Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Unless otherwise indicated or except where the context otherwise requires, the terms “we,” “us,” “our,” “Company” and other similar terms in Item 2 of this Quarterly Report on Form 10-Q refer to Ventas, Inc. and its consolidated subsidiaries.

Cautionary Statements

Forward-Looking Statements

This Quarterly Report on Form 10-Q includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements include, among others, statements of expectations, beliefs, future plans and strategies, anticipated results from operations and developments and other matters that are not historical facts. Forward-looking statements include, among other things, statements regarding our and our officers’ intent, belief or expectation as identified by the use of words such as “assume,” “may,” “will,” “project,” “expect,” “believe,” “intend,” “anticipate,” “seek,” “target,” “forecast,” “plan,” “potential,” “opportunity,” “estimate,” “could,” “would,” “should” and other comparable and derivative terms or the negatives thereof.

Forward-looking statements are based on management’s beliefs as well as on a number of assumptions concerning future events. You should not put undue reliance on these forward-looking statements, which are not a guarantee of performance and are subject to a number of uncertainties and other factors that could cause actual events or results to differ materially from those expressed or implied by the forward-looking statements. We do not undertake a duty to update these forward-looking statements, which speak only as of the date on which they are made. We urge you to carefully review the disclosures we make concerning risks and uncertainties that may affect our business and future financial performance, including those made below and in our filings with the Securities and Exchange Commission, such as in the sections titled “Cautionary Statements — Summary Risk Factors,” “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2022.

Certain factors that could affect our future results and our ability to achieve our stated goals include, but are not limited to: (a) the impact of the ongoing COVID-19 pandemic and other viruses and infections, such as flu and respiratory syncytial virus, and their extended consequences, including of any variants, on our revenue, level of profitability, liquidity and overall risk exposure and the implementation and impact of regulations related to the CARES Act and other stimulus legislation and any future COVID-19 relief measures, including the risk that some or all of the CARES Act or other COVID-19 relief payments we or our tenants, managers or borrowers received may be subject to recoupment; (b) our ability to achieve the anticipated benefits and synergies from, and effectively integrate, our completed or anticipated acquisitions and investments, including our ownership of the properties that previously secured the Santerre Mezzanine Loan; (c) our exposure and the exposure of our tenants, managers and borrowers to complex healthcare and other regulation and the challenges and expense associated with complying with such regulation; (d) the potential for significant general and commercial claims, legal actions, regulatory proceedings or enforcement actions that could subject us or our tenants, managers or borrowers to increased operating costs, uninsured liabilities fines or significant operational limitations, including the loss or suspension of or moratoriums on accreditations, licenses or certificates of need, suspension of new admissions, suspension, decertification or exclusion from federal, state or foreign healthcare programs or facility or community closure; (e) the impact of market and general economic conditions on us and our tenants, managers and borrowers, including economic and financial market events, such as bank failures and other events affecting financial institutions, market volatility, increases in inflation, changes in interest rates and exchange rates, tightening of lending standards and reduced availability of credit or capital, supply chain pressures, rising labor costs and historically low unemployment, events that affect consumer confidence, our occupancy rates and resident fee revenues, and the actual and perceived state of the real estate markets, labor markets and public and private capital markets; (f) our reliance and the reliance of our tenants, managers and borrowers on the financial, credit and capital markets and the risk that those markets may be disrupted or become constrained, including as a result of bank failures or concerns or rumors about such events, tightening of lending standards and reduced availability of credit or capital; (g) our ability, and the ability of our tenants, managers and borrowers, to navigate the trends impacting our or their businesses and the industries in which we or they operate; (h) the risk of bankruptcy, inability to obtain benefits from governmental programs, insolvency or financial deterioration of our tenants, managers, borrowers and other obligors which may, among other things, have an adverse impact on the ability of such parties to pay obligations due to us or our financial results and financial condition; (i) the risk that the borrowers under our loans or other investments default or that, to the extent we are able to foreclose or otherwise acquire the collateral securing our loans or other investments, we will be required to incur additional expense or indebtedness in connection therewith, that the assets will underperform expectations or that we may not be able to subsequently dispose of all or part of such assets on favorable terms; (j) the recognition of reserves, allowances, credit losses or impairment charges are inherently uncertain, may increase or decrease in the future and may not represent or reflect the ultimate value of, or loss that we

ultimately realize with respect to, the relevant assets, which could have an adverse impact on our results of operations and financial condition; (k) the non-renewal of any leases or management agreement or defaults by tenants or managers thereunder and the risk of our inability to replace those tenants or managers on favorable terms, if at all; (l) our ability to identify and consummate future investments in or dispositions of healthcare assets and effectively manage our portfolio opportunities and our investments in co-investment vehicles, joint ventures and minority interests, including our ability to dispose of such assets on favorable terms as a result of rights of first offer or rights of first refusal in favor of third parties; (m) risks related to development, redevelopment and construction projects, including costs associated with inflation, rising interest rates, labor conditions and supply chain pressures; (n) our ability to attract and retain talented employees; (o) the limitations and significant requirements imposed upon our business as a result of our status as a REIT and the adverse consequences (including the possible loss of our status as a REIT) that would result if we are not able to comply with such requirements; (p) the risk of changes in healthcare law or regulation or in tax laws, guidance and interpretations, particularly as applied to REITs, that could adversely affect us or our tenants, managers or borrowers; (q) increases in our borrowing costs as a result of becoming more leveraged, including in connection with acquisitions or other investment activity and rising interest rates; (r) our reliance on third parties to operate a majority of our assets and our limited control and influence over such operations and results; (s) our dependency on a limited number of tenants and managers for a significant portion of our revenues and operating income; (t) the availability, adequacy and pricing of insurance coverage provided by our policies and policies maintained by our tenants, managers or other counterparties; (u) the occurrence of cyber incidents that could disrupt our operations, result in the loss of confidential information or damage our business relationships and reputation; (v) the impact of merger, acquisition and investment activity in the healthcare industry or otherwise affecting our tenants, managers or borrowers; (w) disruptions to the management and operations of our business and the uncertainties caused by activist investors; (x) the risk of catastrophic or extreme weather and other natural events and the physical effects of climate change; (y) the impact of purchase accounting adjustments, impairments, write downs and other non-cash charges related to our equitization of the Santerre Mezzanine Loan; (z) the risk of potential dilution resulting from future sales or issuances of our equity securities; and (aa) the other factors set forth in our periodic filings with the Securities and Exchange Commission.

Note Regarding Third-Party Information

This Quarterly Report includes information that has been derived from SEC filings that has been provided to us by our tenants and managers or been derived from SEC filings or other publicly available information of our tenants and managers. We believe that such information is accurate and that the sources from which it has been obtained are reliable. However, we cannot guarantee the accuracy of such information and have not independently verified the assumptions on which such information is based.

Company Overview

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

We primarily invest in a diversified portfolio of healthcare real estate assets through wholly owned subsidiaries and other co-investment entities. We operate through three reportable business segments: triple-net leased properties, senior housing operating portfolio, which we also refer to as “SHOP” and which was formerly known as senior living operations, and outpatient medical and research portfolio, which was formerly known as office operations. See our Consolidated Financial Statements and the related notes, including “Note 2 – Accounting Policies” and “Note 15 – Segment Information,” included in Item 1 of this Quarterly Report on Form 10-Q. Our senior housing communities are either subject to triple-net leases, in which case they are included in our triple-net leased properties reportable business segment, or operated by independent third-party managers, in which case they are included in our SHOP reportable business segment.

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

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

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

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

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

We aim to enhance shareholder value by delivering consistent, superior total returns through a strategy of (1) generating reliable and growing cash flows, (2) maintaining a balanced, diversified portfolio of high-quality assets and (3) preserving our financial strength, flexibility and liquidity.

Our ability to access capital in a timely and cost-effective manner is critical to the success of our business strategy because it affects our ability to satisfy existing obligations, including the repayment of maturing indebtedness, and to make future investments. Factors such as general market conditions, interest rates, credit ratings on our securities, expectations of our potential future earnings and cash distributions, and the trading price of our common stock impact our access to and cost of external capital. For that reason, we generally attempt to match the long-term duration of our investments in real property with long-term financing through the issuance of shares of our common stock or the incurrence of long-term fixed rate debt.

2023 Highlights

Continuing Impact of and Response to COVID-19 and Its Extended Consequences

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 COVID-19 remains highly uncertain. The extent of COVID-19’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 governmental and regulatory bodies and regions and fluctuate over time; and on other future developments, including the ultimate duration, spread and intensity of the outbreak, 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 COVID-19 on our business, results of operations, financial condition and cash flows.

Investments and Dispositions

• During the six months ended June 30, 2023, we committed to an outpatient medical ground-up development located on the Sutter Roseville Medical Center campus in Roseville, California. The $61.8 million project includes the development of a new class A outpatient medical building and is 100% pre-leased to affiliates of Sutter Health for a 15-year lease term.

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

• On May 1, 2023, we took ownership of the properties that supported our cash-pay non-recourse mezzanine loan to Santerre Health Investors (the “Santerre Mezzanine Loan”) by converting the outstanding principal amount of the Santerre Mezzanine Loan to equity, with no additional consideration being paid. As a result, the Santerre Mezzanine Loan is no longer outstanding. The properties consisted of a diverse pool of outpatient medical buildings, senior housing operating portfolio communities, triple-net leased skilled nursing facilities and hospital assets in the United States, which, at the time, also secured a $1 billion non-recourse senior mortgage loan issued under the CHC Commercial Mortgage Trust 2019-CHC (the “CHC Mortgage Loan”).

