   (3,595    )   (1,450    )   (1,180    )
noncontrolling
interest
Other             788          1,022         4,750        2,058        1,535     
Net cash (used
in) provided by   (214,499  )   698,991       (69,549   )   (299,947  )   681,662   
financing
activities
Net increase
(decrease) in     40,168        (7,779     )   4,771         (10,169   )   9,376
cash and cash
equivalents
Effect of
foreign
currency          (24       )   30             (40       )   (49       )   2
translation on
cash and cash
equivalents
Cash and cash
equivalents at    54,672       62,421        57,690       67,908       58,530    
beginning of
period
Cash and cash
equivalents at    $ 94,816     $  54,672     $ 62,421     $ 57,690     $  67,908 
end of period
                                                                           
Supplemental
schedule of
non-cash
activities:
Assets and
liabilities
assumed from
acquisitions:
Real estate       $ 2,508       $  131,427     $ 81,181      $ 8,839       $  84,939
investments
Other assets      109           3,964          1,894         668           (22,159   )
acquired
Debt assumed      —             115,246        68,602        —             44,923
Other             2,285         17,090         4,071         6,422         9,707
liabilities
Deferred income   332           3,055          262           1,532         —
tax liability
Noncontrolling    —             —              10,140        1,553         8,150
interests


NON-GAAP FINANCIAL MEASURES RECONCILIATION
Funds From Operations (FFO) Including and Excluding Non-Cash Items^1
(Dollars in thousands, except per share amounts)

                                                                                                                 Tentative Estimates
                                                                                                                  Preliminary and
                                                                                                          YOY     Subject to Change           YOY
                  2012                      2013                                                          Growth  FY2014 - Guidance           Growth
                                                                                                                                              (2)
                  Q4          FY            Q1          Q2          Q3          Q4          FY            '12-'13 Low           High          '13-'14E
Net income
attributable to   $ 86,267    $ 362,800     $ 112,193   $ 114,580   $ 118,296   $ 108,440   $ 453,509             $ 485,811     $ 516,601
common
stockholders
Net income
attributable to
common            $ 0.29      $ 1.23        $ 0.38      $ 0.39      $ 0.40      $ 0.37      $ 1.54                $ 1.64        $ 1.74
stockholders
per share
                                                                                                                                              
Adjustments:
Depreciation
and
amortization on   180,158     710,082       174,091     170,106     175,585     196,514     716,296               760,786       750,786
real estate
assets
Depreciation on
real estate
assets related
to
noncontrolling    (2,435    ) (8,503      ) (2,502    ) (2,617    ) (2,719    ) (2,674    ) (10,512     )         (9,705      ) (11,705     )
interest
Depreciation on
real estate
assets related
to
unconsolidated    1,510       7,516         1,646       1,622       1,634       1,641       6,543                 6,501         5,501
entities
Gain on
re-measurement
of equity
interest upon
acquisition,      —           (16,645     ) (1,241    ) —           —           —           (1,241      )         —             —
net
Discontinued
operations:
Gain on real
estate            (1,804    ) (80,952     ) (477      ) (1,718    ) (488      ) (1,376    ) (4,059      )         1,000         (1,000      )
dispositions,
net
Depreciation
and
amortization on   20,321     50,269       11,574     22,468     11,360     2,520      47,922              1,000        3,000       
real estate
assets
Subtotal: FFO     197,750     661,767       183,091     189,861     185,372     196,625     754,949               759,582       746,582
add-backs
Subtotal: FFO
add-backs per    $ 0.67     $ 2.25       $ 0.62     $ 0.64     $ 0.63     $ 0.66     $ 2.56              $ 2.56       $ 2.52       
share
FFO               $ 284,017   $ 1,024,567   $ 295,284   $ 304,441   $ 303,668   $ 305,065   $ 1,208,458   18   %  $ 1,245,393   $ 1,263,183   4    %
FFO per share    $ 0.96     $ 3.48       $ 1.00     $ 1.03     $ 1.03     $ 1.03     $ 4.09       18   %  $ 4.20       $ 4.26       3    %
                                                                                                                                              
