Ventas, Inc. (VTR, NYSE)
Industry: REIT - Healthcare Facilities
Annual report, fiscal year 2013


## Excellence.
Sustained. \( ^{®} \) 

## A VENTAS \( ^{®} \)



# Growth.
Performance.
Leadership.

Ventas, Inc., an S&P 500 company, is a leading real estate investment trust with nearly 1,500 seniors housing and healthcare properties. Our 10-year total shareholder return of 320 percent demonstrates the power of our consistent growth, profitability, diversified business model and financial strength.

That's not just excellence. That's Excellence. Sustained. \( ^{®} \)



## Financial Highlights

<table><tr><td></td><td>2013</td><td>2012</td><td>2011</td></tr><tr><td>(In thousands, except per share amounts)</td><td></td><td></td><td></td></tr><tr><td>Operating Data:</td><td></td><td></td><td></td></tr><tr><td>Rental Income</td><td>$ 1,325,984</td><td>$ 1,178,849</td><td>$ 793,802</td></tr><tr><td>Resident Fees and Services</td><td>1,406,005</td><td>1,227,124</td><td>865,800</td></tr><tr><td>Total Revenues</td><td>2,810,053</td><td>2,467,733</td><td>1,731,704</td></tr><tr><td>NOI¹</td><td>1,690,059</td><td>1,490,322</td><td>1,058,324</td></tr><tr><td>Income from Continuing Operations</td><td></td><td></td><td></td></tr><tr><td>Attributable to Common Stockholders</td><td>488,930</td><td>307,835</td><td>362,308</td></tr><tr><td>Net Income Attributable to Common Stockholders</td><td>453,509</td><td>362,800</td><td>364,493</td></tr><tr><td>Cash Flow from Operations</td><td>1,194,755</td><td>992,816</td><td>773,197</td></tr><tr><td>Share Data:</td><td></td><td></td><td></td></tr><tr><td>FFO², Diluted</td><td>$ 4.09</td><td>$ 3.48</td><td>$ 3.57</td></tr><tr><td>Normalized FFO³, Diluted</td><td>$ 4.14</td><td>$ 3.80</td><td>$ 3.37</td></tr><tr><td>Income from Continuing Operations</td><td></td><td></td><td></td></tr><tr><td>Attributable to Common Stockholders, Diluted</td><td>$ 1.66</td><td>$ 1.04</td><td>$ 1.57</td></tr><tr><td>Net Income Attributable to Common Stockholders, Diluted</td><td>$ 1.54</td><td>$ 1.23</td><td>$ 1.58</td></tr><tr><td>Dividends Paid for Year</td><td>$ 2.735</td><td>$ 2.48</td><td>$ 2.30</td></tr><tr><td>Weighted Average Shares Outstanding, Diluted</td><td>295,110</td><td>294,488</td><td>230,790</td></tr><tr><td>Closing Stock Price as of December 31</td><td>$ 57.28</td><td>$ 64.72</td><td>$ 55.13</td></tr><tr><td>Shares Outstanding as of December 31</td><td>294,188</td><td>291,866</td><td>288,809</td></tr><tr><td>Other Data as of December 31:</td><td></td><td></td><td></td></tr><tr><td>Equity Market Capitalization¹</td><td>$ 16,961,582</td><td>$ 19,004,510</td><td>$ 16,024,858</td></tr><tr><td>Total Capitalization¹</td><td>$ 26,326,574</td><td>$ 27,418,156</td><td>$ 22,453,974</td></tr><tr><td>Debt/Total Capitalization</td><td>35.6%</td><td>30.7%</td><td>28.6%</td></tr></table>

Debt/Total
Capitalization

Dividends Per Share
Paid for Year





Year-End Closing
Stock Prices



Cash Flow
from Operations






## Dear Stakeholder,

In 2013, Ventas delivered outstanding results, producing record profits and cash flow. We grew our per share Normalized Funds From Operations (FFO) by 11 percent \( ^{1} \)  and raised our dividend by 10 percent. We continued to expand our thriving enterprise with nearly 2 billion in accretive investments. Plus, we managed our existing assets effectively with 5 percent same-store cash Net Operating Income (NOI) growth.