In connection with our equitization of the Santerre Mezzanine Loan on May 1, 2023, we recognized $41.1 million in valuation-related items in our Consolidated Statements of Income consisting of: (a) the reversal of the $12.0 million and $20.0 million of allowances on the Santerre Mezzanine Loan for the three and six months ended June 30, 2023, respectively, and (b) a gain on foreclosure of real estate of $29.1 million for the three and six months ended June 30, 2023. The gain is the fair value of the properties that secured the Santerre Mezzanine Loan, less the fair value of the CHC Mortgage Loan, less the principal amount of the Santerre Mezzanine Loan on May 1, 2023 (after the reversal of previously recorded allowances), and net of non-real estate assets and liabilities and transaction costs.

Liquidity and Capital

• As of June 30, 2023, we had approximately $2.7 billion in liquidity, including availability under our revolving credit facility and cash and cash equivalents on hand, with $135.0 million borrowings outstanding under our commercial paper program.

• In March 2023, we entered into a new five year C$271.8 million mortgage loan secured by 14 SHOP communities in Canada at an effective fixed rate of 4.36%.

• In the first quarter of 2023, we hedged an incremental $200.0 million of variable rate debt to fixed rate debt through the execution in March 2023 of two-year $400.0 million notional swaps on our unsecured term loan due in 2027, replacing a $200.0 million notional swap that matured in January 2023.

*•*In March and April 2023, we entered into a total of $250.0 million aggregate forward starting swaps with a ten-year weighted average rate of 3.37%. In July 2023, we terminated these swaps in conjunction with the issuance of $426.8 million fixed rate mortgage loan due in 2033.

• In April 2023, our 100% owned subsidiary, Ventas Canada Finance Limited (“Ventas Canada”), issued and sold C$600.0 million aggregate principal amount of 5.398% Senior Notes due 2028 in a private placement at par. Pursuant to cash tender offers, we used the proceeds to repurchase C$613.7 million in aggregate principal amount of outstanding senior notes due in 2024 for an aggregate purchase price of C$600.0 million plus accrued and unpaid interest to, but not including, the settlement date. As a result of the tender offers, we recognized a gain on extinguishment of debt of $8.3 million in our Consolidated Statements of Income for both the three and six months ended June 30, 2023.

• On May 1, 2023, we took ownership of the properties that supported the Santerre Mezzanine Loan by converting the outstanding principal amount of the Santerre Mezzanine Loan to equity, with no additional consideration being paid. The properties consisted of a diverse pool of 153 assets, which, at the time, also secured the CHC Mortgage Loan. At the time of the equitization of the Santerre Mezzanine Loan, there was $1 billion outstanding under the CHC Mortgage Loan and it accrued interest at a weighted average rate of LIBOR + 1.84% and had matured on June 9, 2023. The CHC Mortgage Loan was recorded at fair value, which approximates par, on May 1, 2023.

On June 8, 2023, we voluntary prepaid, without penalty, $656.6 million of the CHC Mortgage Loan. In connection with the prepayment, 83 properties were released from the collateral securing the CHC Mortgage Loan. As of June 30, 2023, $360.2 million remained outstanding under the CHC Mortgage Loan, which was secured by 70 outpatient medical buildings, triple-net leased skilled nursing facilities and hospital assets in the United States.

On June 9, 2023, we extended the maturity date of the CHC Mortgage Loan to June 9, 2024 and amended the CHC Mortgage Loan to replace its LIBOR-based rates with SOFR-based rates. As of June 30, 2023, the CHC Mortgage Loan had a weighted average rate of SOFR + 2.69%.

In July 2023, we provided notice that we intend to repay the full balance of the CHC Mortgage Loan in August 2023.

• In June 2023, Ventas Realty issued $862.5 million aggregate principal amount of its 3.75% Exchangeable Senior Notes due 2026 (the “Exchangeable Notes”) in a private placement. The Exchangeable Notes are senior, unsecured obligations of Ventas Realty and are fully and unconditionally guaranteed on an unsecured and unsubordinated basis by Ventas. The Exchangeable Notes bear interest at a rate of 3.75% per year, payable semi-annually in arrears on June 1 and December 1 of each year, beginning on December 1, 2023. The Exchangeable Notes mature on June 1, 2026, unless earlier exchanged, redeemed or repurchased. The net proceeds from the Exchangeable Notes were primarily used to repay the CHC Mortgage Loan. As of June 30, 2023, we had $862.5 million aggregate principal amount of the Exchangeable Notes outstanding.

• During the six months ended June 30, 2023, we sold 0.5 million shares of our common stock under our ATM program for gross proceeds of $25.6 million, representing an average price of $46.93 per share. As of June 30, 2023, the remaining amount available under our ATM program for future sales of common stock was $974.4 million.

In July 2023, we sold 1.8 million shares of our common stock under our ATM program for gross proceeds of $84.8 million, representing an average price of $48.19 per share. As of July 31, 2023, the remaining amount available under our ATM program for future sales of common stock was $889.6 million.

*•*In July 2023, we entered into a $426.8 million fixed rate mortgage loan, which accrues interest at 5.91%, matures in 2033 and is secured by 19 SHOP communities in the United States.

Other Items

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

• During the six months ended June 30, 2023, we recognized $10.8 million of other income relating to insurance reimbursements received for damage caused by materially disruptive events, primarily winter storm Elliott.

Concentration Risk

We use concentration ratios to identify, understand and evaluate the potential impact of economic downturns and other adverse events that may affect our asset types, geographic locations, business models, and tenants, operators and managers. We evaluate concentration risk in terms of investment mix and operations mix. Investment mix measures the percentage of our investments that is concentrated in a specific asset type or that is operated or managed by a particular tenant, operator or manager. Operations mix measures the percentage of our operating results that is attributed to a particular tenant, operator or manager, geographic location or business model.

The following tables reflect our concentration risk as of the dates and for the periods presented:

			As of June 30, 2023						As of December 31, 2022
Investment mix by asset type (1)****:
Senior housing communities			65.6		%				66.3		%
Outpatient medical			19.5						18.0
Research centers			6.7						6.9
Health systems			4.7						4.9
Inpatient rehabilitation facilities (“IRFs”) and long-term acute care facilities (“LTACs”)			1.6						1.5
Skilled nursing facilities (“SNFs”)			1.8						0.6
Secured loans receivable and investments, net			0.1						1.8
Total			100.0		%				100.0		%
Investment mix by tenant, operator and manager (1)****:
Atria (2)			25.1		%				26.0		%
Sunrise			9.5						9.8
Lillibridge			9.1						9.3
Brookdale Senior Living			7.6						7.8
Le Groupe Maurice			7.0						7.0
Wexford			6.5						6.6
Ardent			5.1						5.3
Kindred			0.8						0.8
All other			29.3						27.4
Total			100.0		%				100.0		%

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(1)Ratios are based on the gross book value of consolidated real estate investments (excluding properties classified as held for sale) as of each reporting date.

(2)Includes assets managed by Holiday.

			For the Three Months Ended June 30,												For the Six Months Ended June 30,
			2023						2022						2023						2022
Operations mix by tenant and operator and business model:
Revenues (1):
SHOP			65.6		%				64.3		%				65.5		%				64.2		%
Brookdale Senior Living (2)			3.4						3.6						3.4						3.6
Kindred			3.0						3.3						3.0						3.3
Ardent			3.0						3.2						3.0						3.2
All others			25.0						25.6						25.1						25.7
Total			100.0		%				100.0		%				100.0		%				100.0		%
Net operating income (“NOI”):
SHOP			36.9		%				33.8		%				36.5		%				35.5		%
Brookdale Senior Living (2)			7.8						8.4						7.9						8.1
Kindred			6.9						7.6						6.8						7.3
Ardent			6.9						7.3						7.0						7.0
All others			41.5						42.9						41.8						42.1
Total			100.0		%				100.0		%				100.0		%				100.0		%
Operations mix by geographic location (3)****:
California			13.7		%				14.4		%				14.0		%				14.4		%
New York			7.5						7.5						7.6						7.4
Texas			6.5						6.7						6.5						6.6
Pennsylvania			5.2						5.2						5.2						5.1
North Carolina			4.4						4.3						4.3						4.5
All others			62.7						61.9						62.4						62.0
Total			100.0		%				100.0		%				100.0		%				100.0		%

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(1)Total revenues include third party capital management revenues, revenue from loans and investments and interest and other income (including amounts related to assets classified as held for sale).

(2)Results exclude ten senior housing communities which are included in the SHOP reportable business segment.

(3)Ratios are based on total revenues (including amounts related to assets classified as held for sale) for each period presented.

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

Triple-Net Lease Performance and Expirations

Any failure, inability or unwillingness by our tenants to satisfy their obligations under our triple-net leases could have a material adverse effect on us. Also, if our tenants are not able or willing to renew our triple-net leases upon expiration, we may be unable to reposition the applicable properties on a timely basis or on the same or better economic terms, if at all. Although our lease expirations are staggered, the non-renewal of some or all of our triple-net leases that expire in any given year could have a material adverse effect on us. During the six months ended June 30, 2023, we had no triple-net lease renewals or expirations without renewal that, in the aggregate, had a material impact on our financial condition or results of operations for that period.

Critical Accounting Policies and Estimates

Our Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information set forth in the Accounting Standards Codification (“ASC”), as published by the Financial Accounting Standards Board (“FASB”), and with the SEC instructions to Form 10-Q and Article 10 of Regulation S-X. 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 periods. We base these estimates on our experience and assumptions we believe to be reasonable under the circumstances. However, if our judgment or interpretation of the facts and circumstances relating to various transactions or other matters had been different, we may have applied a different accounting treatment, resulting in a different presentation of our financial statements. We periodically reevaluate our estimates and assumptions, and in the event they prove to be different from actual results, we make adjustments in subsequent periods to reflect more current estimates and assumptions about matters that are inherently uncertain.

