Ventas : Reports 2020 Fourth Quarter and Full Year Results

Ventas, Inc. (NYSE: VTR) (“Ventas” or the “Company”) today reported results for the fourth quarter and full year ended December 31, 2020.

“During 2020, Ventas’s diverse portfolio, financial strength, experienced team, and committed operating partners enabled the Company to remain strong and stable. We are proud of our work throughout the year to prioritize health and safety and enhance our ESG profile, while continuing to advance our strategic growth objectives and delivering results ahead of expectations despite the enormous challenges posed by the COVID-19 pandemic,” said Debra A. Cafaro, Ventas Chairman and CEO. “In particular, results were bolstered by our Office and Triple-Net Healthcare businesses which continued their positive performance.”

Cafaro continued, “COVID-19 presented the most difficult clinical conditions across the country between November 2020 and through January of this year. As a result, occupancy in our Senior Housing Operating Portfolio (“SHOP”), after benefitting from steadily improving trends through October 2020, declined in the fourth quarter and into 2021, as operators experienced elevated move-outs and limited tours and move-ins to keep residents safe.

“At the same time, virtually all of our U.S. SHOP communities have already received the first dose of the vaccine, with nearly 90 percent scheduled to receive the second dose this month, protecting vulnerable older Americans in our communities. We are grateful that approximately 30,000 residents in our SHOP communities have been vaccinated against COVID-19.

“We are pleased that clinical trends in our SHOP communities have already begun to improve significantly. Leading indicators and demand are again showing strength, with leads in January at the highest level since the beginning of the pandemic. Operators are also beginning to safely reopen communities to tours and new move-ins and to offer a richer lifestyle to benefit residents and their families.

“Over the long term, resilient demand for senior housing and the strong value proposition senior housing offers to residents and their families, together with our high quality, diversified portfolio, position Ventas favorably to deliver value to our stakeholders,” Cafaro concluded.

Full Year and Fourth Quarter 2020 Results
(per share)

		Year Ended December 31
		2020		2019		$ Change		% Change
Net Income (Loss) Attributable to Common Stockholders (“Attributable Net Income (Loss)”)		$1.17		$1.17		($0.00)		(0.4%)
Nareit FFO*		$3.37		$3.88		($0.51)		(13.1%)
Normalized FFO*		$3.32		$3.85		($0.53)		(13.8%)

		Quarter Ended December 31
		2020		2019		$ Change		% Change
Attributable Net Income (Loss)		$0.29		$0.03		$0.26		861.8%
Nareit FFO*		$0.92		$0.94		($0.02)		(2.1%)
Normalized FFO*		$0.83		$0.93		($0.10)		(10.8%)

*

This is a non-GAAP financial measure. Refer to the Non-GAAP Financial Measures Reconciliation tables at the end of this press release and our fourth quarter 2020 supplemental for additional information and a reconciliation to the most directly comparable GAAP measure.

Select 2020 Highlights

• Ensured financial strength and flexibility:
  • $3 billion year-end liquidity
  • 37 percent year-end Total Indebtedness to Gross Asset Value
  • $0.5 billion lower Net Debt at year end 2020 compared to year end 2019
  • 6.1x full year Net Debt to Adjusted Pro Forma EBITDA

• Consistently prioritized the health and safety of employees, residents, tenants and our operators and managers; served as a critical resource for information and best practices; and led our industry in providing COVID-19 testing and financial support to tenants and operators who were adversely affected by the pandemic.

• Proactively addressed the impact of the COVID-19 pandemic in our Triple-Net (“NNN”) senior housing portfolio, announcing mutually beneficial arrangements with multiple tenants, including the two largest NNN senior housing tenants: Brookdale Senior Living Inc. (“Brookdale”) and Holiday Retirement, receiving over $335 million in total up-front consideration.

• Advanced ground-up development of four Research & Innovation (“R&I”) properties containing nearly 1.5 million square feet and continued to expand Ventas’s footprint with partner Le Groupe Maurice (“LGM”), opening nearly 800 new units in two communities in Quebec.

• Received loan repayment and disposition proceeds approaching $1 billion at an average cash yield of 5.3 percent.

• Established the Company’s third-party capital platform, Ventas Investment Management (“VIM”), bringing together our preexisting and new third-party capital ventures under one umbrella. These include the Ventas Life Science and Healthcare Real Estate Fund, L.P. (the “Ventas Fund”), formed in March 2020 and our R&I development joint venture with GIC created in October 2020. VIM now has over $3 billion of assets under management.

• Expanded the Ventas Board of Directors (the “Board”) when Marguerite Nader, CEO of Equity Lifestyles, joined our diverse Board.

• Received numerous ESG recognitions, including: the 2020 Nareit Health Care “Leader in the Light” award for a fourth consecutive year; the Bloomberg Gender-Equality Index for the first time; the 2020 Dow Jones Sustainability World Index for the second consecutive year; and maintained our industry leading position in GRESB.

Fourth Quarter 2020 Property Results

					4Q20 (Quarterly Pools) Year-Over-Year Same-Store Cash NOI* Growth
			Assets		% Change
SHOP1			377		(24.7%)
NNN			362		(10.0%)
Office			357		2.9%
Total Company			1,096		(11.8%)

					4Q20 (Sequential Pools) Sequential Same-Store Cash NOI* Growth
			Assets		% Change		% Change (excl. BKD)2
SHOP1			420		13.4%
NNN			363		(52.9%)		(0.6%)
Office			362		1.5%
Total Company			1,145		(26.1%)		4.4%

*		This is a non-GAAP financial measure. Refer to the Non-GAAP Financial Measures Reconciliation tables at the end of this press release and our fourth quarter 2020 supplemental for additional information and a reconciliation to the most directly comparable GAAP measure.
1		Senior Housing Operating Portfolio (“SHOP”) Same-Store Cash NOI reflects grants received in 4Q20 under the Provider Relief Fund administered by the Department of Health and Human Services (the “HHS Grants”). The HHS Grants are recorded as a contra expense within SHOP operating expenses. HHS Grants received in the Quarterly Pools and Sequential Pools in 4Q20 are ~$33.0M and ~$34.5M, respectively.
2		Due to the material impact of the Brookdale lease modification to 3Q20 Same-Store Cash NOI, NNN and Total Same-Store growth are separately presented excluding the benefit of ~$161.5M in upfront cash consideration received in July 2020 as part of such modification.

Same Store Property Results: Fourth Quarter 2020 Compared to Third Quarter 2020

• Company sequential same-store fourth quarter cash net operating income (“NOI”) declined 26.1 percent due to the receipt of $162 million from Brookdale in connection with a lease resolution in the third quarter (the “Brookdale Consideration”). Excluding the Brookdale Consideration, Company sequential same-store fourth quarter cash NOI grew 4.4 percent, primarily as a result of the receipt in the fourth quarter of $35 million of HHS Grants, which partially mitigate COVID-19 losses incurred by our SHOP communities.

