ACQUISITIONS OF REAL ESTATE PROPERTY

The following summarizes our acquisition and development activities during the six months ended June 30, 2015 and the year ended December 31, 2014. We acquire and invest in seniors housing and healthcare properties primarily to achieve an expected yield on investment, to grow and diversify our portfolio and revenue base, and to reduce our dependence on any single tenant, operator or manager, geographic location, asset type, business model or revenue source.

2015 Acquisitions

HCT Acquisition

In January 2015, we acquired HCT in a stock and cash transaction, which added 152 properties to our portfolio. At the effective time of the merger, each share of HCT common stock outstanding (other than shares held by us, HCT or our respective subsidiaries, which shares were cancelled) was converted into the right to receive either 0.1688 shares of our common stock (with cash paid in lieu of fractional shares) or $11.33 per share in cash, at the election of each HCT shareholder. Shares of HCT common stock for which a valid election was not made were converted into the stock consideration. We funded the transaction through the issuance of approximately 28.4 million shares of our common stock and 1.1 million limited partnership units that are redeemable for shares of our common stock and the payment of approximately $11 million in cash (excluding cash in lieu of fractional shares). In addition, we assumed $167 million of mortgage debt and repaid approximately $730 million of debt, net of HCT cash on hand.

Other 2015 Acquisitions

In 2015, we made other investments totaling approximately $512 million, including the acquisition of ten triple-net

leased properties in the United Kingdom, 12 skilled nursing facilities and one seniors housing community subject to triple-net leases, and one MOB.

Pending Ardent Health Services Acquisition

In April 2015, we announced that we had entered into a definitive agreement to acquire privately owned Ardent Medical Services, Inc. (together with its affiliates, “Ardent Health Services”) for $1.75 billion in cash. Concurrent with the closing of the transaction, we plan to separate Ardent Health Services’ hospital operations from its owned real estate and sell the hospital operations to a newly formed and capitalized operating company (“Ardent”). In July 2015 we announced that we had signed a definitive agreement pursuant to which Ardent will be majority owned by an entity controlled by Equity Group Investments, with Ventas owning a 9.9% interest, and current Ardent management holding a significant ownership stake. Upon closing, we will enter into pre-agreed long-term, triple-net leases with Ardent to operate the acquired properties.

These transactions are both subject to the satisfaction of customary closing conditions, including regulatory approvals, and are expected to be completed in the third quarter of 2015. However, there can be no assurance as to whether, when or on what terms the acquisition of Ardent Health Services or the sale of Ardent Health Services’ hospital operations will be completed.

Estimated Fair Value

We are accounting for our 2015 acquisitions under the acquisition method in accordance with ASC Topic 805, Business Combinations (“ASC 805”). Our initial accounting for acquisitions completed during the six months ended June 30, 2015 remains subject to further adjustment. The following table summarizes the acquisition date fair values of the assets acquired and liabilities assumed, which we determined using level two and level three inputs:



	Triple-Net Leased Properties		Senior Living Operations		MOB Operations		Total
	(In thousands)
Land and improvements	$	123,879	$	70,713	$	171,650	$	366,242
Buildings and improvements	627,111		703,080		1,125,726		2,455,917
Acquired lease intangibles	23,564		83,867		178,165		285,596
Other assets	143,372		275,139		401,701		820,212
Total assets acquired	917,926		1,132,799		1,877,242		3,927,967
Notes payable and other debt	—		77,940		99,917		177,857
Other liabilities	34,992		45,142		48,789		128,923
Total liabilities assumed	34,992		123,082		148,706		306,780
Net assets acquired	882,934		1,009,717		1,728,536		3,621,187
Redeemable OP unitholder interests assumed							87,245
Cash acquired							54,778
Equity issued							2,216,355
Total cash used							$	1,262,809

The determination of fair values of the assets acquired and liabilities assumed has changed and is subject to further adjustment from the amounts reported in ‘‘Note 4-Acquisitions of Real Estate Property’’ of the Notes to Consolidated Financial Statements included in Part I of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2015, filed with the SEC on March 24, 2015, due primarily to reclassification adjustments for presentation and adjustments to our valuation assumptions. The changes to our valuation assumptions were based on more accurate information concerning the subject assets and liabilities. None of these changes had a material impact on our Consolidated Financial Statements.

Included in other assets above is $752.1 million of goodwill, which represents the excess of the purchase price over the fair value of the assets acquired and liabilities assumed as of the acquisition date. Goodwill has been allocated to our reportable business segments based on the respective fair value of the net assets acquired, as follows: triple-net leased properties - $133.6 million; senior living operations - $221.3 million; and MOB operations - $397.2 million.

