News Column

Ventas Reports Record Second Quarter Earnings

August 11, 2014

Normalized FFO Per Diluted Share Increases 11 Percent to $1.12

Company Increases 2014 Normalized FFO Guidance to $4.39 to $4.43 Per Diluted Share

Ventas on Track to Close $3.8 Billion in Strategic Acquisitions

CHICAGO--(BUSINESS WIRE)-- Ventas, Inc. (NYSE: VTR) (“Ventas” or the “Company”) said today that normalized Funds From Operations (“FFO”) for the quarter ended June 30, 2014 increased 11 percent to $331.6 million, from $298.4 million for the comparable 2013 period. Normalized FFO per diluted common share was $1.12 for the quarter ended June 30, 2014, an 11 percent increase from $1.01 for the comparable 2013 period. Normalized FFO per share also grew 11 percent in the second quarter of 2014 over the second quarter of 2013, excluding non-cash items, computed on a consistent basis with prior periods. Weighted average diluted shares outstanding for the quarter increased less than one percent to 296.5 million, compared to 295.1 million in 2013.

“Our productive and powerful portfolio continued to drive FFO and cash flow growth in the second quarter, as we delivered record results for our shareholders,” Ventas Chairman and Chief Executive Officer Debra A. Cafaro said. “We continue to focus on completing our $3.8 billion of strategic accretive transactions. We are delighted to increase our full-year guidance and look forward to continuing our long track record of success. We remain confident that the re-audits of our 2012 and 2013 financial statements by our new auditor will be completed expeditiously,” Cafaro added.

Ventas’s continued growth in normalized FFO per diluted common share is due primarily to the Company’s accretive investments, same-store growth from its portfolio and receipt of fees and other income. These benefits were partially offset by higher general and administrative expenses and the impact of asset sales and loan repayments since the third quarter of 2013.

Normalized FFO for the quarter ended June 30, 2014 excludes the net expense (totaling $15.9 million, or $0.05 per diluted share) from merger-related expenses and deal costs (including integration and transition-related costs), non-cash income tax expense, net losses on extinguishment of debt and amortization of other intangibles. Normalized FFO for the quarter ended June 30, 2013 excluded the net benefit (totaling $6.1 million, or $0.02 per diluted share) from a non-cash income tax benefit and net gains on debt extinguishment, offset by merger-related expenses and deal costs (including integration and transition-related costs) and amortization of other intangibles.

Net income attributable to common stockholders for the quarter ended June 30, 2014 was $138.4 million, or $0.47 per diluted common share, including expense associated with discontinued operations of $0.3 million. Net income attributable to common stockholders for the quarter ended June 30, 2013 was $114.6 million, or $0.39 per diluted common share, including expense associated with discontinued operations of $18.6 million. This $23.8 million increase in net income attributable to common stockholders in 2014 over the prior year is primarily due to the Company’s accretive investments, same-store growth from its portfolio, receipt of fees and other income and gains on sale of real estate; partially offset by higher general and administrative expenses, the impact of asset sales and loan repayments since the third quarter of 2013, loss on extinguishment of debt and increases in income tax expense, depreciation and amortization and merger-related expenses and deal costs.

FFO, as defined by the National Association of Real Estate Investment Trusts (“NAREIT”), for the quarter ended June 30, 2014 increased to $315.8 million, from $304.4 million in the comparable 2013 period. This increase in NAREIT FFO is due primarily to the factors described above for net income attributable to common stockholders, excluding gains on sale of real estate and depreciation. NAREIT FFO per diluted common share for the quarter ended June 30, 2014 increased to $1.07, from $1.03 in 2013.

PRIVATE PAY SENIORS HOUSING OPERATING PORTFOLIO

6.6 Percent Growth in Second Quarter 2014 NOI in Same-Store Stabilized U.S. Communities Versus the Second Quarter of 2013

At June 30, 2014, the Company’s seniors housing operating portfolio included 239 communities managed by Atria Senior Living, Inc. (“Atria”) or Sunrise Senior Living, LLC (“Sunrise”). Second quarter 2014 Net Operating Income (“NOI”) after management fees for this portfolio totaled $125.0 million, an increase of 13.5 percent over the second quarter of 2013. Average unit occupancy was 90.3 percent.

Same-store NOI after management fees grew 6.6 percent and revenue per occupied room (“REVPOR”) grew 2.8 percent in the 198 stabilized private pay seniors housing communities owned by the Company in the U.S. for the full second quarters of 2014 and 2013. Same-store NOI after management fees grew 6.0 percent for the 206 communities owned by the Company in the U.S. for the full second quarters of 2014 and 2013.

SECOND QUARTER HIGHLIGHTS AND OTHER RECENT DEVELOPMENTS

Investments and Dispositions

  • In June 2014, Ventas entered into a definitive agreement to acquire all of the outstanding shares of American Realty Capital Healthcare Trust, Inc. (“HCT”) in a stock and cash transaction valued at approximately $2.9 billion, including investments expected to be made by HCT prior to completion of the merger, the majority of which have now been completed. The Company expects to complete the HCT transaction in accordance with its terms. The transaction is expected to be funded with Ventas common stock valued at $67.13 per share (for aggregate consideration of between $1.8 billion and $2.0 billion), cash and the assumption of debt. However, the transaction remains subject to the approval of HCT shareholders and the satisfaction of customary closing conditions and there can be no assurance as to whether or when the transaction will close.
  • In June 2014, Ventas announced that it had entered into a definitive agreement to acquire 29 independent seniors housing communities located in Canada from Holiday Retirement (“Holiday”). This acquisition is expected to close shortly at an acquisition price of CAD 957 million. We expect to fund the acquisition through borrowings under a new CAD 791 million unsecured term loan closed on July 31, 2014 and the assumption of debt.
  • Since April 1, 2014, Ventas made investments totaling approximately $250 million, excluding development and redevelopment projects, at a first-year cash NOI yield of approximately seven percent.
  • The Company currently has $182 million of development and redevelopment projects underway at an expected unlevered yield over eight percent.
  • Since April 1, 2014, Ventas sold ten properties and received loans receivable repayments for total proceeds of approximately $89 million, which represents a yield of nine percent.

