Cautionary Statements

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

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 (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). All statements regarding our or our tenants', operators', managers' or borrowers' expected future financial position, results of operations, cash flows, funds from operations, dividends and dividend plans, financing plans, business strategy, budgets, projected costs, capital expenditures, competitive positions, acquisitions, investment opportunities, merger integration, growth opportunities, dispositions, expected lease income, continued qualification as a real estate investment trust ("REIT"), plans and objectives of management for future operations and statements that include words such as "anticipate," "if," "believe," "plan," "estimate," "expect," "intend," "may," "could," "should," "will" and other similar expressions are forward-looking statements. These forward-looking statements are inherently uncertain, and security holders must recognize that actual results may differ from our expectations. We do not undertake a duty to update these forward-looking statements, which speak only as of the date on which they are made.

Our actual future results and trends may differ materially depending on a variety of factors discussed in our filings with the Securities and Exchange Commission (the "Commission"). These factors include without limitation:

• The ability and willingness of our operators, tenants, borrowers, managers and other third parties to meet and/or perform the obligations under their respective contractual arrangements with us, including, in some cases, their obligations to indemnify, defend and hold us harmless from and against various claims, litigation and liabilities;

• The ability of our operators, tenants, borrowers and managers to maintain the financial strength and liquidity necessary to satisfy their respective obligations and liabilities to third parties, including without limitation obligations under their existing credit facilities and other indebtedness;

• Our success in implementing our business strategy and our ability to identify, underwrite, finance, consummate and integrate diversifying acquisitions or investments, including those in different asset types and outside the United States;

• The nature and extent of future competition;

• The extent of future or pending healthcare reform and regulation, including cost containment measures and changes in reimbursement policies, procedures and rates;

• Increases in our cost of borrowing as a result of changes in interest rates and other factors;

• The ability of our operators and managers, as applicable, to deliver high quality services, to attract and retain qualified personnel and to attract residents and patients;

• The results of litigation affecting us;

• Changes in general economic conditions and/or economic conditions in the markets in which we may, from time to time, compete, and the effect of those changes on our revenues and our ability to access the capital markets or other sources of funds;

• Our ability to pay down, refinance, restructure and/or extend our indebtedness as it becomes due;

• Final determination of our taxable net income for the year ending December 31, 2009;

• The ability and willingness of our tenants to renew their leases with us upon expiration of the leases and our ability to reposition our properties on the same or better terms in the event such leases expire and are not renewed by our tenants or in the event we exercise our right to replace an existing tenant upon a default;

• Risks associated with our senior living operating portfolio, such as factors causing volatility in our operating income and earnings generated by our properties, including without limitation national and regional economic conditions, costs of materials, energy, labor and services, employee benefit costs, insurance costs and professional and general liability claims, and the timely delivery of accurate property-level financial results for those properties;

• The movement of U.S. and Canadian exchange rates;

• Year-over-year changes in the Consumer Price Index and the effect of those changes on the rent escalators, including the rent escalator for Master Lease 2 with Kindred Healthcare, Inc. (together with its subsidiaries, "Kindred"), and our earnings;

• Our ability and the ability of our operators, tenants, borrowers and managers to obtain and maintain adequate liability and other insurance from reputable and financially stable providers;

• The impact of increased operating costs and uninsured professional liability claims on the liquidity, financial condition and results of operations of our operators, tenants, borrowers and managers and the ability of our operators, tenants, borrowers and managers to accurately estimate the magnitude of those claims;

• The ability and willingness of the lenders under our unsecured revolving credit facilities to fund, in whole or in part, borrowing requests made by us from time to time;

• The impact of market or issuer events on the liquidity or value of our investments in marketable securities; and

• The impact of any financial, accounting, legal or regulatory issues that may affect our major tenants, operators or managers.

Many of these factors are beyond our control and the control of our management.

