8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 26, 2004

VENTAS, INC.

(Exact name of registrant as specified in its charter)

Delaware	1-10989	61-1055020
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

10350 Ormsby Park Place, Suite 300, Louisville, Kentucky	40223
(Address of principal executive offices)	(Zip Code)

(502) 357-9000

(Registrant’s telephone number, including area code)

Item 7. Financial Statements and Exhibits.

(a) Financial statements of businesses acquired.

Not applicable.

(b) Pro forma financial information.

Not applicable.

(c) Exhibits:

99.1 Press Release dated February 26, 2004.

Item 9. Regulation FD Disclosure

The information furnished pursuant to Item 12 is hereby incorporated by reference to this Item 9.

A copy of the press release issued by Ventas, Inc. (the “Company”) on February 26, 2004 (the “Press Release”) is included as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated in this Item 9 by reference.

The information of this Current Report on Form 8-K, including Exhibit 99.2, is furnished pursuant to Item 9 and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section.

Item 12. Results of Operations and Financial Condition

On February 26, 2004, the Company issued the Press Release, which announced the Company’s results of operations and financial condition as of and for the quarter and year ended December 31, 2003.

The Press Release provided that the Company’s normalized funds from operations (“FFO”) for the fourth quarter ended December 31, 2003 was $32.3 million, as compared to $24.2 million for the fourth quarter ended December 31, 2002. The Company’s net income for the fourth quarter ended December 31, 2003 was $77.1 million, as compared to $9.4 million for the fourth quarter ended December 31, 2002.

The Press Release also announced that the Company’s normalized FFO per diluted share for the fourth quarter ended December 31, 2003 was $0.40 per diluted share, as compared to $0.34 per diluted share for the fourth quarter ended December 31, 2002. The Company’s net income per diluted share for the fourth quarter ended December 31, 2003 was $0.95 per diluted share, as compared to $0.13 per diluted share for the fourth quarter ended December 31, 2002.

The Press Release also provided that the Company’s normalized FFO for the year ended December 31, 2003 was $123.5 million, as compared to $95.6 million for the year ended December 31, 2002. The Company’s net income for the year ended December 31, 2003 was $162.8 million, as compared to $65.7 million for the year ended December 31, 2002.

The Press Release also announced that the Company’s normalized FFO per diluted share for the year ended December 31, 2003 was $1.54 per diluted share, as compared to $1.36 per diluted share for the year ended December 31, 2002. The Company’s net income per diluted share for the year ended December 31, 2003 was $2.03 per diluted share, as compared to $0.93 per diluted share for the year ended December 31, 2002.

The Press Release also announced that the Company had affirmed its expectation for normalized FFO per share for the year ended December 31, 2004 of between $1.70 and $1.74 per diluted share. The Company’s expectation for net income per share for the year ended December 31, 2004 is between $1.14 and $1.18 per diluted share.

A copy of the Press Release is included as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated in this Item 12 by reference.

The information of this Current Report on Form 8-K, including Exhibit 99.1, is furnished pursuant to Item 12 and shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that Section.

FORWARD-LOOKING STATEMENTS

This Current Report on Form 8-K includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act. All statements regarding the Company’s and its subsidiaries’ 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, growth opportunities, expected lease income, continued qualification as a real estate investment trust, 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. Such forward-looking statements are inherently uncertain, and security holders must recognize that actual results may differ from the Company’s expectations. The Company does not undertake a duty to update such forward-looking statements.

Actual future results and trends for the Company may differ materially depending on a variety of factors discussed in the Company’s filings with the Securities and Exchange Commission. Factors that may affect the plans or results of the Company include, without limitation, (a) the ability and willingness of Kindred Healthcare, Inc. (“Kindred”) and certain of its affiliates to continue to meet and/or perform their obligations under their contractual arrangements with the Company and the Company’s

subsidiaries, including without limitation the lease agreements and various agreements entered into by the Company and Kindred at the time of the Company’s spin off of Kindred on May 1, 1998 (the “1998 Spin Off”), as such agreements may have been amended and restated in connection with Kindred’s emergence from bankruptcy on April 20, 2001, (b) the ability and willingness of Kindred to continue to meet and/or perform its obligation to indemnify and defend the Company for all litigation and other claims relating to the healthcare operations and other assets and liabilities transferred to Kindred in the 1998 Spin Off, (c) the ability of Kindred and the Company’s other operators to maintain the financial strength and liquidity necessary to satisfy their respective obligations and duties under the leases and other agreements with the Company, and their existing credit agreements, (d) the Company’s success in implementing its business strategy and the Company’s ability to identify and consummate diversifying acquisitions or investments, (e) the nature and extent of future competition, (f) the extent of future healthcare reform and regulation, including cost containment measures and changes in reimbursement policies, procedures and rates, (g) increases in the cost of borrowing for the Company, (h) the ability of the Company’s operators to deliver high quality care and to attract patients, (i) the results of litigation affecting the Company, (j) changes in general economic conditions and/or economic conditions in the markets in which the Company may, from time to time, compete, (k) the ability of the Company to pay down, refinance, restructure, and/or extend its indebtedness as it becomes due, (l) the movement of interest rates and the resulting impact on the value of and the accounting for the Company’s interest rate swap agreement, (m) the ability and willingness of the Company to maintain its qualification as a REIT due to economic, market, legal, tax or other considerations, (n) final determination of the Company’s taxable net income for the year ending December 31, 2003, (o) the ability and willingness of the Company’s tenants to renew their leases with the Company upon expiration of the leases and the Company’s ability to relet its properties on the same or better terms in the event such leases expire and are not renewed by the existing tenants, and (p) the impact on the liquidity, financial condition and results of operations of Kindred and the Company’s other operators resulting from increased operating costs and uninsured liabilities for professional liability claims, and the ability of Kindred and the Company’s other operators to accurately estimate the magnitude of such liabilities. Many of such factors are beyond the control of the Company and its management.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	VENTAS, INC. (Registrant)
Date: February 26, 2004
	By:	/s/    T. Richard Riney
		Name:	T. Richard Riney
		Title:	Executive Vice President and General Counsel