Our 2022 Annual Report contains additional information regarding the critical accounting policies that affect our more significant estimates and judgments used in the preparation of our Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q. There have been no material changes to these policies in 2023.

Results of Operations

As of June 30, 2023, we operated through three reportable business segments: triple-net leased properties, SHOP and outpatient medical and research portfolio. 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 outpatient medical and research portfolio reportable business segment, we primarily acquire, own, develop, lease and manage outpatient medical buildings and research centers throughout the United States. Information provided for “non-segment” includes income from loans and investments and other miscellaneous income 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 net operating income (“NOI”) and related measures for each segment. For further information regarding our reportable business segments and a discussion of our definition of NOI, see “Note 15 – Segment Information” of the Notes to Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q. See “Non-GAAP Financial Measures” included elsewhere in this Quarterly Report on Form 10-Q for additional disclosure and reconciliations of net income attributable to common stockholders, as computed in accordance with GAAP, to NOI.

Three Months Ended June 30, 2023 and 2022

The table below shows our results of operations for the three months ended June 30, 2023 and 2022 and the effect of changes in those results from period to period on our net income attributable to common stockholders (dollars in thousands):

			For the Three Months Ended June 30,												Increase (Decrease) to Net Income
			2023						2022						$						%
NOI:
SHOP			$	177,504					$	150,610					$	26,894					17.9		%
Outpatient medical and research portfolio			144,195						136,583						7,612						5.6
Triple-net leased properties			150,818						145,812						5,006						3.4
Non-segment			8,555						12,998						(4,443)						(34.2)
Total NOI			481,072						446,003						35,069						7.9
Interest and other income			1,032						1,166						(134)						(11.5)
Interest expense			(143,265)						(113,951)						(29,314)						(25.7)
Depreciation and amortization			(304,689)						(283,075)						(21,614)						(7.6)
General, administrative and professional fees			(34,399)						(32,915)						(1,484)						(4.5)
Gain (loss) on extinguishment of debt, net			6,801						(7)						6,808						nm
Transaction expenses and deal costs			(3,069)						(13,078)						10,009						76.5
Allowance on loans receivable and investments			12,065						62						12,003						nm
Gain on foreclosure of real estate			29,127						—						29,127						100.0
Other			17,959						(48,116)						66,075						137.3
Income (loss) before unconsolidated entities, real estate dispositions, income taxes and noncontrolling interests			62,634						(43,911)						106,545						nm
Income (loss) from unconsolidated entities			31,254						(1,047)						32,301						nm
Gain (loss) on real estate dispositions			1,405						(34)						1,439						nm
Income tax benefit			9,773						3,790						5,983						157.9
Income (loss) from continuing operations			105,066						(41,202)						146,268						nm
Net income (loss)			105,066						(41,202)						146,268						nm
Net income attributable to noncontrolling interests			1,613						1,214						(399)						(32.9)
Net income (loss) attributable to common stockholders			$	103,453					$	(42,416)					$	145,869					nm

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nm - not meaningful

NOI—SHOP

The following table summarizes results of operations in our SHOP reportable business segment, including assets sold or classified as held for sale as of June 30, 2023 (dollars in thousands):

			For the Three Months Ended June 30,												Increase (Decrease) to NOI
			2023						2022						$						%
NOI—SHOP:
Resident fees and services			$	724,614					$	658,056					$	66,558					10.1		%
Less: Property-level operating expenses			(547,110)						(507,446)						(39,664)						(7.8)
NOI			$	177,504					$	150,610					$	26,894					17.9

			Number of Properties at June 30,												Average Unit Occupancy for the Three Months Ended June 30,												Average Monthly Revenue Per Occupied Room for the Three Months Ended June 30,
			2023						2022						2023						2022						2023						2022
Total communities			570						548						80.5		%				80.4		%				$	4,679					$	4,388

Resident fees and services include all amounts earned from residents at our senior housing communities, such as rental fees related to resident leases, extended health care fees and other ancillary service income. Property-level operating expenses related to our SHOP reportable business segment include labor, food, utilities, marketing, management and other costs of operating the properties. For senior housing communities in our SHOP reportable business segment, occupancy generally reflects average operator-reported unit occupancy for the reporting period. Average monthly revenue per occupied room reflects average resident fees and services per operator-reported occupied unit for the reporting period.

The NOI increase in our SHOP reportable business segment for the three months ended June 30, 2023 compared to the same period in 2022 was driven by revenue per occupied room growth in 2023, partially offset by moderating operating expense growth. No HHS grants were received for both the three months ended June 30, 2023 and 2022.

The following table compares results of operations for our 508 same-store SHOP communities (dollars in thousands). See “Non-GAAP Financial Measures**—**NOI” included elsewhere in this Quarterly Report on Form 10-Q for additional disclosure regarding same-store NOI for each of our reportable business segments.

			For the Three Months Ended June 30,												Increase (Decrease) to NOI
			2023						2022						$						%
Same-Store NOI—SHOP:
Resident fees and services			$	659,033					$	617,925					$	41,108					6.7		%
Less: Property-level operating expenses			(491,706)						(471,099)						(20,607)						(4.4)
NOI			$	167,327					$	146,826					$	20,501					14.0

			Number of Properties at June 30,												Average Unit Occupancy for the Three Months Ended June 30,												Average Monthly Revenue Per Occupied Room for the Three Months Ended June 30,
			2023						2022						2023						2022						2023						2022
Same-store communities			508						508						81.3		%				81.2		%				$	4,658					$	4,370

The NOI increase in our same-store SHOP reportable business segment for the three months ended June 30, 2023 compared to the same period in 2022 was primarily driven by revenue per occupied room growth in 2023, partially offset by moderating operating expense growth. No HHS grants were received for both the three months ended June 30, 2023 and 2022.

NOI—Outpatient Medical and Research Portfolio

The following table summarizes results of operations in our outpatient medical and research portfolio reportable business segment, including assets sold or classified as held for sale as of June 30, 2023 (dollars in thousands). For properties in our outpatient medical and research portfolio reportable business segment, occupancy generally reflects occupied square footage divided by net rentable square footage as of the end of the reporting period.

			For the Three Months Ended June 30,												Increase (Decrease) to NOI
			2023						2022						$						%
NOI—Outpatient Medical and Research Portfolio:
Rental income			$	215,807					$	199,241					$	16,566					8.3		%
Third party capital management revenues			559						670						(111)						(16.6)
Total revenues			216,366						199,911						16,455						8.2
Less:
Property-level operating expenses			(72,171)						(63,328)						(8,843)						(14.0)
NOI			$	144,195					$	136,583					$	7,612					5.6

			Number of Properties at June 30,												Occupancy at June 30,												Annualized Average Rent Per Occupied Square Foot for the Three Months Ended June 30,
			2023						2022						2023						2022						2023						2022
Total outpatient medical and research portfolio			442						362						88.1		%				89.5		%				$	36					$	36

The NOI increase in outpatient medical and research portfolio reportable business segment for the three months ended June 30, 2023 compared to the same period in 2022 was primarily due to properties acquired in connection with our equitization of the Santerre Mezzanine Loan, leasing activity, high tenant retention and improved parking revenues.

The following table compares results of operations for our 345 same-store outpatient medical and research portfolio (dollars in thousands):

			For the Three Months Ended June 30,												Increase (Decrease) to NOI
			2023						2022						$						%
Same-Store NOI—Outpatient Medical and Research Portfolio:
Rental income			$	195,440					$	189,174					$	6,266					3.3		%
Less: Property-level operating expenses			(62,468)						(59,347)						(3,121)						(5.3)
NOI			$	132,972					$	129,827					$	3,145					2.4

			Number of Properties at June 30,												Occupancy at June 30,												Annualized Average Rent Per Occupied Square Foot for the Three Months Ended June 30,
			2023						2022						2023						2022						2023						2022
Same-store outpatient medical and research portfolio			345						345						91.9		%				91.6		%				$	37					$	36

The NOI increase in our same-store outpatient medical and research portfolio reportable business segment for the three months ended June 30, 2023 compared to the same period in 2022 was primarily driven by leasing activity, high tenant retention and improved parking revenues.

NOI—Triple-Net Leased Properties

The following table summarizes results of operations in our triple-net leased properties reportable business segment, including assets sold or classified as held for sale as of June 30, 2023 (dollars in thousands):

			For the Three Months Ended June 30,												Increase to NOI
			2023						2022						$						%
NOI—Triple-Net Leased Properties:
Rental income			$	154,355					$	149,397					$	4,958					3.3		%
Less: Property-level operating expenses			(3,537)						(3,585)						48						1.3
NOI			$	150,818					$	145,812					$	5,006					3.4

In our triple-net leased properties reportable business segment, our revenues generally consist of fixed rental amounts (subject to contractual escalations) received from our tenants in accordance with the applicable lease terms. We report revenues and property-level operating expenses within our triple-net leased properties reportable business segment for real estate tax and insurance expenses that are paid from escrows collected from our tenants.

The NOI increase in our triple-net leased properties for the three months ended June 30, 2023 compared to the same period in 2022 was primarily driven by properties acquired in connection with our equitization of the Santerre Mezzanine Loan and contractual rent escalators.

