EXCELLENCE. SUSTAINED. INVESTOR PRESENTATION SEPTEMBER 2016

Transcription

1 EXCELLENCE. SUSTAINED. INVESTOR PRESENTATION SEPTEMBER 2016

2 FORWARD-LOOKING STATEMENTS This presentation contains 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. These forward-looking statements include, among others, statements of expectations, beliefs, future plans and strategies, anticipated results from operations and developments and other matters that are not historical facts. The forward-looking statements are based on management s beliefs as well as on a number of assumptions concerning future events. Readers of these materials are cautioned not to put undue reliance on these forward-looking statements, which are not a guarantee of performance and are subject to a number of uncertainties and other factors that could cause actual events or results to differ materially from those expressed or implied by the forward-looking statements. The most important factors that could prevent the Company from achieving its stated goals include, but are not limited to: (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 the Company harmless 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, including investments in different asset types and outside the United States; (d) macroeconomic conditions such as a disruption of or a 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 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) the Company s ability and willingness to maintain its qualification as a REIT in light of economic, market, legal, tax and other considerations; (j) 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 or manager, and obligations, including indemnification obligations, the Company may incur in connection with the replacement of an existing tenant or manager; (k) 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; and (l) the other factors set forth in the Company s periodic filings with the Securities and Exchange Commission. 1

3 TABLE OF CONTENTS Ventas Investment Thesis (3) Ventas & Market Overview (4 14) Ventas Strategy Overview (15 20) Operational Excellence in Seniors Housing (21 27) The Hospital Growth Opportunity (28 35) Our Medical Office Building Platform (36 38) Our Life Science Platform (39 45) Role of Post-Acute Care (46 49) Closing (51) Appendix Definitions and SEC Reg. G Compliance (52 61) 2

4 VENTAS INVESTMENT THESIS EXCELLENCE. SUSTAINED. We are the leading provider of capital to high-quality senior living and healthcare operators Ventas is positioned at the intersection of two large and dynamic markets: healthcare and real estate Each represents nearly 20% of U.S. GDP Demand tailwind of large growing senior population + longevity megatrend $1T, fragmented real estate market ripe for investment Excellence Demonstrated: track record of consistent growth and income through cycles for almost two decades We will sustain excellence with superior People, Properties and Platforms Diversified business model and financial strength High-quality portfolio partnered with leading operators across 6 asset classes Extraordinary external growth opportunities Attractive dividend yield with room to grow Outstanding team with unparalleled track record 3

5 VENTAS & MARKET OVERVIEW EXCELLENCE. SUSTAINED.

6 VENTAS A LEADING REIT WITH STRONG CASH FLOW FROM BALANCED PORTFOLIO AND DEMOGRAPHIC DEMAND Asset Class Diversification Operator Diversification U.S. Acute Care Hospitals Skilled Nursing Specialty Hospitals Life Science 7% 5% 1% 5% 5% 4% Loans $2.0B NOI International Hospitals 31% Seniors Housing - Operating Other 34% $2.0B NOI 19% 11% Atria Lillibridge 19% 5% 9% 24% Wexford 5% 8% 9% Sunrise Medical Office Seniors Housing - NNN Ardent Brookdale Kindred Source: Company financials; as reported. Totals may not add due to rounding. Pro forma for the acquisition of Wexford closed on 09/01/2016; Wexford values based on pro forma 2017 cash NOI as originally announced on 07/05/

7 LONG-TERM SUSTAINABLE GROWTH AND INCOME WITH FINANCIAL STRENGTH Annual FFO / Sh Growth since % Annual Dividend / Sh Growth since % Annual Free Cash Flow / Sh Growth since % TSR CAGR since Credit Rating Completed Spin-Off 12/31/ of CCP 26% BBB+ >$4B Enterprise Value Leading S&P 500 Company 3 $36B Enterprise Value YTD 2016 Comp. Norm. FFO/Share Growth 3 Diversified Portfolio 3 7% <1,300 Assets 1. Source: Company financials. FFO growth based on arithmetic average of annual growth rates from the period. FFO average utilizes 2015 Comparable normalized FFO / share growth rate of 9% as announced in the Company s fourth quarter and year-end 2015 earnings release on 02/12/2016. Dividend CAGR based on Q3 and Q combined VTR + CCP dividends (on a pre-1:4 adjustment basis). 2. Total shareholder return represents compound annual growth rate through 12/31/ Data per Q press release, supplemental and earnings conference call dated 07/29/