EXHIBIT INDEX

Exhibit	Description
99.1	Press Release dated February 26, 2004.

EX-99.1

Exhibit 99.1

Ventas, Inc.    10350 Ormsby Park Place, Ste 300  Louisville, Kentucky 40223    (502) 357^.9000    (502) 357^.9001 Fax

Contacts:	Debra A. Cafaro
	Chairman, President and CEO
	or
	Richard A. Schweinhart
	Senior Vice President and CFO
	(502) 357-9000

VENTAS REPORTS FOURTH QUARTER FFO OF $0.40 PER SHARE

2003 FFO PER SHARE INCREASES 13 PERCENT TO $1.54

Ventas Increases First Quarter 2004 Dividend 21.5 Percent to $0.325 Per Share

LOUISVILLE, Ky (February 26, 2004) – Ventas, Inc. (NYSE:VTR) (“Ventas” or the “Company”) said today that normalized Funds From Operations (“FFO”) for the 2003 fourth quarter rose 33 percent to $32.3 million, compared with $24.2 million in the comparable 2002 period. Normalized FFO per diluted share increased 18 percent to $0.40 from $0.34 per diluted share for the comparable 2002 period. In the fourth quarter ended December 31, 2003, the Company had 81.2 million weighted average diluted shares outstanding, compared to 71.2 million weighted average diluted shares outstanding a year earlier.

The quarter benefited from increased rents resulting from Ventas’s annual lease escalations, income from the Company’s 2002 investments with Trans Healthcare, Inc. (“THI”), decreased interest expense due to lower debt balances and the early pay-off of the United States Settlement.

Normalized FFO per diluted share for the year ended December 31, 2003 was $1.54, a 13 percent increase from the year ended December 31, 2002 level of $1.36 per diluted share. Normalized FFO for 2003 grew 29 percent year-over-year, to $123.5 million in 2003 from $95.6 million in 2002.

Normalized FFO for all periods excludes (a) gains on sales of common stock in the Company’s primary tenant, Kindred Healthcare, Inc. (NASDAQ:KIND) (“Kindred”), (b) the benefit of a $20.2 million reversal of a previously recorded contingent liability, which was recorded as income in the first quarter of 2003, (c) losses from early extinguishment of debt and (d) a one-time swap breakage expense incurred in connection with the Company’s debt refinancing in April 2002.

“In the fourth quarter, Ventas was hitting on all cylinders,” Ventas Chairman, President and CEO Debra A. Cafaro said. “Our strategic diversification program moved forward with our announcement of the acquisition of ElderTrust (NYSE:ETT), which closed February 5, 2004. We also completed the sale of ten underperforming facilities to Kindred, generating $85 million in proceeds,” she added. “Our shareholders are benefiting from our double-digit FFO per share growth. We will continue to manage the Company to deliver consistent, superior total shareholder return while we broaden the Company’s tenant and asset base.”

GAAP NET INCOME

After discontinued operations of $61.8 million, or $0.76 per diluted share, Ventas reported fourth quarter 2003 net income of $77.1 million, or $0.95 per diluted share. After discontinued operations of $1.2 million, or $0.01 per diluted share, net income for the fourth quarter ended December 31, 2002 was $9.4 million, or $0.13 per diluted share. A breakdown of discontinued operations is included in a schedule attached to this Press Release.

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Ventas Reports Fourth Quarter FFO of $0.40 Per Share

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February 26, 2004

After discontinued operations of $66.0 million, or $0.82 per diluted share, net income for the year ended December 31, 2003 was $162.8 million, or $2.03 per diluted share. Net income for the year ended 2002 was $65.7 million, or $0.93 per diluted share, after discontinued operations of $28.4 million, or $0.40 per diluted share.

DIVIDEND INCREASE

Ventas also said its Board of Directors voted to increase the Company’s first quarter 2004 dividend to $0.325 per share, an increase of 21.5 percent from the quarterly dividend of $0.2675 it paid for 2003. The first quarter 2004 dividend is payable on March 25, 2004 to stockholders of record on March 15, 2004.