Normalized Funds
From Operations \( ^{1} \) 

+11%

Per Share
Dividend

+10%

Accretive
Investments

$2 billion

Same-Store
Cash NOI

+5%

Governed by our core values, we continued to protect shareholder capital, manage risk and create greater profitability. We maintained a strong balance sheet, received credit rating upgrades and lengthened our debt maturity schedule at lower all-in rates.

Our outstanding operating and financial results were disconnected from our market performance in 2013, as our Total Shareholder Return (TSR) was (7.6) percent. The Federal Reserve’s May announcement that it would taper its bond purchases and gradually eliminate its quantitative easing policy caused capital outflows from real estate investment trusts (REITs) generally and the large healthcare REITs in particular.
Yet our successes are incontrovertible and validate the strength of our business strategy, superior execution and sustained excellence. Our balanced, diversified portfolio of high-quality seniors housing and healthcare real estate assets serving the needs of a rapidly aging population and patients seeking low-cost, efficient healthcare settings is unmatched. We are respected for being a reliable capital partner who can execute transactions quickly and effectively to meet our customers' needs.

We are motivated by our fundamental responsibility to provide dependable returns to our shareholders, who include institutional investors representing retired firefighters, teachers and other pensioners. They rely on us for income, net worth expansion, capital preservation and financial security.



## Sustaining Excellence

We create shareholder value by driving internal growth, completing accretive investments and raising capital opportunistically. With discipline and vision, we pull the right levers to deliver consistent profitability and increase value. We strive to build a truly excellent, sustainable business with multiple channels for continued growth.

Our long-term value creation flows from the enduring attributes of a rapidly aging population, higher demand for senior living and healthcare services, a $1 trillion fragmented and consolidating seniors housing and healthcare real estate market and continued acceptance of our asset classes among investors. Our long-tenured management team has delivered on these opportunities because we are forward thinking, have a deep understanding of core markets and possess unrivaled experience in structuring investments. We take the right steps to produce dependably growing cash flows and dividends from a diversified and highly productive portfolio of seniors housing and healthcare assets.

Our single-minded focus produces consistently superior results that build shareholder wealth. The evidence is in our outstanding compound annual TSR of over 28 percent and over 15 percent for the 14- and 10-year periods, respectively, ended December 31, 2013. We have handily outperformed the MSCI US REIT and S&P 500 indices since the start of this century.



(1) Source: Bloomberg. 10-year period ended 12/31/2013.



# Anticipating, Preparing,
Executing

Our management team has distinguished itself with a history of thinking ahead, adapting to dynamic market forces and seizing opportunities. We are proud of our record of anticipating and preparing for major directional changes and then executing with speed and rigor.

We entered 2013 knowing that market volatility and cyclical interest rate changes were likely. Our approach was to continue to grow profitability without getting caught off guard by big moves in the market. We acted decisively on matters within our control, prepared for changes in the macro environment beyond our control and remained at the top of our game.

With a laser-sharp focus on shareholder value creation, we further strengthened our Company.

## Portfolio Growth

In making nearly $2 billion in investments in an increasingly crowded market, we refined our investment criteria to focus on private pay seniors housing and hospital-affiliated medical office buildings (MOBs) where we have a competitive advantage. Specifically, we concentrated on acquisitions involving limited amounts of secured debt, taking advantage of our low cost of capital, and creating more shareholder value. We targeted seniors housing investments in markets where we could successfully transition operations to Atria Senior Living, of which we own one-third, providing us with greater profitability.

We pursued MOB opportunities that would enable us to bring property management in-house to our Lillibridge subsidiary, which enjoys strong relationships with the most highly rated hospitals and health systems in the nation. This approach increased our investment yield and leveraged our scale, buying power and pricing discipline.

## Over $21 Billion in Accretive Acquisitions Successfully Completed Since 2000

1,473 Seniors Housing and Healthcare Properties

1,378

602

520

269

Represents property count as of year-end in respective fiscal years.







We love our business. We have a great team, great cost of capital and great sector. Our job is to allocate capital to the right segments at the right time.



## Maintaining Our Financial Strength

Anticipating a change in monetary policy and an increase in interest rates, in 2013 we continued our multiyear efforts to lock in favorable long-term financing to preserve and increase profits.

