Ventas Reports 2015 Fourth Quarter and Full Year Results

Ventas, Inc. (NYSE: VTR) (“Ventas” or the “Company”) today announced that reported normalized Funds From Operations (“FFO”) per diluted common share was $4.47 for the year ended December 31, 2015. Reported normalized FFO for the year ended December 31, 2015 was $1.5 billion. Weighted average diluted shares outstanding for the full year increased to 334.0 million, compared to 296.7 million in 2014.

Reported normalized FFO per diluted common share was $1.03 for the fourth quarter of 2015. Fourth quarter 2015 reported normalized FFO was $346.3 million, compared to $342.2 million for the 2014 period.

These current and prior period reported results include in discontinued operations normalized FFO from the 355 properties that are now owned by Care Capital Properties, Inc. (“CCP”) (NYSE:CCP). The spin-off of CCP as an independent, publicly traded company (the “Spin-Off”) was successfully completed on August 17, 2015. Ventas’s full year 2015 reported results include normalized FFO from those properties for the period January 1 to August 17, 2015.

Normalized FFO for the year ended December 31, 2015 grew 9 percent on a comparable basis (“Comparable”), which adjusts all current and prior periods for the effects of the Spin-Off as if the Spin-Off were completed January 1, 2014. Full-year 2015 Comparable normalized FFO totaled $1.3 billion or $3.95 cents per diluted share. Normalized FFO for the fourth quarter of 2015 grew 7 percent compared to the fourth quarter 2014 on a Comparable basis.

Track Record of Excellence Demonstrated in 2015

“Ventas continued its long track record of consistent outperformance with another exceptional year in 2015,” Ventas Chairman and Chief Executive Officer Debra A. Cafaro said. “Our innovative and value creating spin-off of Care Capital Properties improved the quality of our diversified portfolio and our acquisition of the hospital real estate network of Ardent, a top ten hospital operator, advanced our strategy of building a formidable business in the large, growing and fragmented acute care space. At the same time, the Company delivered superior results to shareholders through 9 percent Comparable FFO per share growth and a 10 percent dividend increase (combined with CCP).

“The Ventas advantage combines our outstanding people, our leading operating partners and our diversified, high quality properties. This unique advantage has enabled us to lead the market and deliver results for shareholders for almost two decades, and gives us confidence that we will sustain our record of excellence into 2016 and beyond,” Cafaro added.

Fourth Quarter and Full Year Net Income and NAREIT FFO

Reported net income attributable to common stockholders for the year ended December 31, 2015 was $417.8 million, or $1.25 per diluted common share. Reported net income attributable to common stockholders for the year ended December 31, 2014 was $475.8 million, or $1.60 per diluted common share.

Reported net income attributable to common stockholders for the quarter ended December 31, 2015 was $124.7 million, or $0.37 per diluted common share. Reported net income attributable to common stockholders for the quarter ended December 31, 2014 was $107.2 million, or $0.36 per diluted common share.

The decrease in full year 2015 reported net income per share from 2014 net income per share is principally due to the inclusion in 2014 of a full year’s results from the properties that were spun off to CCP; higher depreciation expense; and separation and transaction costs in the current year principally related to the Spin-Off and the Ardent transactions. These factors were partially offset by higher net operating income (“NOI”) due to accretive investments and improved property performance in 2015.

Reported FFO, as defined by the National Association of Real Estate Investment Trusts (“NAREIT FFO”), for the year ended December 31, 2015 was $1.4 billion, or $4.09 per diluted common share. NAREIT FFO for the fourth quarter of 2015 was $356.9 million, or $1.06 per diluted common share.

Portfolio Performance

• For the year ended December 31, 2015, same-store cash NOI growth for the Company’s total portfolio (1,008) assets was 3.8 percent compared to 2014, in-line with previous company guidance of 3.5 to 4 percent. For the quarter ended December 31, 2015 same-store cash NOI growth for the Company’s total portfolio (1,056) assets was 1.7 percent.
• At a segment level for full year 2015: triple net same-store cash NOI grew 5.8 percent; the seniors housing operating portfolio (“SHOP”) same-store NOI grew 2.3 percent, consistent with previous guidance; and the medical office building (“MOB”) portfolio grew 2 percent.

2015 and Fourth Quarter Highlights

• Ventas completed the innovative and strategic spin-off of Care Capital Properties and acquired $1.3 billion of Ardent’s hospital real estate network, further enhancing and diversifying the Company’s high-quality portfolio and creating a platform for growth.
• The Company made $5.2 billion in acquisitions in 2015. In addition, Ventas committed to funding approximately $350 million in new development and redevelopment projects, primarily in seniors housing and medical office buildings.
• In the fourth quarter of 2015, the Company acquired $93 million in high quality MOBs that were previously managed by the Company and in which the Company had a minority interest.
• In the fourth quarter, the Company committed to funding approximately $240 million in new high-quality development and redevelopment projects, including:
  • A $166 million ($150 million at the Company’s share), 233,000 square foot multi-tenant “trophy” medical office building development in a 90 / 10 joint venture with Ventas’s existing development partner, Pacific Medical Buildings. The development is located in downtown San Francisco and is connected to Sutter Health’s (AA-; Standard & Poor’s) new flagship hospital, which is currently under construction. The project is expected to be 75 percent leased upon opening.
  • The redevelopment of four Atria communities totaling $86 million. The communities are located in top coastal markets including New York, San Francisco and Philadelphia.
• The Company sold 65 properties and received final repayment on loans receivable for aggregate proceeds of approximately $708 million in 2015. Of these dispositions, 8 properties were sold during the fourth quarter, generating proceeds of $105 million.
• Ventas paid its shareholders dividends of $3.04 per share in 2015. Ventas also distributed, on a tax free basis, shares of CCP valued at $8.51 per Ventas share to effectuate the Spin-Off.
• To fund new investments, Ventas issued and sold a total of 1.4 million shares of common stock in the fourth quarter for aggregate proceeds of approximately $75 million at an average gross price of $54.87 (before sales commissions) under its “at the market” equity offering program. For the full-year of 2015, Ventas issued and sold 7.2 million shares of common stock for aggregate proceeds of approximately $500 million under its “at the market” equity offering program. 5.8 million of these shares were issued prior to the Spin-Off at an average price of $72.94 (before sales commissions) and 1.4 million shares were issued following the Spin-Off at an average price of $54.87 (before sales commissions).
• The Company’s credit profile was strong at year-end, including fixed charge coverage of 4.5x, net debt to adjusted pro forma EBITDA of 6.1x, and a weighted average maturity approximating 7 years. At year-end, Ventas’s debt to total capitalization was 37 percent.

Recent Developments

• To fund new investments, Ventas issued and sold a total of 1.6 million shares of common stock since January 1, 2016 for aggregate proceeds of approximately $92 million at an average gross price of $55.88 (before sales commissions) under its “at the market” equity offering program. The Company’s fully diluted full year 2016 share count is assumed to be 340.4 million.
• Since January 1, 2016 Ventas has sold 6 properties for aggregate proceeds of approximately $61 million.
• The Company currently has a strong liquidity position, with approximately $2.0 billion available under its revolving credit facility, as well as $236 million of cash on hand.