8 CONTINUED TRACK RECORD OF EARNINGS GROWTH, FINANCIAL STRENGTH AND A PRODUCTIVE AND ALIGNED TEAM 1 Excellent Q Outlook Wexford Acquisition 7% Q2 comparable normalized FFO / sh growth 3.5% Q2 same-store pool reported cash NOI growth 5.8x net debt to EBITDA Debt refinancing + successful equity raise Increased 2016 same-store cash NOI growth guidance to 2%-3% $4.05-$ (E) normalized FFO / sh = 3%-5% comparable growth Wexford September close contemplated within current guidance range $1.5B acquisition of Wexford Science & Technology s life science and medical real estate (closed September 1) 6.8% expected cash yield 2 Leading institutional tenants highly rated, top-tier universities, academic medical centers and research companies Best-in-class platform for growth with aligned expert team Class-A assets that are environmentally advanced + architecturally appealing Consistent with VTR strategy of driving reliable growth and income from a diversified portfolio Premier Provider of Capital at the Intersection of Healthcare and Real Estate 1. Data per Q press release, supplemental and earnings conference call dated 07/29/ Represents the expected cash yield on the 23 stabilized assets. 7

9 NEW REIT GICS SECTOR OFFERS OPPORTUNITY 5.0% 4.5% 4.0% 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% Portfolio Managers Underweight REITs Mutual Fund Exposure (~7,500 Funds, $5T AUM) to REITs Manager Exposure 2.2% Gap = ~$100B UW Benchmark Exposure >$100B potential capital inflow to REITs expected with new REIT GICS sector Great opportunity for VTR equity Uniquely positioned at the intersection of healthcare and real estate Track record of cash flow and income growth through cycles Strong balance sheet and liquidity External growth and consolidation opportunities Top team and culture the largest ownership positions by non dedicated funds are in mall giant Simon (SPG), specialty REIT Iron Mountain (IRM), self storage operator Public Storage (PSA), data center REIT Equinix (EQIX) and health care REIT Ventas (VTR) Citibank 06/07/2016 Source: J.P. Morgan Real Estate Research April

10 ATTRACTIVE AND DYNAMIC OPPORTUNITIES VTR AT THE INTERSECTION OF HEALTHCARE AND REAL ESTATE >$17T U.S. GDP Healthcare 20% by VTR ~20% Real Estate 2 Healthcare spending projected to grow 5.8% annually ( ) 1 Large and growing aging population increases demand for healthcare and senior living products Senior population has immense spending power and wealth Senior housing and healthcare real estate market is large, fragmented and ripe for consolidation ($1T real estate market) Healthcare real estate under-owned by REITs <15% well below other REIT sectors Consolidation opportunities at the early stages of asset migration to REITs (most efficient owners) 1. Source: CMS. 2. Source: NAIOP Economic Impacts of Commercial Real Estate, 2015 Edition; represents total economic contribution to GDP (includes multiplier effect). 9

11 HEALTHCARE SPENDING INCREASING National Health Expenditures ($ Trillions) $6.0 $5.0 $4.0 $3.0 $3.1 $3.2 $3.4 $3.6 $ % CAGR $4.0 $4.3 $4.5 $4.8 $5.1 $5.4 $2.0 $1.0 $ (E) 2015(E) 2016(E) 2017(E) 2018(E) 2019(E) 2020(E) 2021(E) 2022(E) 2023 (E) 2024(E) % GDP 17.7% 18.0% 18.1% 18.1% 18.1% 18.3% 18.5% 18.8% 19.1% 19.3% 19.6% Source: CMS. 10

12 DEMOGRAPHICS & LONGEVITY FUELING DEMAND Growing Population of Healthcare Consumers With Immense Wealth and Spending Power And Increasing Care Needs with Age 7x Faster Growth in 75+ Population 1 10,000 Boomers Turning Medicare Eligible Daily 2 20M Newly Insured under ACA 3 >$640K Average 75+ Net Worth 4 73% Of U.S. Healthcare Spending from 50+ Population 5 $12T Of Wealth Transfer to Boomers over Next Years 5 5x More Healthcare Spending from Seniors 6 2.5x More Physician Office Visits from Seniors 7 40% Of 85+ Cohort Need Help with 3+ Activities of Daily Living 5 1. Source: US Census Bureau, Population Division. 2. Source: Pew Research Center. 3. US Department of Health and Human Services (March 2016). 4. Federal Reserve Survey of Consumer Finances. 5. Bank of America Merrill Lynch, Thematic Investing (May 2016). 6. ISI Real Estate Research; Bureau of Labor Statistics. 7. Marcus and Millichap, CMS. 11

13 A $1T DOMESTIC REAL ESTATE MARKET ASSETS SHOULD FLOW TO MOST EFFICIENT OWNERS Outpatient Facilities/ MOBs Life Science / Biotech Facilities Domestic market is large and growing 5% 10% Post-Acute Facilities Early stages of securitized public real estate 39% 15% Private Pay Seniors Housing Dynamic policy environment Care delivery increasingly interconnected 31% Hospitals Consolidating and fragmented market with significant capital needs 12

14 SIGNIFICANT RUNWAY FOR GROWTH EARLY INNINGS OF HEALTHCARE REIT OWNERSHIP PERCENTAGE OF REAL ESTATE OWNED BY REITS Successful Model for Separating Real Estate from Operating Business 40%-50% 50%-55% 20%-25% 12%-15% Healthcare Multifamily Housing (Top 50) 1 Malls Hotels (Top 25) 2 1. Based on number of units owned by top 50 multifamily housing owners. 2. Based on number of units owned by top 25 hotel owners. 13

