Business Wire | Aug 7, 2020 06:55AM EDT

Ventas Reports 2020 Second Quarter Results

Aug. 07, 2020

CHICAGO--(BUSINESS WIRE)--Aug. 07, 2020--Ventas, Inc. (NYSE: VTR) (the "Company") today reported results for the second quarter ended June 30, 2020. The Company also provided an update regarding how its operations and financial condition have been affected by the COVID-19 pandemic.

"Our second quarter results demonstrate the significant benefit of Ventas's diversified portfolio. We achieved strong performance in our Office and Triple-Net Lease segments, which partially offset the unprecedented impact of the COVID-19 pandemic on our senior housing operating portfolio," said Debra A. Cafaro, Ventas Chairman and CEO. "During the quarter, we focused on the health and safety of our employees and those individuals using our properties as a first priority. We also took decisive actions to keep Ventas strong and stable and to weather the initial impact of the pandemic. We are also pleased to have reached mutually beneficial agreements with our two largest senior housing tenants, which provide certainty, flexibility and the opportunity for upside participation in the industry's recovery," she added.

"Healthcare real estate continues to offer compelling, demographically driven growth potential, and Ventas is well positioned to benefit from these powerful tailwinds. However, the near-term clinical, financial, operational and economic environment remains dynamic and highly uncertain. We are confident that we have the experience, team, operators and diverse portfolio to manage through these uncertainties," Cafaro concluded.

Justin Hutchens, the Company's Executive Vice President of Senior Housing, North America, commented, "Second quarter SHOP results were in line with our expectations. Following the significant impact of the COVID-19 pandemic in April, our leading indicators and move-ins showed sustained improvement through the end of the second quarter and into July. Currently, nearly all of our communities are accepting new move-ins and offering a richer living environment for the benefit of seniors and their families. SHOP occupancy in July showed a modest sequential decline, albeit at an improved rate versus the second quarter, because move-ins are still below move-outs. There is resilient demand for senior housing, and we continue to work with our operators to stabilize occupancy and maintain our focus on health and safety."

Decisive Actions for Strength and Stability

* Mutually Beneficial Arrangements with Two Largest Tenants in Triple Net ("NNN") Senior Housing: Ventas reached mutually beneficial arrangements with Brookdale Senior Living Inc. ("Brookdale"), the nation's largest senior housing operator, to proactively address the financial impact of the COVID-19 pandemic. These arrangements provide certainty, flexibility and the opportunity for upside, while enhancing Brookdale's stability. Ventas reset Brookdale's annual cash rent to $100 million, and received up-front consideration approximating $235 million (including $162 million in cash), representing over two and a half years of the cash rent reduction. Warrants exercisable at $3 per share through December 31, 2025 for eight percent of Brookdale's fully diluted shares were included in the up-front consideration, providing Ventas shareholders with the opportunity for meaningful upside participation in any industry recovery. The Company effectively converted 26 Holiday-operated independent living communities to a SHOP operating model from a NNN lease, and received $100 million in consideration. This transaction enables Ventas to retain upside in the communities over time, receive significant value from the lease guarantor and preserve operational flexibility. * Enhancing Ventas Cost Structure, Liquidity and Financial Strength: In mid-June, Ventas adjusted its corporate cost structure in response to the impact of COVID-19 on the Company's business and to enhance operational efficiency and effectiveness. The Company eliminated roles representing over 25 percent of its corporate positions. As a result of these actions and reductions in senior executive compensation for the year, the Company expects that its third quarter 2020 annualized G&A expense will be approximately $25 to $30 million lower than the level reported in FY 2019. The Ventas Board declared a second quarter dividend of $0.45 per share, enabling the Company, as a prudent measure, to conserve approximately $130 million of cash per quarter compared to the prior quarter dividend distribution. Ventas has reduced its planned 2020 capital expenditures by $0.3 billion to approximately $0.5 billion. The Company expects to fund remaining 2020 development and redevelopment capital expenditures through committed financing. The Company took further steps to strengthen its balance sheet and enhance its liquidity position. Ventas raised $0.5 billion through a senior note issuance in March 2020 and paid down substantially all of its borrowings under its $3.0 billion Revolving Credit Facility in June and July 2020. As of August 5, 2020, the Company has ample liquidity of $3.5 billion, including $2.9 billion of undrawn revolver capacity and $0.6 billion in cash and cash equivalents on hand, and no commercial paper outstanding. The Company ended the quarter with an annualized Adjusted Net Debt to EBITDA ratio of 6.3x and Total Indebtedness to Gross Asset Value of 37 percent.

Second Quarter 2020 Results

Second quarter 2020 financial results for the Company were materially affected by the COVID-19 pandemic. The Company recorded $260 million in non-cash items as a result of its evaluation of the value of certain of its assets and the go forward collectability of certain of its future rents as a result of the pandemic's impact primarily on senior housing. Results per share are as follows:

Quarter Ended June 30

2020 2019 $ % Change Change

Net (loss) income attributable to common $ $0.58 $ (172%)stockholders ("Net Income (Loss)") (0.42) (1.00)

Reported Funds from Operations, as defined by $the National Association of Real Estate $0.50 $1.13 (0.63) (56%)Investment Trusts ("Nareit FFO")

Normalized Funds from Operations ("FFO") $0.77 $0.97 $ (21%) (0.20)

The following table compares the Company's actual results for Net Income (Loss), Nareit FFO and Normalized FFO per share for second quarter 2020 to second quarter 2019:

Q2 2020 Results Compared to Q2 2019, Per Share

Net Income Nareit Normalized (Loss) FFO FFO

Q2 2019 per share reported results $0.58 $1.13 $0.97



Property Level Net Operating Income (Loss) (0.19) (0.19) (0.19)

Impact of Holiday Lease Termination 0.13 0.13

Write-off of straight-line rental income, net (0.14) (0.14) of NCI

Non-cash income tax (expense) / benefit (0.31) (0.31)

Allowance on loan investments and impairment (0.11) (0.11) of unconsolidated entities

Real estate depreciation and amortization (0.31)

(Gain)/Loss on sale of real estate assets (0.05)

Other Items (0.02) (0.02) (0.01)

Q2 2020 per share reported results $(0.42) $0.50 $0.77

See page 35 of the second quarter 2020 supplemental for additional information.

Second Quarter Property Results, SHOP Clinical Results and Third Quarter Information

Property Performance: For the second quarter 2020, as expected, the Company's reported year-over-year same-store total property portfolio (1,074 assets, representing 92 percent of the Company's cash net operating income ("NOI")) declined compared to the same period in 2019 driven primarily by the impact of the COVID-19 pandemic. All COVID-19 impacts, including testing, labor, cleaning and supplies, have been reflected in property operating results. The Company's sequential same-store total property portfolio (1,128 assets, representing 97 percent of the Company's cash NOI) declined in the second quarter 2020 versus the first quarter 2020 for the same reason.



Same-Store Cash NOI Growth

Q2 2020

Vs. Q2 2019 Vs. Q1 2020 (1,074 assets) (1,128 assets)



NNN 1.4% / $2M (2.7%) / $(4)M

SHOP (42.7%) / $(65)M (35.9%) / $(59)M

Office 2.7% / $4M (1.4%) / $(2)M

Total Company (13.6%) / $(59)M (14.2%) / $(65)M

For the second quarter 2020:

* NNN Portfolio (39 percent of NOI): Same-store cash NOI growth was due to the receipt of substantially all expected rent from the Company's NNN tenants, including in-place lease escalations. Sequential performance was negatively impacted by a $3 million cash fee received from Capital Senior Living in the NNN senior housing portfolio in the first quarter. The Company has also received substantially all July rents in this portfolio.

