Good morning and welcome to the HCP Conference Call. All participants will be in a listen-only mode. After today's presentation, there will be an opportunity to ask questions. Please also note that today's event is being recorded. At this time, I'd like to turn the conference call over to John Lu, EVP of Corporate Finance. Sir, please go ahead. John Lu - Executive Vice President - Corporate Finance & Investments: Thank you, Jamie. Today's conference call will contain certain forward-looking statements, including those about our guidance and the financial position and operations of our tenants. These statements are made as of today's date and reflect our good faith, beliefs and best judgment based on current information. These statements are subject to the risks, uncertainties and assumptions that are described in our press releases and SEC filings, including our annual report on Form 10-K for the year ended 2015. Forward-looking statements are not guarantees of future performance. Actual results and financial condition may differ materially from those indicated in these forward-looking statements. Future events could render the forward-looking statements untrue, and the company expressly disclaims any obligation to update earlier statements as a result of new information. Additionally, certain non-GAAP financial measures will be discussed on this call. We have provided reconciliations of these measures to the comparable GAAP measures in our supplemental information package and earnings release, both of which have been furnished to the SEC today and are available on our website at www.hcpi.com. Also during the call, we will discuss certain operating metrics, including occupancy, cash flow coverage and same-property performance. These metrics and other related terms are defined in our supplemental information package. I will now turn the call over to our CEO, Mike McKee.

Welcome, everyone. Joining me today is Justin Hutchens, our Chief Investment Officer, and John Lu, our Executive Vice President of Corporate Finance. And I'm pleased to welcome back Tom Herzog on his first earnings call since returning as our Chief Financial Officer. We look forward to sharing with you our quarterly results and updates on several significant initiatives. But before diving into the details, I want to step back for several minutes and give you some additional color on the rationale behind some major changes at the company. They have a purpose. I will start by saying this is an exciting time at HCP. It's a Renaissance of sorts. I've been referring recently to the stage we are entering into as HCP 3.0. I've been fortunate to be a witness to and a participant in each of the generational periods of HCP since its formation in 1985. The first generation was represented by our friend and founding CEO, Ken Roath. Well known to many of you, Ken established our company as one of the first healthcare REITs and grew it significantly with a solid foundation and a stellar reputation. Jay Flaherty is identified with our second generation. Over his decade of leadership, he repositioned the company to a significant extent by moving away from properties reliant on government reimbursement and into larger transactions that provided scale as privatization and consolidation swept through the industry. Lessons learned, one large transaction that we all take responsibility for was our purchase of HCR ManorCare in 2011. At the time of the purchase, this leading skilled nursing post-acute company was widely acclaimed as best-in-class, but it was also heavily reliant on government reimbursement. All of you know, that over the last five years, the skilled nursing post-acute space has been rocked by numerous sequential…

Thank you, Tom. We had a relatively quiet quarter announcing $111 million of investments in the Life Science segment, bringing our year-to-date total investments to $475 million, substantially all in private pay sectors. But more importantly, let me highlight the performance of the remaining 75% of our portfolio that will anchor HCP's future organic growth and why we believe this portfolio stands up among the best in the industry. HCP post-spin will have 95% of our income derived from private pay sources across Senior Housing, Life Science, and Medical properties. In Senior Housing, as Tom mentioned, we had another quarter of strong growth in our 70 communities, thanks to our RIDEA portfolio of 5.6%, bringing our year-to-date growth to 7.5%, driven by occupancy improvement of 150 basis points in the quarter, which was 170 basis points above the overall industry. We were also able to achieve strong rate growth of 3.5%, again, ahead of the industry average. The benefits of our revenue-enhancing capital investments are beginning to take shape, and we feel there is further room to grow in our markets. Our portfolio is positioned in markets with high senior population growth, and has shown resilience to the threats of new supply. Fewer than 15% of our communities have been impacted by recent openings since the start of 2015. Occupancy in our top-five markets improved 100 basis points in the second quarter from prior year to 91%, while growth for the remaining portfolio was even stronger. Our diverse portfolio by geography and care mix allows us to mitigate the concentration risk of new supply and labor challenges. Although our communities located in our top markets enjoyed NOI growth comparable to our peers, our communities located outside the primary markets enjoyed same-store NOI growth of 13% over the prior year. We…

Thanks, Justin. Let me provide now an update on the spin transaction and also take the opportunity to introduce Mark Ordan, our designated CEO for QCP, to make some remarks. The executive team for QCP has been assembled and Mark will speak to that in a moment. We have filed the first amendment to our Form 10. We are in the process with our debt financing for QCP. Market conditions are stable and we're gearing up with our financial advisors, Barclays and Morgan Stanley, to begin formal marketing shortly. We continue to believe firmly that forming QCP represents the superior vehicle with flexibility to unlock significant embedded value in the HCR ManorCare portfolio. Let me turn it over now to Mark Ordan to give us his perspectives.