• Senior Housing Operating Portfolio (30 percent of Total Portfolio)
  • NOI: For the fourth quarter 2020, sequential same-store pool (420 assets) cash NOI increased by 13.4 percent compared to the third quarter driven by the HHS Grants.
  • Occupancy: Average occupancy declined sequentially by 90 basis points from the third quarter to the fourth quarter. Consistent with national trends, accelerating positive COVID-19 cases in November and December in Ventas communities restricted new move ins compared to the third quarter and October. In addition, move out activity also increased in the fourth quarter, and was correlated to geographies with higher COVID-19 incidence.
  • Revenues: Revenues declined sequentially by 2.9 percent as a result of occupancy declines together with heightened intentional discounting and incentives necessitated by the pandemic.
  • Operating Expenses: Operating expenses decreased $32 million sequentially. Excluding the HHS Grants, operating expenses increased approximately $3 million sequentially due to the heightened COVID-19 activity and related testing and labor costs incurred in the quarter.

• NNN Portfolio (35 percent of Total Portfolio)
  • For the fourth quarter 2020, sequential same-store pool (363 assets) cash NOI decreased 0.6 percent compared to the third quarter excluding the Brookdale Consideration. Further adjusting for a $3 million payment from a tenant received in Q3, it grew modestly.
  • Substantially all expected fourth quarter 2020 rent has been received from the Company’s NNN tenants.

• Office Portfolio (30 percent of Total Portfolio)
  • The Office portfolio grew same-store cash NOI 1.5 percent in the fourth quarter versus the third quarter 2020. Performance was led by the Company’s R&I business.
  • The Company received over 99 percent of fourth quarter 2020 rent from the Company’s Office tenants.

Recent Developments

• Expanded the Board with the appointment of Maurice Smith, President and Chief Executive Officer of Health Care Service Corporation (“HCSC”), on February 1, 2021. Smith is a national leader in healthcare, with over 25 years of experience in financial, strategic and operations leadership in the health insurance industry. HCSC is the largest customer owned health insurer in the United States, covering over 16 million members across its Blue Cross and Blue Shield health plans in five states and generating annual revenues of $46 billion.

• Paid its fourth quarter 2020 dividend of $0.45 per share on January 20, 2021 to stockholders of record on January 4, 2021.

• Closed a new four-year $2.75 billion unsecured credit facility (the “Credit Facility”). The Credit Facility was oversubscribed with strong support from 24 new and incumbent financial institutions. The Credit Facility is initially priced at 82.5 basis points over LIBOR based on the Company’s debt ratings, and the maturity date is January 2025.

• Established a Partnership with the Real Estate Executive Council’s Diversity Initiative as the “Founding Diversity Partner – Healthcare Real Estate.”

First Quarter 2021 Guidance

The Company expects the COVID-19 pandemic to continue to affect its business results in the first quarter and its trajectory and ultimate impact remain highly uncertain. The Company currently expects to report first quarter 2021 Attributable Net Income (Loss), Nareit FFO and Normalized FFO within the following ranges:

		1Q21 Guidance
		Per Share
		Low		High
Attributable Net Income (Loss)		($0.07)	-	($0.01)
Nareit FFO*		$0.55	-	$0.59
Normalized FFO*		$0.66	-	$0.71

*

This is a non-GAAP financial measure. Refer to the Non-GAAP Financial Measures Reconciliation tables at the end of this press release and our fourth quarter 2020 supplemental for additional information and a reconciliation to the most directly comparable GAAP measure.

Key assumptions underlying the fourth quarter 2020 to the first quarter 2021 Normalized FFO include, among other things, that average occupancy in the Company’s sequential same-store SHOP business declines 250 to 325 basis points in the first quarter 2021 compared to the fourth quarter 2020, and expenses remain elevated, partially offset by positive in-house rate increases in January. Other first quarter 2021 assumptions are set forth below:

		Increase / (Decrease) to Normalized FFO/sh.
		1Q21 Guidance Midpoint vs. 4Q20 Actuals
4Q20 Normalized FFO*		$0.83
HHS Grants received in 4Q20 in SHOP segment		(0.09)
Unconsolidated entities special income items**		(0.04)
		$0.70
Impact of late 4Q20 senior housing dispositions and transitions		(0.01)
NOI driven principally by SHOP ex. HHS Grants		(0.05)
HHS Grants received to date in 1Q21 in SHOP segment		0.04
1Q21 Normalized FFO* Guidance Midpoint		$0.68

*		This is a non-GAAP financial measure. Refer to the Non-GAAP Financial Measures Reconciliation tables at the end of this press release and our fourth quarter 2020 supplemental for additional information and a reconciliation to the most directly comparable GAAP measure.
**		Refers to receipt of HHS Grants and fees by our unconsolidated entities.

2021 Liquidity, G&A and Capital Activities and Expectations

• As of February 16, 2021, the Company has robust liquidity of $3.0 billion, including $2.7 billion of undrawn revolver capacity and $0.3 billion in cash and cash equivalents on hand, and no commercial paper outstanding.

• On March 15, 2021, Ventas will fully repay $400 million in outstanding aggregate principal amount of its 3.10% senior notes due January 2023, principally using cash on hand, as reflected in its February notice of redemption. The redemption includes a make whole premium of 4.88 percent, plus accrued and unpaid interest.

• The Company is targeting approximately $1.0 billion in asset dispositions across asset classes in the second half of 2021. Proceeds from dispositions are expected to be used to reduce indebtedness and to fund future growth through development and redevelopment capital expenditures of $0.5 billion, principally in the Office segment and with Le Groupe Maurice.

• Following the reduction in the corporate cost structure implemented in 2020, the Company expects full year 2021 general and administrative expenses to range from approximately $135 million to $140 million.

A presentation outlining the Company’s fourth quarter results as well as first quarter 2021 business, clinical, vaccine and operating trends is posted to the Events & Presentations section of Ventas’s website at ir.ventasreit.com/events-and-presentations.

Fourth Quarter and Full Year 2020 Results 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 [phone] (or [phone] for international callers), and the participant passcode is “Ventas.” A live webcast can be accessed from ir.ventasreit.com.

A telephonic replay will be available at [phone] (or [phone] for international callers), passcode 3749905, beginning on February 18, 2021, at approximately 1:00 p.m. Eastern Time and will remain available for 30 days. The webcast replay will be posted in the Investor Relations section of www.ventasreit.com.

About Ventas

Ventas, an S&P 500 company, operates at the intersection of two powerful and dynamic industries – healthcare and real estate. As one of the world’s foremost Real Estate Investment Trusts (REIT), we use the power of capital to unlock the value of real estate, partnering with leading care providers, developers, research and medical institutions, innovators and healthcare organizations whose success is buoyed by the demographic tailwind of an aging population. For more than twenty years, Ventas has followed a successful strategy that endures: combining a high-quality diversified portfolio of properties and capital sources to manage through cycles, working with industry leading partners, and a collaborative and experienced team focused on producing consistent growing cash flows and superior returns on a strong balance sheet, ultimately rewarding Ventas shareholders. As of December 31, 2020, Ventas owned or managed through unconsolidated real estate entities approximately 1,200 properties.

Non-GAAP Financial Measures

This press release includes certain financial performance measures not defined by generally accepted accounting principles in the Unites States (“GAAP”). Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measures are included in this press release. We believe such measures provide investors with additional information concerning our operating performance and a basis to compare our performance with the performance of other REITs. Our definitions and calculations of these non-GAAP measures may not be the same as similar measures reported by other REITs.

These non-GAAP financial measures should not be considered as alternatives to net income attributable to common stockholders (determined in accordance with GAAP) as indicators of our financial performance or as alternatives to cash flow from operating activities (determined in accordance with GAAP) as measures of our liquidity, nor are these measures necessarily indicative of sufficient cash flow to fund all of our needs.