Raised

$1.6 B

in Low-Cost Long-Term Fixed Rate Debt

Reduced Our
Borrowing Cost to

3.8%

Completed a New

$3 B

Credit Facility at
Improved Pricing

These proactive and opportunistic actions improved our borrowing costs. And we managed risk by building our liquidity, lengthening our weighted average maturities, staggering our debt payment schedule and limiting our exposure to market changes.
As evidence of our financial strength and flexibility, we received two credit rating upgrades during the year. We now enjoy BBB+ or equivalent corporate debt ratings from all three leading ratings agencies. Our movement up the credit curve improves our cost of capital and validates the safety of our Company.






# Ventas is a reliable capital provider and can complete deals of any size and complexity. Our financial strength supports our customers' success.

## Accelerating Our Strategy

We successfully re-leased or sold all 89 skilled nursing facilities (SNFs) and long-term acute care hospitals operated by Kindred Healthcare, Inc. (NYSE: KND) whose lease terms expired in 2013. Using our momentum, we also reached a favorable early deal with Kindred regarding upcoming 2015 lease expirations. This mutually beneficial arrangement will enhance value for both companies and reinforce the positive ongoing relationship between us. This win-win deal is a prime example of our ability to work constructively with customers while maintaining our profitability. We are well under way with our marketing process to re-lease the remaining 60 SNFs that Kindred did not renew to qualified regional care providers. This effort should produce an excellent outcome: greater tenant diversification and break-even financial results.






# Trends That Fuel Our Platform

Our business is driven by powerful and growing demand. The 75+ cohort is expected to grow 144 percent between 2012 and 2040. \( ^{1} \)  Healthcare spending is expected to rise to 20 percent of Gross Domestic Product (GDP) by 2022 from its current level of 18 percent. \( ^{2} \)  Approximately 12 percent of the 1 trillion seniors housing and healthcare real estate market is held by REITs. \( ^{3} \)  Within that market, consolidation and vertical integration among care providers are accelerating. These trends provide Ventas with abundant opportunities for continued investment and growth. Our flexible business model allows us to capitalize on these secular changes.

Our portfolio of nearly 1,500 properties across the U.S. and Canada is unparalleled in its breadth and productivity. The portfolio is diversified by asset type, revenue source, operating model, geography and tenant/operator. Our real estate assets have been carefully assembled to deliver reliable, growing cash flows to our stakeholders despite changing economic, reimbursement and capital markets conditions.
The Population of Seniors Age
75 and Older is Growing



Faster Than the Rest
of the U.S. \( ^{1} \) 






## Growing MOB Demand from the Newly Insured
Far Surpasses Available Space

1.8 M

Square Feet of Available
Ventas MOB Space

60M

Square Feet of Expected Demand for MOB Space \( ^{1} \) 

Our current MOB portfolio vacancy is well positioned to absorb the dramatic increase in MOB demand that will come from the newly insured.

(1) Source: Marcus and Millichap



MEDICAL ARTS BUILDING
Concord, North Carolina
Medical Office Building



Our portfolio of 237 private pay seniors housing assets operated by Atria Senior Living and Sunrise Senior Living constitutes one of the highest quality portfolios ever assembled. Properties in our seniors housing operating portfolio (SHOP) are in demand because of their high-end physical environments that seniors and their families can enjoy; access to high service and care levels; and highly desired metropolitan and coastal locations. This portfolio has provided Ventas with outstanding growth. We expect strong performance to continue, aided by the nation’s economic and housing recoveries, as well as improving labor markets, which correlate favorably with seniors housing occupancy levels.
We expect demand in our target market segment, serving populations with higher net worth, incomes and housing values, to remain very favorable. Industry experts project increased seniors housing occupancy in 2014.

Meanwhile, we continue to enjoy growth from our long-term triple-net (NNN) leased seniors housing portfolio, with annual rent escalators primarily tied to the Consumer Price Index. These assets are leased to high-quality, creditworthy operators and produce reliable cash flows.

We also expect to see increased demand for our medical office and outpatient building business from

# Our deep understanding of fundamentals and flexible business model create value for shareholders. We anticipate and capitalize on changing macro trends.