Thank you, Mike. As Mike mentioned, we are progressing in every area necessary to launch the spin of our new company, Quality Care Properties, or QCP. We have a highly experienced management team with Greg Neeb as our President and Chief Investment Officer and Mark Richards as our Chief Financial Officer. I work closely with Greg and Mark for the past decade in several companies, most applicably the turnaround of Sunrise Senior Living where we both owned and operated skilled nursing facilities and a major assisted living and memory care platform. We have a demonstrated track record of actively managing real estate and healthcare operations with a proven ability to work through challenging situations to reach an optimal outcome for our shareholders. We look forward to leading QCP. We have also made good progress on forming our board of directors. We will soon be announcing our highly qualified board of six independent directors joining me with experience across the healthcare, real estate, investing, finance, and legal sectors. As Mike mentioned, we are moving along toward arranging our debt financing which will be in place for the spin, and we will then be able to speak specifically to the debt cost and structure. QCP will emerge with an appropriate capital structure to support our business strategy. We will be a major player in a vital, irreplaceable, and growing sector within healthcare. At its inception, QCP will own a portfolio of 338 properties diversified across 30 states, primarily consisting of post-acute skilled nursing and private pay senior housing facilities operated by HCR ManorCare. QCP's in-place rental income will be approximately $485 million, and we estimate our annual G&A run rate to be just over $20 million. Our near-term goal will be to manage actively our portfolio and relationship with HCR ManorCare in…

Thanks, Mark. In closing, let me summarize a few important points. Our spin is on track and the financing process is underway. The remaining 75% of our portfolio has continued to perform very well, with all sectors producing strong growth. We're happy with our partnership with Brookdale and the growth that our RIDEA portfolio has achieved. And we will continue to work with them to identify ways to address the concentration in a way that is strategic for both companies. We maintain an investment grade balance sheet and have plans in place to improve our leverage profile further. And most importantly, we have assembled an incredibly talented team that will be able to drive value for our shareholders. More to come on this topic in the coming months as we bring HCP 3.0 forward. With that, I will turn it back to the operator to open the line for questions. Thank you.

Ladies and gentlemen, we'll now begin the question-and-answer session. Our first question today comes from Vikram Malhotra from Morgan Stanley. Please go ahead with your question. Landon Park - Morgan Stanley & Co. LLC: Hi, guys. This is Landon Park on for Vikram. Just wondering if we could start out talking about Brookdale a bit more and the triple-net senior housing portfolio. Just how are you approaching that? Several of the buckets seem to move down in terms of coverage if you look at Sunrise. And then more specifically on Brookdale, the negotiations that they say that you're in regarding some of their underperforming assets. And then just longer term, how you're approaching the risk in that portfolio.

Hi. This is Justin. We mentioned on our last call that we were in discussions with Brookdale regarding 25 triple-net assets and those assets are in fact a drag on the triple-net portfolio. I'll note that while we're in negotiations, I think that when we come out of this, there'll be winners on both sides of the table, so we've been taking our time trying to get transaction that creates a win for HCP and that's comfortable for Brookdale as well. And if you look at their overall company, we're encouraged by the new team that's in place. There's a lot of focus on refining systems, putting new controls in place. They've reorganized the company in terms of their oversight over the field. You probably noted, if you follow Brookdale, a lot of confidence coming from the management team through their Investor Day and on their earnings call today. So we're encouraged by the overall performance of the company. Meanwhile, we're mindful of the concentration that HCP will have, pre-spin around 25% concentrated, post-spin, we go to around 34%. Mike mentioned in his prepared remarks that it will be a focus for us. We think that it's ongoing discussions with Brookdale to call the portfolio, can help the concentration and ultimately help the credit quality of the lease moving forward. And then, of course, over time, by growing in other asset classes and what other operators will be able to address the concentration as well. Landon Park - Morgan Stanley & Co. LLC: Okay. And then just on some of the other buckets within triple-net Senior Housing, such as Sunrise and the other bucket also ticked below 1 times coverage it looked like.

Yeah, Sunrise had some slowness in entrance fee sales. We think that'll pick up throughout the rest of the year. I feel comfortable with their performance moving forward. The other bucket we're addressing in a number of ways. We have some assets that are being sold back to operators. We have some transitions where we're moving to new operators. And then we've also converted some triple net lease assets into RIDEA relationships. And net, we think that's neutral financially, but ultimately the assets are going to be in better hands. Landon Park - Morgan Stanley & Co. LLC: Okay. And can you just clarify on the RIDEA II sale, the change in proceeds there and exactly what's happening there?

I'll start quick and I'll hand it over to Tom. I just wanted to note that the transaction itself from an overall economic standpoint, has not changed. When we made that trade, we agreed to a price that supported a 6.5% cap on a trailing basis. And so the equity payment from our partner has not changed. And I'll hand it to Tom. Thomas M. Herzog - Chief Financial Officer & Executive Vice President: Yeah, Landon. So what we're looking at, as Justin indicated, regardless of how we finance it, we still have our same share in the real estate in that joint venture. And it is at a 6.5% trailing cap rate. And, again, so that part doesn't change. What has changed is how we're financing the entity. So, we have this partnership along with another one where we have partners that would like to receive some proceeds. And we don't prefer to receive proceeds at the HCP level because we're more geared toward wanting to bring our leverage down more rapidly and improve our net debt to EBITDA. So the way to accomplish that is to put in place third-party debt for the partners' share of that financing and then we provide debt at the same rate for our share, which gets eliminated in consolidation as if that debt doesn't even exist from our perspective. So our financial position remains unchanged. So we're doing that with a couple of our partnerships. We also have a GBP revolver outstanding for $450 million. We intend to prepay that because there's no prepayment penalties on that. And we can reduce our leverage fairly substantially. That's where we come up with those leverage numbers that I spoke to in the script of coming somewhere in the vicinity of 45.5% to 46% leverage post-spin, bringing it down to 43.5%. And from 6.6 times net debt-to-EBITDA down to 6.25 times net debt-to-EBITDA is that series of moves. One last thing I'd add is in prepayment of that GBP debt, of course we have to pay attention to the hedging that we have on our GBP investments. So we'd enter into a simple cross-currency swap against one of our unsecured notes so that we stay hedged. So that's how we're thinking about the revised financing plan. Landon Park - Morgan Stanley & Co. LLC: Great. Thank you very much.