First Quarter Dividend

The Company said today that its Board of Directors declared a dividend for the first quarter of $0.73 per share. The dividend is payable in cash on March 31, 2016 to stockholders of record on March 7, 2016.

2016 Guidance Range for Reported Normalized FFO of $4.07 to $4.15 Per Diluted Share

Ventas currently expects its 2016 reported normalized FFO per diluted share to range between $4.07 and $4.15, representing 3 to 5 percent growth over 2015 on a Comparable basis. Ventas currently expects its 2016 NAREIT reported FFO per diluted share to be between $4.13 and $4.21.

Total Company same-store cash NOI is forecast to grow 1.5 to 3 percent in 2016. Triple-net same-store cash NOI is forecast to grow 2 to 3 percent, SHOP same-store cash NOI is forecast to grow 1 to 3 percent and MOB same-store cash NOI is estimated to grow 1 to 2 percent in 2016.

The Company’s guidance assumes continued sale of assets, estimating $500 million in proceeds in 2016. The net proceeds are assumed to be reinvested in approximately $350 million in acquisitions and to fund development and redevelopment projects.

Consistent with its practice, the Company’s guidance does not include any further material investments, dispositions or capital activity. A modest reduction in leverage in 2016 to below 6x net debt to adjusted pro forma EBITDA is also assumed in its guidance. A reconciliation of the Company’s guidance to the Company’s projected GAAP earnings is included in this press release.

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

FOURTH QUARTER CONFERENCE CALL

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 (877) 703-6105 (or (857) 244-7304 for international callers). The participant passcode is “Ventas.” The conference call is being webcast live by NASDAQ OMX and can be accessed at the Company’s website at www.ventasreit.com. A replay of the webcast will be available following the call online, or by calling (888) 286-8010 (or (617) 801-6888 for international callers), passcode 97749067, beginning at approximately 2:00 p.m. Eastern Time and will remain for 35 days.

Ventas, Inc., an S&P 500 company, is a leading real estate investment trust. Its diverse portfolio of approximately 1,300 assets in the United States, Canada and the United Kingdom consists of seniors housing communities, medical office buildings, skilled nursing facilities, specialty hospitals and general acute care hospitals. Through its Lillibridge subsidiary, Ventas provides management, leasing, marketing, facility development and advisory services to highly rated hospitals and health systems throughout the United States. More information about Ventas and Lillibridge can be found at www.ventasreit.com and www.lillibridge.com.

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. A comprehensive listing of the Company’s properties is available at www.ventasreit.com/our-portfolio/properties-by-location.

This press release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements regarding the Company’s or its tenants’, operators’, borrowers’ or managers’ expected future financial condition, results of operations, cash flows, funds from operations, dividends and dividend plans, financing opportunities and plans, capital markets transactions, business strategy, budgets, projected costs, operating metrics, capital expenditures, competitive positions, acquisitions, investment opportunities, dispositions, merger or acquisition integration, growth opportunities, expected lease income, continued qualification as a real estate investment trust (“REIT”), plans and objectives of management for future operations and statements that include words such as “anticipate,” “if,” “believe,” “plan,” “estimate,” “expect,” “intend,” “may,” “could,” “should,” “will” and other similar expressions are forward-looking statements. These forward-looking statements are inherently uncertain, and actual results may differ from the Company’s expectations. The Company does not undertake a duty to update these forward-looking statements, which speak only as of the date on which they are made.

The Company’s actual future results and trends may differ materially from expectations depending on a variety of factors discussed in the Company’s filings with the Securities and Exchange Commission. These factors include without limitation: (a) the ability and willingness of the Company’s tenants, operators, borrowers, managers and other third parties to satisfy their obligations under their respective contractual arrangements with the Company, including, in some cases, their obligations to indemnify, defend and hold harmless the Company from and against various claims, litigation and liabilities; (b) the ability of the Company’s tenants, operators, borrowers and managers to maintain the financial strength and liquidity necessary to satisfy their respective obligations and liabilities to third parties, including without limitation obligations under their existing credit facilities and other indebtedness; (c) the Company’s success in implementing its business strategy and the Company’s ability to identify, underwrite, finance, consummate and integrate diversifying acquisitions and investments; (d) macroeconomic conditions such as a disruption of or lack of access to the capital markets, changes in the debt rating on U.S. government securities, default or delay in payment by the United States of its obligations, and changes in the federal or state budgets resulting in the reduction or nonpayment of Medicare or Medicaid reimbursement rates; (e) the nature and extent of future competition, including new construction in the markets in which the Company’s seniors housing communities and medical office buildings (“MOBs”) are located; (f) the extent of future or pending healthcare reform and regulation, including cost containment measures and changes in reimbursement policies, procedures and rates; (g) increases in the Company’s borrowing costs as a result of changes in interest rates and other factors; (h) the ability of the Company’s tenants, operators and managers, as applicable, to comply with laws, rules and regulations in the operation of the Company’s properties, to deliver high-quality services, to attract and retain qualified personnel and to attract residents and patients; (i) changes in general economic conditions or economic conditions in the markets in which the Company may, from time to time, compete, and the effect of those changes on the Company’s revenues, earnings and funding sources; (j) the Company’s ability to pay down, refinance, restructure or extend its indebtedness as it becomes due; (k) the Company’s ability and willingness to maintain its qualification as a REIT in light of economic, market, legal, tax and other considerations; (l) final determination of the Company’s taxable net income for the year ended December 31, 2015 and for the year ending December 31, 2016; (m) the ability and willingness of the Company’s tenants to renew their leases with the Company upon expiration of the leases, the Company’s ability to reposition its properties on the same or better terms in the event of nonrenewal or in the event the Company exercises its right to replace an existing tenant, and obligations, including indemnification obligations, the Company may incur in connection with the replacement of an existing tenant; (n) risks associated with the Company’s senior living operating portfolio, such as factors that can cause volatility in the Company’s operating income and earnings generated by those properties, including without limitation national and regional economic conditions, costs of food, materials, energy, labor and services, employee benefit costs, insurance costs and professional and general liability claims, and the timely delivery of accurate property-level financial results for those properties; (o) changes in exchange rates for any foreign currency in which the Company may, from time to time, conduct business; (p) year-over-year changes in the Consumer Price Index or the UK Retail Price Index and the effect of those changes on the rent escalators contained in the Company’s leases and the Company’s earnings; (q) the Company’s ability and the ability of its tenants, operators, borrowers and managers to obtain and maintain adequate property, liability and other insurance from reputable, financially stable providers; (r) the impact of increased operating costs and uninsured professional liability claims on the Company’s liquidity, financial condition and results of operations or that of the Company’s tenants, operators, borrowers and managers, and the ability of the Company and the Company’s tenants, operators, borrowers and managers to accurately estimate the magnitude of those claims; (s) risks associated with the Company’s MOB portfolio and operations, including the Company’s ability to successfully design, develop and manage MOBs and to retain key personnel; (t) the ability of the hospitals on or near whose campuses the Company’s MOBs are located and their affiliated health systems to remain competitive and financially viable and to attract physicians and physician groups; (u) risks associated with the Company’s investments in joint ventures and unconsolidated entities, including its lack of sole decision-making authority and its reliance on its joint venture partners’ financial condition; (v) the impact of market or issuer events on the liquidity or value of the Company’s investments in marketable securities; (w) consolidation activity in the seniors housing and healthcare industries resulting in a change of control of, or a competitor’s investment in, one or more of the Company’s tenants, operators, borrowers or managers or significant changes in the senior management of the Company’s tenants, operators, borrowers or managers; (x) the impact of litigation or any financial, accounting, legal or regulatory issues that may affect the Company or its tenants, operators, borrowers or managers; and (y) changes in accounting principles, or their application or interpretation, and the Company’s ability to make estimates and the assumptions underlying the estimates, which could have an effect on the Company’s earnings.

