Ventas (VTR) 8-K Financial Statements and Exhibits

Exhibit 99.5

VENTAS, INC.

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

As of and For the Nine Months Ended September 30, 2010 and For the Year Ended December 31, 2009

On October 22, 2010, Ventas, Inc. (“Ventas” or the “Company”) announced that it had entered into a definitive agreement to acquire 118 private pay seniors housing communities managed by Atria Senior Living Group (“Atria”) (including assets owned by Atria’s affiliate One Lantern Senior Living Inc (“One Lantern”)) from funds affiliated with Lazard Real Estate Partners for a purchase price of approximately $3.1 billion, comprised of $1.35 billion in Ventas common stock (a fixed 24.96 million shares), $150 million in cash and the assumption or repayment of approximately $1.6 billion of debt and capital lease obligations, less assumed cash. These pro forma condensed consolidated financial statements assume no repayment of the $1.6 billion of net debt. Certain assets and liabilities of Atria and One Lantern consisting primarily of the property management business and certain working capital, property leases and insurance items will not be acquired and have been so reflected in the pro forma adjustments.

The following unaudited pro forma condensed consolidated financial information sets forth:

• The historical consolidated financial information of Ventas as of and for the nine months ended September 30, 2010 and for the year ended December 31, 2009 derived from Ventas’s consolidated financial statements;

• The historical consolidated financial information of Atria and One Lantern as of and for the nine months ended September 30, 2010 and for the year ended December 31, 2009 derived from Atria and One Lantern’s consolidated financial statements, respectively;

• Pro forma adjustments to give effect to Ventas’s acquisition of Atria and One Lantern on the consolidated balance sheet of Ventas as of September 30, 2010, as if the acquisition closed on September 30, 2010;

• Pro forma adjustments to give effect to Ventas’s acquisition of Atria and One Lantern on the consolidated statements of income of Ventas for the nine months ended September 30, 2010, as if the acquisition closed on January 1, 2010 and for the year ended December 31, 2009, as if the acquisition closed on January 1, 2009; and

• Pro forma adjustments to give effect to Ventas’s other 2009 and 2010 acquisitions and other investments, dispositions, significant debt activity and 2009 equity offering on the consolidated statements of income of Ventas for the nine months ended September 30, 2010, as if these transactions occurred on January 1, 2010 and for the year ended December 31, 2009, as if these transactions occurred on January 1, 2009.

These unaudited pro forma condensed consolidated financial statements are prepared for informational purposes only and are based on assumptions and estimates considered appropriate by Ventas’s management; however, they are not necessarily indicative of what Ventas’s consolidated financial condition or results of operations actually would have been assuming the transactions had been consummated as of the dates indicated, nor do they purport to represent the consolidated financial position or results of operations for future periods. Further, as these unaudited pro forma condensed consolidated financial statements include only those adjustments directly attributable to the transactions described above, they do not include the impact of any strategies that management may consider in order to continue to efficiently manage Ventas’s operations. This pro forma condensed consolidated financial information should be read in conjunction with:

• Ventas’s unaudited consolidated financial statements as of and for the three and nine months ended September 30, 2010 included in the Company’s Quarterly Report on Form 10-Q for the quarter then ended, filed with the Securities and Exchange Commission (“SEC”) on November 5, 2010; and

• Ventas’s audited consolidated financial statements as of and for the year ended December 31, 2009 included in the Company’s Current Report on Form 8-K filed with the SEC on November 8, 2010.

The acquisition of Atria and One Lantern will be accounted for using the purchase method of accounting. The total purchase price of approximately $3.1 billion will be allocated to the assets acquired and liabilities assumed based upon their respective fair values. The purchase price allocation has not been finalized and is subject to change based upon finalization of working capital adjustments and completion of appraisals of the tangible and intangible assets acquired. The purchase price allocation is preliminary and will be finalized once the transaction closes which is anticipated to occur in the first half of 2011. The allocations included in the pro forma condensed consolidated financial statements are estimates based upon the best available information at the current time. Upon closing the Company will record the fair value of the assets and liabilities assumed utilizing all available information including appraisal information with respect to the tangible and intangible assets acquired.