“We are delighted to begin the year by increasing our dividend by over 21 percent,” Cafaro said. “We want to share the benefits of our cash flow growth with our shareholders and at the same time maintain a conservative, secure dividend payout ratio of approximately 75 percent of anticipated 2004 FFO.”

FOURTH QUARTER HIGHLIGHTS AND OTHER RECENT DEVELOPMENTS

• Ventas announced the acquisition of ElderTrust for $184 million, adding 18 new properties including nine assisted living facilities, one independent living facility, five skilled nursing facilities, two medical office buildings and one financial building to the Company’s extensive portfolio. The acquisition was completed February 5, 2004. At the closing of the transaction, ElderTrust had approximately $33.5 million in unrestricted and restricted cash on hand, effectively reducing the net purchase price.

• Early in 2004, Ventas announced the acquisition of 14 assisted and independent living facilities for $115 million that will be leased to nationally recognized Brookdale Living Communities, Inc. (“Brookdale”). The facilities are located in ten states, contain about 2,000 private pay units and have an average occupancy of 93 percent. Ventas has closed on seven of the properties, and expects to complete the remaining transactions shortly.

• Ventas sold 10 underperforming properties to its primary tenant, Kindred, for total consideration of $85 million. The transaction resulted in a gain of $54.9 million. Included in the sale were two hospitals and eight skilled nursing facilities. Proceeds from the sale were redeployed into Ventas’s strategic diversification program, including the acquisition of ElderTrust.

• On a pro forma basis for 2004, assuming the completion of the ElderTrust and Brookdale transactions on January 1, 2004, Kindred rent would represent 83 percent of the Company’s expected revenue in 2004.

• At December 31, 2003, the Company’s net debt: EBITDA ratio stood at 2.8x, as a result of the Company’s consistent efforts to strengthen its balance sheet.

• Each of Moody’s and Standard and Poor’s rating agencies raised its outlook for Ventas to positive in the fourth quarter.

• The 227 skilled nursing facilities and hospitals leased to Kindred produced EBITDAR to rent coverage of 1.7 times (after management fees) for the trailing twelve month period ended September 30, 2003 (the latest date available).

• On October 1, 2003, Medicare reimbursement for skilled nursing facilities increased by 6.26 percent.

• Ventas reduced the notional amount of its swap to $330 million from $450 million in December 2003.

• Ventas finished 2003 with Total Shareholder Return (“TSR”) of 106 percent, and 70 percent compound annual TSR for the three years ended December 31, 2003, making it the top performing Real Estate Investment Trust (“REIT”) in the Morgan Stanley REIT Index for both periods.

• The Company opened its Distribution Reinvestment and Stock Purchase Plan (“DRIP”) to permit shareholders to invest in Ventas stock directly and through dividend reinvestment, with a two percent discount.

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Ventas Reports Fourth Quarter FFO of $0.40 Per Share

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February 26, 2004

• Consistent with the Company’s focus on sound corporate governance, the Company terminated its Shareholders Rights Plan (which had an anti-takeover effect) in 2003.

FOURTH QUARTER 2003 RESULTS

Revenue for the quarter ended December 31, 2003 was $50.5 million, of which $47.4 million (or 93.7 percent) resulted from leases with Kindred. Fourth quarter expenses totaled $35.3 million, and included $9.9 million of depreciation expense, $15.9 million of interest expense on debt financing and $5.2 million loss on swap breakage. General, administrative and professional expenses for the 2003 fourth quarter totaled $3.9 million.

2003 RESULTS

Revenue for 2003 was $205.0 million, of which $183.2 million (or 89.4 percent) resulted from leases with Kindred. Expenses of $108.3 million for the year were reduced by the $20.2 million reversal of a contingent liability and included $39.7 million of depreciation expense, $61.8 million of interest expense and $4.9 million of interest expense on the United States Settlement, which was paid in full in June 2003 without prepayment penalty or premium. General and administrative and professional expenses for the year totaled $15.2 million.

VENTAS AFFIRMS 2004 NORMALIZED FFO GUIDANCE

Ventas affirmed its 2004 normalized FFO guidance of between $1.70 and $1.74 per diluted share. If achieved, these results would represent approximately 12 percent per share growth in normalized FFO in 2004. The Company’s guidance includes the impact of the recently completed merger with ElderTrust and the acquisition and leasing of the remaining seven Brookdale properties that are currently under contract for purchase. There can be no assurance that the remaining Brookdale transactions will occur or when they will occur. Any failure or delay in completing these transactions will reduce the amount of 2004 FFO Ventas expects to achieve. Consistent with its practice, Ventas’s FFO guidance (and related GAAP earnings projections) for 2004 exclude the impact of additional acquisitions and divestitures, gains and losses on the sales of assets, and capital transactions. Its guidance also excludes the future impact of (a) any expense the Company records for non-cash “swap ineffectiveness,” and (b) any expenses related to the write-off of unamortized deferred financing fees or additional costs, expenses or premiums incurred as a result of early debt retirement.

