Item 8. Financial Statements and Supplementary Data

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Item 8. Financial Statements and Supplementary Data

Ventas, Inc.

Index to Consolidated Financial Statements and Financial Statement Schedules


Management Report on Internal Control over Financial Reporting			71
Report of Independent Registered Public Accounting Firm (KPMG LLP, Chicago, IL, Auditor Firm ID: 185)			72
Report of Independent Registered Public Accounting Firm on Internal Control over Financial Reporting			74
Consolidated Balance Sheets as of December 31, 2022 and 2021			75
Consolidated Statements of Income for the Years Ended December 31, 2022, 2021 and 2020			76
Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2022, 2021 and 2020			77
Consolidated Statements of Equity for the Years Ended December 31, 2022, 2021 and 2020			78
Consolidated Statements of Cash Flows for the Years Ended December 31, 2022, 2021 and 2020			79
Notes to Consolidated Financial Statements			81
Consolidated Financial Statement Schedules
Schedule III — Real Estate and Accumulated Depreciation			121
Schedule IV — Mortgage Loans on Real Estate			124

MANAGEMENT REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act of 1934, as amended. This system is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with U.S. GAAP. Because of its inherent limitations, internal control over financial reporting is not intended to provide absolute assurance that a misstatement of our financial statements would be prevented or detected.

Management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, conducted an assessment of the effectiveness of the Company’s internal control over financial reporting based on the criteria set forth in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on this assessment, management has concluded that our internal control over financial reporting was effective at the reasonable assurance level as of December 31, 2022.

The effectiveness of our internal control over financial reporting as of December 31, 2022 has been audited by KPMG LLP, an independent registered public accounting firm, as stated in their report included herein.

Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors

Ventas, Inc.:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Ventas, Inc. and subsidiaries (the Company) as of December 31, 2022 and 2021, the related consolidated statements of income, comprehensive income, equity, and cash flows for each of the years in the three-year period ended December 31, 2022, and the related notes and financial statement schedules III and IV (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2022, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 10, 2023 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Impairment of real estate investments in the senior housing operating portfolio

As discussed in Notes 1, 2, and 5 to the consolidated financial statements, the Company periodically evaluates its long-lived assets, primarily consisting of investments in real estate, for impairment indicators. If indicators of impairment are present, the Company evaluates the carrying value of the related real estate investments in relation to the future undiscounted cash flows of the underlying operations. In performing this evaluation, the Company considers market conditions and current intentions with respect to holding or disposing of the asset and adjusts the net book value of real estate properties to fair value if the sum of the expected future undiscounted cash flows, including sales proceeds, is less than book value. During the year, impairment indicators arose for certain real estate properties and as a result, recoverability assessments were performed.

We identified the evaluation of real estate investments within the senior housing operating portfolio for impairment as a critical audit matter. Subjective auditor judgment was required in evaluating the Company’s determination of the future undiscounted cash flows. In particular, the undiscounted cash flows were sensitive to significant assumptions, including capitalization rates, projected operating cash flows, and stabilization period. Additionally, subjective auditor judgment and specialized skills and knowledge were needed to evaluate market data used by the Company.

The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls related to the impairment process. This included controls related to the Company’s impairment process and the significant assumptions described above. To test certain of the Company’s undiscounted cash flow estimates, we evaluated the Company’s forecasts of projected operating cash flows by comparing actual results to the Company’s forecasts adjusted for current market trends. In addition, we involved valuation professionals with specialized skills and knowledge, who assisted in evaluating the Company’s significant assumptions by comparing the significant assumptions to publicly available market data.

/s/ KPMG LLP

We have served as the Company’s auditor since 2014.

Chicago, Illinois

February 10, 2023

Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors Ventas, Inc.:

Opinion on Internal Control Over Financial Reporting

We have audited Ventas, Inc. and subsidiaries' (the Company) internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2022 and 2021, the related consolidated statements of income, comprehensive income, equity, and cash flows for each of the years in the three-year period ended December 31, 2022, and the related notes and financial statement schedules III and IV (collectively, the consolidated financial statements), and our report dated February 10, 2023 expressed an unqualified opinion on those consolidated financial statements.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ KPMG LLP

Chicago, Illinois

February 10, 2023

VENTAS, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except per share amounts)


	As of December 31,
	2022		2021
Assets
Real estate investments:
Land and improvements	$	2,437,905	$	2,432,065
Buildings and improvements	26,020,048		25,778,490
Construction in progress	310,456		269,315
Acquired lease intangibles	1,346,190		1,369,747
Operating lease assets	310,307		317,858
	30,424,906		30,167,475
Accumulated depreciation and amortization	(9,264,456)		(8,350,637)
Net real estate property	21,160,450		21,816,838
Secured loans receivable and investments, net	537,075		530,126
Investments in unconsolidated real estate entities	579,949		523,465
Net real estate investments	22,277,474		22,870,429
Cash and cash equivalents	122,564		149,725
Escrow deposits and restricted cash	48,181		46,872
Goodwill	1,044,415		1,046,140
Assets held for sale	44,893		28,399
Deferred income tax assets, net	10,490		11,152
Other assets	609,823		565,069
Total assets	$	24,157,840	$	24,717,786
Liabilities and equity
Liabilities:
Senior notes payable and other debt	$	12,296,780	$	12,027,544
Accrued interest	110,542		106,602
Operating lease liabilities	190,440		197,234
Accounts payable and other liabilities	1,031,689		1,090,254
Liabilities related to assets held for sale	6,492		10,850
Deferred income tax liabilities	35,570		59,259
Total liabilities	13,671,513		13,491,743
Redeemable OP unitholder and noncontrolling interests	264,650		280,283
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, 399,707 and 399,420 shares issued at December 31, 2022 and 2021, respectively	99,912		99,838
Capital in excess of par value	15,539,777		15,498,956
Accumulated other comprehensive loss	(36,800)		(64,520)
Retained earnings (deficit)	(5,449,385)		(4,679,889)
Treasury stock, 10 and 0 shares issued at December 31, 2022 and 2021, respectively	(536)		—
Total Ventas stockholders’ equity	10,152,968		10,854,385
Noncontrolling interests	68,709		91,375
Total equity	10,221,677		10,945,760
Total liabilities and equity	$	24,157,840	$	24,717,786

See accompanying notes.

VENTAS, INC.

CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share amounts)


	For the Years Ended December 31,
	2022		2021		2020
Revenues
Rental income:
Triple-net leased	$	598,154	$	653,823	$	695,265
Office	801,159		794,297		799,627
	1,399,313		1,448,120		1,494,892
Resident fees and services	2,651,886		2,270,001		2,197,160
Third party capital management revenues	26,199		20,096		15,191
Income from loans and investments	48,160		74,981		80,505
Interest and other income	3,635		14,809		7,609
Total revenues	4,129,193		3,828,007		3,795,357
Expenses
Interest	467,557		440,089		469,541
Depreciation and amortization	1,197,798		1,197,403		1,109,763
Property-level operating expenses:
Senior living	2,004,420		1,811,728		1,658,671
Office	257,003		257,001		256,612
Triple-net leased	15,301		15,335		22,160
	2,276,724		2,084,064		1,937,443
Third party capital management expenses	6,194		4,433		2,315
General, administrative and professional fees	144,874		129,758		130,158
Loss on extinguishment of debt, net	581		59,299		10,791
Transaction expenses and deal costs	51,577		47,318		29,812
Allowance on loans receivable and investments	19,757		(9,082)		24,238
Other	58,268		37,110		707
Total expenses	4,223,330		3,990,392		3,714,768
(Loss) income before unconsolidated entities, real estate dispositions, income taxes and noncontrolling interests	(94,137)		(162,385)		80,589
Income from unconsolidated entities	28,500		4,983		1,844
Gain on real estate dispositions	7,780		218,788		262,218
Income tax benefit (expense)	16,926		(4,827)		96,534
(Loss) income from continuing operations	(40,931)		56,559		441,185

Net (loss) income	(40,931)		56,559		441,185
Net income attributable to noncontrolling interests	6,516		7,551		2,036
Net (loss) income attributable to common stockholders	$	(47,447)	$	49,008	$	439,149
Earnings per common share
Basic:
(Loss) income from continuing operations	$	(0.10)	$	0.15	$	1.18
Net (loss) income attributable to common stockholders	(0.12)		0.13		1.18
Diluted:1
(Loss) income from continuing operations	$	(0.10)	$	0.15	$	1.17
Net (loss) income attributable to common stockholders	(0.12)		0.13		1.17

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

See accompanying notes.

VENTAS, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Dollars in thousands)


	For the Years Ended December 31,
	2022		2021		2020
Net (loss) income	$	(40,931)	$	56,559	$	441,185
Other comprehensive income (loss):
Foreign currency translation (loss) gain	(11,837)		(3,357)		3,254
Unrealized loss on available for sale securities	(1,838)		(23,875)		(3,549)
Unrealized gain (loss) on derivative instruments	39,377		19,934		(17,918)
Total other comprehensive income (loss)	25,702		(7,298)		(18,213)
Comprehensive (loss) income	(15,229)		49,261		422,972
Comprehensive income attributable to noncontrolling interests	4,497		10,418		3,613
Comprehensive (loss) income attributable to common stockholders	$	(19,726)	$	38,843	$	419,359

See accompanying notes.

VENTAS, INC.

CONSOLIDATED STATEMENTS OF EQUITY

For the Years Ended December 31, 2022, 2021 and 2020

(In thousands, except per share amounts)


	Common Stock Par Value		Capital in Excess of Par Value		Accumulated Other Comprehensive Loss		Retained Earnings (Deficit)		Treasury Stock		Total Ventas Stockholders’ Equity		Non- controlling Interests		Total Equity
Balance at January 1, 2020	$	93,185	$	14,056,453	$	(34,564)	$	(3,669,050)	$	(132)	$	10,445,892	$	99,560	$	10,545,452
Net income	—		—		—		439,149		—		439,149		2,036		441,185
Other comprehensive (loss) income	—		—		(19,790)		—		—		(19,790)		1,577		(18,213)
Net change in noncontrolling interests	—		8,227		—		—		—		8,227		(5,149)		3,078
Dividends to common stockholders—$2.1425 per share	—		—		—		(800,475)		—		(800,475)		—		(800,475)
Issuance of common stock	371		65,640		—		—		—		66,011		—		66,011
Issuance of common stock for stock plans, restricted stock grants and other	79		22,568		—		—		132		22,779		—		22,779

Adjust redeemable OP unitholder interests to current fair value	—		18,638		—		—		—		18,638		—		18,638
Redemption of OP Units	—		(264)		—		—		—		(264)		—		(264)


Balance at December 31, 2020	93,635		14,171,262		(54,354)		(4,030,376)		—		10,180,167		98,024		10,278,191
Net income	—		—		—		49,008		—		49,008		7,551		56,559
Other comprehensive (loss) income	—		—		(10,166)		—		—		(10,166)		2,868		(7,298)
Acquisition-related activity	3,332		747,916		—		—		—		751,248		—		751,248
Net change in noncontrolling interests	—		(58,925)		—		—		—		(58,925)		(17,068)		(75,993)
Dividends to common stockholders—$1.80 per share	—		—		—		(698,521)		—		(698,521)		—		(698,521)

Issuance of common stock for stock plans, restricted stock grants and other	2,871		649,941		—		—		(76)		652,736		—		652,736
Adjust redeemable OP unitholder interests to current fair value	—		(11,178)		—		—		—		(11,178)		—		(11,178)
Redemption of OP Units	—		(60)		—		—		76		16		—		16


Balance at December 31, 2021	99,838		15,498,956		(64,520)		(4,679,889)		—		10,854,385		91,375		10,945,760
Net loss	—		—		—		(47,447)		—		(47,447)		6,516		(40,931)
Other comprehensive (loss) income	—		—		27,720		—		—		27,720		(2,018)		25,702

Net change in noncontrolling interests	—		(9,235)		—		—		—		(9,235)		(27,164)		(36,399)
Dividends to common stockholders—$1.80 per share	—		—		—		(722,049)		—		(722,049)		—		(722,049)

Issuance of common stock for stock plans, restricted stock grants and other	74		38,370		—		—		(536)		37,908		—		37,908

Adjust redeemable OP unitholder interests to current fair value	—		11,480		—		—		—		11,480		—		11,480
Redemption of OP Units	—		206		—		—		—		206		—		206
Balance at December 31, 2022	$	99,912	$	15,539,777	$	(36,800)	$	(5,449,385)	$	(536)	$	10,152,968	$	68,709	$	10,221,677

See accompanying notes.

V****ENTAS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands)


	For the Years Ended December 31,
	2022		2021		2020
Cash flows from operating activities:
Net (loss) income	$	(40,931)	$	56,559	$	441,185
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	1,197,798		1,197,403		1,109,763
Amortization of deferred revenue and lease intangibles, net	(63,543)		(88,795)		(40,856)
Other non-cash amortization	12,957		17,709		20,719
Allowance on loans receivable and investments	19,757		(9,082)		24,238
Stock-based compensation	30,715		31,966		21,487
Straight-lining of rental income	(11,094)		(14,468)		103,082
Loss on extinguishment of debt, net	581		59,299		10,791
Gain on real estate dispositions	(7,780)		(218,788)		(262,218)
Gain on real estate loan investments	—		(1,448)		(167)

Income tax benefit	(21,348)		(1,224)		(101,985)
Income and other from unconsolidated entities	(28,500)		(4,973)		(1,832)

Distributions from unconsolidated entities	19,847		19,326		4,920

Other	52,489		26,404		(779)
Changes in operating assets and liabilities:
Increase in other assets	(52,897)		(54,571)		(68,233)
Increase (decrease) in accrued interest	4,915		(5,922)		276
Increase in accounts payable and other liabilities	7,197		16,721		189,785
Net cash provided by operating activities	1,120,163		1,026,116		1,450,176
Cash flows from investing activities:
Net investment in real estate property	(446,628)		(1,369,052)		(78,648)
Investment in loans receivable	(30,700)		(489)		(115,163)
Proceeds from real estate disposals	112,926		840,438		1,044,357
Proceeds from loans receivable	890		348,091		119,011



Development project expenditures	(231,939)		(247,694)		(380,413)
Capital expenditures	(222,130)		(185,275)		(148,234)
Distributions from unconsolidated entities	28,311		17,847		—
Investment in unconsolidated entities	(83,652)		(129,291)		(286,822)
Insurance proceeds for property damage claims	13,704		1,285		207
Net cash (used in) provided by investing activities	(859,218)		(724,140)		154,295
Cash flows from financing activities:
Net change in borrowings under revolving credit facilities	(27,179)		(125,399)		(88,868)
Net change in borrowings under commercial paper program	122,414		279,929		(565,524)
Proceeds from debt	957,781		1,534,298		733,298
Repayments of debt	(575,391)		(2,109,617)		(479,539)
Purchase of noncontrolling interests	(170)		(24,224)		(8,239)
Payment of deferred financing costs	(8,824)		(27,166)		(8,379)
Issuance of common stock, net	—		617,438		55,362
Cash distribution to common stockholders	(720,319)		(686,888)		(928,809)
Cash distribution to redeemable OP unitholders	(6,292)		(6,761)		(7,283)
Cash issued for redemption of OP Units	(1,487)		(96)		(575)
Contributions from noncontrolling interests	5,371		1,731		1,314
Distributions to noncontrolling interests	(32,325)		(13,577)		(12,946)
Proceeds from stock option exercises	8,691		8,169		15,103
Other	(6,198)		(6,303)		(4,936)
Net cash used in financing activities	(283,928)		(558,466)		(1,300,021)
Net (decrease) increase in cash, cash equivalents and restricted cash	(22,983)		(256,490)		304,450
Effect of foreign currency translation	(2,869)		1,447		1,088
Cash, cash equivalents and restricted cash at beginning of year	196,597		451,640		146,102
Cash, cash equivalents and restricted cash at end of year	$	170,745	$	196,597	$	451,640

V****ENTAS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

(Dollars in thousands)


	For the Years Ended December 31,
	2022		2021		2020
Supplemental disclosure of cash flow information:
Interest paid including payments and receipts for derivative instruments	$	467,556	$	402,025	$	429,636
Supplemental schedule of non-cash activities:
Assets acquired and liabilities assumed from acquisitions and other:
Real estate investments	$	16,540	$	1,319,988	$	170,484
Other assets	875		16,913		1,224
Debt	—		482,482		55,368
Other liabilities	7,747		102,256		2,707
Deferred income tax liability	960		446		337
Noncontrolling interests	3,351		468		20,259
Equity issued	—		751,248		—
Equity issued for redemption of OP Units	—		76		—
Investment in unconsolidated entities	8,100		—		—

See accompanying notes.