You bet.

Our next question comes from Jordan Sadler from KeyBanc Capital Markets. Please go ahead with your question.

Thank you, everybody. And good morning. Welcome back, Tom. Thomas M. Herzog - Chief Financial Officer & Executive Vice President: Yes. Thank you.

Sure. My question is regarding the $2.9 billion figure you identified from dispose and the dividend back from QCP. Is there any way you can break that out for us at this point? Thomas M. Herzog - Chief Financial Officer & Executive Vice President: Fair question, but the answer is, no, we really can't. It would be premature. We're working right now on the financing portion for QCP. And over the coming weeks, we'll have a better idea of exactly what those terms will look like and the amounts. And then the corresponding amount to add up to the amount of proceeds that we've spoken to will come through non-core sales out of our portfolio. So either way, we're in fine shape to have the proceeds that we need. But the make-up of the two components is yet to be determined based on how the markets look.

Okay. But that $2.9 million includes basically the total amount of proceeds that will be received from QCP by HCP? Thomas M. Herzog - Chief Financial Officer & Executive Vice President: That's correct. What happens is QCP obtains the funding in the form of those – of that debt, and it makes a distribution of those proceeds back to HCP. So, we receive those proceeds, plus then we have noncore sales to make up the difference.

Great. Okay. I'm just obviously trying to back into the implied valuation. Thomas M. Herzog - Chief Financial Officer & Executive Vice President: Yeah. I understand.

So, my other question regarding the coverage on HCR, Justin, you gave it ex the 33. Can you give it to us ex the 17 as well?

Let me just step back and talk about the coverage but also the performance outlook for HCR. You might remember that we gave a sensitivity range at the beginning of the year that started at $505 million and went to $555 million, and that's the EBITDAR at the company level. At this time, as we look ahead, there's some pluses in the second half of the year. There's a 2% plus Medicare increase for skilled nursing and hospice. Seasonally, Q4 is generally strong, although that's not always the case. So, as we've looked at that and incorporated feedback from the company, we point to the lower end of that range at this point in time, and a corresponding fixed charge cover would be 1.07 or 1.10. If you take out the impact that was picked up from the asset sales, so the drag from the asset sales, you're about at 1.04. Another way to look at it, though, is that we have more assets sales to go. There's about $65 million more in sales coming, 10 are under contract, total proceeds we estimate to be around $54 million, and then we have another 7 that will pick up the remaining amounts. And we expect the 10 to close by year end and then the remaining amounts to close in the first quarter. But the timing of that sale can help us to get to that 1.1 cover.

Okay. That's helpful. Thank you. And just one clarification, if I may. The target net debt you mentioned EBITDA, Tom, is 6.6 times. Is that a pro forma number, pro forma to spin? Thomas M. Herzog - Chief Financial Officer & Executive Vice President: Yeah. That's pro forma to spin. And keep in mind that...

You'll be at 6.6 times pro forma? Thomas M. Herzog - Chief Financial Officer & Executive Vice President: It would be at 6.6 times. We called it mid 6 times because I think in the last call just to reconcile. But it's about 6.6 times. And then after we complete these financing activities over the next few months, that would drive it back down to the 6.25 times, which is, I mean, frankly, is part of our ongoing efforts and plan to start to, patiently, over the next two years to three years' work our way back towards BBB+ metrics. And that's what we're thinking about as we look at the leverage. And the net debt-to-EBITDA is we're currently at a comfortable BBB. And we intend to take actions through a variety of measures to work our way back towards a BBB+ metrics over the next two years to three years which is where we'd like to land.

Thank you for all the color and the time. Thomas M. Herzog - Chief Financial Officer & Executive Vice President: You bet.

Our next question comes from Juan Sanabria from Bank of America Merrill Lynch. Please go ahead with your question.

Hi. Thanks for the time. Just a couple of questions. First on the Life Science portfolio. Could you just give us a sense of how much free rent is still yet to burn off? And any sense of the mark-to-market on the portfolio maturing through 2018 and how we should think about that?

Well, high level, I'm sure you noted that the occupancy is 98.7%. There's been solid growth due to the mark-to-market and also new leasing activity. However, as we look ahead, most of our leases are at market at this point. So, we would anticipate high occupancy but that organic growth due to the mark-to-market leasing would slow down a bit.

And any color on the free rent burning off, or how much is left? John Lu - Executive Vice President - Corporate Finance & Investments: Hey, Juan. This is John. On Life Science, when we signed a new lease 7 years, 10 years generally, you have the first few months that's free rent. So, you saw us increase our occupancy every quarter. We have sort of a new all-time high occupancy the last four quarters, five quarters every quarter, so that's going to phase out over time. But generally, in the longer term lease, you have the first few months where you have that rent – free rent, and that's what Tom talked about earlier in his prepared remarks, part of the 8% plus we put this quarter pertained to sort of burn-off of those things. But you'll see that normalize over time. As Justin mentioned, occupancy getting to that pretty high levels.

Okay. And then, just on the hospital side, what's the driver of the deceleration over the back half of the year that's implied by the guidance that was adjusted down? If you can give us some color on that. Thomas M. Herzog - Chief Financial Officer & Executive Vice President: There was a contractual rent reset that occurred. So, we expect to pick up again next year. You'll see that the growth back on a regular pace.