* SHOP Portfolio (27 percent of NOI): For the sequential same-store pool (390 assets), cash NOI totaled $106 million, and declined $59 million, in line with the Company's expectations regarding impact from COVID-19. Compared to the first quarter, second quarter average occupancy declined 470 basis points, from 86.9 percent to 82.2 percent, and operating costs increased. Leading Indicators: Within the quarter, leading indicators and move-ins improved from April through the end of June on a sustained basis. In June, leads and move-ins were 77 percent and 70 percent, respectively, as compared to prior year. Occupancy: Occupancy loss was most concentrated in April, and declined at an improving rate intra quarter through the end of June. New resident move-ins continued to be lower than move-outs in each month, at a narrowing gap, which resulted in continued occupancy loss. At the end of the second quarter, occupancy stood at approximately 80.6 percent. Rate: Revenue per occupied room ("RevPOR") declined minimally year-over-year and 290 basis points sequentially, as the COVID-19 pandemic caused disproportionately large occupancy loss concentrated in higher rate New York and New Jersey markets. Operating Expenses: Operating expenses increased by 3.4 percent sequentially. The quarter included $42 million of COVID-19 related expenses, partially offset by lower non-COVID-19 operating and management fee expenses. COVID-19 operating expense increases trended more favorably intra-quarter as labor hours were reduced and supply costs eased. SHOP Clinical Results and Third Quarter Trends: In July, leads and move-ins continued to improve sequentially, and point-to-point occupancy declined approximately 50 basis points, or about one third the average rate per month experienced in the second quarter. 96 percent of our communities are currently open to new resident move-ins. Our operators have administered COVID-19 tests for over 69,000 front line caregivers and residents. Despite the increase in testing, confirmed COVID-19 cases amongst SHOP residents has continued to improve, from 26 residents per day in April to five per day currently. There are approximately 40,000 SHOP residents in our portfolio. 89 percent of our communities have either never had a confirmed COVID-19 resident case or have not had a confirmed COVID-19 resident case in the last 14 days.

* Office Portfolio (30 percent of NOI): The Office portfolio showed outstanding performance in the second quarter, delivering strong year-over-year same-store cash NOI growth led by the Company's university-based Research & Innovation portfolio and stable performance from the Medical Office Building business. The Company received 99 percent of second quarter contractual rent. The Company has already received 97 percent of July Office rents.

Other Recent Highlights & Developments

* Marguerite M. Nader Appointed to Board of Directors:Marguerite M. Nader, President and Chief Executive Officer, Equity LifeStyle Properties, Inc., has been appointed as an independent member of the Company's Board of Directors. Nader is a seasoned real estate executive with deep real estate and financial experience and an outstanding record of shareholder value creation.

* Environmental, Social and Governance (ESG) Recognition: Ventas was named as the top real estate company, and #32 overall, in 3BL Media's 100 Best Corporate Citizens of 2020.

Second Quarter 2020 Conference Call and Investor Presentation

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 (844) 776-7841 (or +1 (661) 378-9542 for international callers), and the participant passcode is "Ventas." The call will also be webcast live by Intrado DM and can be accessed at the Company's website at www.ventasreit.com. A replay of the call will be available at the Company's website, or by calling (855) 859-2056 (or +1 (404) 537-3406 for international callers), passcode 5654536, beginning on August 7, 2020, at approximately 1:00 p.m. Eastern Time and will remain available for 30 days.

A presentation outlining the Company's second quarter results and recent trends is posted to the "Investor Presentations" section of Ventas's website at https://www.ventasreit.com/investor-presentations.

About Ventas

Ventas, Inc. (together with its subsidiaries, unless otherwise expressly noted), an S&P 500 company, is a real estate investment trust with a highly diversified portfolio of senior housing, research and innovation, and healthcare properties located throughout the United States, Canada and the United Kingdom. As of March 31, 2020, Ventas owned or managed through unconsolidated joint ventures approximately 1,200 properties (including properties classified as held for sale), consisting of senior housing communities, medical office buildings, research and innovation centers, inpatient rehabilitation and long-term acute care facilities, and health systems. 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.

The Company routinely announces material information to investors and the marketplace using press releases, Securities and Exchange Commission ("SEC") filings, public conference calls, webcasts and the Company's website at www.ventasreit.com/investor-relations. The information that the Company posts to its website may be deemed to be material. Accordingly, the Company encourages investors and others interested in the Company to routinely monitor and review the information that the Company posts on its website, in addition to following the Company's press releases, SEC filings and public conference calls and webcasts. 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/annual-reports--supplemental-information. A comprehensive listing of the Company's properties is available at www.ventasreit.com/our-portfolio/properties-by-stateprovince.

Certain of the information contained herein, including intra-quarter operating information and number of confirmed cases of COVID-19, has been provided by our operators and we have not verified this information through an independent investigation or otherwise. We have no reason to believe that this information is inaccurate in any material respect, but we cannot assure you of its accuracy.

This press release also 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 or acquisition 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 SEC. These factors include without limitation: (a) the effects of the ongoing COVID-19 pandemic and measures intended to prevent its spread on the Company's business, results of operations, cash flows and financial condition, including declines in revenues and increases in operating costs in the Company's senior housing operating portfolio, deterioration in the financial conditions of the Company's tenants and their ability to satisfy their payment obligations to the Company, constraints in the Company's ability to access capital and other sources of funding; increased risk of claims, litigation and regulatory proceedings and uncertainty that may adversely affect the Company; and the ability of federal, state and local governments to respond to and manage the COVID-19 pandemic successfully; (b) 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; (c) 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; (d) 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; (e) 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; (f) the nature and extent of future competition, including new construction in the markets in which the Company's senior housing communities and office buildings are located; (g) the extent and effect of future or pending healthcare reform and regulation, including cost containment measures and changes in reimbursement policies, procedures and rates; (h) increases in the Company's borrowing costs as a result of changes in interest rates and other factors, including the potential phasing out of the London Inter-bank Offered Rate after 2021; (i) the ability of the Company's tenants, 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; (j) 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; (k) the Company's ability to pay down, refinance, restructure or extend its indebtedness as it becomes due; (l) the Company's ability and willingness to maintain its qualification as a REIT in light of economic, market, legal, tax and other considerations; (m) final determination of the Company's taxable net income for the year ended December 31, 2019 and for the year ending December 31, 2020; (n) 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; (o) 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; (p) changes in exchange rates for any foreign currency in which the Company may, from time to time, conduct business; (q) year-over-year changes in the Consumer Price Index or the UK Retail Price Index and the effect of those changes on the rent escalators contained in the Company's leases and the Company's earnings; (r) 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; (s) the impact of damage to the Company's properties from catastrophic weather and other natural events and the physical effects of climate change; (t) 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; (u) risks associated with the Company's office building portfolio and operations, including the Company's ability to successfully design, develop and manage office buildings and to retain key personnel; (v) the ability of the hospitals on or near whose campuses the Company's medical office buildings are located and their affiliated health systems to remain competitive and financially viable and to attract physicians and physician groups; (w) 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; (x) the Company's ability to obtain the financial results expected from its development and redevelopment projects; (y) the impact of market or issuer events on the liquidity or value of the Company's investments in marketable securities; (z) consolidation activity in the senior housing and healthcare 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; (aa) the impact of litigation or any financial, accounting, legal or regulatory issues that may affect the Company or its tenants, operators, borrowers or managers; and (bb) changes in accounting principles, or their application or interpretation, and the Company's ability to make estimates and the assumptions underlying the estimates, which could have an effect on the Company's earnings.