Occupancy rates may affect the profitability of our tenants’ operations. For senior housing communities and post-acute properties in our triple-net leased properties reportable business segment, occupancy generally reflects average operator-reported unit and bed occupancy, respectively, for the reporting period. Because triple-net financials are delivered to us following the reporting period, occupancy is reported in arrears. The following table sets forth average continuing occupancy rates for the first quarter of 2023 and 2022 related to the triple-net leased properties we owned at June 30, 2023 and 2022, respectively. The table excludes non-stabilized properties, properties owned through investments in unconsolidated real estate entities, certain properties for which we do not receive occupancy information and properties acquired or properties that transitioned operators for which we do not have a full quarter of occupancy results.

			Number of Properties Owned at June 30, 2023						Average Occupancy for the Three Months Ended March 31, 2023									Number of Properties Owned at June 30, 2022						Average Occupancy for the Three Months Ended March 31, 2022
Senior housing communities			240						77.1%									260						74.9%
SNFs			16						84.1									16						80.7
IRFs and LTACs			36						57.3									36						58.1

The following table compares results of operations for our 308 same-store triple-net leased properties (dollars in thousands):

			For the Three Months Ended June 30,												Increase (Decrease) to NOI
			2023						2022						$						%
Same-Store NOI—Triple-Net Leased Properties:
Rental income			$	145,508					$	144,490					$	1,018					0.7		%
Less: Property-level operating expenses			(3,391)						(3,209)						(182)						(5.7)
NOI			$	142,117					$	141,281					$	836					0.6

The NOI increase in our same-store triple-net leased portfolio for the three months ended June 30, 2023 compared to the same period in 2022 was primarily driven by contractual rent escalators.

NOI—Non-Segment

Information provided for non-segment NOI 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. The $4.4 million decrease in non-segment NOI for the three months ended June 30, 2023 compared to the same period in 2022 was primarily due to lower interest income from loans receivable and investments due to the conversion of the outstanding principal amount of the Santerre Mezzanine Loan to equity in May 2023, and a $43.4 million loan investment that was repaid at par in February 2023.

Company Results

Interest and Other Income

Interest and other income for the three months ended June 30, 2023 compared to the same period in 2022 was relatively flat.

Interest Expense

The $29.3 million increase in interest expense for the three months ended June 30, 2023 compared to the same period in 2022 was primarily due to an increase of $19.8 million due to higher effective interest rate and an increase of $6.4 million due to higher debt balances. Our weighted average debt outstanding was $13.1 billion and $12.5 billion for the three months ended June 30, 2023 and 2022, respectively. Our weighted average effective interest rate was 4.18% and 3.54% for the three months ended June 30, 2023 and 2022, respectively. Capitalized interest was $2.9 million and $2.7 million for the three months ended June 30, 2023 and 2022, respectively.

Depreciation and Amortization

The $21.6 million increase in depreciation and amortization expense for the three months ended June 30, 2023 compared to the same period in 2022 was primarily due to depreciation and amortization related to the properties that secured the Santerre Mezzanine Loan received on May 1, 2023.

General, Administrative and Professional Fees

The $1.5 million increase in general, administrative and professional fees for the three months ended June 30, 2023 compared to the same period in 2022 was primarily due to inflationary impacts and the return to a more normalized business environment.

Gain (Loss) on Extinguishment of Debt, Net

The $6.8 million change in gain (loss) on extinguishment of debt, net for the three months ended June 30, 2023 compared to the same period in 2022 was primarily due to $8.3 million of gain recognized as a result of the April 2023 cash tender offers.

Transaction Expenses and Deal Costs

The $10.0 million decrease in transaction expenses and deal costs for the three months ended June 30, 2023 compared to the same period in 2022 was primarily due to higher costs in 2022 in connection with stockholder relations matters.

Allowance on Loans Receivable and Investments

In connection with our equitization of the Santerre Mezzanine Loan on May 1, 2023, we derecognized the allowance previously recorded and reversed $12.0 million of allowance during the three months ended June 30, 2023. As of June 30, 2023, the Santerre Mezzanine Loan is no longer outstanding.

Gain on Foreclosure of Real Estate

The gain of $29.1 million for the three months ended June 30, 2023 was recorded in connection with our equitization of the Santerre Mezzanine Loan on May 1, 2023 and is the excess of the fair value of the properties that secured the Santerre Mezzanine Loan, less the fair value of the CHC Mortgage Loan, less the principal amount of the Santerre Mezzanine Loan on May 1, 2023 (after the reversal of previously recorded allowances), and net of non-real estate assets and liabilities and transaction costs.

Other

The $66.1 million change in other expense for the three months ended June 30, 2023 compared to the same period in 2022 was primarily due to an increase of $53.7 million in unrealized gain on stock warrants received in connection with the Brookdale Senior Living lease modification. As of June 30, 2023, the fair value of the stock warrants was $40.5 million, which was $12.4 million higher than the value at the grant date.

Income (Loss) from Unconsolidated Entities

The $32.3 million change in loss from unconsolidated entities for the three months ended June 30, 2023 compared to the same period in 2022 was primarily due to a $33.5 million gain recognized upon the sale of approximately 24% of our 9.8% ownership interest in Ardent to a third-party investor in May 2023.

Gain (Loss) on Real Estate Dispositions

The $1.4 million change in gain on real estate dispositions for the three months ended June 30, 2023 compared to the same period in 2022 was primarily due to dispositions of real estate during the second quarter of 2023, which resulted in the recognition of a gain on sale of $1.4 million.

Income Tax Benefit

The $9.8 million income tax benefit for the three months ended June 30, 2023 was primarily due to losses in certain of our TRS entities and an $8.0 million benefit from internal restructurings of U.S. TRS entities. The $3.8 million income tax benefit for the three months ended June 30, 2022 was primarily due to losses in certain of our TRS entities and a $2.0 million benefit from an internal restructuring of a U.S. TRS.

Six Months Ended June 30, 2023 and 2022

The table below shows our results of operations for the six months ended June 30, 2023 and 2022 and the effect of changes in those results from period to period on our net income attributable to common stockholders (dollars in thousands):

			For the Six Months Ended June 30,												Increase (Decrease) to Net Income
			2023						2022						$						%
NOI:
SHOP			$	345,275					$	326,201					$	19,074					5.8		%
Outpatient medical and research portfolio			280,914						274,557						6,357						2.3
Triple-net leased properties			296,761						293,365						3,396						1.2
Non-segment			23,987						24,864						(877)						(3.5)
Total NOI			946,937						918,987						27,950						3.0
Interest and other income			2,775						1,702						1,073						63.0
Interest expense			(271,340)						(224,745)						(46,595)						(20.7)
Depreciation and amortization			(586,808)						(572,139)						(14,669)						(2.6)
General, administrative and professional fees			(79,197)						(75,913)						(3,284)						(4.3)
Gain (loss) on extinguishment of debt, net			6,801						(7)						6,808						nm
Transaction expenses and deal costs			(4,455)						(33,070)						28,615						86.5
Allowance on loans receivable and investments			20,129						116						20,013						nm
Gain on foreclosure of real estate			29,127						—						29,127						100.0
Other			10,197						(20,926)						31,123						148.7
Income (loss) before unconsolidated entities, real estate dispositions, income taxes and noncontrolling interests			74,166						(5,995)						80,161						nm
Income (loss) from unconsolidated entities			25,631						(5,316)						30,947						nm
Gain on real estate dispositions			11,606						2,421						9,185						nm
Income tax benefit			12,575						8,280						4,295						51.9
Income (loss) from continuing operations			123,978						(610)						124,588						nm
Net income (loss)			123,978						(610)						124,588						nm
Net income attributable to noncontrolling interests			3,008						3,074						66						2.1
Net income (loss) attributable to common stockholders			$	120,970					$	(3,684)					$	124,654					nm

---

nm - not meaningful

NOI—Senior Housing Operating Portfolio

The following table summarizes results of operations in our SHOP reportable business segment, including assets sold or classified as held for sale as of June 30, 2023 (dollars in thousands):

			For the Six Months Ended June 30,												Increase (Decrease) to NOI
			2023						2022						$						%
NOI—SHOP:
Resident fees and services			$	1,429,607					$	1,309,177					$	120,430					9.2		%
Less: Property-level operating expenses			(1,084,332)						(982,976)						(101,356)						(10.3)
NOI			$	345,275					$	326,201					$	19,074					5.8

			Number of Properties at June 30,												Average Unit Occupancy For the Six Months Ended June 30,												Average Monthly Revenue Per Occupied Room For the Six Months Ended June 30,
			2023						2022						2023						2022						2023						2022
Total communities			570						548						80.6		%				80.2		%				$	4,653					$	4,379

The NOI increase in our SHOP reportable business segment for the six months ended June 30, 2023 compared to the same period in 2022 was primarily driven by higher revenues in 2023 driven by higher occupancy and revenue per occupied room, partially offset by higher operating expenses in 2023, driven by HHS grants received in 2022, which are reflected as a reduction in property-level operating expenses, and macro inflationary impacts on labor in 2023. During the six months ended June 30, 2023 and 2022, HHS grants received reduced property-level operating expenses by zero and $34.0 million, respectively.