VENTAS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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, medical office buildings (“MOBs”), life science, research and innovation 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 December 31, 2022, we owned or had investments in approximately 1,300 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 office operations. See “Note 2 – Accounting Policies” and “Note 18 – 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 December 31, 2022, we leased a total of 326 properties (excluding properties within our office operations 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 and 29 properties, respectively, as of December 31, 2022.

As of December 31, 2022, 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 553 senior housing communities.

As of December 31, 2022, we owned a total of 376 properties in our office operations reportable business segment. These properties generally consist of MOBs that are predominantly located on or contiguous to a health system campus and life science, research and innovation 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 MOB 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.

Starting in 2020, our business was significantly impacted by both the COVID-19 pandemic itself, including actions taken to prevent the spread of the virus and its variants, and its extended consequences. The trajectory and future impact of the COVID-19 pandemic remains highly uncertain. The extent of the pandemic’s continuing and ultimate effect on our operational and financial performance will depend on a variety of factors, including the impact of new variants of the virus and the effectiveness of available vaccines against those variants; ongoing clinical experience, which may differ considerably across regions and fluctuate over time; and on other future developments, including the ultimate duration, spread and intensity of the outbreaks, the availability of testing, the extent to which governments impose, roll-back or re-impose preventative restrictions and the availability of ongoing government financial support to our business, tenants and operators. Due to these uncertainties, we are not able at this time to estimate the ultimate impact of the COVID-19 pandemic on our business, results of operations, financial condition and cash flows.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2 – ACCOUNTING POLICIES

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.

U.S. generally accepted accounting principles (“GAAP”) require 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”). A VIE is broadly defined as an entity with one or more of the following characteristics: (a) the total equity investment at risk is insufficient to finance the entity’s activities without additional subordinated financial support; (b) as a group, the holders of the equity investment at risk lack (i) the ability to make decisions about the entity’s activities through voting or similar rights, (ii) the obligation to absorb the expected losses of the entity, or (iii) the right to receive the expected residual returns of the entity; and (c) the equity investors have voting rights that are not proportional to their economic interests, and substantially all of the entity’s activities either involve, or are conducted on behalf of, an investor that has disproportionately few voting rights. We consolidate our investment in a VIE when we determine that we are its primary beneficiary. We may change our original assessment of a VIE upon subsequent events such as the modification of contractual arrangements that affects the characteristics or adequacy of the entity’s equity investments at risk and the disposition of all or a portion of an interest held by the primary beneficiary.

We identify the primary beneficiary of a VIE as the enterprise that has both: (i) the power to direct the activities of the VIE that most significantly impact the entity’s economic performance and (ii) the obligation to absorb losses or the right to receive benefits of the VIE that could be significant to the entity. We perform this analysis on an ongoing basis.

As it relates to investments in joint ventures, GAAP may preclude consolidation by the sole general partner in certain circumstances based on the type of rights held by the limited partner or partners. We assess limited partners’ rights and their impact on our consolidation conclusions, and we reassess if there is a change to the terms or in the exercisability of the rights of the limited partners, the sole general partner increases or decreases its ownership of limited partnership (“LP”) interests or there is an increase or decrease in the number of outstanding LP interests. We also apply this guidance to managing member interests in limited liability companies (“LLCs”).

We consolidate several VIEs that share the following common characteristics:

the VIE is in the legal form of an LP or LLC;
the VIE was designed to own and manage its underlying real estate investments;
we are the general partner or managing member of the VIE;
we own a majority of the voting interests in the VIE;
a minority of voting interests in the VIE are owned by external third parties, unrelated to us;
the minority owners do not have substantive kick-out or participating rights in the VIE; and
we are the primary beneficiary of the VIE.

We have separately identified certain special purpose entities that were established to allow investments in life science, research and innovation projects by tax credit investors (“TCIs”). We have determined that these special purpose entities are VIEs, we are a holder of variable interests and we are the primary beneficiary of the VIEs, and therefore, we consolidate these special purpose entities. Our primary beneficiary determination is based upon several factors, including but not limited to the rights we have in directing the activities which most significantly impact the VIEs’ economic performance as well as certain guarantees which protect the TCIs from losses should a tax credit recapture event occur.

In general, the assets of consolidated VIEs are available only for the settlement of the obligations of the respective entities. Unless otherwise required by the LP or LLC agreement, any mortgage loans of the consolidated VIEs are non-recourse

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to us. The table below summarizes the total assets and liabilities of our consolidated VIEs as reported on our Consolidated Balance Sheets (dollars in thousands):


	December 31, 2022				December 31, 2021
	Total Assets		Total Liabilities		Total Assets		Total Liabilities
NHP/PMB L.P.	$	741,890	$	252,518	$	749,834	$	251,352
Other identified VIEs	3,657,023		1,504,113		3,805,567		1,552,237
Tax credit VIEs	128,240		16,767		458,953		103,992

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 adjust our investment in unconsolidated entities for additional contributions made, distributions received as well as our share of the investee’s earnings or losses, which is included in income from unconsolidated entities in our Consolidated Statements of Income.

We base the initial carrying value of investments in unconsolidated entities on the fair value of the assets at the time we acquired the joint venture interest. We estimate fair values for our equity method investments based on discounted cash flow models that include all estimated cash inflows and outflows over a specified holding period and, where applicable, any estimated debt premiums or discounts. The capitalization rates, discount rates and credit spreads we use in these models are based upon assumptions that we believe to be within a reasonable range of current market rates for the respective investments.

We generally amortize any difference between our cost basis and the basis reflected at the joint venture level, if any, over the lives of the related assets and liabilities and include that amortization in our share of income or loss from unconsolidated entities. For earnings of equity method investments with pro rata distribution allocations, net income or loss is allocated between the partners in the joint venture based on their respective stated ownership percentages. In other instances, net income or loss may be allocated between the partners in the joint venture based on the hypothetical liquidation at book value method (the “HLBV method”). Under the HLBV method, net income or loss is allocated between the partners based on the difference between each partner’s claim on the net assets of the joint venture at the end and beginning of the period, after taking into account contributions and distributions. Each partner’s share of the net assets of the joint venture is calculated as the amount that the partner would receive if the joint venture were to liquidate all of its assets at net book value and distribute the resulting cash to creditors and partners in accordance with their respective priorities. Under the HLBV method, in any given period, we could record more or less income than the joint venture has generated, than actual cash distributions we receive or than the amount we may receive in the event of an actual liquidation.

Redeemable OP Unitholder and Noncontrolling Interests

We own a majority interest in NHP/PMB L.P. (“NHP/PMB”), a limited partnership formed in 2008 to acquire properties from entities affiliated with Pacific Medical Buildings LLC (“PMB”). Given our wholly owned subsidiary is the general partner and the primary beneficiary of NHP/PMB, we consolidate NHP/PMB as a VIE. As of December 31, 2022, third-party investors owned 3.9 million Class A limited partnership units in NHP/PMB (“OP Units”), which represented 34% of the total units then outstanding, and we owned 7.6 million Class B limited partnership units in NHP/PMB, representing the remaining 66%. The OP Units may be redeemed at any time at the election of the holder for cash or, at our option, 0.9051 shares of our common stock per OP Unit, subject to adjustment in certain circumstances. We are party by assumption to a registration rights agreement with the holders of the OP Units that requires us, subject to the terms and conditions and certain exceptions set forth therein, to file and maintain a registration statement relating to the issuance of shares of our common stock upon redemption of OP Units.

The OP Units are classified outside of permanent equity on our Consolidated Balance Sheets because they may be redeemed by third parties under circumstances that are outside of our control. We reflect the OP Units at the greater of cost or redemption value. As of December 31, 2022 and 2021, the fair value of the OP Units was $162.7 million and $182.1 million, respectively. We recognize changes in fair value through capital in excess of par value, net of cash distributions paid and purchases by us of any OP Units. Our diluted earnings per share includes the effect of any potential shares outstanding from redemption of the OP Units.

Certain noncontrolling interests of other consolidated joint ventures were also classified as redeemable at December 31, 2022 and 2021. We record the carrying amount of these noncontrolling interests at the greater of their initial carrying

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

amount (increased or decreased for the noncontrolling interests’ share of net income or loss and distributions) or the redemption value, which is primarily based on the fair value of the underlying real estate asset. Our joint venture partners have certain redemption rights with respect to their noncontrolling interests in these joint ventures that are outside of our control, and the redeemable noncontrolling interests are classified outside of permanent equity on our Consolidated Balance Sheets. We recognize changes in the carrying value of redeemable noncontrolling interests through capital in excess of par value on our Consolidated Balance Sheets.

Noncontrolling Interests

Excluding the redeemable noncontrolling interests described above, we present the portion of any equity that we do not own in entities that we control (and thus consolidate) as noncontrolling interests and classify those interests as a component of consolidated equity, separate from total Ventas stockholders’ equity, on our Consolidated Balance Sheets. For consolidated joint ventures with pro rata distribution allocations, net income or loss, and comprehensive income, is allocated between the joint venture partners based on their respective stated ownership percentages. In other cases, net income or loss is allocated between the joint venture partners based on the HLBV method. We account for purchases or sales of equity interests that do not result in a change of control as equity transactions, through capital in excess of par value. We include net income attributable to the noncontrolling interests in net income in our Consolidated Statements of Income and we include the noncontrolling interests’ share of comprehensive income in our Consolidated Statements of Comprehensive Income.

Accounting for Historic and New Markets Tax Credits

For certain of our life science, research and innovation centers, we are party to contractual arrangements with TCIs that were established to enable the TCIs to receive benefits of historic tax credits (“HTCs”), new markets tax credits (“NMTCs”) or both. As of December 31, 2022, we owned three properties that had syndicated HTCs or NMTCs, or both, to TCIs.

In general, TCIs invest cash into special purpose entities that invest in entities that own the subject property and generate the tax credits. The TCIs receive substantially all of the tax credits and hold only a nominal interest in the economic risk and benefits of the special purpose entities.

HTCs are delivered to the TCIs upon substantial completion of the project. NMTCs are allowed for up to 39% of a qualified investment and are delivered to the TCIs after the investment has been funded and spent on a qualified business. HTCs are subject to recapture within five years of substantial completion. The amount of the recapture is equal to 100% of the HTCs during the first year after the completion of the historic rehabilitation and is reduced by 20% each year during the subsequent five year period. NMTCs are subject to recapture until the end of the seventh year following the qualifying investment. We have provided the TCIs with certain guarantees which protect the TCIs from losses should a tax credit recapture event occur. The contractual arrangements with the TCIs include a put/call provision whereby we may be obligated or entitled to repurchase the interest of the TCIs in the special purpose entities at the end of the tax credit recapture period. We anticipate that either the TCIs will exercise their put rights or we will exercise our call rights prior to the applicable tax credit recapture periods.

The portion of the TCI’s investment that is attributed to the put is recorded at fair value at inception in accounts payable and other liabilities on our Consolidated Balance Sheets, and is accreted to the expected put price as interest expense in our Consolidated Statements of Income over the recapture period. The remaining balance of the TCI’s investment is initially recorded in accounts payable and other liabilities on our Consolidated Balance Sheets and will be relieved upon delivery of the tax credit to the TCI, as a reduction in the carrying value of the subject property, net of allocated expenses. Direct and incremental costs incurred in structuring the transaction are deferred and will be recognized as an increase in the cost basis of the subject property upon the recognition of the related tax credit as discussed above.

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.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Accounting for Real Estate Acquisitions

When we acquire real estate, we first make reasonable judgments about whether the transaction involves an asset or a business. Our real estate acquisitions are generally accounted for as asset acquisitions as substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets. Regardless of whether an acquisition is considered a business combination or an asset acquisition, we record the cost of the businesses or assets acquired as tangible and intangible assets and liabilities based upon their estimated fair values as of the acquisition date.

We estimate the fair value of buildings acquired on an as-if-vacant basis or replacement cost basis and depreciate the building value over the estimated remaining life of the building, generally not to exceed 35 years. We determine the fair value of other fixed assets, such as site improvements, and furniture, fixtures and equipment, based upon the replacement cost and depreciate such value over the assets’ estimated remaining useful lives as determined at the applicable acquisition date. We determine the value of land either by considering the sales prices of similar properties in recent transactions or based on internal analyses of recently acquired and existing comparable properties within our portfolio. We generally determine the value of construction in progress based upon the replacement cost. However, for certain acquired properties that are part of a ground-up development, we determine fair value by using the same valuation approach as for all other properties and deducting the estimated cost to complete the development. During the remaining construction period, we capitalize project costs until the development has reached substantial completion. Construction in progress, including capitalized interest, is not depreciated until the development has reached substantial completion.

Intangibles primarily include the value of in-place leases and acquired lease contracts. We include all lease-related intangible assets and liabilities within acquired lease intangibles and accounts payable and other liabilities, respectively, on our Consolidated Balance Sheets.

The fair value of acquired lease-related intangibles, if any, reflects: (i) the estimated value of any above or below market leases, determined by discounting the difference between the estimated market rent and in-place lease rent; and (ii) the estimated value of in-place leases related to the cost to obtain tenants, including leasing commissions, and an estimated value of the absorption period to reflect the value of the rent and recovery costs foregone during a reasonable lease-up period as if the acquired space was vacant. We amortize any acquired lease-related intangibles to revenue or amortization expense over the remaining life of the associated lease plus any assumed bargain renewal periods. If a lease is terminated prior to its stated expiration or not renewed upon expiration, we recognize all unamortized amounts of lease-related intangibles associated with that lease in operations over the shortened lease term.

We estimate the fair value of purchase option intangible assets and liabilities, if any, by discounting the difference between the applicable property’s acquisition date fair value and an estimate of its future option price. We do not amortize the resulting intangible asset or liability over the term of the lease, but rather adjust the recognized value of the asset or liability upon sale.

In connection with an acquisition, we may assume rights and obligations under certain lease agreements pursuant to which we become the lessee of a given property. We generally assume the lease classification previously determined by the prior lessee absent a modification in the assumed lease agreement. We assess assumed operating leases, including ground leases, to determine whether the lease terms are favorable or unfavorable to us given current market conditions on the acquisition date. To the extent the lease terms are favorable or unfavorable to us relative to market conditions on the acquisition date, we recognize an intangible asset or liability at fair value and amortize that asset or liability to interest or rental expense in our Consolidated Statements of Income over the applicable lease term. Where we are the lessee, we record the acquisition date values of leases, including any above or below market value, within operating lease assets and operating lease liabilities on our Consolidated Balance Sheets.

We estimate the fair value of noncontrolling interests assumed consistent with the manner in which we value all of the underlying assets and liabilities.

We calculate the fair value of long-term assumed debt by discounting the remaining contractual cash flows on each instrument at the current market rate for those borrowings, which we approximate based on the rate at which we would expect to incur a replacement instrument on the date of acquisition, and recognize any fair value adjustments related to long-term debt as effective yield adjustments over the remaining term of the instrument.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Impairment of Long-Lived and Intangible Assets

We periodically evaluate our long-lived assets, primarily consisting of investments in real estate, for impairment indicators. If indicators of impairment are present, we evaluate the carrying value of the related real estate investments in relation to the future undiscounted cash flows of the underlying operations. In performing this evaluation, we consider market conditions and our current intentions with respect to holding or disposing of the asset. We adjust the net book value of properties and other long-lived assets to fair value if the sum of the expected future undiscounted cash flows, including sales proceeds, is less than book value. We recognize an impairment loss at the time we make any such determination.

If impairment indicators arise with respect to intangible assets with finite useful lives, we evaluate impairment by comparing the carrying amount of the asset to the estimated future undiscounted net cash flows expected to be generated by the asset. If estimated future undiscounted net cash flows are less than the carrying amount of the asset, then we estimate the fair value of the asset and compare the estimated fair value to the intangible asset’s carrying value. We recognize any shortfall from carrying value as an impairment loss in the current period.

We evaluate our investments in unconsolidated entities for impairment at least annually, and whenever events or changes in circumstances indicate that the carrying value of our investment may exceed its fair value. If we determine that a decline in the fair value of our investment in an unconsolidated entity is other-than-temporary, and if such reduced fair value is below the carrying value, we record an impairment.

We test goodwill for impairment at least annually, and more frequently if indicators of impairment arise. We first assess qualitative factors, such as current macroeconomic conditions, state of the equity and capital markets and our overall financial and operating performance, to determine the likelihood that the fair value of a reporting unit is less than its carrying amount. If we determine it is more likely than not that the fair value of a reporting unit is less than its carrying amount, we proceed with estimating the fair value of the reporting unit. A goodwill impairment, if any, will be recognized in the period it is determined and is measured as the amount by which a reporting unit’s carrying value exceeds its fair value.