    Liquidity, Capital Raising and Balance Sheet

  • In April, Ventas issued and sold $700 million aggregate principal amount of senior notes with a weighted average interest rate of 2.75 percent and a weighted average maturity of seven years.
  • The Company repaid approximately $188 million of mortgages that had a weighted average interest rate of 5.9 percent (cash) and 4.1 percent (GAAP). The Company recognized a net loss on repayment of debt totaling $2.9 million during the quarter.
  • Ventas’s debt to total capitalization was 34 percent at June 30, 2014.
  • The Company’s net debt to Adjusted Pro Forma EBITDA (as defined herein) at June 30, 2014 was 5.5x.
  • Currently, the Company has $1.8 billion of availability under its revolving credit facility, CAD 803 million in cash funded for the Holiday acquisition and $295 million of cash on hand.

    PORTFOLIO UPDATE AND ADDITIONAL INFORMATION

  • Same-store cash NOI growth for the Company’s total portfolio (1,326 assets) was 4.5 percent for the quarter ended June 30, 2014 compared to the second quarter of 2013.
  • The Company’s second quarter 2014 financial statements included in its Quarterly Report on Form 10-Q filed today with the Securities and Exchange Commission (“SEC”) have been prepared in accordance with SEC rules. The Company’s new independent auditor, KPMG LLP (“KPMG”), continues its work to re-audit the Company’s 2012 and 2013 financial statements, and the Company currently expects such work to be completed by the end of the third quarter of 2014, although there can be no assurance as to the timing of such completion. As previously stated, Ventas believes that its financial statements for the referenced periods present fairly, in all material respects, the financial condition, results of operations and cash flows of the Company as of the end of and for those periods, and may continue to be relied upon. The Company also believes that its internal control over financial reporting was effective during those periods. However, there can be no assurance that KPMG will reach the same conclusions as the Company’s prior auditor, Ernst & Young LLP, regarding the application of accounting standards, management estimates or other factors affecting the Company’s financial statements.
  • The Company has successfully re-leased to Kindred Healthcare, Inc. (“Kindred”), transitioned to replacement operators or sold 103 of the 108 healthcare assets whose lease terms with Kindred were scheduled to expire on September 30, 2014. The Company expects to sell or transition the remaining five assets by the end of 2014, although such transactions remain subject to regulatory approval and other conditions, and there can be no assurance that the Company will be able to do so on a timely basis, if at all. Kindred is contractually obligated to continue to pay full rent through December 31, 2014 on four of the five remaining assets (and the fifth asset is currently under contract for sale). As previously stated, the Company expects that the net impact of all of these transactions will be substantially breakeven to its 2015 NOI and normalized FFO per share.
  • 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 RAISES 2014 NORMALIZED FFO PER DILUTED SHARE GUIDANCE TO $4.39 TO $4.43

    Ventas currently expects its 2014 normalized FFO per diluted share to range between $4.39 and $4.43, an increase from previously announced 2014 guidance of between $4.31 and $4.37 per diluted share. The Company’s improved guidance range constitutes approximately seven to eight percent per share growth in 2014, excluding non-cash items (projected to be $0.12 per diluted share), computed on a consistent basis with prior periods, and six to seven percent on an as-reported basis. A reconciliation of the Company’s guidance, and the non-cash items, to the Company’s projected GAAP earnings is included in this press release.

    The Company’s normalized FFO guidance (and related GAAP earnings projections) for all periods assumes, with certain immaterial exceptions: all of the Company’s tenants and borrowers continue to meet all of their obligations to the Company; full-year same-store NOI growth for the Company’s total portfolio of 3.5 to four percent; closing of the Holiday transaction by September 1, 2014; full-year 2014 NOI from its 270 managed seniors housing communities (including 29 to-be-acquired Holiday seniors housing assets) of between $512 million and $520 million; no material changes to current applicable foreign currency exchange rates; current and future expected long-term acquisition financing totaling approximately $800 million; and additional dispositions totaling approximately $250 million by year end.

    The Company’s normalized FFO guidance (and related GAAP earnings projections) for all periods excludes the impact from the closing of its pending acquisition of HCT. It also 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 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, penalties or premiums incurred as a result of early retirement or payment of debt, (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, (e) the impact of future unannounced acquisitions or divestitures (including pursuant to tenant options to purchase) and capital transactions, (f) the financial impact of contingent consideration, charitable donations made to the Ventas Charitable Foundation, gains and losses for non-operational foreign currency hedge agreements and changes in the fair value of financial instruments, and (g) expenses related to the re-audit and re-review of the Company’s historical financial statements and related matters.

    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 assurances 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.