CONSOLIDATED BALANCE SHEETS
As of December 31, 2015, September 30, 2015, June 30, 2015, March 31, 2015 and December 31, 2014
(In thousands, except per share amounts)
		December 31,				September 30,				June 30,				March 31,				December 31,
		2015				2015				2015				2015				2014
Assets
Real estate investments:
Land and improvements		$	2,056,428			$	2,068,467			$	2,016,281			$	1,974,013			$	1,711,654
Buildings and improvements		20,309,599				20,220,624				19,247,902				19,049,345				17,420,392
Construction in progress		92,005				124,381				129,186				118,483				109,689
Acquired lease intangibles		1,344,422				1,347,493				1,214,702				1,197,567				955,035
		23,802,454				23,760,965				22,608,071				22,339,408				20,196,770
Accumulated depreciation and amortization		(4,177,234		)		(3,972,544		)		(3,780,388		)		(3,569,773		)		(3,423,780		)
Net real estate property		19,625,220				19,788,421				18,827,683				18,769,635				16,772,990
Secured loans receivable and investments, net		857,112				766,707				762,312				746,793				802,881
Investments in unconsolidated real estate entities		95,707				96,208				85,461				95,147				91,872
Net real estate investments		20,578,039				20,651,336				19,675,456				19,611,575				17,667,743
Cash and cash equivalents		53,023				65,231				60,532				120,225				55,348
Escrow deposits and restricted cash		77,896				74,491				193,960				223,772				71,771
Goodwill		1,047,497				1,052,321				1,058,607				947,386				363,971
Assets held for sale		93,060				152,014				2,822,553				3,012,994				2,555,322
Other assets		412,403				418,584				395,770				452,533				451,758
Total assets		$	22,261,918			$	22,413,977			$	24,206,878			$	24,368,485			$	21,165,913
Liabilities and equity
Liabilities:
Senior notes payable and other debt		$	11,206,996			$	11,284,957			$	11,456,038			$	11,549,062			$	10,844,351
Accrued interest		80,864				67,440				77,713				77,444				62,182
Accounts payable and other liabilities		779,380				791,556				784,547				777,595				750,657
Liabilities related to assets held for sale		34,340				48,860				225,269				222,389				237,973
Deferred income taxes		338,382				352,658				370,161				371,785				344,337
Total liabilities		12,439,962				12,545,471				12,913,728				12,998,275				12,239,500
Redeemable OP unitholder and noncontrolling interests		196,529				198,832				199,404				257,246				172,016
Commitments and contingencies
Equity:
Ventas stockholders' equity:
Preferred stock, $1.00 par value; 10,000 shares authorized, unissued		—				—				—				—				—
Common stock, $0.25 par value; 334,386; 333,027; 331,965; 330,913 and 298,478 shares issued at December 31, 2015, September 30, 2015, June 30, 2015, March 31, 2015 and December 31, 2014, respectively		83,579				83,238				82,982				82,718				74,656
Capital in excess of par value		11,602,838				11,523,312				12,708,898				12,616,056				10,119,306
Accumulated other comprehensive (loss) income		(7,565		)		(592		)		10,180				4,357				13,121
Retained earnings (deficit)		(2,111,958		)		(1,992,848		)		(1,772,529		)		(1,660,856		)		(1,526,388		)
Treasury stock, 44; 61; 28; 32 and 7 shares at December 31, 2015, September 30, 2015, June 30, 2015, March 31, 2015 and December 31, 2014, respectively		(2,567		)		(3,675		)		(2,048		)		(2,385		)		(511		)
Total Ventas stockholders' equity		9,564,327				9,609,435				11,027,483				11,039,890				8,680,184
Noncontrolling interest		61,100				60,239				66,263				73,074				74,213
Total equity		9,625,427				9,669,674				11,093,746				11,112,964				8,754,397
Total liabilities and equity		$	22,261,918			$	22,413,977			$	24,206,878			$	24,368,485			$	21,165,913

CONSOLIDATED STATEMENTS OF INCOME
For the three months and years ended December 31, 2015 and 2014
(In thousands, except per share amounts)
		For the Three Months Ended								For the Year Ended
		December 31,								December 31,
		2015				2014				2015				2014
Revenues:
Rental income:
Triple-net leased		$	208,210			$	174,500			$	779,801			$	674,547
Medical office buildings		145,958				116,968				566,245				463,910
		354,168				291,468				1,346,046				1,138,457
Resident fees and services		454,871				411,170				1,811,255				1,552,951
Medical office building and other services revenue		11,541				11,124				41,492				29,364
Income from loans and investments		20,361				14,876				86,553				51,778
Interest and other income		333				3,452				1,052				4,263
Total revenues		841,274				732,090				3,286,398				2,776,813
Expenses:
Interest		103,692				77,948				367,114				292,065
Depreciation and amortization		236,795				218,049				894,057				725,216
Property-level operating expenses:
Senior living		307,261				273,563				1,209,415				1,036,556
Medical office buildings		45,073				38,811				174,225				158,832
		352,334				312,374				1,383,640				1,195,388
Medical office building services costs		7,467				7,527				26,565				17,092
General, administrative and professional fees		27,636				28,106				128,035				121,738
(Gain) loss on extinguishment of debt, net		(486		)		485				14,411				5,564
Merger-related expenses and deal costs		(2,079		)		7,360				102,944				43,304
Other		4,009				7,673				17,957				25,743
Total expenses		729,368				659,522				2,934,723				2,426,110
Income before loss from unconsolidated entities, income taxes, discontinued operations, real estate dispositions and noncontrolling interest		111,906				72,568				351,675				350,703
Loss from unconsolidated entities		(223		)		(688		)		(1,420		)		(139		)
Income tax benefit		11,548				13,552				39,284				8,732
Income from continuing operations		123,231				85,432				389,539				359,296
Discontinued operations		(2,331		)		20,709				11,103				99,735
Gain on real estate dispositions		4,160				1,456				18,580				17,970
Net income		125,060				107,597				419,222				477,001
Net income attributable to noncontrolling interest		332				407				1,379				1,234
Net income attributable to common stockholders		$	124,728			$	107,190			$	417,843			$	475,767
Earnings per common share:
Basic:
Income from continuing operations attributable to common stockholders, including real estate dispositions		$	0.38			$	0.29			$	1.23			$	1.28
Discontinued operations		(0.01		)		0.07				0.03				0.34
Net income attributable to common stockholders		$	0.37			$	0.36			$	1.26			$	1.62
Diluted:
Income from continuing operations attributable to common stockholders, including real estate dispositions		$	0.38			$	0.29			$	1.22			$	1.26
Discontinued operations		(0.01		)		0.07				0.03				0.34
Net income attributable to common stockholders		$	0.37			$	0.36			$	1.25			$	1.60
Weighted average shares used in computing earnings per common share:
Basic		332,914				294,810				330,311				294,175
Diluted		336,406				297,480				334,007				296,677
Dividends declared per common share		$	0.73			$	0.79			$	3.04			$	2.965