Estimates of fair value used in our evaluation of goodwill (if necessary based on our qualitative assessment), investments in real estate, investments in unconsolidated entities and intangible assets are based upon discounted future cash flow projections or other acceptable valuation techniques that are based, in turn, upon all available evidence including level three inputs, such as revenue and expense growth rates, estimates of future cash flows, capitalization rates, discount rates, general economic conditions and trends, or other available market data such as replacement cost or comparable sales. Our ability to accurately predict future operating results and cash flows and to estimate and determine fair values impacts the timing and recognition of impairments. While we believe our assumptions are reasonable, changes in these assumptions may have a material impact on our financial results.

Assets Held for Sale and Discontinued Operations

We sell properties from time to time for various reasons, including favorable market conditions or the exercise of purchase options by tenants. We classify certain long-lived assets as held for sale once the criteria, as defined by GAAP, have been met. Long-lived assets to be disposed of are reported at the lower of their carrying amount or fair value minus cost to sell and are no longer depreciated.

If at any time we determine that the criteria for classifying assets as held for sale are no longer met, we reclassify assets within net real estate investments on our Consolidated Balance Sheets for all periods presented. The carrying amount of these assets is adjusted (in the period in which a change in classification is determined) to reflect any depreciation expense that would have been recognized had the asset been continuously classified as net real estate investments.

We report discontinued operations when the following criteria are met: (1) a component of an entity or group of components that has been disposed of or classified as held for sale and represents a strategic shift that has or will have a major effect on an entity’s operations and financial results; or (2) an acquired business is classified as held for sale on the acquisition date. The results of operations for assets meeting the definition of discontinued operations are reflected in our Consolidated Statements of Income as discontinued operations for all periods presented. We allocate estimated interest expense to discontinued operations based on property values and our weighted average interest rate or the property’s actual mortgage interest.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Loans Receivable

We record loans receivable, other than those acquired in connection with a business combination, on our Consolidated Balance Sheets (either in secured loans receivable and investments, net or other assets, in the case of non-mortgage loans receivable) at the unpaid principal balance, net of any deferred origination fees, purchase discounts or premiums and valuation allowances. We amortize net deferred origination fees, which are comprised of loan fees collected from the borrower net of certain direct costs, and purchase discounts or premiums over the contractual life of the loan using the effective interest method and immediately recognize in income any unamortized balances if the loan is repaid before its contractual maturity.

Cash Equivalents

Cash equivalents consist of highly liquid investments with a maturity date of three months or less when purchased. These investments are stated at cost, which approximates fair value.

Escrow Deposits and Restricted Cash

Escrow deposits consist of amounts held by us or our lenders to provide for future real estate tax, insurance expenditures and tenant improvements related to our properties and operations. Restricted cash generally represents amounts paid to us for security deposits and other similar purposes.

Deferred Financing Costs

We amortize deferred financing costs, which are reported as a reduction to senior notes payable and other debt on our Consolidated Balance Sheets, as a component of interest expense over the terms of the related borrowings using a method that approximates a level yield. Amortized costs of approximately $18.2 million, $19.7 million and $23.0 million were included in interest expense for the years ended December 31, 2022, 2021 and 2020, respectively.

Available for Sale Securities

We classify available for sale securities as a component of other assets on our Consolidated Balance Sheets (other than our interests in government-sponsored pooled loan investments, which are classified as secured loans receivable and investments, net on our Consolidated Balance Sheets). We record these securities at fair value and include unrealized gains and losses recorded in stockholders’ equity as a component of accumulated other comprehensive income on our Consolidated Balance Sheets. If we determine that a credit loss exists with respect to individual investments, we will recognize an allowance against the amortized cost basis of the investment with a corresponding charge to net income (in allowance on loans receivable and investments) in our Consolidated Statements of Income. We report interest income, including discount or premium amortization, on available for sale securities and gains or losses on securities sold, which are based on the specific identification method, in income from loans and investments in our Consolidated Statements of Income.

Derivative Instruments

We recognize all derivative instruments in other assets or accounts payable and other liabilities on our Consolidated Balance Sheets at fair value as of the reporting date. We recognize changes in the fair value of derivative instruments in other expense in our Consolidated Statements of Income or accumulated other comprehensive income on our Consolidated Balance Sheets, depending on the intended use of the derivative and our designation of the instrument.

We do not use our derivative financial instruments, including interest rate caps, interest rate swaps and foreign currency forward contracts, for trading or speculative purposes. Our foreign currency forward contracts and certain of our interest rate swaps (including the interest rate swap contracts of consolidated and unconsolidated joint ventures) are designated as effectively hedging the variability of expected cash flows related to their underlying securities and, therefore, also are recorded on our Consolidated Balance Sheets at fair value, with changes in the fair value of these instruments recognized in accumulated other comprehensive income on our Consolidated Balance Sheets. We recognize any noncontrolling interests’ proportionate share of the changes in fair value of swap contracts of our consolidated joint ventures in noncontrolling interests on our Consolidated Balance Sheets. We recognize our proportionate share of the change in fair value of swap contracts of our unconsolidated joint ventures in accumulated other comprehensive income on our Consolidated Balance Sheets. Certain of our other interest rate swaps and rate caps were not designated as having a hedging relationship with the underlying securities and therefore do not meet the criteria for hedge accounting under GAAP. Accordingly, these derivative instruments are recorded on

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

our Consolidated Balance Sheets at fair value, and changes in the fair value of these instruments are recognized in current earnings (in other expense) in our Consolidated Statements of Income.

Fair Values of Financial Instruments

Fair value is a market-based measurement, not an entity-specific measurement, and we determine fair value based on the assumptions that we expect market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, GAAP establishes a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within levels one and two of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within level three of the hierarchy).

Level one inputs utilize unadjusted quoted prices for identical assets or liabilities in active markets that we have the ability to access. Level two inputs are inputs other than quoted prices included in level one that are directly or indirectly observable for the asset or liability. Level two inputs may include quoted prices for similar assets and liabilities in active markets and other inputs for the asset or liability that are observable at commonly quoted intervals, such as interest rates, foreign exchange rates and yield curves. Level three inputs are unobservable inputs for the asset or liability, which typically are based on our own assumptions, because there is little, if any, related market activity. If the determination of the fair value measurement is based on inputs from different levels of the hierarchy, the level within which the entire fair value measurement falls is the lowest-level input that is significant to the fair value measurement in its entirety. If the volume and level of market activity for an asset or liability has decreased significantly relative to the normal market activity for such asset or liability (or similar assets or liabilities), then transactions or quoted prices may not accurately reflect fair value. In addition, if there is evidence that a transaction for an asset or liability is not orderly, little, if any, weight is placed on that transaction price as an indicator of fair value. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability.

We use the following methods and assumptions in estimating the fair value of our financial instruments whose fair value is determined on a recurring basis.

Cash and cash equivalents - The carrying amount of unrestricted cash and cash equivalents reported on our Consolidated Balance Sheets approximates fair value due to the short maturity of these instruments.

*•*Escrow deposits and restricted cash - The carrying amount of escrow deposits and restricted cash reported on our Consolidated Balance Sheets approximates fair value due to the short maturity of these instruments.

Loans receivable - We estimate the fair value of loans receivable using level two and level three inputs, including underlying asset performance and credit quality. We discount future cash flows using current interest rates at which similar loans with the same terms and length to maturity would be made to borrowers with similar credit ratings.

As of December 31, 2022, we recognized a $20.0 million allowance on our cash-pay mezzanine loan (the “Santerre Mezzanine Loan”) to Santerre Health Investors. The Santerre Mezzanine Loan has a current principal balance of $486.1 million, is priced at LIBOR + 6.42% and is freely prepayable in whole or in part subject to satisfaction of certain financial and non-financial terms and conditions. The Santerre Mezzanine Loan generated $40.0 million in loan interest income to Ventas in 2022.

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. In the case of the Mezzanine Loan, the analysis took into account a variety of factors, including market conditions, cap rates for comparable assets, forecasted estimates of net operating income, discount rates, lease coverage levels and the continuing impact of COVID-19 and its extended consequences on the operating performance of certain of the collateral, including occupancy and operating expenses such as labor. The allowance was calculated as of December 31, 2022 and does not take into account changes in the underlying facts that may have occurred after that date. The allowance is based on numerous estimates and assumptions that are inherently uncertain and is subject to adjustment as the underlying facts change. The allowance may not represent the loss, if any, that we ultimately recognize.

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Available for sale securities - We estimate the fair value of marketable debt securities using level two inputs. We observe quoted prices for similar assets or liabilities in active markets that we have the ability to access. We estimate the fair value of certain government-sponsored pooled loan investments using level three inputs. We consider credit spreads, underlying asset performance and credit quality, default rates and confirmed settlement amounts at maturity.
Derivative instruments - We estimate the fair value of derivative instruments, including interest rate caps, interest rate swaps, and foreign currency forward contracts, using level two inputs.

*◦*Interest rate caps - We observe forward yield curves and other relevant information.

*◦*Interest rate swaps - We observe alternative financing rates derived from market-based financing rates, forward yield curves and discount rates.

*◦*Foreign currency forward contracts - We estimate the future values of the two currency tranches using forward exchange rates that are based on traded forward points and calculate a present value of the net amount using a discount factor based on observable traded interest rates.

Stock warrants - We estimate the fair value of stock warrants using level two inputs that are obtained from public sources. Inputs include equity spot price, dividend yield, volatility and risk-free rate.

*•*Senior notes payable and other debt - We estimate the fair value of senior notes payable and other debt using level two inputs. We discount the future cash flows using current interest rates at which we could obtain similar borrowings. For mortgage debt, we may estimate fair value using level three inputs, similar to those used in determining fair value of loans receivable (above).

*•*Redeemable OP unitholder interests - We estimate the fair value of our redeemable OP unitholder interests using level one inputs. We base fair value on the closing price of our common stock, as OP Units may be redeemed at the election of the holder for cash or, at our option, shares of our common stock, subject to adjustment in certain circumstances.

Revenue Recognition

Triple-Net Leased Properties and Office Operations

Certain of our triple-net leases and most of our MOB and life science, research and innovation centers’ (collectively, “office operations”) leases provide for periodic and determinable increases in base rent. We recognize base rental revenues under these leases on a straight-line basis over the applicable lease term when collectability of substantially all rents is probable. Recognizing rental income on a straight-line basis generally results in recognized revenues during the first half of a lease term exceeding the cash amounts contractually due from our tenants, creating a straight-line rent receivable that is included in other assets on our Consolidated Balance Sheets. At December 31, 2022 and 2021, this cumulative excess totaled $187.5 million and $176.9 million, respectively (excluding properties classified as held for sale).

Certain of our leases provide for periodic increases in base rent only if certain revenue parameters or other substantive contingencies are met. We recognize the increased rental revenue under these leases as the related parameters or contingencies are met, rather than on a straight-line basis over the applicable lease term.

We assess the probability of collecting substantially all rents under our leases based on several factors, including, among other things, payment history, the financial strength of the tenant and any guarantors, the historical operations and operating trends of the property, the historical payment pattern of the tenant, the type of property, the value of the underlying collateral, if any, expected future performance of the property and current economic conditions. If our evaluation of these factors indicates it is not probable that we will be able to collect substantially all rents under the lease, we record a charge to rental income. If we change our conclusions regarding the probability of collecting rent payments required by a lease, we may recognize adjustments to rental income in the period we make such change in our conclusions.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SHOP

Our resident agreements are accounted for as leases and we recognize resident fees and services, other than move-in fees, monthly as services are provided. We recognize move-in fees on a straight-line basis over the average resident stay.

Other

We provide various services to our unconsolidated real estate entities in exchange for fees and reimbursements, which are determined in accordance with the terms specific to each arrangement. We recognize these fees as we provide the services.

We may also earn promote revenue within the VIM platform related to the Ventas Fund, a perpetual life investment vehicle focused on investments in research and innovation centers, medical office buildings and senior housing communities in North America. Within the Ventas Fund, promote revenue is generally based on the Ventas Fund’s cumulative returns over three-year performance periods. The promote revenue is based on operating performance and real estate valuation of the portfolio, including highly variable inputs such as capitalization rates, market rents, and interest rates. As the asset appreciation is an important driver of the promote and the key inputs in the valuation process can change, we generally recognize promote revenues at or near the end of the performance period. We include these revenues as a component of third party capital management revenues in our Consolidated Statements of Income.

We may also earn promote revenues within the VIM platform related to our other investment vehicles. Within these other investment vehicles, promote revenues are generally earned after our partners have received distributions sufficient to provide a specified rate of return on their invested capital.

We recognize interest income from loans and investments, including discounts and premiums, using the effective interest method when collectability is reasonably assured. We apply the effective interest method on a loan-by-loan basis and recognize discounts and premiums as yield adjustments over the related loan term. We recognize interest income on loans with an allowance on a cash basis.

We evaluate a current estimate of all expected credit losses over the life of a financial instrument, which may result in recognition of credit losses on loans and other financial instruments before an actual event of default. We establish reserves for any estimated credit losses with a corresponding charge to allowance on loans receivable and investments in our Consolidated Statements of Income. Subsequent changes in our estimate of credit losses may result in a corresponding increase or decrease to allowance on loans receivable and investments in our Consolidated Statements of Income.

Accounting for Leased Property

We lease real property, primarily land and corporate office space, and equipment, primarily vehicles at our senior housing communities. At lease inception, we establish an operating lease asset and operating lease liability, calculated as the present value of future minimum lease payments on our Consolidated Balance Sheets. As our leases do not provide an implicit rate, we use a discount rate that approximates our incremental borrowing rate available at lease commencement to determine the present value. Our lease expense primarily consists of ground and corporate office leases. Ground lease expense is included in interest expense and corporate office lease expense is included in general, administrative and professional fees in our Consolidated Statements of Income.

Stock-Based Compensation

We recognize share-based payments to employees and directors, including grants of stock options and restricted stock, included in general, administrative and professional fees in our Consolidated Statements of Income generally on a straight-line basis over the requisite service period based on the grant date fair value of the award.

Gain on Real Estate Dispositions

We recognize a gain on real estate disposition when we transfer control of a property and when it is probable that we will collect substantially all of the related consideration.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Federal Income Tax

We have elected to be treated as a REIT under the applicable provisions of the Internal Revenue Code of 1986, as amended (the “Code”), for every year beginning with the year ended December 31, 1999. Accordingly, we generally are not subject to federal income tax on net income that we distribute to our stockholders, provided that we continue to qualify as a REIT. However, with respect to certain of our subsidiaries that have elected to be treated as taxable REIT subsidiaries (“TRS” or “TRS entities”), we record income tax expense or benefit, as those entities are subject to federal income tax similar to regular corporations. Certain foreign subsidiaries are subject to foreign income tax, although they did not elect to be treated as TRSs.

We account for deferred income taxes using the asset and liability method and recognize deferred tax assets and liabilities for the expected future tax consequences of events that have been included in our financial statements or tax returns. Under this method, we determine deferred tax assets and liabilities based on the differences between the financial reporting and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Any increase or decrease in the deferred tax liability that results from a change in circumstances, and that causes us to change our judgment about expected future tax consequences of events, is included in the tax provision when such changes occur. Deferred income taxes also reflect the impact of operating loss and tax credit carryforwards. A valuation allowance is provided if we believe it is more likely than not that all or some portion of the deferred tax asset will not be realized. Any increase or decrease in the valuation allowance that results from a change in circumstances, and that causes us to change our judgment about the realizability of the related deferred tax asset, is included in the tax provision when such changes occur.

We recognize the tax benefit from an uncertain tax position claimed or expected to be claimed on a tax return only if it is more likely than not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. We recognize interest and penalties, if applicable, related to uncertain tax positions as part of income tax benefit or expense in our Consolidated Statements of Income.

Foreign Currency

Certain of our subsidiaries’ functional currencies are the local currencies of their respective foreign jurisdictions. We translate the results of operations of our foreign subsidiaries into U.S. dollars using average rates of exchange in effect during the period, and we translate balance sheet accounts using exchange rates in effect at the end of the period. We record the resulting currency translation adjustments in accumulated other comprehensive income, a component of stockholders’ equity, on our Consolidated Balance Sheets, and we record foreign currency transaction gains and losses in other expense in our Consolidated Statements of Income. We recognize any noncontrolling interests’ proportionate share of currency translation adjustments of our foreign consolidated joint ventures in noncontrolling interests on our Consolidated Balance Sheets.

Segment Reporting

As of December 31, 2022, 2021 and 2020, we operated through three reportable business segments: triple-net leased properties, SHOP and office operations. In our triple-net leased properties segment, we invest in and own senior 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. In our SHOP segment, we invest in senior housing communities throughout the United States and Canada and engage independent operators, such as Atria and Sunrise, to manage those communities. In our office operations segment, we primarily acquire, own, develop, lease and manage MOBs and life science, research and innovation centers throughout the United States. See “Note 18 – Segment Information.”