    SECOND QUARTER CONFERENCE CALL

    Ventas will hold a conference call to discuss this earnings release tomorrow at 9:00 a.m. Eastern Time (8:00 a.m. Central Time). The dial-in number for the conference call is (877) 474-9502 (or (857) 244-7555 for international callers). The participant passcode is “Ventas.” The conference call is being webcast live by NASDAQ OMX and can be accessed at the Company’s website at www.ventasreit.com. A replay of the webcast will be available following the call online, or by calling (888) 286-8010 (or (617) 801-6888 for international callers), passcode 29479795, beginning at approximately 1:00 p.m. Eastern Time and will remain for 29 days.

    Ventas, Inc., an S&P 500 company, is a leading real estate investment trust. Its diverse portfolio of nearly 1,500 assets in the United States, Canada and the United Kingdom 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 the Company’s pending acquisition of HCT and 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 or manager, and obligations, including indemnification obligations, the Company may incur in connection with the replacement of an existing tenant or manager; (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 exchange rates for any foreign currency in which the Company may, from time to time, conduct business; (p) 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; (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 seniors 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; (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;(z) 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; and (aa) the impact of expenses related to the re-audit and re-review of the Company’s historical financial statements and related matters. Many of these factors are beyond the control of the Company and its management.

     
    CONSOLIDATED BALANCE SHEETS
    As of June 30, 2014, March 31, 2014, December 31, 2013, September 30, 2013 and June 30, 2013
    (In thousands, except per share amounts)
             
    June 30,March 31,December 31,September 30,June 30,
    2014   2014   2013   2013   2013  
     
    Assets
    Real estate investments:
    Land and improvements $ 1,848,922 $ 1,867,146 $ 1,855,968 $ 1,856,739 $ 1,783,664
    Buildings and improvements 18,591,786 18,658,616 18,457,028 18,383,075 17,238,843
    Construction in progress 93,629 71,862 80,415 79,172 99,947
    Acquired lease intangibles 1,009,474   1,014,711   1,010,181   1,012,163   990,548  
    21,543,811 21,612,335 21,403,592 21,331,149 20,113,002
    Accumulated depreciation and amortization (3,657,541 ) (3,515,868 ) (3,328,006 ) (3,156,206 ) (2,977,154 )
    Net real estate property 17,886,270 18,096,467 18,075,586 18,174,943 17,135,848
    Secured loans receivable and investments, net 414,051 376,074 376,229 400,889 470,441
    Investments in unconsolidated entities 89,423   90,929   91,656   91,531   93,155  
    Net real estate investments 18,389,744 18,563,470 18,543,471 18,667,363 17,699,444
    Cash and cash equivalents 86,635 59,791 94,816 54,672 62,421
    Escrow deposits and restricted cash 75,514 76,110 84,657 98,200 94,492
    Deferred financing costs, net 63,399 59,726 62,215 55,242 50,821
    Other assets 1,175,494   943,671   946,335   1,003,881   889,404  
    Total assets $ 19,790,786   $ 19,702,768   $ 19,731,494   $ 19,879,358   $ 18,796,582  
     
    Liabilities and equity
    Liabilities:
    Senior notes payable and other debt $ 9,602,439 $ 9,481,051 $ 9,364,992 $ 9,413,318 $ 8,420,073
    Accrued interest 56,722 61,083 54,349 62,176 50,860
    Accounts payable and other liabilities 975,282 938,098 1,001,515 1,019,166 887,314
    Deferred income taxes 256,392   252,499   250,167   248,369   247,591  
    Total liabilities 10,890,835 10,732,731 10,671,023 10,743,029 9,605,838
     
    Redeemable OP unitholder and noncontrolling interests 169,292 160,115 156,660 171,921 184,217
     
    Commitments and contingencies
     
    Equity:
    Ventas stockholders' equity:
    Preferred stock, $1.00 par value; 10,000 shares authorized, unissued
    Common stock, $0.25 par value; 294,358; 294,346; 297,901; 297,328; and 296,940 shares issued at June 30, 2014, March 31, 2014, December 31, 2013, September 30, 2013 and June 30, 2013, respectively 73,602 73,599 74,488 74,345 74,248
    Capital in excess of par value 9,849,301 9,858,733 10,078,592 10,032,285 9,996,095
    Accumulated other comprehensive income 26,255 18,464 19,659 21,293 19,752
    Retained earnings (deficit) (1,294,048 ) (1,218,967 ) (1,126,541 ) (1,021,628 ) (943,384 )
    Treasury stock, 0; 3; 3,712; 3,699; and 3,698 shares at June 30, 2014, March 31, 2014, December 31, 2013, September 30, 2013 and June 30, 2013, respectively   (162 ) (221,917 ) (221,203 ) (221,129 )
    Total Ventas stockholders' equity 8,655,110 8,731,667 8,824,281 8,885,092 8,925,582
    Noncontrolling interest 75,549   78,255   79,530   79,316   80,945  
    Total equity 8,730,659   8,809,922   8,903,811   8,964,408   9,006,527  

    Total liabilities and equity

    $ 19,790,786   $ 19,702,768   $ 19,731,494   $ 19,879,358   $ 18,796,582  
     


    CONSOLIDATED STATEMENTS OF INCOME
    For the three and six months ended June 30, 2014 and 2013
    (In thousands, except per share amounts)
           