Cautionary Statements

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 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. These forward-looking statements include, among others, statements of expectations, beliefs, future plans and strategies, anticipated results from operations and developments and other matters that are not historical facts. Forward-looking statements include, among other things, statements regarding our and our officers’ intent, belief or expectation as identified by the use of words such as “may,” “will,” “project,” “expect,” “believe,” “intend,” “anticipate,” “seek,” “target,” “forecast,” “plan,” “potential,” “estimate,” “could,” “would,” “should” and other comparable and derivative terms or the negatives thereof.

Forward-looking statements are based on management’s beliefs as well as on a number of assumptions concerning future events. You should not put undue reliance on these forward-looking statements, which are not a guarantee of performance and are subject to a number of uncertainties and other factors that could cause actual events or results to differ materially from those expressed or implied by the forward-looking statements. You are urged to carefully review the disclosures we make concerning risks and uncertainties that may affect our business and future financial performance in our filings with the Securities and Exchange Commission, including those made in the “Risk Factors” section and “Management’s Discussion & Analysis of Financial Condition and Results of Operations” section of our most recently filed Annual Report on Form 10-K. We do not undertake a duty to update these forward-looking statements, which speak only as of the date on which they are made.

Certain factors that could affect our future results and our ability to achieve our stated goals include, but are not limited to: (a) the impact of the ongoing COVID-19 pandemic on our revenue, level of profitability, liquidity and overall risk exposure and the implementation and impact of regulations related to the CARES Act and other stimulus legislation and any future COVID-19 relief measures; (b) our exposure and the exposure of our tenants, borrowers and managers to complex healthcare and other regulation and the challenges and expense associated with complying with such regulation; (c) the potential for significant general and commercial claims, legal actions, regulatory proceedings or enforcement actions that could subject us or our tenants, borrowers or managers to increased operating costs and uninsured liabilities; (d) the impact of market and general economic conditions, including economic and financial market events, or events that affect consumer confidence, our occupancy rates and resident fee revenues, and the actual and perceived state of the real estate markets and public capital markets; (e) our ability, and the ability of our tenants, borrowers and managers, to navigate the trends impacting our or their businesses and the industries in which we or they operate; (f) the risk of bankruptcy, insolvency or financial deterioration of our tenants, borrowers, managers and other obligors and our ability to foreclose successfully on the collateral securing our loans and other investments in the event of a borrower default; (g) our ability to identify and consummate future investments in healthcare assets and effectively manage our expansion opportunities and our investments in co-investment vehicles; (h) our ability to attract and retain talented employees; (i) the limitations and significant requirements imposed upon our business as a result of our status as a REIT and the adverse consequences (including the possible loss of our status as a REIT) that would result if we are not able to comply; (j) the risk of changes in healthcare law or regulation or in tax laws, guidance and interpretations, particularly as applied to REITs, that could adversely affect us or our tenants, borrowers or managers; (k) increases in the Company’s borrowing costs as a result of becoming more leveraged or as a result of changes in interest rates and phasing out of LIBOR rates; (l) our dependency on a limited number of tenants and managers for a significant portion of our revenues and operating income; (m) the adequacy of insurance coverage provided by our policies and policies maintained by our tenants, managers or other counterparties; (n) the occurrence of cyber incidents that could disrupt our operations, result in the loss of confidential information or damage our business relationships and reputation; (o) the impact of merger, acquisition and investment activity in the healthcare industry or otherwise affecting our tenants, borrowers or managers; and (p) the risk of catastrophic or extreme weather and other natural events and the physical effects of climate change.

CONSOLIDATED BALANCE SHEETS
(In thousands, except per share amounts)
		December 31,				September 30,				June 30,				March 31,				December 31,
		2020				2020				2020				2020				2019
Assets
Real estate investments:
Land and improvements		$	2,261,415			$	2,268,583			$	2,258,699			$	2,246,245			$	2,285,648
Buildings and improvements		24,323,279				24,196,730				23,964,691				23,826,989				24,386,051
Construction in progress		265,748				567,052				496,349				505,648				461,815
Acquired lease intangibles		1,230,886				1,246,312				1,242,414				1,243,571				1,308,077
Operating lease assets		346,372				386,946				389,302				391,908				385,225
		28,427,700				28,665,623				28,351,455				28,214,361				28,826,816
Accumulated depreciation and amortization		(7,877,665		)		(7,687,211		)		(7,453,251		)		(7,241,597		)		(7,092,243		)
Net real estate property		20,550,035				20,978,412				20,898,204				20,972,764				21,734,573
Secured loans receivable and investments, net		605,567				604,452				681,831				623,716				704,612
Investments in unconsolidated real estate entities		443,688				162,860				166,039				165,745				45,022
Net real estate investments		21,599,290				21,745,724				21,746,074				21,762,225				22,484,207
Cash and cash equivalents		413,327				588,343				992,824				2,848,115				106,363
Escrow deposits and restricted cash		38,313				40,147				36,312				38,144				39,739
Goodwill		1,051,650				1,050,742				1,050,115				1,050,137				1,051,161
Assets held for sale		9,608				15,748				76,021				69,199				85,527
Deferred income tax assets, net		9,987				304				304				47,495				47,495
Other assets		807,229				779,475				687,738				802,513				877,716
Total assets		$	23,929,404			$	24,220,483			$	24,589,388			$	26,617,828			$	24,692,208
Liabilities and equity
Liabilities:
Senior notes payable and other debt		$	11,895,412			$	12,047,919			$	12,530,036			$	14,172,279			$	12,158,773
Accrued interest		111,444				97,828				117,687				87,245				111,115
Operating lease liabilities		209,917				247,255				248,912				250,357				251,196
Accounts payable and other liabilities		1,133,066				1,234,933				998,446				1,141,551				1,145,939
Liabilities related to assets held for sale		3,246				1,987				5,514				4,765				5,224
Deferred income tax liabilities		62,638				53,711				56,963				47,533				200,831
Total liabilities		13,415,723				13,683,633				13,957,558				15,703,730				13,873,078
Redeemable OP unitholder and noncontrolling interests		235,490				249,143				231,920				197,701				273,678
Commitments and contingencies
Equity:
Ventas stockholders’ equity:
Preferred stock, $1.00 par value; 10,000 shares authorized, unissued		—				—				—				—				—
Common stock, $0.25 par value; 374,609; 373,940; 373,113; 373,094; and 372,811; shares issued at December 31, 2020, September 30, 2020, June 30, 2020, March 31, 2020, and December 31, 2019, respectively		93,635				93,467				93,261				93,256				93,185
Capital in excess of par value		14,171,262				14,142,349				14,118,119				14,135,657				14,056,453
Accumulated other comprehensive loss		(54,354		)		(65,042		)		(82,761		)		(103,408		)		(34,564		)
Retained earnings (deficit)		(4,030,376		)		(3,972,647		)		(3,816,460		)		(3,491,696		)		(3,669,050		)
Treasury stock, 0; 33; 24; 22; and 2 shares at December 31, 2020, September 30, 2020, June 30, 2020, March 31, 2020, and December 31, 2019, respectively		—				(1,275		)		(947		)		(867		)		(132		)
Total Ventas stockholders’ equity		10,180,167				10,196,852				10,311,212				10,632,942				10,445,892
Noncontrolling interests		98,024				90,855				88,698				83,455				99,560
Total equity		10,278,191				10,287,707				10,399,910				10,716,397				10,545,452
Total liabilities and equity		$	23,929,404			$	24,220,483			$	24,589,388			$	26,617,828			$	24,692,208

CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
		For the Three Months Ended								For the Years Ended
		December 31,								December 31,
		2020				2019				2020				2019
Revenues
Rental income:
Triple-net leased		$	168,027			$	191,065			$	695,265			$	780,898
Office		199,931				210,423				799,627				828,978
		367,958				401,488				1,494,892				1,609,876
Resident fees and services		529,739				568,271				2,197,160				2,151,533
Office building and other services revenue		4,522				2,988				15,191				11,156
Income from loans and investments		18,302				22,382				80,505				89,201
Interest and other income		644				875				7,609				10,984
Total revenues		921,165				996,004				3,795,357				3,872,750
Expenses
Interest		114,208				116,707				469,541				451,662
Depreciation and amortization		261,966				348,910				1,109,763				1,045,620
Property-level operating expenses:
Senior living		393,309				405,564				1,658,671				1,521,398
Office		64,420				68,277				256,612				260,249
Triple-net leased		5,156				6,469				22,160				26,561
		462,885				480,310				1,937,443				1,808,208
Office building services costs		488				544				2,315				2,319
General, administrative and professional fees		29,537				39,621				130,158				158,726
Loss on extinguishment of debt, net		3,405				39				10,791				41,900
Merger-related expenses and deal costs		3,683				4,151				29,812				15,235
Allowance on loans receivable and investments		(10,416		)		—				24,238				—
Other		(16,043		)		(6,309		)		707				(10,339		)
Total expenses		849,713				983,973				3,714,768				3,513,331
Income before unconsolidated entities, real estate dispositions, income taxes and noncontrolling interests		71,452				12,031				80,589				359,419
Income (loss) from unconsolidated entities		17,705				167				1,844				(2,454		)
Gain on real estate dispositions		22,117				1,389				262,218				26,022
Income tax benefit (expense)		679				(694		)		96,534				56,310
Income from continuing operations		111,953				12,893				441,185				439,297
Net income		111,953				12,893				441,185				439,297
Net income attributable to noncontrolling interests		1,502				1,450				2,036				6,281
Net income attributable to common stockholders		$	110,451			$	11,443			$	439,149			$	433,016
Earnings per common share
Basic:
Income from continuing operations		$	0.30			$	0.03			$	1.18			$	1.20
Net income attributable to common stockholders		0.29				0.03				1.18				1.18
Diluted:
Income from continuing operations		$	0.30			$	0.03			$	1.17			$	1.19
Net income attributable to common stockholders		0.29				0.03				1.17				1.17
Weighted average shares used in computing earnings per common share
Basic		374,473				372,663				373,368				365,977
Diluted		377,696				376,453				376,503				369,886

QUARTERLY CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
		For the Three Months Ended
		December 31,				September 30,				June 30,				March 31,				December 31,
		2020				2020				2020				2020				2019
Revenues
Rental income:
Triple-net leased		$	168,027			$	156,136			$	176,240			$	194,862			$	191,065
Office		199,931				198,376				192,925				208,395				210,423
		367,958				354,512				369,165				403,257				401,488
Resident fees and services		529,739				541,322				549,329				576,770				568,271
Office building and other services revenue		4,522				3,868				3,673				3,128				2,988
Income from loans and investments		18,302				18,666				19,491				24,046				22,382
Interest and other income		644				572				1,540				4,853				875
Total revenues		921,165				918,940				943,198				1,012,054				996,004
Expenses
Interest		114,208				115,505				123,132				116,696				116,707
Depreciation and amortization		261,966				249,366				349,594				248,837				348,910
Property-level operating expenses:
Senior living		393,309				422,653				432,578				410,131				405,564
Office		64,420				66,934				60,752				64,506				68,277
Triple-net leased		5,156				5,398				5,275				6,331				6,469
		462,885				494,985				498,605				480,968				480,310
Office building services costs		488				557				543				727				544
General, administrative and professional fees		29,537				32,081				28,080				40,460				39,621
Loss on extinguishment of debt, net		3,405				7,386				—				—				39
Merger-related expenses and deal costs		3,683				11,325				6,586				8,218				4,151
Allowance on loans receivable and investments		(10,416		)		4,999				29,655				—				—
Other		(16,043		)		5,681				5,286				5,783				(6,309		)
Total expenses		849,713				921,885				1,041,481				901,689				983,973
Income (loss) before unconsolidated entities, real estate dispositions, income taxes and noncontrolling interests		71,452				(2,945		)		(98,283		)		110,365				12,031
Income (loss) from unconsolidated entities		17,705				865				(5,850		)		(10,876		)		167
Gain on real estate dispositions		22,117				12,622				1,254				226,225				1,389
Income tax benefit (expense)		679				3,195				(56,356		)		149,016				(694		)
Income (loss) from continuing operations		111,953				13,737				(159,235		)		474,730				12,893
Net income (loss)		111,953				13,737				(159,235		)		474,730				12,893
Net income (loss) attributable to noncontrolling interests		1,502				986				(2,065		)		1,613				1,450
Net income (loss) attributable to common stockholders		$	110,451			$	12,751			$	(157,170	)		$	473,117			$	11,443
Earnings per common share
Basic:
Income (loss) from continuing operations		$	0.30			$	0.04			$	(0.43	)		$	1.27			$	0.03
Net income (loss) attributable to common stockholders		0.29				0.03				(0.42		)		1.27				0.03
Diluted:1
Income (loss) from continuing operations		$	0.30			$	0.04			$	(0.43	)		$	1.26			$	0.03
Net income (loss) attributable to common stockholders		0.29				0.03				(0.42		)		1.26				0.03
Weighted average shares used in computing earnings per common share
Basic		374,473				373,177				372,982				372,829				372,663
Diluted		377,696				376,295				376,024				375,997				376,453