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Government Assistance

Provider Relief Grants. We applied for and received grants under Phase 2, Phase 3 and Phase 4 of the Provider Relief Fund administered by the U.S. Department of Health & Human Services (“HHS”) on behalf of the assisted living communities in our senior living operations 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. We will not be required to repay distributions from the Provider Relief Fund, provided that we 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, reporting and record keeping requirements and cooperating with any government audits. See “Government Regulation—CARES Act and Similar Governmental Funding Programs” in Part I, Item 1 of this Annual Report.

Other Government Assistance. We, and our tenants, borrowers, managers and unconsolidated entities also received grants administered by other domestic, foreign, local, regional or national governments on behalf of our senior housing communities primarily to partially mitigate losses attributable to COVID-19.

During 2022, we received $54.2 million and $10.5 million in HHS and other government grants, respectively. During 2021 and 2020, we received $15.4 million and $35.1 million, respectively, in HHS grants. These grants are recognized as a contra expense within property-level operating expenses in our Consolidated Statements of Income in the period in which they were received. Any grants that are ultimately received and retained by us are not expected to fully offset the losses incurred in our SHOP segment that are attributable to COVID-19. Further, although we continue to monitor and evaluate the terms and conditions associated with these government grants, we cannot assure you that we will be in compliance with all requirements related to the payments received, in which case some or all of the grants received may need to be repaid.

COVID-19 Assessment

We have not identified the COVID-19 pandemic, on its own, as a “triggering event” for purposes of evaluating impairment of real estate assets, goodwill and other intangibles, investments in unconsolidated entities and financial instruments. However, as of December 31, 2022, 2021 and 2020, we considered the effect of the pandemic on certain of our assets (described below) and our ability to recover the respective carrying values of these assets. We applied our considerations to existing critical accounting policies that require us to make estimates and assumptions regarding future events that affect the reported amounts of assets and liabilities. We based our estimates on our experience and on assumptions we believe to be reasonable under the circumstances. As a result, we recognized no COVID-19 related charges during 2022 and 2021 but recognized the following charges for the year ended December 31, 2020:

Adjustment to rental income: As of December 31, 2020, we concluded that it is probable we will not collect substantially all rents from certain tenants, primarily within our triple-net leased properties segment. As a result, we recognized adjustments to rental income of $74.6 million for the year ended December 31, 2020. Rental payments from these tenants will be recognized in rental income when received.
Impairment of real estate assets: During 2020, we compared our estimate of undiscounted cash flows, including a hypothetical terminal value, for certain real estate assets to the assets’ respective carrying values. During 2020, we recognized $126.5 million of impairments representing the difference between the assets’ carrying value and the then-estimated fair value of $239.9 million. The impaired assets, primarily senior housing communities, represent approximately 1% of our consolidated net real estate property as of December 31, 2020. Impairments are recorded within depreciation and amortization in our Consolidated Statements of Income and are primarily related to our SHOP reportable business segment.
Loss on financial instruments and impairment of unconsolidated entities: As of December 31, 2020, we concluded that credit losses exist within certain of our non-mortgage loans receivable and government-sponsored pooled loan investments. As a result, we recognized credit loss charges of $34.7 million for the year ended December 31, 2020 within allowance on loans receivable and investments in our Consolidated Statements of Income. During the fourth quarter of 2020, we received $10.5 million as a principal payment on previously reserved loans. In addition, during 2020 we recognized an impairment of $10.7 million in an equity investment in an unconsolidated entity also recorded within allowance on loans receivable and investments in our Consolidated Statements of Income.
Deferred tax asset valuation allowance: During 2020, we concluded that it was not more likely than not that deferred tax assets (primarily US federal NOL carryforwards which begin to expire in 2032) would be realized based on our

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

cumulative loss in recent years for certain of our TRS entities. As a result, we recorded a valuation allowance of $56.4 million against these deferred tax assets on our Consolidated Balance Sheets with a corresponding charge to income tax benefit (expense) in our Consolidated Statements of Income.

Recently Adopted Accounting Standards

In November 2021, the FASB issued Accounting Standards Update 2021-10, Disclosures by Business Entities about Government Assistance (“ASU 2021-10”), which requires expanded annual disclosures for transactions involving the receipt of government assistance. Required disclosures include a description of the nature of the transactions with government entities, our accounting policies for such transactions and their impact to our Consolidated Financial Statements. We adopted ASU 2021-10 on January 1, 2022 and the adoption of this standard did not have a material impact on our Consolidated Financial Statements.

Reclassifications

Certain prior year amounts have been reclassified to conform to the current year presentation.

NOTE 3 – CONCENTRATION OF CREDIT RISK

As of December 31, 2022, Atria, Sunrise, Brookdale Senior Living, Ardent and Kindred managed or operated approximately 26.0%, 9.8%, 7.8%, 5.3% and 0.8%, respectively, of our consolidated real estate investments based on gross book value (excluding properties classified as held for sale as of December 31, 2022). 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 12.4% and 53.9% 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 December 31, 2022). MOBs, life science, research and innovation 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 33.7%. Our consolidated properties were located in 47 states, the District of Columbia, seven Canadian provinces and the United Kingdom as of December 31, 2022, 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, excluding interest and other income, less property-level operating expenses and third party capital management expenses) for each of the years ended December 31, 2022, 2021 and 2020. See “Non-GAAP Financial Measures” included elsewhere in this Annual Report on Form 10-K for additional disclosure and a reconciliation of net income attributable to common stockholders, as computed in accordance with GAAP, to NOI.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Triple-Net Leased Properties

The properties we lease to Brookdale Senior Living, Ardent and Kindred accounted for a significant portion of our triple-net leased properties segment revenues and NOI for the years ended December 31, 2022, 2021 and 2020. Refer to Item 1A. Risk Factors. 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 Years Ended December 31,
	2022		2021		2020
Revenues (1):
Brookdale Senior Living (2)	3.6	%	3.9	%	4.4	%
Ardent	3.2		3.3		3.2
Kindred	3.2		3.8		3.5
NOI:
Brookdale Senior Living (2)	8.1	%	8.6	%	9.0	%
Ardent	7.1		7.4		6.6
Kindred	7.3		7.8		7.1

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

(2)2022, 2021 and 2020 results include $42.6 million, $42.6 million and $21.3 million, respectively, of amortization of up-front consideration received in 2020 from the Brookdale Lease.

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 December 31, 2022, 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 extensions at the greater of escalated rent and fair market rental. Kindred has the option to renew the Group 2 properties for one, 5-year extensions 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.

Brookdale Transactions

In July 2020, we entered into a revised master lease agreement (the “Brookdale Lease”) and certain other agreements (together with the Brookdale Lease, the “Agreements”) with Brookdale Senior Living. The Agreements modify our current arrangements with Brookdale Senior Living as follows:

We received up-front consideration of $235 million, which is being amortized over the remaining lease term and consisted of: (a) $162 million in cash including $47 million from the transfer to Ventas of deposits under the Brookdale Lease; (b) a $45 million note; (c) $28 million in warrants exercisable for 16.3 million shares of Brookdale Senior Living common stock, which are exercisable at any time prior to December 31, 2025 and have an exercise price of $3.00 per share. In October 2021, we received full repayment of the note from Brookdale.

Under the terms of the Brookdale Lease, base rent escalates annually at 3% per annum, which escalation commenced on January 1, 2022.

The warrants are classified within other assets on our Consolidated Balance Sheets. These warrants are measured at fair value with changes in fair value being recognized within other expense in our Consolidated Statements of Income.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Also in July 2020, Brookdale Senior Living transferred fee ownership of five senior living communities to us, in full satisfaction and repayment of a $78 million loan to Brookdale Senior Living from us that was secured by the five communities. Brookdale Senior Living manages those communities for us under a terminable management agreement.

Holiday Transaction

In April 2020, we completed a transaction with affiliates of Holiday Retirement (collectively, “Holiday”), including (a) entry into a new, terminable management agreement with Holiday Management Company for our 26 independent living assets previously subject to a triple-net lease (the “Holiday Lease”) with Holiday; (b) termination of the Holiday Lease; and (c) our receipt from Holiday of $33.8 million in cash from the transfer to us of deposits under the Holiday Lease and $66.0 million in principal amount of secured notes. As a result of the Holiday Lease termination, we recognized $50.2 million within triple-net leased rental income, composed of $99.8 million of cash and notes received less $49.6 million from the write-off of accumulated straight-line receivable.

Future Contractual Rents

The following table sets forth the future contracted minimum rentals, excluding contingent rent escalations, but including straight-line rent adjustments where applicable, for all of our consolidated triple-net and office building leases as of December 31, 2022 (excluding properties classified as held for sale as of December 31, 2022, dollars in thousands):


	Brookdale Senior Living		Ardent		Kindred		Other		Total
2023	$	148,901	$	146,108	$	130,518	$	695,990	$	1,121,517
2024	148,674		146,108		130,518		645,622		1,070,922
2025	148,217		146,108		60,732		553,657		908,714
2026	—		145,580		25,839		483,536		654,955
2027	—		144,524		25,839		389,830		560,193
Thereafter	—		1,090,603		8,613		1,340,595		2,439,811
Total	$	445,792	$	1,819,031	$	382,059	$	4,109,230	$	6,756,112

Senior Housing Operating Portfolio

As of December 31, 2022, Atria and Sunrise, collectively, provided comprehensive property management and accounting services with respect to 334 of our 544 consolidated senior housing communities, for which we pay annual management fees pursuant to long-term management agreements.

On July 30, 2021, Atria acquired the management services division of Holiday, which at the time managed a pool of 26 communities for Ventas. As of December 31, 2022, Atria and its subsidiaries, including Holiday, managed a pool of 242 senior housing communities for Ventas. Ventas has the ongoing right to terminate the management contract for 91 of the communities with short term notice.

As of December 31, 2022, 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 upon certain circumstances with or without the payment of a fee.

We successfully transitioned the operations of 90 senior living communities owned by us and operated under management agreements with Eclipse Senior Living, Inc. (“ESL”) to seven experienced managers on or before January 2, 2022. ESL ceased operation of its management business in early 2022 following completion of the transitions. We incurred certain one-time transition costs and expenses in connection with the transitions, which were recognized within transaction expenses and deal costs in our Consolidated Statements of Income.

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

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

operate our senior housing communities in compliance with the terms of our management agreements and all applicable laws and regulations.

NOTE 4 – ACQUISITIONS OF REAL ESTATE PROPERTY

We acquire and invest in senior housing, medical office buildings, life science, research and innovation centers and other healthcare properties primarily to achieve an expected yield on our investment, to grow and diversify our portfolio and revenue base, and to reduce our dependence on any single tenant, operator or manager, geographic location, asset type, business model or revenue source. The following summarizes our acquisition activities during 2022, 2021 and 2020. Each of our acquisitions disclosed below was accounted for as an asset acquisition.

2022 Acquisitions

During the year ended December 31, 2022, for an aggregate purchase price of $453.2 million, we acquired 18 MOBs leased to affiliates of Ardent, one behavioral health center, one research and innovation center (all of which are reported within our office operations segment) and two senior housing communities (which are reported within our SHOP segment).

2021 Acquisitions

On September 21, 2021, we acquired New Senior Investment Group Inc. (“New Senior”) for a purchase price of $2.3 billion in an all-stock transaction pursuant to an Agreement and Plan of Merger dated as of June 28, 2021 (the “Merger Agreement”) by and among Ventas, Cadence Merger Sub LLC, our wholly owned subsidiary (“Merger Sub”), and New Senior. Under the Merger Agreement, on the acquisition date, Merger Sub merged with and into New Senior, with New Senior surviving the merger as our wholly owned subsidiary (the “New Senior Acquisition”). The New Senior Acquisition was valued at approximately $2.4 billion. We funded the transaction through the issuance of approximately 13.3 million shares of our common stock, with each New Senior stockholder receiving 0.1561 shares of Ventas common stock for each share of New Senior common stock that they owned immediately prior to the acquisition. In addition to the equity issuance, we funded the acquisition through the assumption of $482.5 million of New Senior mortgage debt and $1.1 billion of cash paid at closing. The New Senior Acquisition added 102 independent living communities to our SHOP reportable business segment and one independent living community to our triple-net lease properties reportable business segment. We accounted for this transaction as an asset acquisition and the financial results of New Senior have been included in our consolidated financial statements from the acquisition date.

During the year ended December 31, 2021, we acquired six Canadian senior housing communities reported within our SHOP reportable business segment and a behavioral health center in Plano, Texas reported within our office operations reportable business segment for aggregate consideration of $240.7 million.

2020 Acquisitions

During the year ended December 31, 2020, we acquired two research and innovation centers reported within our office operations reportable business segment, seven senior housing communities reported within our SHOP reportable business segment and one LTAC reported within our triple-net leased properties reportable business segment for an aggregate consideration of $249.5 million.

NOTE 5 – DISPOSITIONS AND IMPAIRMENTS

2022 Activity

During the year ended December 31, 2022, we sold seven senior housing communities, two MOBs, three triple-net leased properties, one vacant land parcel and one vacant office building for aggregate consideration of $115.1 million and recognized a net gain on the sale of these assets of $7.8 million in our Consolidated Statements of Income.

2021 Activity

During the year ended December 31, 2021, we sold 34 MOBs, eight triple-net leased properties and 23 senior housing communities for aggregate consideration of $859.7 million and recognized gains on the sale of these assets of $218.8 million in our Consolidated Statements of Income.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2020 Activity

During the year ended December 31, 2020, we recognized $262.2 million of gains on sale of real estate in our Consolidated Statements of Income as described below.

In March 2020, we formed the Ventas Life Science and Healthcare Real Estate Fund, L.P. (the “Ventas Fund”), a perpetual life vehicle that focuses on investments in research and innovation centers, medical office buildings and senior housing communities in North America. To seed the Ventas Fund, we contributed six (two of which are on the same campus) stabilized research and innovation and medical office properties. We received cash consideration of $620 million and a 21% interest in the Ventas Fund. We recognized a gain on the transactions of $225.1 million.

In October 2020, we formed a joint venture (the “R&I Development JV”) with GIC. To seed the R&I Development JV, we contributed our controlling ownership interest in four in-progress university-based research and innovation development projects (the “Initial R&I JV Projects”). At closing, GIC reimbursed us for its share of costs incurred to date and we recognized a gain of $13.7 million. We own an over 50% interest and GIC owns a 45% interest in the Initial R&I JV Projects.

See “Note 7 – Investments in Unconsolidated Entities” for additional details on the Ventas Fund and the JV.

Also during 2020, we sold four MOBs, four senior housing communities, 22 triple-net leased properties and one land parcel for aggregate consideration of $249.6 million, and we recognized a gain on the sale of these assets of $23.4 million.

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):


	December 31, 2022					December 31, 2021
	Number of Properties Held for Sale	Assets Held for Sale		Liabilities Held for Sale		Number of Properties Held for Sale	Assets Held for Sale		Liabilities Held for Sale
SHOP	3	$	44,852	$	5,675	2	$	24,964	$	9,321
Office operations	—	41		817		2	3,435		1,529
Triple-net leased properties	—	—		—		—	—		—
Total	3	$	44,893	$	6,492	4	$	28,399	$	10,850

Real Estate Impairment

We recognized impairments of $107.8 million, $219.4 million and $153.8 million for the years ended December 31, 2022, 2021 and 2020, respectively, which are recorded primarily as a component of depreciation and amortization in our Consolidated Statements of Income. The impairments recorded during 2022 and 2021 were primarily a result of a change in our intent to hold or a change in the future cash flows of the impaired assets. A significant portion of our 2020 charges resulted from the impact of COVID-19. (See “Note 2 – Accounting Policies - COVID-19 Assessment”).

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 6 – LOANS RECEIVABLE AND INVESTMENTS

As of December 31, 2022 and 2021, we held $561.4 million and $549.2 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		Unrealized Gain		Carrying Amount		Fair Value
As of December 31, 2022:
Secured/mortgage loans and other, net (1)	$	513,669	$	(20,000)	$	—	$	493,669	$	493,627
Government-sponsored pooled loan investments, net (2)	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 (3)	28,959		(4,621)		—		24,338		23,416

Total loans receivable and investments, net	$	586,034	$	(24,621)	$	—	$	561,413	$	560,449

As of December 31, 2021:
Secured/mortgage loans and other, net (1)	$	488,913	$	—	$	—	$	488,913	$	478,931
Government-sponsored pooled loan investments, net (2)	39,376		—		1,836		41,213		41,213
Total investments reported as secured loans receivable and investments, net	528,289		—		1,836		530,126		520,144
Non-mortgage loans receivable, net (3)	24,418		(5,394)		—		19,024		19,039

Total loans receivable and investments, net	$	552,707	$	(5,394)	$	1,836	$	549,150	$	539,183

(1)Includes the $486.1 million principal amount, cash-pay Santerre Mezzanine Loan, which is priced at LIBOR + 6.42% and secured by a pledge of equity interests in entities that hold a diverse pool of medical office, senior housing, skilled nursing and other healthcare assets. The Santerre Mezzanine loan has a current maturity date of June 9, 2023, subject to the borrower’s right to extend for one year,subject to satisfaction of certain conditions. The Santerre Mezzanine Loan is currently prepayable in whole or in part subject to satisfaction of certain financial and non-financial terms and conditions. Other included investments have contractual maturities in 2024 and 2027.