And what was the rent reset? What was the coverage and where did it go, I guess where was it from and where did it go to and how big was that? John Lu - Executive Vice President - Corporate Finance & Investments: Hey, Juan. It's one of the – first of all, our hospital portfolio, as you know, it's pretty small and it's one of the hospital tenants were – what we did was we spread out a rent reduction previously under the old contract. It would've been a one – overall one year period. We spread it out over a longer period of time. And economically speaking, it doesn't change the cash flows under the lease. It's just on a timing standpoint. So, from 2016 to back half of the year, you saw the cash same-store growth. That's what you noted in terms of midpoint of the range. And we just sort of spread it over a longer period of time, and part of that trickled into the latter half of this year.

Okay. And just one last quick one. CapEx expectations for the RIDEA portfolio. You talked about seeing some of the benefits from some of the redevelopment CapEx, but what should we expect spend maybe per unit from here?

We're spending between $4,000 and $5,000 a unit, about two-thirds of that is going into major refreshes, the repositioning of the assets. The rest is routine. We're not getting into forecasting for next year, but I would anticipate there'll be some carryover from some projects that are underway. But as you know, we're actually quite pleased with the results we're seeing. We've dug into several of the markets where we've had that projects completed. We tracked the cash flow performance and occupancy of those assets relative to market, and we're finding that we're outperforming. So, there's definitely a net benefit in the early going from this capital expenditures. However, as we've looked at this and with Tom on board now, we're going to make this a priority topic. We're going to revamp and enhance our internal tracking, and it'll help us to articulate it more clearly, externally as well. In fact, maybe Tom can mention a few of the highlights, and how we're going to approach this. Thomas M. Herzog - Chief Financial Officer & Executive Vice President: Yeah. I'll just take a minute on it. When we think about revenue-enhancing CapEx, and Justin and I both worked around this for a long time, so we just need to put in place the review processes and systems to capture returns that we already know are inherent in a lot of work that we're doing, but to put more rigor around it. We think about the type of spend that it is, it's exterior common areas, it's kitchen, bath, FF&E, et cetera. Lot of the stuff might have a 12-year life. It usually requires a fairly high cash-on-cash return in the front end, probably has a average life somewhere in the vicinity of 12 years. We're going to fine-tune this through our discussions. We're obviously going to want to underwrite to an IRR a certain number of basis points above our WACC to make sure that there's honesty in the projects that we approve, that there is a positive return to our investors. And then I have a view on the impact on the same-store portfolio growth so that, again, we've got a feel for what it does to the numbers. Now, as you know over time, with these types of programs, the rollover effect occurs and then that becomes a smaller number the same-store impact from it, but these are things that Justin and I and others on the team are going to get underneath and be ready to speak to in the future.

Thank you very much. Thomas M. Herzog - Chief Financial Officer & Executive Vice President: You bet.

Our next question comes from Nick Yulico [UBS Securities LLC]. Please go ahead with your question.

Thanks. I just want to go back to Mark who comments on looking at alternatives to work with HCR ManorCare. It seems like the most obvious candidate here would be to eventually reduce the rents and exchange QCP gets more equity in the OpCo HCR ManorCare, but this could result in QCP having to shed its REIT status. So, I guess how are you and the board going to weigh that issue about as an alternative looking to get something in return for a rent cut, but it resulting in you guys maybe having to lose your REIT status?

Well, by design, QCP has this – as we've said several times the tools and flexibility to work with HCR ManorCare's management team, which we look forward to doing to finding, for lack of a better phrase, a comprehensive solution. So, it could go down the path that you outlined. It could go down several paths but we think that this is a great, long-term value in that portfolio and we look forward to working with ManorCare to unlock that. And our expectation is that we're going to be a REIT and then we'll be able to work out our issues and maintain that REIT status. But that remains to be seen. The key point, I think, from an HCP shareholder is that this is a vehicle that's more suited, especially given our 100% focus on working with ManorCare, this is a vehicle that's more suited to working this out than HCP would have been. So, our shareholders should be able to benefit from both.

Okay. And then going back to your comment about the dividend of QCP being low to modest into build-up near-term liquidity, I mean, what exactly does low to modest mean? I mean, are you referring to an absolute dollar amount, a payout ratio, how should we think about that?

No, I think I'm referring to a philosophy and getting ahead of myself because our board obviously and our company has not yet established. But I would say that I think it's just good corporate finance to expect that we would start out modestly. I'm talking philosophically to get our footing where we then have room to grow from there. So, I meant nothing more than that. And I certainly could not pinpoint a dollar amount or a payout ratio today.

Okay. Okay. And then I guess, just lastly, I know you're not sort of saying what the – in the past, you said the – HCP has said that the debt could be some sort of five times debt-to-EBITDA type of level for the SpinCo. Is that still the case, and maybe you can talk a little bit more about the types of financing you're trying to do, whether it's secured, leveraged loan financing, and then as we think about ultimately what HCP is doing here, which is raising debt at SpinCo to pay off your debt at HCP of a sort of 6.3% rate, I think you said, is the rate – I mean, is that going to be just the debt for that – is that going to be a neutral event? Is it going to be dilutive? Is it going to be accretive? I mean, how should we think about the rate of what you're trying to raise versus payoff? Thomas M. Herzog - Chief Financial Officer & Executive Vice President: Multiple part question. Great question. But let me hit the pieces. Your first question was the 5.0 times, we really stirred out more in the mid-3s, as far as net debt-to-EBITDA based on current rents. And that 5.0 times that you're referencing would be somebody in the Street looking at it and modifying or underwriting a rent at a 1.3 times on the skill than 1.1 times on the assisted net debt. That is not where we're at right now. So I would just start by saying it's more in that mid to upper 3s as to where we'd stand on day one and – but yet to be determined. As far as the different types of financing that could occur, we'd like a 3. I…

All right, that's helpful. Thank you, Tom and Mark. Thomas M. Herzog - Chief Financial Officer & Executive Vice President: You bet.

