Ventas 2011 normalized FFO increases 71.1% to $777.0 million

Ventas, Inc. (NYSE: VTR) ("Ventas" or the "Company") said today that normalized Funds From Operations ("FFO") for the year ended December 31, 2011 increased approximately 71.1 percent to $777.0 million, from $454.0 million for the comparable 2010 period. Normalized FFO per diluted common share was $3.37 for the year ended December 31, 2011, an increase of 17.0 percent from $2.88 for the comparable 2010 period. Weighted average diluted shares outstanding for the full year rose by 46.4 percent to 230.8 million, compared to 157.7 million in 2010.

“Ventas delivered excellent results in 2011, as our portfolio performed well while we successfully integrated over $11 billion of accretive acquisitions”

The substantial growth in 2011 normalized FFO per diluted common share from 2010 is due to the Company's acquisitions of Nationwide Health Properties, Inc. ("NHP") and 117 properties managed by Atria Senior Living, Inc. ("Atria"), the full year benefit of 2010 acquisitions, including the medical office building ("MOB") portfolio acquired with the Company's Lillibridge Healthcare Services subsidiary ("Lillibridge"), increased net operating income from the Company's seniors housing communities managed by Sunrise Senior Living, Inc. (NYSE: SRZ) ("Sunrise"), and rental increases from the Company's triple-net lease portfolio, partially offset by increases in general and administrative expenses (including stock-based compensation), higher interest expense and higher weighted average diluted shares outstanding.

"Ventas delivered excellent results in 2011, as our portfolio performed well while we successfully integrated over $11 billion of accretive acquisitions," Ventas Chairman and CEO Debra A. Cafaro said. "We have a highly diversified portfolio approaching 1,400 properties, with nearly 80 percent of our annualized revenues derived from private pay sources, an outstanding balance sheet and an attractive cost of capital. We have positioned Ventas to be a leader in the $1 trillion healthcare real estate market as it consolidates," she said. "Our proven and dedicated management team will use these powerful attributes to deliver consistent superior total returns to our shareholders."

Normalized FFO for the year ended December 31, 2011 excludes the net benefit (totaling $47.9 million, or $0.21 per diluted share) from net litigation proceeds and income tax benefit, partially offset by merger-related expenses and deal costs (including integration costs), mark-to-market adjustment for derivatives, loss on extinguishment of debt and amortization of other intangibles. Normalized FFO for the year ended December 31, 2010 excluded the net expense (totaling $32.5 million, or $0.21 per diluted share) from merger-related expenses and deal costs (including integration costs), loss on extinguishment of debt, amortization of other intangibles and non-cash income tax expense.

Net income attributable to common stockholders for the year ended December 31, 2011 was $364.5 million, or $1.58 per diluted common share, including discontinued operations of $1.7 million, compared with net income attributable to common stockholders for the year ended December 31, 2010 of $246.2 million, or $1.56 per diluted common share, including discontinued operations of $30.8 million. This increase in net income attributable to common stockholders is primarily the result of the NHP acquisition, a full year benefit of the Company's 2010 acquisitions, including its Lillibridge MOBs, and a net benefit of $47.9 million comprised principally of net litigation proceeds and income tax benefit, partially offset by merger-related expenses and deal costs (including integration costs), mark-to-market adjustment for derivatives, loss on extinguishment of debt and amortization of other intangibles.

FFO, as defined by the National Association of Real Estate Investment Trusts ("NAREIT"), for the year ended December 31, 2011 increased 95.7 percent to $824.9 million, from $421.5 million in the comparable 2010 period. NAREIT FFO per diluted common share for the year ended December 31, 2011 increased 33.7 percent to $3.57, from $2.67 in 2010. This increase is primarily due to the factors described above for net income.

FOURTH QUARTER 2011

Fourth quarter 2011 normalized FFO increased 114 percent to $259.3 million, from $121.4 million for the comparable 2010 period. Normalized FFO per diluted common share was $0.89 for the quarter ended December 31, 2011, an increase of 15.6 percent from $0.77 for the comparable 2010 period. Fourth quarter 2011 normalized FFO per diluted common share versus the comparable period in 2010 benefited from the Company's acquisitions of NHP and the Atria-managed communities and rental increases from the Company's triple-net lease portfolio, partially offset by increases in general and administrative expenses (including stock-based compensation), higher interest expense and a greater number of weighted average diluted shares outstanding, which rose by 83.7 percent to 290.6 million, compared to 158.2 million in 2010.

Normalized FFO for the quarter ended December 31, 2011 excludes the net benefit (totaling $99.7 million, or $0.34 per diluted share) from net litigation proceeds and income tax benefit, partially offset by merger-related expenses and deal costs (including integration costs), loss on extinguishment of debt, mark-to-market adjustment for derivatives and amortization of other intangibles.