15 WHAT IS VENTAS S WINNING FORMULA? ENSURING EXCELLENCE. SUSTAINED. PEOPLE OUR PEOPLE OUR PROCESSES OUR CULTURE ADVANTAGED REAL ESTATE ASSETS IN ATTRACTIVE MARKETS PROPERTIES ADVANTAGE PLATFORMS LEADING OPERATORS ACROSS THE SITES OF CARE 14

16 VENTAS STRATEGY OVERVIEW EXCELLENCE. SUSTAINED.

17 NORMALIZED FFO ($) / SHARE (INDEXED TO 2001) OUR FORESIGHT AND INNOVATION CHANGED THE WAY INVESTORS THINK ABOUT HEALTHCARE REAL ESTATE Healthcare Real Estate Foresight Execute Early Grow Platforms with Winning Operators of 10 credit upgrades during financial crisis 4.0 RIDEA RMZ Campaign (E) Source: Company financials. Based on annual growth rates from the (E) period. 2016(E) based on the midpoint of the Company s normalized FFO / share guidance announced in the Company s second quarter 2016 earnings release on 07/29/ and 2016 periods utilize Comparable normalized FFO / share growth rates. 16

18 HEALTHCARE DELIVERY IS CONVERGING REQUIRING SOLUTIONS ACROSS SITES OF CARE AND GEOGRAPHIES Community- Based Care Hospitals Leading operators consolidating + Care delivery increasingly interconnected + Dynamic policy environment = Seniors Housing Life Science Post- Acute Care Need for broad and deep CAPITAL AND REAL ESTATE SOLUTIONS 17

19 WE ARE PARTNERED WITH THE LEADERS Community- Based Care Hospitals Seniors Housing Post- Acute Care Life Science 18

20 VENTAS GROWING WITH LEADING TENANTS AND OPERATORS Post-Acute Care Seniors Housing Medical Office Life Science Hospitals Partnerships w/ Nation s Top Operating Partners in Industry % Segment NOI from Top-Ranked Operators 90% 81% 85% 1 73% 2 100% % Total VTR NOI 3 11% 55% 19% 5% 6% Source: Company financials; as reported. Totals may not add due to rounding. 1. Represents affiliated MOB cash NOI from assets affiliated with investment-grade systems and HCA. 2. Represents revenue from excellent credit tenants, including 11 universities with an average credit rating of Aa2, investment-grade companies and public companies with an equity market capitalization exceeding $1 billion. 3. Segments shown exclude loan portfolio. Pro forma for the acquisition of Wexford closed on 09/01/2016; Wexford values based on pro forma 2017 cash NOI as originally announced on 07/05/

21 FUTURE GROWTH PROSPECTS ARE BRIGHT DRIVE OPERATIONAL EXCELLENCE WITH LEADING OPERATORS BUILD ON ADVANTAGED PLATFORMS WITHIN ASSET CLASSES CAPITALIZE ON HEALTHCARE CONVERGENCE EXPLORE NEW MARKETS MOBs and SHOP E.g., Hospitals, Life Science and Redevelopment Real estate solutions across sites of care New asset classes and geographies Opportunity to Change the Way Leading Healthcare Providers Think about Capital Sources 20

22 OPERATIONAL EXCELLENCE IN SENIORS HOUSING EXCELLENCE. EXEMPLIFIED.

23 VENTAS SENIORS HOUSING PORTFOLIO 1 Life Science U.S. Acute Care Hospitals Skilled Nursing Specialty Hospitals Medical Office 7% 5% 19% Loans 1% 5% 5% 4% $2.0B NOI 24% International Hospitals 31% Seniors Housing - Operating Seniors Housing - NNN Outstanding SHOP assets in advantaged markets + high-quality NNN leases ~50% SHOP / 50% NNN seniors housing portfolio Tremendous industry tailwinds Growth in the seniors population Benefits of communal living 1.5%-3% 2016(E) same-store NOI growth 1. Data per Q press release, supplemental and earnings conference call dated 07/29/2016. Pro forma for the acquisition of Wexford closed on 09/01/2016; Wexford values based on pro forma 2017 cash NOI as originally announced on 07/05/

24 ATTRACTIVE SHOP ASSETS VTR SHOP PORTFOLIO HAS HIGH-QUALITY ASSETS IN ATTRACTIVE LOCATIONS Ventas SHOP 1,2 Industry benchmarks Median household income $76,442 $55,551 2 Median home value $411,601 $192, population growth 11.8% 11.6% 2 Building age Note: Demographic figures reflect 3-mile radius from each community. 1. SHOP portfolio represents U.S. portfolio; metrics weighted by NOI; from 2Q16 Ventas supplemental. 2. Demographic data provided by Nielsen and reflects 2016 projections, unless otherwise noted; certain Canadian data is unavailable; population growth reflects Nielsen projections. 3. 2Q16 NIC data; AL/IL supply excluding new construction. 23