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 Years Ended December 31,
		2020				2019
Cash flows from operating activities:
Net income		$	441,185			$	439,297
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		1,109,763				1,045,620
Amortization of deferred revenue and lease intangibles, net		(40,856		)		(7,967		)
Other non-cash amortization		20,719				22,985
Allowance on loans receivable and investments		24,238				—
Stock-based compensation		21,487				33,923
Straight-lining of rental income		103,082				(30,073		)
Loss on extinguishment of debt, net		10,791				41,900
Gain on real estate dispositions		(262,218		)		(26,022		)
Gain on real estate loan investments		(167		)		—
Income tax benefit		(101,985		)		(58,918		)
(Income) loss from unconsolidated entities		(1,832		)		2,464
Distributions from unconsolidated entities		4,920				1,600
Other		(779		)		13,264
Changes in operating assets and liabilities:
Increase in other assets		(68,233		)		(76,693		)
Increase in accrued interest		276				9,737
Increase in accounts payable and other liabilities		189,785				26,666
Net cash provided by operating activities		1,450,176				1,437,783
Cash flows from investing activities:
Net investment in real estate property		(78,648		)		(958,125		)
Investment in loans receivable		(115,163		)		(1,258,187		)
Proceeds from real estate disposals		1,044,357				147,855
Proceeds from loans receivable		119,011				1,017,309
Development project expenditures		(380,413		)		(403,923		)
Capital expenditures		(148,234		)		(156,724		)
Distributions from unconsolidated entities		—				172
Investment in unconsolidated entities		(286,822		)		(3,855		)
Insurance proceeds for property damage claims		207				30,179
Net cash provided by (used in) investing activities		154,295				(1,585,299		)
Cash flows from financing activities:
Net change in borrowings under revolving credit facilities		(88,868		)		(569,891		)
Net change in borrowings under commercial paper program		(565,524		)		565,524
Proceeds from debt		733,298				3,013,191
Repayment of debt		(479,539		)		(2,623,916		)
Purchase of noncontrolling interests		(8,239		)		—
Payment of deferred financing costs		(8,379		)		(21,403		)
Issuance of common stock, net		55,362				942,085
Cash distribution to common stockholders		(928,809		)		(1,157,720		)
Cash distribution to redeemable OP unitholders		(7,283		)		(9,218		)
Cash issued for redemption of OP Units		(575		)		(2,203		)
Contributions from noncontrolling interests		1,314				6,282
Distributions to noncontrolling interests		(12,946		)		(9,717		)
Proceeds from stock option exercises		15,103				36,179
Other		(4,936		)		(8,519		)
Net cash (used in) provided by financing activities		(1,300,021		)		160,674
Net increase in cash, cash equivalents and restricted cash		304,450				13,158
Effect of foreign currency translation		1,088				1,480
Cash, cash equivalents and restricted cash at beginning of period		146,102				131,464
Cash, cash equivalents and restricted cash at end of period		$	451,640			$	146,102
Supplemental schedule of non-cash activities:
Assets acquired and liabilities assumed from acquisitions and other:
Real estate investments		$	170,484			$	1,057,138
Other assets		1,224				11,140
Debt		55,368				907,746
Other liabilities		2,707				47,121
Deferred income tax liability		337				95
Noncontrolling interests		20,259				113,316
Equity issued for redemption of OP Units		—				127

QUARTERLY CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
		For the Three Months Ended
		December 31,				September 30,				June 30,				March 31,				December 31,
		2020				2020				2020				2020				2019
Cash flows from operating activities:
Net income (loss)		$	111,953			$	13,737			$	(159,235	)		$	474,730			$	12,893
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		261,966				249,366				349,594				248,837				348,910
Amortization of deferred revenue and lease intangibles, net		(15,513		)		(19,009		)		(3,361		)		(2,973		)		(1,483		)
Other non-cash amortization		5,508				5,558				5,802				3,851				6,075
Allowance on loans receivable and investments		(10,416		)		4,999				29,655				—				—
Stock-based compensation		4,165				5,765				1,043				10,514				7,253
Straight-lining of rental income		(4,052		)		15,635				98,287				(6,788		)		(4,393		)
Loss on extinguishment of debt, net		3,405				7,386				—				—				39
Gain on real estate dispositions		(22,117		)		(12,622		)		(1,254		)		(226,225		)		(1,389		)
Gain on real estate loan investments		—				—				—				(167		)		—
Income tax (benefit) expense		(2,283		)		(4,575		)		55,146				(150,273		)		1,331
(Income) loss from unconsolidated entities		(17,701		)		(865		)		5,858				10,876				(157		)
Distributions from unconsolidated entities		1,960				1,360				—				1,600				200
Other		(16,394		)		2,859				8,951				3,805				4,028
Changes in operating assets and liabilities:
(Increase) decrease in other assets		(5		)		(55,765		)		1,305				(13,768		)		(17,327		)
Increase (decrease) in accrued interest		13,251				(20,069		)		30,126				(23,032		)		25,646
(Decrease) increase in accounts payable and other liabilities		(17,964		)		240,642				(16,358		)		(16,535		)		(27,391		)
Net cash provided by operating activities		295,763				434,402				405,559				314,452				354,235
Cash flows from investing activities:
Net investment in real estate property		(1,023		)		(156		)		2,070				(79,539		)		(18,320		)
Investment in loans receivable		(2,016		)		(45,857		)		(66,239		)		(1,051		)		(610		)
Proceeds from real estate disposals		361,753				54,800				2,365				625,439				70,300
Proceeds from loans receivable		12,045				191				7,658				99,117				8,626
Development project expenditures		(70,446		)		(129,569		)		(86,169		)		(94,229		)		(174,078		)
Capital expenditures		(53,827		)		(40,888		)		(26,730		)		(26,789		)		(56,937		)
Distributions from unconsolidated entities		—				—				—				—				21
Investment in unconsolidated entities		(278,990		)		33				(2,056		)		(5,809		)		(2,144		)
Insurance proceeds (expense) for property damage claims		174				(9		)		—				42				9,722
Net cash (used in) provided by investing activities		(32,330		)		(161,455		)		(169,101		)		517,181				(163,420		)
Cash flows from financing activities:
Net change in borrowings under revolving credit facilities		(14,724		)		(539,560		)		(2,296,737		)		2,762,153				(848,568		)
Net change in borrowings under commercial paper program		—				—				—				(565,524		)		261,016
Proceeds from debt		75,741				17,024				557,774				82,759				806,614
Repayment of debt		(352,011		)		(16,227		)		(48,328		)		(62,973		)		(167,781		)
Purchase of noncontrolling interests		(8,239		)		—				—				—				—
Payment of deferred financing costs		(815		)		(15		)		(5,586		)		(1,963		)		(3,536		)
Issuance of common stock, net		18,967				36,395				—				—				(165		)
Cash distribution to common stockholders		(168,446		)		(168,078		)		(295,981		)		(296,304		)		(295,931		)
Cash distribution to redeemable OP unitholders		(1,329		)		(1,326		)		(2,303		)		(2,325		)		(2,336		)
Cash issued for redemption of OP Units		—				(5		)		—				(570		)		(1,842		)
Contributions from noncontrolling interests		176				792				191				155				1,323
Distributions to noncontrolling interests		(3,280		)		(3,373		)		(3,750		)		(2,543		)		(3,314		)
Proceeds from stock option exercises		11,585				—				129				3,389				2,045
Other		53				(98		)		63				(4,954		)		(1,918		)
Net cash (used in) provided by financing activities		(442,322		)		(674,471		)		(2,094,528		)		1,911,300				(254,393		)
Net (decrease) increase in cash, cash equivalents and restricted cash		(178,889		)		(401,524		)		(1,858,070		)		2,742,933				(63,578		)
Effect of foreign currency translation		2,039				878				947				(2,776		)		1,084
Cash, cash equivalents and restricted cash at beginning of period		628,490				1,029,136				2,886,259				146,102				208,596
Cash, cash equivalents and restricted cash at end of period		$	451,640			$	628,490			$	1,029,136			$	2,886,259			$	146,102
Supplemental schedule of non-cash activities:
Assets acquired and liabilities assumed from acquisitions and other:
Real estate investments		$	1,000			$	92,373			$	76,578			$	533			$	657
Other assets		—				610				558				56				17
Debt		—				—				55,368				—				—
Other liabilities		—				610				1,699				398				785
Deferred income tax liability		—				337				—				—				95
Noncontrolling interests		—				—				20,068				191				(206		)
Equity issued for redemption of OP Units		—				—				—				—				127