Kindred, Sunrise and Brookdale Senior Living Information

Each of Kindred, Sunrise Senior Living, Inc. (together with its subsidiaries, "Sunrise") and Brookdale Senior Living Inc. (together with its subsidiaries, which include Brookdale Living Communities, Inc. ("Brookdale") and Alterra Healthcare Corporation ("Alterra"), "Brookdale Senior Living") is subject to the reporting requirements of the Commission and is required to file with the Commission annual reports containing audited financial information and quarterly reports containing unaudited financial information. The information related to Kindred, Sunrise and Brookdale Senior Living contained or referred to in this Quarterly Report on Form 10-Q is derived from filings made by Kindred, Sunrise or Brookdale Senior Living, as the case may be, with the Commission or other publicly available information, or has been provided to us by Kindred, Sunrise or Brookdale Senior Living. We have not verified this information either through an independent investigation or by reviewing Kindred's, Sunrise's or Brookdale Senior Living's public filings. We have no reason to believe that this information is inaccurate in any material respect, but we cannot assure you that all of this information is accurate. Kindred's, Sunrise's and Brookdale Senior Living's filings with the Commission can be found at the Commission's website at www.sec.gov. We are providing this data for informational purposes only, and you are encouraged to obtain Kindred's, Sunrise's and Brookdale Senior Living's publicly available filings from the Commission.

Background Information

We are a REIT with a geographically diverse portfolio of seniors housing and healthcare properties in the United States and Canada. As of September 30, 2009, this portfolio consisted of 501 assets: 243 seniors housing communities, 187 skilled nursing facilities, 40 hospitals and 31 medical office buildings ("MOBs") and other properties in 43 states and two Canadian provinces. With the exception of our seniors housing communities that are managed by Sunrise pursuant to long-term management agreements and the majority of our MOBs, we lease our properties to healthcare operating companies under "triple-net" or "absolute-net" leases, which require the tenants to pay all property-related expenses. We also had real estate loan investments relating to seniors housing and healthcare companies as of September 30, 2009.

We conduct substantially all of our business through our wholly owned subsidiaries, Ventas Realty, Limited Partnership ("Ventas Realty"), PSLT OP, L.P. and Ventas SSL, Inc. Our primary business consists of acquiring, financing and owning seniors housing and healthcare properties and leasing those properties to third parties or operating those properties through independent third-party managers.

Our business strategy is comprised of three principal objectives: (1) portfolio diversification; (2) stable earnings and growth; and (3) maintaining a strong balance sheet and liquidity.

As of September 30, 2009, approximately 39.3%, 22.2% and 14.3% of our properties, based on the gross book value of real estate investments, were managed or operated by Sunrise, Brookdale Senior Living and Kindred, respectively. Approximately 44.5%, 12.9% and 26.5% of our total revenues and 20.5%, 19.1% and 38.6% of our total net operating income ("NOI") (including amounts in discontinued operations) for the nine months ended September 30, 2009 were attributable to senior living operations managed by Sunrise, our leases with Brookdale Senior Living and our master lease agreements with Kindred (the "Kindred Master Leases"), respectively. Seniors housing communities and skilled nursing facilities constituted approximately 75.0% and 12.8%, respectively, of our portfolio, based on the gross book value of real estate investments, as of September 30, 2009.

Recent Developments

Sunwest Update

On September 30, 2009, we completed the non-judicial foreclosure of a seniors housing community located in Merced, California related to one of our outstanding first mortgage loans to an affiliate of Sunwest Management, Inc. (the "Sunwest Loans"). The property was placed in state court receivership on December 1, 2008 as a result of default by the borrowers on certain of their obligations under the Sunwest Loans. Immediately upon foreclosure, we completed the sale of the property to an affiliate of one of our existing tenants for approximately $6.3 million. In connection with the sale, we provided $5.0 million of first mortgage financing to the purchaser, secured by, among other things, the property, and received cash consideration of $1.2 million after expenses. The loan matures in September 2012, bears interest at a variable rate of 30-day LIBOR plus 6.5% per annum and is guaranteed by our tenant. We did not recognize any gain or loss as a result of this transaction.

