UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)
☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2023
OR
☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
	ACT OF 1934 FOR THE TRANSITION PERIOD FROM____________TO____________

Commission file number: 1-10989

Ventas, Inc.

(Exact Name of Registrant as Specified in Its Charter)

Delaware	61-1055020
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)

353 N. Clark Street, Suite 3300

Chicago, Illinois 60654

(Address of Principal Executive Offices)    

(877) 483-6827

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Trading Symbol	Name of Exchange on Which Registered
Common Stock $0.25 par value	VTR	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒    No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒    No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer ☐	Non-accelerated filer	☐
Smaller reporting company	☐		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐    No ☒

As of August 1, 2023, there were 402,377,931 shares of the registrant’s common stock outstanding.

VENTAS, INC.

FORM 10-Q

INDEX

		Page
PART I—FINANCIAL INFORMATION
Item 1.	Consolidated Financial Statements (Unaudited)	1
	Consolidated Balance Sheets as of June 30, 2023 and December 31, 2022	1
	Consolidated Statements of Income for the Three and Six Months Ended June 30, 2023 and 2022	2
	Consolidated Statements of Comprehensive Income for the Three and Six Months Ended June 30, 2023 and 2022	3
	Consolidated Statements of Equity for the Three and Six Months Ended June 30, 2023 and 2022	4
	Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2023 and 2022	6
	Notes to Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	31
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	59
Item 4.	Controls and Procedures	61
PART II—OTHER INFORMATION
Item 1.	Legal Proceedings	62
Item 1A.	Risk Factors	62
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	62
Item 3.	Defaults Upon Senior Securities	62
Item 4.	Mine Safety Disclosures	62
Item 5.	Other Information	62
Item 6.	Exhibits	63

PART I—FINANCIAL INFORMATION

ITEM 1.    CONSOLIDATED FINANCIAL STATEMENTS

VENTAS, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except per share amounts, unaudited)

	As of June 30, 2023		As of December 31, 2022
Assets
Real estate investments:
Land and improvements	$	2,630,480	$	2,437,905
Buildings and improvements	27,438,274		26,020,048
Construction in progress	387,194		310,456
Acquired lease intangibles	1,498,639		1,346,190
Operating lease assets	321,344		310,307
	32,275,931		30,424,906
Accumulated depreciation and amortization	(9,792,822)		(9,264,456)
Net real estate property	22,483,109		21,160,450
Secured loans receivable and investments, net	27,749		537,075
Investments in unconsolidated real estate entities	629,184		579,949
Net real estate investments	23,140,042		22,277,474
Cash and cash equivalents	138,648		122,564
Escrow deposits and restricted cash	71,699		48,181
Goodwill	1,045,147		1,044,415
Assets held for sale	21,027		44,893
Deferred income tax assets, net	6,980		10,490
Other assets	647,319		609,823
Total assets	$	25,070,862	$	24,157,840
Liabilities and equity
Liabilities:
Senior notes payable and other debt	$	13,354,740	$	12,296,780
Accrued interest	112,788		110,542
Operating lease liabilities	200,968		190,440
Accounts payable and other liabilities	1,069,590		1,031,689
Liabilities related to assets held for sale	2,959		6,492
Deferred income tax liabilities	29,702		35,570
Total liabilities	14,770,747		13,671,513
Redeemable OP unitholder and noncontrolling interests	271,671		264,650
Commitments and contingencies
Equity:
Ventas stockholders’ equity:
Preferred stock, $1.00 par value; 10,000 shares authorized, unissued	—		—
Common stock, $0.25 par value; 600,000 shares authorized, 400,620 and 399,707 shares outstanding at June 30, 2023 and December 31, 2022, respectively	100,206		99,912
Capital in excess of par value	15,584,858		15,539,777
Accumulated other comprehensive loss	(14,552)		(36,800)
Retained earnings (deficit)	(5,688,499)		(5,449,385)
Treasury stock, 276 and 10 shares issued at June 30, 2023 and December 31, 2022, respectively	(13,631)		(536)
Total Ventas stockholders’ equity	9,968,382		10,152,968
Noncontrolling interests	60,062		68,709
Total equity	10,028,444		10,221,677
Total liabilities and equity	$	25,070,862	$	24,157,840

See accompanying notes.

1

VENTAS, INC.

CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share amounts, unaudited)