Net income attributable to common stockholders for the quarter ended December 31, 2011 was $192.9 million, or $0.66 per diluted common share, compared with net income attributable to common stockholders for the quarter ended December 31, 2010 of $77.6 million, or $0.49 per diluted common share. This increase in net income attributable to common stockholders is primarily the result of the NHP acquisition and a net benefit of $99.7 million from net litigation proceeds and income tax benefit, partially offset by merger-related expenses and deal costs (including integration costs), loss on extinguishment of debt, mark-to-market adjustment for derivatives and amortization of other intangibles.

NAREIT FFO for the quarter ended December 31, 2011 increased 232 percent to $359.1 million, from $108.3 million in the comparable 2010 period. Fourth quarter 2011 NAREIT FFO per diluted common share increased 82.4 percent to $1.24, from $0.68 in the fourth quarter of 2010. This increase is primarily due to the factors described above for net income.

FIRST QUARTER DIVIDEND INCREASES 8 PERCENT TO $0.62 PER COMMON SHARE

Ventas also said today that its Board of Directors increased the Company's first quarter 2012 dividend by eight percent to $0.62 per share. The dividend is payable in cash on March 29, 2012 to stockholders of record on March 9, 2012.

"Dividends and dividend growth are important components of the total return proposition we offer to our shareholders. Because of our significant growth and reliable cash flows, we are pleased to increase our dividend by eight percent, which enables us to share our success with shareholders and still maintain an attractive, strong payout ratio," Cafaro said.

PRIVATE PAY SENIORS HOUSING OPERATING PORTFOLIO

Fourth Quarter 2011 Total Portfolio NOI Grows 2.4 Percent Versus Third Quarter to $89.5 Million and Fourth Quarter Average Occupancy Trending Positively

At December 31, 2011, the Company's seniors housing operating portfolio included 79 private pay seniors housing communities managed by Sunrise and 118 private pay seniors housing communities managed by Atria.

Net Operating Income after management fees ("NOI") for all communities increased 2.4 percent to $89.5 million in the fourth quarter of 2011 compared to the third quarter of 2011, the Company's first full quarter of ownership of the Atria-managed portfolio. Stabilized unit occupancy for the fourth quarter of 2011 increased 100 basis points.

NOI for the Sunrise-managed communities increased to $156.7 million for the year ended December 31, 2011, compared to $154.3 million for the comparable 2010 period. The comparable 2010 period included the benefit to NOI of a $5 million cash payment from Sunrise for expense overages. Excluding this 2010 payment, 2011 NOI for the Sunrise-managed communities increased 5.0 percent compared to 2010. Average daily resident occupancy for the year increased 120 basis points to 90.3 percent versus 2010, and the average daily rate increased year over year by 3.6 percent to $183.

2011 RECAP

• Ventas closed over $11 billion in acquisitions during 2011, including NHP and substantially all of the real estate assets of Atria Senior Living Group, Inc. ("ASLG").
• Ventas delivered total shareholder return ("TSR") of 9.8 percent in 2011 and 721.3 percent for the ten-year period ended December 31, 2011.
• Ventas received ratings upgrades from all three nationally recognized rating agencies. Ventas's senior unsecured debt is currently rated BBB+ (stable) by Fitch, BBB (stable) by Standard & Poor's and Baa2 (stable) by Moody's.
• Ventas issued and sold $700 million aggregate principal amount of senior notes at a stated annual interest rate of 4.75 percent, purchased or repaid $769 million aggregate principal amount of its outstanding senior and convertible notes, and repaid $308 million of mortgage debt.
• Ventas sold approximately 6 million shares of its common stock in an underwritten public offering and received proceeds of $300 million. In conjunction with the ASLG and NHP acquisitions, Ventas issued approximately 25 million and 100 million shares of common stock, respectively.
• Ventas received approximately $219 million in final repayments on its loans receivable investments.
• Ventas entered into a new $2.0 billion unsecured revolving credit facility priced at LIBOR plus 110 basis points (at December 31, 2011) that matures in October 2015, with a right to extend maturity for one year under certain conditions.
• In December 2011, Ventas closed a new $500 million unsecured term loan facility with a weighted average maturity of 4.5 years, priced at 125 basis points over LIBOR (at December 31, 2011).
• "Same-store" cash NOI growth for the Company's total portfolio (498 assets) was 2.6 percent in 2011, compared to 2010. The prior period included the benefit to NOI of $5 million in cash payments from Sunrise to Ventas for expense overages; excluding such payments, the growth rate was 3.4 percent.
• Cash flows from operations totaled $773.2 million, an increase of 72.7 percent over 2010.
• Ventas received aggregate proceeds of $228 million from HCP, Inc. ("HCP") in connection with the Company's lawsuit against HCP arising out of the Company's 2007 acquisition of Sunrise Senior Living REIT.