NON-GAAP FINANCIAL MEASURES RECONCILIATION
Funds From Operations Attributable to Common Stockholders (FFO)1
and Funds Available for Distribution Attributable to Common Stockholders (FAD)1
(Dollars in thousands, except per share amounts)
																							FY YoY
		2019						2020															Growth
		Q4			FY			Q1			Q2			Q3			Q4			FY			19-'20
Net income (loss) attributable to common stockholders		$	11,443		$	433,016		$	473,117		$	(157,170	)	$	12,751		$	110,451		$	439,149		1	%
Net income (loss) attributable to common stockholders per share2		$	0.03		$	1.17		$	1.26		$	(0.42	)	$	0.03		$	0.29		$	1.17		—	%
Adjustments:
Depreciation and amortization on real estate assets		347,371			1,039,550			247,330			348,110			247,969			260,705			1,104,114
Depreciation on real estate assets related to noncontrolling interests		(3,682		)	(9,762		)	(3,843		)	(4,068		)	(4,475		)	(4,381		)	(16,767		)
Depreciation on real estate assets related to unconsolidated entities		311			187			561			1,307			1,360			1,758			4,986
Gain on real estate dispositions		(1,389		)	(26,022		)	(226,225		)	(1,254		)	(12,622		)	(22,117		)	(262,218		)
(Loss) gain on real estate dispositions related to noncontrolling interests		(11		)	343			(6		)	(3		)	—			—			(9		)
Gain on real estate dispositions related to unconsolidated entities		(395		)	(1,263		)	—			—			—			—			—
Subtotal: FFO add-backs		342,205			1,003,033			17,817			344,092			232,232			235,965			830,106
Subtotal: FFO add-backs per share		$	0.91		$	2.71		$	0.05		$	0.92		$	0.62		$	0.62		$	2.20
FFO (Nareit) attributable to common stockholders		$	353,648		$	1,436,049		$	490,934		$	186,922		$	244,983		$	346,416		$	1,269,255		(12	%)
FFO (Nareit) attributable to common stockholders per share		$	0.94		$	3.88		$	1.31		$	0.50		$	0.65		$	0.92		$	3.37		(13	%)
Adjustments:
Change in fair value of financial instruments		(22		)	(78		)	(10		)	(13		)	1,157			(23,062		)	(21,928		)
Non-cash income tax expense (benefit)		1,330			(58,918		)	(140,895		)	55,505			(4,763		)	(7,961		)	(98,114		)
Loss on extinguishment of debt, net		39			41,900			—			—			7,386			3,405			10,791
Loss (gain) on non-real estate dispositions related to unconsolidated entities		19			(18		)	239			—			(244		)	(592		)	(597		)
Merger-related expenses, deal costs and re-audit costs		5,089			18,208			8,773			6,605			12,793			6,519			34,690
Amortization of other intangibles		121			484			118			118			118			118			472
Other items related to unconsolidated entities		374			3,291			(875		)	(263		)	290			234			(614		)
Non-cash impact of changes to equity plan		1,165			7,812			6,895			(3,337		)	(1,923		)	(2,087		)	(452		)
Natural disaster (recoveries) expenses, net		(10,704		)	(25,683		)	941			252			125			(71		)	1,247
Impact of Holiday lease termination		—			—			—			(50,184		)	—			—			(50,184		)
Write-off of straight-line rental income, net of noncontrolling interests		—			—			—			52,368			18,408			87			70,863
Allowance on loan investments and impairment of unconsolidated entities, net of noncontrolling interests		—			—			—			40,320			4,635			(10,412		)	34,543
Subtotal: normalized FFO add-backs		(2,589		)	(13,002		)	(124,814		)	101,371			37,982			(33,822		)	(19,283		)
Subtotal: normalized FFO add-backs per share		$	(0.01	)	$	(0.04	)	$	(0.33	)	$	0.27		$	0.10		$	(0.09	)	$	(0.05	)
Normalized FFO attributable to common stockholders		$	351,059		$	1,423,047		$	366,120		$	288,293		$	282,965		$	312,594		$	1,249,972		(12	%)
Normalized FFO attributable to common stockholders per share		$	0.93		$	3.85		$	0.97		$	0.77		$	0.75		$	0.83		$	3.32		(14	%)
Non-cash items included in normalized FFO:
Amortization of deferred revenue and lease intangibles, net		(1,483		)	(7,967		)	(2,973		)	(3,362		)	(19,009		)	(15,513		)	(40,857		)
Other non-cash amortization, including fair market value of debt		6,075			22,985			3,851			5,803			5,558			5,508			20,720
Stock-based compensation		6,088			26,111			3,619			4,380			7,688			6,252			21,939
Straight-lining of rental income		(4,393		)	(30,073		)	(6,788		)	(5,526		)	(4,648		)	(4,052		)	(21,014		)
Subtotal: non-cash items included in normalized FFO		6,287			11,056			(2,291		)	1,295			(10,411		)	(7,805		)	(19,212		)
Cash impact of Brookdale lease modification		—			—			—			—			161,533			—			161,533
Cash impact of Holiday lease termination		—			—			—			33,795			—			—			33,795
FAD Capital Expenditures3		(55,400		)	(152,582		)	(24,972		)	(26,102		)	(39,955		)	(52,645		)	(143,674		)
Normalized FAD attributable to common stockholders		$	301,946		$	1,281,521		$	338,857		$	297,281		$	394,132		$	252,144		$	1,282,414		0	%
Merger-related expenses, deal costs and re-audit costs		(5,089		)	(18,208		)	(8,773		)	(6,605		)	(12,793		)	(6,519		)	(34,690		)
Other items related to unconsolidated entities		(374		)	(3,291		)	875			263			(290		)	(234		)	614
FAD attributable to common stockholders		$	296,483		$	1,260,022		$	330,959		$	290,939		$	381,049		$	245,391		$	1,248,338		(1	%)
Weighted average diluted shares		376,453			369,886			375,997			376,024			376,295			377,696			376,503

1		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. 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 diluted earnings per share when a loss from continuing operations exists, as the effect would be an antidilutive per share amount.
3		2019 FAD Capital Expenditures have been updated to exclude the impact of Initial Capital Expenditures. Impact on reported values are as follows: Q4 2019 ($1.5M) and FY 2019 ($4.1M).

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 entities. Adjustments for unconsolidated partnerships and entities 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, re-audit costs and 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
FFO Attributable to Common Stockholders Q1 2021 Guidance1,2
(Dollars in millions, except per share amounts)
		Q1 2021 Guidance
		Tentative / Preliminary and Subject to Change
		Q1 2021 - Guidance						Q1 2021 - Per Share
		Low			High			Low			High
Net Income Attributable to Common Stockholders		($27	)		($4	)		($0.07	)		($0.01	)
Depreciation and Amortization Adjustments		236			230			0.63			0.61
Gain on Real Estate Dispositions		(2	)		(2	)		(0.01	)		(0.00	)
Other Adjustments 3		(0	)		(0	)		(0.00	)		(0.00	)
FFO (Nareit) Attributable to Common Stockholders		$207			$224			$0.55			$0.59
Merger-Related Expenses, Deal Costs and Re-Audit Costs		5			6			0.01			0.02
Natural Disaster Expenses (Recoveries), Net		—			—			0.00			0.00
Other Adjustments 3		38			38			0.10			0.10
Normalized FFO Attributable to Common Stockholders		$250			$268			$0.66			$0.71
% Year-Over-Year Growth								(32	%)		(27	%)
Weighted Average Diluted Shares (in millions)		378			378

1		The Company’s guidance constitutes forward-looking statements within the meaning of the federal securities laws and is based on a number of assumptions that are subject to change and many of which are outside the control of the Company. Actual results may differ materially from the Company’s expectations depending on factors discussed in this press release and the Company’s filings with the Securities and Exchange Commission.
2		Per share quarterly amounts may not add to annual per share amounts due to changes in the Company's weighted average diluted share count, if any.
3		Other Adjustments include the categories of adjustments presented in our “Non-GAAP Financial Measures Reconciliation – Funds From Operations Attributable to Common Stockholders (FFO) and Funds Available for Distribution Attributable to Common Stockholders (FAD)” above.