	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2023		2022		2023		2022
Revenues
Rental income:
Triple-net leased	$	154,355	$	149,397	$	304,094	$	300,958
Outpatient medical and research portfolio	215,807		199,241		418,811		399,781
	370,162		348,638		722,905		700,739
Resident fees and services	724,614		658,056		1,429,607		1,309,177
Third party capital management revenues	3,996		4,326		8,173		8,275
Income from loans and investments	6,554		10,752		20,143		20,599
Interest and other income	1,032		1,166		2,775		1,702
Total revenues	1,106,358		1,022,938		2,183,603		2,040,492
Expenses
Interest	143,265		113,951		271,340		224,745
Depreciation and amortization	304,689		283,075		586,808		572,139
Property-level operating expenses:
Senior housing	547,110		507,446		1,084,332		982,976
Outpatient medical and research portfolio	72,171		63,328		139,084		126,511
Triple-net leased	3,537		3,585		7,333		7,593
	622,818		574,359		1,230,749		1,117,080
Third party capital management expenses	1,436		1,410		3,142		2,723
General, administrative and professional fees	34,399		32,915		79,197		75,913
(Gain) loss on extinguishment of debt, net	(6,801)		7		(6,801)		7
Transaction expenses and deal costs	3,069		13,078		4,455		33,070
Allowance on loans receivable and investments	(12,065)		(62)		(20,129)		(116)
Gain on foreclosure of real estate	(29,127)		—		(29,127)		—
Other	(17,959)		48,116		(10,197)		20,926
Total expenses	1,043,724		1,066,849		2,109,437		2,046,487
Income (loss) before unconsolidated entities, real estate dispositions, income taxes and noncontrolling interests	62,634		(43,911)		74,166		(5,995)
Income (loss) from unconsolidated entities	31,254		(1,047)		25,631		(5,316)
Gain (loss) on real estate dispositions	1,405		(34)		11,606		2,421
Income tax benefit	9,773		3,790		12,575		8,280
Income (loss) from continuing operations	105,066		(41,202)		123,978		(610)
Net income (loss)	105,066		(41,202)		123,978		(610)
Net income attributable to noncontrolling interests	1,613		1,214		3,008		3,074
Net income (loss) attributable to common stockholders	$	103,453	$	(42,416)	$	120,970	$	(3,684)
Earnings per common share
Basic:
Income (loss) from continuing operations	$	0.26	$	(0.10)	$	0.31	$	—
Net income (loss) attributable to common stockholders	0.26		(0.11)		0.30		(0.01)
Diluted:1
Income (loss) from continuing operations	$	0.26	$	(0.10)	$	0.31	$	—
Net income (loss) attributable to common stockholders	0.26		(0.11)		0.30		(0.01)

______________________________

1 Potential common shares are not included in the computation of diluted earnings per share (“EPS”) when a loss from continuing operations exists as the effect would be an antidilutive per share amount.

See accompanying notes.

2

VENTAS, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands, unaudited)

	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2023		2022		2023		2022
Net income (loss)	$	105,066	$	(41,202)	$	123,978	$	(610)
Other comprehensive income:
Foreign currency translation income (loss)	1,881		(11,429)		5,780		(20,742)
Unrealized loss on available for sale securities	—		(1,531)		—		(2,119)
Unrealized gain on derivative instruments	28,001		14,107		19,199		33,143
Total other comprehensive income	29,882		1,147		24,979		10,282
Comprehensive income (loss)	134,948		(40,055)		148,957		9,672
Comprehensive income (loss) attributable to noncontrolling interests	5,578		(580)		5,739		5,191
Comprehensive income (loss) attributable to common stockholders	$	129,370	$	(39,475)	$	143,218	$	4,481

See accompanying notes.

3

VENTAS, INC.

CONSOLIDATED STATEMENTS OF EQUITY

For the Three Months Ended June 30, 2023 and 2022

(In thousands, except per share amounts, unaudited)

	For the Three Months Ended June 30, 2023
2019	Common Stock Par Value		Capital in Excess of Par Value		Accumulated Other Comprehensive (Loss) Income		Retained Earnings (Deficit)		Treasury Stock		Total Ventas Stockholders’ Equity		Noncontrolling Interests		Total Equity
Balance at April 1, 2023	$	100,065	$	15,562,017	$	(40,469)	$	(5,611,067)	$	(13,555)	$	9,996,991	$	67,611	$	10,064,602
Net income	—		—		—		103,453		—		103,453		1,613		105,066
Other comprehensive income	—		—		25,917		—		—		25,917		3,965		29,882
Net change in noncontrolling interests	—		3,463		—		—		—		3,463		(13,127)		(9,664)
Dividends to common stockholders—$0.45 per share	—		10		—		(180,885)		—		(180,875)		—		(180,875)
Issuance of common stock for stock plans, restricted stock grants and other	141		30,378		—		—		(76)		30,443		—		30,443
Adjust redeemable OP unitholder interests to current fair value	—		(11,010)		—		—		—		(11,010)		—		(11,010)
Balance at June 30, 2023	$	100,206	$	15,584,858	$	(14,552)	$	(5,688,499)	$	(13,631)	$	9,968,382	$	60,062	$	10,028,444

	For the Three Months Ended June 30, 2022
	Common Stock Par Value		Capital in Excess of Par Value		Accumulated Other Comprehensive (Loss) Income		Retained Earnings (Deficit)		Treasury Stock		Total Ventas Stockholders’ Equity		Noncontrolling Interests		Total Equity
Balance at April 1, 2022	$	99,888	$	15,478,467	$	(59,296)	$	(4,821,653)	$	—	$	10,697,406	$	95,284	$	10,792,690
Net loss	—		—		—		(42,416)		—		(42,416)		1,214		(41,202)
Other comprehensive income	—		—		2,941		—		—		2,941		(1,794)		1,147
Net change in noncontrolling interests	—		(7,379)		—		—		—		(7,379)		(3,906)		(11,285)
Dividends to common stockholders—$0.45 per share	—		—		—		(180,500)		—		(180,500)		—		(180,500)
Issuance of common stock for stock plans, restricted stock grants and other	25		9,882		—		—		(408)		9,499		—		9,499
Adjust redeemable OP unitholder     interests to current fair value	—		33,045		—		—		—		33,045		—		33,045
Balance at June 30, 2022	$	99,913	$	15,514,015	$	(56,355)	$	(5,044,569)	$	(408)	$	10,512,596	$	90,798	$	10,603,394

See accompanying notes.

4

VENTAS, INC.