FOURTH QUARTER HIGHLIGHTS AND OTHER RECENT DEVELOPMENTS

Portfolio, Performance and Balance Sheet Highlights

Investments

• As previously announced, Ventas and Cogdell Spencer Inc. (NYSE: CSA) ("Cogdell") entered into a definitive agreement under which Ventas will acquire Cogdell and its 72 high-quality MOBs in an all-cash transaction. Completion of the acquisition is expected to occur in the second quarter of 2012, although there can be no assurance as to whether or when the closing will occur. Cogdell has called a special meeting of stockholders for March 9, 2012 to vote upon the transaction.
• In the fourth quarter of 2011, Ventas invested over $325 million, including the assumption of $139.1 million in debt, in MOBs and seniors housing communities.

Liquidity, Ratings and Balance Sheet

• In February 2012, the Company issued and sold $600.0 million aggregate principal amount of 4.25 percent senior notes due 2022, at a public offering price equal to 99.214 percent of par for total proceeds of $595.3 million, before the underwriting discount and expenses.
• In February 2012, the Company sold nine assets for aggregate consideration of $121.3 million and called $200.0 million principal amount of its 6½ percent senior notes due 2016 for redemption. The Company expects to recognize a net gain from these transactions.
• The Company currently has approximately $2.0 billion of borrowing capacity available under its unsecured revolving credit facility and approximately $270 million in cash and cash equivalents.
• At December 31, 2011, the Company had $455.6 million of borrowings outstanding under its unsecured revolving credit facility, $500 million of borrowings outstanding under its new unsecured term loan facility, and $45.8 million of cash and cash equivalents.
• The Company's debt to total capitalization at December 31, 2011 was approximately 29 percent.
• The Company's net debt to Adjusted Pro Forma EBITDA (as defined herein) at December 31, 2011 was 4.7x.
• In November 2011, Ventas received $125 million from HCP to settle the Company's outstanding lawsuit against HCP. The Company recorded approximately $117 million in net income in the fourth quarter as a result of this litigation, after payment of expenses and a donation to the Ventas Charitable Foundation.

Portfolio & Additional Information

• The 197 skilled nursing facilities and hospitals master leased by the Company to Kindred Healthcare, Inc. (NYSE: KND) ("Kindred") produced EBITDARM (earnings before interest, taxes, depreciation, amortization, rent and management fees) to actual cash rent coverage of 2.1x for the trailing 12-month period ended September 30, 2011 (the latest date available).
• Supplemental information regarding the Company can be found on the Company's website under the "Investor Relations" section or at www.ventasreit.com/investor-relations/financial-information/supplemental-information.

VENTAS ISSUES 2012 NORMALIZED FFO PER DILUTED SHARE GUIDANCE OF $3.63 TO $3.69

Ventas currently expects its 2012 normalized FFO per diluted share, excluding the impact of unannounced acquisitions, divestitures and capital transactions, but including completion of its pending acquisition of Cogdell in the second quarter of 2012 on its contractual terms, to range between $3.63 and $3.69.

The Company's normalized FFO guidance (and related GAAP earnings projections) for all periods assumes that all of the Company's tenants and borrowers continue to meet all of their obligations to the Company. In addition, the Company's normalized FFO guidance excludes (a) gains and losses on the sales of real property assets, (b) merger-related costs and expenses, including amortization of intangibles and transition and integration expenses, and deal costs and expenses, (c) the impact of any expenses related to asset impairment and valuation allowances, the write-off of unamortized deferred financing fees, or additional costs, expenses, discounts, make-whole payments, penalties or premiums incurred as a result of early retirement or payment of the Company's debt, (d) the non-cash effect of income tax benefits or expenses and derivative transactions that have non-cash mark-to-market impacts on the Company's income statement, (e) the impact of future unannounced acquisitions or divestitures (including pursuant to tenant options to purchase) and capital transactions, and (f) the reversal or incurrence of contingent consideration and liabilities.

The Company's guidance is based on a number of other assumptions, which are subject to change and many of which are outside the control of the Company. If actual results vary from these assumptions, the Company's expectations may change. There can be no assurance that the Company will achieve these results.

A reconciliation of the Company's guidance to the Company's projected GAAP earnings is attached to this press release. The Company may from time to time update its publicly announced guidance, but it is not obligated to do so.