Kindred Update

On April 30, 2009, Kindred renewed, through April 30, 2015, its leases covering 109 healthcare assets owned by us (one of which we subsequently sold in June 2009 (see below)) whose initial base term will expire on April 30, 2010. The assets whose lease term has been extended include 87 skilled nursing facilities (including the one sold) and 22 long-term acute care hospitals that are contained within ten different renewal bundles in the Kindred Master Leases. Kindred retains two sequential renewal options for these assets.

In June 2009, we sold six skilled nursing facilities to Kindred for total consideration of $58.0 million, consisting of $55.7 million aggregate sales price and a $2.3 million lease termination fee. The proceeds from the

sale are currently being held in an Internal Revenue Code Section 1031 exchange escrow account with a qualified intermediary. Cash rent for these assets for the May 1, 2008 to April 30, 2009 lease year was approximately $5.6 million. We recognized a net gain on the sale of these assets of $38.9 million in the second quarter of 2009. Upon closing, each of the six facilities sold was removed from the Kindred Master Leases. One of the assets sold was included among the assets whose base term was renewed by Kindred to 2015 and the remaining five assets sold had lease terms expiring April 30, 2013.

Senior Notes and Common Stock Offerings

In April 2009, we completed the sale of $200.0 million aggregate principal amount of 6 1/2% senior notes due 2016 (the "2016 Notes") of Ventas Realty and a wholly owned subsidiary, Ventas Capital Corporation ("Ventas Capital" and together with Ventas Realty, the "Issuers"), in an underwritten public offering pursuant to our shelf registration statement. In April 2009, we also completed the sale of 13,062,500 shares of our common stock in an underwritten public offering pursuant to our shelf registration statement. We used the net proceeds from the offerings ($465.7 million) to fund our cash tender offers with respect to certain outstanding series of senior notes issued by the Issuers (described below), to repay debt and for general corporate purposes.

Debt Repayments, Purchases and Tender Offers

During the nine months ended September 30, 2009, we purchased in open market transactions and/or through cash tender offers $361.6 million of our senior notes composed of: $121.6 million principal amount of our outstanding 6 3/4% senior notes due 2010, $109.4 million principal amount of our outstanding 9% senior notes due 2012, $103.3 million principal amount of our outstanding 6 5/8% senior notes due 2014 and $27.3 million principal amount of our outstanding 7 1/8% senior notes due 2015. We recognized a net loss on extinguishment of debt of $0 and $6.1 million for the three and nine months ended September 30, 2009, respectively, related to these transactions.

We also repaid in full, at par, $49.8 million principal amount of our outstanding 8 3/4% senior notes due 2009 at maturity on May 1, 2009, and we repaid $7.1 million and $82.6 million in mortgage debt during the three and nine months ended September 30, 2009, respectively.

We funded these repayments, purchases and tender offers with the net proceeds from the sale of the 2016 Notes, our concurrent offering of common stock and cash on hand. See "Note 11-Capital Stock" of the Notes to Consolidated Financial Statements included in Item 1 of this Quarterly Report on Form 10-Q.

Government Regulation

Medicare Reimbursement; Long-Term Acute Care Hospitals

On July 31, 2009, CMS placed on public display for August 27, 2009 publication its final rule updating the prospective payment system for long-term acute care hospitals (LTAC PPS) for the 2010 fiscal year (October 1, 2009 through September 30, 2010), including setting the LTAC PPS standard federal payment rate for long-term acute care hospitals. CMS estimates that net payments to long-term acute care hospitals under the final rule would increase by approximately 3.3% in fiscal year 2010.

In the rule placed on public display on July 31, 2009 for August 27, 2009 publication, CMS also finalized the rule revising the severity-adjusted diagnosis-related group relative payment weights for all discharges from long-term acute care hospitals from June 3, 2009 through the remainder of the 2009 fiscal year (September 30, 2009) to correct an error in CMS's calculation of the budget neutrality factor.

We are currently analyzing the financial implications of this final rule on the operators of our long-term acute care hospitals.

We cannot assure you that this rule or other future updates to LTAC PPS or Medicare reimbursement for long-term acute care hospitals will not materially adversely affect our operators, which, in turn, could have a material adverse effect on our business, financial condition, results of operations and liquidity, on our ability to service our indebtedness and other obligations and on our ability to make distributions to our stockholders, as required for us to continue to qualify as a REIT (a "Material Adverse Effect").