QUARTERLY CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
		2015 Quarters																2014 Fourth
		Fourth				Third				Second				First				Quarter
Revenues:
Rental income:
Triple-net leased		$	208,210			$	201,028			$	182,006			$	188,557			$	174,500
Medical office buildings		145,958				142,755				140,472				137,060				116,968
		354,168				343,783				322,478				325,617				291,468
Resident fees and services		454,871				454,825				454,645				446,914				411,170
Medical office building and other services revenue		11,541				10,000				9,408				10,543				11,124
Income from loans and investments		20,361				18,924				25,215				22,053				14,876
Interest and other income		333				74				174				471				3,452
Total revenues		841,274				827,606				811,920				805,598				732,090
Expenses:
Interest		103,692				97,135				83,959				82,328				77,948
Depreciation and amortization		236,795				226,332				214,711				216,219				218,049
Property-level operating expenses:
Senior living		307,261				304,540				299,252				298,362				273,563
Medical office buildings		45,073				43,305				43,410				42,437				38,811
		352,334				347,845				342,662				340,799				312,374
Medical office building services costs		7,467				6,416				5,764				6,918				7,527
General, administrative and professional fees		27,636				32,114				33,959				34,326				28,106
(Gain) loss on extinguishment of debt, net		(486		)		15,331				(455		)		21				485
Merger-related expenses and deal costs		(2,079		)		62,145				12,265				30,613				7,360
Other		4,009				4,795				4,279				4,874				7,673
Total expenses		729,368				792,113				697,144				716,098				659,522
Income before (loss) income from unconsolidated entities, income taxes, discontinued operations, real estate dispositions and noncontrolling interest		111,906				35,493				114,776				89,500				72,568
(Loss) income from unconsolidated entities		(223		)		(955		)		9				(251		)		(688		)
Income tax benefit		11,548				10,697				9,789				7,250				13,552
Income from continuing operations		123,231				45,235				124,574				96,499				85,432
Discontinued operations		(2,331		)		(22,383		)		18,243				17,574				20,709
Gain on real estate dispositions		4,160				265				7,469				6,686				1,456
Net income		125,060				23,117				150,286				120,759				107,597
Net income attributable to noncontrolling interest		332				265				465				317				407
Net income attributable to common stockholders		$	124,728			$	22,852			$	149,821			$	120,442			$	107,190
Earnings per common share:
Basic:
Income from continuing operations attributable to common stockholders, including real estate dispositions		$	0.38			$	0.14			$	0.39			$	0.32			$	0.29
Discontinued operations		(0.01		)		(0.07		)		0.06				0.05				0.07
Net income attributable to common stockholders		$	0.37			$	0.07			$	0.45			$	0.37			$	0.36
Diluted:
Income from continuing operations attributable to common stockholders, including real estate dispositions		$	0.38			$	0.14			$	0.40			$	0.32			$	0.29
Discontinued operations		(0.01		)		(0.07		)		0.05				0.05				0.07
Net income attributable to common stockholders		$	0.37			$	0.07			$	0.45			$	0.37			$	0.36
Weighted average shares used in computing earnings per common share:
Basic		332,914				332,491				330,715				325,454				294,810
Diluted		336,406				336,338				334,026				329,203				297,480

CONSOLIDATED STATEMENTS OF CASH FLOWS
For the years ended December 31, 2015 and 2014
(In thousands)
		2015				2014
Cash flows from operating activities:
Net income		$	419,222			$	477,001
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization (including amounts in discontinued operations)		973,663				828,467
Amortization of deferred revenue and lease intangibles, net		(24,129		)		(18,871		)
Other non-cash amortization		5,448				(312		)
Stock-based compensation		19,537				20,994
Straight-lining of rental income, net		(33,792		)		(38,687		)
Loss on extinguishment of debt, net		14,411				5,564
Gain on real estate dispositions (including amounts in discontinued operations)		(18,811		)		(19,183		)
Gain on real estate loan investments		—				(1,455		)
Gain on sale of marketable securities		(5,800		)		—
Income tax benefit		(42,384		)		(9,431		)
Loss from unconsolidated entities		1,244				139
Loss on re-measurement of equity interest upon acquisition, net		176				—
Distributions from unconsolidated entities		23,462				6,508
Other		6,517				9,416
Changes in operating assets and liabilities:
Decrease in other assets		42,316				5,317
Increase in accrued interest		19,995				7,958
Decrease in accounts payable and other liabilities		(9,308		)		(18,580		)
Net cash provided by operating activities		1,391,767				1,254,845
Cash flows from investing activities:
Net investment in real estate property		(2,650,788		)		(1,468,286		)
Investment in loans receivable and other		(171,144		)		(498,992		)
Proceeds from real estate disposals		492,408				118,246
Proceeds from loans receivable		109,176				73,557
Purchase of marketable securities		—				(96,689		)
Proceeds from sale or maturity of marketable securities		76,800				21,689
Funds held in escrow for future development expenditures		4,003				4,590
Development project expenditures		(119,674		)		(106,988		)
Capital expenditures		(107,487		)		(87,454		)
Investment in unconsolidated operating entity		(26,282		)		—
Other		(30,704		)		(14,713		)
Net cash used in investing activities		(2,423,692		)		(2,055,040		)
Cash flows from financing activities:
Net change in borrowings under credit facility		(723,457		)		540,203
Net cash impact of CCP Spin-off		(128,749		)		—
Proceeds from debt		2,512,747				2,007,707
Proceeds from debt related to CCP Spin-off		1,400,000				—
Repayment of debt		(1,435,596		)		(1,151,395		)
Purchase of noncontrolling interest		(3,819		)		—
Payment of deferred financing costs		(24,665		)		(14,220		)
Issuance of common stock, net		491,023				242,107
Cash distribution to common stockholders		(1,003,413		)		(875,614		)
Cash distribution to redeemable OP unitholders		(15,095		)		(5,762		)
Purchases of redeemable OP units		(33,188		)		(503		)
Contributions from noncontrolling interest		—				491
Distributions to noncontrolling interest		(12,649		)		(9,559		)
Other		6,983				24,602
Net cash provided by financing activities		1,030,122				758,057
Net decrease in cash and cash equivalents		(1,803		)		(42,138		)
Effect of foreign currency translation on cash and cash equivalents		(522		)		2,670
Cash and cash equivalents at beginning of period		55,348				94,816
Cash and cash equivalents at end of period		$	53,023			$	55,348
Supplemental schedule of non-cash activities:
Assets and liabilities assumed from acquisitions:
Real estate investments		$	2,565,960			$	370,741
Utilization of funds held for an Internal Revenue Code Section 1031 exchange		(8,911		)		—
Other assets acquired		20,090				15,280
Debt assumed		177,857				241,076
Other liabilities		54,459				24,039
Deferred income tax liability		52,153				110,728
Noncontrolling interests		88,085				—
Equity issued		2,204,585				10,178
Non-cash impact of CCP Spin-Off		1,256,404				—