CONSOLIDATED STATEMENTS OF EQUITY

For the Six Months Ended June 30, 2023 and 2022

(In thousands, except per share amounts, unaudited)

	For the Six Months Ended June 30, 2023
2019	Common Stock Par Value		Capital in Excess of Par Value		Accumulated Other Comprehensive (Loss) Income		Retained Earnings (Deficit)		Treasury Stock		Total Ventas Stockholders’ Equity		Noncontrolling Interests		Total Equity
Balance at January 1, 2023	$	99,912	$	15,539,777	$	(36,800)	$	(5,449,385)	$	(536)	$	10,152,968	$	68,709	$	10,221,677
Net income	—		—		—		120,970		—		120,970		3,008		123,978
Other comprehensive income	—		—		22,248		—		—		22,248		2,731		24,979
Net change in noncontrolling interests	—		4,856		—		—		—		4,856		(14,386)		(9,530)
Dividends to common stockholders—$0.90 per share	—		10		—		(360,084)		—		(360,074)		—		(360,074)
Issuance of common stock for stock plans, restricted stock grants and other	294		48,217		—		—		(13,095)		35,416		—		35,416
Adjust redeemable OP unitholder interests to current fair value	—		(7,933)		—		—		—		(7,933)		—		(7,933)
Redemption of OP Units	—		(69)		—		—		—		(69)		—		(69)
Balance at June 30, 2023	$	100,206	$	15,584,858	$	(14,552)	$	(5,688,499)	$	(13,631)	$	9,968,382	$	60,062	$	10,028,444

	For the Six Months Ended June 30, 2022
	Common Stock Par Value		Capital in Excess of Par Value		Accumulated Other Comprehensive (Loss) Income		Retained Earnings (Deficit)		Treasury Stock		Total Ventas Stockholders’ Equity		Noncontrolling Interests		Total Equity
Balance at January 1, 2022	$	99,838	$	15,498,956	$	(64,520)	$	(4,679,889)	$	—	$	10,854,385	$	91,375	$	10,945,760
Net loss	—		—		—		(3,684)		—		(3,684)		3,074		(610)
Other comprehensive income	—		—		8,165		—		—		8,165		2,117		10,282
Net change in noncontrolling interests	—		(6,521)		—		—		—		(6,521)		(5,768)		(12,289)
Dividends to common stockholders—$0.90 per share	—		—		—		(360,996)		—		(360,996)		—		(360,996)
Issuance of common stock for stock plans, restricted stock grants and other	75		25,172		—		—		(408)		24,839		—		24,839
Adjust redeemable OP unitholder interests to current fair value	—		(3,592)		—		—		—		(3,592)		—		(3,592)
Balance at June 30, 2022	$	99,913	$	15,514,015	$	(56,355)	$	(5,044,569)	$	(408)	$	10,512,596	$	90,798	$	10,603,394

See accompanying notes.

5

VENTAS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands, unaudited)

	For the Six Months Ended June 30,
	2023		2022
Cash flows from operating activities:
Net income (loss)	$	123,978	$	(610)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	586,808		572,139
Amortization of deferred revenue and lease intangibles, net	(29,592)		(33,491)
Other non-cash amortization	8,969		6,412
Allowance on loans receivable and investments	(20,129)		(116)
Stock-based compensation	20,389		22,601
Straight-lining of rental income	(1,884)		(7,559)
(Gain) loss on extinguishment of debt, net	(6,801)		7
Gain on real estate dispositions	(11,606)		(2,421)
Income tax benefit	(15,813)		(11,184)
(Gain) loss and other from unconsolidated entities	(25,618)		5,322
Gain on foreclosure of real estate	(29,127)		—
Distributions from unconsolidated entities	9,682		10,719
Other	(14,279)		25,128
Changes in operating assets and liabilities:
Increase in other assets	(17,341)		(32,622)
Decrease in accrued interest	(3,524)		(2,008)
(Decrease) increase in accounts payable and other liabilities	(19,468)		315
Net cash provided by operating activities	554,644		552,632
Cash flows from investing activities:
Net investment in real estate property	(977)		(388,295)
Investment in loans receivable	(589)		(5,225)
Proceeds from real estate disposals	64,405		6,171
Proceeds from loans receivable	43,822		487
Proceeds from sale of interest in unconsolidated entities	50,054		—
Net cash assumed in foreclosure of real estate	11,615		—
Development project expenditures	(144,809)		(81,878)
Capital expenditures	(96,271)		(91,004)
Distributions from unconsolidated entities	—		25,652
Investment in unconsolidated entities	(64,247)		(33,086)
Insurance proceeds for property damage claims	9,390		7,918
Net cash used in investing activities	(127,607)		(559,260)
Cash flows from financing activities:
Net change in borrowings under revolving credit facilities	8,293		(7,822)
Net change in borrowings under commercial paper program	(267,414)		55,184
Proceeds from debt	1,748,532		706,915
Repayment of debt	(1,489,112)		(394,395)
Purchase of noncontrolling interests	(110)		(170)
Payment of deferred financing costs	(27,356)		(4,126)
Issuance of common stock, net	25,007		—
Cash distribution to common stockholders	(361,703)		(360,098)
Cash distribution to redeemable OP unitholders	(3,089)		(3,072)
Cash issued for redemption of OP Units	(655)		—
Contributions from noncontrolling interests	7,979		39
Distributions to noncontrolling interests	(17,388)		(7,873)
Proceeds from stock option exercises	1,736		8,691
Other	(12,805)		(6,219)
Net cash used in financing activities	(388,085)		(12,946)
Net increase (decrease) in cash, cash equivalents and restricted cash	38,952		(19,574)
Effect of foreign currency translation	650		(992)
Cash, cash equivalents and restricted cash at beginning of period	170,745		196,597
Cash, cash equivalents and restricted cash at end of period	$	210,347	$	176,031

See accompanying notes.