    For the Three Months EndedFor the Six Months Ended
    June 30,June 30,
    2014   2013   2014   2013  
    Revenues:
    Rental income:
    Triple-net leased $ 242,726 $ 213,171 $ 480,572 $ 425,705
    Medical office buildings 114,890   110,277   230,113   220,693  
    357,616 323,448 710,685 646,398
    Resident fees and services 374,473 341,594 745,534 680,764
    Medical office building and other services revenue 4,367 3,537 10,667 7,185
    Income from loans and investments 14,625 14,733 25,392 30,836
    Interest and other income 173   797   446   1,835  
    Total revenues 751,254 684,109 1,492,724 1,367,018
    Expenses:
    Interest 91,501 82,237 179,342 160,871
    Depreciation and amortization 190,818 171,527 384,412 346,995
    Property-level operating expenses:
    Senior living 249,424 231,337 497,719 462,245
    Medical office buildings 39,335   38,151   78,680   74,444  
    288,759 269,488 576,399 536,689
    Medical office building services costs 1,626 1,667 4,997 3,306
    General, administrative and professional fees 31,306 27,324 64,172 56,098
    Loss (gain) on extinguishment of debt, net 2,924 (720 ) 2,665 (720 )
    Merger-related expenses and deal costs 9,599 6,667 20,359 10,929
    Other 4,863   4,385   10,092   8,972  
    Total expenses 621,396   562,575   1,242,438   1,123,140  
    Income before income (loss) from unconsolidated entities, income taxes, discontinued operations, real estate dispositions and noncontrolling interest 129,858 121,534 250,286 243,878
    Income (loss) from unconsolidated entities 348 (506 ) 596 423
    Income tax (expense) benefit (3,274 ) 12,064   (6,707 ) 10,320  
    Income from continuing operations 126,932 133,092 244,175 254,621
    Discontinued operations (255 ) (18,559 ) 2,776 (26,990 )
    Gain on real estate dispositions 11,889     12,889    
    Net income 138,566 114,533 259,840 227,631
    Net income (loss) attributable to noncontrolling interest 168   (47 ) 395   858  
    Net income attributable to common stockholders $ 138,398   $ 114,580   $ 259,445   $ 226,773  
    Earnings per common share:
    Basic:
    Income from continuing operations attributable to common stockholders, including real estate dispositions $ 0.47 $ 0.45 $ 0.87 $ 0.87
    Discontinued operations (0.00 ) (0.06 ) 0.01   (0.09 )
    Net income attributable to common stockholders $ 0.47   $ 0.39   $ 0.88   $ 0.78  
    Diluted:
    Income from continuing operations attributable to common stockholders, including real estate dispositions $ 0.47 $ 0.45 $ 0.87 $ 0.86
    Discontinued operations (0.00 ) (0.06 ) 0.01   (0.09 )
    Net income attributable to common stockholders $ 0.47   $ 0.39   $ 0.88   $ 0.77  
     
    Weighted average shares used in computing earnings per common share:
    Basic 293,988 292,635 293,932 292,049
    Diluted 296,504 295,123 296,369 294,584
     
    Dividends declared per common share $ 0.725 $ 0.67 $ 1.45 $ 1.34
     


    QUARTERLY CONSOLIDATED STATEMENTS OF INCOME
    (In thousands, except per share amounts)
             
    2014 Quarters2013 Quarters
    SecondFirstFourthThirdSecond
     
    Revenues:
    Rental income:
    Triple-net leased $ 242,726 $ 237,846 $ 232,873 $ 218,698 $ 213,171
    Medical office buildings 114,890   115,223   114,635   114,779   110,277  
    357,616 353,069 347,508 333,477 323,448
    Resident fees and services 374,473 371,061 366,129 359,112 341,594
    Medical office building and other services revenue 4,367 6,300 6,478 4,146 3,537
    Income from loans and investments 14,625 10,767 12,924 14,448 14,733
    Interest and other income 173   273   146   66   797  
    Total revenues 751,254 741,470 733,185 711,249 684,109
     
    Expenses:
    Interest 91,501 87,841 90,274 83,764 82,237
    Depreciation and amortization 190,818 193,594 198,042 177,038 171,527
    Property-level operating expenses:
    Senior living 249,424 248,295 250,123 244,316 231,337
    Medical office buildings 39,335   39,345   37,938   40,566   38,151  
    288,759 287,640 288,061 284,882 269,488
    Medical office building services costs 1,626 3,371 3,358 1,651 1,667
    General, administrative and professional fees 31,306 32,866 30,349 28,659 27,324
    Loss (gain) on extinguishment of debt, net 2,924 (259 ) 2,110 (189 ) (720 )
    Merger-related expenses and deal costs 9,599 10,760 4,497 6,208 6,667
    Other 4,863   5,229   5,407   4,353   4,385  
    Total expenses 621,396   621,042   622,098   586,366   562,575  
     
    Income before income (loss) from unconsolidated entities, income taxes, discontinued operations, real estate dispositions and noncontrolling interest 129,858 120,428 111,087 124,883 121,534
    Income (loss) from unconsolidated entities 348 248 (1,041 ) 110 (506 )
    Income tax (expense) benefit (3,274 ) (3,433 ) (1,272 ) 2,780   12,064  
    Income from continuing operations 126,932 117,243 108,774 127,773 133,092
    Discontinued operations (255 ) 3,031 (115 ) (9,174 ) (18,559 )
    Gain on real estate dispositions 11,889   1,000        
    Net income 138,566 121,274 108,659 118,599 114,533
    Net income (loss) attributable to noncontrolling interest 168   227   219   303   (47 )
    Net income attributable to common stockholders $ 138,398   $ 121,047   $ 108,440   $ 118,296   $ 114,580  
     