CONSOLIDATED BALANCE SHEETS

(In thousands, except per share amounts)



June 30, March 31, December 31, September 30, June 30,

2020 2020 2019 2019 2019



Assets

Real estate investments:

Land and $ 2,256,981 $ 2,244,526 $ 2,283,929 $ 2,280,877 $ 2,128,409 improvements

Buildings and 23,959,070 23,821,353 24,380,440 24,459,114 22,837,251 improvements

Construction 495,888 505,188 461,354 432,713 386,550 in progress

Acquired lease 1,240,488 1,241,646 1,306,152 1,334,915 1,267,322 intangibles

Operating 389,302 391,908 385,225 388,480 374,319 lease assets

28,341,729 28,204,621 28,817,100 28,896,099 26,993,851

Accumulateddepreciation (7,448,987 ) (7,237,345 ) (7,088,013 ) (6,964,061 ) (6,758,067 ) andamortization

Net realestate 20,892,742 20,967,276 21,729,087 21,932,038 20,235,784 property

Secured loansreceivable and 681,831 623,717 704,612 709,714 693,651 investments,net

Investments inunconsolidated 166,039 165,745 45,022 45,905 47,112 real estateentities

Net realestate 21,740,612 21,756,738 22,478,721 22,687,657 20,976,547 investments

Cash and cash 992,824 2,848,115 106,363 148,063 81,987 equivalents

Escrowdeposits and 36,312 38,144 39,739 60,533 56,309 restrictedcash

Goodwill 1,050,115 1,050,137 1,051,161 1,049,985 1,050,470

Assets held 81,817 75,039 91,433 4,520 1,754 for sale

Deferredincome tax 304 47,495 47,495 - - assets, net

Other assets 687,404 802,160 877,296 852,795 821,844

Total assets $ 24,589,388 $ 26,617,828 $ 24,692,208 $ 24,803,553 $ 22,988,911



Liabilities and equity

Liabilities:

Senior notespayable and $ 12,530,036 $ 14,172,279 $ 12,158,773 $ 12,053,184 $ 10,256,092 other debt

Accrued 117,687 87,245 111,115 85,214 111,388 interest

Operatinglease 248,912 250,357 251,196 249,237 233,757 liabilities

Accountspayable and 998,186 1,141,309 1,145,700 1,194,162 1,137,980 otherliabilities

Liabilitiesrelated to 5,773 5,007 5,463 1,531 1,216 assets heldfor sale

Deferredincome tax 56,964 47,533 200,831 147,524 149,454 liabilities

Total 13,957,558 15,703,730 13,873,078 13,730,852 11,889,887 liabilities



Redeemable OPunitholder and 231,920 197,701 273,678 312,478 222,662 noncontrollinginterests



Commitmentsand contingencies



Equity:

Ventasstockholders' equity:

Preferredstock, $1.00par value; - - - - - 10,000 sharesauthorized,unissued

Common stock,$0.25 parvalue;373,113;373,094;372,811;372,726; and371,478;shares issued 93,261 93,256 93,185 93,164 92,852 at June 30,2020, March31, 2020,December 31,2019,September 30,2019, and June30, 2019,respectively

Capital inexcess of par 14,118,119 14,135,657 14,056,453 14,017,030 13,940,117 value

Accumulatedother (82,761 ) (103,408 ) (34,564 ) (59,857 ) (39,671 ) comprehensiveloss

Retainedearnings (3,816,460 ) (3,491,696 ) (3,669,050 ) (3,384,421 ) (3,173,287 ) (deficit)

Treasurystock, 24; 22;2; 3; and 0shares at June30, 2020,March 31, (947 ) (867 ) (132 ) (210 ) - 2020, December31, 2019,September 30,2019, and June30, 2019,respectively

Total Ventasstockholders' 10,311,212 10,632,942 10,445,892 10,665,706 10,820,011 equity

Noncontrolling 88,698 83,455 99,560 94,517 56,351 interests

Total equity 10,399,910 10,716,397 10,545,452 10,760,223 10,876,362

Totalliabilities $ 24,589,388 $ 26,617,828 $ 24,692,208 $ 24,803,553 $ 22,988,911 and equity

CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share amounts)



For the Three Months Ended For the Six Months Ended

June 30, June 30,

2020 2019 2020 2019

Revenues

Rental income:

Triple-net $ 176,240 $ 196,382 $ 371,102 $ 396,450 leased

Office 192,925 202,188 401,320 403,616

369,165 398,570 772,422 800,066

Resident fees 549,329 520,725 1,126,099 1,042,172 and services

Office buildingand other 3,673 2,691 6,801 5,209 servicesrevenue

Income fromloans and 19,491 19,529 43,537 36,655 investments

Interest and 1,540 9,202 6,393 9,489 other income

Total revenues 943,198 950,717 1,955,252 1,893,591

Expenses

Interest 123,132 110,369 239,828 220,988

Depreciationand 349,594 226,187 598,431 462,107 amortization

Property-leveloperating expenses:

Senior living 432,578 366,837 842,709 727,823

Office 60,752 62,743 125,258 124,828

Triple-net 5,275 6,321 11,606 13,754 leased

498,605 435,901 979,573 866,405

Office building 543 515 1,270 1,148 services costs

General,administrativeand 29,984 43,079 72,519 83,839 professionalfees

Loss onextinguishment - 4,022 - 4,427 of debt, net

Merger-relatedexpenses and 6,586 4,600 14,804 6,780 deal costs

Allowance onloans 29,655 - 29,655 - receivable andinvestments

Other 3,382 (11,481 ) 7,090 (11,458 )

Total expenses 1,041,481 813,192 1,943,170 1,634,236

(Loss) incomebeforeunconsolidatedentities, realestate (98,283 ) 137,525 12,082 259,355 dispositions,income taxesandnoncontrollinginterests

Loss fromunconsolidated (5,850 ) (2,529 ) (16,726 ) (3,475 ) entities

Gain on realestate 1,254 19,150 227,479 24,597 dispositions

Income tax(expense) (56,356 ) 57,752 92,660 59,009 benefit

(Loss) incomefrom continuing (159,235 ) 211,898 315,495 339,486 operations

Net (loss) (159,235 ) 211,898 315,495 339,486 income

Net (loss)incomeattributable to (2,065 ) 1,369 (452 ) 3,172 noncontrollinginterests

Net (loss)incomeattributable to $ (157,170 ) $ 210,529 $ 315,947 $ 336,314 commonstockholders

Earnings per common share

Basic:

(Loss) incomefrom continuing $ (0.43 ) $ 0.59 $ 0.85 $ 0.94 operations

Net (loss)incomeattributable to (0.42 ) 0.58 0.85 0.94 commonstockholders

Diluted:^1

(Loss) incomefrom continuing $ (0.43 ) $ 0.58 $ 0.84 $ 0.93 operations

Net (loss)incomeattributable to (0.42 ) 0.58 0.84 0.93 commonstockholders



Weightedaverage sharesused in computingearnings percommon share

Basic 372,982 361,722 372,905 359,301

Diluted 376,024 365,553 376,020 363,100

1 Potential common shares are not included in the computation of diluted earnings per share when a loss from continuing operations exists as the effect would be an antidilutive per share amount.