(2)Repaid at par in February 2023.

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

2022 Activity

In 2022, we provided secured debt financing in the aggregate amount of $29.1 million with terms ranging from two to five years and interest rates ranging from Term SOFR plus 3.75% to 5.00%.

As of December 31, 2022, we recognized a $20.0 million allowance on the Santerre Mezzanine Loan. 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. See “Note 2 – Accounting Policies - Fair Values of Financial Instruments” of the Consolidated Financial Statements.

The Santerre Mezzanine Loan has a current principal balance of $486.1 million, is priced at LIBOR + 6.42% and is freely prepayable in whole or in part subject to satisfaction of certain financial and non-financial terms and conditions. The Santerre Mezzanine Loan generated $40.0 million in loan interest income to Ventas in 2022. The Santerre Mezzanine Loan was entered into on June 7, 2019 for a five-year term, inclusive of three one-year extensions at the borrower’s option. The borrower has exercised two of its three extension options, with the final extension option exercisable between 30 to 60 days prior to the current maturity date of June 9, 2023, subject to satisfaction of certain conditions.

The Santerre Mezzanine Loan is subordinate to the rights of a $1.0 billion principal amount senior loan (the “Santerre Senior Loan”) priced at LIBOR + 1.84%. The Santerre Senior Loan is secured by a diverse pool of medical office, senior housing, skilled nursing and other healthcare assets and the Santerre Mezzanine Loan is secured by equity interests in entities that own those assets. Both loans are otherwise non-recourse to the borrower, subject to certain exceptions. The borrower has

VENTAS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

acquired an interest rate cap for the benefit of the Santerre Mezzanine Loan and the Santerre Senior Loan in the notional amount of $1.5 billion, which sets LIBOR at 3.36% and expires on June 9, 2023.

The borrower remained current on all financial obligations to Ventas through January 2023 and is expected to remain current through February 2023. However, the current post-Covid under-performance of certain of the collateral, coupled with the rise in interest rates in the third quarter and accelerating into the fourth quarter of 2022, has caused the ratio of net operating income of the collateral to interest due on the Santerre Mezzanine Loan to decline significantly.

While we believe that the borrower has taken and is taking targeted actions to attempt to improve the performance of or sell certain of the collateral, future cash flows from the collateral may be insufficient to fully pay interest expense on the Santerre Mezzanine Loan. If the borrower is unable to or does not meet its obligations under the Santerre Mezzanine Loan, there are a variety of remedies available to us, including the ability to foreclose on the collateral and assume and extend the Santerre Senior Loan for an additional year.

See also “Risk Factors – We face potential adverse consequences from the bankruptcy, insolvency or financial deterioration of our tenants, managers, borrowers and other obligors” and “Risk Factors – If a borrower defaults, we may be unable to obtain payment, successfully foreclose on collateral or realize the value of any collateral, which could adversely affect our ability to recover our investment.”

2021 Activity

In October 2021, we received proceeds of $45.0 million in full repayment of a note (which was included above in Non-mortgage loans receivable, net) from Brookdale Senior Living. The note was issued to us in connection with the modification of our lease with Brookdale Senior Living in the third quarter of 2020.

In July 2021, we received $66.0 million from Holiday Retirement as repayment in full of secured notes which Holiday Retirement previously issued to us as part of a lease termination transaction entered into in April 2020.

In July 2021, we received aggregate proceeds of $224 million from the redemption of Ardent’s outstanding 9.75% Senior Notes due 2026 (which was included above in Marketable debt securities) at a price equal to 107.313% of the principal amount of the notes, plus accrued and unpaid interest. The redemption resulted in a gain of $16.6 million, which is recorded in income from loans and investments in our Consolidated Statements of Income. As of December 31, 2021, $23.0 million of unrealized gain related to these securities was included in accumulated other comprehensive income on our Consolidated Balance Sheet.

In April 2021, we received $19.2 million in full repayment of certain government-sponsored pooled loan investments. In the first quarter of 2021, prior to such repayment, we reversed an $8.8 million allowance we had previously recorded in 2020 on this investment with a corresponding adjustment to allowance on loans receivable and investments in our Consolidated Statements of Income. There was no impact to our Consolidated Statements of Income from the loan repayment.

During the first quarter of 2021, we received aggregate proceeds of $16.5 million for the redemption and sale of marketable debt securities, resulting in total gains of $1.0 million, which is recorded in income from loans and investments in our Consolidated Statements of Income. As of December 31, 2021, $1.2 million of unrealized gain was presented within accumulated other comprehensive income on our Consolidated Balance Sheet related to these securities. These securities had a weighted average interest rate of 8.3% and were due to mature between 2024 and 2026.

In March 2021, $11.9 million of previously reserved non-mortgage loans were forgiven. We derecognized both the amortized cost bases and allowances for these loans during the quarter ended March 31, 2021. There was no impact to our Consolidated Statements of Income from the loan forgiveness.

NOTE 7 – 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.

VENTAS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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 December 31, 2022 and 2021, respectively (dollars in thousands):


	Ownership (1)		Carrying Amount
	as of December 31,		as of December 31,
	2022	2021	2022		2021
Investment in unconsolidated real estate entities:
Ventas Life Science & Healthcare Real Estate Fund	21.0%	21.1%	$	263,979	$	267,475
Pension Fund Joint Venture	22.9%	22.9%	25,028		29,192
Research & Innovation Development Joint Venture	51.0%	51.0%	284,962		221,363
Ventas Investment Management Platform			573,969		518,030
Atrium Health & Wake Forest Joint Venture	48.5%	—%	5,403		—
All other (2)	34.0%-38.0%	34.0%-50.0%	577		5,435
Total investments in unconsolidated real estate entities			$	579,949	$	523,465

(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 land parcels, parking structures and other de minimis investments in unconsolidated real estate entities.

In 2022, we earned our first promote revenue of $9.9 million as general partner of the Ventas Life Science & Healthcare Real Estate Fund within VIM. The promote revenue was recorded in third party capital management revenues in our Consolidated Statements of Income.

In 2022, we, together with our joint venture partners Wexford and Atrium Health, closed or committed to a new approximately 326,000 square foot development in Charlotte, North Carolina, which will include an education building and is 100% pre-leased to Aa3 rated non-profit health system Atrium Health and to Wake Forest University School of Medicine. The development has an expected completion date of 2025 and is expected to be the academic core of Atrium Health system in Charlotte.

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 $14.5 million, $12.4 million and $6.7 million for the years ended December 31, 2022, 2021 and 2020, 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. Our 9.8% ownership interest in Ardent entitles us to customary minority rights and protections, including the right to appoint one member to the Ardent Board of Directors.

VENTAS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2022 Activity

During the fourth quarter of 2022, Atria combined its proprietary cloud-based senior housing management software platform, Glennis, with two other complementary companies in the Software as a Service (SaaS) technology space. The merger transaction was executed under the sponsorship and majority ownership of an experienced private equity technology investor. We own a 34% stake in Atria and recognized a $26.1 million gain on sale in the fourth quarter of 2022 in income from unconsolidated entities in our Consolidated Statements of Income. We now own nearly 10% of the new combined SaaS company.

In December 2022, we recognized $11.7 million in income from unconsolidated entities in our Consolidated Statements of Income relating to our share of a net gain on real estate disposition recognized by Ardent.

2020 Activity

In June 2020, as a result of COVID-19, we recognized an impairment charge of $10.7 million related to our investment in an unconsolidated operating entity, which was recorded within allowance on loans receivable and investments in our Consolidated Statements of Income. See “Note 2 – Accounting Policies - COVID-19 Assessment.”

NOTE 8 – INTANGIBLES

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


	As of December 31, 2022			As of December 31, 2021
	Balance		Weighted Average Remaining Amortization Period in Years	Balance		Weighted Average Remaining Amortization Period in Years
Intangible assets:
Above-market lease intangibles (1)	$	129,038	5.4	$	129,121	5.9
In-place and other lease intangibles (2)	1,217,152		8.0	1,240,626		7.2
Goodwill	1,044,415		N/A	1,046,140		N/A
Other intangibles (2)	34,404		5.6	34,517		6.5
Accumulated amortization	(1,061,305)		N/A	(944,403)		N/A
Net intangible assets	$	1,363,704	7.8	$	1,506,001	7.1
Intangible liabilities:
Below-market lease intangibles (1)	$	333,672	8.6	$	334,365	9.7
Other lease intangibles	13,498		N/A	13,608		N/A
Accumulated amortization	(258,639)		N/A	(244,975)		N/A
Purchase option intangibles	3,568		N/A	3,568		N/A
Net intangible liabilities	$	92,099	8.6	$	106,566	9.7

(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. For the years ended December 31, 2022, 2021 and 2020, our net amortization related to these intangibles was $102.4 million, $29.3 million and $45.7 million, respectively.

VENTAS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following is a summary of the estimated net amortization related to these intangibles for each of the next five years (dollars in thousands):


	Estimated Net Amortization
2023	$	108,638
2024	56,615
2025	10,612
2026	6,912
2027	6,071

The table below reflects the carrying amount of goodwill, by segment, as of December 31, 2022 (dollars in thousands):


	Goodwill
Office operations	$	464,561
Triple-net leased properties	320,372
SHOP	259,482
Total goodwill	$	1,044,415

NOTE 9 – OTHER ASSETS

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


	As of December 31,
	2022		2021
Straight-line rent receivables	$	187,536	$	176,877
Non-mortgage loans receivable, net	24,338		19,024
Stock warrants	23,621		48,884

Other intangibles, net	6,393		7,270
Investment in unconsolidated operating entities	95,363		73,602
Other	272,572		239,412
Total other assets	$	609,823	$	565,069

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.

VENTAS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 10 – SENIOR NOTES PAYABLE AND OTHER DEBT

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


	As of December 31,
	2022		2021
Unsecured revolving credit facility (1)(2)	$	25,230	$	56,448
Commercial paper notes	403,000		280,000
Unsecured term loan due 2023	—		200,000
2.55% Senior Notes, Series D due 2023 (2)	202,967		217,667
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)	184,515		197,879
2.80% Senior Notes, Series E due 2024 (2)	442,837		474,909
Unsecured term loan due 2025 (2)	369,031		395,757
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
Unsecured term loan due 2027	500,000		—
2.45% Senior Notes, Series G due 2027 (2)	350,579		375,970
3.85% Senior Notes due 2027	400,000		400,000
4.00% Senior Notes due 2028	650,000		650,000
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)	221,419		237,454
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	2,436,443		2,431,831
Total	12,361,244		12,093,138
Deferred financing costs, net	(63,410)		(69,925)
Unamortized fair value adjustment	23,535		32,888
Unamortized discounts	(24,589)		(28,557)
Senior notes payable and other debt	$	12,296,780	$	12,027,544

(1)As of December 31, 2022 and 2021, respectively, $3.7 million and $30.9 million of aggregate borrowings were denominated in Canadian dollars. Aggregate borrowings of $21.5 million and $25.6 million were denominated in British pounds as of December 31, 2022 and 2021, 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.

VENTAS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

We have a $2.75 billion unsecured revolving credit facility initially priced at LIBOR plus 0.825% 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.

Our unsecured credit facility imposed certain customary restrictions on us, including restrictions pertaining to: (i) liens; (ii) investments; (iii) the incurrence of additional indebtedness; (iv) mergers and dissolutions; (v) certain dividend, distribution and other payments; (vi) permitted businesses; (vii) transactions with affiliates; (viii) agreements limiting certain liens; and (ix) the maintenance of certain consolidated total leverage, secured debt leverage, unsecured debt leverage and fixed charge coverage ratios and minimum consolidated adjusted net worth, and contains customary events of default.

As of December 31, 2022, we had $2.7 billion of undrawn capacity on our unsecured revolving credit facility with $25.2 million borrowings outstanding and an additional $15.4 million restricted to support outstanding letters of credit. We limit our use of the unsecured revolving credit facility, to the extent necessary, to support our commercial paper program when commercial paper notes are outstanding.

Our wholly owned subsidiary, Ventas Realty, Limited Partnership (“Ventas Realty”), may issue from time to time unsecured commercial paper notes up to a maximum aggregate amount outstanding at any time of $1.0 billion. The notes are sold under customary terms in the U.S. commercial paper note market and are ranked pari passu with all of Ventas Realty’s other unsecured senior indebtedness. The notes are fully and unconditionally guaranteed by Ventas, Inc. As of December 31, 2022, we had $403.0 million in borrowings outstanding under our commercial paper program.

In June 2022, we entered into a Credit and Guaranty Agreement (the “New Credit Agreement”) with Ventas Realty, as borrower. The New Credit Agreement replaces Ventas Realty’s previous $200.0 million unsecured term loan priced at LIBOR plus 0.90% that matured in 2023 with a new $500.0 million unsecured term loan that matures in 2027 and is initially priced at Term SOFR plus 0.95% based on Ventas Realty’s debt ratings. The New Credit Agreement also includes an accordion feature that permits us to increase our aggregate borrowings thereunder to up to $1.25 billion, subject to the satisfaction of certain conditions, including the receipt of additional commitments for such increase.

As of December 31, 2022, we had a C$500 million or $369.0 million unsecured term loan facility priced at Canadian Dollar Offered Rate (“CDOR”) plus 0.90% that matures in 2025.

In October 2022, we executed a letter agreement for a $100.0 million uncommitted line for standby letters of credit. The letter agreement contains certain customary covenants and under its terms, we are required to pay a commission on each outstanding letter of credit at a rate to be agreed upon in writing at issuance of each letter of credit. As of December 31, 2022, there were no material amounts outstanding under this facility.

Senior Notes

As of December 31, 2022, we had outstanding $7.2 billion aggregate principal amount of senior notes issued by Ventas Realty, approximately $75.2 million aggregate principal amount of senior notes issued by Nationwide Health Properties, Inc. (“NHP”) and assumed by our subsidiary, Nationwide Health Properties, LLC (“NHP LLC”), as successor to NHP, in connection with our acquisition of NHP, and C$1.9 billion aggregate principal amount of senior notes issued by our subsidiary, Ventas Canada Finance Limited (“Ventas Canada”). All of the senior notes issued by Ventas Realty and Ventas Canada are unconditionally guaranteed by Ventas, Inc.

Ventas Realty’s senior notes are part of our and Ventas Realty’s general unsecured obligations, ranking equal in right of payment with all of our and Ventas Realty’s existing and future senior obligations and ranking senior in right of payment to all of our and Ventas Realty’s existing and future subordinated indebtedness. However, Ventas Realty’s senior notes are effectively subordinated to our and Ventas Realty’s secured indebtedness, if any, to the extent of the value of the assets securing that indebtedness. Ventas Realty’s senior notes are also structurally subordinated to the preferred equity and indebtedness, whether secured or unsecured, of our subsidiaries (other than Ventas Realty and, with respect to those senior notes co-issued by Ventas Capital Corporation, Ventas Capital Corporation).

VENTAS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Ventas Canada’s senior notes are part of our and Ventas Canada’s general unsecured obligations, ranking equal in right of payment with all of Ventas Canada’s existing and future subordinated indebtedness. However, Ventas Canada’s senior notes are effectively subordinated to our and Ventas Canada’s secured indebtedness, if any, to the extent of the value of the assets securing that indebtedness. Ventas Canada’s senior notes are also structurally subordinated to the preferred equity and indebtedness, whether secured or unsecured, of our subsidiaries (other than Ventas Canada).

NHP LLC’s senior notes are part of NHP LLC’s general unsecured obligations, ranking equal in right of payment with all of NHP LLC’s existing and future senior obligations and ranking senior to all of NHP LLC’s existing and future subordinated indebtedness. However, NHP LLC’s senior notes are effectively subordinated to NHP LLC’s secured indebtedness, if any, to the extent of the value of the assets securing that indebtedness. NHP LLC’s senior notes are also structurally subordinated to the preferred equity and indebtedness, whether secured or unsecured, of its subsidiaries.

Ventas Realty and Ventas Canada may redeem each series of their respective senior notes in whole at any time or in part from time to time, prior to maturity at the redemption prices set forth in the applicable indenture (which include, in many instances, a make-whole premium), plus, in each case, accrued and unpaid interest thereon to the redemption date.

Mortgages

At December 31, 2022, we had 113 mortgage loans outstanding in the aggregate principal amount of $2.4 billion, which is secured by 105 of our properties. Of these loans, 98 loans in the aggregate principal amount of $2.0 billion bear interest at fixed rates ranging from 0% to 13.01% per annum, and 15 loans in the aggregate principal amount of $400.5 million bear interest at variable rates ranging from 3.63% to 6.85% per annum as of December 31, 2022. At December 31, 2022, the weighted average annual rate on our fixed rate mortgage loans was 3.7%, and the weighted average annual rate on our variable rate mortgage loans was 5.1%. Our mortgage loans had a weighted average maturity of 4.5 years as of December 31, 2022.