VENTAS, INC.

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET

As of September 30, 2010

(In thousands)

	Historical
	Ventas		Atria (A)		One Lantern (B)		Acquisition Adjustments (C)			Pro Forma As Adjusted
Assets
Net real estate investments	$	5,454,226	$	1,055,732	$	717,827	$	1,393,397	(D)	$	8,621,182
Cash and cash equivalents		33,790		161,916		21,085		(94,683	) (E)		122,108
Escrow deposits and restricted cash		41,985		29,139		33,599		(12,864	) (E)		91,859
Deferred financing costs, net		22,739		12,191		4,343		(16,534	) (F)		22,739
Other		248,077		123,092		15,968		(22,596	) (G)		364,541
Total assets	$	5,800,817	$	1,382,070	$	792,822	$	1,246,720		$	9,222,429
Liabilities and equity:
Liabilities:
Senior notes payable and other debt	$	2,895,547	$	1,072,914	$	651,180	$	190,331	(H)	$	4,809,972
Accrued interest		33,748		162		7,153		(12	) (E)		41,051
Accounts payable and other accrued liabilities		202,985		81,620		39,922		(23,261	) (I)		301,266
Deferred income taxes		252,351		29,409		—		20,591	(J)		302,351
Total liabilities		3,384,631		1,184,105		698,255		187,649			5,454,640
Commitments and contingencies
Equity:
Total stockholders’ equity		2,401,482		197,965		56,834		1,096,804	(K)		3,753,085
Noncontrolling interest		14,704		—		37,733		(37,733	) (L)		14,704
Total equity		2,416,186		197,965		94,567		1,059,071			3,767,789
Total liabilities and equity	$	5,800,817	$	1,382,070	$	792,822	$	1,246,720		$	9,222,429

See accompanying notes to unaudited pro forma condensed consolidated financial statements.

VENTAS, INC.

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME

For the nine months ended September 30, 2010

(In thousands, except per share amounts)

	Ventas Historical			Ventas 2010 Transactions Adjustments (M)			Pro Forma as Adjusted for Ventas 2010 Transactions			Atria Historical (A)			One Lantern Historical (B)			Acquisition Adjustments (C)			Pro Forma As Adjusted
Revenues:
Rental income:
Triple-net leased	$	351,625		$	254		$	351,879		$	—		$	—		$	—		$	351,879
Medical office buildings		47,246			20,990			68,236			—			—			—			68,236
Resident fees and services		331,535			1,636			333,171			349,058			123,149			(24,792	) (N)		780,586
Medical office building services revenue		6,711			13,422			20,133			—			—			—			20,133
Income from loans and investments		11,336			964			12,300			—			—			—			12,300
Interest and other income		420			6			426			59,324			643			(59,675	) (N)		718
Total revenues		748,873			37,272			786,145			408,382			123,792			(84,467	)		1,233,852
Expenses:
Interest		133,449			10,465			143,914			52,122			35,267			(19,740	) (O)		211,563
Depreciation and amortization		154,458			12,883			167,341			38,591			17,040			78,787	(P)		301,759
Property-level operating expenses:
Senior living		219,802			1,436			221,238			296,349			82,654			(57,403	) (Q)		542,838
Medical office buildings		16,267			7,416			23,683			—			—			—			23,683
Medical office building services costs		4,633			9,266			13,899			—			—			—			13,899
General, administrative and professional fees		35,819			7,548			43,367			35,413			498			(35,911	) (N)		43,367
Foreign currency (gain) loss		(404	)		—			(404	)		—			—			—			(404	)
Loss on extinguishment of debt		6,549			—			6,549			2			—			(2	) (N)		6,549
Other		—			—			—			4,091			8,812			(61	) (N)		12,842
Merger related expenses and deal costs		11,668			514			12,182			—			—			—			12,182
Total expenses		582,241			49,528			631,769			426,568			144,271			(34,330	)		1,168,278
Income (loss) before (loss) income from unconsolidated entities, income taxes, discontinued operations and noncontrolling interest		166,632			(12,256	)		154,376			(18,186	)		(20,479	)		(50,137	)		65,574
(Loss) income from unconsolidated entities		(392	)		(784	)		(1,176	)		—			75			(75	) (N)		(1,176	)
Income tax (expense) benefit		(2,352	)		—			(2,352	)		5,165			—			31,145	(R)		33,958
Income (loss) from continuing operations		163,888			(13,040	)		150,848			(13,021	)		(20,404	)		(19,067	)		98,356
Discontinued operations		7,139			(7,139	)		—			—			—			—			—
Net income (loss)		171,027			(20,179	)		150,848			(13,021	)		(20,404	)		(19,067	)		98,356
Net income (loss) attributable to noncontrolling interest		2,443			—			2,443			—			(2,962	)		2,962	(L)		2,443
Net income (loss) attributable to common stockholders	$	168,584		$	(20,179	)	$	148,405		$	(13,021	)	$	(17,442	)	$	(22,029	)	$	95,913
Earnings per common share:
Basic	$	1.08			n/a		$	0.95			n/a			n/a			n/a		$	0.53
Diluted	$	1.07			n/a		$	0.94			n/a			n/a			n/a		$	0.53
Shares used in computing earnings per common share:
Basic		156,566			n/a			156,566			n/a			n/a			24,959	(S)		181,525
Diluted		157,453			n/a			157,453			n/a			n/a			24,959	(S)		182,412