25 SHOP ASSETS IN ATTRACTIVE LOCATIONS 21% West Coast NOI 1 SHOP Top 30 MSAs 44% East Coast NOI 1 >60% of SHOP NOI in highbarrier-to-entry coastal markets 1 Median home values 2.1x national average Median household income 1.4x national average 2Q16 occupancy 50bps higher than NIC industry average 2 Note: Data as of the second quarter ended 6/30/2016, unless otherwise noted. 1. Percentage of U.S. SHOP NOI in coastal markets as shown on map. 2. 2Q16 NIC Primary and Secondary Market data. 24

26 VENTAS SHOP STRATEGY WE HAVE A FOCUSED SHOP PARTNERSHIP STRATEGY VTR SHOP 1 All Others VTR SHOP STRATEGY Focused on building scale with winners driving operational excellence 30% Sunrise 63% Atria Offers partner for future growth and redevelopment Reduces intra-portfolio competition and portfolio overlap Builds deeper strategic relationships >90% Two Focused Operators Atria 5-year NOI CAGR nearly 400bps better than industry average 1. NOI diversification; Data as of the second quarter ended 06/30/

27 NATIONAL SCALE DRIVES EFFICIENCY EXAMPLE: ATRIA DRIVES EFFICIENCY THROUGH HR AND COST SAVINGS ROBUST PROCESSES FOCUSED ON ATTRACTING, DEVELOPING AND RETAINING TALENT SAVINGS REALIZED ACROSS CORPORATE AND LOCAL COSTS Growth Opportunities 22% Insurance savings through VTR aggregation Robust Training Transition Support 13% 11% Food savings through national culinary program 1 Property management savings via national service contracts Incentives 9% Collateral production savings via in-house print shop Source: Atria internal data, Food cost savings represent change from 2010 costs relative to CPI index for food ( ). 26

28 SALES AND MARKETING OPPORTUNITIES EXAMPLE: ATRIA SELLS VALUE PROPOSITION OF SENIORS HOUSING THROUGH MARKETING Dining Exercise / Physical Activity Transportation Social Life Independence Emergency Assistance Housekeeping Assisted living 40-60% cheaper than recreating benefits at home High-cost market: New York, NY Re-create benefits at home 1 : $12,011 Assisted Living rent 2 : $5,694 Low-cost market: Phoenix, AZ Re-create benefits at home 1 : $7,388 Assisted Living rent 2 : $4,024 ~1% Penetration Rate Increase = Full U.S. Occupancy 1. APFM national average (05/06/2015) adjusted based on local COLA adjustments from Sperling's Best Places (New York: 1.46, Phoenix: 1.04); includes home health rate inflation (24%) based on Department of Social Services CT daily rate for Medicaid covered client adjustment. 2. 2Q16 NIC Average Rent by market (New York, NY and Phoenix, AZ). 27

29 THE HOSPITAL GROWTH OPPORTUNITY EXCELLENCE. FORWARD.

30 VENTAS ACUTE CARE HOSPITAL PORTFOLIO 1 U.S. Acute Care Hospitals Skilled Nursing Specialty Hospitals Life Science Medical Office 7% 5% 4% 19% 5% Loans 1% 5% $2.0B NOI 24% International Hospitals 31% Seniors Housing - Operating >$100M annualized rent = 5% NOI ~3x EBITDARM coverage (operator cash flow / rent) 3 key markets, network of real estate Well-capitalized tenant with ~2x net debt / EBITDA Seniors Housing - NNN 1. Data per Q press release, supplemental and earnings conference call dated 07/29/2016. Pro forma for the acquisition of Wexford closed on 09/01/2016; Wexford values based on pro forma 2017 cash NOI as originally announced on 07/05/

31 Spending on Hospitals ($B) HOSPITALS: LARGE, GROWING ONE-THIRD OF HEALTHCARE SPENDING 2,000 1,500 1, ,031 1,147 +6% 1,292 1,463 1, Source: CMS. 30

32 DEMOGRAPHIC FUNDAMENTALS SUPPLY CONSTRAINED AND UTILIZATION INCREASING U.S. NUMBER OF HOSPITAL BEDS (000s) DAILY VOLUMES (000s) ,050 1, , F F 2020F Source: AHA Hospital Statistics. 1. Daily volumes is "US Adjusted Average Daily Census (000s)" average number of patients receiving care each day during a reported period, adjusted for inpatient vs. outpatient. 31

33 HOSPITALS ARE EVOLVING HOSPITALS remain the NERVE CENTER of healthcare delivery SHORTER LENGTHS OF STAY HIGHER VOLUMES HIGHEST ACUITY CARE 32

34 ROLE OF HOSPITALS IS CHANGING FROM... TO... Independent physicians EMPLOYED PHYSICIANS General acute care HIGHER ACUITY WITH CENTERS OF EXCELLENCE Fee-for-service VALUE-BASED AND BUNDLED PAYMENTS Stand-alone hospital NETWORK OF SITES 33