During the years ended December 31, 2022 and 2021, we repaid in full mortgage loans in the aggregate principal amount of $0.6 million and $284.7 million, respectively.

In September 2021, we assumed $482.5 million in mortgage debt maturing in 2025 in connection with the New Senior Acquisition including a $25.4 million fair value premium, which is amortized over the remaining term through interest expense in our Consolidated Statement of Income. See “Note 4 – Acquisitions of Real Estate Property”.

Scheduled Maturities of Borrowing Arrangements and Other Provisions

As of December 31, 2022, our indebtedness had the following maturities (dollars in thousands):


	Principal Amount Due at Maturity		Unsecured Revolving Credit Facility and Commercial Paper Notes (1)		Scheduled Periodic Amortization		Total Maturities
2023	$	466,792	$	403,000	$	45,056	$	914,848
2024	1,691,862		—		39,657		1,731,519
2025	2,016,471		25,230		34,096		2,075,797
2026	1,049,404		—		27,498		1,076,902
2027	1,328,150		—		26,823		1,354,973
Thereafter	5,076,523		—		130,682		5,207,205
Total maturities	$	11,629,202	$	428,230	$	303,812	$	12,361,244

(1)At December 31, 2022, we had $305.7 million of borrowings outstanding under our unsecured revolving credit facility and commercial paper program, net of $122.6 million of unrestricted cash and cash equivalents.

The instruments governing our outstanding indebtedness contain covenants that limit our ability and the ability of certain of our subsidiaries to, among other things: (i) incur debt; (ii) make certain dividends, distributions and investments; (iii) enter into certain transactions; and/or (iv) merge, consolidate or sell certain assets. Ventas Realty’s and Ventas Canada’s senior notes also require us and our subsidiaries to maintain total unencumbered assets of at least 150% of our unsecured debt. Our credit facilities also require us to maintain certain financial covenants pertaining to, among other things, our consolidated total leverage, secured debt, unsecured debt, fixed charge coverage and net worth.

VENTAS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As of December 31, 2022, we were in compliance with all of these covenants.

Derivatives and Hedging

In the normal course of our business, interest rate fluctuations affect future cash flows under our variable rate debt obligations, loans receivable and marketable debt securities, and foreign currency exchange rate fluctuations affect our operating results. We follow established risk management policies and procedures, including the use of derivative instruments, to mitigate the impact of these risks.

We do not use derivative instruments for trading or speculative purposes, and we have a policy of entering into contracts only with major financial institutions based upon their credit ratings and other factors. When considered together with the underlying exposure that the derivative is designed to hedge, we do not expect that the use of derivatives in this manner would have any material adverse effect on our future financial condition or results of operations.

As of December 31, 2022, our variable rate debt obligations of $1.5 billion reflect, in part, the effect of $144.2 million notional amount of interest rate swaps with maturities on March 22, 2027 that effectively convert fixed rate debt to variable rate debt. As of December 31, 2022, our fixed rate debt obligations of $10.9 billion reflect, in part, the effect of $338.0 million and C$267.8 million notional amount of interest rate swaps with maturities ranging from January 2023 to April 2031, in each case that effectively convert variable rate debt to fixed rate debt.

NOTE 11 – FAIR VALUES OF FINANCIAL INSTRUMENTS

The carrying amounts and fair values of our financial instruments were as follows (dollars in thousands):


	As of December 31, 2022				As of December 31, 2021
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Assets:
Cash and cash equivalents	$	122,564	$	122,564	$	149,725	$	149,725
Escrow deposits and restricted cash	48,181		48,181		46,872		46,872
Stock warrants (1)	23,621		23,621		48,884		48,884
Secured mortgage loans and other, net	493,669		493,627		488,913		478,931
Non-mortgage loans receivable, net (1)	24,338		23,416		19,024		19,039

Government-sponsored pooled loan investments, net	43,406		43,406		41,213		41,213
Derivative instruments (1)	24,316		24,316		1,128		1,128
Liabilities:
Senior notes payable and other debt, gross	12,361,244		11,493,824		12,093,138		12,891,937
Derivative instruments (2)	145		145		12,290		12,290
Redeemable OP Units	162,663		162,663		182,112		182,112

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

(2)Included in accounts payable and other liabilities on our Consolidated Balance Sheets.

For a discussion of the assumptions considered, refer to “Note 2 – Accounting Policies.” The use of different market assumptions and estimation methodologies may have a material effect on the reported estimated fair value amounts. Accordingly, the estimates presented above are not necessarily indicative of the amounts we would realize in a current market exchange.

VENTAS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 12 – LONG-TERM COMPENSATION

Compensation Plans

We currently have:

two plans under which outstanding options to purchase common stock, shares of restricted stock or restricted stock units have been granted to our officers, employees and non-employee directors (the 2006 Stock Plan for Directors and the 2012 Incentive Plan). Future grants are not permitted under any of these plans.
one plan, the 2022 Incentive Plan, under which equity awards, including shares of restricted stock or restricted stock units, have been or may be granted to our officers, employees and non-employee directors;
one plan under which certain non-employee directors have received or may receive deferred common stock in lieu of director fees (the Non-Employee Directors’ Cash Compensation Deferral Plan, formerly known as the Non-Employee Directors’ Deferred Stock Compensation Plan).

These plans are referred to collectively as the “Plans.”

During the year ended December 31, 2022, we were permitted to issue shares and grant options, restricted stock and restricted stock units only under the Executive Deferred Stock Compensation Plan, the Non-Employee Directors’ Cash Compensation Deferral Plan, the 2012 Incentive Plan and the 2022 Incentive Plan. The 2006 Stock Plan for Directors expired on December 31, 2012, and no additional grants were permitted under after that date. The Executive Deferred Stock Compensation Plan was terminated in early 2022. Authority to grant awards under the 2012 Plan expired when the 2022 Plan became effective; accordingly, no new grants were permitted under the 2012 Plan after September 30, 2022. The 2022 Incentive Plan was effective October 1, 2022 and grants starting on October 1, 2022 were awarded under this plan.

The number of shares initially reserved for issuance and the number of shares available for future grants or issuance under these Plans as of December 31, 2022 were as follows:

Executive Deferred Stock Compensation Plan—0.6 million shares were reserved initially for issuance to our executive officers in lieu of the payment of all or a portion of their salary, at their option. None of our Executives has deferred shares pursuant to the Executive Deferred Stock Compensation Plan, and the Plan was terminated in early 2022. Accordingly, no shares were available for issuance under this Plan as of December 31, 2022.
Non-Employee Directors’ Cash Compensation Deferral Plan—0.6 million shares were reserved initially for issuance to non-employee directors in lieu of the payment of all or a portion of their retainer and meeting fees, at their option, and 0.4 million shares were available for future issuance as of December 31, 2022.
2012 Incentive Plan—10.7 million shares (plus the number of shares or options outstanding under the 2006 Plans as of December 31, 2012 that were or are subsequently forfeited or expire unexercised) were reserved initially for grants or issuance to employees and non-employee directors. Authority to grant awards under the 2012 Plan expired when the 2022 Plan became effective; accordingly, no new grants were permitted under the 2012 Plan after September 30, 2022.
2022 Incentive Plan—11.4 million shares, plus any shares of common stock subject to awards granted under the 2012 Plan as of October 1, 2022, that expire, or for any reason are forfeited, cancelled or terminated either without such shares being issued or with such shares being forfeited (such shares the “2012 Plan Shares”) were reserved initially for grants or issuance to employees and non-employee directors, and 11.4 million shares were available for future issuance as of December 31, 2022.

Outstanding options issued under the Plans are exercisable at the market price on the date of grant, expire ten years from the date of grant, and are fully vested.

VENTAS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Stock Options

The following is a summary of stock option activity in 2022:


	Shares (000’s)	Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (years)	Intrinsic Value ($000’s)
Outstanding as of December 31, 2021	3,761	$	61.63
Options granted	—	—
Options exercised	(157)	55.50
Options forfeited	—	—
Options expired	(30)	55.99
Outstanding as of December 31, 2022	3,574	61.95		3.1	$	—
Exercisable as of December 31, 2022	3,574	61.95		3.1	$	—

Compensation costs for all share-based awards are based on the grant date fair value and are recognized on a straight-line basis during the requisite service periods, with charges primarily recorded in general, administrative and professional fees in our Consolidated Statements of Income. As of December 31, 2022, 2021 and 2020, there was no unrecognized compensation expense relating to stock options.

Aggregate proceeds received from options exercised under the Plans for the years ended December 31, 2022, 2021 and 2020 were $8.7 million, $9.0 million and $5.1 million, respectively. The total intrinsic value at exercise of options exercised during the years ended December 31, 2022, 2021 and 2020 was $0.7 million, $1.5 million and $1.3 million, respectively. There was no deferred income tax benefit for stock options exercised.

Restricted Stock and Restricted Stock Units

We recognize the fair value of shares of restricted stock and restricted stock units (including time-based and performance-based awards) on the grant date of the award as stock-based compensation expense over the requisite service period, with charges primarily to general, administrative and professional fees of $30.7 million, $31.9 million and $21.4 million in 2022, 2021 and 2020, respectively, in our Consolidated Statements of Income. Restricted stock and restricted stock unit awards to employees generally vest over a three year period, while awards to non-employee directors typically vest within two years. If provided in the applicable Plan or award agreement, the vesting of restricted stock and restricted stock units may accelerate upon a change of control (as defined in the applicable Plan) of Ventas and other specified events. In addition to customary change in control vesting provisions, awards generally vest on retirement provided certain conditions are met. Employees are typically not retirement eligible until age plus years of service equals 75, with a minimum age of 62; the retirement age for non-employee directors is 75.

The following is a summary of the status of our non-vested restricted stock and restricted stock units (including time-based and performance-based awards) as of December 31, 2022, and changes during the year ended December 31, 2022:


	Restricted Stock (000’s)	Weighted Average Grant Date Fair Value		Restricted Stock Units (000’s)	Weighted Average Grant Date Fair Value
Non-vested at December 31, 2021	448	$	50.96	1,047	$	52.84
Granted	43	55.52		449	57.07
Vested	(117)	51.15		(457)	57.66
Forfeited	(60)	51.14		(48)	68.19
Non-vested at December 31, 2022	314	51.47		991	52.13

As of December 31, 2022, we had $21.8 million of unrecognized compensation cost related to non-vested restricted stock and restricted stock units under the Plans. We expect to recognize that cost over a weighted average period of 1.5 years.

VENTAS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The total fair value at the vesting date for restricted stock and restricted stock units that vested during the years ended December 31, 2022, 2021 and 2020 was $29.6 million, $23.4 million and $19.8 million, respectively.

Employee and Director Stock Purchase Plan

We have in effect an Employee and Director Stock Purchase Plan (“ESPP”) under which our employees and directors may purchase shares of our common stock at a discount. Pursuant to the terms of the ESPP, on each purchase date, participants may purchase shares of common stock at a price not less than 90% of the market price on that date (with respect to the employee tax-favored portion of the plan) and not less than 95% of the market price on that date (with respect to the additional employee and director portion of the plan). We initially reserved 3.0 million shares for issuance under the ESPP. As of December 31, 2022, 0.2 million shares had been purchased under the ESPP and 2.8 million shares were available for future issuance.

Employee Benefit Plan

We maintain a 401(k) plan that allows eligible employees to defer compensation subject to certain limitations imposed by the Code. In 2022, we made contributions for each qualifying employee of up to 3.5% of his or her salary, subject to certain limitations. During 2022, 2021 and 2020, our aggregate contributions were approximately $1.6 million, $1.5 million and $1.6 million, respectively.

NOTE 13 – INCOME TAXES

We have elected to be taxed as a REIT under the applicable provisions of the Code for every year beginning with the year ended December 31, 1999. We have also elected for certain of our subsidiaries to be treated as TRS entities, which are subject to federal, state and foreign income taxes. All entities other than the TRS entities are collectively referred to as the “REIT” within this note. Certain REIT entities are subject to foreign income tax.

Although we intend to continue to operate in a manner that will enable us to qualify as a REIT, such qualification depends upon our ability to meet, on a continuing basis, various distribution, stock ownership and other tests. Our tax treatment of distributions per common share was as follows:


	For the Years Ended December 31,
	2022		2021		2020
Tax treatment of distributions:
Ordinary income	$	—	$	—	$	—
Qualified ordinary income	0.04906		0.00330		0.00696
199A qualified business income	1.75094		1.25274		2.14381
Long-term capital gain	—		0.16448		0.28450
Unrecaptured Section 1250 gain	—		0.37948		0.04973
Non-dividend distribution	—		—		—
Distribution reported for 1099-DIV purposes	1.80000		1.80000		2.48500
Add: Dividend declared in current year and taxable in following year	0.45000		0.45000		0.45000
Less: Dividend declared in prior year and taxable in current year	(0.45000)		(0.45000)		(0.79250)
Distribution declared per common share outstanding	$	1.80000	$	1.80000	$	2.14250

VENTAS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

We believe we have met the annual REIT distribution requirement by payment of at least 90% of our estimated taxable income for 2022, 2021 and 2020. Our consolidated expense (benefit) for income taxes was as follows (dollars in thousands):


	For the Years Ended December 31,
	2022		2021		2020
Current - Federal	$	(2,257)	$	662	$	402
Current - State	2,662		2,116		2,107
Deferred - Federal	338		6,431		(56,835)
Deferred - State	1,310		72		(35,447)
Current - Foreign	3,217		3,439		2,929
Deferred - Foreign	(22,196)		(7,893)		(9,690)
Total	$	(16,926)	$	4,827	$	(96,534)

The 2022 income tax benefit is primarily due to a $7.5 million income tax benefit from operating losses at certain TRS entities and an income tax benefit of $11.9 million from an internal restructuring of foreign TRS entities. The 2021 income tax expense is due to a $3.5 million deferred tax expense related to an internal restructuring of certain U.S. TRS entities, a $3.3 million deferred tax expense related to the revaluation of certain deferred tax liabilities as a result of enacted tax rate changes in the United Kingdom, and a $3.7 million deferred tax expense related to the release of certain residual tax effects from marketable debt securities. The 2020 income tax benefit was primarily due to a $95.9 million net deferred tax benefit from an internal restructuring of certain TRS entities, partially offset by a valuation allowance recorded against certain deferred tax assets.

Although the TRS entities and certain other foreign entities have paid minimal cash federal, state and foreign income taxes for the year ended December 31, 2022, their income tax liabilities may increase in future years as we exhaust net operating loss (“NOL”) carryforwards and as our senior living and other operations grow. Such increases could be significant.

A reconciliation of income tax expense and benefit, which is computed by applying the federal corporate tax rate for the years ended December 31, 2022, 2021 and 2020, to the income tax expense and benefit is as follows (dollars in thousands):


	For the Years Ended December 31,
	2022		2021		2020
Tax at statutory rate on earnings from continuing operations before unconsolidated entities, noncontrolling interest and income taxes	$	(19,733)	$	(34,127)	$	27,132
State income taxes, net of federal benefit	(5,411)		(8,256)		(1,967)
Change in valuation allowance from ordinary operations	53,117		59,572		86,359

Tax at statutory rate on earnings not subject to federal income taxes	(31,528)		(22,869)		(53,808)
Foreign rate differential and foreign taxes	123		4,405		3,342
Change in tax status of TRS	(1,961)		3,485		(150,287)


Other differences	(11,533)		2,617		(7,305)
Income tax (benefit) expense	$	(16,926)	$	4,827	$	(96,534)

VENTAS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Each TRS is a tax-paying component for purposes of classifying deferred tax assets and liabilities. The tax effects of temporary differences and carryforwards included in the net deferred tax liabilities are summarized as follows (dollars in thousands):


	As of December 31,
	2022		2021		2020
Property, primarily differences in depreciation and amortization, the tax basis of land assets and the treatment of interests and certain costs	$	(34,734)	$	(58,691)	$	(60,494)
Operating loss and interest deduction carryforwards	220,891		187,407		124,606
Expense accruals and other	16,723		21,628		10,516
Valuation allowance	(227,960)		(198,450)		(127,279)
Net deferred tax liabilities	$	(25,080)	$	(48,106)	$	(52,651)

Our net deferred tax liability decreased $23.0 million during 2022 primarily due to a $7.5 million impact from operating losses at certain TRS entities and the reversal of $11.9 million of deferred tax liabilities from an internal restructuring of foreign TRS entities. Our net deferred tax liability decreased $4.5 million during 2021 due to a $3.5 million deferred tax expense related to an internal restructuring of certain U.S. TRS entities, a $3.3 million deferred tax expense related to the revaluation of certain deferred tax liabilities as a result of enacted tax rate changes in the United Kingdom, and a $3.7 million deferred tax expense related to the release of certain residual tax effects from marketable debt securities. Our net deferred tax liability decreased $100.7 million during 2020 primarily due to a change in the tax status of certain of our TRS entities. This was offset by the recording of valuation allowances against $54.4 million of other deferred tax assets.