Adjustments:
Merger-related
expenses and      13,617      63,183        4,262       6,592       6,209       4,497       21,560                10,000        20,000
deal costs
Income tax
(benefit)         (3,555    ) (6,286      ) 1,744       (12,064   ) (2,780    ) 1,272       (11,828     )         16,000        13,000
expense
(Gain) loss on
extinguishment    (699      ) 37,640        —           (873      ) (189      ) 2,110       1,048                 5,000         (1,000      )
of debt
Change in fair
value of          (52       ) 99            25          —           —           424         449                   —             —
financial
instruments
Amortization of
other             255        1,022        256        255        256        255        1,022               1,522        522         
intangibles
Subtotal:
normalized FFO    9,566       95,658        6,287       (6,090    ) 3,496       8,558       12,251                32,522        32,522
add-backs
Subtotal:
normalized FFO   $ 0.03     $ 0.32       $ 0.02     $ (0.02   ) $ 0.01     $ 0.03     $ 0.04              $ 0.11       $ 0.11       
add-backs per
share
Normalized FFO    $ 293,583   $ 1,120,225   $ 301,571   $ 298,351   $ 307,164   $ 313,623   $ 1,220,709   9    %  $ 1,277,915   $ 1,295,705   5    %
Normalized FFO   $ 0.99     $ 3.80       $ 1.03     $ 1.01     $ 1.04     $ 1.06     $ 4.14       9    %  $ 4.31       $ 4.37       5    %
per share
                                                                                                                                              
Non-cash items
included in
normalized FFO:
Amortization of
deferred
revenue and
lease
intangibles,      (4,153    ) (17,118     ) (3,310    ) (3,693    ) (4,156    ) (4,634    ) (15,793     )         (15,525     ) (17,025     )
net
Other non-cash
amortization,
including fair
market
value of debt     (8,617    ) (39,943     ) (5,329    ) (4,072    ) (3,975    ) (3,369    ) (16,745     )         (6,868      ) (7,368      )
Stock-based       4,255       20,784        5,662       5,138       4,210       5,643       20,653                20,200        24,200
compensation
Straight-lining
of rental         (7,330    ) (24,042     ) (7,865    ) (6,465    ) (6,835    ) (9,375    ) (30,540     )        (28,693     ) (30,193     )
income, net
Subtotal:
non-cash items    (15,845   ) (60,319     ) (10,842   ) (9,092    ) (10,756   ) (11,735   ) (42,425     )         (30,886     ) (30,386     )
included in
normalized FFO
Subtotal:
normalized FFO   $ (0.05   ) $ (0.20     ) $ (0.04   ) $ (0.03   ) $ (0.04   ) $ (0.04   ) $ (0.14     )        $ (0.10     ) $ (0.10     ) 
add-backs per
share
Normalized FFO,
excluding         $ 277,738   $ 1,059,906   $ 290,729   $ 289,259   $ 296,408   $ 301,888   $ 1,178,284   11   %  $ 1,247,029   $ 1,265,319   7    %
non-cash items
Normalized FFO
per share,       $ 0.93     $ 3.60       $ 0.99     $ 0.98     $ 1.00     $ 1.02     $ 3.99       11   %  $ 4.21       $ 4.27       6    %
excluding
non-cash items
Weighted
average diluted   297,089     294,488       293,924     295,123     295,190     296,047     295,110               296,500       296,500
shares
                                                                                                                                              
^1 Totals and per share amounts may not add due to rounding. Per share quarterly amounts may not add to annual per share amounts
due to material changes in the Company’s weighted average diluted share count, if any.
^2 2013-2014E growth assumes the midpoint of 2014 guidance.