QUARTERLY CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share amounts)



For the Quarters Ended

June 30, March 31, December 31, September 30, June 30,

2020 2020 2019 2019 2019

Revenues

Rental income:

Triple-net $ 176,240 $ 194,862 $ 191,065 $ 193,383 $ 196,382 leased

Office 192,925 208,395 210,423 214,939 202,188

369,165 403,257 401,488 408,322 398,570

Resident fees 549,329 576,770 568,271 541,090 520,725 and services

Officebuilding and 3,673 3,128 2,988 2,959 2,691 other servicesrevenue

Income fromloans and 19,491 24,046 22,382 30,164 19,529 investments

Interest and 1,540 4,853 875 620 9,202 other income

Total revenues 943,198 1,012,054 996,004 983,155 950,717



Expenses

Interest 123,132 116,696 116,707 113,967 110,369

Depreciationand 349,594 248,837 348,910 234,603 226,187 amortization

Property-leveloperating expenses:

Senior living 432,578 410,131 405,564 388,011 366,837

Office 60,752 64,506 68,277 67,144 62,743

Triple-net 5,275 6,331 6,469 6,338 6,321 leased

498,605 480,968 480,310 461,493 435,901

Officebuilding 543 727 544 627 515 services costs

General,administrativeand 29,984 42,535 41,627 40,530 43,079 professionalfees

Loss onextinguishment - - 39 37,434 4,022 of debt, net

Merger-relatedexpenses and 6,586 8,218 4,151 4,304 4,600 deal costs

Allowance onloans 29,655 - - - - receivable andinvestments

Other 3,382 3,708 (8,315 ) 2,164 (11,481 )

Total expenses 1,041,481 901,689 983,973 895,122 813,192

Income beforeunconsolidatedentities, realestatedispositions, (98,283 ) 110,365 12,031 88,033 137,525 income taxesandnoncontrollinginterests

(Loss) incomefrom (5,850 ) (10,876 ) 167 854 (2,529 ) unconsolidatedentities

Gain on realestate 1,254 226,225 1,389 36 19,150 dispositions

Income tax(expense) (56,356 ) 149,016 (694 ) (2,005 ) 57,752 benefit

(Loss) incomefrom (159,235 ) 474,730 12,893 86,918 211,898 continuingoperations

Net (loss) (159,235 ) 474,730 12,893 86,918 211,898 income

Net (loss)incomeattributable (2,065 ) 1,613 1,450 1,659 1,369 tononcontrollinginterests

Net (loss)incomeattributable $ (157,170 ) $ 473,117 $ 11,443 $ 85,259 $ 210,529 to commonstockholders



Earnings per common share

Basic:

(Loss) incomefrom $ (0.43 ) $ 1.27 $ 0.03 $ 0.23 $ 0.59 continuingoperations

Net (loss)incomeattributable (0.42 ) 1.27 0.03 0.23 0.58 to commonstockholders

Diluted:^1

(Loss) incomefrom $ (0.43 ) $ 1.26 $ 0.03 $ 0.23 $ 0.58 continuingoperations

Net (loss)incomeattributable (0.42 ) 1.26 0.03 0.23 0.58 to commonstockholders



Weightedaverage sharesused in computingearnings percommon share

Basic 372,982 372,829 372,663 372,426 361,722

Diluted 376,024 375,997 376,453 376,625 365,553

1 Potential common shares are not included in the computation of diluted earnings per share when a loss from continuing operations exists as the effect would be an antidilutive per share amount.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

For the Six Months Ended June 30,

2020 2019

Cash flows from operating activities:

Net income $ 315,495 $ 339,486

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization 598,431 462,107

Amortization of deferred revenue and lease (6,334 ) (6,145 ) intangibles, net

Other non-cash amortization 9,653 11,587

Allowance on loans receivable and investments 29,655 -

Stock-based compensation 11,557 18,475

Straight-lining of rental income 91,499 (17,000 )

Loss on extinguishment of debt, net - 4,427

Gain on real estate dispositions (227,479 ) (24,597 )

Gain on real estate loan investments (167 ) -

Income tax benefit (95,127 ) (61,195 )

Loss from unconsolidated entities 16,734 3,475

Distributions from unconsolidated entities 1,600 1,300

Other 12,756 5,091

Changes in operating assets and liabilities:

Increase in other assets (12,463 ) (44,472 )

Increase in accrued interest 7,094 11,398

(Decrease) increase in accounts payable and (32,893 ) 25,282 other liabilities

Net cash provided by operating activities 720,011 729,219

Cash flows from investing activities:

Net investment in real estate property (77,469 ) (208,039 )

Investment in loans receivable (67,290 ) (507,148 )

Proceeds from real estate disposals 627,804 74,405

Proceeds from loans receivable 106,775 289,657

Development project expenditures (180,398 ) (114,226 )

Capital expenditures (53,519 ) (58,381 )

Investment in unconsolidated entities (7,865 ) (934 )

Insurance proceeds for property damage claims 42 16,939

Net cash provided by (used in) investing 348,080 (507,727 ) activities

Cash flows from financing activities:

Net change in borrowings under revolving 465,416 (506,551 ) credit facilities

Net change in borrowings under commercial (565,524 ) 269,810 paper program

Proceeds from debt 640,533 712,934

Repayment of debt (111,301 ) (997,061 )

Payment of deferred financing costs (7,549 ) (6,837 )

Issuance of common stock, net - 866,033

Cash distribution to common stockholders (592,285 ) (567,142 )

Cash distribution to redeemable OP unitholders (4,628 ) (4,551 )

Cash issued for redemption of OP Units (570 ) -

Contributions from noncontrolling interests 346 3,594

Distributions to noncontrolling interests (6,293 ) (4,103 )

Proceeds from stock option exercises 3,518 25,738

Other (4,891 ) (6,732 )

Net cash provided by (used in) financing (183,228 ) (214,868 ) activities

Net increase in cash, cash equivalents and 884,863 6,624 restricted cash

Effect of foreign currency translation (1,829 ) 208

Cash, cash equivalents and restricted cash at 146,102 131,464 beginning of period

Cash, cash equivalents and restricted cash at $ 1,029,136 $ 138,296 end of period



Supplemental schedule of non-cash activities:

Assets acquired and liabilities assumed from acquisitions and other:

Real estate investments $ 77,111 $ 1,069

Other assets 614 183

Debt 55,368 -

Other liabilities 2,097 1,252

Noncontrolling interests 20,259 -

QUARTERLY CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

For the Quarters Ended

June 30, March 31, December 31, September 30, June 30,

2020 2020 2019 2019 2019

Cash flows fromoperating activities:

Net (loss) $ (159,235 ) $ 474,730 $ 12,893 $ 86,918 $ 211,898 income

Adjustments toreconcile netincome to net cash providedby operatingactivities:

Depreciationand 349,594 248,837 348,910 234,603 226,187 amortization

Amortization ofdeferredrevenue and (3,361 ) (2,973 ) (1,483 ) (339 ) (3,299 ) leaseintangibles,net

Other non-cash 5,802 3,851 6,075 5,323 5,456 amortization

Allowance onloans 29,655 - - - - receivable andinvestments

Stock-based 1,043 10,514 7,253 8,195 10,070 compensation

Straight-liningof rental 98,287 (6,788 ) (4,393 ) (8,680 ) (8,511 ) income

Loss onextinguishment - - 39 37,434 4,022 of debt, net

Gain on realestate (1,254 ) (226,225 ) (1,389 ) (36 ) (19,150 ) dispositions

Gain on realestate loan - (167 ) - - - investments

Income tax(benefit) 55,146 (150,273 ) 1,331 946 (59,480 ) expense

Loss (income)from 5,858 10,876 (157 ) (854 ) 2,529 unconsolidatedentities

Distributionsfrom - 1,600 200 100 100 unconsolidatedentities

Other 8,951 3,805 4,028 4,145 2,808

Changes inoperating assets andliabilities:

Decrease(increase) in 1,305 (13,768 ) (17,327 ) (14,894 ) (30,768 ) other assets

Increase(decrease) in 30,126 (23,032 ) 25,646 (27,307 ) 29,445 accruedinterest

(Decrease)increase inaccounts (16,358 ) (16,535 ) (27,391 ) 28,775 21,792 payable andotherliabilities

Net cashprovided by 405,559 314,452 354,235 354,329 393,099 operatingactivities

Cash flows frominvesting activities:

Net investmentin real estate 2,070 (79,539 ) (18,320 ) (731,766 ) (194,942 ) property

Investment inloans (66,239 ) (1,051 ) (610 ) (750,429 ) (502,891 ) receivable

Proceeds fromreal estate 2,365 625,439 70,300 3,150 56,854 disposals

Proceeds fromloans 7,658 99,117 8,626 719,026 288,382 receivable

Developmentproject (86,169 ) (94,229 ) (174,078 ) (115,619 ) (64,574 ) expenditures

Capital (26,730 ) (26,789 ) (56,937 ) (41,406 ) (36,426 ) expenditures

Distributionsfrom - - 21 151 - unconsolidatedentities

Investment inunconsolidated (2,056 ) (5,809 ) (2,144 ) (777 ) (247 ) entities

Insuranceproceeds for - 42 9,722 3,518 13,941 property damageclaims

Net cash (usedin) provided by (169,101 ) 517,181 (163,420 ) (914,152 ) (439,903 ) investingactivities

Cash flows fromfinancing activities:

Net change inborrowingsunder revolving (2,296,737 ) 2,762,153 (848,568 ) 785,228 194,224 creditfacilities

Net change inborrowingsunder - (565,524 ) 261,016 34,698 75,312 commercialpaper program

Proceeds from 557,774 82,759 806,614 1,493,643 6,343 debt

Repayment of (48,328 ) (62,973 ) (167,781 ) (1,459,074 ) (734,491 ) debt

Payment ofdeferred (5,586 ) (1,963 ) (3,536 ) (11,030 ) - financing costs

Issuance ofcommon stock, - - (165 ) 76,217 767,655 net

Cashdistribution to (295,981 ) (296,304 ) (295,931 ) (294,647 ) (284,268 ) commonstockholders

Cashdistribution to (2,303 ) (2,325 ) (2,336 ) (2,331 ) (2,335 ) redeemable OPunitholders

Cash issued forredemption of - (570 ) (1,842 ) (361 ) - OP Units

Contributionsfrom 191 155 1,323 1,365 2,371 noncontrollinginterests

Distributionsto (3,750 ) (2,543 ) (3,314 ) (2,300 ) (1,480 ) noncontrollinginterests

Proceeds fromstock option 129 3,389 2,045 8,396 21,422 exercises

Other 63 (4,954 ) (1,918 ) 131 142

Net cash (usedin) provided by (2,094,528 ) 1,911,300 (254,393 ) 629,935 44,895 financingactivities

Net (decrease)increase incash, cash (1,858,070 ) 2,742,933 (63,578 ) 70,112 (1,909 ) equivalents andrestricted cash

Effect offoreign 947 (2,776 ) 1,084 188 (26 ) currencytranslation

Cash, cashequivalents andrestricted cash 2,886,259 146,102 208,596 138,296 140,231 at beginning ofperiod

Cash, cashequivalents andrestricted cash $ 1,029,136 $ 2,886,259 $ 146,102 $ 208,596 $ 138,296 at end ofperiod

QUARTERLY CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)

(In thousands)

For the Quarters Ended

June 30, March 31, December 31, September 30, June 30,

2020 2020 2019 2019 2019

Supplementalschedule of non-cashactivities:

Assets acquiredand liabilitiesassumed from acquisitionsand other:

Real estate $ 76,578 $ 533 $ 657 $ 1,055,412 $ 1,069 investments

Other assets 558 56 17 10,940 183

Debt 55,368 - - 907,746 -

Other 1,699 398 785 45,084 1,252 liabilities

Deferred income - - 95 - - tax

Noncontrolling 20,068 191 (206 ) 113,522 - interests

Equity issuedfor redemption - - 127 - - of OP Units

NON-GAAP FINANCIAL MEASURES RECONCILIATION

Funds From Operations (FFO) and Funds Available for Distribution (FAD)^1

(Dollars in thousands, except per share amounts)

Q2 YoY

2019 2020 Growth

Q2 Q3 Q4 FY Q1 Q2 YTD 19-'20

Net income(loss)attributable to $ 210,529 $ 85,259 $ 11,443 $ 433,016 $ 473,117 $ (157,170 ) $ 315,947 (175 %)commonstockholders

Net income(loss)attributable to $ 0.58 $ 0.23 $ 0.03 $ 1.17 $ 1.26 $ (0.42 ) $ 0.84 (172 %)commonstockholdersper share^2

Adjustments:

Depreciationandamortization on 224,630 233,078 347,371 1,039,550 247,330 348,110 595,440 real estateassets

Depreciation onreal estateassets related (1,750 ) (2,496 ) (3,682 ) (9,762 ) (3,843 ) (4,068 ) (7,911 ) tononcontrollinginterests

Depreciation onreal estateassets related 167 (456 ) 311 187 561 1,307 1,868 tounconsolidatedentities

Gain on realestate (19,150 ) (36 ) (1,389 ) (26,022 ) (226,225 ) (1,254 ) (227,479 ) dispositions

Gain (loss) onreal estatedispositions - - (11 ) 343 (6 ) (3 ) (9 ) related tononcontrollinginterests

Gain on realestatedispositions (2 ) (67 ) (395 ) (1,263 ) - - - related tounconsolidatedentities

Subtotal: FFO 203,895 230,023 342,205 1,003,033 17,817 344,092 361,909 add-backs

Subtotal: FFOadd-backs per $ 0.56 $ 0.61 $ 0.91 $ 2.71 $ 0.05 $ 0.92 $ 0.96 share

FFO (Nareit)attributable to $ 414,424 $ 315,282 $ 353,648 $ 1,436,049 $ 490,934 $ 186,922 $ 677,856 (55 %)commonstockholders

FFO (Nareit)attributable tocommon $ 1.13 $ 0.84 $ 0.94 $ 3.88 $ 1.31 $ 0.50 $ 1.80 (56 %)stockholdersper share



Adjustments:

Change in fairvalue of (11 ) (7 ) (22 ) (78 ) (10 ) (13 ) (23 ) financialinstruments

Non-cash incometax (benefit) (59,480 ) 946 1,330 (58,918 ) (140,895 ) 55,505 (85,391 ) expense

Loss onextinguishment 4,022 37,434 39 41,900 - - - of debt, net

(Gain) loss onnon-real estatedispositions (3 ) (34 ) 19 (18 ) 239 - 239 related tounconsolidatedentities

Merger-relatedexpenses, deal 5,564 4,726 5,089 18,208 8,773 6,605 15,378 costs andre-audit costs

Amortization ofother 121 121 121 484 118 118 236 intangibles

Other itemsrelated to 1,377 502 374 3,291 (875 ) (263 ) (1,138 ) unconsolidatedentities