Our next question comes from Kevin Tyler from Green Street Advisors. Please go ahead with your question.

Yes, thanks. Tom, just following up on that point when you broke out the leverage answering Nick's question there, I didn't hear you mention anything related to the seller financing meaning HCP extending any financing directly to QCP. I just want to make sure I'm hearing that correctly and understand your thinking on that topic at this point. Thomas M. Herzog - Chief Financial Officer & Executive Vice President: Yeah. You heard me correctly. I did not allude to seller financing because as we go out to the market, we're going to see how it all lines out but it's our initial goals of – we'll see if we can get those finance without seller financing. That would be our preference. But at the same time, we have to see what the market holds. We've got a lot of different alternatives that we can consider. So, I don't want to pin us down to anything specific but in the numbers that I gave and the commentary that I provided assume no seller financing.

Okay. Thanks. And then one other – and maybe it's for you, Mark, on ManorCare. But in light of the Department of Justice settlement or pending settlement that Genesis had announced, I'm wondering what read-through there might be, if any, to the ongoing suit at ManorCare with the DOJ and if there was any update that you could provide on that at this point. Thomas M. Herzog - Chief Financial Officer & Executive Vice President: I guess I'll jump in and take that, and then, Mark, you can add if you want but as we look at the DoJ case, it's still early in the process, just starting discovery. There really is no way of projecting a potential outcome at this point. So, we're already seeing some settlements and they appear to be manageable. So, that's probably all that we can see at this point on that topic.

Okay. Last one I had, Justin, on the Brookdale portfolio and their results last night, occupancy slid a little bit but management talked about some strength in June. And I'm just wondering in your portfolio, you saw a little bit of decline quarter-over-quarter but did you see similar strength in June? And are you expecting that occupancy will head higher maybe in the back half of the year? Or I'm just curious on the outlook given some competitive pressure on the way?

Now, I think what I'll do is this I'll speak to our expectations in terms of performance in our RIDEA portfolio. And when you take that whole bucket of 70 communities that I spoke to during my prepared remarks, as we look forward, we could see the – although the performance has started out pretty hot in the beginning of the year, we could see the total year coming in around 4% to 5%, which would have been better than our early expectations at the beginning of the year for that same portfolio. But what you're facing in the second half of the year, you have some new supply in some of our markets. We also have some more labor pressure that we'll face as well. Q3 tends to be a softer quarter seasonally. Brookdale had some remarks on their call that were favorable leading into Q3. But in terms of our RIDEA expectations, we're expecting a solid year at 4% to 5%, but potentially a little bit of a softer back half of the year. And then in terms of the triple-net portfolio, that performance, to your point, doesn't perfectly track the Brookdale corporate performance, but it's pretty close. So I would really defer to Brookdale's management commentary in terms of the overall company expectations as it relates to our triple-net portfolio.

Appreciate it.

Our next question comes from Chad Vanacore from Stifel. Please go ahead with your question. Chad Vanacore - Stifel, Nicolaus & Co., Inc.: Hi. Good afternoon.

Hello there. Chad Vanacore - Stifel, Nicolaus & Co., Inc.: Hey, there. You've got a contemplated leverage and you know that you're looking at maybe secured and unsecured corporate debt for the SpinCo. So at what ranges of rates do you think you could get on to each of those pieces? Thomas M. Herzog - Chief Financial Officer & Executive Vice President: Yeah, I'd ask the same question if I were in your shoes, but we're in the middle of the process right now, some of us folks at HCP and Mark and our bankers. And although I'd like to tell you where we're at, it would be premature. We're going to have to hold that one back until we get out and we market and have a little closer feel for where we're at. Chad Vanacore - Stifel, Nicolaus & Co., Inc.: Okay. So it's really too early to say what the appetite from investors would be? Thomas M. Herzog - Chief Financial Officer & Executive Vice President: Yeah. I'll put it this way. The appetite from investors at this point has been very favorable. We feel confident. But until we get closer, we probably can't comment a whole lot more than that. Chad Vanacore - Stifel, Nicolaus & Co., Inc.: Okay then. Let's think about SG&A. You said at spin maybe $21 million to $23 million on, what was it, $485 million of rent. That's just south of 5% of revenue. Is that fully baked to include stock comp and other costs that are typically in G&A? Thomas M. Herzog - Chief Financial Officer & Executive Vice President: Yes.

Yes. Chad Vanacore - Stifel, Nicolaus & Co., Inc.: Okay. And then just thinking about your dividend policy on the spin knowing that it's going to be set by the board. What are some good marketing comps that are helping you to determine what an appropriate dividend is there?

I think, like any company, we would look at our cash flow, our expected cash flow since QCP's whole reason for being is to work out a full solution with its one tenant. I think that's a decision that the board will make. And as I said earlier, it's a Corporate Finance 101 decision. We want to build cash and, once we get a sense of our stability, set our dividend policy. I don't think there's an exact comp for this. It's a little bit of a one-off. Chad Vanacore - Stifel, Nicolaus & Co., Inc.: All right. Justin, just thinking about the Senior Housing portfolio. You mentioned maybe some supply and some wage pressure in the back half. Can you point to any specific markets that you're seeing supply in and then how much of your NOI could or would be impacted?