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 and normalized FFO appropriate measures of operating performance of an
equity REIT. In particular, the Company believes that normalized FFO is useful
because it allows investors, analysts and Company management to compare the
Company’s operating performance to the operating performance of other real
estate companies and between periods on a consistent basis without having to
account for differences caused by unanticipated items such as transactions and
litigation.

The Company uses the NAREIT definition of FFO. NAREIT defines FFO as net
income, computed in accordance with GAAP, excluding gains (or losses) from
sales of real estate property, including gain on re-measurement of equity
method investments, and impairment write-downs of depreciable real estate,
plus real estate 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. The Company defines normalized FFO as FFO excluding the following
income and expense items (which may be recurring in nature): (a)
merger-related costs and expenses, including amortization of intangibles,
transition and integration/severance expenses, and deal costs and expenses,
including expenses and recoveries relating to acquisition lawsuits; (b) the
impact of any expenses related to asset impairment and valuation allowances,
the write-off of unamortized deferred financing fees, or additional costs,
expenses, discounts, make-whole payments, penalties or premiums incurred as a
result of early retirement or payment of the Company’s debt; (c) the non-cash
effect of income tax benefits or expenses and derivative transactions that
have non-cash mark-to-market impacts on the Company’s income statement; (d)
except as specifically stated in the case of guidance, the impact of future
acquisitions or divestitures (including pursuant to tenant options to
purchase) and capital transactions; (e) the financial impact of contingent
consideration; (f) charitable donations made to the Ventas Charitable
Foundation; and (g) gains and losses for non-operational foreign currency
hedge agreements and changes in the fair value of financial instruments.

FFO and normalized FFO presented herein may not be identical to FFO and
normalized FFO presented by other real estate companies due to the fact that
not all real estate companies use the same definitions. FFO and normalized FFO
should not be considered as alternatives to net income (determined in
accordance with GAAP) as indicators of the Company’s financial performance or
as alternatives to cash flow from operating activities (determined in
accordance with GAAP) as measures of the Company’s liquidity, nor are FFO and
normalized 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 and normalized FFO should be examined in conjunction with net income as
presented elsewhere herein.

                  NON-GAAP FINANCIAL MEASURES RECONCILIATION
                    Net Debt to Adjusted Pro Forma EBITDA

The following information considers the pro forma effect on net income,
interest and depreciation of the Company’s investments and other capital
transactions that were completed during the three months ended December 31,
2013, as if the transactions had been consummated as of the beginning of the
period. The following table illustrates net debt to pro forma earnings before
interest, taxes, depreciation and amortization (including non-cash stock-based
compensation expense), excluding gains or losses on extinguishment of debt,
income or loss from noncontrolling interest and unconsolidated entities, loss
from merger-related expenses and deal costs, net gains on real estate activity
and changes in the fair value of financial instruments (including amounts in
discontinued operations) (“Adjusted Pro Forma EBITDA”) (dollars in thousands):

                                                        
          Net income attributable to common stockholders       $ 108,440
          Pro forma adjustments for current period
          investments, capital
          transactions and dispositions                        5,960       
                                                                             
          Pro forma net income for the three months ended      114,400
          December 31, 2013
          Add back:
          Pro forma interest (including discontinued           87,279
          operations)
          Pro forma depreciation and amortization (including   200,815
          discontinued operations)
          Stock-based compensation                             5,643
          Loss on extinguishment of debt, net                  2,110
          Gain on real estate dispositions, net                (1,376      )
          Noncontrolling interest                              219
          Loss from unconsolidated entities                    1,041
          Income tax expense (including discontinued           1,272
          operations)
          Change in fair value of financial instruments        424
          Other taxes                                          998
          Pro forma merger-related expenses and deal costs     3,693       
          Adjusted Pro Forma EBITDA                            $ 416,518   
          Adjusted Pro Forma EBITDA, annualized                $ 1,666,072 
                                                                             