Medicare Reimbursement; Skilled Nursing Facilities

On July 31, 2009, CMS issued its final rule updating the prospective payment system for skilled nursing facilities (SNF PPS) for the 2010 fiscal year (October 1, 2009 through September 30, 2010). Under the final rule, the update to the SNF PPS standard federal payment rate for skilled nursing facilities includes a 2.2% increase in the market basket index for the 2010 fiscal year. The final rule also provides a recalibration in the case-mix indexes for the resource utilization groups (RUGs) used to determine the daily payment for beneficiaries in skilled nursing facilities that is expected to reduce payments to skilled nursing facilities by 3.3% in fiscal year 2010. CMS estimates that net payments to skilled nursing facilities as a result of the market basket increase and the recalibration in the case-mix indexes for RUGS under the final rule would decrease by approximately $360 million, or 1.1%, in fiscal year 2010.

The final rule includes other changes that may additionally affect net payments to skilled nursing facilities, including, by way of example, implementation of the RUG-IV classification model for fiscal year 2011 and possible new requirements for the quarterly reporting of nursing home staffing data. We are currently analyzing the financial implication of this final rule on the operators of our skilled nursing facilities.

We cannot assure you that this rule or other future updates to SNF PPS or Medicare reimbursement for skilled nursing facilities will not materially adversely affect our operators, which, in turn, could have a Material Adverse Effect on us.

Healthcare Reform

There are currently pending various comprehensive reform initiatives that could transform the healthcare system in the United States. Both the U.S. House of Representatives and the U.S. Senate are considering reform bills that address a number of issues, including healthcare cost-saving measures. Many of the proposals could or would affect private healthcare programs. Future healthcare reform or legislation or changes in the administration or implementation of governmental and non-governmental healthcare reimbursement programs could have a material adverse effect on our operators' liquidity, financial condition or results of operations, which could adversely affect their ability to satisfy their obligations to us and which, in turn, could have a Material Adverse Effect on us.

Critical Accounting Policies and Estimates

Our Consolidated Financial Statements included in Item 1 of this Quarterly Report on Form 10-Q have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP"), which requires us to make estimates and judgments about future events that affect the reported amounts in the financial statements and the related disclosures. We base estimates on our experience and on various other assumptions believed to be reasonable under the circumstances. These judgments affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. If our judgment or interpretation of the facts and circumstances relating to various transactions or other matters had been different, it is possible that different accounting treatment would have been applied, resulting in a different presentation of our financial statements. From time to time, we re-evaluate our estimates and assumptions. In the event estimates or assumptions prove to be different from actual results, adjustments are made in subsequent periods to reflect more current estimates and assumptions about matters that are inherently uncertain. The critical accounting policies used in the preparation

of our Consolidated Financial Statements included in Item 1 of this Quarterly Report on Form 10-Q are described in our consolidated financial statements and notes thereto included in our Current Report on Form 8-K filed with the Commission on August 7, 2009.

Results of Operations

Three Months Ended September 30, 2009 and 2008

The table below shows our results of operations for the three months ended
September 30, 2009 and 2008 and the dollar and percentage changes in those
results from period to period (dollars in thousands).



                                                 For the Three Months
                                                  Ended September 30,                 Change
                                                   2009          2008              $             %
Revenues:
Rental income                                  $    126,002    $ 121,172       $   4,830         4.0 %
Resident fees and services                          106,515      108,610          (2,095 )      (1.9 )
Income from loans and investments                     3,214        3,426            (212 )      (6.2 )
Interest and other income                                99        1,913          (1,814 )     (94.8 )