QUARTERLY CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
		2015 Quarters																2014 Fourth
		Fourth				Third				Second				First				Quarter
Cash flows from operating activities:
Net income		$	125,060			$	23,117			$	150,286			$	120,759			$	107,597
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization (including amounts in discontinued operations)		236,793				240,210				249,207				247,453				241,291
Amortization of deferred revenue and lease intangibles, net		(4,817		)		(5,682		)		(7,027		)		(6,603		)		(4,096		)
Other non-cash amortization		2,397				2,142				1,428				(519		)		304
Stock-based compensation		3,476				4,869				4,885				6,307				4,202
Straight-lining of rental income, net		(8,674		)		(8,357		)		(8,082		)		(8,679		)		(9,043		)
(Gain) loss on extinguishment of debt, net		(486		)		15,331				(455		)		21				485
Gain on real estate dispositions (including amounts in discontinued operations)		(4,162		)		(217		)		(7,746		)		(6,686		)		(1,457		)
Gain on real estate loan investments		—				—				—				—				(1,206		)
Gain on sale of marketable securities		—				—				(5,800		)		—				—
Income tax benefit		(11,667		)		(12,477		)		(10,390		)		(7,850		)		(13,851		)
Loss (income) from unconsolidated entities		47				955				(9		)		251				688
Loss on re-measurement of equity interest upon acquisition, net		176				—				—				—				—
Distributions from unconsolidated entities		2,912				5,577				14,324				649				1,121
Other		3,241				170				847				2,259				1,067
Changes in operating assets and liabilities:
Decrease (increase) in other assets		31,152				20,875				(14,326		)		4,615				8,623
Increase (decrease) in accrued interest		13,657				(9,770		)		316				15,792				(6,877		)
(Decrease) increase in accounts payable and other liabilities		(19,383		)		27,578				6,097				(23,600		)		6,025
Net cash provided by operating activities		369,722				304,321				373,555				344,169				334,873
Cash flows from investing activities:
Net investment in real estate property		(93,800		)		(1,303,078		)		(181,371		)		(1,072,539		)		(284,250		)
Investment in loans receivable and other		(96,758		)		(18,727		)		(16,086		)		(39,573		)		(432,556		)
Proceeds from real estate disposals		82,775				136,442				106,850				166,341				5,500
Proceeds from loans receivable		2,267				13,634				1,219				92,056				17,984
Purchase of marketable securities		—				—				—				—				(50,000		)
Proceeds from sale or maturity of marketable securities		—				19,575				57,225				—				—
Funds held in escrow for future development expenditures		—				—				—				4,003				1,988
Development project expenditures		(29,216		)		(27,828		)		(29,163		)		(33,467		)		(35,613		)
Capital expenditures		(31,675		)		(32,383		)		(22,258		)		(21,171		)		(31,219		)
Investment in unconsolidated operating entity		—				(26,282		)		—				—				—
Other		(2,720		)		(19,171		)		(4,633		)		(4,180		)		(10,704		)
Net cash used in investing activities		(169,127		)		(1,257,818		)		(88,217		)		(908,530		)		(818,870		)
Cash flows from financing activities:
Net change in borrowings under credit facility		66,949				(469,072		)		131,563				(452,897		)		693,887
Net cash impact of CCP Spin-off		—				(128,749		)		—				—				—
Proceeds from debt		1,686				1,403,090				15,138				1,092,833				—
Proceeds from debt related to CCP Spin-off		—				1,400,000				—				—				—
Repayment of debt		(106,526		)		(1,050,628		)		(253,795		)		(24,647		)		(246,278		)
Purchase of noncontrolling interest		—				(3		)		(1,156		)		(2,660		)		—
Payment of deferred financing costs		(772		)		(9,285		)		(173		)		(14,435		)		726
Issuance of common stock, net		73,205				65,651				66,840				285,327				242,107
Cash distribution to common stockholders		(243,838		)		(243,171		)		(261,494		)		(254,910		)		(235,200		)
Cash distribution to redeemable OP unitholders		(2,319		)		(8,079		)		(2,332		)		(2,365		)		(1,548		)
Purchases of redeemable OP units		—				—				(32,619		)		(569		)		(503		)
Contributions from noncontrolling interest		—				—				—				—				491
Distributions to noncontrolling interest		(1,399		)		(1,783		)		(7,645		)		(1,822		)		(2,799		)
Other		494				561				238				5,690				25,153
Net cash (used in) provided by financing activities		(212,520		)		958,532				(345,435		)		629,545				476,036
Net (decrease) increase in cash and cash equivalents		(11,925		)		5,035				(60,097		)		64,535				(7,961		)
Effect of foreign currency translation on cash and cash equivalents		(283		)		(336		)		404				(307		)		(1,286		)
Cash and cash equivalents at beginning of period		65,231				60,532				120,225				55,348				64,595
Cash and cash equivalents at end of period		$	53,023			$	65,231			$	60,532			$	119,576			$	55,348

QUARTERLY CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
(In thousands)
		2015 Quarters																2014 Fourth
		Fourth				Third				Second				First				Quarter
Supplemental schedule of non-cash activities:
Assets and liabilities assumed from acquisitions:
Real estate investments		$	(1,190	)		$	3,649			$	20,672			$	2,542,829			$	16,746
Utilization of funds held for an Internal Revenue Code Section 1031 exchange		—				—				(8,911		)		—				—
Other assets acquired		(131		)		3,716				(206		)		16,711				11,597
Debt assumed		—				—				—				177,857				12,926
Other liabilities		(3,478		)		8,149				4,052				45,736				4,598
Deferred income tax liability		1,317				(784		)		7,503				44,117				641
Noncontrolling interests		840				—				—				87,245				—
Equity issued		—				—				—				2,204,585				10,178
Non-cash impact of CCP Spin-Off		—				1,256,404				—				—				—