                                                                             
          As of December 31, 2013:
          Debt                                                 $ 9,364,992
          Cash, including cash escrows pertaining to debt      (123,591    )
          Net debt                                             $ 9,241,401 
                                                                             
          Net debt to Adjusted Pro Forma EBITDA                5.5          x


NON-GAAP FINANCIAL MEASURES RECONCILIATION
NOI by Segment
(In thousands)
                                                                      
                 2013 Quarters                                           2012
                                                                         Fourth
                 Fourth       Third        Second       First         Quarter
Revenues
                                                                         
Triple-Net
Triple-Net       $ 232,544     $ 218,373     $ 212,826     $ 212,134     $ 206,188
Rental Income
                                                                         
Medical Office
Buildings
Medical Office   106,966       107,418       104,220       104,437       102,249
- Stabilized
Medical Office   7,668        7,361        6,057        5,979        6,054
- Lease up
Total Medical
Office           114,634      114,779      110,277      110,416      108,303
Buildings -
Rental Income
Total Rental     347,178       333,152       323,103       322,550       314,491
Income
                                                                         
Medical Office
Building         4,851        2,530        2,159        2,537        2,839
Services
Revenue
Total Medical
Office           119,485       117,309       112,436       112,953       111,142
Buildings -
Revenue
                                                                         
Triple-Net
Services         1,127         1,116         1,115         1,111         1,111
Revenue
Non-Segment
Services         500          500          263          —            —
Revenue
Total Medical
Office
Building and     6,478         4,146         3,537         3,648         3,950
Other Services
Revenue
                                                                         
Seniors
Housing
Operating
Seniors
Housing -        360,064       355,294       336,754       326,880       309,252
Stabilized
Seniors
Housing -        5,422         3,152         4,114         11,548        11,940
Lease up
Seniors
Housing -        643          666          726          742          743
Other
Total Resident
Fees and         366,129       359,112       341,594       339,170      321,935
Services
                                                                         
Non-Segment
Income from      12,924       14,448       14,733       16,103       14,690
Loans and
Investments
Total
Revenues,
excluding        732,709       710,858       682,967       681,471       655,066
Interest and
Other Income
                                                                         
Property-Level
Operating
Expenses
                                                                         
Medical Office
Buildings
Medical Office   35,262        37,669        35,930        34,371        37,209
- Stabilized
Medical Office   2,676        2,897        2,221        1,922        2,236
- Lease up
Total Medical
Office           37,938        40,566        38,151        36,293        39,445
Buildings
                                                                         
Seniors
Housing
Operating
Seniors
Housing -        245,404       241,319       227,907       222,362       212,782
Stabilized
Seniors
Housing -        4,145         2,392         2,814         7,933         9,191
Lease up
Seniors
Housing -        574          605          616          613          580
Other
Total Seniors    250,123      244,316      231,337      230,908     222,553
Housing
Total
Property-Level   288,061       284,882       269,488       267,201       261,998
Operating
Expenses
                                                                         
Medical Office
Building         3,358         1,651         1,667         1,639         1,569
Services Costs
                                                                         
Net Operating
Income
                                                                         
Triple-Net
Triple-Net       232,544       218,373       212,826       212,134       206,188
Properties
Triple-Net
Services         1,127        1,116        1,115        1,111        1,111
Revenue
Total            233,671       219,489       213,941       213,245       207,299
Triple-Net
                                                                         
Medical Office
Buildings
Medical Office   71,704        69,749        68,290        70,066        65,040
- Stabilized
Medical Office   4,992        4,464        3,836        4,057        3,818
- Lease up
Total Medical
Office           76,696        74,213        72,126        74,123        68,858
Buildings
                                                                         
Seniors
Housing
Operating
Seniors
Housing -        114,660       113,975       108,847       104,518       96,470
Stabilized
Seniors
Housing -        1,277         760           1,300         3,615         2,749
Lease up
Seniors
Housing -        69           61           110          129          163
Other
Total Seniors    116,006       114,796       110,257       108,262       99,382
Housing
Non-Segment      13,424       14,948       14,996       16,103       14,690
Net Operating    $ 439,797    $ 423,446    $ 411,320    $ 411,733    $ 390,229
Income
                                                                         
Note: Amounts above are adjusted to exclude discontinued operations for all
periods presented.