NON-GAAP FINANCIAL MEASURES RECONCILIATION
Net Debt to Adjusted Pro Forma EBITDA1
(Dollars in thousands)
		For the Year Ended				For the Three Months Ended
		December 31, 2020				December 31, 2020				September 30, 2020
Net income attributable to common stockholders		$	439,149			$	110,451			$	12,751
Adjustments:
Interest		469,541				114,208				115,505
Loss on extinguishment of debt, net		10,791				3,405				7,386
Taxes (including tax amounts in general, administrative and professional fees)		(91,389		)		667				(1,849		)
Depreciation and amortization		1,109,763				261,966				249,366
Non-cash stock-based compensation expense		21,487				4,165				5,765
Merger-related expenses, deal costs and re-audit costs		29,811				3,683				11,325
Net income attributable to noncontrolling interests, adjusted for partners’ share of consolidated entity EBITDA		(24,381		)		(6,285		)		(6,359		)
Loss from unconsolidated entities, adjusted for Ventas share of EBITDA from unconsolidated entities		59,631				8,982				11,811
Gain on real estate dispositions		(262,218		)		(22,117		)		(12,622		)
Unrealized foreign currency gains		(439		)		(184		)		(146		)
Change in fair value of financial instruments		(21,928		)		(23,061		)		1,155
Natural disaster expenses (recoveries), net		1,203				41				181
Write-off of straight-line rental income from Holiday lease termination		49,611				—				—
Write-off of straight-line rental income, net of noncontrolling interests		70,863				87				18,408
Allowance on loan investments and impairment of unconsolidated entities, net of noncontrolling interests		23,879				(10,411		)		4,635
Adjusted EBITDA		$	1,885,374			$	445,597			$	417,312
Adjustments for current period activity		(7,442		)		(7,051		)		(1,385		)
Adjusted Pro Forma EBITDA		$	1,877,932			$	438,546			$	415,927
Adjusted Pro Forma EBITDA annualized						$	1,754,184			$	1,663,708
Total debt		$	11,895,412			$	11,895,412			$	12,047,919
Debt on assets held for sale		2,634				2,634				—
Cash		(413,327		)		(413,327		)		(588,343		)
Restricted cash pertaining to debt		(20,477		)		(20,477		)		(21,021		)
Partners’ share of consolidated debt		(271,557		)		(271,557		)		(259,994		)
Ventas share of non-consolidated debt		213,013				213,013				120,807
Net debt		$	11,405,698			$	11,405,698			$	11,299,368
Net debt to Adjusted Pro Forma EBITDA			6.1	x			6.5	x			6.8	x

1

Totals may not add due to rounding.

The table above illustrates net debt to adjusted 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, partners’ share of EBITDA of consolidated entities, 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 leases, and including (a) Ventas’ share of EBITDA from unconsolidated entities and (b) 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 and year ended December 31, 2020 and the three months ended September 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 (Constant Currency)
(Dollars in thousands)
For the Three Months Ended December 31, 2020 and 2019
	Triple-Net			Senior Housing Operating			Office			Non-Segment			Total
For the Three Months Ended December 31, 2020
Net income attributable to common stockholders													$	110,451
Adjustments:
Interest and other income													(644		)
Interest expense													114,208
Depreciation and amortization													261,966
General, administrative and professional fees													29,537
Loss on extinguishment of debt, net													3,405
Merger-related expenses and deal costs													3,683
Allowance on loans receivable and investments													(10,416		)
Other													(16,043		)
Income from unconsolidated entities													(17,705		)
Gain on real estate dispositions													(22,117		)
Income tax benefit													(679		)
Net income attributable to noncontrolling interests													1,502
Reported segment NOI	$	162,871		$	136,430		$	136,827		$	21,020		$	457,148
Adjustments to Cash NOI:
Straight-lining of rental income	(1,879		)	—			(2,272		)	—			(4,151		)
Non-cash rental income	(12,707		)	—			(2,390		)	—			(15,097		)
Write-off of straight-line rental income	14			—			85			—			99
NOI not included in cash NOI1	(2,675		)	253			(1,247		)	—			(3,669		)
Non-segment NOI	—			—			—			(21,020		)	(21,020		)
Cash NOI	145,624			136,683			131,003			—			413,310
Adjustments to Same-store NOI:
Cash NOI not included in same-store	(1,416		)	(15,940		)	(4,912		)	—			(22,268		)
Same-store cash NOI (constant currency)	$	144,208		$	120,743		$	126,091		$	—		$	391,042
Percentage (decrease) increase	(10.0		%)	(24.7		%)	2.9		%				(11.8		%)

For the Three Months Ended December 31, 2019
Net income attributable to common stockholders													$	11,443
Adjustments:
Interest and other income													(875		)
Interest expense													116,707
Depreciation and amortization													348,910
General, administrative and professional fees													39,621
Loss on extinguishment of debt, net													39
Merger-related expenses and deal costs													4,151
Other													(6,309		)
Income from unconsolidated entities													(167		)
Gain on real estate dispositions													(1,389		)
Income tax expense													694
Net income attributable to noncontrolling interests													1,450
Reported segment NOI	$	184,596		$	162,707		$	143,664		$	23,308		$	514,275
Adjustments to Cash NOI:
Straight-lining of rental income	(112		)	—			(4,281		)	—			(4,393		)
Non-cash rental income	(364		)	—			(762		)	—			(1,126		)
Cash modification fees	—			—			(180		)	—			(180		)
NOI not included in cash NOI1	(23,601		)	11			(11,713		)	—			(35,303		)
Non-segment NOI	—			—			—			(23,308		)	(23,308		)
NOI impact from change in FX	155			516			—			—			671
Cash NOI	$	160,674		$	163,234		$	126,728		$	—		$	450,636
Adjustments to Same-store NOI:
Cash NOI not included in same-store	(399		)	(2,776		)	(4,237		)	—			(7,412		)
NOI impact from change in FX not in same-store	—			(13		)	—			—			(13		)
Same-store cash NOI (constant currency)	$	160,275		$	160,445		$	122,491		$	—		$	443,211

1

Excludes sold assets, Assets Held for Sale, development properties not yet operational and land parcels.