Reconciliation of the Company’s normalized FFO guidance to the Company’s projected GAAP earnings is provided on a schedule attached to this Press Release. The Company may from time to time update its publicly announced FFO guidance, but it is not obligated to do so.

ASSUMPTIONS AND QUALIFICATIONS

The declaration and payment of future dividends remains subject to the oversight and approval of the Company’s Board of Directors and is generally reviewed quarterly. The Company may from time to time update its publicly announced expectations regarding future dividends but it is not obligated to do so.

The Company’s FFO guidance and expectation regarding future dividends are based on a number of assumptions, which are subject to change and many of which are outside the control of the Company. If actual results vary from these assumptions, the Company’s expectations may change. There can be no assurance that the Company will achieve the projected FFO results or the timing or amount of future dividends.

FOURTH QUARTER CONFERENCE CALL

Ventas will hold a conference call to discuss this earnings release on Friday morning, February 27, 2004, at 10:00 a.m. Eastern Time (9:00 a.m. Central Time). The conference call is being web cast by CCBN and can be

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February 26, 2004

accessed at the Ventas website at www.ventasreit.com or www.fulldisclosure.com. An online replay of the web cast will be available at approximately 12:00 p.m. Eastern Time and will be archived for thirty (30) days.

Ventas, Inc. is a healthcare real estate investment trust that owns 42 hospitals, 199 nursing facilities, 18 senior housing facilities and 11 other facilities in 38 states. The Company also has investments in 25 additional healthcare and senior housing facilities. More information about Ventas can be found on its website at www.ventasreit.com.

This Press Release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements regarding Ventas, Inc.’s (“Ventas” or the “Company”) and its subsidiaries’ 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, growth opportunities, expected lease income, continued qualification as a real estate investment trust (“REIT”), plans and objectives of management for future operations and statements that include words such as “anticipate,” “if,” “believe,” “plan,” “estimate,” “expect,” “intend,” “may,” “could,” “should,” “will” and other similar expressions are forward-looking statements. Such forward-looking statements are inherently uncertain, and security holders must recognize that actual results may differ from the Company’s expectations. The Company does not undertake a duty to update such forward-looking statements.

Actual future results and trends for the Company may differ materially depending on a variety of factors discussed in the Company’s filings with the Securities and Exchange Commission (the “Commission”). Factors that may affect the plans or results of the Company include, without limitation, (a) the ability and willingness of Kindred Healthcare, Inc. (“Kindred”) and certain of its affiliates to continue to meet and/or perform their obligations under their contractual arrangements with the Company and the Company’s subsidiaries, including without limitation the lease agreements and various agreements entered into by the Company and Kindred at the time of the Company’s spin off of Kindred on May 1, 1998 (the “1998 Spin Off”), as such agreements may have been amended and restated in connection with Kindred’s emergence from bankruptcy on April 20, 2001, (b) the ability and willingness of Kindred to continue to meet and/or perform its obligation to indemnify and defend the Company for all litigation and other claims relating to the healthcare operations and other assets and liabilities transferred to Kindred in the 1998 Spin Off, (c) the ability of Kindred and the Company’s other operators to maintain the financial strength and liquidity necessary to satisfy their respective obligations and duties under the leases and other agreements with the Company, and their existing credit agreements, (d) the Company’s success in implementing its business strategy and the Company’s ability to identify and consummate diversifying acquisitions or investments, (e) the nature and extent of future competition, (f) the extent of future healthcare reform and regulation, including cost containment measures and changes in reimbursement policies, procedures and rates, (g) increases in the cost of borrowing for the Company, (h) the ability of the Company’s operators to deliver high quality care and to attract patients, (i) the results of litigation affecting the Company, (j) changes in general economic conditions and/or economic conditions in the markets in which the Company may, from time to time, compete, (k) the ability of the Company to pay down, refinance, restructure, and/or extend its indebtedness as it becomes due, (l) the movement of interest rates and the resulting impact on the value of and the accounting for the Company’s interest rate swap agreement, (m) the ability and willingness of the Company to maintain its qualification as a REIT due to economic, market, legal, tax or other considerations, (n) final determination of the Company’s taxable net income for the year ending December 31, 2003, (o) the ability and willingness of the Company’s tenants to renew their leases with the Company upon expiration of the leases and the Company’s ability to relet its properties on the same or better terms in the event such leases expire and are not renewed by the existing tenants, and (p) the impact on the liquidity, financial condition and results of operations of Kindred and the Company’s other operators resulting from increased operating costs and uninsured liabilities for professional liability claims, and the ability of Kindred and the Company’s other operators to accurately estimate the magnitude of such liabilities. Many of such factors are beyond the control of the Company and its management.