See accompanying notes to unaudited pro forma condensed consolidated financial statements.

VENTAS, INC.

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME

For the year ended December 31, 2009

(In thousands, except per share amounts)

	Ventas Historical		Ventas 2009 and 2010 Transactions Adjustments (M)			Pro Forma as Adjusted for Ventas 2009 and 2010 Transactions			Atria Historical (A)			One Lantern Historical (B)			Acquisition Adjustments (C)			Pro Forma As Adjusted
Revenues:
Rental income:
Triple-net leased	$	460,646	$	1,225		$	461,871		$	—		$	—		$	—		$	461,871
Medical office buildings		35,922		52,681			88,603			—			—			—			88,603
Resident fees and services		421,058		5,007			426,065			441,663			154,501			(32,327	) (N)		989,902
Medical office building services revenue		—		26,844			26,844			—			—			—			26,844
Income from loans and investments		13,107		2,319			15,426			—			—			—			15,426
Interest and other income		842		13			855			76,354			531			(75,893	) (N)		1,847
Total revenues		931,575		88,089			1,019,664			518,017			155,032			(108,220	)		1,584,493
Expenses:
Interest		176,990		8,414			185,404			68,721			48,217			(25,576	) (O)		276,766
Depreciation and amortization		199,531		30,200			229,731			46,268			30,181			102,774	(P)		408,954
Property-level operating expenses:
Senior living		290,045		4,454			294,499			379,315			107,437			(73,475	) (Q)		707,776
Medical office buildings		12,768		19,008			31,776			—			—			—			31,776
Medical office building services costs		—		18,532			18,532			—			—			—			18,532
General, administrative and professional fees		38,830		15,096			53,926			43,896			1,304			(45,200	) (N)		53,926
Foreign currency loss		50		—			50			—			—			—			50
Loss on extinguishment of debt		6,080		—			6,080			462			115			(577	) (N)		6,080
Other		—		—			—			3,804			(13,536	)		(124	) (N)		(9,856	)
Merger related expenses and deal costs		13,015		1,028			14,043			—			590			—			14,633
Total expenses		737,309		96,732			834,041			542,466			174,308			(42,178	)		1,508,637
Income (loss) before loss from unconsolidated entities, income taxes, discontinued operations and noncontrolling interest		194,266		(8,643	)		185,623			(24,449	)		(19,276	)		(66,042	)		75,856
Loss from unconsolidated entities		—		(1,568	)		(1,568	)		—			(45	)		45	(N)		(1,568	)
Income tax benefit		1,719		—			1,719			4,732			—			43,407	(R)		49,858
Income (loss) from continuing operations		195,985		(10,211	)		185,774			(19,717	)		(19,321	)		(22,590	)		124,146
Discontinued operations		73,375		(73,375	)		—			(103	)		4,513			(4,410	) (N)		—
Net income (loss)		269,360		(83,586	)		185,774			(19,820	)		(14,808	)		(27,000	)		124,146
Net income attributable to noncontrolling interest		2,865		(595	)		2,270			—			329			(329	) (L)		2,270
Net income (loss) attributable to common stockholders	$	266,495	$	(82,991	)	$	183,504		$	(19,820	)	$	(15,137	)	$	(26,671	)	$	121,876
Earnings per common share:
Basic	$	1.75		n/a		$	1.17			n/a			n/a			n/a		$	0.67
Diluted	$	1.74		n/a		$	1.17			n/a			n/a			n/a		$	0.67
Shares used in computing earnings per common share:
Basic		152,566		3,660			156,226			n/a			n/a			24,959	(S)		181,185
Diluted		152,758		3,660			156,418			n/a			n/a			24,959	(S)		181,377