NON-GAAP FINANCIAL MEASURES RECONCILIATION
Funds From Operations (FFO) and Funds Available for Distribution (FAD) Including Comparable Earnings1
(Dollars in thousands, except per share amounts)
																														YOY
		2014								2015																				Growth
		Q4				FY				Q1				Q2				Q3				Q4				YTD				'14-'15
Net income attributable to common stockholders 2		$	107,190			$	475,767			$	120,442			$	149,821			$	22,852			$	124,728			$	417,843
Net income attributable to common stockholders per share 2		$	0.36			$	1.60			$	0.37			$	0.45			$	0.07			$	0.37			$	1.25
Adjustments:
Depreciation and amortization on real estate assets		216,239				718,649				214,429				212,908				224,688				235,101				887,126
Depreciation on real estate assets related to noncontrolling interest		(2,506		)		(10,314		)		(2,052		)		(1,964		)		(1,964		)		(1,926		)		(7,906		)
Depreciation on real estate assets related to unconsolidated entities		1,332				5,792				1,462				1,464				1,445				2,982				7,353
Loss on re-measurement of equity interest upon acquisition, net		—				—				—				—				—				176				176
Gain on real estate dispositions		(1,456		)		(17,970		)		(6,686		)		(7,469		)		(265		)		(4,160		)		(18,580		)
Discontinued operations:
(Gain) loss on real estate dispositions		(52		)		(1,494		)		—				(277		)		48				17				(212		)
Depreciation and amortization on real estate assets		23,241				103,250				31,234				34,496				13,878				—				79,608
Subtotal: FFO add-backs		236,798				797,913				238,387				239,158				237,830				232,190				947,565
Subtotal: FFO add-backs per share		$	0.80			$	2.69			$	0.72			$	0.72			$	0.71			$	0.69			$	2.84
FFO (NAREIT) attributable to common stockholders		$	343,988			$	1,273,680			$	358,829			$	388,979			$	260,682			$	356,918			$	1,365,408			7	%
FFO (NAREIT) attributable to common stockholders per share		$	1.16			$	4.29			$	1.09			$	1.16			$	0.78			$	1.06			$	4.09			(5	%)
Adjustments:
Change in fair value of financial instruments		485				5,121				(46		)		70				(18		)		454				460
Non-cash income tax benefit		(13,851		)		(9,431		)		(7,850		)		(10,389		)		(12,477		)		(11,668		)		(42,384		)
Loss (gain) on extinguishment of debt, net		485				5,013				21				(39		)		16,301				(486		)		15,797
Merger-related expenses, deal costs and re-audit costs		10,625				54,389				36,002				15,135				100,548				659				152,344
Amortization of other intangibles		480				1,246				591				591				438				438				2,058
Subtotal: normalized FFO add-backs		(1,776		)		56,338				28,718				5,368				104,792				(10,603		)		128,275
Subtotal: normalized FFO add-backs per share		$	(0.01	)		$	0.19			$	0.09			$	0.02			$	0.31			$	(0.03	)		$	0.38
Normalized FFO attributable to common stockholders		$	342,212			$	1,330,018			$	387,547			$	394,347			$	365,474			$	346,315			$	1,493,683			12	%
Normalized FFO attributable to common stockholders per share		$	1.15			$	4.48			$	1.18			$	1.18			$	1.09			$	1.03			$	4.47			(0	%)
Adjusted: Normalized FFO from CCP spin-off		(57,051		)		(250,100		)		(68,701		)		(69,306		)		(35,393		)		—				(173,400		)
Adjusted Normalized FFO from CCP spin-off per share		$	(0.19	)		$	(0.84	)		$	(0.21	)		$	(0.21	)		$	(0.11	)		$	—			$	(0.52	)
Comparable Normalized FFO attributable to common stockholders		$	285,161			$	1,079,918			$	318,846			$	325,041			$	330,081			$	346,315			$	1,320,283			22	%
Comparable Normalized FFO attributable to common stockholders per share		$	0.96			$	3.64			$	0.97			$	0.97			$	0.98			$	1.03			$	3.95			9	%
Non-cash items included in normalized FFO:
Amortization of deferred revenue and lease intangibles, net		(4,096		)		(18,871		)		(6,603		)		(7,027		)		(5,682		)		(4,817		)		(24,129		)
Other non-cash amortization, including fair market value of debt		304				(312		)		(519		)		1,428				2,142				2,397				5,448
Stock-based compensation		4,202				20,994				6,307				4,885				4,869				3,476				19,537
Straight-lining of rental income, net		(9,043		)		(38,687		)		(8,679		)		(8,082		)		(8,357		)		(8,674		)		(33,792		)
Subtotal: non-cash items included in normalized FFO		(8,633		)		(36,876		)		(9,494		)		(8,796		)		(7,028		)		(7,618		)		(32,936		)
Capital expenditures		(32,527		)		(92,928		)		(22,148		)		(23,520		)		(33,536		)		(33,496		)		(112,700		)
Normalized FAD attributable to common stockholders		$	301,052			$	1,200,214			$	355,905			$	362,031			$	324,910			$	305,201			$	1,348,047			12	%
Normalized FAD attributable to common stockholders per share		$	1.01			$	4.05			$	1.08			$	1.08			$	0.97			$	0.91			$	4.04			(0	%)
Adjusted: Normalized FAD from CCP spin-off		(51,535		)		(230,477		)		(61,014		)		(64,080		)		(29,987		)		—				(155,081		)
Adjusted: Normalized FAD from CCP spin-off per share		$	(0.17	)		$	(0.78	)		$	(0.19	)		$	(0.19	)		$	(0.09	)		$	—			$	(0.46	)
Comparable Normalized FAD attributable to common stockholders 3		$	249,517			$	969,737			$	294,891			$	297,951			$	294,923			$	305,201			$	1,192,966			23	%
Comparable Normalized FAD attributable to common stockholders per share 3		$	0.84			$	3.27			$	0.90			$	0.89			$	0.88			$	0.91			$	3.57			9	%
Merger-related expenses, deal costs and re-audit costs		(10,625		)		(54,389		)		(36,002		)		(15,135		)		(100,548		)		(659		)		(152,344		)
FAD attributable to common stockholders		$	290,427			$	1,145,825			$	319,903			$	346,896			$	224,362			$	304,542			$	1,195,703			4	%
FAD attributable to common stockholders per share		$	0.98			$	3.86			$	0.97			$	1.04			$	0.67			$	0.91			$	3.58			(7	%)
Adjusted: FAD from CCP spin-off		(50,952		)		(228,730		)		(56,454		)		(61,760		)		7,204				2,333				(108,677		)
Adjusted FAD from CCP spin-off per share		$	(0.17	)		$	(0.77	)		$	(0.17	)		$	(0.18	)		$	0.02			$	0.01			$	(0.33	)
Comparable FAD attributable to common stockholders		$	239,475			$	917,095			$	263,449			$	285,136			$	231,566			$	306,875			$	1,087,026			19	%
Comparable FAD attributable to common stockholders per share		$	0.81			$	3.09			$	0.80			$	0.85			$	0.69			$	0.91			$	3.25			5	%
Weighted average diluted shares		297,480				296,677				329,203				334,026				336,338				336,406				334,007
1 Totals and per share amounts may not add due to rounding. Per share quarterly amounts may not add to annual per share amounts due to material changes in the Company’s weighted average diluted share count, if any.
2 CCP impacts calculated based on net income related to discontinued operations, less the de minimis share of discontinued operations net income not related to CCP assets, assuming (a) G&A of $2.5 million in Q4’14 ($0.01 per share), $10.0 million for the full-year of 2014 ($0.03 per share), $2.5 million in Q1’15 and Q2’15 ($0.01 per share per quarter), and $1.3 million in Q3’15 ($0.00 per share) and (b) interest expense of $6.5 million in Q4’14 ($0.02 per share), $26.1 million for the full-year 2014 ($0.09 per share), $6.9 million in Q1’15 and Q2’15 ($0.02 per share per quarter), and $4.3 million in Q3’15 ($0.01 per share); these adjustments differ from the respective amounts found in discontinued operations.
3 Q1’14, Q2’14 and Q3'14 Comparable Normalized FAD represents $235,126 / $0.79 per share, $238,724 / $0.80 per share and $223,530 / $0.75 per share, respectively.