6

VENTAS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

(In thousands, unaudited)

	For the Six Months Ended June 30,
	2023		2022
Supplemental schedule of non-cash activities:
Assets acquired and liabilities assumed from acquisitions and other:
Real estate investments	$	—	$	3,176
Other assets	7,873		362
Other liabilities	9,000		2,944
Deferred income tax liability	12,382		594
Settlement of loan receivable	486,082		—
Real estate received in settlement of loan receivable	1,566,395		—
Assumption of debt related to real estate owned	1,016,804		—

See accompanying notes.

7

VENTAS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1—DESCRIPTION OF BUSINESS

Ventas, Inc. (together with its consolidated subsidiaries, unless otherwise indicated or except where the context otherwise requires, “we,” “us,” “our,” “Company” and other similar terms), an S&P 500 company, is a real estate investment trust (“REIT”) operating at the intersection of healthcare and real estate. We hold a highly diversified portfolio of senior housing communities, outpatient medical buildings, research centers, hospitals and other healthcare facilities, which we generally refer to collectively as “healthcare real estate,” located throughout the United States, Canada and the United Kingdom. As of June 30, 2023, we owned or had investments in approximately 1,400 properties (including properties classified as held for sale). Our company was originally founded in 1983 and is headquartered in Chicago, Illinois with additional corporate offices in Louisville, Kentucky and New York, New York.

We primarily invest in a diversified portfolio of healthcare real estate assets through wholly owned subsidiaries and other co-investment entities. We operate through three reportable business segments: triple-net leased properties, senior housing operating portfolio, which we also refer to as “SHOP” and which was formerly known as senior living operations, and outpatient medical and research portfolio, which was formerly known as office operations. See “Note 2 – Accounting Policies” and “Note 15 – Segment Information.” Our senior housing communities are either subject to triple-net leases, in which case they are included in our triple-net leased properties reportable business segment, or operated by independent third-party managers, in which case they are included in our SHOP reportable business segment.

As of June 30, 2023, we leased a total of 355 properties (excluding properties within our outpatient medical and research portfolio reportable business segment) to various healthcare operating companies under triple-net or absolute-net leases that obligate the tenants to pay all property-related expenses, including maintenance, utilities, repairs, taxes, insurance and capital expenditures. Our three largest tenants, Brookdale Senior Living Inc. (together with its subsidiaries, “Brookdale Senior Living”), Ardent Health Partners, LLC (together with its subsidiaries, “Ardent”) and Kindred Healthcare, LLC (together with its subsidiaries, “Kindred”) leased from us 121 properties, 30 properties (including 19 outpatient medical buildings) and 29 properties, respectively, as of June 30, 2023.

As of June 30, 2023, pursuant to long-term management agreements, we engaged independent operators, such as Atria Senior Living, Inc. (together with its subsidiaries, including Holiday Retirement (“Holiday”), “Atria”) and Sunrise Senior Living, LLC (together with its subsidiaries, “Sunrise”), to manage 579 senior housing communities.

As of June 30, 2023, we owned or had investments in a total of 460 properties in our outpatient medical and research portfolio reportable business segment. These properties generally consist of outpatient medical buildings that are predominantly located on or contiguous to a health system campus and research properties that are affiliated with and often located on or contiguous to a university or academic medical campus. Through our Lillibridge Healthcare Services, Inc. subsidiary and our ownership interest in PMB Real Estate Services LLC, we also provide outpatient medical building management, leasing, marketing, facility development and advisory services to highly rated hospitals and health systems throughout the United States.

In addition, from time to time, we make secured and unsecured loans and other investments relating to healthcare real estate or operators.

We have a third-party institutional capital management business, Ventas Investment Management (“VIM”), which includes our open-ended investment vehicle, the Ventas Life Science & Healthcare Real Estate Fund (the “Ventas Fund”). Through VIM, we partner with third-party institutional investors to invest in healthcare real estate through various joint ventures and other co-investment vehicles where we are the sponsor or general partner.

8

VENTAS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 2—ACCOUNTING POLICIES

The accompanying Consolidated Financial Statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information set forth in the Accounting Standards Codification (“ASC”), as published by the Financial Accounting Standards Board (“FASB”), and with the Securities and Exchange Commission (“SEC”) instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair statement of results for the interim period have been included. Operating results for the three and six months ended June 30, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023. The accompanying Consolidated Financial Statements and related notes should be read in conjunction with the audited Consolidated Financial Statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2022 (the “2022 Annual Report”). Certain prior period amounts have been reclassified to conform to the current period presentation.

Accounting Estimates

The preparation of financial statements in accordance with GAAP requires us to make estimates and assumptions regarding future events that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Principles of Consolidation

The accompanying Consolidated Financial Statements include our accounts and the accounts of our wholly owned subsidiaries and the joint venture entities over which we exercise control. All intercompany transactions and balances have been eliminated in consolidation, and our net earnings are reduced by the portion of net earnings attributable to noncontrolling interests.

GAAP requires us to identify entities for which control is achieved through means other than voting rights and to determine which business enterprise is the primary beneficiary of variable interest entities (“VIEs”). Substantially all of the assets of the VIEs are real estate investments, and substantially all of the liabilities of the VIEs are mortgage loans. Assets of the consolidated VIEs can only be used to settle obligations of such VIEs. Liabilities of the consolidated VIEs represent claims against the specific assets of the VIEs. The table below summarizes the total assets and liabilities of our consolidated VIEs as reported on our Consolidated Balance Sheets (dollars in thousands):

	As of June 30, 2023				As of December 31, 2022
	Total Assets		Total Liabilities		Total Assets		Total Liabilities
NHP/PMB L.P.	$	746,467	$	252,293	$	741,890	$	252,518
Fonds Immobilier Groupe Maurice, S.E.C.	2,009,243		1,213,624		1,957,075		1,170,928
Other identified VIEs	1,704,600		359,247		1,699,949		333,185
Tax credit VIEs	121,771		16,504		128,240		16,767

U.S. Department of Health & Human Services Grants

We applied for grants under the Provider Relief Fund administered by the U.S. Department of Health & Human Services (“HHS”) on behalf of the assisted living communities in our SHOP reportable business segment to partially mitigate losses attributable to COVID-19. These grants are intended to reimburse eligible providers for expenses incurred to prevent, prepare for and respond to COVID-19 and lost revenues attributable to COVID-19. Recipients are not required to repay distributions from the Provider Relief Fund, provided that they attest to and comply with certain terms and conditions, including not using grants received from the Provider Relief Fund to reimburse expenses or losses that other sources are obligated to reimburse, complying with reporting and record keeping requirements and cooperating with any government audits.