35 % of Community Hospitals Total Margin 1 (%) Log Revenue ($M) MARKET CONSOLIDATION RESULTS IN BETTER MARGINS AND CREDIT HOSPITALS INCREASINGLY CONSOLIDATING CONSOLIDATED HOSPITALS HAVE STRONGER MARGINS AND HAVE BETTER CREDIT % 50% 40% 35% Unaffiliated hospitals 8% 6% 4% 6.3% MHS Non-MHS % 50% 60% 65% MHS 2% 3.1% 4.7% 1.9% % Investor- Owned Hospitals Tax-Exempt Hospitals 0 CCC+ B- B B+ BB- BB Credit Rating 2 BB+ 3B 3B+ Sources: AHA Chartbook, Journal of Healthcare Finance, "How Prepared are US Hospitals for the Affordable Care Act," Capital IQ. 1. Net income / Total Revenues. 2. n =24 ; all healthcare providers. 34

36 CAPITAL SOURCE TO PROVIDERS TO HELP THEM GROW, CONSOLIDATE AND SERVE PATIENTS CONSOLIDATION OPPORTUNITIES GREATER THAN EVER State and local government Nongovernment, tax-exempt 20% GROWTH OPPORTUNITIES Investorowned 21% 59% Public companies looking to spin off assets PE owned hospital systems Grow with tax-exempt hospitals ~5,000 HOSPITALS 35

37 OUR MEDICAL OFFICE BUILDING PLATFORM EXCELLENCE. ESTABLISHED.

38 VENTAS MEDICAL OFFICE PORTFOLIO 1 Life Science U.S. Acute Care Hospitals Skilled Nursing Specialty Hospitals Medical Office 7% 5% 19% Loans 1% 5% 5% 4% $2.0B NOI 24% International Hospitals 31% Seniors Housing - Operating Seniors Housing - NNN 400+ hospital relationships #1 largest owner of MOBs in the U.S. 2 ~92% total occupancy 96% affiliated or on campus 85% of affiliations are investmentgrade hospital systems and HCA 3 1. Data per Q press release, supplemental and earnings conference call dated 07/29/2016. Pro forma for the acquisition of Wexford closed on 09/01/2016; Wexford values based on pro forma 2017 cash NOI as originally announced on 07/05/ Equity Research. 3. Represents cash NOI from assets with investment-grade systems and HCA. 37

39 SECULAR TRENDS ATTRACTIVE INCREASING INSURED POPULATION, INCREASING VISITS, INCREASING SPEND INCREASING INSURED POPULATION GROWING PHYSICIAN VISITS HIGHER SPENDING 20M Newly insured 1 10,000 New seniors eligible for Medicare daily 2 2.5x Number of visits 65+ cohort makes to physician offices relative to the rest of the population 3 $6,000 $4,000 $2,000 $0 Seniors 65+ spend 5x more per person 4 $1,000 <25 Years Old $5, Years Old 1. Newly insured under ACA. Source: US Department of Health and Human Services (March 2016). 2. Congressional Budget Office. 3. Marcus and Millichap, CMS. 4. ISI Real Estate Research and Bureau of Labor Statistics. 38

40 OUR LIFE SCIENCE PLATFORM EXCELLENCE. SUSTAINED.

41 VENTAS LIFE SCIENCE PORTFOLIO 1 Life Science U.S. Acute Care Hospitals Skilled Nursing Specialty Hospitals 5% Medical Office 7% 19% Loans 1% 5% 5% 4% $2.0B NOI 24% International Hospitals 31% Seniors Housing - Operating Seniors Housing - NNN ~$95M pro forma 2017 cash rent = 5% pro forma VTR NOI 73% of revenue from excellent credit tenants 11 universities with avg. Aa2 rating Investment grade companies Public companies with >$1B equity market capitalization Favorable NNN lease structures 10 year weighted average lease term 2% annual rent escalators Exclusive pipeline agreement for growth 1. Data per Q press release, supplemental and earnings conference call dated 07/29/2016. Pro forma for the acquisition of Wexford closed on 09/01/2016; Wexford values based on pro forma 2017 cash NOI as originally announced on 07/05/ Equity Research. 3. Represents cash NOI from assets with investment grade systems and HCA. 40

42 HIGH-QUALITY OPERATING PORTFOLIO WITH INSTITUTIONAL-QUALITY TENANTS Class-A Operating Properties 4.1 million square feet of purposebuilt real estate with average age of 6 years Located on or contiguous to major campuses 13 LEED-certified buildings High-quality Properties Excellent Amenities for Tenants New Relationships with Institutional-quality Tenants Note: Statistics represent 23 operating properties. 41

43 ADDITIONAL GROWTH FROM NEAR-TERM DEVELOPMENT PROPERTIES The Chesterfield W.F. Innovation Quarter Bailey Power Plant Property University Endowment 1 Life sciences R&D spend 2 Location Square feet Duke (Durham, NC) $7.3 billion $868 million On-campus 286K Wake Forest (Winston Salem, NC) $1.2 billion $172 million Adjacent to campus 111K Tenants Duke University Wake Forest Opening / endowments; National Association of College and University Business Officers and Commonfund Institute data from National Science Foundation 42