The following table compares results of operations for our 506 same-store SHOP communities (dollars in thousands):

			For the Six Months Ended June 30,												Increase (Decrease) to NOI
			2023						2022						$						%
Same-Store NOI—SHOP:
Resident fees and services			$	1,305,416					$	1,217,576					$	87,840					7.2		%
Less: Property-level operating expenses			(982,252)						(908,427)						(73,825)						(8.1)
NOI			$	323,164					$	309,149					$	14,015					4.5

			Number of Properties at June 30,												Average Unit Occupancy For the Six Months Ended June 30,												Average Monthly Revenue Per Occupied Room For the Six Months Ended June 30,
			2023						2022						2023						2022						2023						2022
Same-store communities			506						506						81.3		%				80.9		%				$	4,651					$	4,360

The NOI increase in our same-store SHOP reportable business segment for the six months ended June 30, 2023 compared to the same period in 2022 was primarily driven by positive trends in occupancy and revenue per occupied room, partially offset by higher operating expenses, driven by HHS grants received in 2022, which are reflected as a reduction in property-level operating expenses, and macro inflationary impacts on labor in 2023. During the six months ended June 30, 2023 and 2022, HHS grants received reduced property-level operating expenses by zero and $29.3 million, respectively.

NOI—Outpatient Medical and Research Portfolio

The following table summarizes results of operations in our outpatient medical and research portfolio reportable business segment, including assets sold or classified as held for sale as of June 30, 2023 (dollars in thousands):

			For the Six Months Ended June 30,												Increase (Decrease) to NOI
			2023						2022						$						%
NOI—Outpatient Medical and Research Portfolio:
Rental income			$	418,811					$	399,781					$	19,030					4.8		%
Third party capital management revenues			1,187						1,287						(100)						(7.8)
Total revenues			419,998						401,068						18,930						4.7
Less:
Property-level operating expenses			(139,084)						(126,511)						(12,573)						(9.9)
NOI			$	280,914					$	274,557					$	6,357					2.3

			Number of Properties at June 30,												Occupancy at June 30,												Annualized Average Rent Per Occupied Square Foot For the Six Months Ended June 30,
			2023						2022						2023						2022						2023						2022
Total outpatient medical and research portfolio			442						362						88.1		%				89.5		%				$	36					$	36

The NOI increase in our outpatient medical and research portfolio reportable business segment for the six months ended June 30, 2023 compared to the same period in 2022 was primarily due to properties acquired in connection with our equitization of the Santerre Mezzanine Loan, leasing activity, high tenant retention, and improved parking revenues.

The following table compares results of operations for our 326 same-store outpatient medical and research portfolio (dollars in thousands):

			For the Six Months Ended June 30,												Increase (Decrease) to NOI
			2023						2022						$						%
Same-Store NOI—Outpatient Medical and Research Portfolio:
Rental income			$	382,899					$	372,465					$	10,434					2.8		%
Less: Property-level operating expenses			(125,025)						(118,739)						(6,286)						(5.3)
NOI			$	257,874					$	253,726					$	4,148					1.6

			Number of Properties at June 30,												Occupancy at June 30,												Annualized Average Rent Per Occupied Square Foot For the Six Months Ended June 30,
			2023						2022						2023						2022						2023						2022
Same-store outpatient medical and research portfolio			326						326						91.7		%				91.7		%				$	38					$	37

The NOI increase in our same-store outpatient medical and research portfolio reportable business segment for the six months ended June 30, 2023 compared to the same period in 2022 was primarily due to leasing activity, high tenant retention, improved parking income and favorable expense controls.

NOI—Triple-Net Leased Properties

The following table summarizes results of operations in our triple-net leased properties reportable business segment, including assets sold or classified as held for sale as of June 30, 2023 (dollars in thousands):

			For the Six Months Ended June 30,												Increase to NOI
			2023						2022						$						%
NOI—Triple-Net Leased Properties:
Rental income			$	304,094					$	300,958					$	3,136					1.0		%
Less: Property-level operating expenses			(7,333)						(7,593)						260						3.4
NOI			$	296,761					$	293,365					$	3,396					1.2

The NOI increase in our triple-net leased properties for the six months ended June 30, 2023 compared to the same period in 2022 was primarily driven by properties acquired in connection with our equitization of the Santerre Mezzanine Loan, contractual rent escalators and additional rental income received, partially offset by rental income from communities that were transitioned to our senior housing operating portfolio or sold.

The following table compares results of operations for our 308 same-store triple-net leased properties (dollars in thousands):

			For the Six Months Ended June 30,												Increase (Decrease) to NOI
			2023						2022						$						%
Same-Store NOI—Triple-Net Leased Properties:
Rental income			$	294,210					$	289,469					$	4,741					1.6		%
Less: Property-level operating expenses			(7,171)						(7,007)						(164)						(2.3)
NOI			$	287,039					$	282,462					$	4,577					1.6

The NOI increase in our same-store triple-net leased properties reportable business segment for the six months ended June 30, 2023 compared to the same period in 2022 was primarily driven by contractual rent escalators and additional rental income received, partially offset by previously executed lease resolutions with several smaller senior housing triple-net tenants who were materially affected by COVID-19.

NOI—Non-Segment

The $0.9 million decrease in non-segment NOI for the six months ended June 30, 2023 compared to the same period in 2022 was primarily due to lower interest income from loans receivable and investments primarily due to a $43.4 million loan investment that was repaid at par in February 2023, partially offset by higher income from outstanding loans due to higher rates in 2023.

Company Results

Interest and Other Income

The $1.1 million increase in interest and other income for the three months ended June 30, 2023 compared to the same period in 2022 was primarily due to higher interest rates earned on our bank deposits.

Interest Expense

The $46.6 million increase in interest expense for the six months ended June 30, 2023 compared to the same period in 2022 was primarily due to an increase of $36.7 million due to higher effective interest rate and $7.0 million due to higher debt balances. Our weighted average debt outstanding was $12.7 billion and $12.4 billion for the six months ended June 30, 2023 and 2022, respectively. Our weighted average effective interest rate was 4.11% and 3.52% for the six months ended June 30, 2023 and 2022, respectively. Capitalized interest for the six months ended June 30, 2023 and 2022 was $5.6 million and $5.2 million, respectively.

Depreciation and Amortization

The $14.7 million increase in depreciation and amortization expense for the six months ended June 30, 2023 compared to the same period in 2022 is primarily due to depreciation and amortization related to the properties that secured the Santerre Mezzanine Loan received on May 1, 2023.

General, Administrative and Professional Fees

The $3.3 million increase in general, administrative and professional fees was primarily due to inflationary impacts and the return to a more normalized business environment.

Gain (Loss) on Extinguishment of Debt, Net

The $6.8 million change in gain (loss) on extinguishment of debt, net for the six months ended June 30, 2023 compared to the same period in 2022 was primarily due to $8.3 million of gain recognized as a result of the April 2023 cash tender offers.

Transaction Expenses and Deal Costs

The $28.6 million decrease in transaction expenses and deal costs was primarily attributable to $20.5 million incurred in connection with stockholder relations matters in 2022.

Allowance on Loans Receivable and Investments

In connection with our equitization of the Santerre Mezzanine Loan on May 1, 2023, we derecognized the allowance previously recorded and reversed $20.0 million of allowance during the six months ended June 30, 2023. As of June 30, 2023, the Santerre Mezzanine Loan is no longer outstanding.

Gain on Foreclosure of Real Estate

The gain of $29.1 million for the six months ended June 30, 2023 was recorded in connection with our equitization of the Santerre Mezzanine Loan on May 1, 2023 and is the excess of the fair value of the properties that secured the Santerre Mezzanine Loan, less the fair value of the CHC Mortgage Loan, less the principal amount of the Santerre Mezzanine Loan on May 1, 2023 (after the reversal of previously recorded allowances), and net of non-real estate assets and liabilities and transaction costs.

Other

The $31.1 million change in other expense was primarily due to an increase of $26.1 million in unrealized gain on the stock warrants received in connection with the Brookdale Senior Living lease modification in the third quarter of 2020. As of June 30, 2023, the fair value of the stock warrants was $40.5 million, which was $12.4 million higher than the value at the grant date.

Income (Loss) from Unconsolidated Entities

The $30.9 million change in income (loss) from unconsolidated entities for the six months ended June 30, 2023 compared to the same period in 2022 was primarily due to a $33.5 million gain recognized upon the sale of approximately 24% of our 9.8% ownership interest in Ardent to a third-party investor in May 2023.

Gain on Real Estate Dispositions

The $9.2 million increase in gain on real estate dispositions was primarily due to $11.6 million in gains during 2023 for the sale of six senior housing communities (three of which were vacant), five outpatient medical buildings, one research center and three triple-net leased properties (two of which were vacant), partially offset by a gain of $2.4 million in 2022 for the sale of a vacant land parcel.

Income Tax Benefit

The $12.6 million of income tax benefit for the six months ended June 30, 2023 was primarily due to losses in certain of our TRS entities and an $8.0 million benefit from internal restructurings of U.S. TRS entities. The $8.3 million of income tax benefit for the six months ended June 30, 2022 was primarily due to losses in certain of our TRS entities and a $2.0 million benefit from an internal restructuring of a U.S. TRS.

Non-GAAP Financial Measures

We consider certain non-GAAP financial measures to be useful supplemental measures of our operating performance. A non-GAAP financial measure is a measure of historical or future financial performance, financial position or cash flows that excludes or includes amounts that are not so excluded from or included in the most directly comparable measure calculated and presented in accordance with U.S. GAAP. Described below are the non-GAAP financial measures used by management to evaluate our operating performance and that we consider most useful to investors, together with reconciliations of these measures to the most directly comparable GAAP measures.

The non-GAAP financial measures we present in this Quarterly Report on Form 10-Q may not be comparable to those presented by other real estate companies due to the fact that not all real estate companies use the same definitions. You should not consider these measures as alternatives for, or superior to, financial measures calculated in accordance with GAAP. In order to facilitate a clear understanding of our consolidated historical operating results, you should examine these measures in conjunction with the most directly comparable GAAP measures as presented in our Consolidated Financial Statements and other financial data included elsewhere in this Quarterly Report on Form 10-Q.