Total revenues                                      235,830      235,121             709         0.3
Expenses:
Interest                                             43,660       50,745          (7,085 )     (14.0 )
Depreciation and amortization                        50,349       49,997             352         0.7
Property-level operating expenses                    76,338       81,698          (5,360 )      (6.6 )
General, administrative and professional
fees (including non-cash stock-based
compensation expense of $3,078 and $3,326
for the three months ended 2009 and 2008,
respectively)                                         9,657       11,626          (1,969 )     (16.9 )
Foreign currency loss (gain)                             32          (45 )            77       > 100
Loss on extinguishment of debt                           -           344            (344 )        nm
Merger-related expenses and deal costs                5,894        1,248           4,646       > 100

Total expenses                                      185,930      195,613          (9,683 )      (5.0 )

Income before reversal of contingent
liability, income taxes, discontinued
operations and noncontrolling interest               49,900       39,508          10,392        26.3
Reversal of contingent liability                         -        23,328         (23,328 )        nm
Income tax benefit                                      410          415              (5 )      (1.2 )

Income from continuing operations                    50,310       63,251         (12,941 )     (20.5 )
Discontinued operations                                 120        1,555          (1,435 )     (92.3 )

Net income                                           50,430       64,806         (14,376 )     (22.2 )
Net income attributable to noncontrolling
interest, net of tax                                    625        1,040            (415 )     (39.9 )

Net income attributable to common
stockholders                                   $     49,805    $  63,766       $ (13,961 )     (21.9 )%

nm-not meaningful

Revenues

The increase in our third quarter 2009 rental income over the same period in 2008 primarily reflects $1.5 million of additional rent resulting from the annual escalator in the rent paid under the Kindred Master Leases effective May 1, 2009, $1.9 million in additional rent from the MOBs and a skilled nursing facility we acquired during 2008 and 2009, a rent reset increase of $0.5 million on four seniors housing communities and three skilled nursing facilities and various other escalations in the rent paid on our other existing properties. Rental income included in discontinued operations was $0 and $4.4 million for the three months ended September 30, 2009 and 2008, respectively.

Revenues related to our triple-net leased properties segment are received directly from the tenant based on the terms of the lease and are generally fixed amounts, with annual escalators (subject to certain thresholds). Therefore, while occupancy information is relevant to the operations of our triple-net leased properties, our revenues and financial results are not directly impacted by the overall occupancy levels or profits at the triple-net leased properties.

Resident fees and services consist of all amounts earned from residents at our seniors housing communities that are managed by Sunrise, including rental fees related to resident leases, extended health care fees and other ancillary service income. The decrease in resident fees and services during the third quarter of 2009 over the same period in 2008 can be attributed primarily to the movements in the Canadian dollar exchange rate, which had an unfavorable impact of $1.1 million in 2009, and lower average occupancy. Average occupancy rates related to these properties were as follows:

                                                                          Average Resident Occupancy
                                                                             For the Three Months
                                         Number of Communities               Ended September 30,
                                          2009            2008            2009                  2008
Stabilized Communities                         78              76            88.1 %                91.5 %
Lease-Up Communities                            1               3            72.0 %                59.1 %

Total                                          79              79            87.6 %                89.7 %

Same-Store Stabilized Communities              76              76            88.3 %                91.5 %

The decrease in our third quarter 2009 interest and other income over the same period in 2008 is primarily due to the resolution in September 2008 of a legal dispute and higher interest rates earned on cash balances in 2008.

Expenses

Interest expense included in discontinued operations was $0 and $1.9 million for the three months ended September 30, 2009 and 2008, respectively. Total interest expense, including interest allocated to discontinued operations, decreased $9.0 million in 2009 over 2008, primarily due to a $0.7 million reduction in interest from lower effective interest rates and an $8.7 million reduction in interest from lower loan balances. Interest expense includes $1.9 million and $1.7 million of amortized deferred financing fees for the three months ended September 30, 2009 and 2008, respectively. Our effective interest rate decreased to 6.6% for the three months ended September 30, 2009, from 6.7% for the same period in 2008. Movements in the Canadian dollar exchange rate had a favorable impact on interest expense of $0.1 million for the three months ended September 30, 2009, compared to the same period in 2008.

Property-level operating expenses include all expenses related to our MOB operations and all amounts incurred for the operations of our seniors housing communities managed by Sunrise, such as labor, food, utilities, marketing, . . .