9

VENTAS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

During the three and six months ended June 30, 2023, we did not receive any HHS grants. During the three and six months ended June 30, 2022, we received $0 and $34.0 million, respectively, in HHS grants in connection with our applications and recognized these grants within property-level operating expenses in our Consolidated Statements of Income in the period in which they were received.

Accounting for Foreclosed Properties

The Company may receive properties pursuant to a foreclosure, deed in lieu of foreclosure or other legal action in full or partial settlement of loans receivable by taking legal title or physical possession of the properties. We refer to such actions as a “foreclosure” and to such properties as “foreclosed properties”. We account for foreclosed properties received in settlement of loans receivable in accordance with ASC 310, Receivables. Foreclosed real estate received in full or partial satisfaction of a loan and any debt assumed upon foreclosure is recorded at fair value at the time of foreclosure. If the amortized cost basis in the loan exceeds the fair value of the collateral received, the difference is recorded as an allowance on loans receivable and investments in the Consolidated Statements of Income. Conversely, if the fair value of the collateral received is higher than the amortized cost basis in the loan, the difference, less the fair value of any debt assumed, less the principal amount of the loan receivable (after the reversal of previously recorded allowances), and net of working capital assumed and transaction costs, is recorded as a gain on foreclosure of real estate in the Consolidated Statements of Income.

Exchangeable Senior Notes

We account for our exchangeable senior notes in accordance with ASC 470-20, Debt - Debt with Conversion and Other Options (after the adoption of Accounting Standards Update (“ASU”) 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”)). We evaluate the exchange features embedded in our exchangeable senior notes in accordance with ASC 815, Derivatives and Hedging. ASC 815 requires embedded derivatives to be separated from their host nonderivative contracts and accounted for as free-standing derivative financial instruments if, and only if, each of the following three criteria is met: (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable GAAP with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. Certain contracts that involve an entity’s own equity are explicitly exempted from the requirements of ASC 815.

NOTE 3—CONCENTRATION OF CREDIT RISK

As of June 30, 2023, Atria, Sunrise, Brookdale Senior Living, Ardent and Kindred managed or operated approximately 25.1%, 9.5%, 7.6%, 5.1% and 0.8%, respectively, of our consolidated real estate investments based on gross book value (excluding properties classified as held for sale as of June 30, 2023). Because Atria and Sunrise manage our properties in exchange for a management fee from us, we are not directly exposed to their credit risk in the same manner or to the same extent as triple-net tenants like Brookdale Senior Living, Ardent and Kindred.

Based on gross book value, approximately 11.1% and 54.5% of our consolidated real estate investments were senior housing communities included in the triple-net leased properties and SHOP reportable business segments, respectively (excluding properties classified as held for sale as of June 30, 2023). Outpatient medical buildings, research centers, inpatient rehabilitation facilities (“IRFs”) and long-term acute care facilities (“LTACs”), health systems, skilled nursing facilities (“SNFs”) and secured loans receivable and investments collectively comprised the remaining 34.4%. Our consolidated properties were located in 47 states, the District of Columbia, seven Canadian provinces and the United Kingdom as of June 30, 2023, with properties in one state (California) accounting for more than 10% of our total consolidated revenues and net operating income (“NOI,” which is defined as total revenues, less interest and other income, property-level operating expenses and third party capital management expenses) for each of the three months ended June 30, 2023 and 2022. See “Non-GAAP Financial Measures” included elsewhere in this Quarterly Report on Form 10-Q for additional disclosure and a reconciliation of net income attributable to common stockholders, as computed in accordance with GAAP, to NOI.

10

VENTAS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Triple-Net Leased Properties

The properties we triple-net leased to Brookdale Senior Living, Ardent and Kindred accounted for a significant portion of total revenues and total NOI for the three months ended June 30, 2023 and 2022. The following table reflects the concentration risk related to our triple-net leased properties including assets held for sale for the periods presented:

	For the Three Months Ended June 30,
	2023		2022
Contribution as a Percentage of Total Revenues (1):
Brookdale Senior Living	3.4	%	3.6	%
Ardent	3.0		3.2
Kindred	3.0		3.3
Contribution as a Percentage of Total NOI (2):
Brookdale Senior Living	7.8	%	8.4	%
Ardent	6.9		7.3
Kindred	6.9		7.6

____________________________

(1)Total revenues include third party capital management revenues, income from loans and investments and interest and other income.

(2)See “Non-GAAP Financial Measures” included elsewhere in this Quarterly Report on Form 10-Q for additional disclosure and a reconciliation of net income attributable to common stockholders, as computed in accordance with GAAP, to NOI.

Each of our leases with Brookdale Senior Living, Ardent and Kindred is a triple-net lease that obligates the tenant to pay all property-related expenses, including maintenance, utilities, repairs, taxes, insurance and capital expenditures, and to comply with the terms of the mortgage financing documents, if any, affecting the properties. In addition, each of our Brookdale Senior Living, Ardent and Kindred leases is guaranteed by a corporate parent.