Due to uncertainty regarding the realization of certain deferred tax assets, we have established valuation allowances, primarily in connection with the NOL carryforwards related to certain TRSs. The amounts related to NOLs at the TRS entities for 2022, 2021 and 2020 are $171.0 million, $140.6 million and $83.2 million, respectively.

We are subject to corporate-level taxes (“built-in gains tax”) for any asset dispositions during the five year period immediately after the assets were owned by a C corporation (either prior to our REIT election, through stock acquisition or merger). The amount of income potentially subject to built-in gains tax is generally equal to the lesser of the excess of the fair value of the asset over its adjusted tax basis as of the date it became a REIT asset or the actual amount of gain. Some, but not all, future gains could be offset by available NOL carryforwards.

At December 31, 2022, 2021 and 2020, the REIT had NOL carryforwards of $1.1 billion, $1.1 billion and $896.4 million, respectively. Additionally, the REIT has $10.8 million of federal income tax credits that were carried over from acquisitions. These amounts can be used to offset future taxable income (or taxable income for prior years if an audit determines that tax is owed), if any. The REIT will be entitled to utilize NOLs and tax credit carryforwards only to the extent that REIT taxable income exceeds our deduction for dividends paid. Certain NOL and credit carryforwards are limited as to their utilization by Section 382 of the Code. The remaining REIT carryforwards begin to expire in 2023.

For the years ended December 31, 2022 and 2021, the net difference between tax bases and the reported amount of REIT assets and liabilities for federal income tax purposes was approximately $3.0 billion and $3.3 billion, respectively, less than the book bases of those assets and liabilities for financial reporting purposes.

Generally, we are subject to audit under the statute of limitations by the Internal Revenue Service (“IRS”) for the year ended December 31, 2019 and subsequent years and are subject to audit by state taxing authorities for the year ended December 31, 2018 and subsequent years. We are subject to audit generally under the statutes of limitation by the Canada Revenue Agency and provincial authorities with respect to the Canadian entities for the year ended December 31, 2018 and subsequent years. We are subject to audit in the United Kingdom generally for the periods ended in and subsequent to 2021.

VENTAS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table summarizes the activity related to our unrecognized tax benefits (dollars in thousands):


	2022		2021
Balance as of January 1	$	6,082	$	6,057

Additions to tax positions related to prior years	2		29
Subtractions to tax positions related to prior years	(256)		(4)


Balance as of December 31	$	5,828	$	6,082

Included in these unrecognized tax benefits of $5.8 million and $6.1 million at December 31, 2022 and 2021, respectively, were $5.0 million and $5.3 million of tax benefits at December 31, 2022 and 2021, respectively, that, if recognized, would reduce our annual effective tax rate. We accrued no interest or penalties related to the unrecognized tax benefits during 2022. We do not expect our unrecognized tax benefits to increase or decrease materially in 2023.

As a part of the transfer pricing structure in the normal course of business, the REIT enters into transactions with certain TRSs, such as leasing transactions, other capital financing and allocation of general and administrative costs, which transactions are intended to comply with the IRS and foreign tax authority transfer pricing rules.

NOTE 14 – COMMITMENTS AND CONTINGENCIES

From time to time, we are party to various lawsuits, investigations, claims and other legal and regulatory proceedings arising in connection with our business. In certain circumstances, regardless of whether we are a named party in a lawsuit, investigation, claim or other legal or regulatory proceeding, we may be contractually obligated to indemnify, defend and hold harmless our tenants, operators, managers or other third parties against, or may otherwise be responsible for, such actions, proceedings or claims. These claims may include, among other things, professional liability and general liability claims, commercial liability claims, unfair business practices claims and employment claims, as well as regulatory proceedings, including proceedings related to our senior housing operating portfolio, where we are typically the holder of the applicable healthcare license. These claims may not be fully insured and some may allege large damage amounts.

It is the opinion of management, that the disposition of any such lawsuits, investigations, claims and other legal and regulatory proceedings that are currently pending will not, individually or in the aggregate, have a material adverse effect on us. However, regardless of the merits of a particular action, investigation or claim, we may be forced to expend significant financial resources to defend and resolve these matters. We are unable to predict the ultimate outcome of these lawsuits, investigations, claims and other legal and regulatory proceedings, and if management’s assessment of our liability with respect thereto is incorrect, such actions, investigations and claims could have a material adverse effect on us.

Operating Leases

We lease land, equipment and corporate office space. At inception, we establish an operating lease asset and operating lease liability represented as the present value of future minimum lease payments. As our leases do not provide an implicit rate, we use a discount rate that approximates our incremental borrowing rate available at lease commencement to determine the present value of lease payments. The incremental borrowing rates were adjusted for the length of the individual lease term. The weighted average discount rate and remaining lease term of our leases are 7.33% and 36.0 years, respectively. Operating lease assets and liabilities are not recognized for leases with an initial term of 12 months or less, as these short-term leases are accounted for similar to previous guidance.

Our lease expense primarily consists of ground leases, which is included in interest expense in our Consolidated Statements of Income. For the years ended December 31, 2022, 2021 and 2020, we recognized $31.9 million, $31.9 million and $32.1 million of expense relating to our leases. For the years ended December 31, 2022, 2021 and 2020, cash paid for leases was $24.0 million, $25.1 million and $25.4 million, respectively, as reported within operating cash outflows in our Consolidated Statements of Cash Flows.

VENTAS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table summarizes future minimum lease obligations under non-cancelable ground and other operating leases as of December 31, 2022 (dollars in thousands):


2023	$	21,369
2024	20,305
2025	15,960
2026	15,904
2027	15,198
Thereafter	572,204
Total undiscounted minimum lease payments	660,940
Less: imputed interest	(470,500)
Operating lease liabilities	$	190,440

NOTE 15 – EARNINGS PER SHARE

The following table shows the amounts used in computing our basic and diluted earnings per share (in thousands, except per share amounts):


	For the Years Ended December 31,
	2022		2021		2020
Numerator for basic and diluted earnings per share:
(Loss) income from continuing operations	$	(40,931)	$	56,559	$	441,185

Net (loss) income	(40,931)		56,559		441,185
Net income attributable to noncontrolling interests	6,516		7,551		2,036
Net (loss) income attributable to common stockholders	$	(47,447)	$	49,008	$	439,149
Denominator:
Denominator for basic earnings per share—weighted average shares	399,549		382,785		373,368
Effect of dilutive securities:
Stock options	—		34		—
Restricted stock awards	390		365		171
OP unitholder interests	3,515		3,120		2,964
Denominator for diluted earnings per share—adjusted weighted average shares	403,454		386,304		376,503
Basic earnings per share:
(Loss) income from continuing operations	$	(0.10)	$	0.15	$	1.18
Net (loss) income attributable to common stockholders	(0.12)		0.13		1.18
Diluted earnings per share: (1)
(Loss) income from continuing operations	$	(0.10)	$	0.15	$	1.17
Net (loss) income attributable to common stockholders	(0.12)		0.13		1.17

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

There were 3.6 million, 3.1 million and 4.0 million anti-dilutive options outstanding for the years ended December 31, 2022, 2021 and 2020, respectively.

VENTAS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 16 – PERMANENT AND TEMPORARY EQUITY

Capital Stock

In September 2021, we issued approximately 13.3 million shares of our common stock at a value of $751.2 million in connection with the New Senior Acquisition.

We participate in an “at-the-market” equity offering program (“ATM program”), pursuant to which we may, from time to time, sell up to $1.0 billion aggregate gross sales price of shares of our common stock. There were no issuances under the ATM program for the year ended December 31, 2022. During the years ended December 31, 2021 and 2020, we sold 10.9 million and 1.5 million shares of our common stock under our previous ATM program for gross proceeds of $626.4 million and $66.6 million, respectively, at an average gross price of $57.71 and $44.88 per share, respectively.

Excess Share Provision

In order to preserve our ability to maintain REIT status, our Amended and Restated Certificate of Incorporation (our “Charter”) provides that if a person acquires beneficial ownership of more than 9% of our outstanding common stock or 9.9% of our outstanding preferred stock, the shares that are beneficially owned in excess of such limit are deemed to be excess shares. These shares are automatically deemed transferred to a trust for the benefit of a charitable institution or other qualifying organization selected by our Board of Directors. The trust is entitled to all dividends with respect to the shares, and the trustee may exercise all voting power over the shares.

We have the right to buy the excess shares for a purchase price equal to the lesser of the price per share in the transaction that created the excess shares or the market price on the date we buy the shares, and we may defer payment of the purchase price for the excess shares for up to five years. If we do not purchase the excess shares, the trustee of the trust is required to transfer the excess shares at the direction of the Board of Directors. The owner of the excess shares is entitled to receive the lesser of the proceeds from the sale or the original purchase price for such excess shares, and any additional amounts are payable to the beneficiary of the trust. As of December 31, 2022, there were no shares in the trust.

Our Board of Directors is empowered to grant waivers from the excess share provisions of our Charter.

Accumulated Other Comprehensive Loss

The following is a summary of our accumulated other comprehensive loss (dollars in thousands):


	As of December 31,
	2022		2021
Foreign currency translation loss	$	(60,364)	$	(56,227)
Unrealized (loss) gain on available for sale securities	—		1,836
Unrealized gain (loss) on derivative instruments	23,564		(10,129)
Total accumulated other comprehensive loss	$	(36,800)	$	(64,520)

VENTAS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Redeemable OP Unitholder and Noncontrolling Interests

The following is a roll-forward of our redeemable OP unitholder and noncontrolling interests for 2022 (dollars in thousands):


	Redeemable OP Unitholder Interests		Redeemable Noncontrolling Interests		Total Redeemable OP Unitholder and Noncontrolling Interests
Balance as of December 31, 2021	$	182,112	$	98,171	$	280,283
New issuances	—		8,491		8,491
Change in fair value	(11,480)		(4,675)		(16,155)
Dispositions	—		—		—
Distributions and other	(6,276)		—		(6,276)
Redemptions	(1,693)		—		(1,693)
Balance as of December 31, 2022	$	162,663	$	101,987	$	264,650

NOTE 17 – RELATED PARTY TRANSACTIONS

Atria provides comprehensive property management and accounting services with respect to our senior housing communities that Atria operates, for which we pay annual management fees pursuant to long-term management agreements. For the years ended December 31, 2022, 2021 and 2020, we incurred fees to Atria of $61.5 million, $50.8 million and $54.1 million, respectively, the majority of which are recorded within property-level operating expenses in our Consolidated Statements of Income. For the year ended December 31, 2022, we incurred fees to Atria of $6.1 million primarily in connection with the transition of senior housing communities operated by Atria, which are recorded within transaction expenses and deal costs in our Consolidated Statements of Income. For the years ended December 31, 2021 and 2020, we paid fees to Atria of $20.3 million and $1.1 million, respectively, in connection with the sale or transition of senior housing communities operated by Atria. These fees are considered transaction costs and are primarily recorded within depreciation and amortization expense in our Consolidated Statements of Income.

We hold a 34% ownership interest in Atria, which entitles us to customary minority rights and protections, including the right to appoint two members to the Atria Board of Directors.

As of December 31, 2022, we leased 11 hospitals to Ardent pursuant to a single, triple-net master lease agreement. For the years ended December 31, 2022, 2021 and 2020, we recognized rental income from Ardent of $130.5 million, $127.2 million and $122.6 million, respectively, relating to the Ardent master lease. As of December 31, 2022, we also leased 19 MOBs to Ardent under separate leases included in our office operations reportable business segment and recognized rental income of $12.1 million for the year ended December 31, 2022.

We also hold a 9.8% ownership interest in Ardent, which entitles us to customary minority rights and protections, as well as the right to appoint one member to the Ardent Board of Directors. In September 2022, Ardent’s majority equity owner entered into a definitive purchase agreement to sell a minority equity investment in Ardent to a third-party investor. We have the right to, and have elected to, participate in the proposed transaction by selling a pro-rata portion of our ownership interest to the third-party investor on the same terms. If the proposed transaction is consummated, our ownership interest in Ardent would be reduced. The transaction is subject to customary closing conditions, including regulatory approvals and we cannot assure you that the transaction will close.

ESL ceased operation of its management business in early 2022 following completion of the transition of 90 senior housing communities to other operators. We held a 34% ownership interest in ESL, which entitled us to customary minority rights and protections, including the right to appoint two members to the ESL Board of Directors. ESL provided comprehensive property management and accounting services with respect to our senior housing communities that ESL operated, for which we paid annual management fees pursuant to a management agreement. For the years ended December 31, 2021 and 2020, we incurred fees to ESL of $11.8 million and $15.1 million, respectively, the majority of which are recorded within property-level operating expenses in our Consolidated Statements of Income. For the year ended December 31, 2022, no fees were incurred. In connection with the transition of the operations of 90 senior housing communities, in 2021 we paid ESL $24.0 million, which is recorded within transaction expenses and deal costs in our Consolidated Statements of Income. For the years ended December

VENTAS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

31, 2020, we incurred fees paid to ESL of $5.2 million, which is primarily recorded within transaction expenses and deal costs in our Consolidated Statements of Income.

NOTE 18 – SEGMENT INFORMATION

As of December 31, 2022, we operated through three reportable business segments: triple-net leased properties, SHOP and office operations. In our triple-net leased properties reportable business segment, we invest in and own senior 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. In our SHOP reportable business segment, we invest in senior housing communities throughout the United States and Canada and engage independent operators, such as Atria and Sunrise, to manage those communities. In our office operations reportable business segment, we primarily acquire, own, develop, lease and manage MOBs and life science, research and innovation centers throughout the United States. Information provided for “non-segment” includes management fees and promote revenues, net of expenses related to our third-party institutional capital management business, income from loans and investments and various corporate-level expenses not directly attributable to any of our three reportable business segments. Assets included in “non-segment” consist primarily of corporate assets, including cash, restricted cash, loans receivable and investments, and miscellaneous accounts receivable.

Our chief operating decision maker evaluates performance of the combined properties in each reportable business segment and determines how to allocate resources to those segments, in significant part, based on NOI and related measures for each segment. We define NOI as total revenues, less interest and other income, property-level operating expenses and third party capital management expenses. We consider NOI useful because it allows investors, analysts and our management to measure unlevered property-level operating results and to compare our operating results to the operating results of other real estate companies between periods on a consistent basis. In order to facilitate a clear understanding of our historical consolidated operating results, NOI should be examined in conjunction with net income attributable to common stockholders as presented in our Consolidated Financial Statements and other financial data included elsewhere in this Annual Report on Form 10-K. See “Non-GAAP Financial Measures” included elsewhere in this Annual Report on Form 10-K for additional disclosure and reconciliations of net income attributable to common stockholders, as computed in accordance with GAAP, to NOI.

Interest expense, depreciation and amortization, general, administrative and professional fees, income tax expense and other non-property-specific revenues and expenses are not allocated to individual reportable business segments for purposes of assessing segment performance. There are no intersegment sales or transfers.