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Ventas Reports Fourth Quarter FFO of $0.40 Per Share

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February 26, 2004

CONSOLIDATED BALANCE SHEETS

(In thousands)

	December 31, 2003			December 31, 2002
Assets
Real estate investments:
Land	$	104,300		$	119,559
Building and improvements		985,881			1,101,847
		1,090,181			1,221,406
Accumulated depreciation		(408,891	)		(409,132	)
Total net real estate property		681,290			812,274
Loan receivable, net		16,455			16,528
Total net real estate investments		697,745			828,802
Cash and cash equivalents		82,104			2,455
Restricted cash		7,575			19,953
Investment in Kindred common stock		—			16,713
Deferred financing costs, net		13,465			17,704
Notes receivable from employees, former employees and accrued interest		3,772			4,139
Other assets		8,189			6,014
Total assets	$	812,850		$	895,780
Liabilities and stockholders’ equity (deficit)
Liabilities:
Senior Notes payable and other debt	$	640,562		$	707,709
United States Settlement		—			43,992
Securities settlement due (purchase of Senior Notes)		—			37,366
Deferred revenue		15,308			18,883
Interest rate swap agreements		27,868			47,672
Accrued dividend		21,614			16,596
Accrued interest		5,821			7,237
Accounts payable and other accrued liabilities		14,562			25,402
Other liabilities—disputed refunds and accumulated interest		406			14,156
Deferred income taxes		30,394			30,394
Total liabilities		756,535			949,407
Commitments and contingencies
Stockholders’ equity (deficit):
Preferred stock, unissued		—			—
Common stock		20,652			20,652
Capital in excess of par value		162,466			191,779
Unearned compensation on restricted stock		(748	)		(793	)
Accumulated other comprehensive loss		(18,294	)		(26,116	)
Retained earnings (deficit)		(56,790	)		(134,279	)
		107,286			51,243
Treasury stock		(50,971	)		(104,870	)
Total stockholders’ equity (deficit)		56,315			(53,627	)
Total liabilities and stockholders’ equity (deficit).	$	812,850		$	895,780

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Ventas Reports Fourth Quarter FFO of $0.40 Per Share

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February 26, 2004

CONSOLIDATED STATEMENTS OF INCOME

For the Years Ended December 31, 2003, 2002 and 2001

(In thousands, except per share amounts)

	2003			2002
Revenues:
Rental income	$	191,232		$	175,950
Interest income from loan receivable		3,036			995
Gain on sale of Kindred common stock		9,039			5,014
Interest and other income		1,696			1,178
Total revenues		205,003			183,137
Expenses:
General and administrative		12,724			9,763
Professional fees		2,434			3,150
Amortization of restricted stock grants		1,274			1,853
Depreciation		39,720			38,459
Net loss on swap breakage		5,168			5,407
Swap ineffectiveness		296			1,850
Loss on extinguishment of debt		84			11,077
Interest		61,790			71,027
Interest on United States Settlement		4,943			5,461
Reversal of contingent liability		(20,164	)		—
Total expenses		108,269			148,047
Income before provision (benefit) for income taxes, gain on disposal of real estate assets and discontinued operations		96,734			35,090
Provision (benefit) for income taxes		—			(2,200	)
Income before gain on disposal of real estate assets and discontinued operations		96,734			37,290
Net gain on real estate disposals		—			64
Income before discontinued operations		96,734			37,354
Discontinued operations (including gain/loss on sale of assets)		66,019			28,352
Net income	$	162,753		$	65,706
Earnings per common share:
Basic:
Income before discontinued operations	$	1.22		$	0.54
Net income	$	2.05		$	0.95
Diluted:
Income before discontinued operations	$	1.21		$	0.53
Net income	$	2.03		$	0.93
Weighted average number of shares outstanding, basic		79,340			69,336
Weighted average number of shares outstanding, diluted		80,094			70,290
Dividend declared per common share	$	1.07		$	0.95

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February 26, 2004

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Years Ended December 31, 2003 and 2002

(In thousands)

	2003			2002
Cash flows from operating activities:
Net income	$	162,753		$	65,706
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation (including amounts in discontinued operations)		41,943			42,107
Amortization of deferred financing costs		4,095			3,706
Amortization of restricted stock grants		1,274			1,853
Reversal of contingent liability		(20,164	)		—
Normalized rents		(108	)		(188	)
Gain on sale of assets (including amounts in discontinued operations)		(60,820	)		(28,528	)
Loss on impairment of assets (included in discontinued operations)		845			—
Loss on extinguishment of debt		84			11,077
Amortization of deferred revenue		(3,707	)		(2,711	)
Net loss on swap breakage		5,168			5,407
Swap ineffectiveness		296			1,850
Other		(508	)		174
Changes in operating assets and liabilities:
Decrease in restricted cash		12,378			820
Increase in accounts receivable and other assets		(1,892	)		(1,338	)
Increase (decrease) in accounts payable and accrued and other liabilities		(4,271	)		16,450
Net cash provided by operating activities		137,366			116,385
Cash flows from investing activities:
Purchase of furniture and equipment		(258	)		(308	)
Investment in real estate property		—			(53,000	)
Investment in loan receivable		—			(64,931	)
Proceeds from sale of loan receivable, net		—			49,033
Sale of real estate properties		139,164			28,620
Proceeds from sale of Kindred Healthcare, Inc. common stock		20,223			6,950
Proceeds from loan receivable		205			—
Repayment (issuance) of notes receivable from employees		367			(504	)
Net cash provided by (used in) investing activities		159,701			(34,140	)
Cash flows from financing activities:
Net change in borrowings under revolving line of credit		(59,900	)		(101,301	)
Proceeds from debt		—			620,300
Purchase of senior notes		(37,366	)		—
Repayment of debt		(7,247	)		(18,590	)
Repayment of debt through refinancing		—			(607,106	)
Payment of swap breakage fee		(8,575	)		(12,837	)
Payment of deferred financing costs		(40	)		(15,127	)
Payment on the United States Settlement		(46,647	)		(10,755	)
Issuance of common stock		22,604			97,155
Cash distribution to stockholders		(80,247	)		(50,125	)
Net cash used in financing activities		(217,418	)		(98,386	)
Net increase (decrease) in cash and cash equivalents		79,649			(16,141	)
Cash and cash equivalents at beginning of year		2,455			18,596
Cash and cash equivalents at end of year	$	82,104		$	2,455
Supplemental disclosure of cash flow information:
Interest paid including swap payments and receipts	$	70,342		$	60,790
Supplemental disclosure of non cash activity:
Dividend distribution of Kindred common stock	$	—		$	17,086