Kindred Lease

As of June 30, 2023, we leased 29 properties to Kindred pursuant to a single, triple-net master lease agreement (together with certain other agreements related to such master lease, collectively, the “Kindred Lease”). Pursuant to the Kindred Lease, the 29 properties are divided into two groups. The first group is composed of 6 properties (“Group 1”) and the second group is composed of 23 properties (“Group 2”). The existing term of the Kindred Lease expires on April 30, 2028 for Group 1 and April 30, 2025 for Group 2. Kindred has the option to renew the Group 1 properties for two, 5-year extension at the greater of escalated rent and fair market rental. Kindred has the option to renew the Group 2 properties for one, 5-year extension at escalated rent, and following that, two additional 5-year extensions at the greater of escalated rent and fair market rent. The Kindred Lease is guaranteed by a parent company.

Senior Housing Operating Portfolio

As of June 30, 2023, Atria and Sunrise, collectively, provided comprehensive property management and accounting services with respect to 334 of our 570 consolidated senior housing communities, for which we pay annual management fees pursuant to long-term management agreements.

As of June 30, 2023, Atria and its subsidiaries, including Holiday, managed a pool of 242 senior housing communities for Ventas. Ventas has the right to terminate the management contract for 91 of the communities on short notice.

As of June 30, 2023, Sunrise managed 92 communities for Ventas pursuant to multiple management agreements (collectively, the “Sunrise Management Agreements”). Our Sunrise Management Agreements have initial terms expiring between 2035 and 2040. Ventas has the ability to terminate some or all of the Sunrise Management Agreements under certain circumstances.

11

VENTAS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

We rely on our managers’ personnel, expertise, technical resources and information systems, proprietary information, good faith and judgment to manage our senior housing operating portfolio efficiently and effectively. We also rely on our managers to set appropriate resident fees, provide accurate property-level financial results in a timely manner and otherwise operate our senior housing communities in compliance with the terms of our management agreements and all applicable laws and regulations.

NOTE 4—DISPOSITIONS AND IMPAIRMENTS

2023 Activity

During the six months ended June 30, 2023, we sold six senior housing communities (three of which were vacant), five outpatient medical buildings, one research center and three triple-net leased properties (two of which were vacant) for aggregate consideration of $64.4 million and recognized a gain on the sale of these assets of $11.6 million in our Consolidated Statements of Income.

Assets Held for Sale

The table below summarizes our real estate assets classified as held for sale including the amounts reported on our Consolidated Balance Sheets, which may include anticipated post-closing settlements of working capital for disposed properties (dollars in thousands):

	As of June 30, 2023					As of December 31, 2022
	Number of Properties Held for Sale	Assets Held for Sale		Liabilities Related to Assets Held for Sale		Number of Properties Held for Sale	Assets Held for Sale		Liabilities Related to Assets Held for Sale
SHOP	2	$	21,027	$	1,910	3	$	44,852	$	5,675
Outpatient Medical and Research Portfolio (1)	—	—		1,049		—	41		817
Total	2	$	21,027	$	2,959	3	$	44,893	$	6,492

______________________________

(1)Primarily relates to sold assets that will be settled post close.

Real Estate Impairments

We recognized impairments of $10.7 million and $12.6 million for the three months ended June 30, 2023 and 2022, respectively, and $19.2 million and $26.9 million for the six months ended June 30, 2023 and 2022, respectively, which are recorded primarily as a component of depreciation and amortization in our Consolidated Statements of Income. The impairments recorded were primarily a result of a change in our intent to hold or a change in the future cash flows of the impaired assets.

12

VENTAS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 5—LOANS RECEIVABLE AND INVESTMENTS

As of June 30, 2023 and December 31, 2022, we had $52.2 million and $561.4 million, respectively, of loans receivable and investments, net of allowance, relating to senior housing and healthcare operators or properties. The following is a summary of our loans receivable and investments, net, including amortized cost, fair value and unrealized gains or losses on available for sale investments (dollars in thousands):    

	Amortized Cost		Allowance		Carrying Amount		Fair Value
As of June 30, 2023:
Secured/mortgage loans and other, net (1)	$	27,749	$	—	$	27,749	$	27,790
Non-mortgage loans receivable, net (2)	28,992		(4,492)		24,500		23,626
Total loans receivable and investments, net	$	56,741	$	(4,492)	$	52,249	$	51,416
As of December 31, 2022:
Secured/mortgage loans and other, net (3)	$	513,669	$	(20,000)	$	493,669	$	493,627
Government-sponsored pooled loan investments, net (4)	43,406		—		43,406		43,406
Total investments reported as secured loans receivable and investments, net	557,075		(20,000)		537,075		537,033
Non-mortgage loans receivable, net (2)	28,959		(4,621)		24,338		23,416
Total loans receivable and investments, net	$	586,034	$	(24,621)	$	561,413	$	560,449

______________________________

(1)Investments have contractual maturities in 2024 and 2027.

(2)Included in other assets on our Consolidated Balance Sheets.

(3)Includes the Company’s cash-pay non-recourse mezzanine loan to Santerre Health Investors (the “Santerre Mezzanine Loan”), which was no longer outstanding as of June 30, 2023. Other included investments have contractual maturities in 2024 and 2027.

(4)Repaid at par in February 2023.