See accompanying notes to unaudited pro forma condensed consolidated financial statements.

VENTAS, INC.

NOTES AND MANAGEMENT’S ASSUMPTIONS TO UNAUDITED PRO FORMA

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1 – BASIS OF PRO FORMA PRESENTATION

Ventas, Inc. (“Ventas” or the “Company”) is a real estate investment trust (“REIT”) with a geographically diverse portfolio of seniors housing and healthcare properties in the United States and Canada. The historical consolidated financial statements of Ventas include the accounts of the Company and its wholly owned subsidiaries and joint venture entities over which it exercises control.

On October 22, 2010, Ventas announced that it had entered into a definitive agreement to acquire 118 private pay seniors housing communities managed by Atria Senior Living Group (“Atria”) (including assets owned by Atria’s affiliate One Lantern Senior Living Inc (“One Lantern”)) from funds affiliated with Lazard Real Estate Partners (“Lazard”) for a purchase price of approximately $3.1 billion, comprised of $1.35 billion in Ventas common stock (a fixed 24.96 million shares), $150 million in cash and the assumption or repayment of approximately $1.6 billion of debt and capital lease obligations, less assumed cash. These pro forma condensed consolidated financial statements assume no repayment of the $1.6 billion of net debt.

NOTE 2 – ADJUSTMENTS TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET

(A) Reflects historical financial condition or results of operations of Atria as of or for the nine months ended September 30, 2010 or for the year ended December 31, 2009. Certain amounts have been reclassified to conform to Ventas’s presentation.

(B) Reflects historical financial condition or results of operations of One Lantern as of or for the nine months ended September 30, 2010 or for the year ended December 31, 2009. Certain amounts have been reclassified to conform to Ventas’s presentation.

(C) Represents adjustments to record the acquisition of Atria and One Lantern by Ventas based upon the purchase price of approximately $3.1 billion. The calculation of the purchase price to be allocated is as follows (in millions, except per share amounts):

Equity to be issued (24.96 million shares at $54.09/share)	$	1,350
Cash to be paid (assumed to be funded with borrowings from our unsecured revolving credit facilities)		150
Assumption of net debt, including capital lease obligations		1,618
Purchase price	$	3,118

(D) Reflects adjustment to eliminate assets of Atria and One Lantern that Ventas is not purchasing and adjustment to record the estimated increase over Atria and One Lantern’s historical investment in real estate based upon the preliminary estimated fair value for the tangible and intangible real estate assets. These estimated values are as follows (in millions):

Land	$	608
Buildings and improvements		2,445
Acquired lease intangibles		114
Estimated value of net real estate investments	$	3,167

(E) Reflects adjustments to eliminate assets and liabilities of Atria and One Lantern that Ventas is not acquiring or assuming as part of the working capital consideration.