Yeah, about 20% of our NOI in the RIDEA portfolio is exposed to new supply, or 15% of our communities. We've had pretty good results where we have faced new supply to date. Occupancy typically comes under pressure. We've had an exception to that where we had an independent living portfolio that was concentrated in Houston, for instance. It performed quite well. What tends to happen is you'll have occupancy be impacted in the market and, therefore, in your community within that market, but rate tends to hold. So we're still seeing EBITDA growth or NOI growth in communities that are impacted by new supply to date. However, as we look forward and try to predict the performance, we're going to be conservative and anticipate some impact. On the wage front, we found it really interesting that our communities that are located in the top 31 MSAs are actually more impacted by wage increases than our secondary markets. In fact, they're substantially more impacted. So, there's pressure there as well. Chad Vanacore - Stifel, Nicolaus & Co., Inc.: All right. Appreciate all the color. Thanks.

You bet.

Our next question comes from Smedes Rose from Citi. Please go ahead with your question.

Hi. Thanks. I wanted to ask just about the employment contract that was detailed in your Form 10 this morning, for Mark. While we know that attracting executives costs money, it just seems like a lot of the payments and the size are quite high. And I wanted to ask you if you could highlight your thinking around the agreement. And particularly, it seems like there's an opportunity to make several million dollars quite early on in employment. And just be interested to hear some of your thoughts around this.

Well, this is Mark. I'd say that I think if you look at the contract, it's overwhelmingly weighted toward creating upside in the portfolio. So that was what attracted me to this. This is a long-term value play.

This is Mike McKee. I'd just emphasize the same thing. We are delighted that, one, we have Mark and his team available. As he said and I would reiterate, it's been a delight to work with them and I think that HCR ManorCare will find a real partner to work with. There's no question that a comprehensive plan, some new path needs to be developed and Mark and his team are the right counterparty to do that. And we did, in negotiating compensation, as Mark mentioned, highly weight it towards incentives. So as shareholder value is developed, he has an opportunity to be aligned with that objective. So we're glad that's in place. We are glad we could put it in the Form 10. And we're looking forward to getting the companies, the rest of its governance and so forth put together over the next six weeks or eight weeks. And they'll be ready to launch as a new public company.

Okay. Thanks for that. I wanted to ask you, too, you mentioned some thoughts around the dividend from the ManorCare spin. Could you just talk about your goals of reducing leverage at HCP and how you think about the dividend at HCP, which will likely have to be reset? Is that an opportunity to reduce your payout ratio? Do you have any targets in mind to achieve your targeted leverage levels more quickly? Thomas M. Herzog - Chief Financial Officer & Executive Vice President: Well, again, this is Tom. My thinking and talking with the senior management team here is that we bring this leverage back to the BBB+ levels with some degree of patience over time in a variety of ways. So, it's not something that we have to do quickly. And because obviously you can take actions and then move it very quickly, but then that puts pressure on FAD and cash flow growth and dividend growth. So, that's not the intent. As we think about dividend, of course I'll start by saying that's a board decision. But at the same time, we're at about 0.85 times coverage, somewhere in that vicinity. And as we think forward, there's nothing that would lead me to believe at this point that you should expect a dramatic change from that based on the post-spin HCP entity. But, again, I will say again that that's a final decision of the board and there will be further conversations on that topic.

Okay. Thank you. Thomas M. Herzog - Chief Financial Officer & Executive Vice President: You bet.

Our next question comes from Michael Carroll from RBC Capital Markets. Please go ahead with your question.

Yes, thanks. Justin, real quick on HCR ManorCare. I believe earlier you indicated that operating trends are trending towards the lower end of the previous 2016 outlook. What's driving this slower performance that maybe wasn't expected at the start of the year?

Well, actually what I was pointing to was the range that we gave which is $505 million to $555 million. And that if you look at the $263 million that they had year-to-date through the first half of the year and then consider some pluses, which is the Medicare increases and hospice and SNF, typical Q4 seasonal lift. Although we know from recent memory that doesn't always come true for us. And then, the timing of the remaining assets sales that there's some support for performance that could be a little bit better than lower end of the range and could be close to middle part of the range.

Okay. You're actually expecting it to be in the midpoint of that range, just maybe a little bit higher?

It could be middle or lower.

Okay. Then how much of these results are actually being impacted by legal and regulatory defense costs that was mentioned at the start of the year? Is that within expectations?

Yes. Those are within expectations.

Okay. And then, last question. Can you kind of give us an update on the company's investment strategy and how that's evolving? I know in the second quarter, it looks like you bought or had some focus on somewhat medical office buildings and the life science asset and a new market for you. I mean, do you expand – plan on expanding that life science portfolio, do you want to go into different markets? If so, what markets are you interested in? Thomas M. Herzog - Chief Financial Officer & Executive Vice President: Yeah. Let me point initially to the inventor behavior we've had year-to-date, and then a little bit about the go-forward, but if you look at – to your point, what we've done year-to-date, we've had investments, we have dispositions. But two-thirds of those investments, just short of two-thirds was directed to the life science segment, sort of moving to private pay assets and core markets. We have development, we have redevelopment as well, very high demand in San Diego and at our Bay Area markets. And then, if you look at the dispositions, about two-thirds of those were skilled nursing facilities. So, you have a relationship where you're moving away from government reimbursement, you're moving into private pay assets. And if you look ahead at HCP, as I mentioned, and as Mike mentioned, on a regular basis, we're going to have a portfolio that represents the 75% that's left post spin that's 95% private pay. And so, as we look forward, we're going to move into those segments which are senior housing, life science, medical office building. We'll have more on the plan on upcoming calls. Certainly, there's a lot of discussions underway in terms of – as Mike has pointed out, HCP 3.0, what that's going to look like moving forward. But what we're most excited about is that the starting point is a very high-quality portfolio and a game plan to reposition the balance sheet. And then we'll have an investment thesis that will clearly articulate in the future.