On May 1, 2023, we took ownership of the properties that secured the Santerre Mezzanine Loan by converting the outstanding principal amount of the Santerre Mezzanine Loan to equity, with no additional consideration being paid. As a result, the Santerre Mezzanine Loan is no longer outstanding. The properties consisted of a diverse pool of outpatient medical buildings, senior housing operating portfolio communities, triple-net leased skilled nursing facilities and hospital assets in the United States, which, at the time, also secured a $1 billion non-recourse senior mortgage loan issued under the CHC Commercial Mortgage Trust 2019-CHC (the “CHC Mortgage Loan”). For additional information regarding the CHC Mortgage Loan, see “Note 9 – Senior Notes Payable And Other Debt.”

As of December 31, 2022, we recognized a $20.0 million allowance on the Santerre Mezzanine Loan in our Consolidated Statements of Income. The allowance for the Santerre Mezzanine Loan was calculated using the “current expected credit loss”, or “CECL”, model, which considers relevant information about past events, current conditions and reasonable and supportable forecasts to estimate expected losses as of the most recent balance sheet date. During the three months ended March 31, 2023, we recorded an $8.0 million partial reversal of the allowance in our Consolidated Statements of Income resulting in a $12.0 million allowance as of March 31, 2023. In connection with our equitization of the Santerre Mezzanine Loan on May 1, 2023, we recognized $41.1 million in valuation-related items in our Consolidated Statements of Income consisting of: (a) the reversal of the $12.0 million and $20.0 million of allowances on the Santerre Mezzanine Loan for the three and six months ended June 30, 2023, respectively, and (b) a gain on foreclosure of real estate of $29.1 million for the three and six months ended June 30, 2023. The gain is the fair value of the properties that secured the Santerre Mezzanine Loan, less the fair value of the CHC Mortgage Loan, less the principal amount of the Santerre Mezzanine Loan on May 1, 2023 (after the reversal of previously recorded allowances), and net of non-real estate assets and liabilities and transaction costs. For additional information, see “Note 10 – Fair Value Measurements”.

13

VENTAS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 6—INVESTMENTS IN UNCONSOLIDATED ENTITIES

We report investments in unconsolidated entities over whose operating and financial policies we have the ability to exercise significant influence under the equity method of accounting. We are not required to consolidate these entities because our joint venture partners have significant participating rights, nor are these entities considered VIEs, as they are controlled by equity holders with sufficient capital. We invest in both real estate entities and operating entities which are described further below.

Investments in Unconsolidated Real Estate Entities

Through our Ventas Investment Management Platform, which combines our extensive third-party capital ventures under a single platform, we partner with third-party institutional investors to invest in healthcare real estate through various joint ventures and other co-investment vehicles where we are the sponsor or general partner.

Below is a summary of our investments in unconsolidated real estate entities as of June 30, 2023 and December 31, 2022, respectively (dollars in thousands):

	Ownership as of (1)		Carrying Amount as of
	June 30, 2023	December 31, 2022	June 30, 2023		December 31, 2022
Investments in unconsolidated real estate entities:
Ventas Life Science & Healthcare Real Estate Fund	21.0%	21.0%	$	258,200	$	263,979
Pension Fund Joint Venture	23.5%	22.9%	26,934		25,028
Research & Innovation Development Joint Venture	51.4%	51.0%	328,535		284,962
Ventas Investment Management Platform			613,669		573,969
Atrium Health & Wake Forest Joint Venture	48.5%	48.5%	14,877		5,403
All other (2)	34.0%-38.0%	34.0%-38.0%	(2,316)		577
Total investments in unconsolidated real estate entities			$	626,230	$	579,949

______________________________

(1)     The entities in which we have an ownership interest may have less than a 100% interest in the underlying real estate. The ownership percentages in the table reflect our interest in the underlying real estate. Joint venture members, including us in some instances, have equity participation rights based on the underlying performance of the investments, which could result in non pro rata distributions.

(2)     Includes investments in parking structures and other de minimis investments in unconsolidated real estate entities. The balance as of June 30, 2023 includes investments in unconsolidated real estate entities that are recorded in accounts payable and other liabilities as of June 30, 2023 on our Consolidated Balance Sheets.

We provide various services to our unconsolidated real estate entities in exchange for fees and reimbursements. Total management fees earned in connection with these services were $3.6 million and $3.8 million for the three months ended June 30, 2023 and 2022, respectively, and $7.2 million and $7.3 million for the six months ended June 30, 2023 and 2022, respectively. Such amounts are included in third party capital management revenues in our Consolidated Statements of Income.

Investments in Unconsolidated Operating Entities

We own investments in unconsolidated operating entities such as Ardent and Atria, which are included within other assets on our Consolidated Balance Sheets. Our 34% ownership interest in Atria entitles us to customary minority rights and protections, including the right to appoint two members to the Atria Board of Directors.

As of June 30, 2023, we held a 7.5% ownership interest in Ardent, which entitles us to customary minority rights and protections, including the right to appoint one member to the Ardent Board of Directors. In May 2023, we sold approximately 24% of our ownership interest in Ardent to a third-party investor for $50.1 million in total proceeds. As a result of the sale, we recognized $33.5 million of gain for both the three and six months ended June 30, 2023 in income from unconsolidated entities in our Consolidated Statements of Income and our ownership interest in Ardent was reduced from 9.8% to 7.5%.