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February 26, 2004

SUPPLEMENTAL DATA

Funds from Operations

FFO and Normalized FFO for the four quarters and year ended December 31, 2003 (in thousands, except per share amounts):

	First			Second			Third			Fourth			Year
Net income	$	37,288		$	16,129		$	32,212		$	77,124		$	162,753
Adjustments:
Depreciation on real estate assets		9,864			9,861			9,878			9,833			39,436
Other items:
Discontinued operations:
Real estate depreciation – discontinued		873			873			286			191			2,223
(Gain) loss on sale of real estate		—			5,254			(2,065	)		(54,970	)		(51,781	)
FFO		48,025			32,117			40,311			32,178			152,631
Realized gain on sale of Kindred common stock		—			(922	)		(8,117	)		—			(9,039	)
Reversal of contingent liability		(20,164	)		—			—			—			(20,164	)
Loss on extinguishment of debt		—			—			—			84			84
Normalized FFO	$	27,861		$	31,195		$	32,194		$	32,262			123,512
Per diluted share:
Net income	$	0.47		$	0.20		$	0.40		$	0.95		$	2.03
Adjustments:
Depreciation on real estate assets		0.12			0.12			0.12			0.12			0.49
Other items:
Discontinued operations:
Real estate depreciation – discontinued		0.02			0.01			0.00			0.00			0.03
(Gain) loss on sale of real estate		—			0.07			(0.02	)		(0.67	)		(0.64	)
FFO		0.61			0.40			0.50			0.40			1.91
Realized gain on sale of Kindred common stock		—			(0.01	)		(0.10	)		—			(0.11	)
Reversal of contingent liability		(0.26	)		—			—			—			(0.26	)
Loss on extinguishment of debt		—			—			—			0.00			0.00
Normalized FFO	$	0.35		$	0.39		$	0.40		$	0.40		$	1.54

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Ventas Reports Fourth Quarter FFO of $0.40 Per Share

Page 9

February 26, 2004

Projected FFO per diluted share for the year ended December 31, 2004:

	2004 Projected
Per diluted share:
Net income	$	1.14	—	$	1.18
Adjustments:
Depreciation on real estate assets		0.56	—		0.56
FFO	$	1.70	—	$	1.74
Adjustments:		—			—
Normalized FFO	$	1.70	—	$	1.74

Historical cost accounting for real estate assets implicitly assumes that the value of real estate assets diminishes predictably over time. Since real estate values instead have historically risen or fallen with market conditions, many industry investors have considered presentations of operating results for real estate companies that use historical cost accounting to be insufficient by themselves. To overcome this problem, the Company considers FFO an appropriate measure of performance of an equity REIT and uses the National Association of Real Estate Investment Trusts (“NAREIT”) definition of FFO. NAREIT defines FFO as net income (computed in accordance with generally accepted accounting principles), excluding gains (or losses) from sales of property, plus depreciation and amortization and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures will be calculated to reflect funds from operations on the same basis.

FFO presented herein is not necessarily comparable to FFO presented by other real estate companies due to the fact that not all real estate companies use the same definition. FFO should not be considered as an alternative to net income (determined in accordance with accounting principles generally accepted in the United States (“GAAP”)), as an indicator of the Company’s financial performance, as an alternative to cash flow from operating activities (determined in accordance with GAAP), as a measure of the Company’s liquidity, nor is FFO necessarily indicative of sufficient cash flow to fund all of the Company’s needs. The Company believes that in order to facilitate a clear understanding of the consolidated historical operating results of the Company, FFO should be examined in conjunction with net income as presented elsewhere in this Press Release.