44 ENHANCES VENTAS S RELATIONSHIPS WITH LEADING UNIVERSITIES, ACADEMIC MEDICAL CENTERS AND RESEARCH COMPANIES Geographic Presence and University Affiliations MSA with Lillibridge presence Key Highlights for Leading Tenants Relationships with 11 top research universities that account for 10% of all university life science R&D spending Average university credit rating of Aa2 (49% of rev.) Top 10 Tenants by Revenue No. Tenant Sq. ft. (000s) Credit Rating / market cap 1 Wake Forest 661 Aa3 2 Alexion 517 $27B 1 3 Yale 283 Aaa 4 Penn Medicine 268 Aa1 5 Univ. of Maryland 145 Aa1 6 Old Dominion 122 A1 2 7 Inmar 243 B2 8 Therapeutic Proteins 86 NR 9 Paragon 58 NR 10 Eisai, Inc. 169 $16B 3 Total 2, Alexion is not rated; has market capitalization of $27 billion. 2. Only rated by S&P; Moody s equivalent rating is displayed. 3. Eisai is a Japanese company not rated by Moody s or S&P; has market capitalization of US $16 billion. 43

45 TOTAL ADDRESSABLE MARKET OPPORTUNITY Growth Opportunities Large and fragmented market place o $38 billion total university life science R&D spend across 100+ universities o Growing R&D spend to address increasing aging population and chronic illnesses Current tenants account for 10% of university life science R&D spend o Strong tenant demand at existing universities fueling additional growth opportunities o Opportunity for Ventas to expand to other leading universities Current Tenants 2014 R&D ($ millions) Drexel, Old Dominion, IIT $88 Duke $868 U. of Penn $656 Current tenants, 10% Yale $640 $4 Billion Wake Forest in Total $172 Penn State $250 Other potential tenants, 90% Miami $254 Maryland $382 Wash. U. $586 Total University Life Science R&D Spend $38 Billion in Total Source: National Science Foundation. 44

46 LIFE SCIENCE INDUSTRY EXPERIENCING CONTINUED GROWTH Overview University Life Sciences Research Spending Global life science R&D market is ~$200 billion in spend 12.3K drugs are in R&D pipelines, growing 5.3% since 2005 University life science is $38 billion market, growing 3.6% since 2005 Higher FDA approval rates & upcoming patent expirations have driven consistent growth in the R&D pipeline Large phama s record cash balances, demand for larger pipelines and a lack of organic growth continues to fuel M&A Demand driven by prevalence of chronic diseases, the leading source of hospital admits, mortality and healthcare cost Universities & Research institutions have increased R&D spending $28B $4B $15B $38B $6B $21B $9B $12B Biological sciences Medical sciences Other CAGR +3.6% +4.0% +3.7% +3.2% Biotech M&A Market ($ billions) Chronically Ill Individuals in U.S. ($ millions) Pharma/Biotech M&A has grown at a +27% CAGR since 2012 $150bn $78bn $173bn $100bn Global Healthcare M&A Volume (deals below $10 billion) $259bn $210bn $158bn $131bn In 2015, 48% of U.S. population has at least 1 chronic illness and 24% have at least Pharma/Biotech Services Medtech Source: Projection of Chronic Illness Prevalence and Cost Inflation (Wu, Shin-Yi et al. 2000); National Science Foundation; CDA CDER Note: Latest data as of 2014; federal scientific research funding represents total funds that are committed by federal agencies to support science-related research at higher education institutions across the U.S. 45

47 ROLE OF POST-ACUTE CARE EXCELLENCE. EVOLVED.

48 VENTAS POST-ACUTE PORTFOLIO 1 Skilled Nursing Specialty Hospitals Life Science U.S. Acute Care Hospitals Medical Office 7% 5% 19% Loans 1% 4% 5% 5% $2.0B NOI 24% International Hospitals 31% Seniors Housing - Operating Seniors Housing - NNN 2x post-acute EBITDARM coverage (operator cash flow / rent) Only 4% SNFs Guaranteed leases 68 of 92 post-acute assets with leading operator Kindred ~5.6x operator adjusted net debt / EBITDAR 2 Well-developed strategy, diversified business model ~6 years remaining lease term 1. Data per Q press release, supplemental and earnings conference call dated 07/29/2016. Pro forma for the acquisition of Wexford closed on 09/01/2016; Wexford values based on pro forma 2017 cash NOI as originally announced on 07/05/ Calculated as Kindred s net debt (long-term debt plus 2016 guided rent expenses multiplied by 6) less cash and cash equivalents, divided by 2016 guided Core EBITDAR. Based on Kindred s Q earnings release and conference call on 08/04/