Seniors housing communities meet the growing residential, social and assistance needs of seniors. Favorable demographic trends and a growing acceptance of seniors housing communities will continue to stimulate demand from the 18 million seniors who are 75 or older. \( ^{1} \)  In that cohort, households with annual incomes exceeding 50,000 are projected to grow 33 percent between 2012 and 2017. \( ^{2} \)  Additionally, nearly 15 million seniors are expected to sell their homes by 2030. \( ^{1} \) 

Growing demand for seniors housing spurred some increased supply in 2013, with about 22,000 units under construction at year end. \( ^{3} \)  Because our SHOP portfolio is located in high barrier-to-entry markets, we are confident about its continued strength.
more Medicare-eligible Baby Boomers, as well as newly insured individuals under the Affordable Care Act and Medicaid expansion. Demand from just these newly insured individuals should increase MOB space needs by an additional 60 million square feet. \( ^{4} \)  This increase does not account for growth due to newly Medicare-eligible Baby Boomers. Our assets are low-cost settings that will enjoy growing utilization as “part of the solution” to reduce national healthcare spending. Our high-quality MOB portfolio consisting of 18 million square feet—already over 90 percent occupied—is ready to meet that demand.

The fundamentals of our business are compelling and irrefutable. They continue to form the building blocks for our future success. Our experienced team manages existing assets skillfully and executes on high-quality investments. Additionally, we have the scale, cost of capital and proven strategy to stay at the forefront of changing macro trends.



## Seniors Housing Continues to Benefit from an Aging Population, Improving Economic Conditions and Limited New Supply

Job growth and seniors housing occupancy are highly correlated. \( ^{1} \) 



Our same-store SHOP cash NOI grew a strong 6% in 2013. And, from 2010 to 2013, our total seniors housing NOI increased 166%.

Growth in Ventas Seniors Housing Portfolio and NOI \( ^{2} \) 



Our SHOP assets are in areas that are wealthier than the national average.

50% Higher Household Income vs. National Median

127% Higher
Home Value vs.
National Median



The 75+ cohort is expected to grow 144% by 2040, \( ^{5} \)  further fueling demand for seniors housing that is expected to continue to outpace supply.



18 M

Seniors over the age of 75 in 2012



Total seniors housing units in 4Q13 including 22,000 under construction \( ^{8} \)



## Working Forward

We are committed to continuing our growth by maximizing cash flow from our existing portfolio and, with our deep industry knowledge and ready access to capital, through accretive investments.

We will participate with our customers (existing and new) as a capital partner in the consolidation trend that is sweeping seniors housing and healthcare providers in the U.S. (and globally). Our strong balance sheet and attractively priced capital provide us with a tremendous business advantage to quickly seize opportunities. Our flexible business model and astute management team enable us to move into different asset types within our expertise at early stages of upward cycles.

Over the past few years, we have focused on buying MOBs and seniors housing assets because that is where we saw the best returns; our shareholders have been rewarded by the increased cash flows and valuations of those assets. We will continue to invest in those segments, targeting deals where we enjoy a competitive advantage. We will also consider allocating capital into other segments when we see superior risk-adjusted returns and opportunities for future growth.

As we look ahead, we will consider extending our growth and diversification strategy outside the U.S., including Canada and other western countries with aging populations and strong commitments to serving them. We may also consider investments in established democracies building healthcare infrastructure to serve the needs of a growing middle class. Wherever we go and whatever we do, we will invest wisely and thoughtfully.

## Pursuing Sound and Effective Sustainability Practices

## 60

ENERGY STAR \( ^{®} \) 
Certified Properties

## 124

ENERGY STAR \( ^{®} \)  Labels

## 11

Properties Built to LEED \( ^{®} \)  Standards





Ventas is a member of the U.S. Green Building Council and has LEED-accredited staff. We are also an ENERGY STAR partner.






At the same time, we are mindful that Ventas owns valuable assets in an increasingly popular industry. We may consider selectively disposing of assets to redeploy proceeds into segments, assets, geographies or operators with higher value-creating opportunities. This approach may become more attractive if we observe excess capital flowing into our asset types or the public markets undervalue certain of our segments or our enterprise as a whole.

We have also ramped up our capital allocation to redevelop our existing portfolio and engage in limited ground up development. This investment approach should enable us to achieve superior risk-adjusted returns while simultaneously improving our portfolio.

Corporate citizenship is a core value at Ventas. As a result of our concerted efforts over the past year, we have measurably improved our sustainability practices and standards. Environmental awareness is a focal point for our existing portfolio and a factor in our acquisition, redevelopment and divestiture decisions. Protecting scarce resources is good for the environment and our business because it creates lasting efficiencies and more highly valued properties.