14

VENTAS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 7—INTANGIBLES

The following is a summary of our intangibles (dollars in thousands):

	As of June 30, 2023			As of December 31, 2022
	Balance		Weighted Average Remaining Amortization Period in Years	Balance		Weighted Average Remaining Amortization Period in Years
Intangible assets:
Above-market lease intangibles (1)	$	141,098	6.4	$	129,038	5.4
In-place and other lease intangibles (2)	1,357,541		7.2	1,217,152		8.0
Goodwill	1,045,147		N/A	1,044,415		N/A
Other intangibles (2)	34,441		5.2	34,404		5.6
Accumulated amortization	(1,137,288)		N/A	(1,061,305)		N/A
Net intangible assets	$	1,440,939	7.1	$	1,363,704	7.8
Intangible liabilities:
Below-market lease intangibles (1)	$	342,741	7.7	$	333,672	8.6
Other lease intangibles	13,498		N/A	13,498		N/A
Accumulated amortization	(261,079)		N/A	(258,639)		N/A
Purchase option intangibles	3,568		N/A	3,568		N/A
Net intangible liabilities	$	98,728	7.7	$	92,099	8.6

______________________________

(1)     Amortization of above- and below-market lease intangibles is recorded as a decrease and an increase to revenues, respectively, in our Consolidated Statements of Income.

(2)     Amortization of lease intangibles is recorded in depreciation and amortization in our Consolidated Statements of Income.

N/A—Not Applicable

Above-market lease intangibles and in-place and other lease intangibles are included in acquired lease intangibles within real estate investments on our Consolidated Balance Sheets. Other intangibles (including non-compete agreements, trade names and trademarks) are included in other assets on our Consolidated Balance Sheets. Below-market lease intangibles, other lease intangibles and purchase option intangibles are included in accounts payable and other liabilities on our Consolidated Balance Sheets.

NOTE 8—OTHER ASSETS

The following is a summary of our other assets (dollars in thousands):

	As of June 30, 2023		As of December 31, 2022
Straight-line rent receivables	$	193,583	$	187,536
Non-mortgage loans receivable, net	24,500		24,338
Stock warrants	40,451		23,621
Other intangibles, net	5,997		6,393
Investment in unconsolidated operating entities	79,417		95,363
Other	303,371		272,572
Total other assets	$	647,319	$	609,823

Stock warrants represent warrants exercisable at any time prior to December 31, 2025, in whole or in part, for 16.3 million shares of Brookdale Senior Living common stock at an exercise price of $3.00 per share. These warrants are measured at fair value with changes in fair value being recognized within other expense in our Consolidated Statements of Income.

15

VENTAS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 9—SENIOR NOTES PAYABLE AND OTHER DEBT

The following is a summary of our senior notes payable and other debt (dollars in thousands):

	As of June 30, 2023		As of December 31, 2022
Unsecured revolving credit facility (1)(2)	$	35,019	$	25,230
Commercial paper notes	135,000		403,000
2.55% Senior Notes, Series D due 2023 (2)	—		202,967
3.50% Senior Notes due 2024	400,000		400,000
3.75% Senior Notes due 2024	400,000		400,000
4.125% Senior Notes, Series B due 2024 (2)	123,339		184,515
2.80% Senior Notes, Series E due 2024 (2)	55,181		442,837
Unsecured term loan due 2025 (2)	377,758		369,031
3.50% Senior Notes due 2025	600,000		600,000
2.65% Senior Notes due 2025	450,000		450,000
4.125% Senior Notes due 2026	500,000		500,000
3.25% Senior Notes due 2026	450,000		450,000
3.75% Exchangeable Senior Notes due 2026	862,500		—
Unsecured term loan due 2027	500,000		500,000
2.45% Senior Notes, Series G due 2027 (2)	358,870		350,579
3.85% Senior Notes due 2027	400,000		400,000
4.00% Senior Notes due 2028	650,000		650,000
5.398% Senior Notes, Series I due 2028 (2)	453,309		—
4.40% Senior Notes due 2029	750,000		750,000
3.00% Senior Notes due 2030	650,000		650,000
4.75% Senior Notes due 2030	500,000		500,000
2.50% Senior Notes due 2031	500,000		500,000
3.30% Senior Notes, Series H due 2031 (2)	226,655		221,419
6.90% Senior Notes due 2037 (3)	52,400		52,400
6.59% Senior Notes due 2038 (3)	22,823		22,823
5.70% Senior Notes due 2043	300,000		300,000
4.375% Senior Notes due 2045	300,000		300,000
4.875% Senior Notes due 2049	300,000		300,000
Mortgage loans and other	3,086,088		2,436,443
Total	13,438,942		12,361,244
Deferred financing costs, net	(81,363)		(63,410)
Unamortized fair value adjustment	19,510		23,535
Unamortized discounts	(22,349)		(24,589)
Senior notes payable and other debt	$	13,354,740	$	12,296,780

______________________________

(1)As of June 30, 2023 and December 31, 2022, respectively, $12.8 million and $3.7 million of aggregate borrowings were denominated in Canadian dollars. Aggregate borrowings of $22.2 million and $21.5 million were denominated in British pounds as of June 30, 2023 and December 31, 2022, respectively.

(2)British Pound and Canadian Dollar debt obligations shown in US Dollars.

(3)Our 6.90% senior notes due 2037 are subject to repurchase at the option of the holders, at par, on October 1, 2027, and our 6.59% senior notes due 2038 are subject to repurchase at the option of the holders, at par, on July 7 in each of 2023 and 2028.

16

VENTAS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Credit Facilities, Commercial Paper, Unsecured Term Loans and Letters of Credit

We have a $2.75 billion unsecured revolving credit facility priced at SOFR plus 0.925%, which is subject to adjustment based on the Company’s debt rating. The unsecured revolving credit facility matures in January 2025, but may be extended at our option, subject to the satisfaction of certain conditions, for two additional periods of six months each. The unsecured revolving credit facility also includes an accordion feature that permits us to increase our aggregate borrowing capacity thereunder to up to $3.75 billion, subject to the satisfaction of certain conditions, including the receipt of additional commitments for such increase.