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Ventas Reports Fourth Quarter FFO of $0.40 Per Share

Page 10

February 26, 2004

Net Debt to EBITDA

Earnings before interest, income taxes, depreciation and amortization (“EBITDA”) and Normalized EBITDA for the years ended December 31, 2003 and 2002 (dollars in thousands):

	Year Ended December 31, 2003			Year Ended December 31, 2002
Net income	$	162,753		$	65,706
Add Back:
Interest		61,790			71,027
Interest on United States Settlement		4,943			5,461
Depreciation		39,720			38,459
Swap ineffectiveness		296			1,850
Amortization of restricted stock grants		1,274			1,853
Benefit for income taxes		—			(2,200	)
Net loss on swap breakage		5,168			5,407
Loss on extinguishment of debt		84			11,077
Discontinued Operations add back:
Depreciation		2,223			3,648
Interest		3,075			5,732
EBITDA		281,326			208,020
Adjustments:
Gain on sale of Kindred common stock		(9,039	)		(5,014	)
Reversal of contingent liability		(20,164	)		—
Discontinued operations:
(Gain) loss on sale of real estate		(51,781	)		(23,450	)
Loss on impairment of asset		845			—
Normalized EBITDA	$	201,187		$	179,556
Debt	$	640,562		$	707,709
Kindred common stock		—			(16,713	)
Cash		(82,104	)		(2,455	)
Net debt	$	558,458		$	688,541
Net debt to EBITDA		2.8x			3.8x

The Company considers EBITDA a profitability measure which indicates the Company’s ability to service debt. Normalized EBITDA excludes income and expense items that are nonrecurring in the Company’s core business. The Company considers the Net Debt to EBITDA ratio a useful measure to evaluate the Company’s ability to pay its indebtedness. EBITDA presented herein is not necessarily comparable to EBITDA presented by other companies due to the fact that not all companies use the same definition. EBITDA should not be considered as an alternative to net income (determined in accordance with GAAP), as an indicator of the Company’s financial performance, as an alternative to cash flow from operating activities (determined in accordance with GAAP), as a measure of the Company’s liquidity, nor is EBITDA necessarily indicative of sufficient cash flow to fund all of the Company’s needs. The Company believes that in order to facilitate a clear understanding of the consolidated historical operating results of the Company, EBITDA should be examined in conjunction with net income as presented elsewhere in this Press Release.

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Ventas Reports Fourth Quarter FFO of $0.40 Per Share

Page 11

February 26, 2004

Ventas, Inc.

2003 QUARTERLY STATEMENTS OF INCOME

($000, except per share amounts)

	First			Second			Third			Fourth			Year
Revenues:
Rental income	$	45,764		$	46,705		$	49,355		$	49,408		$	191,232
Interest income from loan receivable		747			758			766			765			3,036
Gain on sale of Kindred common stock		—			922			8,117			—			9,039
Interest and other income		492			553			280			371			1,696
Total revenues		47,003			48,938			58,518			50,544			205,003
Expenses:
General and administrative		3,140			3,080			3,136			3,368			12,724
Professional fees		760			702			416			556			2,434
Amortization of restricted stock grants		291			310			309			364			1,274
Depreciation		9,928			9,925			9,952			9,915			39,720
Net loss on swap breakage		—			—			—			5,168			5,168
Swap ineffectiveness		—			369			—			(73	)		296
Loss on extinguishment of debt		—			—			—			84			84
Interest		15,932			15,662			14,313			15,883			61,790
Interest on United States Settlement		1,182			3,761			—			—			4,943
Reversal of contingent liability		(20,164	)		—			—			—			(20,164	)
Total expenses		11,069			33,809			28,126			35,265			108,269
Income before discontinued operations		35,934			15,129			30,392			15,279			96,734
Discontinued operations		1,354			1,000			1,820			61,845			66,019
Net income	$	37,288		$	16,129		$	32,212		$	77,124		$	162,753
Weighted average number of shares outstanding, basic		78,834			78,935			79,389			80,187			79,340
Weighted average number of shares outstanding, diluted		79,296			79,575			80,258			81,232			80,094
Earnings per common share:
Basic:
Income before discontinued operations	$	0.46		$	0.19		$	0.38		$	0.19		$	1.22
Discontinued operations		0.01			0.01			0.03			0.77			0.83
Net income	$	0.47		$	0.20		$	0.41		$	0.96		$	2.05
Diluted:
Income before discontinued operations	$	0.45		$	0.19		$	0.38		$	0.19		$	1.21
Discontinued operations		0.02			0.01			0.02			0.76			0.82
Net income	$	0.47		$	0.20		$	0.40		$	0.95		$	2.03
Discontinued Operations
Revenues	$	3,420		$	4,195		$	1,261		$	1,389		$	10,265
Interest and other income		—			4,116			—			6,000			10,116
Interest		1,193			1,184			375			323			3,075
Depreciation		873			873			286			191			2,223
Loss on impairment of asset held for sale		—			—			845			—			845
Income before gain on sale of real estate		1,354			6,254			(245	)		6,875			14,238
Gain on sale of real estate		—			(5,254	)		2,065			54,970			51,781
Discontinued operations	$	1,354		$	1,000		$	1,820		$	61,845		$	66,019

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Ventas Reports Fourth Quarter FFO of $0.40 Per Share

Page 12

February 26, 2004

Ventas, Inc.