    Earnings per common share:
    Basic:
    Income from continuing operations attributable to common stockholders, including real estate dispositions $ 0.47 $ 0.40 $ 0.37 $ 0.43 $ 0.45
    Discontinued operations (0.00 ) 0.01   (0.00 ) (0.03 ) (0.06 )
    Net income attributable to common stockholders $ 0.47   $ 0.41   $ 0.37   $ 0.40   $ 0.39  
    Diluted:
    Income from continuing operations attributable to common stockholders, including real estate dispositions $ 0.47 $ 0.40 $ 0.37 $ 0.43 $ 0.45
    Discontinued operations (0.00 ) 0.01   (0.00 ) (0.03 ) (0.06 )
    Net income attributable to common stockholders $ 0.47   $ 0.41   $ 0.37   $ 0.40   $ 0.39  
     
    Weighted average shares used in computing earnings per common share:
    Basic 293,988 293,875 293,674 292,818 292,635
    Diluted 296,504 296,245 296,047 295,190 295,123
     


    CONSOLIDATED STATEMENTS OF CASH FLOWS
    For the six months ended June 30, 2014 and 2013
    (In thousands)
      2014     2013  
    Cash flows from operating activities:
    Net income $ 259,840 $ 227,631
    Adjustments to reconcile net income to net cash provided by operating activities:
    Depreciation and amortization (including amounts in discontinued operations) 385,940 380,932
    Amortization of deferred revenue and lease intangibles, net (9,879 ) (7,003 )
    Other non-cash amortization (2,928 ) (9,401 )
    Stock-based compensation 11,411 10,800
    Straight-lining of rental income, net (17,231 ) (14,330 )
    Loss (gain) on extinguishment of debt, net 2,665 (873 )
    Gain on real estate dispositions (including amounts in discontinued operations) (14,142 ) (2,195 )
    Gain on real estate loan investments (1,099 )

    Gain on sale of marketable securities

    (856 )
    Income tax expense (benefit) 6,407 (10,320 )
    (Income) loss from unconsolidated entities (596 ) 818
    Gain on re-measurement of equity interest upon acquisition, net (1,241 )
    Other 6,494 3,872
    Changes in operating assets and liabilities:
    Decrease (increase) in other assets 11,208 (16,415 )
    Increase in accrued interest 2,374 3,315
    Decrease in accounts payable and other liabilities (45,861 ) (55,947 )
    Net cash provided by operating activities 595,702 507,688
    Cash flows from investing activities:
    Net investment in real estate property (271,526 ) (283,622 )
    Purchase of noncontrolling interest (3,588 ) (6,124 )
    Investment in loans receivable and other (44,488 ) (32,332 )
    Proceeds from real estate disposals 52,350 24,290
    Proceeds from loans receivable 5,980 218,043
    Purchase of marketable securities (46,689 )
    Proceeds from sale or maturity of marketable securities 5,493
    Funds held in escrow for future development expenditures 2,602 11,816
    Development project expenditures (44,423 ) (48,284 )
    Capital expenditures (35,526 ) (32,459 )
    Other (125 ) (411 )
    Net cash used in investing activities (385,433 ) (143,590 )
    Cash flows from financing activities:
    Net change in borrowings under revolving credit facilities (199,951 ) (280,926 )
    Proceeds from debt 696,661 918,455
    Repayment of debt (272,726 ) (685,518 )
    Payment of deferred financing costs (6,846 ) (12,997 )
    Issuance of common stock, net 82,384
    Cash distribution to common stockholders (426,952 ) (392,230 )
    Cash distribution to redeemable OP unitholders (2,762 ) (2,313 )
    Purchases of redeemable OP units (208 )
    Contributions from noncontrolling interest 2,094
    Distributions to noncontrolling interest (4,908 ) (5,045 )
    Other (574 ) 6,808  
    Net cash used in financing activities (218,058 ) (369,496 )
    Net decrease in cash and cash equivalents (7,789 ) (5,398 )
    Effect of foreign currency translation on cash and cash equivalents (392 ) (89 )
    Cash and cash equivalents at beginning of period 94,816   67,908  
    Cash and cash equivalents at end of period $ 86,635   $ 62,421  
     
    Supplemental schedule of non-cash activities:
    Assets and liabilities assumed from acquisitions:
    Real estate investments $ 54,282 $ 90,020
    Other assets acquired 1,634 2,562
    Debt assumed 51,115 68,602
    Other liabilities 3,675 10,493
    Deferred income tax liability 1,126 1,794
    Noncontrolling interests 11,693
     


    QUARTERLY CONSOLIDATED STATEMENTS OF CASH FLOWS
    (In thousands)
             
    2014 Quarters2013 Quarters
    SecondFirstFourthThirdSecond
    Cash flows from operating activities:
    Net income $ 138,566 $ 121,274 $ 108,659 $ 118,599 $ 114,533
    Adjustments to reconcile net income to net cash provided by operating activities:
    Depreciation and amortization (including amounts in discontinued operations) 192,064 193,876 200,556 188,393 193,989
    Amortization of deferred revenue and lease intangibles, net (4,496 ) (5,383 ) (4,634 ) (4,156 ) (3,693 )
    Other non-cash amortization (963 ) (1,965 ) (3,369 ) (3,975 ) (4,072 )
    Stock-based compensation 5,367 6,044 5,643 4,210 5,138
    Straight-lining of rental income, net (9,317 ) (7,914 ) (9,375 ) (6,835 ) (6,465 )
    Loss (gain) on extinguishment of debt, net 2,924 (259 ) 2,110 (189 ) (873 )
    Gain on real estate dispositions (including amounts in discontinued operations) (11,705 ) (2,437 ) (1,376 ) (46 ) (1,718 )
    Gain on real estate loan investments (1,458 ) (2,499 ) (759 )