49 KINDRED IS A WINNER Diverse Business Mix Impact of LTAC Criteria 4 BETTER ASSETS LEADING TO BETTER OPERATOR RESULTS LTAC 34% 12% 2% KND ~$55M expected EBITDARM impact from LTAC criteria in 2017 $55M $30M $25M $30M $30M Rehab 2 SNF Home Health & Hospice 19% 14% 32% 88% 85% 10% 13% Kindred 1 Genesis 2 HCRMC 3 Kindred Genesis HCRMC Q2 Core EPS Beat + $126M Core Operating Cash Flow; Reaffirmed 2016 Guidance 2017 trough, pro forma impact to VTR post-acute EBITDARM coverage ~0.1x-0.2x impact 5 Win-win sale of 7 LTACs 2016 KND Impact ~$200M Cash Rent Q3'15 Q1 16 TTM VTR Post-Acute EBITDARM EBITDARM Coverage Coverage Q1 16 Q3'15 TTM VTR Pro Forma Post-Acute EBITDARM EBITDARM Coverage Coverage 1. Based on YTD Q revenue before eliminations. 2. Based on YTD Q revenue. SNF category corresponds to inpatient services in Genesis 10K and includes AL facilities. Pro forma for the sale of Genesis s home health and hospice business. 3. Based on 2015 revenue. Rehab revenue reported as 'Other' in ManorCare Annual Report. SNF revenue reported as 'Long-Term Care' in ManorCare Annual report and includes the operations of SNFs, ALFs and Memory Care facilities. 4. Information based on Kindred s fourth quarter 2015 earnings release and conference call on February 25-26, Excludes the impact of timing, lease escalations and organic operator EBITDARM growth. 2x KND Impact Impact Expected to Improve Back Half 2017 (by 50%) and 2018 ~$400M EBITDARM 1.8x-1.9x 48

50 KINDRED IS A LEADING CARE PROVIDER Ensign & Kindred Screen Well on Hospital Re-admission Rates Kindred & Consulate Screen Best On Outpatient Emergency Department Visits 25 % Short-stay Residents Re-Hospitalized after Nursing Home Admission (25%-75% Percentile) 16 % Short-stay Residents Who Have Had an Outpatient Emergency Department Visit (25%-75% Percentile) Genesis HCR ManorCare Golden Living Life Care Sava Consulate Ensign Kindred National Better = Lower Bar / Median Median for All Facilities 6 Genesis HCR ManorCare Kindred Range Golden Living Life Care Sava Consulate Ensign Kindred National Kindred s Leading Quality Measures Position It to Win in Value-Based Payment System Source: Morgan Stanley Research (April 28, 2016). 49

51 SUMMARY Ventas is an S&P 500 diversified provider of capital to leading senior living and healthcare operators. Ventas has a long and successful history of outperformance, stability, growth and income with a strong balance sheet. Massive, fragmented healthcare real estate market with strong demand tailwinds and longevity megatrend provide opportunities for growth. The Ventas Advantage of people, platforms and properties will fuel Ventas s continued success. 50

52 EXCELLENCE. SUSTAINED. 1 Welcome Overviewv9.ppt 51

53 DEFINITIONS AND SEC REG. G COMPLIANCE

54 DEFINITION OF TERMS NAREIT Funds from Operations ( FFO ) 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 believes that income from continuing operations is the most comparable GAAP measure. Normalized FFO We consider normalized FFO to be an appropriate measure of the operating performance of an equity REIT. This measure of operating performance allows investors, analysts and our management to compare 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. Normalized FFO is calculated as NAREIT FFO excluding the following income and expense items (which may be recurring in nature): (i) Deal Costs, (ii) 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, (iii) 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, (iv) the financial impact of contingent consideration, severance-related costs and charitable donations to the Ventas Charitable Foundation, (v) gains and losses for non-operational foreign currency hedge agreements and changes in the fair value of financial instruments and (vi) gains and losses on non-real estate dispositions related to unconsolidated entities. Comparable Results Reported results excluding from all current and prior periods the effects of the CCP spin-off as if the Spin-Off had been completed at the beginning of the prior period; provides comparable baseline of results for current period relative to prior period results. 53

55 DEFINITION OF TERMS (CONT D) Seniors Housing Operating Portfolio ( SHOP ) In our senior living operations segment, we invest in seniors housing communities throughout the United States and Canada and engage independent operators, such as Atria and Sunrise, to manage those communities pursuant to long-term management agreements. Ventas realizes the income and expense, including the management fees paid to its independent operators, of the SHOP portfolio in its financial statements. Triple-Net Leased ( NNN ) Portfolio Under our triple-net leased properties segment, we invest in seniors housing and healthcare properties throughout the United States and the United Kingdom and lease those properties to 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. The NNN portfolio includes leased seniors housing assets, specialty hospitals, skilled nursing facilities, U.S. acute care hospitals and international hospitals. Medical Office Building ( MOB ) Portfolio In our MOB operations segment, we primarily own, acquire, develop, lease and manage MOBs throughout the United States through our whollyowned MOB business Lillibridge Healthcare Services. Loan Portfolio In our loan portfolio, we make secured and non-mortgage loans relating to seniors housing and healthcare operators or properties. Annualized Revenue & NOI A period s reported revenue and Property NOI, extrapolated on a per diem, monthly or quarterly basis to an annualized result. Results may be adjusted for certain one-time or out-of-period items, reflect only Ventas s share of ownership and are presented in U.S. dollars ( USD ) based on the applicable exchange rates where revenue and expenses are translated from a foreign currency. Property Net Operating Income ( Property NOI ) For owned assets, reported property-level revenues less reported property-level operating expenses. For debt investments, total interest income. 54