For the Three Months Ended December 31, 2020 and September 30, 2020
	Triple-Net			Senior Housing Operating			Office			Non-Segment			Total
For the Three Months Ended December 31, 2020
Net income attributable to common stockholders													$	110,451
Adjustments:
Interest and other income													(644		)
Interest expense													114,208
Depreciation and amortization													261,966
General, administrative and professional fees													29,537
Loss on extinguishment of debt, net													3,405
Merger-related expenses and deal costs													3,683
Allowance on loans receivable and investments													(10,416		)
Other													(16,043		)
Income from unconsolidated entities													(17,705		)
Gain on real estate dispositions													(22,117		)
Income tax benefit													(679		)
Net income attributable to noncontrolling interests													1,502
Reported segment NOI	$	162,871		$	136,430		$	136,827		$	21,020		$	457,148
Adjustments to Cash NOI:
Straight-lining of rental income	(1,879		)	—			(2,272		)	—			(4,151		)
Non-cash rental income	(12,707		)	—			(2,390		)	—			(15,097		)
Write-off of straight-line rental income	14			—			85			—			99
NOI not included in cash NOI1	(2,675		)	253			(1,247		)	—			(3,669		)
Non-segment NOI	—			—			—			(21,020		)	(21,020		)
Cash NOI	145,624			136,683			131,003			—			413,310
Adjustments to Same-store NOI:
Cash NOI not included in same-store	(896		)	(865		)	(3,209		)	—			(4,970		)
Same-store cash NOI (constant currency)	$	144,728		$	135,818		$	127,794		$	—		$	408,340
Percentage (decrease) increase	(52.9		%)	13.4		%	1.5		%				(26.1		%)
Adjusted percentage (decrease) increase - constant currency	(0.6		%)	13.4		%	1.5		%				4.4		%
For the Three Months Ended September 30, 2020
Net income attributable to common stockholders													$	12,751
Adjustments:
Interest and other income													(572		)
Interest expense													115,505
Depreciation and amortization													249,366
General, administrative and professional fees													32,081
Loss on extinguishment of debt, net													7,386
Merger-related expenses and deal costs													11,325
Allowance on loans receivable and investments													4,999
Other													5,681
Income from unconsolidated entities													(865		)
Gain on real estate dispositions													(12,622		)
Income tax benefit													(3,195		)
Net income attributable to noncontrolling interests													986
Reported segment NOI	$	150,738		$	118,669		$	133,325		$	20,094		$	422,826
Adjustments to Cash NOI:
Straight-lining of rental income	(2,072		)	—			(2,576		)	—			(4,648		)
Non-cash rental income	(12,687		)	—			(5,936		)	—			(18,623		)
Cash impact of Brookdale lease modification	161,533			—			—			—			161,533
Write-off of straight-line rental income	14,312			—			5,970			—			20,282
NOI not included in cash NOI1	(4,581		)	556			(1,708		)	—			(5,733		)
Non-segment NOI	—			—			—			(20,094		)	(20,094		)
NOI impact from change in FX	143			885			—			—			1,028
Cash NOI	$	307,386		$	120,110		$	129,075		$	—		$	556,571
Adjustments to Same-store NOI:
Cash NOI not included in same-store	(299		)	(274		)	(3,128		)	—			(3,701		)
NOI impact from change in FX not in same-store	—			(41		)	—			—			(41		)
Same-store cash NOI (constant currency)	$	307,087		$	119,795		$	125,947		$	—		$	552,829
Adjusted Same-store cash NOI:
Less cash impact of Brookdale lease modification	(161,533		)	—			—			—			(161,533		)
Adjusted Same-store cash NOI - constant currency	$	145,554		$	119,795		$	125,947		$	—		$	391,296

1

Excludes sold assets, Assets Held for Sale, development properties not yet operational and land parcels.

For the Year Ended December 31, 2020 and 2019
	Triple-Net			Senior Housing Operating			Office			Non-Segment			Total
For the Year Ended December 31, 2020
Net income attributable to common stockholders													$	439,149
Adjustments:
Interest and other income													(7,609		)
Interest expense													469,541
Depreciation and amortization													1,109,763
General, administrative and professional fees													130,158
Loss on extinguishment of debt, net													10,791
Merger-related expenses and deal costs													29,812
Allowance on loans receivable and investments													24,238
Other													707
Income from unconsolidated entities													(1,844		)
Gain on real estate dispositions													(262,218		)
Income tax benefit													(96,534		)
Net income attributable to noncontrolling interests													2,036
Reported segment NOI	$	673,105		$	538,489		$	549,375		$	87,021		$	1,847,990
Adjustments to Cash NOI:
Straight-lining of rental income	(8,833		)	—			(12,286		)	—			(21,119		)
Non-cash rental income	(28,726		)	—			(10,668		)	—			(39,394		)
Cash modification fees	3,029			—			(1,000		)	—			2,029
Cash impact of Brookdale lease modification	161,533			—			—			—			161,533
Impact of Holiday lease termination	(50,184		)	—			—			—			(50,184		)
Write-off of straight-line rental income	67,636			—			6,953			—			74,589
NOI not included in cash NOI1	(34,803		)	(930		)	(12,082		)	—			(47,815		)
Non-segment NOI	—			—			—			(87,021		)	(87,021		)
Cash NOI	782,757			537,559			520,292			—			1,840,608
Adjustments to Same-store NOI:
Cash modification fees not in same-store	—			—			1,000			—			1,000
Cash NOI not included in same-store	(6,361		)	(126,740		)	(24,577		)	—			(157,678		)
Same-store cash NOI (constant currency)	$	776,396		$	410,819		$	496,715		$	—		$	1,683,930
Percentage increase (decrease)	21.9		%	(30.5		%)	3.3		%				(1.5		%)
Adjusted Same-store cash NOI:
Less cash impact of Brookdale lease modification	(161,533		)	—			—			—			(161,533		)
Adjusted Same-store cash NOI - constant currency	$	614,863		$	410,819		$	496,715		$	—		$	1,522,397
Adjusted percentage (decrease) increase - constant currency	(3.5		%)	(30.5		%)	3.3		%				(10.9		%)

For the Year Ended December 31, 2019
Net income attributable to common stockholders													$	433,016
Adjustments:
Interest and other income													(10,984		)
Interest expense													451,662
Depreciation and amortization													1,045,620
General, administrative and professional fees													158,726
Loss on extinguishment of debt, net													41,900
Merger-related expenses and deal costs													15,235
Other													(10,339		)
Loss from unconsolidated entities													2,454
Gain on real estate dispositions													(26,022		)
Income tax benefit													(56,310		)
Net income attributable to noncontrolling interests													6,281
Reported segment NOI	$	754,337		$	630,135		$	574,157		$	92,610		$	2,051,239
Adjustments to Cash NOI:
Straight-lining of rental income	(11,557		)	—			(18,516		)	—			(30,073		)
Non-cash rental income	(3,250		)	—			(3,830		)	—			(7,080		)
Cash modification fees	100			—			(180		)	—			(80		)
NOI not included in cash NOI1	(97,655		)	246			(45,341		)	—			(142,750		)
Non-segment NOI	—			—			—			(92,610		)	(92,610		)
NOI impact from change in FX	123			(1,255		)	—			—			(1,132		)
Cash NOI	$	642,098		$	629,126		$	506,290		$	—		$	1,777,514
Adjustments to Same-store NOI:
Cash NOI not included in same-store	(5,097		)	(38,753		)	(25,292		)	—			(69,142		)
NOI impact from change in FX not in same-store	—			442			—			—			442
Same-store cash NOI (constant currency)	$	637,001		$	590,815		$	480,998		$	—		$	1,708,814

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 portfolio performance-based disclosures 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.

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