    Gain on sale of marketable securities

    (856 )
    Income tax expense (benefit) 2,974 3,433 1,272 (2,780 ) (12,064 )
    (Income) loss from unconsolidated entities (348 ) (248 ) 1,041 (111 ) 506
    Other 3,418 3,076 2,274 2,261 967
    Changes in operating assets and liabilities:
    Decrease (increase) in other assets 4,967 6,241 27,442 (11,717 ) (5,956 )
    (Decrease) in accrued interest (4,379 ) 6,753 (7,818 ) 11,309 (7,215 )
    (Decrease) increase in accounts payable and other liabilities (7,791 ) (38,070 ) 38,359   35,277   5,921  
    Net cash provided by operating activities 311,281 284,421 359,326 327,741 277,383
    Cash flows from investing activities:
    Net investment in real estate property (89,660 ) (181,866 ) (78,236 ) (1,075,144 ) (227,447 )
    Purchase of noncontrolling interest (3,588 ) (6,436 ) (1,771 ) (2,938 )
    Investment in loans receivable and other (43,296 ) (1,192 ) (3,246 ) (2,385 ) (29,543 )
    Proceeds from real estate disposals 26,200 26,150 6,400 4,901 13,040
    Proceeds from loans receivable 4,817 1,163 26,362 81,113 71,649
    Purchase of marketable securities (21,689 ) (25,000 )
    Proceeds from sale or maturity of marketable securities 5,493
    Funds held in escrow for future development expenditures 2,602 4,269 3,373 6,376
    Development project expenditures (20,475 ) (23,948 ) (21,034 ) (26,423 ) (26,696 )
    Capital expenditures (19,392 ) (16,134 ) (30,980 ) (18,175 ) (12,664 )
    Other   (125 ) (1,758 )   (333 )
    Net cash used in investing activities (167,083 ) (218,350 ) (104,659 ) (1,034,511 ) (203,063 )
    Cash flows from financing activities:
    Net change in borrowings under revolving credit facilities (381,705 ) 181,754 (71,443 ) 188,340 94,990
    Proceeds from debt 696,661 1,000,702 848,389 1,584
    Repayment of debt (204,953 ) (67,773 ) (951,960 ) (155,014 ) (49,725 )
    Payment of deferred financing costs (6,679 ) (167 ) (11,300 ) (6,980 ) 811
    Issuance of common stock, net 35,341 23,618 77,334
    Cash distribution to common stockholders (213,479 ) (213,473 ) (213,353 ) (196,540 ) (196,530 )
    Cash distribution to redeemable OP unitholders (1,360 ) (1,402 ) (1,561 ) (1,166 ) (1,162 )
    Purchases of redeemable OP units (342 ) (109 ) (100 )
    Contributions from noncontrolling interest 301 2,094
    Distributions to noncontrolling interest (2,671 ) (2,237 ) (1,672 ) (2,569 ) (3,595 )
    Other (2,215 ) 1,641   788   1,022   4,750  
    Net cash (used in) provided by financing activities (116,401 ) (101,657 ) (214,499 ) 698,991   (69,549 )
    Net increase (decrease) in cash and cash equivalents 27,797 (35,586 ) 40,168 (7,779 ) 4,771
    Effect of foreign currency translation on cash and cash equivalents (953 ) 561 (24 ) 30 (40 )
    Cash and cash equivalents at beginning of period 59,791   94,816   54,672   62,421   57,690  
    Cash and cash equivalents at end of period $ 86,635   $ 59,791   $ 94,816   $ 54,672   $ 62,421  
     
    Supplemental schedule of non-cash activities:
    Assets and liabilities assumed from acquisitions:
    Real estate investments $ 51,330 $ 2,952 $ 2,508 $ 131,427 $ 81,181
    Other assets acquired 1,634 109 3,964 1,894
    Debt assumed 51,115 115,246 68,602
    Other liabilities 723 2,952 2,285 17,090 4,071
    Deferred income tax liability 1,126 332 3,055 262
    Noncontrolling interests 10,140
     


    NON-GAAP FINANCIAL MEASURES RECONCILIATION

    Funds From Operations (FFO) Including and Excluding Non-Cash Items1

    (Dollars in thousands, except per share amounts)
     
                  Tentative Estimates  
    Preliminary andMidpoint
    Subject to ChangeYOY
    2013   2014   FY2014 - Guidance   Growth
    Q2   Q3   Q4   FY   Q1   Q2   Low   High   '13-'14E
    Net income attributable to common stockholders $ 114,580 $ 118,296 $ 108,440 $ 453,509 $ 121,047 $138,398$

    461,351

      $

    503,211

    Net income attributable to common stockholders per share$0.39$0.40$0.37$1.54$0.41$0.47$

    1.56

    $

    1.70

     
    Adjustments:
    Depreciation and amortization on real estate assets 170,111 175,591 196,520 716,412 192,043 189,219785,336775,336
    Depreciation on real estate assets related to noncontrolling interest (2,617 ) (2,719 ) (2,674 ) (10,512 ) (2,644 ) (2,661)(9,657)(11,657)
    Depreciation on real estate assets related to unconsolidated entities 1,622 1,634 1,641 6,543 1,494 1,4956,4895,489
    Gain on re-measurement of equity interest upon acquisition, net (1,241 )
    Gain on real estate dispositions (1,000 ) (11,889)(12,889)(32,889)
    Discontinued operations:
    Gain on real estate dispositions (1,718 ) (488 ) (1,376 ) (4,059 ) (1,438 ) (45)(483)(2,483)
    Depreciation and amortization on real estate assets 22,463     11,354     2,514     47,806     281     1,247     1,628     2,628  
    Subtotal: FFO add-backs 189,861 185,372 196,625 754,949 188,736 177,366770,424736,424
    Subtotal: FFO add-backs per share   $0.64     $0.63     $0.66     $2.56     $0.64     $0.60     $2.60     $2.48        
    FFO $ 304,441 $ 303,668 $ 305,065 $ 1,208,458 $ 309,783 $315,764$