Funds From Operations and Normalized Funds From Operations Attributable to Common Stockholders

Historical cost accounting for real estate assets implicitly assumes that the value of real estate assets diminishes predictably over time. However, since real estate values historically have risen or fallen with market conditions, many industry investors deem presentations of operating results for real estate companies that use historical cost accounting to be insufficient by themselves. For that reason, we consider Funds From Operations attributable to common stockholders (“FFO”) and Normalized FFO to be appropriate supplemental measures of operating performance of an equity REIT. We believe that the presentation of FFO, combined with the presentation of required GAAP financial measures, has improved the understanding of operating results of REITs among the investing public and has helped make comparisons of REIT operating results more meaningful. Management generally considers FFO to be a useful measure for understanding and comparing our operating results because, by excluding gains and losses related to sales of previously depreciated operating real estate assets, impairment losses on depreciable real estate and real estate asset depreciation and amortization (which can differ across owners of similar assets in similar condition based on historical cost accounting and useful life estimates), FFO can help investors compare the operating performance of a company’s real estate across reporting periods and to the operating performance of other companies. We believe that Normalized FFO is useful because it allows investors, analysts and our management to compare our operating performance to the operating performance of other real estate companies across periods on a consistent basis without having to account for differences caused by non-recurring items and other non-operational events such as transactions and litigation. In some cases, we provide information about identified non-cash components of FFO and Normalized FFO because it allows investors, analysts and our management to assess the impact of those items on our financial results.

We use the National Association of Real Estate Investment Trusts (“Nareit”) definition of FFO. Nareit defines FFO as net income attributable to common stockholders (computed in accordance with GAAP) excluding gains (or losses) from sales of real estate property, including gain (or loss) on re-measurement of equity method investments and impairment write-downs of depreciable real estate, plus real estate depreciation and amortization, and after adjustments for unconsolidated entities and noncontrolling interests. Adjustments for unconsolidated entities and noncontrolling interests will be calculated to reflect FFO on the same basis. We define Normalized FFO as Nareit FFO excluding the following income and expense items, without duplication: (a) transaction expenses and deal costs, including transaction, integration and severance-related costs and expenses, and amortization of intangibles, in each case net of noncontrolling interests’ share of these items and including Ventas’ share of these items from unconsolidated entities; (b) the impact of expenses related to asset impairment and valuation allowances, the write-off of unamortized deferred financing fees or additional costs, expenses, discounts, make-whole payments, penalties or premiums incurred as a result of early retirement or payment of our debt; (c) the non-cash effect of income tax benefits or expenses, the non-cash impact of changes to our executive equity compensation plan, derivative transactions that have non-cash mark-to-market impacts on our Consolidated Statements of Income and non-cash charges related to leases; (d) the financial impact of contingent consideration; (e) gains and losses for non-operational foreign currency hedge agreements and changes in the fair value of financial instruments; (f) gains and losses on non-real estate dispositions and other items related to

unconsolidated entities; (g) net expenses or recoveries related to materially disruptive events; and (h) other items set forth in the Normalized FFO reconciliation included herein.

The following table summarizes our FFO and Normalized FFO for the three and six months ended June 30, 2023 and 2022 (dollars in thousands). Normalized FFO for the six months ended June 30, 2023 over the same period in 2022 includes $34.0 million of HHS grants received in 2022, which reduced property-level operating expenses. Excluding HHS grants, Normalized FFO for the six months ended June 30, 2023 increased over the same period in 2022 due to increased net operating income from our properties led by our SHOP reportable business segment as a result of increased revenues driven by positive trends in occupancy and revenue per occupied room, partially offset by higher interest expense.

			For the Three Months Ended June 30,												For the Six Months Ended June 30,
			2023						2022						2023						2022
Net income (loss) attributable to common stockholders			$	103,453					$	(42,416)					$	120,970					$	(3,684)
Adjustments:
Depreciation and amortization on real estate assets			304,095						282,313						585,572						570,416
Depreciation on real estate assets related to noncontrolling interests			(4,344)						(4,335)						(8,721)						(8,784)
Depreciation on real estate assets related to unconsolidated entities			10,675						7,621						20,852						14,886
(Gain) loss on real estate dispositions			(1,405)						34						(11,606)						(2,421)
(Gain) loss on real estate dispositions related to noncontrolling interests			—						—						(5)						17
Gain on real estate dispositions related to unconsolidated entities			—						(301)						(180)						(301)
Nareit FFO attributable to common stockholders			412,474						242,916						706,882						570,129
Adjustments:
Change in fair value of financial instruments			(12,290)						37,837						(12,367)						7,956
Non-cash income tax expense			(11,535)						(5,379)						(15,807)						(11,184)
Loss (gain) on extinguishment of debt, net of noncontrolling interests and including Ventas’s share attributable to unconsolidated entities			(6,795)						7						(6,795)						7
Gain on transactions related to unconsolidated entities			(33,492)						—						(33,312)						(3)
Transaction expenses and deal costs, net of noncontrolling interests and including Ventas’ share attributable to unconsolidated entities			3,376						15,027						5,480						36,315
Amortization of other intangibles including Ventas’ share attributable to unconsolidated entities			96						268						192						536
Other items related to unconsolidated entities			1,006						(1,285)						2,093						(1,154)
Non-cash impact of changes to equity plan			(2,402)						(2,389)						4,820						4,817
Materially disruptive events, net and including Ventas’ share attributable to unconsolidated entities			(6,902)						2,074						(2,716)						(1,635)
Allowance on loan investments and impairment of unconsolidated entities, net of noncontrolling interests			(12,064)						(61)						(20,127)						(114)
Gain on foreclosure of real estate			(29,127)						—						(29,127)						—
Normalized FFO attributable to common stockholders			$	302,345					$	289,015					$	599,216					$605,670

NOI

We also consider NOI an important supplemental measure because it allows investors, analysts and our management to assess our unlevered property-level operating results and to compare our operating results with those of other real estate companies and between periods on a consistent basis. We define NOI as total revenues, less interest and other income, property-level operating expenses and third party capital management expenses.

The following table sets forth a reconciliation of net income attributable to common stockholders to NOI (dollars in thousands):

			For the Three Months Ended June 30,												For the Six Months Ended June 30,
			2023						2022						2023						2022
Net income (loss) attributable to common stockholders			$	103,453					$	(42,416)					$	120,970					$	(3,684)
Adjustments:
Interest and other income			(1,032)						(1,166)						(2,775)						(1,702)
Interest expense			143,265						113,951						271,340						224,745
Depreciation and amortization			304,689						283,075						586,808						572,139
General, administrative and professional fees			34,399						32,915						79,197						75,913
(Gain) loss on extinguishment of debt, net			(6,801)						7						(6,801)						7
Transaction expenses and deal costs			3,069						13,078						4,455						33,070
Allowance on loans receivable and investments			(12,065)						(62)						(20,129)						(116)
Gain on foreclosure of real estate			(29,127)						—						(29,127)						—
Other			(17,959)						48,116						(10,197)						20,926
Net income attributable to noncontrolling interests			1,613						1,214						3,008						3,074
(Income) loss from unconsolidated entities			(31,254)						1,047						(25,631)						5,316
Income tax benefit			(9,773)						(3,790)						(12,575)						(8,280)
(Gain) loss on real estate dispositions			(1,405)						34						(11,606)						(2,421)
NOI			$	481,072					$	446,003					$	946,937					$	918,987

See “Results of Operations” for discussions regarding both NOI and same-store NOI. We define same-store as properties owned, consolidated and operational for the full period in both comparison periods and that are not otherwise excluded; provided, however, that we may include selected properties that otherwise meet the same-store criteria if they are included in substantially all of, but not a full, period for one or both of the comparison periods, and in our judgment such inclusion provides a more meaningful presentation of our segment performance.

Newly acquired development properties and recently developed or redeveloped properties in our SHOP reportable business segment will be included in same-store once they are stabilized for the full period in both periods presented. These properties are considered stabilized upon the earlier of (a) the achievement of 80% sustained occupancy or (b) 24 months from the date of acquisition or substantial completion of work. Recently developed or redeveloped properties in our outpatient medical and research portfolio and triple-net leased properties reportable business segments will be included in same-store once substantial completion of work has occurred for the full period in both periods presented. Our senior housing operating portfolio and triple-net leased properties that have undergone operator or business model transitions will be included in same-store once operating under consistent operating structures for the full period in both periods presented.

Properties are excluded from same-store if they are: (i) sold, classified as held for sale or properties whose operations were classified as discontinued operations in accordance with GAAP; (ii) impacted by materially disruptive events such as flood or fire; (iii) for SHOP, those properties that are currently undergoing a materially disruptive redevelopment; (iv) for our outpatient medical and research portfolio and triple-net leased properties reportable business segments, those properties for which management has an intention to institute, or has instituted, a redevelopment plan because the properties may require major property-level expenditures to maximize value, increase NOI, or maintain a market-competitive position and/or achieve property stabilization, most commonly as the result of an expected or actual material change in occupancy or NOI; or (v) for SHOP and triple-net leased properties reportable business segments, those properties that are scheduled to undergo operator or business model transitions, or have transitioned operators or business models after the start of the prior comparison period.

To eliminate the impact of exchange rate movements, all portfolio performance-based disclosures assume constant exchange rates across comparable periods, using the following methodology: the current period’s results are shown in actual reported USD, while prior comparison period’s results are adjusted and converted to USD based on the average exchange rate for the current period.

