Ventas Comments on Full Year 2016 Expectations and Issues Preliminary 2017 Outlook

  • Expects to Achieve 2016 Normalized FFO per Share Approximating the
    High-End of Previous Guidance Range
  • Issues Preliminary 2017 Outlook
  • Same-Store Cash Flow Growth, Portfolio Enhancement and Financial
    Strength Expected to Continue in 2017

CHICAGO–(BUSINESS WIRE)–$VTR–Ventas, Inc. (NYSE: VTR) (“Ventas” or the “Company”), in conjunction
with its presentation at the J.P. Morgan Healthcare Conference (the
“J.P. Morgan Conference”) today, announced that it expects to achieve
normalized Funds From Operations (“FFO”) per share for the full year
2016 approximating the high-end of its previously announced guidance
range of $4.10 to $4.13.

“Our diversified and advantaged portfolio continues to perform well and
we expect to achieve strong 2016 results, with 4 to 5 percent FFO per
share growth for the year,” Ventas Chairman and Chief Executive Officer
Debra A. Cafaro said. “In 2016, we exceeded our strategic disposition
targets and enhanced our financial position. We increased our dividend
by 6 percent and delivered 16 percent total shareholder return. As the
leading capital provider to high-quality senior living, healthcare and
life science research institutions, our aligned, cohesive team remains
focused on delivering value to shareholders and our leading operators.

“Our 2017 forecast reflects our continued strategic actions to create
short- and long-term shareholder value, including: disposition of nearly
$1 billion in assets, including substantially all of our skilled nursing
portfolio at a premium valuation; redeploying proceeds into investments
in high-quality hospitals and attractive life science and innovation
centers; and strengthening our balance sheet through longer debt
maturities,” concluded Ms. Cafaro. “While these actions will affect
year-over-year growth, we are confident that improving our portfolio
quality and asset mix while enhancing our credit profile are the right
steps for Ventas to continue our long track record of excellence and
leading market position.”

2016 Expectations

  • The Company expects normalized FFO per diluted share for the full year
    2016 to approximate the high-end of its previously announced guidance
    range of $4.10 to $4.13.
  • The Company’s full year 2016 same-store cash NOI growth is expected to
    be within its prior guidance of 2.5 to 3 percent. Individual segment
    same-store full year 2016 growth rates should remain within previously
    disclosed ranges.
  • Proceeds from accelerated dispositions and receipt of loan repayments
    in 2016 exceeded $600 million compared to prior guidance of $500
    million. Fourth quarter proceeds approached $350 million and included:

    • Asset sales of nearly $240 million at 7 percent cash and GAAP
      yields, resulting in a significant net gain.
    • Repayment of well-secured and structured loan investments
      previously made by the Company at par plus a premium (8 percent
      cash and GAAP yield).
  • Ventas continued to strengthen its healthy balance sheet and financial
    position, with Net Debt to Adjusted Pro Forma EBITDA expected to
    improve to a range of 5.7x to 5.8x at year end 2016 compared to 6.1x
    at year end 2015.

The Company’s full year 2016 guidance is based on a number of
assumptions that are subject to change and many of which are outside the
control of the Company. The Company has not completed its year-end
financial and accounting procedures for the fiscal year-ended 2016 and
the Company’s independent registered public accounting firm has not
audited, reviewed, compiled or performed any procedures with respect to
2016 results. If actual results for full year 2016 vary from these
assumptions, the Company’s actual financial results may be materially
different from its current estimated guidance. There can be no assurance
that the Company will achieve these results. A reconciliation of the
Company’s full year 2016 guidance is included in this press release.

Preliminary 2017 Outlook

Ventas’s 2017 forecast reflects the continued execution of its plan to
create shareholder value including optimizing its portfolio through the
strategic disposition of substantially all its skilled nursing
portfolio; investing for future growth; and enhancing its financial
profile and liquidity. In 2017, Ventas also expects to continue to grow
its overall same-store cash NOI. The Company’s preliminary expectations
for 2017 include:

  • 2017 normalized FFO per diluted share of $4.12 to $4.18.
  • Total Company full year 2017 same-store cash NOI growth of 1.5 to 2.5
    percent, with each segment expected to contribute positively to
    same-store cash NOI growth. Same-store reported GAAP growth from the
    portfolio is expected, as is typically the case, to be lower than
    same-store cash NOI growth due principally to the straight-lining
    impact of certain of the Company’s leases, and the impact of the
    extension of substantially all of the Company’s long-term acute care
    hospital leases with Kindred Healthcare, Inc.
  • Strategic dispositions to further optimize the portfolio and
    redeployment of capital into higher quality investments, with
    dispositions effected at a cost of capital that approximates the rate
    of new investments:

    • Strategic dispositions totaling $900 million, including $700
      million in proceeds in the second half of the year through the
      potential sale of 36 skilled nursing facilities owned by Ventas.
      If achieved the Company would realize a gain exceeding $600
      million. However, the Company does not control whether and when
      these assets will be sold; and
    • Redeployment of disposition proceeds into new investments
      exceeding $1 billion, mainly to expand the Company’s platforms
      with Ardent Health Services (“Ardent”) and Wexford Science +
      Technology, LLC (“Wexford”). These investments include providing
      $700 million in secured debt to fund Ardent’s acquisition of LHP
      Hospital Group, expected to close late in the first quarter of
      2017; and closing $300 million of new acquisitions, including
      high-quality life science and innovation centers operated by
  • Funding two new attractive ground-up developments with Wexford that
    expand existing life science and innovation centers associated with
    the University of Pennsylvania and Washington University.
  • The carryover impact of 2016 deleveraging activities and dispositions,
    higher interest rates and enhancement of the Company’s credit profile
    through refinancing approximately $1 billion of current debt in order
    to lengthen the Company’s weighted average maturity schedule.
  • In 2016, Ventas benefitted from profits from various transactions and
    fees, which are not projected to recur in 2017.

The Company’s 2017 preliminary outlook 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 full year 2017 results vary from these
assumptions, the Company’s actual financial results may be materially
different from its current preliminary outlook. There can be no
assurance that the Company will achieve these results. A reconciliation
of the Company’s full year 2017 preliminary outlook to the Company’s
projected 2017 GAAP earnings is included in this press release.

Fourth Quarter and Full Year 2016 Release and
Earnings Call

Ventas expects to report final results for the fourth quarter and full
year ended December 31, 2016 on Friday, February 10, 2016. The earnings
conference call is scheduled for 10 a.m. Eastern Time on this date, and
investors can access the conference call by calling (844) 776-7841 (or
(661) 378-9542 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
A replay of the webcast will be available following the call online, or
by calling (855) 859-2056 (or (404) 537-3406 for international callers),
passcode 50587913, beginning at approximately 2:00 p.m. Eastern Time and
will remain for 36 days.

J.P. Morgan Conference Presentation

Today a presentation regarding the Company will be made by Company
management at the J.P. Morgan Conference in San Francisco, California at
12:00 p.m. pacific time. The presentation will be webcast and may be
accessed through the Company’s website at
for a limited period of time following the event. A presentation
containing supplemental information regarding today’s announcement,
including quantitative reconciliations between each non-GAAP financial
measure referenced in this release and its most directly comparable GAAP
measure, in addition to any written materials relating to the Company’s
meetings with certain investors at the J.P. Morgan Conference can be
accessed at the Company’s website and will remain archived for a limited
period of time at

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, life science and innovation
centers, 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

Supplemental information regarding the Company can be found on the
Company’s website under the “Investor Relations” section or at—supplemental-information.
A comprehensive listing of the Company’s properties is available at

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.
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
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.
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
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 Company’s ability to obtain the financial results
expected from its development and redevelopment projects; (w) the impact
of market or issuer events on the liquidity or value of the Company’s
investments in marketable securities; (x) 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; (y) 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 (z) 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.

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 supplemental 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) the
financial impact of contingent consideration, severance-related costs
and charitable donations made to the Ventas Charitable Foundation; (e)
gains and losses for non-operational foreign currency hedge agreements
and changes in the fair value of financial instruments; (f) gains and
losses on non-real estate dispositions related to unconsolidated
entities; and (g) 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 or income from continuing operations (both
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
income from continuing operations is the most comparable GAAP measure
because it provides insight into the Company’s continuing operations.
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 and income from continuing operations as presented
elsewhere herein.

The Company considers NOI and same-store cash NOI to be important
supplemental measures to net income because they allow investors,
analysts and Company management to assess the Company’s unlevered
property-level operating results and to compare the Company’s operating
results with the operating results of other real estate companies and
between periods on a consistent basis. The Company defines NOI as total
revenues, less interest and other income, property-level operating
expenses and office building services costs (including amounts in
discontinued operations). Cash receipts may differ due to straight-line
recognition of certain rental income and the application of other GAAP
policies. The Company defines same-store cash NOI as the NOI for
properties owned, consolidated and operational for the full period in
both comparison periods excluding the impact of non-cash items such as
straight-line rent and the impact of exchange rate movements across the
comparison periods. In certain cases, results for same-store cash NOI
may be adjusted to reflect non-recurring items and the receipt of cash
payments and fees not fully recognized as NOI in the period. Same-store
cash NOI excludes assets intended for disposition and, for the seniors
housing operating portfolio, those properties that transitioned
operators after the start of the prior comparison period.

The Company has not provided a reconciliation of its forecasted full
year 2017 same-store cash NOI growth to its most directly comparable
GAAP measure because the Company is unable to quantify certain amounts
that would be required to be included in the comparable GAAP measure
without unreasonable efforts.


Ventas, Inc.
Ryan K. Shannon
(877) 4-VENTAS

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