Non-cash impactof changes to 2,584 1,729 1,165 7,812 6,895 (3,337 ) 3,558 equity plan

Naturaldisaster (13,339 ) (101 ) (10,704 ) (25,683 ) 941 252 1,193 (recoveries)expenses, net

Impact ofHoliday lease - - - - - (50,184 ) (50,184 ) termination

Write-off ofstraightlinerental income, - - - - - 52,368 52,368 net ofnoncontrollinginterests

Allowance onloaninvestments and - - - - - 40,320 40,320 impairment ofunconsolidatedentities

Subtotal:normalized FFO (59,165 ) 45,316 (2,589 ) (13,002 ) (124,814 ) 101,371 (23,444 ) add-backs

Subtotal:normalized FFO $ (0.16 ) $ 0.12 $ (0.01 ) $ (0.04 ) $ (0.33 ) $ 0.27 $ (0.06 ) add-backs pershare

Normalized FFOattributable to $ 355,259 $ 360,598 $ 351,059 $ 1,423,047 $ 366,120 $ 288,293 $ 654,412 (19 %)commonstockholders

Normalized FFOattributable tocommon $ 0.97 $ 0.96 $ 0.93 $ 3.85 $ 0.97 $ 0.77 $ 1.74 (21 %)stockholdersper share



Non-cash itemsincluded in normalized FFO:

Amortization ofdeferredrevenue and (3,299 ) (339 ) (1,483 ) (7,967 ) (2,973 ) (3,362 ) (6,335 ) leaseintangibles,net

Other non-cashamortization,including fair 5,335 5,444 6,075 22,985 3,851 5,803 9,654 market value ofdebt

Stock-based 7,486 6,466 6,088 26,111 3,619 4,380 7,999 compensation

Straight-liningof rental (8,511 ) (8,680 ) (4,393 ) (30,073 ) (6,788 ) (5,526 ) (12,314 ) income

Subtotal:non-cash items 1,011 2,891 6,287 11,056 (2,291 ) 1,295 (996 ) included innormalized FFO

Cash Impact ofHoliday Lease - - - - - 33,795 33,795 Termination

FAD Capital (33,777 ) (39,695 ) (55,400 ) (152,582 ) (24,972 ) (26,102 ) (51,074 ) Expenditures^3

Normalized FADattributable to $ 322,493 $ 323,794 $ 301,946 $ 1,281,521 $ 338,857 $ 297,281 $ 636,137 (8 %)commonstockholders

Merger-relatedexpenses, deal (5,564 ) (4,726 ) (5,089 ) (18,208 ) (8,773 ) (6,605 ) (15,378 ) costs andre-audit costs

Other itemsrelated to (1,377 ) (502 ) (374 ) (3,291 ) 875 263 1,138 unconsolidatedentities

FADattributable to $ 315,552 $ 318,566 $ 296,483 $ 1,260,022 $ 330,959 $ 290,939 $ 621,897 (8 %)commonstockholders

Weightedaverage diluted 365,553 376,625 376,453 369,886 375,997 376,024 376,020 shares



^1 Per share quarterly amounts may not add to annual per share amounts due tomaterial changes in the Company's weighted average diluted share count, if any.Per share amounts may not add to total per share amounts due to rounding.

^2 Potential common shares are not included in the computation of dilutedearnings per share when a loss from continuing operations exists as the effectwould be an antidilutive per share amount.

^3 2019 FAD Capital Expenditures have been updated to exclude the impact ofInitial Capital Expenditures. Impact on quarterly reported values are asfollows: Q2 2019 ($0.6M), Q3 2019 ($1.7M), Q4 2019 ($1.5M), Q1 2020 ($1.8M), Q22020 ($0.6M).

Historical cost accounting for real estate assets implicitly assumes that the value of real estate assets diminishes predictably over time. However, since real estate values historically have risen or fallen with market conditions, many industry investors deem presentations of operating results for real estate companies that use historical cost accounting to be insufficient by themselves. For that reason, the Company considers FFO, normalized FFO, FAD and normalized FAD to be appropriate supplemental 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 non-recurring items and other non-operational events such as transactions and litigation. In some cases, the Company provides information about identified non-cash components of FFO and normalized FFO because it allows investors, analysts and Company management to assess the impact of those items on the Company's financial results.

The Company uses the National Association of Real Estate Investment Trusts ("Nareit") definition of FFO. Nareit defines FFO as net income attributable to common stockholders (computed in accordance with GAAP), excluding gains or losses from sales of real estate property, including gains or losses 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 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, the non-cash impact of changes to the Company's executive equity compensation plan, derivative transactions that have non-cash mark-to-market impacts on the Company's income statement and non-cash charges related to leases; (d) the financial impact of contingent consideration, severance-related costs and charitable donations made to the Ventas Charitable Foundation; (e) gains and losses for non-operational foreign currency hedge agreements and changes in the fair value of financial instruments; (f) gains and losses on non-real estate dispositions and other unusual items related to unconsolidated entities; (g) expenses related to the re-audit and re-review in 2014 of the Company's historical financial statements and related matters; (h) net expenses or recoveries related to natural disasters and (i) any other incremental items set forth in the normalized FFO reconciliation included herein.

Normalized FAD represents normalized FFO excluding non-cash components and straight-line rent adjustments, deducting FAD Capital Expenditures plus cash received related to lease terminations and modifications. FAD Capital Expenditures are (i) Ventas-invested capital expenditures, whether routine or non-routine, that extend the useful life of a property but are not expected to generate incremental income for the Company (ii) Office Building and Triple-Net leasing commissions paid to third-party agents and (iii) capital expenditures for second-generation tenant improvements. It excludes (i) costs for a first generation lease (e.g., a development project) or related to properties that have undergone redevelopment and (ii) Initial Capital Expenditures, which are defined as capital expenditures required to bring a newly acquired or newly transitioned property up to standard. Initial Capital Expenditures are typically incurred within the first 12 months after acquisition or transition, respectively.

FAD represents normalized FAD after subtracting merger-related expenses, deal costs and re-audit costs and other unusual items related to unconsolidated entities.

FFO, normalized FFO, FAD and normalized FAD presented herein may not be comparable to those presented by other real estate companies due to the fact that not all real estate companies use the same definitions. FFO, normalized FFO, FAD and normalized FAD should not be considered as alternatives to net income attributable to common stockholders (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 they 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, normalized FFO, FAD and normalized FAD should be examined in conjunction with net income attributable to common stockholders as presented elsewhere herein.

NON-GAAP FINANCIAL MEASURES RECONCILIATION

Net Debt to Adjusted Pro Forma EBITDA^1

(Dollars in thousands)

For the Three Months Ended June 30, 2020:



Net loss attributable to common stockholders $ (157,170 )

Adjustments:

Interest 123,132

Taxes (including tax amounts in general, administrative and 57,500 professional fees)

Depreciation and amortization 349,594

Non-cash stock-based compensation expense 1,043

Merger-related expenses, deal costs and re-audit costs 6,586

Net income attributable to noncontrolling interests, adjusted (5,639 ) for consolidated joint venture partners' share of EBITDA

Loss from unconsolidated entities, adjusted for Ventas share 10,439 of EBITDA from unconsolidated entities

Gain on real estate dispositions (1,254 )

Unrealized foreign currency gains (37 )

Change in fair value of financial instruments (13 )

Natural disaster expenses (recoveries), net 198

Impact of Holiday lease termination (50,184 )

Write-off of straightline rental income, net of 52,368 noncontrolling interests

Allowance on loan investments and impairment of 40,320 unconsolidated entities

Adjusted EBITDA $ 426,883

Adjustments for current period activity 24,210

Adjusted Pro Forma EBITDA $ 451,093



Adjusted Pro Forma EBITDA annualized $ 1,804,372



As of June 30, 2020:



Total debt $ 12,530,036

Cash (992,824 )

Restricted cash pertaining to debt (19,239 )

Consolidated joint venture partners' share of debt (257,004 )

Ventas share of debt from unconsolidated entities 116,688

Net debt $ 11,377,657



Net debt to Adjusted Pro Forma EBITDA 6.3 x

^1 Totals may not add due to rounding.