(F) Represents the write-off of Atria and One Lantern’s deferred financing costs, which were not assigned any value in the allocation of the acquisition.

(G) Reflects adjustment to eliminate other assets of Atria and One Lantern that Ventas is not acquiring as part of the working capital consideration, net of other acquired assets.

(H) Represents the following adjustments (in millions):

Write-off Atria and One Lantern’s fair market value of debt adjustment	$	29
Fair market value of debt adjustment allocated for the acquisition		61
Debt not assumed as part of the acquisition		(57	)
Net adjustment allocated for the acquired capital lease obligations		7
Net borrowings on unsecured revolving credit facility		150
Pro forma adjustment to debt	$	190

(I) Reflects adjustment to eliminate other liabilities of Atria and One Lantern that Ventas is not assuming as part of the working capital consideration, offset by approximately $14.3 million of a contingent consideration liability and approximately $2.0 million of below market operating lease intangibles, both of which are based on the preliminary fair value calculations.

(J) Represents the write-off of Atria’s deferred income tax liability, which is not assigned any value in the allocation of the acquisition, offset by Ventas’s estimate of approximately $50 million for its deferred tax liability associated with the step up to fair value for book purposes of the Atria and One Lantern assets (difference between book and tax bases).

(K) Represents the write-off of Atria and One Lantern’s historical equity, net of the issuance of 24.96 million shares of Ventas common stock, which was valued at $1.35 billion at the time of the announcement of the transaction.

(L) Reflects the acquisition of the noncontrolling interest of a Lazard entity in One Lantern as part of the transaction consideration.

NOTE 3 – VENTAS 2009 AND 2010 TRANSACTIONS ADJUSTMENTS

(M) Reflects the effect on Ventas’s historical consolidated statements of income and shares used in computing earnings per common share as if Ventas had consummated its 2010 and 2009 acquisitions and other investments (including debt to fund these acquisitions and investments), dispositions, significant debt activity and 2009 equity offering as of the beginning of the nine-month period ended September 30, 2010 or the beginning of the year ended December 31, 2009.

NOTE 4 – ADJUSTMENTS TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(N) Reflects adjustments to eliminate revenues and expenses of Atria and One Lantern attributable to assets or liabilities that Ventas is not acquiring or assuming as part of the acquisition.

(O) Represents the following adjustments (in millions):

	For the nine months ended September 30, 2010			For the year ended December 31, 2009
Debt not assumed as part of the acquisition	$	(3	)	$	(4	)
Fair market value of debt adjustment allocated for the acquisition		(15	)		(19	)
Amortization of below market lease intangible		(2	)		(2	)
Pro forma adjustment to interest	$	(20	)	$	(25	)

(P) Based on the preliminary purchase price allocation, Ventas expects to allocate $608 million to land and $2.4 billion to buildings and improvements. Depreciation expense is calculated on a straight line basis based on Ventas’s purchase price allocation and using a 35-year life for buildings and permanent structural improvements, a five-year life for furniture and equipment and a 20-year life for land improvements. Additionally, Ventas’s purchase price allocation includes $114 million of acquired lease intangibles, primarily related to in-place leases, which will be amortized over the average life of these leases (approximately one year). Further, the adjustment reflects the elimination of depreciation expense related to assets Ventas is not acquiring.

(Q) Reflects adjustments to eliminate expenses of Atria and One Lantern attributable to assets or liabilities that Ventas is not acquiring or assuming as part of the acquisition, offset by the 5% management fee Ventas will be paying to Atria for management services related to the acquired communities.

(R) Reflects adjustments to eliminate tax benefit of Atria, offset by the estimated tax benefit Ventas expects to recognize due to the acquisition.

(S) Reflects the issuance of 24.96 million shares of Ventas common stock at closing.