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 measures of operating performance of an equity REIT. In particular, the Company believes that normalized FFO is useful because it allows investors, analysts and Company management to compare the Company’s operating performance to the operating performance of other real estate companies and between periods on a consistent basis without having to account for differences caused by unanticipated items and other events such as transactions and litigation. In some cases, the Company provides information about identified non-cash components of FFO and normalized FFO because it allows investors, analysts and Company management to assess the impact of those items on the Company’s financial results.

The Company uses the NAREIT definition of FFO. NAREIT defines FFO as net income attributable to common stockholders (computed in accordance with GAAP) excluding gains (or losses) from sales of real estate property, including gain (or loss) on re-measurement of equity method investments, and impairment write-downs of depreciable real estate, plus real estate depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures will be calculated to reflect FFO on the same basis. The Company defines normalized FFO as FFO excluding the following income and expense items (which may be recurring in nature): (a) merger-related costs and expenses, including amortization of intangibles, transition and integration expenses, and deal costs and expenses, including expenses and recoveries relating to acquisition lawsuits; (b) the impact of any expenses related to asset impairment and valuation allowances, the write-off of unamortized deferred financing fees, or additional costs, expenses, discounts, make-whole payments, penalties or premiums incurred as a result of early retirement or payment of the Company’s debt; (c) the non-cash effect of income tax benefits or expenses and derivative transactions that have non-cash mark-to-market impacts on the Company’s income statement; (d) except as specifically stated in the case of guidance, the impact of future acquisitions or divestitures (including pursuant to tenant options to purchase) and capital transactions; (e) the financial impact of contingent consideration, severance-related costs, charitable donations made to the Ventas Charitable Foundation, gains and losses for non-operational foreign currency hedge agreements and changes in the fair value of financial instruments; and (f) expenses related to the re-audit and re-review in 2014 of the Company’s historical financial statements and related matters. Normalized FAD represents normalized FFO excluding non-cash components, straight-line rental adjustments and deducting capital expenditures, including tenant allowances and leasing commissions. FAD represents normalized FAD after subtracting merger-related expenses, deal costs and re-audit costs.

FFO, normalized FFO, FAD and normalized FAD 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, FAD and normalized FAD should not be considered as alternatives to net income (determined in accordance with GAAP) as indicators of the Company’s financial performance or as alternatives to cash flow from operating activities (determined in accordance with GAAP) as measures of the Company’s liquidity, nor are 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 as presented elsewhere herein.

NON-GAAP FINANCIAL MEASURES RECONCILIATION
EPS, FFO and FAD Guidance Attributable to Common Shareholders 1
(Dollars in millions, except per share amounts)
		Tentative / Preliminary and Subject to Change
		FY2016 - Guidance						2016 - Per Share
		Low			High			Low			High
Net Income Attributable to Common Stockholders		$645			$664			$1.89			$1.95
Depreciation and Amortization Adjustments		867			907			2.55			2.67
Other Adjustments 2		(107	)		(139	)		(0.31	)		(0.41	)
FFO (NAREIT) Attributable to Common Stockholders		$1,405			$1,432			$4.13			$4.21
Merger-Related Expenses, Deal Costs and Re-Audit Costs		5			10			0.01			0.03
Other Adjustments 2		(26	)		(30	)		(0.07	)		(0.09	)
Normalized FFO Attributable to Common Stockholders		$1,384			$1,412			$4.07			$4.15
% Year-Over-Year Comparable Growth								3	%		5	%
Capital expenditures		(120	)		(130	)		(0.35	)		(0.38	)
Other Adjustments 2		(15	)		(17	)		(0.04	)		(0.05	)
Normalized FAD Attributable to Common Stockholders		$1,249			$1,265			$3.67			$3.72
% Year-Over-Year Comparable Growth								3	%		4	%
Merger-Related Expense, Deal Costs and Re-Audit Costs		(5	)		(10	)		(0.01	)		(0.03	)
Other Adjustments 2		1			1			0.00			0.00
FAD Attributable to Common Stockholders		$1,245			$1,256			$3.66			$3.69
% Year-Over-Year Comparable Growth								13	%		14	%
Weighted Average Diluted Shares		340,357			340,357

1		Totals and per share amounts may not add due to rounding. Per share quarterly amounts may not add to annual per share amounts due to changes in the Company's weighted average diluted share count, if any.
2		See Funds From Operations (FFO) and Funds Available for Distribution (FAD) Including Comparable Earnings table for detailed breakout of “other adjustments” for each respective category.

NON-GAAP FINANCIAL MEASURES RECONCILIATION

Net Debt to Adjusted Pro Forma EBITDA

The following information considers the pro forma effect on net income of the Company’s investments and other capital transactions that were completed during the three months ended December 31, 2015, as if the transactions had been consummated as of the beginning of the period. The following table illustrates net debt to pro forma earnings before interest, taxes, depreciation and amortization (including non-cash stock-based compensation expense), excluding gains or losses on extinguishment of debt, income or loss from noncontrolling interest and unconsolidated entities (excluding cash distributions), 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 on real estate activity, gains or losses on re-measurement of equity interest upon acquisition and changes in the fair value of financial instruments (including amounts in discontinued operations) (“Adjusted Pro Forma EBITDA”) (dollars in thousands):

Net income attributable to common stockholders		$	124,728
Pro forma adjustments for current period investments, capital transactions and dispositions		1,456
Pro forma net income for the three months ended December 31, 2015		126,184
Add back:
Pro forma interest		103,269
Pro forma depreciation and amortization		239,204
Stock-based compensation		3,476
Gain on real estate dispositions		(4,162		)
Gain on extinguishment of debt, net		(486		)
Loss from unconsolidated entities		223
Noncontrolling interest		332
Loss on re-measurement of equity interest upon acquisition, net		176
Income tax benefit		(11,548		)
Change in fair value of financial instruments		454
Other taxes		494
Merger-related expenses, deal costs and re-audit costs		(414		)
Adjusted Pro Forma EBITDA		457,202
Adjusted Pro Forma EBITDA annualized		$	1,828,808
As of December 31, 2015:
Debt		$	11,206,996
Cash, adjusted for cash escrows pertaining to debt		(74,246		)
Net debt		$	11,132,750
Net debt to Adjusted Pro Forma EBITDA		6.1			x