Okay, great. Thank you.

Our next question comes from Rich Anderson from Mizuho Securities. Please go ahead with your question.

Thanks and good morning up there. So, Tom Herzog, you mentioned the mid-3s multiple on current rents. I'm curious, will lenders be willing to make a deal like that when you consider the 0.83 times facility coverage and declining situation there? Or does there have to be what we would estimate a 35% to 40% rent cut first before you can actually come to get a commitment to a financing package? And maybe that question go for Mark or Tom or anybody.

Well, I'll jump in. It's Mark. We are confident that we'll be able to finance these the way that Tom outlined before. So, I think that people understand the value of the real estate, the strength that's in the portfolio and that despite the fact that recent trends have been negative that this is a clearly financeable company.

So, you expect the financing to happen on current rents initially?

I'd say that anybody looking at the real estate is going to think about a range of possible rents when they...

Okay.

...consider the financing. And our expectation, I think, is reasonable that we're going to size it with that range in mind. So, I don't think...

Okay.

...I don't really see a problem. Thomas M. Herzog - Chief Financial Officer & Executive Vice President: I'd just add one thing, Rich. You mentioned the facility level coverage. The other thing that as investors look at this financing, you got to keep in mind that what is behind the master lease is also the hospice operations which threw off a lot of cash flow and give additional value to the lease arrangement itself. And that's part of what Mark is alluding to when he said there's a range of potential outcomes and within his various opportunities, things that he'll be considering as he goes forward as well. But those are the conversations we have with lenders.

Okay. And so, will a commitment – you mentioned fourth quarter spin actual transaction which I think is a little bit delay. I think I remember it was supposed to happen in September but I'm willing to look past that a few months. But, I mean, will the commitment come first before the actual transaction or the reverse or you don't know right now?

I would – and you mean the commitment on the debt.

Yes.

It's possible that it will. We could do it either way at our option. And that's something that we have been in discussions on both internally and as we visit with our banks. So, it could go either direction.

Okay. And then last. My second question, if we can assume that's a one-question question. On the dividend, you kind of probably have some adjustment to make at HCP RemainCo. Tom, we talked a little bit about this Aristocrat status. Do you have any sense of the shareholder base that is kind of tied to that and benchmarks to that and would be natural sellers of your stock, assuming you kind of have to cut the dividend? Thomas M. Herzog - Chief Financial Officer & Executive Vice President: Yeah, we did look at that. And there was a study done on that before I came in. What was concluded, it is a fairly small percentage of the investor base, and we do not believe it's going to have a significant impact on our company.

Okay. Fair enough. Thanks. Thomas M. Herzog - Chief Financial Officer & Executive Vice President: You bet. Thanks, Rich.

Our next question comes from John Kim from BMO Capital Markets.

Thanks. Good morning. Thanks for the increased disclosure. I'm going to have a few question on it. So on page 13 of your press release, looking at your full year same-store guidance, I'm just trying to tie that into what you actually accomplished in the first half of the year, and in particular in the senior housing side. So the 1.2% to 2.2% same property cash NOI growth sort of suggests, when you compare this versus page 19, a pretty steep decline in sequential growth. Am I seeing this the right way and what would sort of determine that?

John, I'll do just the initial part, this is Justin. In senior housing, you might remember that we had previously negotiated contractual rent reduction with Brookdale. And so you're seeing that impact, the senior housing growth overall throughout this year. And that was related to a multipart transaction that had occurred previously where we form the RIDEA structure with them.

Okay. I thought that was reflected in your FAD in your same-store numbers when you're saying it's in the same-store pool? John Lu - Executive Vice President - Corporate Finance & Investments: Yeah, John. Those assets, we didn't – obviously didn't take out from our same-store. It does – it is reflecting our FAD metrics. That was a multipart transaction back in 2014 where we gave away an escalator instead of writing a check. We retired a number of – 49 purchase options, some of which were in the money. And also, we converted 49 properties out of the triple-net lease into RIDEA structure. We got lease termination fees. I don't want to go back too far back in the history, but those were the 2014 transaction that we've previously talked about. Now, if you look at the triple-net senior housing growth on the same-store basis, it is burdened by the rent reduction adjustment I alluded to. That's why you see it sort of in the – with the one handle. Typically, you would expect triple-net escalators to be in that sort of mid-2% handles. And so, it's burdened by it.

Okay. On the topic of purchase options, can you just provide some more color on the Genentech assets which the purchase options totaled $581 million? Maybe perhaps what the cap rate is or how you determine the value of the assets upon sale? John Lu - Executive Vice President - Corporate Finance & Investments: Those purchase options came as part of the Slough acquisition back in 2007. Those were already in the lease. And the purchase price, the strike price on those options were fixed. So, they were just part of the contract. And you're right, John, it's about the dollar amount that you talked about. The first phase is going to close that Tom talked about in his prepared remarks. $310 million will close in November of this year. And then, the rest of it will come in 2018. I believe it's the third quarter or fourth quarter of 2018.