NOTE 5 – FUNDS FROM OPERATIONS AND NORMALIZED FUNDS FROM OPERATIONS

Ventas’s historical and pro forma funds from operations (“FFO”) and normalized FFO for the nine months ended September 30, 2010 are summarized as follows (in thousands):

	Ventas Historical			Ventas 2010 Transactions Adjustments (M)			Pro Forma as Adjusted for Ventas 2010 Transactions			Atria Historical (A)			One Lantern Historical (B)			Acquisition Adjustments (C)			Pro Forma As Adjusted
Net income attributable to common stockholders	$	168,584		$	(20,179	)	$	148,405		$	(13,021	)	$	(17,442	)	$	(22,029	)	$	95,913
Adjustments:
Real estate depreciation and amortization		153,321			12,883			166,204			38,591			17,040			78,787			300,622
Real estate depreciation related to noncontrolling interest		(5,033	)		—			(5,033	)		—			—			—			(5,033	)
Real estate depreciation related to unconsolidated entities		1,275			2,550			3,825			—			—			—			3,825
Discontinued operations:
Gain on sale of real estate assets		(5,393	)		5,393			—			—			—			—			—
Depreciation on real estate assets		464			(61	)		403			—			—			—			403
FFO		313,218			586			313,804			25,570			(402	)		56,758			395,730
Adjustments:
Income tax expense (benefit)		761			—			761			(5,165	)		—			(31,145	)		(35,549	)
Loss on extinguishment of debt		6,549			—			6,549			2			—			(2	)		6,549
Merger-related expenses and deal costs		11,668			514			12,182			—			—			—			12,182
Loss on interest rate swap		—			—			—			—			5,834			—			5,834
Amortization of other intangibles		338			253			591			—			—			—			591
Normalized FFO	$	332,534		$	1,353		$	333,887		$	20,407		$	5,432		$	25,611		$	385,337

FFO per diluted share outstanding for the nine months ended September 30, 2010 follows (in thousands, except per share amounts):

	Ventas Historical			Pro Forma As Adjusted
Net income attributable to common stockholders	$	1.07		$	0.53
Adjustments:
Real estate depreciation and amortization		0.97			1.65
Real estate depreciation related to noncontrolling interest		(0.03	)		(0.03	)
Real estate depreciation related to unconsolidated entities		0.01			0.02
Discontinued operations:
Gain on sale of real estate assets		(0.03	)		—
Depreciation on real estate assets		—			—
FFO		1.99			2.17
Adjustments:
Income tax benefit		—			(0.19	)
Loss on extinguishment of debt		0.04			0.04
Merger-related expenses and deal costs		0.07			0.07
Loss on interest rate swap		—			0.03
Amortization of other intangibles		—			—
Normalized FFO	$	2.11		$	2.11
Dilutive shares outstanding used in computing FFO and normalized FFO per common share		157,453			182,412

Historical and pro forma FFO and normalized FFO for the year ended December 31, 2009 are summarized as follows (in thousands):

	Ventas Historical			Ventas 2009  and 2010 Transactions Adjustments (M)			Pro Forma as Adjusted for Ventas 2009 and 2010 Transactions			Atria Historical (A)			One Lantern Historical (B)			Acquisition Adjustments (C)			Pro Forma As Adjusted
Net income attributable to common stockholders	$	266,495		$	(82,991	)	$	183,504		$	(19,820	)	$	(15,137	)	$	(26,671	)	$	121,876
Adjustments:
Real estate depreciation and amortization		198,841			30,200			229,041			46,268			30,181			102,774			408,264
Real estate depreciation related to noncontrolling interest		(6,349	)		(54	)		(6,403	)		—			—			—			(6,403	)
Real estate depreciation related to unconsolidated entities		—			5,100			5,100			—			—			—			5,100
Discontinued operations:
Gain on sale of real estate assets		(67,305	)		67,305			—			(16	)		(5,249	)		5,265			—
Depreciation on real estate assets		1,727			(1,079	)		648			—			—			—			648
FFO		393,409			18,481			411,890			26,432			9,795			81,368			529,485
Adjustments:
Income tax benefit		(3,459	)		—			(3,459	)		(4,732	)		—			(43,407	)		(51,598	)
Loss on extinguishment of debt		6,080			—			6,080			462			115			(577	)		6,080
Merger-related expenses and deal costs		13,015			1,028			14,043			—			590			—			14,633
Gain on interest rate swap		—			—			—			—			(16,960	)		—			(16,960	)
Amortization of other intangibles		—			788			788			—			—			—			788
Normalized FFO	$	409,045		$	20,297		$	429,342		$	22,162		$	(6,460	)	$	37,384		$	482,428