The market and the external environment will always provide opportunities to create value if we remain keen students and are willing to shift gears as conditions change.






We have also dedicated the Ventas Charitable Foundation to supporting worthy causes important to our constituents, employees and communities. We have the privilege and the responsibility to share our success with those who need our support.

A cornerstone of our future growth is our leadership team, distinguished by its interdisciplinary approach with mutually supportive expertise and rigorous debate. We believe we make the best decisions and execute our strategy most capably that way. We greatly value our long-tenured team, enhanced by key additions who have made us stronger. Our achievements and successes are truly a team effort, and our senior management sets a great example of collaboration, cohesiveness, enterprise focus and integrity for the whole company. I am grateful to our employees for their valuable contributions and tireless dedication to each other and our shareholders. Ventas’s sustained excellence depends on our culture of high standards, intensity and constant improvement throughout the organization.

One of my most important goals at Ventas has been to build and retain an “aspirational” Board of Directors that could improve the Company by engaging in informed and respectful debate with each other and management, while providing guidance and wisdom.

Outstanding execution comes from our people, who are at the heart of Ventas’s sustained excellence. Our leadership team deserves its reputation for innovation, responsiveness and reliability.



From Left to Right: Timothy A. Doman, senior vice president and chief portfolio officer, Todd W. Lillibridge, executive vice president, medical property operations; president and chief executive officer, Lillibridge Healthcare Services, Raymond J. Lewis, president, Vincent M. Cozzi, senior vice president, Lori B. Wittman, senior vice president, capital markets and investor relations, John K. Hart, senior vice president and chief information officer



It is an art to support, encourage and challenge management for the benefit of stakeholders. At Ventas, we have achieved a level of constructive Board engagement that is exemplary; our Board members all contribute as individuals, through the different prisms of their experience, and as a unit, using their collective judgment to benefit the enterprise.

In 2013, Ventas received an outstanding rating for our “governance capacity,” which measures the ability and courage of directors to understand complex business issues and take action. Governance and industry experts have long known that boards having a high proportion of members with significant relevant business experience generate superior investor returns, and Ventas is a great example. The strength, independence and judgment of our Board members have contributed mightily to the excellence that has become synonymous with Ventas.
As I reflect on my 15th anniversary as CEO of Ventas, I am reminded of our exceptional and improbable journey from a small troubled company to a shareholder-focused, S&P 500 company that ranks as one of Fortune’s Most Admired real estate companies globally.

At Ventas, we use our past successes, as well as our shortcomings, as constant motivation to raise the bar. To our stakeholders who have trusted us to protect and grow their precious capital, thank you for the opportunity to serve as your stewards and achieve sustained excellence.



Debra A. Cafaro
Chairman and Chief Executive Officer
March 17, 2014



From Left to Right: Richard A. Schweinhart, executive vice president and chief financial officer, T. Richard Riney, executive vice president, chief administrative officer and general counsel, Brian K. Wood, senior vice president and chief tax officer, Debra A. Cafaro, chairman and chief executive officer, Robert J. Brehl, chief accounting officer and controller, John D. Cobb, executive vice president and chief investment officer