    1,231,775

    $

    1,239,635

    2 %
    FFO per share   $1.03     $1.03     $1.03     $4.09     $1.05     $1.07     $

    4.15

        $

    4.18

       

    2

    %
     
    Adjustments:
    Change in fair value of financial instruments 424 449 (68 ) 1094141
    Non-cash income tax (benefit) expense (12,064 ) (2,780 ) 1,272 (11,828 ) 3,433 2,974

    11,500

    9,500

    (Gain) loss on extinguishment of debt, net (873 ) (189 ) 2,110 1,048 (810 ) 2,9241,7973,797
    Merger-related expenses and deal costs 6,592 6,209 4,497 21,560 10,761 9,60255,000

    60,000

    Amortization of other intangibles 255     256     255     1,022     256     255     1,522     522  
    Subtotal: normalized FFO add-backs (6,090 ) 3,496 8,558 12,251 13,572 15,864

    69,860

    73,860

    Subtotal: normalized FFO add-backs per share   $(0.02)   $0.01     $0.03     $0.04     $0.05     $0.05     $

    0.24

        $

    0.25

           
    Normalized FFO $ 298,351 $ 307,164 $ 313,623 $ 1,220,709 $ 323,355 $331,628$1,301,635$1,313,495 7 %
    Normalized FFO per share   $1.01     $1.04     $1.06     $4.14     $1.09     $1.12     $4.39     $4.43     7 %
     
    Non-cash items included in normalized FFO:
    Amortization of deferred revenue and lease intangibles, net (3,693 ) (4,156 ) (4,634 ) (15,793 ) (5,383 ) (4,496)(17,542)(18,542)
    Other non-cash amortization, including fair market value of debt (4,072 ) (3,975 ) (3,369 ) (16,745 ) (1,965 ) (963)(2,294)(2,794)
    Stock-based compensation 5,138 4,210 5,643 20,653 6,044 5,367

    21,500

    24,200
    Straight-lining of rental income, net (6,465 )   (6,835 )   (9,375 )   (30,540 )   (7,914 )   (9,317)   (38,348)   (39,848)
    Subtotal: non-cash items included in normalized FFO (9,092 ) (10,756 ) (11,735 ) (42,425 ) (9,218 ) (9,409)

    (36,684

    )(36,984)
    Subtotal: non-cash items included in normalized FFO per share   $(0.03)   $(0.04)   $(0.04)   $(0.14)   $(0.03)   $(0.03)   $(0.12)   $(0.12)      
    Normalized FFO, excluding non-cash items $ 289,259 $ 296,408 $ 301,888 $ 1,178,284 $ 314,137 $322,219$

    1,264,951

    $1,276,511 8 %
    Normalized FFO per share, excluding non-cash items   $0.98     $1.00     $1.02     $3.99     $1.06     $1.09     $4.27     $4.31     8 %
    Weighted average diluted shares 295,123 295,190 296,047 295,110 296,245 296,504296,500     296,500  
     
    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.
     


    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 have historically 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 and normalized FFO to be 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 and other 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 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 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, charitable donations made to the Ventas Charitable Foundation, gains and losses for non-operational foreign currency hedge agreements and changes in the fair value of financial instruments; and (f) expenses related to the re-audit and re-review of the Company’s historical financial statements and related matters.

    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, depreciation and merger-related expenses and deal costs of the Company’s investments and other capital transactions that were completed during the three months ended June 30, 2014, 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   138,398
    Pro forma adjustments for current period investments, capital transactions and dispositions 4,257  
    Pro forma net income for the three months ended June 30, 2014 142,655
    Add back:
    Pro forma interest 91,468
    Pro forma depreciation and amortization 192,404
    Stock-based compensation 5,367
    Gain on real estate dispositions (11,705 )
    Loss on extinguishment of debt, net 2,924
    Income from unconsolidated entities (348 )
    Noncontrolling interest 168
    Income tax expense 3,274
    Change in fair value of financial instruments 109
    Other taxes 1,303
    Pro forma merger-related expenses and deal costs 9,021  
    Adjusted Pro Forma EBITDA 436,640  
    Adjusted Pro Forma EBITDA annualized 1,746,560  
     
     
    As of June 30, 2014:
    Debt 9,602,439
    Cash, adjusted for cash escrows pertaining to debt and debt related to assets held for sale (66,214 )
    Net debt 9,536,225  
     
    Net debt to Adjusted Pro Forma EBITDA 5.5   x
     


    NON-GAAP FINANCIAL MEASURES RECONCILIATION 1, 2
    NOI by Segment
    (In thousands)
             
    2014 Quarters2013 Quarters
    SecondFirstFourthThirdSecond
    Revenues
     
    Triple-Net
    Triple-Net Rental Income $ 242,726 $ 237,846 $ 232,873 $ 218,698 $ 213,171
     