FFO per diluted share outstanding for the year ended December 31, 2009 follows (in thousands, except per share amounts):

	Ventas Historical			Pro Forma As Adjusted
Net income attributable to common stockholders	$	1.74		$	0.67
Adjustments:
Real estate depreciation and amortization		1.30			2.25
Real estate depreciation related to noncontrolling interest		(0.04	)		(0.04	)
Real estate depreciation related to unconsolidated entities		—			0.03
Discontinued operations:
Gain on sale of real estate assets		(0.44	)		—
Depreciation on real estate assets		0.01			—
FFO		2.58			2.92
Adjustments:
Income tax benefit		(0.02	)		(0.28	)
Loss on extinguishment of debt		0.04			0.03
Merger-related expenses and deal costs		0.09			0.08
Gain on interest rate swap		—			(0.09	)
Amortization of other intangibles		—			—
Normalized FFO	$	2.68		$	2.66
Dilutive shares outstanding used in computing FFO and normalized FFO per common share		152,758			181,377

Pro forma FFO and normalized FFO are presented for information purposes only, and were based on available information and assumptions that the Company’s management believes to be reasonable; however, they are not necessarily indicative of what Ventas’s FFO or normalized FFO actually would have been assuming the transactions had occurred as of the dates indicated.

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, Ventas considers FFO and normalized FFO appropriate measures of operating performance of an equity REIT. Further, Ventas believes that normalized FFO provides useful information because it allows investors, analysts and Ventas management to compare Ventas’s operating performance to the operating performance of other real estate companies and between periods on a consistent basis without having to account for differences caused by unanticipated items. Ventas uses the National Association of Real Estate Investment Trusts (“NAREIT”) definition of FFO. NAREIT defines FFO as net income (computed in accordance with GAAP), excluding gains (or losses) from sales of real estate property, plus real estate depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures are calculated to reflect FFO on the same basis. Ventas defines “normalized FFO” as FFO excluding the following items (which may be recurring in nature): (a) gains and losses on the sales of assets; (b) merger-related costs and expenses, including amortization of intangible and transition and integration expenses, and deal costs and expenses, including expenses relating to the Company’s lawsuit against HCP, Inc.; (c) the impact of any expenses related to asset impairment and valuations allowances, the write-off of unamortized deferred financing fees, or additional costs, expenses, discounts or premiums incurred as a result of early debt retirement or payment of the Company’s debt; and (d) the non-cash effect of income tax benefits or expenses.

FFO and normalized FFO presented herein are not necessarily identical to FFO and normalized FFO presented by other real estate companies due to the fact that not all real estate companies use the same definitions. FFO and normalized FFO should not be considered as alternatives to net income (determined in accordance with GAAP) as indicators of Ventas’s financial performance or as alternatives to cash flow from operating activities (determined in accordance with GAAP) as measures of Ventas’s liquidity, nor are FFO and normalized FFO necessarily indicative of sufficient cash flow to fund all of Ventas’s needs. Ventas believes that in order to facilitate a clear understanding of Ventas’s consolidated historical operating results, FFO and normalized FFO should be examined in conjunction with net income as presented in the Unaudited Pro Forma Condensed Consolidated Financial Statements.