Liquidity and Capital Resources

Our principal sources of liquidity are cash flows from operations, proceeds from the issuance of debt and equity securities, borrowings under our unsecured revolving credit facility and commercial paper program, and proceeds from asset sales.

For the next 12 months, our principal liquidity needs are to: (i) fund operating expenses; (ii) meet our debt service requirements; (iii) repay maturing mortgage and other debt; (iv) fund acquisitions, investments and commitments and any development and redevelopment activities; (v) fund capital expenditures; and (vi) make distributions to our stockholders and unitholders, as required for us to continue to qualify as a REIT. Depending upon the availability of external capital, we believe our liquidity is sufficient to fund these uses of cash. We expect that these liquidity needs generally will be satisfied by a combination of the following: cash flows from operations, cash on hand, debt assumptions and financings (including secured financings), issuances of debt and equity securities, dispositions of assets (in whole or in part through joint venture arrangements with third parties) and borrowings under our revolving credit facilities and commercial paper program. However, an inability to access liquidity through multiple capital sources concurrently could have a material adverse effect on us.

Our material contractual obligations arising in the normal course of business primarily consist of long-term debt and related interest payments, and operating obligations which include ground lease obligations. During the six months ended June 30, 2023, our contractual obligations increased primarily due to the issuance of $862.5 million aggregate principal amount of 3.75% Exchangeable Senior Notes due 2026. See “Note 9 – Senior Notes Payable And Other Debt” of the Notes to Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for further information regarding our significant debt activities.

We may, from time to time, seek to retire or purchase our outstanding indebtedness for cash or in exchange for equity securities in open market purchases, privately negotiated transactions or otherwise. Such repurchases or exchanges, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions, prospects for capital and other factors. The amounts involved may be material.

Loans Receivable and Investments

On May 1, 2023, we took ownership of the properties that supported the Santerre Mezzanine Loan by converting the outstanding principal amount of the Santerre Mezzanine Loan to equity, with no additional consideration being paid. As a result, the Santerre Mezzanine Loan is no longer outstanding.

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

As of June 30, 2023, we had $2.7 billion of undrawn capacity on our unsecured revolving credit facility with $35.0 million outstanding and an additional $1.2 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.

As of June 30, 2023, our $100.0 million uncommitted line for standby letters of credit had an outstanding balance of $14.7 million. The agreement governing the line contains certain customary covenants and, under its terms, we are required to pay a commission on each outstanding letter of credit at a fixed rate.

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 June 30, 2023, we had $135.0 million in borrowings outstanding under our commercial paper program.

As of June 30, 2023, we had a C$500 million unsecured term loan facility priced at Canadian Dollar Offered Rate (“CDOR”) plus 0.90% that matures in 2025.

Exchangeable Senior Notes

In June 2023, Ventas Realty issued $862.5 million aggregate principal amount of its 3.75% Exchangeable Senior Notes due 2026 (the “Exchangeable Notes”) in a private placement. The Exchangeable Notes are senior, unsecured obligations of Ventas Realty and are fully and unconditionally guaranteed on an unsecured and unsubordinated basis by Ventas. The Exchangeable Notes bear interest at a rate of 3.75% per year, payable semi-annually in arrears on June 1 and December 1 of each year, beginning on December 1, 2023. The Exchangeable Notes mature on June 1, 2026, unless earlier exchanged, redeemed or repurchased. The net proceeds from the Exchangeable Notes were primarily used to repay the CHC Mortgage Loan. As of June 30, 2023, we had $862.5 million aggregate principal amount of the Exchangeable Notes outstanding.

The Exchangeable Notes are exchangeable at an initial exchange rate of 18.2460 shares of our common stock per $1,000 principal amount of Exchangeable Notes (equivalent to an initial exchange price of approximately $54.81 per share of common stock). The initial exchange rate is subject to adjustment, including in the event of the payment of a quarterly dividend in excess of $0.45 per share, but will not be adjusted for any accrued and unpaid interest. Upon exchange of the Exchangeable Notes, Ventas Realty will pay cash up to the aggregate principal amount of the Exchangeable Notes to be exchanged and pay or deliver (or cause to be delivered), as the case may be, cash, shares of common stock or a combination of cash and shares of common stock, at Ventas Realty’s election, in respect of the remainder, if any, of its exchange obligation in excess of the aggregate principal amount of the Exchangeable Notes being exchanged. Prior to the close of business on the business day immediately preceding March 1, 2026, the Exchangeable Notes will be exchangeable at the option of the noteholders only upon the satisfaction of specified conditions and during certain periods described in the indenture governing the Exchangeable Notes. On or after March 1, 2026, until the close of business on the business day immediately preceding the maturity date, the Exchangeable Notes will be exchangeable at the option of the noteholders at any time regardless of these conditions or periods.

Senior Notes

In April 2023, our 100% owned subsidiary, Ventas Canada Finance Limited (“Ventas Canada”), issued and sold C$600.0 million aggregate principal amount of 5.398% Senior Notes due 2028 in a private placement at par. Pursuant to cash tender offers, we used the proceeds to repurchase C$613.7 million in aggregate principal amount of outstanding senior notes due in 2024 for an aggregate purchase price of C$600.0 million plus accrued and unpaid interest as disclosed below:

• In April 2023, we repurchased C$527.0 million principal amount of our 2.80% Senior Notes, Series E due April 2024 at 97.6% of par value, plus accrued and unpaid interest to, but not including, the settlement date.

• In April 2023, we repurchased C$86.7 million principal amount of our 4.125% Senior Notes, Series B due September 2024 at 98.5% of par value, plus accrued and unpaid interest to, but not including, the settlement date.

As a result of the tender offers, we recognized a gain on extinguishment of debt of $8.3 million in our Consolidated Statements of Income for both the three and six months ended June 30, 2023.

Mortgages

In March 2023, we entered into a C$271.8 million floating rate mortgage loan maturing in 2028 with an interest rate of CDOR + 0.88%. The mortgage is secured by 14 SHOP communities in Canada.

On May 1, 2023, we took ownership of the properties that supported the Santerre Mezzanine Loan by converting the outstanding principal amount of the Santerre Mezzanine Loan to equity, with no additional consideration being paid. The properties consisted of a diverse pool of 153 assets, which, at the time, also secured the CHC Mortgage Loan. At the time of the equitization of the Santerre Mezzanine Loan, there was $1 billion outstanding under the CHC Mortgage Loan and it accrued interest at a weighted average rate of LIBOR + 1.84% and had matured on June 9, 2023. The CHC Mortgage Loan was recorded at fair value, which approximates par, on May 1, 2023.

On June 8, 2023, we voluntary prepaid, without penalty, $656.6 million of the CHC Mortgage Loan. In connection with the prepayment, 83 properties were released from the collateral securing the CHC Mortgage Loan. As of June 30, 2023, $360.2 million remained outstanding under the CHC Mortgage Loan, which was secured by 70 outpatient medical buildings, triple-net leased skilled nursing facilities and hospital assets in the United States.

On June 9, 2023, we extended the maturity date of the CHC Mortgage Loan to June 9, 2024 and amended the CHC Mortgage Loan to replace its LIBOR-based rates with SOFR-based rates. As of June 30, 2023, the CHC Mortgage Loan had a weighted average rate of SOFR + 2.69%.

In July 2023, we provided notice that we intend to repay the full balance of the CHC Mortgage Loan in August 2023.

In July 2023, we entered into a $426.8 million fixed rate mortgage loan, which accrues interest at 5.91%, matures in 2033 and is secured by 19 SHOP communities in the United States.

Equity Offerings

From time to time, we may sell our common stock under an “at-the-market” equity offering program (“ATM program”). During the six months ended June 30, 2023, we sold 0.5 million shares of our common stock under our ATM program for gross proceeds of $25.6 million, representing an average price of $46.93 per share. As of June 30, 2023, the remaining amount available under our ATM program for future sales of common stock was $974.4 million.

In July 2023, we sold 1.8 million shares of our common stock under our ATM program for gross proceeds of $84.8 million, representing an average price of $48.19 per share. As of July 31, 2023, the remaining amount available under our ATM program for future sales of common stock was $889.6 million.

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.

In the first quarter of 2023, we hedged an incremental $200.0 million of variable rate debt to fixed rate debt through the execution in March 2023 of two-year $400.0 million notional swaps on our unsecured term loan due in 2027, replacing a $200.0 million notional swap that matured in January 2023. The swap instruments are designated as cash flow hedges.

In March 2023, in connection with our new C$271.8 million mortgage loan, we entered into an interest rate swap totaling a notional amount of C$271.8 million with a maturity of March 14, 2028 that effectively converts CDOR-based floating rate debt to fixed rate debt.

In March and April 2023, we entered into a total of $250.0 million aggregate forward starting swaps with a ten-year weighted average rate of 3.37%:

• In March 2023, we entered into a total of $200.0 million of notional forward starting swaps that reduced our exposure to fluctuations in interest rates related to changes in rates between the trade dates of the swaps and the forecasted issuance of long-term debt. The rate on the notional amounts was locked at a ten-year weighted average rate of 3.41%. The forward-starting interest rate swap instruments are designated as cash flow hedges.

• In April 2023, we entered into a total of $50.0 million of notional forward starting swaps that reduced our exposure to fluctuations in interest rates related to changes in rates between the trade dates of the swap and the forecasted issuance of long-term debt. The rate on the notional amounts was locked at a ten-year weighted average rate of 3.17%. The forward-starting interest rate swap instruments are designated as cash flow hedges.

*•*In July 2023, we terminated the above-mentioned forward starting swaps in conjunction with the issuance of the $426.8 million fixed rate mortgage loan due in 2033.