                  NON-GAAP FINANCIAL MEASURES RECONCILIATION
                                  Annual NOI
                                (In thousands)

The Company believes that NOI and same-store NOI provide useful information
because those disclosures allow investors, analysts and Company management to
measure unlevered property-level operating results and to compare the
Company's operating results to the operating results of other real estate
companies and between periods on a consistent basis. Those terms are commonly
used in evaluating results of real estate companies. The Company defines NOI
as total revenues, excluding interest and other income, less property-level
operating expenses and medical office building services costs (including
amounts in discontinued operations). The following is a reconciliation of NOI
to net income (including amounts in discontinued operations) for the years
ended December31, 2013 and 2012:

                                                         
                                                 2013            2012
                                                 
          Net income                             $ 454,889       $ 361,775
          Adjustments:
          Interest and other income                (2,047    )     (6,158    )
          Interest                                 340,381         302,031
          Depreciation and amortization            769,881         764,774
          General, administrative and              115,109         98,813
          professional fees
          Loss on extinguishment of debt, net      1,048           37,640
          Merger-related expenses and deal         21,634          63,183
          costs
          Other                                    18,325          8,842
          Loss (income) from unconsolidated        508             (18,154   )
          entities
          Income tax benefit                       (11,828   )     (6,286    )
          Gain on real estate dispositions,       (3,617    )    (80,952   )
          net
          NOI                                      1,704,283       1,525,508
          Discontinued operations                 (14,224   )    (35,186   )
          NOI (excluding amounts in              $ 1,690,059    $ 1,490,322 
          discontinued operations)
                                                                 
          Seniors Housing Operating NOI
                                                2013            2012
          Revenues
          Total Resident Fees and Services       $ 1,406,005     $ 1,227,124
          Property-Level Operating Expenses
          Total Seniors Housing                   956,684       841,022   
          Net Operating Income
          Total Seniors Housing                  $ 449,321      $ 386,102   
                                                               
                                                                

NON-GAAP FINANCIAL MEASURES RECONCILIATION
Same-Store Total Portfolio NOI
(Dollars in thousands)
                                                For the Year Ended
                                                 December 31,
                                                 2013           2012
                                                                 
Net Operating Income                             $ 1,690,059     $ 1,490,322
                                                                 
Add:
4th Quarter $20 Million Rent Prepayment           20,000        —         
                                                                 
Less:
NOI Not Included in Same-Store                     229,676         98,534
Straight-Lining of Rental Income                   30,554          23,632
Non-Cash Rental Income                             13,086          15,941
Non-Segment NOI                                   59,471        39,913    
                                                  332,787       178,020   
                                                                 
Same-Store Cash NOI With the Rent Prepayment     $ 1,377,272    $ 1,312,302 
                                                                 
Percentage Increase                                               5.0       %
                                                                 
Less:
4th Quarter $20 Million Rent Prepayment           20,000        —         
                                                                 
Same-Store Cash NOI Without the Rent             $ 1,357,272    $ 1,312,302 
Prepayment
                                                                 
Percentage Increase                                               3.4       %
                                                                 
Same-Store Seniors Housing Operating Portfolio NOI
                                                 For the Year Ended
                                                 December 31,
                                                 2013            2012
                                                                 
Net Operating Income                             $ 449,321       $ 386,102
                                                                 
Less:
NOI Not Included in Same-Store                    63,844        20,977    
Same-Store NOI as Reported                       $ 385,477      $ 365,125   
                                                                 
Percentage Increase                                               5.6       %
                                                                             

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Ventas, Inc.
Lori B. Wittman,(877) 4-VENTAS
 
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