## Supplemental Data

Funds From Operations (FFO) and Normalized FFO

<table><tr><td rowspan="2">For the Year Ended December 31,</td><td rowspan="2">2013</td><td rowspan="2">2012</td><td rowspan="2">2011</td><td colspan="3">Per diluted share (1)</td></tr><tr><td>2013</td><td>2012</td><td>2011</td></tr><tr><td>(In thousands, except per share amounts)</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Net income attributable to common stockholders</td><td>$ 453,509</td><td>$ 362,800</td><td>$ 364,493</td><td>$ 1.54</td><td>$ 1.23</td><td>$ 1.58</td></tr><tr><td>Adjustments:</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Real estate depreciation and amortization</td><td>716,296</td><td>710,082</td><td>441,766</td><td>2.43</td><td>2.41</td><td>1.91</td></tr><tr><td>Real estate depreciation related to noncontrolling interest</td><td>(10,512)</td><td>(8,503)</td><td>(3,471)</td><td>(0.04)</td><td>(0.03)</td><td>(0.02)</td></tr><tr><td>Real estate depreciation related to unconsolidated entities</td><td>6,543</td><td>7,516</td><td>6,552</td><td>0.02</td><td>0.03</td><td>0.03</td></tr><tr><td>Gain on re-measurement of equity interest upon acquisition, net</td><td>(1,241)</td><td>(16,645)</td><td>—</td><td>(0.00)</td><td>(0.06)</td><td>—</td></tr><tr><td>Discontinued operations:</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Gain on real estate dispositions, net</td><td>(4,059)</td><td>(80,952)</td><td>—</td><td>(0.01)</td><td>(0.27)</td><td>—</td></tr><tr><td>Depreciation on real estate assets</td><td>47,922</td><td>50,269</td><td>15,511</td><td>0.16</td><td>0.17</td><td>0.07</td></tr><tr><td>FFO</td><td>1,208,458</td><td>1,024,567</td><td>824,851</td><td>4.09</td><td>3.48</td><td>3.57</td></tr><tr><td>Litigation proceeds, net</td><td>—</td><td>—</td><td>(202,259)</td><td>—</td><td>—</td><td>(0.88)</td></tr><tr><td>Merger-related expenses and deal costs</td><td>21,560</td><td>63,183</td><td>153,923</td><td>0.07</td><td>0.21</td><td>0.67</td></tr><tr><td>Income tax benefit</td><td>(11,828)</td><td>(6,286)</td><td>(31,137)</td><td>(0.04)</td><td>(0.02)</td><td>(0.13)</td></tr><tr><td>Loss on extinguishment of debt, net</td><td>1,048</td><td>37,640</td><td>27,604</td><td>0.00</td><td>0.13</td><td>0.12</td></tr><tr><td>Change in fair value of financial instruments</td><td>449</td><td>99</td><td>2,959</td><td>0.00</td><td>0.00</td><td>0.01</td></tr><tr><td>Amortization of other intangibles</td><td>1,022</td><td>1,022</td><td>1,022</td><td>0.00</td><td>0.00</td><td>0.00</td></tr><tr><td>NORMALIZED FFO</td><td>$ 1,220,709</td><td>$ 1,120,225</td><td>$ 776,963</td><td>$ 4.14</td><td>$ 3.80</td><td>$ 3.37</td></tr></table>

(1) Per share amounts may not add due to rounding.

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. To overcome this problem, we consider FFO and normalized FFO to be appropriate measures of operating performance of an equity REIT. In particular, we believe that normalized FFO is useful because it allows investors, analysts and our management to compare our 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, we provide information about identified non-cash components of FFO and normalized FFO because it allows investors, analysts and our management to assess the impact of those items.

## Net Operating Income (NOI)

<table><tr><td>For the Year Ended December 31,</td><td>2013</td><td>2012</td><td>2011</td></tr><tr><td>(In thousands)</td><td></td><td></td><td></td></tr><tr><td>Net income</td><td>$ 454,889</td><td>$ 361,775</td><td>$ 363,261</td></tr><tr><td>Adjustments:</td><td></td><td></td><td></td></tr><tr><td>Interest and other income*</td><td>(2,047)</td><td>(6,158)</td><td>(1,217)</td></tr><tr><td>Interest*</td><td>340,381</td><td>302,031</td><td>242,057</td></tr><tr><td>Depreciation and amortization*</td><td>769,881</td><td>764,774</td><td>459,704</td></tr><tr><td>General, administrative and professional fees*</td><td>115,109</td><td>98,813</td><td>74,537</td></tr><tr><td>Loss on extinguishment of debt, net*</td><td>1,048</td><td>37,640</td><td>27,604</td></tr><tr><td>Litigation proceeds, net</td><td>—</td><td>—</td><td>(202,259)</td></tr><tr><td>Merger-related expenses and deal costs</td><td>21,634</td><td>63,183</td><td>153,923</td></tr><tr><td>Other*</td><td>18,325</td><td>8,842</td><td>8,653</td></tr><tr><td>Loss (income) from unconsolidated entities</td><td>508</td><td>(18,154)</td><td>52</td></tr><tr><td>Income tax benefit*</td><td>(11,828)</td><td>(6,286)</td><td>(31,137)</td></tr><tr><td>Gain on real estate dispositions, net*</td><td>(3,617)</td><td>(80,952)</td><td>—</td></tr><tr><td>NOI*</td><td>1,704,283</td><td>1,525,508</td><td>1,095,178</td></tr><tr><td>Discontinued operations</td><td>(14,224)</td><td>(35,186)</td><td>(36,854)</td></tr><tr><td>NOI (excluding amounts in discontinued operations)</td><td>$ 1,690,059</td><td>$ 1,490,322</td><td>$ 1,058,324</td></tr></table>

* Including amounts in discontinued operations.