On May 1, 2023, in connection with taking ownership of the properties securing the Santerre Mezzanine Loan, which was collateral for the CHC Mortgage Loan, we also took ownership of existing interest rate caps based on LIBOR with an aggregate notional amount of $1.5 billion that expired in June 2023. On June 5, 2023, in connection with the extension of the maturity date of the CHC Mortgage Loan, we purchased interest rate caps with a total notional value of $360.2 million that expire in June 2024. The objective of the interest rate caps is to offset the variability of cash flows in the CHC Mortgage Loan interest payments attributable to fluctuations in SOFR beyond 9.42%.

Dividends

During the six months ended June 30, 2023, we declared a dividend of $0.45 per share of our common stock in each of the first and second quarter. In order to continue to qualify as a REIT, we must make annual distributions to our stockholders of at least 90% of our REIT taxable income (excluding net capital gain). In addition, we will be subject to income tax at the regular corporate rate to the extent we distribute less than 100% of our REIT taxable income, including any net capital gains. We intend to pay dividends greater than 100% of our taxable income, after the use of any net operating loss carryforwards, for 2023.

We expect that our cash flows will exceed our REIT taxable income due to depreciation and other non-cash deductions in computing REIT taxable income and that we will be able to satisfy the 90% distribution requirement. However, from time to time, we may not have sufficient cash on hand or other liquid assets to meet this requirement or we may decide to retain cash or distribute such greater amount as may be necessary to avoid income and excise taxation. If we do not have sufficient cash on hand or other liquid assets to enable us to satisfy the 90% distribution requirement, or if we desire to retain cash, we may borrow funds, issue additional equity securities, pay taxable stock dividends, if possible, distribute other property or securities or engage in a transaction intended to enable us to meet the REIT distribution requirements or any combination of the foregoing.

Cash Flows

The following table sets forth our sources and uses of cash flows for the six months ended June 30, 2023 and 2022 (dollars in thousands):

			For the Six Months Ended June 30,												(Decrease) Increase to Cash
			2023						2022						$						%
Cash, cash equivalents and restricted cash at beginning of period			$	170,745					$	196,597					$	(25,852)					(13.1)%
Net cash provided by operating activities			554,644						552,632						2,012						0.4
Net cash used in investing activities			(127,607)						(559,260)						431,653						77.2
Net cash used in financing activities			(388,085)						(12,946)						(375,139)						nm
Effect of foreign currency translation			650						(992)						1,642						165.5
Cash, cash equivalents and restricted cash at end of period			$	210,347					$	176,031					$	34,316					19.5

---

nm - not meaningful

Cash Flows from Operating Activities

Cash flows from operating activities increased $2.0 million during the six months ended June 30, 2023 compared to the same period in 2022 primarily due to higher property NOI in 2023, and higher transaction expenses and deal costs in 2022 in connection with stockholder relations matters, partially offset by higher interest expense and no HHS grants received in 2023.

Cash Flows from Investing Activities

Net cash used in investing activities decreased $431.7 million during the six months ended June 30, 2023 compared to the same period in 2022 primarily due to higher acquisition volume in 2022, and higher proceeds from real estate dispositions and sale of approximately 24% of our ownership interest in Ardent in 2023, partially offset by higher capital expenditures in 2023.

Cash Flows from Financing Activities

Net cash used in financing activities increased $375.1 million during the six months ended June 30, 2023 compared to the same period in 2022 primarily due to higher repayments under our commercial paper program in 2023.

Capital Expenditures

The terms of our triple-net leases generally obligate our tenants to pay all capital expenditures necessary to maintain and improve our triple-net leased properties. However, from time to time, we may fund the capital expenditures for our triple-net leased properties through loans or advances to the tenants, which may increase the amount of rent payable with respect to the properties in certain cases. We may also fund capital expenditures for which we may become responsible upon expiration of our triple-net leases or in the event that our tenants are unable or unwilling to meet their obligations under those leases. We also expect to fund capital expenditures related to our SHOP and outpatient medical and research portfolio reportable business segments with the cash flows from the properties or through additional borrowings. We expect that these liquidity needs generally will be satisfied by a combination of the following: cash flows from operations, cash on hand, debt assumptions and financings (including secured financings), issuances of debt and equity securities, dispositions of assets (in whole or in part through joint venture arrangements with third parties) and borrowings under our revolving credit facilities and commercial paper program.

To the extent that unanticipated capital expenditure needs arise or significant borrowings are required, our liquidity may be affected adversely. Our ability to borrow additional funds may be restricted in certain circumstances by the terms of the instruments governing our outstanding indebtedness.

We are party to certain agreements that obligate us to develop senior housing or healthcare properties funded through capital that we and, in certain circumstances, our joint venture partners provide. As of June 30, 2023, we had seven active and committed projects pursuant to these agreements, including three projects that are unconsolidated.

In addition, from time to time, we engage in redevelopment projects with respect to our existing senior housing communities to maximize the value, increase NOI, maintain a market-competitive position, achieve property stabilization or change the primary use of the property.

Off-Balance Sheet Arrangements

We own interests in certain unconsolidated entities as described in “Note 6 – Investments In Unconsolidated Entities.” Except in limited circumstances, our risk of loss is limited to our investment in the joint venture and any outstanding loans receivable. In addition, we have certain properties which serve as collateral for debt that is owed by a previous owner of certain of our facilities, as described under “Note 9 – Senior Notes Payable And Other Debt” to the Consolidated Financial Statements. Our risk of loss for these certain properties is limited to the outstanding debt balance plus penalties, if any. Further, we use financial derivative instruments to hedge interest rate and foreign currency exchange rate exposure. Finally, at June 30, 2023, we had $15.8 million outstanding letters of credit obligations. We have no other material off-balance sheet arrangements that we expect would materially affect our liquidity and capital resources except those described above.

Guarantor and Issuer Financial Information

Ventas, Inc. has fully and unconditionally guaranteed the obligation to pay principal and interest with respect to the outstanding senior notes issued by our 100% owned subsidiary, Ventas Realty. None of our other subsidiaries is obligated with respect to Ventas Realty’s outstanding senior notes.

Ventas, Inc. has also fully and unconditionally guaranteed the obligation to pay principal and interest with respect to the outstanding senior notes, including the Exchangeable Notes, issued by our 100% owned subsidiary, Ventas Canada Finance Limited (“Ventas Canada”). None of our other subsidiaries is obligated with respect to Ventas Canada’s outstanding senior notes, all of which were issued on a private placement basis in Canada.

In connection with the acquisition of Nationwide Health Properties, Inc. (“NHP”), our 100% owned subsidiary Nationwide Health Properties, LLC (“NHP LLC”), as successor to NHP, assumed the obligation to pay principal and interest with respect to the outstanding senior notes issued by NHP. Neither we nor any of our subsidiaries (other than NHP LLC) is obligated with respect to any of NHP LLC’s outstanding senior notes.

In addition, Ventas, Inc. has fully and unconditionally guaranteed the obligations under our $2.75 billion unsecured revolving credit facility, our C$500.0 million unsecured term loan facility, the New Credit Agreement and our $100.0 million uncommitted line for standby letters of credit.

Under certain circumstances, contractual and legal restrictions, including those contained in the instruments governing our subsidiaries’ outstanding mortgage indebtedness, may restrict our ability to obtain cash from our subsidiaries for the

purpose of meeting our debt service obligations, including our payment guarantees with respect to Ventas Realty’s and Ventas Canada’s senior notes.

The following summarizes our guarantor and issuer balance sheet and statement of income information as of June 30, 2023 and December 31, 2022 and for the six months ended June 30, 2023 and the year ended December 31, 2022 (in thousands) for each of Ventas Realty, as issuer of certain notes registered under the Exchange Act, and Ventas, Inc., on an unconsolidated basis, as guarantor of such notes:

Balance Sheet Information

			As of June 30, 2023
			Guarantor						Issuer
Assets
Investment in and advances to affiliates			$	17,762,125					$	3,049,374
Total assets			17,840,054						3,165,555
Liabilities and equity
Intercompany loans			12,099,497						(4,311,414)
Total liabilities			12,320,462						4,363,280
Redeemable OP unitholder and noncontrolling interests			104,938						—
Total equity (deficit)			5,414,654						(1,197,725)
Total liabilities and equity			17,840,054						3,165,555

			As of December 31, 2022
			Guarantor						Issuer
Assets
Investment in and advances to affiliates			$	17,691,107					$	3,049,374
Total assets			17,752,892						3,155,014
Liabilities and equity
Intercompany loans			11,704,160						(3,825,402)
Total liabilities			11,925,997						4,263,316
Redeemable OP unitholder and noncontrolling interests			102,148						—
Total equity (deficit)			5,724,747						(1,108,302)
Total liabilities and equity			17,752,892						3,155,014

Statement of Income Information

			For the Six Months Ended June 30, 2023
			Guarantor						Issuer
Equity earnings in affiliates			$	108,898					$	—
Total revenues			110,213						71,753
Income (loss) before unconsolidated entities, real estate dispositions, income taxes and noncontrolling interests			122,327						(101,857)
Net income (loss)			120,970						(101,857)
Net income (loss) attributable to common stockholders			120,970						(101,857)

			For the Year Ended December 31, 2022
			Guarantor						Issuer
Equity earnings in affiliates			$	43,317					$	—
Total revenues			45,037						145,560
Loss before unconsolidated entities, real estate dispositions, income taxes and noncontrolling interests			(45,383)						(173,407)
Net loss			(47,447)						(173,407)
Net loss attributable to common stockholders			(47,447)						(173,407)