VENTAS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Summary information by reportable business segment is as follows (dollars in thousands):


	For the Year Ended December 31, 2022
	SHOP		Office Operations		Triple-Net Leased Properties		Non-Segment		Total
Revenues:
Rental income	$	—	$	801,159	$	598,154	$	—	$	1,399,313
Resident fees and services	2,651,886		—		—		—		2,651,886
Third party capital management revenues	—		2,448		—		23,751		26,199
Income from loans and investments	—		—		—		48,160		48,160
Interest and other income	—		—		—		3,635		3,635
Total revenues	$	2,651,886	$	803,607	$	598,154	$	75,546	$	4,129,193

Total revenues	$	2,651,886	$	803,607	$	598,154	$	75,546	$	4,129,193
Less:
Interest and other income	—		—		—		3,635		3,635
Property-level operating expenses	2,004,420		257,003		15,301		—		2,276,724
Third party capital management expenses	—		—		—		6,194		6,194
NOI	$	647,466	$	546,604	$	582,853	$	65,717	1,842,640
Interest and other income									3,635
Interest expense									(467,557)
Depreciation and amortization									(1,197,798)
General, administrative and professional fees									(144,874)
Loss on extinguishment of debt, net									(581)
Transaction expenses and deal costs									(51,577)
Allowance on loans receivable and investments									(19,757)
Other									(58,268)
Income from unconsolidated entities									28,500
Gain on real estate dispositions									7,780
Income tax benefit									16,926
Loss from continuing operations									(40,931)

Net loss									(40,931)
Net income attributable to noncontrolling interests									6,516
Net loss attributable to common stockholders									$	(47,447)

VENTAS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


	For the Year Ended December 31, 2021
	SHOP		Office Operations		Triple-Net Leased Properties		Non-Segment		Total
Revenues:
Rental income	$	—	$	794,297	$	653,823	$	—	$	1,448,120
Resident fees and services	2,270,001		—		—		—		2,270,001
Third party capital management revenues	—		8,384		—		11,712		20,096
Income from loans and investments	—		—		—		74,981		74,981
Interest and other income	—		—		—		14,809		14,809
Total revenues	$	2,270,001	$	802,681	$	653,823	$	101,502	$	3,828,007

Total revenues	$	2,270,001	$	802,681	$	653,823	$	101,502	$	3,828,007
Less:
Interest and other income	—		—		—		14,809		14,809
Property-level operating expenses	1,811,728		257,001		15,335		—		2,084,064
Third party capital management expenses	—		1,798		—		2,635		4,433
NOI	$	458,273	$	543,882	$	638,488	$	84,058	1,724,701
Interest and other income									14,809
Interest expense									(440,089)
Depreciation and amortization									(1,197,403)
General, administrative and professional fees									(129,758)
Loss on extinguishment of debt, net									(59,299)
Transaction expenses and deal costs									(47,318)
Allowance on loans receivable and investments									9,082
Other									(37,110)
Income from unconsolidated entities									4,983
Gain on real estate dispositions									218,788
Income tax expense									(4,827)
Income from continuing operations									56,559

Net income									56,559
Net income attributable to noncontrolling interests									7,551
Net income attributable to common stockholders									$	49,008

VENTAS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


	For the Year Ended December 31, 2020
	SHOP		Office Operations		Triple-Net Leased Properties		Non-Segment		Total
Revenues:
Rental income	$	—	$	799,627	$	695,265	$	—	$	1,494,892
Resident fees and services	2,197,160		—		—		—		2,197,160
Third party capital management revenues	—		8,675		—		6,516		15,191
Income from loans and investments	—		—		—		80,505		80,505
Interest and other income	—		—		—		7,609		7,609
Total revenues	$	2,197,160	$	808,302	$	695,265	$	94,630	$	3,795,357

Total revenues	$	2,197,160	$	808,302	$	695,265	$	94,630	$	3,795,357
Less:
Interest and other income	—		—		—		7,609		7,609
Property-level operating expenses	1,658,671		256,612		22,160		—		1,937,443
Third party capital management expenses	—		2,315		—		—		2,315
NOI	$	538,489	$	549,375	$	673,105	$	87,021	1,847,990
Interest and other income									7,609
Interest expense									(469,541)
Depreciation and amortization									(1,109,763)
General, administrative and professional fees									(130,158)
Loss on extinguishment of debt, net									(10,791)
Transaction expenses and deal costs									(29,812)
Allowance on loans receivable and investments									(24,238)
Other									(707)
Income from unconsolidated entities									1,844
Gain on real estate dispositions									262,218
Income tax benefit									96,534
Income from continuing operations									441,185

Net income									441,185
Net income attributable to noncontrolling interests									2,036
Net income attributable to common stockholders									$	439,149

Assets by reportable business segment are as follows (dollars in thousands):


	As of December 31,
Assets:	2022				2021
SHOP	$	12,369,218	51.2	%	$	12,811,611	51.8	%
Office operations	6,558,416		27.1		6,341,888		25.7
Triple-net leased properties	4,272,303		17.7		4,578,534		18.5
Non-segment	957,903		4.0		985,753		4.0
Total assets	$	24,157,840	100.0	%	$	24,717,786	100.0	%

VENTAS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Capital expenditures, including investments in real estate property and development project expenditures, by reportable business segment are as follows (dollars in thousands):


	For the Years Ended December 31,
Capital expenditures:	2022		2021		2020
SHOP	$	423,420	$	1,463,551	$	191,891
Office operations	472,662		245,546		372,475
Triple-net leased properties	4,614		92,924		42,930
Total capital expenditures	$	900,696	$	1,802,021	$	607,296

Our portfolio of properties and mortgage loan and other investments are located in the United States, Canada and the United Kingdom. Revenues are attributed to an individual country based on the location of each property. Geographic information regarding our operations is as follows (dollars in thousands):


	For the Years Ended December 31,
Revenues:	2022		2021		2020
United States	$	3,652,327	$	3,363,197	$	3,381,357
Canada	449,091		434,862		389,205
United Kingdom	27,775		29,948		24,795
Total revenues	$	4,129,193	$	3,828,007	$	3,795,357


	As of December 31,
Net real estate property:	2022		2021
United States	$	18,168,224	$	18,562,738
Canada	2,782,350		3,007,008
United Kingdom	209,876		247,092
Total net real estate property	$	21,160,450	$	21,816,838

VENTAS, INC.

SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION

(Dollars in thousands)


	For the Years Ended December 31,
	2022		2021		2020
Reconciliation of real estate:
Carrying cost:
Balance at beginning of period	$	28,479,870	$	26,850,442	$	27,133,514
Additions during period:
Acquisitions	460,959		2,413,570		249,290
Capital expenditures	443,710		423,752		485,479
Deductions during period:
Foreign currency translation	(350,188)		17,030		80,302
Other (1)	(265,942)		(1,224,924)		(1,098,143)
Balance at end of period	$	28,768,409	$	28,479,870	$	26,850,442

Accumulated depreciation:
Balance at beginning of period	$	7,433,480	$	6,967,413	$	6,200,230
Additions during period:
Depreciation expense	907,134		865,627		809,067
Dispositions:
Sales and/or transfers to assets held for sale	(72,047)		(401,208)		(82,559)
Foreign currency translation	(37,407)		1,648		40,675
Balance at end of period	$	8,231,160	$	7,433,480	$	6,967,413

(1)Other may include sales, transfers to assets held for sale and impairments.

VENTAS, INC.

SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION

December 31, 2022

(Dollars in thousands**)**


						Initial Cost to Company						Gross Amount Carried at Close of Period
		Description	Count	Encumbrances		Land and Improvements		Buildings and Improvements		Costs Capitalized Subsequent to Acquisition (1)		Land and Improvements		Buildings and Improvements		Total		Accumulated Depreciation		NBV		Year of Construction	Year Acquired	Life on which Depreciation In Income Statement is Computed
UNITED STATES PROPERTIES
	Senior Housing
		Atria Senior Living	213	$	519,795	$	620,020	$	5,562,067	$	620,708	$	646,063	$	6,156,732	$	6,802,795	$	1,798,095	$	5,004,700	1835 - 2013	2007 - 2021	13 - 54 years
		Brookdale Senior Living	129	48,040		191,164		2,026,833		142,934		191,398		2,169,533		2,360,931		955,838		1,405,093		1915 - 2012	2004 - 2021	24 - 35 years
		Sunrise Senior Living	80	—		198,915		2,113,355		213,682		211,200		2,314,752		2,525,952		1,054,266		1,471,686		1987 - 2009	2007 - 2012	35 - 35 years
		Sinceri Senior Living	35	—		57,120		590,981		47,177		56,028		639,250		695,278		242,250		453,028		1974 - 2005	2006 - 2015	35 - 35 years
		Priority Life Care Properties	26	—		25,356		279,159		36,906		26,232		315,189		341,421		124,292		217,129		1920 - 2008	2006 - 2019	35 - 35 years
		Koelsch Senior Communities	19	74,556		27,721		292,414		13,285		28,131		305,289		333,420		65,045		268,375		1972 - 2017	2011 - 2017	35 - 35 years
		Discovery Senior Living	19	—		23,308		268,214		32,331		24,229		299,624		323,853		103,856		219,997		1984 - 2005	2006 - 2014	35 - 35 years
		Sodalis Senior Living	18	—		21,451		208,224		2,518		21,630		210,563		232,193		84,743		147,450		1996 - 2007	2006 - 2015	35 - 35 years
		Matthews Senior Living	14	—		11,470		25,011		(15,253)		8,906		12,322		21,228		9,683		11,545		1985 - 2007	2011 - 2011	35 - 35 years
		American House	13	—		6,593		146,157		16,564		7,680		161,634		169,314		61,208		108,106		1998 - 2000	2006 - 2014	35 - 35 years
		Azura Memory Care	13	—		6,361		53,002		10,850		7,200		63,013		70,213		20,726		49,487		1990 - 2019	2011 - 2019	35 - 35 years
		Milestone Retirement Communities	12	—		17,956		188,500		2,832		17,956		191,332		209,288		53,592		155,696		1965 - 2011	2011 - 2014	35 - 35 years
		Avamere Family of Companies	11	—		20,407		113,192		6,609		20,653		119,555		140,208		42,209		97,999		1998 - 2012	2011 - 2015	35 - 35 years
		Hawthorn Senior Living	10	57,383		35,668		220,099		8,126		35,718		228,175		263,893		12,737		251,156		1998 - 2008	2021 - 2021	27 - 50 years
		Meridian Senior Living	10	—		17,977		77,599		1,416		17,977		79,015		96,992		28,491		68,501		1972 - 2012	2011 - 2015	35 - 35 years
		Ridgeline Management Company	10	—		11,405		94,242		3,219		11,405		97,461		108,866		29,630		79,236		1972 - 2007	2011 - 2021	11 - 35 years
		Sonida Senior Living	10	—		14,080		118,512		25,991		14,462		144,121		158,583		59,673		98,910		1977 - 1998	2005 - 2012	35 - 35 years
		Other Senior Housing Operators	67	83,133		115,658		1,030,904		45,210		114,520		1,077,252		1,191,772		303,940		887,832		1979 - 2020	2004 - 2022	12 - 39 years
		Other Senior Housing CIP	1	—		—		73		—		—		73		73		—		73		CIP	CIP	CIP
	Total Senior Housing		710	782,907		1,422,630		13,408,538		1,215,105		1,461,388		14,584,885		16,046,273		5,050,274		10,995,999

	Medical Office
		Lillibridge	194	37,821		150,207		1,992,555		505,405		149,840		2,498,327		2,648,167		996,900		1,651,267		1960 - 2016	2004 - 2021	4 - 39 years
		PMB RES	38	238,647		73,863		972,701		119,813		75,214		1,091,163		1,166,377		359,768		806,609		1972 - 2019	2011 - 2019	19 - 35 years
		Ardent Health Services	19	—		5,638		214,808		600		5,638		215,408		221,046		7,887		213,159		1974 - 2011	2018 - 2022	35 - 35 years
		Memorial Health System	12	—		2,346		25,031		13,166		2,451		38,092		40,543		20,981		19,562		1976 - 2002	2010 - 2010	35 - 35 years
		Other MOBs	65	479		110,447		887,801		46,901		107,059		938,090		1,045,149		297,571		747,578		1984 - 2019	2004 - 2022	25 - 35 years
		Other MOBs CIP	1	—		—		—		—		—		—		—		—		—		CIP	CIP	CIP
	Total Medical Office		329	276,947		342,501		4,092,896		685,885		340,202		4,781,080		5,121,282		1,683,107		3,438,175


						Initial Cost to Company						Gross Amount Carried at Close of Period
		Description	Count	Encumbrances		Land and Improvements		Buildings and Improvements		Costs Capitalized Subsequent to Acquisition (1)		Land and Improvements		Buildings and Improvements		Total		Accumulated Depreciation		NBV		Year of Construction	Year Acquired	Life on which Depreciation In Income Statement is Computed
	Life Science, Research & Innovation
		Wexford	32	242,600		92,229		1,582,631		125,979		94,181		1,706,658		1,800,839		309,613		1,491,226		1923 - 2019	2016 - 2022	15 - 60 years
		Other Life Science	2	—		1,194		76,515		68		1,194		76,583		77,777		7,204		70,573		2010 - 2016	2020 - 2020	35 - 35 years
		Other Life Science CIP	10	—		52,956		49,312		—		52,956		49,312		102,268		3,901		98,367		CIP	CIP	CIP
	Total Life Science, R&I		44	242,600		146,379		1,708,458		126,047		148,331		1,832,553		1,980,884		320,718		1,660,166

	IRFs & LTACs
		Kindred Healthcare	29	—		33,385		222,156		(1,000)		32,385		222,156		254,541		207,147		47,394		1937 - 1995	1976 - 2020	20 - 40 years
		Other IRFs & LTACs	7	—		11,057		167,682		1,068		11,057		168,750		179,807		44,750		135,057		1989 - 2012	2011 - 2015	35 - 36 years
	Total IRFs & LTACs		36	—		44,442		389,838		68		43,442		390,906		434,348		251,897		182,451

	Health Systems
		Ardent Health Services	10	—		98,428		1,126,010		78,104		97,416		1,205,126		1,302,542		252,999		1,049,543		1928 - 2020	2015 - 2020	20 - 47 years

	Skilled Nursing
		Genesis Healthcare	12	—		11,350		164,745		(5,708)		11,350		159,037		170,387		73,087		97,300		1897 - 1995	2004 - 2011	30 - 35 years
		Other Skilled Nursing	4	—		1,636		18,793		1,405		1,816		20,018		21,834		13,500		8,334		1955 - 1990	1991 - 2009	29 - 40 years
	Total Skilled Nursing		16	—		12,986		183,538		(4,303)		13,166		179,055		192,221		86,587		105,634

CANADIAN PROPERTIES
	Senior Housing
		Le Groupe Maurice	35	1,094,556		149,601		1,815,395		(6,378)		146,110		1,812,508		1,958,618		144,733		1,813,885		2000 - 2022	2019 - 2022	40 - 60 years
		Atria Senior Living	29	—		75,553		845,363		(72,107)		66,479		782,330		848,809		236,902		611,907		1988 - 2008	2014 - 2014	35 - 35 years
		Sunrise Senior Living	12	—		46,600		418,821		(70,388)		38,786		356,247		395,033		162,284		232,749		2000 - 2007	2007 - 2007	35 - 35 years
		Brightwater Senior Living	6	—		25,172		146,694		(10,890)		23,471		137,505		160,976		5,567		155,409		2006 - 2012	2021 - 2021	35 - 35 years
		Other Senior Housing CIP	2	37,087		14,832		92,133		—		14,832		92,133		106,965		—		106,965		CIP	CIP	CIP
	Total Senior Housing		84	1,131,643		311,758		3,318,406		(159,763)		289,678		3,180,723		3,470,401		549,486		2,920,915

UNITED KINGDOM PROPERTIES
	Senior Housing
		Canford Healthcare Limited	12	—		42,445		84,181		(21,537)		35,037		70,052		105,089		16,863		88,226		1980 - 2014	2015 - 2017	40 - 40 years

	International Hospital
		Spire Healthcare	3	—		11,903		136,628		(33,162)		9,245		106,124		115,370		19,229		96,141		1980 - 2010	2014 - 2014	50 - 50 years

TOTAL			1,244	$	2,434,097	$	2,433,472	$	24,448,493	$	1,886,444	$	2,437,905	$	26,330,504	$	28,768,409	$	8,231,160	$	20,537,249

(1) Adjustments to basis included provisions for asset impairments, partial dispositions, costs capitalized subsequent to acquisitions and foreign currency translation adjustments.

VENTAS, INC.

SCHEDULE IV - MORTGAGE LOANS ON REAL ESTATE

December 31, 2022

(Dollars in thousands)


Location	Interest Rate	Fixed / Variable	Maturity Date	Periodic Payment Terms	Prior Liens		Face Amount of Mortgages		Carrying Amount of Mortgages		Principal Amount of Loans Subject to Delinquent Principal or Interest
First mortgage relating to 1 senior housing property located in:
Pennsylvania	Term SOFR plus 3.75%	Variable	11/4/2027	Interest only; principal payments start in 2024	$	—	$	18,086	$	18,100	$	—
First mortgage relating to 2 senior housing properties located in:
Texas	Lesser of 9.50% or SOFR + 5.50%	Variable	6/16/2024	Interest only	—		7,226		7,152		—
Mezzanine loan relating to 153 properties located in:
Multiple (1)	LIBOR + 6.42%	Variable	6/9/2023	Interest only	1,016,804		486,082		466,082		—
Total					$	1,016,804	$	511,394	$	491,334	$	—

(1) The carrying amount includes a $20.0 million allowance recognized as of December 31, 2022. See “Note 6 – Loans Receivable and Investments” of the Notes to Consolidated Financial Statements.

Reconciliation of Mortgage Loans:


	Year Ended December 31,
	2022		2021		2020
Beginning Balance	$	486,200	$	552,797	$	642,218
Additions:
New loans	25,247		—		66,000

Total additions	25,247		—		66,000
Deductions:
Principal repayments	(113)		(66,597)		(155,170)

Allowance	(20,000)		—		—


Total deductions	(20,113)		(66,597)		(155,170)
Effect of foreign currency translation	—		—		(251)
Ending Balance	$	491,334	$	486,200	$	552,797

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