So, any disclosure on the cap rate or maybe your IRR or return on capital? John Lu - Executive Vice President - Corporate Finance & Investments: On a cap rate basis, if you look at it, again, it's a fixed price purchase price but on a forward 12-month rent, it's about 8% yield on forward 12-month rent and on a $1 per square foot basis again depending on which phase you look at on a blended basis about $730 a foot, give or take, and that's actually similar in the range of where we're building The Cove at depending on the TI package you're looking at.

Can you remind us if there is any other purchase options in the life science or MOB portfolio outside of the Genentech purchase option? John Lu - Executive Vice President - Corporate Finance & Investments: Nothing meaningful, John.

Okay. And then a final question, maybe for Mike. Any views on changing the corporate name of HCP, something that maybe reflects the new direction of the company?

No, we have not talked about that and don't expect to do it. We're pretty proud of HCP. We've had a challenging couple of years here but this is a great franchise. We're glad to be a part of it. And as I say, we see the next generation here with a lot of optimism coming together. So, no, there's no plan to change the name but certainly we're looking for the next five years to be working of a very strong base, a good balance sheet and a lot of opportunities. So, there's been a lot of work that's going on to get us where we are. There's still work to go but we appreciate very much the confidence that the market has given us as we gone through the last couple of months and we're pretty confident we can build on that.

Great. Thank you.

Our next question comes from Michael Mueller from JPMorgan. Please go ahead with your question.

Yes. Hi. I guess in terms of post-spin, thinking about that, should we expect any notable change in HCP's G&A on a go-forward basis? Thomas M. Herzog - Chief Financial Officer & Executive Vice President: It's not going to be – there is some percentage that transfers with it, but not a huge change.

Okay. And then Tom, when you were talking about the dividend before, I think you said you don't expect a dramatic change from where you are now. Were you talking about the actual dividend being paid, or were you talking about the coverage level, FFO payouts. Or can you just clarify that? Thomas M. Herzog - Chief Financial Officer & Executive Vice President: No. I was talking about some type of a payout ratio, because obviously when we have a portion of our assets transferred to QCP, there is going to be a reset within that from an FFO, FAD perspective and corresponding dividend perspective. And with that, the dividend will be reset. But again, I'll remind you that the final decision on the dividend will be a board decision.

Got it. Okay. But your comments, it was ratio-based when you were saying that? Thomas M. Herzog - Chief Financial Officer & Executive Vice President: It was based on payout ratio that there could be some expectation that we might see it around that.

Got it. Okay. That was it. Thank you. Thomas M. Herzog - Chief Financial Officer & Executive Vice President: Thank you.

And our next question comes from Tayo Okusanya from Jefferies. Please go ahead with your question.

Hi. Good afternoon, everyone. Just quick question around guidance. I may have missed this earlier. But again, you had a nice bump in guidance but your same-store NOI, your cash same-store NOI growth assumptions are still the same. So I'm just trying to reconcile where the increase is coming from.

Yeah, fair question. We were wondering if someone's going to ask that, Tayo. Yeah. We had the bump in guidance, let's just take the FFO adjusted was $0.03 on those senior housing development loans that was picked up. We had about – in the quarter and then we had – or again, for the guidance, and then we had about $2.5 to improve portfolio performance and timing of capital recycle and call that split 50:50, maybe $0.01 to $0.015 each. And then you might wonder well, wait a minute, if you had better portfolio performance, why didn't that affect same property performance and that's because it was generated from assets outside of the same store pool. Specifically, like in life science, The Cove where there will be development earn-in and the like, which, of course, would be an expectation as those assets come online.

Okay. That's actually very helpful to know. Also, another question. I don't know whether – just from an acquisition perspective, I don't know whether you guys took a look at the Ventas acquisition of the Wexford portfolio. And you guys have been pretty bullish on life sciences for quite a while. And it seemed like it could have been an interesting opportunity. And if you did, kind of why didn't you pull the trigger?

This is Justin. Certainly, we're aware of their acquisition and it wouldn't be appropriate in our view to comment on our peers' transaction. Certainly, we're committed to life science and we have a track record of growing and leasing up and pushing the cash flows mark-to-market over time in San Francisco and San Diego. Those have been our primary focus and we've been very committed to those markets. You may have noted one of our dispositions was a one-off we had in Cambridge, which is a core life science market. It just hasn't been a core life science market for HCP. So, we've really focused on expanding our presence in the two core markets where we currently reside. I certainly wouldn't rule out other markets in the future by any means, and expect life science to be a significant part of our business moving forward.

Okay. Great. Thank you.

Thanks, Tayo.

Ladies and gentlemen, we've reached the end of today's question-and-answer session. I'd like to turn the conference call back over to management for any closing remarks.

So, we really appreciate the call today. There's obviously a lot in motion at HCP. By our next call, we fully expect that QCP will be a freestanding company. HCP will have made tangible progress on our deleveraging and concentration targets. We'll then be in a growth mode, but not in a scale race. It will be balanced and targeted to total shareholder return. Our focus continues to be on team, on balance sheet, on our asset and tenant mix, and on building from a strong foundation. And as I mentioned a minute ago, we really do appreciate the confidence that the market has shown over the last several months. We know there's been a lot of change, but I hope the explanation earlier in the call gives some context to what that's all about. So, thank you for participating. Good day. We look forward to talking to you further. Thank you.

Ladies and gentlemen, that does conclude today's conference call. We do thank you for joining. You may now disconnect your lines.