2002 QUARTERLY STATEMENTS OF INCOME

(In thousands, except per share amounts)

	First		Second		Third			Fourth		Year
Revenues:
Rental Income	$	42,786	$	43,759	$	44,221		$	45,184	$	175,950
Interest income from loan receivable		—		—		—			995		995
Gain on sale of Kindred common stock		—		3,822		1,192			—		5,014
Interest and other income		342		373		237			226		1,178
Total revenues		43,128		47,954		45,650			46,405		183,137
Expenses:
General and administrative		2,311		2,601		2,410			2,441		9,763
Professional fees		565		936		900			749		3,150
Amortization of restricted stock grants		422		715		354			362		1,853
Depreciation		9,518		9,527		9,527			9,887		38,459
Loss on extinguishment of debt		—		6,919		—			4,158		11,077
Net loss on swap breakage		—		5,407		—			—		5,407
Swap ineffectiveness		—		180		118			1,552		1,850
Interest		18,331		17,594		17,322			17,780		71,027
Interest on United States Settlement		1,471		1,402		1,331			1,257		5,461
Total expenses		32,618		45,281		31,962			38,186		148,047
Income before benefit for income taxes, gain on disposal of real estate assets and discontinued operations		10,510		2,673		13,688			8,219		35,090
Benefit for income taxes		—		—		(2,200	)		—		(2,200	)
Income before gain on disposal of real estate assets and discontinued operations		10,510		2,673		15,888			8,219		37,290
Net gain on real estate disposals		—		—		—			64		64
Income before discontinued operations		10,510		2,673		15,888			8,283		37,354
Discontinued operations		2,191		23,795		1,205			1,161		28,352
Net income	$	12,701	$	26,468	$	17,093		$	9,444	$	65,706
Weighted average number of shares outstanding, basic		68,698		68,850		69,098			70,637		69,336
Weighted average number of shares outstanding, diluted		69,844		70,002		70,047			71,204		70,290
Earnings per common share:
Basic:
Income before discontinued operations	$	0.15	$	0.04	$	0.23		$	0.12	$	0.54
Discontinued operations		0.03		0.34		0.02			0.01		0.41
Net income	$	0.18	$	0.38	$	0.25		$	0.13	$	0.95
Diluted:
Income before discontinued operations	$	0.15	$	0.04	$	0.23		$	0.12	$	0.53
Discontinued operations		0.03		0.34		0.01			0.01		0.40
Net income	$	0.18	$	0.38	$	0.24		$	0.13	$	0.93
Discontinued Operations
Revenues	$	3,611	$	3,812	$	3,429		$	3,430	$	14,282
Interest		1,529		1,485		1,337			1,381		5,732
Depreciation		948		925		887			888		3,648
Income before gain on sale of real estate		1,134		1,402		1,205			1,161		4,902
Gain on sale of real estate		1,057		22,393		—			—		23,450
Discontinued operations	$	2,191	$	23,795	$	1,205		$	1,161	$	28,352

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Ventas Reports Fourth Quarter FFO of $0.40 Per Share

Page 13

February 26, 2004

Portfolio of Properties

The following information provides an overview of the Company’s portfolio of healthcare properties as of and for the year ended December 31, 2003, excluding discontinued operations ($’s in thousands):

	As of and for the Year Ended December 31, 2003 1
Portfolio by Type	# of Properties	# of Beds	Revenue		Percent of Rental Revenue		# of States
Healthcare Property
Skilled Nursing Facilities	194	24,399	$	124,628	65	%	30
Hospitals	42	3,629		65,493	34	%	19
Other Facilities	9	181		1,111	1	%	2
Total	245	28,209	$	191,232	100	%	37
Other Real Estate Investments
Loan Receivable	25	1,983	$	3,036

¹ The information presented above does not give effect to the consummation of the ElderTrust merger or the Brookdale acquisitions.

Kindred Coverage Ratios

The following is based on data provided by Kindred to the Company or obtained from Kindred’s public filings. This information reflects Kindred’s EBITDAR coverage by Master Lease after management fees and excluding the 26 facilities sold to Kindred in 2003:

Master Lease	TTM 1 EBITDAR Coverage 2
1	2.0
2	1.9
3	1.4
4	1.5
5	1.3
Portfolio	1.7

¹ Trailing Twelve Months EBITDAR ended September 30, 2003 (the latest available data provided by Kindred) to the sum of (a) the Company’s Trailing Twelve Months cash rental revenue, plus (b) the $8.6 million in annual rental revenue added by the June 30, 2003 Master Lease amendments.

² Coverage reflects the ratio of Kindred’s EBITDAR to rent. EBITDAR is defined as earnings before interest, income taxes, depreciation, amortization and rent but after deducting a 5 percent management fee. EBITDAR is adjusted by $4.4 million in order to normalize certain of Kindred’s professional liability insurance expenses.

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Ventas Reports Fourth Quarter FFO of $0.40 Per Share

Page 14

February 26, 2004

Scheduled Maturities of Borrowing Arrangements

The Company’s indebtedness has the following maturities (in thousands):

2004	$	3,412
2005		3,690
2006		210,122
2007		57,300
2008		—
Thereafter		366,038
Total	$	640,562

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