56 2016 GUIDANCE 1,2 Dollars in millions USD, except per share amounts Income, FFO & FAD Attributable to Common Stockholders Same-Store Cash NOI Growth Tentative / Preliminary & Subject to Change Tentative / Preliminary & FY Guidance Per Share Subject to Change Low High Low High Low High Income from Continuing Operations $506 $552 $1.46 $1.59 Total Same-Store Cash NOI Growth 2% 3% Adjustments NNN 3.5% 4% Net Income Attributable to Common Stockholders $615 $641 $1.77 $1.84 SHOP 1.5% 3% Depreciation & Amortization Adjustments MOB 1% 2% Other Adjustments 3 (111) (91) (0.32) (0.26) FFO (NAREIT) Attributable to Common Stockholders $1,410 $1,435 $4.05 $4.13 Merger-Related Expenses, Deal Costs & Re-Audit Costs Other Adjustments 3 (27) (30) (0.08) (0.09) Normalized FFO Attributable to Common Stockholders $1,409 $1,436 $4.05 $4.13 % Year-Over-Year Comparable Growth 3% 5% Non-Cash Items Included in Normalized FFO (17) (21) Capital Expenditures (109) (119) Normalized FAD Attributable to Common Stockholders $1,283 $1,296 Merger-Related Expenses, Deal Costs & Re-Audit Costs (26) (31) Other Adjustments FAD Attributable to Common Stockholders $1,257 $1,265 Weighted Average Diluted Shares 347, ,705 Key Guidance Changes Since 04/29/16 Total company same-store cash NOI growth to 2% - 3% from 1.5% - 3% NNN same-store cash NOI growth to 3.5% - 4% from 2.5% 3.5% SHOP same-store cash NOI growth to 1.5% - 3% from 1% - 3% Addition of $1.5B Wexford acquisition plus related funding and transaction expenses Key Guidance Assumptions Wexford transaction closes Q Dispositions of approximately $500 million No further material acquisitions, dispositions or capital activity 1. The Company s guidance constitutes forward-looking statements within the meaning of the federal securities laws and is based on a number of assumptions that are subject to change and many of which are outside the control of the Company. Actual results may differ materially from the Company's expectations depending on factors discussed in the Company s filings with the Securities and Exchange Commission. 2. 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. 3. See page 24 of supplemental for detailed breakout of other adjustments for each respective category. 55

57 EARNINGS ($ IN 000S, EXCEPT PER SHARE AMOUNTS) 1,2 NON-GAAP FINANCIAL MEASURES FFO AND FAD RECONCILIATION INCLUDING COMPARABLE 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 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 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 $6.9 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. 56

58 NORMALIZED FFO ($ IN 000S, EXCEPT PER SHARE AMOUNTS) NON-GAAP FINANCIAL MEASURES 1. Per share amounts may not add due to rounding. 57

59 NON-GAAP FINANCIAL MEASURES ADJUSTED PRO FORMA 1 EBITDA AND NET DEBT TO ADJUSTED PRO FORMA 1 EBITDA ($ IN 000S) 1. The following information considers the pro forma effect on net income, interest and depreciation and amortization of the Com pany s investments and other capital transactions that were completed during the three months ended June 30, 2016 and March 31, 2016, as if the transactions had been consummated as of the beginning of the period. The above table illustrates net debt to pro forma earnings before interest, taxes, depreciation and amortization (including non-cash stockbased 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 reaudit and re-review of our historical financial statements in 2014, 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 ). 58

60 NON-GAAP FINANCIAL MEASURES ADJUSTED PRO FORMA 1 EBITDA AND FIXED CHARGE COVERAGE RATIO ($ IN 000S) 1. The following information considers the pro forma effect on net income, interest, depreciation and amortization, merger-related expenses and deal costs and income taxes of the Company s investments and other capital transactions that were completed during the trailing twelve months ended June 30, 2016, as if the transactions had been consummated as of the beginning of the period. The above table illustrates pro forma earnings before interest, taxes, depreciation and amortization (including non-cash stock-based compensation expense), excluding gains or losses on extinguishment of debt, merger-related expenses and deal costs, expenses related to the re-audit and re-review of our historical financial statements in 2014, net gains on real estate activity and changes in the fair value of financial instruments (including amounts in discontinued operations) ( Adjusted Pro Forma EBITDA ). 59

61 NOI RECONCILIATION BY SEGMENT 1,2 ($ IN 000S) NON-GAAP FINANCIAL MEASURES 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. 60

62 NOI RECONCILIATION BY SEGMENT (CONT D) 1,2 ($ IN 000S) NON-GAAP FINANCIAL MEASURES 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. 61