The table above illustrates net debt to pro forma earnings before interest, taxes, depreciation and amortization (including non-cash stock-based compensation expense, asset impairment and valuation allowances), excluding gains or losses on extinguishment of debt, consolidated joint venture partners' share of EBITDA, merger-related expenses and deal costs, expenses related to the re-audit and re-review in 2014 of the Company's historical financial statements, net gains or losses on real estate activity, gains or losses on re-measurement of equity interest upon acquisition, changes in the fair value of financial instruments, unrealized foreign currency gains or losses, net expenses or recoveries related to natural disasters and non-cash charges related to lease terminations, and including (a) the Company's share of EBITDA from unconsolidated entities and (b) adjustments for other immaterial or identified items ("Adjusted EBITDA").

The information above considers the pro forma effect on Adjusted EBITDA of the Company's activity during the three months ended June 30, 2020, as if the transactions had been consummated as of the beginning of the period ("Adjusted Pro Forma EBITDA") and considers any other incremental items set forth in the Adjusted Pro Forma EBITDA reconciliation included herein.

The Company believes that net debt, Adjusted Pro Forma EBITDA and net debt to Adjusted Pro Forma EBITDA are useful to investors, analysts and Company management because they allow the comparison of the Company's credit strength between periods and to other real estate companies without the effect of items that by their nature are not comparable from period to period.

NON-GAAP FINANCIAL MEASURES RECONCILIATION

Net Operating Income (NOI) and Same-Store Cash NOI by Segment (ConstantCurrency)

(Dollars in thousands)



For the Three Months Ended June 30, 2020 and 2019



Triple-Net Senior Housing Office Non-Segment Total Operating

For the Three Months Ended June 30, 2020:

Net lossattributable to $ (157,170 ) commonstockholders

Adjustments:

Interest and (1,540 ) other income

Interest 123,132

Depreciationand 349,594 amortization

General,administrativeand 29,984 professionalfees

Merger-relatedexpenses and 6,586 deal costs

Allowance onloans 29,655 receivable andinvestments

Other 3,382

Loss fromunconsolidated 5,850 entities

Gain on realestate (1,254 ) dispositions

Income tax 56,356 expense

Net lossattributable to (2,065 ) noncontrollinginterests

Reported $ 170,965 $ 116,751 $ 133,887 $ 20,907 $ 442,510 segment NOI

Adjustments to Cash NOI:

Straight-liningof rental (2,183 ) - (3,343 ) - (5,526 ) income

Non-cash rental (1,803 ) - (1,238 ) - (3,041 ) income

Impact ofHoliday lease (50,184 ) - - - (50,184 ) termination

Write-off ofstraightline 53,304 - 898 - 54,202 rental income

NOI notincluded in (3,315 ) (1,886 ) (1,697 ) - (6,898 ) cash NOI^1

Non-segment NOI - - - (20,907 ) (20,907 )

Cash NOI $ 166,784 $ 114,865 $ 128,507 $ - $ 410,156

Adjustments to Same-store NOI:

Cash NOI notincluded in (715 ) (28,403 ) (4,900 ) - (34,018 ) same-store

Same-store cashNOI (constant $ 166,069 $ 86,462 $ 123,607 $ - $ 376,138 currency)

Percentage increase 1.4 (42.7 %) 2.7 (13.6 (decrease) % % %)



For the Three Months Ended June 30, 2019:

Net incomeattributable to $ 210,529 commonstockholders

Adjustments:

Interest and (9,202 ) other income

Interest 110,369

Depreciationand 226,187 amortization

General,administrativeand 43,079 professionalfees

Loss onextinguishment 4,022 of debt, net

Merger-relatedexpenses and 4,600 deal costs

Other (11,481 )

Loss fromunconsolidated 2,529 entities

Gain on realestate (19,150 ) dispositions

Income tax (57,752 ) benefit

Net incomeattributable to 1,369 noncontrollinginterests

Reported $ 190,061 $ 153,888 $ 140,780 $ 20,370 $ 505,099 segment NOI

Adjustments to Cash NOI:

Straight-liningof rental (3,993 ) - (4,519 ) - (8,512 ) income

Non-cash rental (959 ) - (2,210 ) - (3,169 ) income

Cashmodification - - 462 - 462 fees

NOI notincluded in (20,454 ) (350 ) (9,780 ) - (30,584 ) cash NOI^1

Non-segment NOI - - - (20,370 ) (20,370 )

NOI impact from (208 ) (650 ) - - (858 ) change in FX

Cash NOI $ 164,447 $ 152,888 $ 124,733 $ - $ 442,068

Adjustments to Same-store NOI:

Cash NOI notincluded in (679 ) (1,936 ) (4,360 ) - (6,975 ) same-store

Same-store cashNOI (constant $ 163,768 $ 150,952 $ 120,373 $ - $ 435,093 currency)

1 Excludes sold assets, assets held for sale, development properties not yet operational and land parcels.

For the Three Months Ended June 30, 2020 and March 31, 2020

Triple-Net Senior Housing Office Non-Segment Total Operating

For the Three Months Ended June 30, 2020:

Net lossattributable to $ (157,170 ) commonstockholders

Adjustments:

Interest and (1,540 ) other income

Interest 123,132

Depreciationand 349,594 amortization

General,administrativeand 29,984 professionalfees

Merger-relatedexpenses and 6,586 deal costs

Allowance onloans 29,655 receivable andinvestments

Other 3,382

Loss fromunconsolidated 5,850 entities

Gain on realestate (1,254 ) dispositions

Income tax 56,356 expense

Net lossattributable to (2,065 ) noncontrollinginterests

Reported $ 170,965 $ 116,751 $ 133,887 $ 20,907 $ 442,510 segment NOI

Adjustments to Cash NOI:

Straight-liningof rental (2,183 ) - (3,343 ) - (5,526 ) income

Non-cash rental (1,803 ) - (1,238 ) - (3,041 ) income

Impact ofHoliday lease (50,184 ) - - - (50,184 ) termination

Write-off ofstraightline 53,304 - 898 - 54,202 rental income

NOI notincluded in (3,315 ) (1,886 ) (1,697 ) - (6,898 ) cash NOI^1

Non-segment NOI - - - (20,907 ) (20,907 )

Cash NOI $ 166,784 $ 114,865 $ 128,507 $ - $ 410,156

Adjustments to Same-store NOI:

Cash NOI notincluded in - (9,345 ) (4,231 ) - (13,576 ) same-store

Same-store cashNOI (constant $ 166,784 $ 105,520 $ 124,276 $ - $ 396,580 currency)

Percentage decrease (2.7 (35.9 (1.4 %) (14.2 %) %) %)



For the Three Months Ended March 31, 2020:

Net incomeattributable to $ 473,117 commonstockholders

Adjustments:

Interest and (4,853 ) other income

Interest 116,696

Depreciationand 248,837 amortization

General,administrativeand 42,535 professionalfees

Merger-relatedexpenses and 8,218 deal costs

Other 3,708

Loss fromunconsolidated 10,876 entities

Gain on realestate (226,225 ) dispositions

Income tax (149,016 ) benefit

Net incomeattributable to 1,613 noncontrollinginterests

Reported $ 188,531 $ 166,639 $ 145,336 $ 25,000 $ 525,506 segment NOI

Adjustments to Cash NOI:

Straight-liningof rental (2,693 ) - (4,095 ) - (6,788 ) income

Non-cash rental (1,529 ) - (1,104 ) - (2,633 ) income

Cashmodification 3,029 - (1,000 ) - 2,029 fees

NOI notincluded in (15,744 ) 211 (7,476 ) - (23,009 ) cash NOI^1

Non-segment NOI - - - (25,000 ) (25,000 )

NOI impact from (189 ) (1,273 ) - - (1,462 )change in FX

Cash NOI $ 171,405 $ 165,577 $ 131,661 $ - $ 468,643

Adjustments to Same-store NOI:

Cashmodification - - 1,000 - 1,000 fees not insame-store

Cash NOI notincluded in - (984 ) (6,622 ) - (7,606 ) same-store

NOI impact fromchange in FX - 38 - - 38 not insame-store

Same-store cashNOI (constant $ 171,405 $ 164,631 $ 126,039 $ - $ 462,075 currency)

1 Excludes sold assets, assets held for sale, development properties not yet operational and land parcels.

For the Six Months Ended June 30, 2020 and 2019

Senior Housing Triple-Net Office Non-Segment Total Operating

For the Six Months Ended June 30, 2020:

Net incomeattributable to $ 315,947 commonstockholders

Adjustments:

Interest and (6,393 ) other income

Interest 239,828

Depreciationand 598,431 amortization

General,administrativeand 72,519 professionalfees

Merger-relatedexpenses and 14,804 deal costs

Allowance onloans 29,655 receivable andinvestments

Other 7,090

Loss fromunconsolidated 16,726 entities

Gain on realestate (227,479 ) dispositions

Income tax (92,660 ) benefit

Net lossattributable to (452 ) noncontrollinginterests

Reported $ 359,496 $ 283,390 $ 279,224 $ 45,906 $ 968,016 segment NOI

Adjustments to Cash NOI:

Straight-liningof rental (4,876 ) - (7,438 ) - (12,314 ) income

Non-cash rental (3,332 ) - (2,343 ) - (5,675 ) income

Cashmodification 3,029 - (1,000 ) - 2,029 fees

Impact ofHoliday lease (50,184 ) - (50,184 ) termination

Write-off ofstraightline 53,304 898 54,202 rental income

NOI notincluded in (19,058 ) (1,709 ) (9,172 ) - (29,939 ) cash NOI^1

Non-segment NOI - - - (45,906 ) (45,906 )

Cash NOI $ 338,379 $ 281,681 $ 260,169 $ - $ 880,229

Adjustments to Same-store NOI:

Cashmodification - - 1,000 - 1,000 fees not insame-store

Cash NOI notincluded in (2,014 ) (53,949 ) (12,144 ) - (68,107 ) same-store

Same-store cashNOI (constant $ 336,365 $ 227,732 $ 249,025 $ - $ 813,122 currency)

Percentage increase 2.7 (26.2 4.3 (7.0 (decrease) % %) % %)

For the Six Months Ended June 30, 2019:

Net incomeattributable to $ 336,314 commonstockholders

Adjustments:

Interest and (9,489 ) other income

Interest 220,988

Depreciationand 462,107 amortization

General,administrativeand 83,839 professionalfees

Loss onextinguishment 4,427 of debt, net

Merger-relatedexpenses and 6,780 deal costs

Other (11,458 )

Loss fromunconsolidated 3,475 entities

Gain on realestate (24,597 ) dispositions

Income tax (59,009 ) benefit

Net incomeattributable to 3,172 noncontrollinginterests

Reported $ 382,696 $ 314,349 $ 281,266 $ 38,238 $ 1,016,549 segment NOI

Adjustments to Cash NOI:

Straight-liningof rental (7,574 ) - (9,426 ) - (17,000 ) income

Non-cash rental (1,979 ) - (3,996 ) - (5,975 ) income

Cashmodification 100 - - - 100 fees

NOI notincluded in (43,339 ) (1,131 ) (20,128 ) - (64,598 ) cash NOI^1

Non-segment NOI - - - (38,238 ) (38,238 )

NOI impact from (310 ) (851 ) - - (1,161 ) change in FX

Cash NOI $ 329,594 $ 312,367 $ 247,716 $ - $ 889,677

Adjustments to Same-store NOI:

Cash NOI notincluded in (2,166 ) (3,726 ) (9,001 ) - (14,893 ) same-store

Same-store cashNOI (constant $ 327,428 $ 308,641 $ 238,715 $ - $ 874,784 currency)

1 Excludes sold assets, assets held for sale, development properties not yet operational and land parcels.

The Company considers NOI and same-store cash NOI as important supplemental measures because they allow investors, analysts and the Company's management to assess its unlevered property-level operating results and to compare its operating results with those of other real estate companies and between periods on a consistent basis. The Company defines NOI as total revenues, less interest and other income, property-level operating expenses and office building services costs. In the case of NOI, cash receipts may differ due to straight-line recognition of certain rental income and the application of other GAAP policies. The Company defines same-store as properties owned, consolidated and operational for the full period in both comparison periods and are not otherwise excluded; provided, however, that the Company may include selected properties that otherwise meet the same-store criteria if they are included in substantially all of, but not a full, period for one or both of the comparison periods, and in the Company's judgment such inclusion provides a more meaningful presentation of its portfolio performance. Newly acquired or recently developed or redeveloped properties in the Company's Seniors Housing Operating Portfolio ("SHOP") will be included in same-store once they are stabilized for the full period in both periods presented. These properties are considered stabilized upon the earlier of (a) the achievement of 80% sustained occupancy or (b) 24 months from the date of acquisition or substantial completion of work. Recently developed or redeveloped properties in the Office and Triple-Net Leased Portfolios will be included in same-store once substantial completion of work has occurred for the full period in both periods presented. SHOP and Triple-Net Leased properties that have undergone operator or business model transitions will be included in same-store once operating under consistent operating structures for the full period in both periods presented.

Properties are excluded from same-store if they are: (i) sold, classified as held for sale or properties whose operations were classified as discontinued operations in accordance with GAAP; (ii) impacted by materially disruptive events such as flood or fire; (iii) those properties that are currently undergoing a materially disruptive redevelopment; (iv) for the Office Portfolio, those properties for which management has an intention to institute a redevelopment plan because the properties may require major property-level expenditures to maximize value, increase net operating income, or maintain a market-competitive position and/or achieve property stabilization; or (v) for the SHOP and Triple-Net Leased Portfolios, those properties that are scheduled to undergo operator or business model transitions, or have transitioned operators or business models after the start of the prior comparison period.

To eliminate the impact of exchange rate movements, all same-store NOI measures assume constant exchange rates across comparable periods, using the following methodology: the current period's results are shown in actual reported USD, while prior comparison period's results are adjusted and converted to USD based on the average exchange rate for the current period.

View source version on businesswire.com: https://www.businesswire.com/news/home/20200807005186/en/

CONTACT: Sarah Whitford (877) 4-VENTAS