NON-GAAP FINANCIAL MEASURES RECONCILIATION 1, 2
NOI by Segment
(In thousands)
		2015 Quarters																2014 Fourth
		Fourth				Third				Second				First				Quarter
Revenues
Triple-Net
Triple-Net Rental Income		$	208,210			$	201,028			$	182,006			$	188,557			$	174,500
Medical Office Buildings
Medical Office - Stabilized		135,642				130,573				129,145				123,210				104,170
Medical Office - Lease up		7,176				8,611				8,129				8,429				6,675
Medical Office - Other		3,140				3,571				3,198				5,421				6,123
Total Medical Office Buildings - Rental Income		145,958				142,755				140,472				137,060				116,968
Total Rental Income		354,168				343,783				322,478				325,617				291,468
Medical Office Building Services Revenue		9,370				8,459				7,749				8,858				9,218
Total Medical Office Buildings - Revenue		155,328				151,214				148,221				145,918				126,186
Triple-Net Services Revenue		1,147				1,011				1,139				1,136				1,136
Non-Segment Services Revenue		1,024				530				520				549				770
Total Medical Office Building and Other Services Revenue		11,541				10,000				9,408				10,543				11,124
Seniors Housing Operating
Seniors Housing - Stabilized		438,649				437,816				438,110				431,890				398,855
Seniors Housing - Lease up		16,222				17,009				16,535				15,024				12,083
Seniors Housing - Other		—				—				—				—				232
Total Resident Fees and Services		454,871				454,825				454,645				446,914				411,170
Non-Segment Income from Loans and Investments		20,361				18,924				25,215				22,053				14,876
Total Revenues, excluding Interest and Other Income		840,941				827,532				811,746				805,127				728,638
Property-Level Operating Expenses
Medical Office Buildings
Medical Office - Stabilized		43,095				38,593				38,490				36,808				33,332
Medical Office - Lease up		3,235				3,013				3,087				3,242				2,509
Medical Office - Other		(1,257		)		1,699				1,833				2,387				2,970
Total Medical Office Buildings		45,073				43,305				43,410				42,437				38,811
Seniors Housing Operating
Seniors Housing - Stabilized		294,288				290,619				286,321				286,277				262,915
Seniors Housing - Lease up		12,973				13,921				12,931				12,085				10,421
Seniors Housing - Other		—				—				—				—				227
Total Seniors Housing		307,261				304,540				299,252				298,362				273,563
Total Property-Level Operating Expenses		352,334				347,845				342,662				340,799				312,374
Medical Office Building Services Costs		7,467				6,416				5,764				6,918				7,527
Net Operating Income
Triple-Net
Triple-Net Properties		208,210				201,028				182,006				188,557				174,500
Triple-Net Services Revenue		1,147				1,011				1,139				1,136				1,136
Total Triple-Net		209,357				202,039				183,145				189,693				175,636
Medical Office Buildings
Medical Office - Stabilized		92,547				91,980				90,655				86,402				70,838
Medical Office - Lease up		3,941				5,598				5,042				5,187				4,166
Medical Office - Other		4,397				1,872				1,365				3,034				3,153
Medical Office Building Services		1,903				2,043				1,985				1,940				1,691
Total Medical Office Buildings		102,788				101,493				99,047				96,563				79,848
Seniors Housing Operating
Seniors Housing - Stabilized		144,361				147,197				151,789				145,613				135,940
Seniors Housing - Lease up		3,249				3,088				3,604				2,939				1,662
Seniors Housing - Other		—				—				—				—				5
Total Seniors Housing		147,610				150,285				155,393				148,552				137,607
Non-Segment		21,385				19,454				25,735				22,602				15,646
Net Operating Income		$	481,140			$	473,271			$	463,320			$	457,410			$	408,737
1 Amounts above are adjusted to exclude discontinued operations for all periods presented.
2 Amounts above are not restated for changes between categories from quarter to quarter.

NON-GAAP FINANCIAL MEASURES RECONCILIATION
(Dollars in thousands)
Total Portfolio Same-Store Constant Currency Cash NOI
		For the Three Months Ended								For the Year Ended
		December 31,								December 31,
		2015				2014				2015				2014
Net Operating Income		$	481,140			$	408,737			$	1,875,141			$	1,560,070
Adjustments:
Lease Modification Fee		—				—				5,200				—
NOI Not Included in Same-Store		(79,080		)		(18,552		)		(343,815		)		(112,301		)
Straight-Lining of Rental Income		(8,674		)		(9,008		)		(33,721		)		(38,553		)
Non-Cash Rental Income		(4,163		)		(947		)		(15,456		)		(4,674		)
Non-Segment NOI		(21,385		)		(15,644		)		(89,176		)		(54,048		)
Constant Currency Adjustment		—				(2,874		)		—				(3,193		)
		(113,302		)		(47,025		)		(476,968		)		(212,769		)
Constant Currency NOI as Reported		$	367,838			$	361,712			$	1,398,173			$	1,347,301
Percentage Increase						1.7		%						3.8		%

NON-GAAP FINANCIAL MEASURES RECONCILIATION
(Dollars in thousands)
Triple-Net Portfolio Same-Store Constant Currency Cash NOI
		For the Year Ended
		December 31,
		2015				2014
Net Operating Income		$	784,234			$	679,112
Adjustments:
Lease Modification Fee		5,200				—
NOI Not Included in Same-Store		(129,030		)		(55,291		)
Straight-Lining of Rental Income		(18,964		)		(26,473		)
Non-Cash Rental Income		(18,681		)		(8,840		)
		(161,475		)		(90,604		)
Constant Currency NOI as Reported		$	622,759			$	588,508
Percentage Increase						5.8		%

NON-GAAP FINANCIAL MEASURES RECONCILIATION
(Dollars in thousands)
Senior Housing Operating Portfolio Same-Store Constant Currency Cash NOI
		For the Year Ended
		December 31,
		2015				2014
Net Operating Income		$	601,840			$	516,395
Less:
NOI Not Included in Same-Store		(109,706		)		(32,203		)
Constant Currency Adjustment		—				(3,193		)
		(109,706		)		(35,396		)
Constant Currency NOI as Reported		$	492,134			$	480,999
Percentage Increase						2.3		%

NON-GAAP FINANCIAL MEASURES RECONCILIATION
(Dollars in thousands)
MOB Portfolio Same-Store Constant Currency Cash NOI
		For the Year Ended
		December 31,
		2015				2014
Net Operating Income		$	399,891			$	310,515
Adjustments:
NOI Not Included in Same-Store		(105,079		)		(24,807		)
Straight-Lining of Rental Income		(14,758		)		(12,080		)
Non-Cash Rental Income		3,225				4,166
		(116,612		)		(32,721		)
Constant Currency NOI as Reported		$	283,279			$	277,794
Percentage Increase						2.0		%

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