Aggregate Revenue and NOI

For the six months ended June 30, 2015, aggregate revenues and NOI derived from our 2015 real estate acquisitions during our period of ownership were $144.8 million and $86.9 million, respectively.

Transaction Costs

As of June 30, 2015, we had incurred a total of $41.6 million of acquisition-related costs related to our completed 2015 acquisitions, all of which were expensed as incurred and included in merger-related expenses and deal costs in our Consolidated Statements of Income for the applicable periods. For the six months ended June 30, 2015 and 2014, we expensed, as incurred, $30.8 million and $2.6 million, respectively, of these acquisition-related costs related to our completed 2015 acquisitions.

Unaudited Pro Forma

The following table illustrates the effect on net income and earnings per share if we had consummated the HCT acquisition as of January 1, 2014.



	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2015		2014		2015		2014
	(In thousands, except per share amounts)
Revenues	$	891,250	$	824,308	$	1,788,818	$	1,638,813
Income from continuing operations attributable to common stockholders, including real estate dispositions	$	149,074	$	141,923	$	288,796	$	263,190
Earnings per common share:
Basic:
Income from continuing operations attributable to common stockholders, including real estate dispositions	$	0.45	$	0.44	$	0.88	$	0.82
Diluted:
Income from continuing operations attributable to common stockholders, including real estate dispositions	$	0.45	$	0.44	$	0.87	$	0.81
Weighted average shares used in computing earnings per common share:
Basic	330,715		322,403		327,890		322,347
Diluted	334,026		326,037		331,424		325,902

Acquisition-related costs related to the HCT acquisition are not expected to have a continuing impact and, therefore, have been excluded from these pro forma results. The pro forma results also do not include the impact of any synergies that may be achieved in the HCT acquisition, any reduction in our borrowing costs resulting from the acquisition or any strategies that management may consider in order to continue to efficiently manage our operations, nor do they give pro forma effect to any other acquisitions, dispositions or capital markets transactions that we completed during the periods presented. These pro forma results are not necessarily indicative of the operating results that would have been obtained had the HCT acquisition occurred at the beginning of the periods presented, nor are they necessarily indicative of future operating results.

2014 Acquisitions

Holiday Canada Acquisition

In August 2014, we acquired 29 seniors housing communities located in Canada from Holiday Retirement (the “Holiday Canada Acquisition”) for a purchase price of CAD 957.0 million. We also paid CAD 26.9 million in costs relating to the early repayment of debt at closing. We funded the Holiday Canada Acquisition initially through borrowings under a CAD 791.0 million unsecured term loan that we incurred in July 2014 (and subsequently repaid primarily through a private placement of senior notes in Canada) and the assumption of CAD 193.7 million of debt.

Other 2014 Acquisitions

During the year ended December 31, 2014, we also acquired three triple-net leased private hospitals (located in the United Kingdom), 26 triple-net leased seniors housing communities and four seniors housing communities that are being operated by independent third-party managers for aggregate consideration of approximately $812.0 million. We also paid $18.8 million in costs relating to the early repayment of debt at closing of the applicable transactions. In addition, we acquired a construction design, planning and consulting business to complement our MOB operations through the issuance of 148,241 shares of our common stock.

Completed Developments

During 2014, we completed the development of two MOBs and one seniors housing community, representing $41.2 million of net real estate property on our Consolidated Balance Sheets as of December 31, 2014.

Estimated Fair Value

We are accounting for our 2014 acquisitions under the acquisition method in accordance with ASC 805 and have completed our initial accounting, which is subject to further adjustment. The following table summarizes the acquisition date fair values of the assets acquired and liabilities assumed in our 2014 real estate acquisitions, which we determined using level two and level three inputs:



	Triple-Net Leased Properties		Senior Living Operations		Total
	(In thousands)
Land and improvements	$	45,586	$	100,281	$	145,867
Buildings and improvements	546,849		1,081,384		1,628,233
Acquired lease intangibles	28,883		36,452		65,335
Other assets	227		12,393		12,620
Total assets acquired	621,545		1,230,510		1,852,055
Notes payable and other debt	12,927		228,150		241,077
Other liabilities	8,609		124,714		133,323
Total liabilities assumed	21,536		352,864		374,400
Net assets acquired	600,009		877,646		1,477,655
Cash acquired	227		8,704		8,931
Total cash used	$	599,782	$	868,942	$	1,468,724