    Medical Office Buildings
    Medical Office - Stabilized 101,795 101,259 100,492 101,023 95,050
    Medical Office - Lease up 6,839 7,324 7,529 7,213 8,719
    Medical Office - Other 6,256   6,640   6,614   6,543   6,508
    Total Medical Office Buildings - Rental Income 114,890   115,223   114,635   114,779   110,277
    Total Rental Income 357,616 353,069 347,508 333,477 323,448
     
    Medical Office Building Services Revenue 2,722   4,652   4,851   2,530   2,159
    Total Medical Office Buildings - Revenue 117,612 119,875 119,486 117,309 112,436
     
    Triple-Net Services Revenue 1,145 1,148 1,127 1,116 1,115
    Non-Segment Services Revenue 500   500   500   500   263
    Total Medical Office Building and Other Services Revenue 4,367 6,300 6,478 4,146 3,537
     
    Seniors Housing Operating
    Seniors Housing - Stabilized 363,618 361,404 360,064 355,294 336,754
    Seniors Housing - Lease up 10,227 9,018 5,422 3,152 4,114
    Seniors Housing - Other 628   639   643   666   726
    Total Resident Fees and Services 374,473 371,061 366,129 359,112 341,594
     
    Non-Segment Income from Loans and Investments 14,625   10,767   12,924   14,448   14,733
    Total Revenues, excluding Interest and Other Income 751,081 741,197 733,039 711,183 683,312
     
    Property-Level Operating Expenses
     
    Medical Office Buildings
    Medical Office - Stabilized 33,641 33,545 32,296 34,646 32,119
    Medical Office - Lease up 2,733 2,783 2,620 2,830 3,101
    Medical Office - Other 2,961   3,017   3,022   3,090   2,931
    Total Medical Office Buildings 39,335 39,345 37,938 40,566 38,151
     
    Seniors Housing Operating
    Seniors Housing - Stabilized 241,380 241,298 245,404 241,319 227,907
    Seniors Housing - Lease up 7,473 6,420 4,145 2,392 2,814
    Seniors Housing - Other 571   577   574   605   616
    Total Seniors Housing 249,424   248,295   250,123   244,316   231,337
    Total Property-Level Operating Expenses 288,759 287,640 288,061 284,882 269,488
     
    Medical Office Building Services Costs 1,626 3,371 3,358 1,651 1,667
     
    Net Operating Income
     
    Triple-Net
    Triple-Net Properties 242,726 237,846 232,873 218,698 213,171
    Triple-Net Services Revenue 1,145   1,148   1,127   1,116   1,115
    Total Triple-Net 243,871 238,994 234,000 219,814 214,286
     
    Medical Office Buildings
    Medical Office - Stabilized 68,154 67,714 68,196 66,377 62,931
    Medical Office - Lease up 4,106 4,541 4,909 4,383 5,618
    Medical Office - Other 3,295 3,623 3,592 3,453 3,577
    Medical Office Buildings Services 1,096   1,281   1,493   879   492
    Total Medical Office Buildings 76,651 77,159 78,190 75,092 72,618
     
    Seniors Housing Operating
    Seniors Housing - Stabilized 122,238 120,106 114,660 113,975 108,847
    Seniors Housing - Lease up 2,754 2,598 1,277 760 1,300
    Seniors Housing - Other 57   62   69   61   110
    Total Seniors Housing 125,049 122,766 116,006 114,796 110,257
    Non-Segment 15,125   11,267   13,424   14,948   14,996
    Net Operating Income $ 460,696   $ 450,186   $ 441,620   $ 424,650   $ 412,157
     
    1 Amounts above are adjusted to exclude discontinued operations for all periods presented.
    2 Amounts above are not restated for changes between categories from quarter to quarter.
     


    NON-GAAP FINANCIAL MEASURES RECONCILIATION
    (Dollars in thousands)
     
    Total Portfolio Same-Store NOI
      For the Three Months Ended
    June 30,
    2014     2013  
     
    Net Operating Income$460,696$412,157
     
    Less:
    NOI Not Included in Same-Store 35,330 7,522
    Straight-Lining of Rental Income, Excluding Discontinued Operations 9,319 6,463
    Non-Cash Rental Income 3,629 2,924
    Non-Segment NOI 15,125   14,996  
    63,403   31,905  
     
    Same-Store Cash NOI as Reported $ 397,293   $ 380,252  
     
    Percentage Increase 4.5%
     
    Seniors Housing Operating Portfolio Same-Store U.S. NOI
     
    For the Three Months Ended
    June 30,
    2014   2013  
     
    Net Operating Income$125,049$110,257
     
    Less:
    U.S. NOI Not Included in Same-Store 11,022 1,069
    Non-Domestic NOI 5,891   7,206  
    16,913   8,275  
     
    Same-Store U.S. NOI as Reported $ 108,136   $ 101,982  
     
    Percentage Increase 6.0%
     


    NON-GAAP FINANCIAL MEASURES RECONCILIATION
    (Dollars in thousands)
     
    Seniors Housing Operating Portfolio Same-Store Stable U.S. NOI
      For the Three Months Ended
    June 30,
    2014     2013  
     
    Net Operating Income$125,049$110,257
     
    Less:
    U.S. NOI Not Included in Same-Store Stable 15,076 5,389
    Non-Domestic NOI 5,891   7,206  
    20,967   12,595  
     
    Same-Store Stable U.S. NOI as Reported $ 104,082   $ 97,662  
     
    Percentage Increase 6.6%
     


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    Ventas, Inc.

    Lori B. Wittman, (877) 4-VENTAS


    Source: Ventas, Inc.


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