We consider NOI an important supplemental measure to net income because it allows investors, analysts and our management to assess our unlevered property-level operating results and to compare our operating results with the operating results of other real estate companies and between periods on a consistent basis.

FFO, normalized FFO and NOI presented herein may not be identical 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 and NOI should not be considered as alternatives to net income (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 FFO, normalized FFO and NOI necessarily indicative of sufficient cash flow to fund all of our needs. In order to facilitate a clear understanding of our consolidated historical operating results, FFO, normalized FFO and NOI should be examined in conjunction with net income as presented in our Consolidated Financial Statements.



## Directors and Executive Officers

## Directors

Debra A. Cafaro
Chairman and Chief Executive Officer
Ventas, Inc.

Douglas Crocker II
Presiding Director of Ventas, Inc.
Chairman and Chief Investment Officer
Pearlmark Multifamily Partners, L.L.C.

Ronald G. Geary
President
Ellis Park Race Course, Inc.

Jay M. Gellert
President and Chief Executive Officer
Health Net, Inc.

Richard I. Gilchrist
Senior Advisor
Irvine Company

Matthew J. Lustig
Chief Executive Officer and
Managing Principal
Lazard Real Estate Partners

Douglas M. Pasquale
Chief Executive Officer
Capstone Enterprises Corporation

## Investor Information

CORPORATE OFFICES

353 North Clark Street
Suite 3300
Chicago, IL 60654
312.660.3800

10350 Ormsby Park Place
Suite 300
Louisville, KY 40223
502.357.9000

2050 Main Street
Suite 800
Irvine, CA 92614
949.718.4400

Robert D. Reed
Senior Vice President and
Chief Financial Officer
Sutter Health

Sheli Z. Rosenberg
Consultant
Skadden, Arps, Slate, Meagher & Flom LLP

Glenn J. Rufrano
Chairman and Chief Executive Officer
O'Connor Capital Partners

James D. Shelton
Chairman
Omnicare, Inc.

Committees of the Board

Audit and Compliance Committee
Reed (Chair), Rosenberg, Rufrano

Executive Committee
Crocker (Chair), Cafaro,
Geary, Rosenberg

Executive Compensation Committee
Gellert (Chair), Gilchrist, Shelton

Investment Committee
Crocker (Chair), Cafaro,
Geary, Pasquale, Shelton

ANNUAL MEETING
The Annual Meeting of Stockholders will convene May 15, 2014, at 8:00 a.m. local (Central time at 353 North Clark St., James C. Tyree Auditorium, Chicago, IL 60654

STOCK INFORMATION

Ventas, Inc. is traded on the NYSE under the ticker symbol "VTR." As of March 17, 2014, Ventas had 294.3 million shares outstanding.

TRANSFER AGENT AND REGISTRAR
Wells Fargo Shareowner Services
P.O. Box 64874
St. Paul, MN 55164-0854
800.468.9716
shareowneronline.com
Nominating and Corporate Governance Committee
Rosenberg (Chair), Crocker, Geary

## Executive Officers

Debra A. Cafaro
Chairman and Chief Executive Officer

Raymond J. Lewis
President

John D. Cobb
Executive Vice President
and Chief Investment Officer

Todd W. Lillibridge
Executive Vice President,
Medical Property Operations and
President and Chief Executive Officer,
Lillibridge Healthcare Services, Inc.

T. Richard Riney
Executive Vice President,
Chief Administrative Officer and
General Counsel

Richard A. Schweinhart
Executive Vice President and
Chief Financial Officer

INDEPENDENT AUDITORS
Ernst & Young LLP

INFORMATION
Copies of our 2013 Form 10-K and other filings with the Securities and Exchange Commission may be obtained without charge by contacting our Chicago corporate office or through our website at ventasreit.com.

MEMBER
National Association of Real Estate
Investment Trusts



## VENTAS \( ^{®} \) 

Ventas, Inc.

353 North Clark Street, Suite 3300
Chicago, Illinois 60654
(NYSE: VTR)

ventasreit.com