Good day, ladies and gentlemen, and welcome to the First Quarter 2015 Ventas Earnings Conference Call. My name is Dave; I will be your operator for today. At this time, all participants are in a listen-only mode. We will conduct a question-and-answer session towards the end of this conference. [Operator Instructions] As a reminder, the call is being recorded for replay purposes. I'd now like to turn the call over to Ms. Lori Wittman, SVP of Capital Markets and Investor Relations. Please proceed Ma’am.

Thank you, Dave. Good morning and welcome to the Ventas conference call to review the company's announcement today regarding its results for the quarter and the quarter ended March 31, 2015. As we start, let me express that all projections and predictions and certain other statements to be made during this conference call may be considered forward-looking statements within the meaning of the Federal Securities Laws. These projections, predictions and statements are based on management's current beliefs, as well as on a number of assumptions concerning future events. The forward-looking statements are subject to many risks, uncertainties and contingencies, and stockholders and others should recognize that actual events may differ materially from the company's expectations, whether expressed or implied. We refer you to the company's reports filed with the Securities and Exchange Commission, including the Company's Annual Report on Form 10-K for the year-ended December 31, 2014, and the company's other reports filed periodically with the SEC for a discussion of these forward-looking statements and other factors that could affect these forward-looking statements. Many of these factors are beyond the control of the company and its management. The information being provided today is as of this date only and Ventas expressly disclaims any obligation to release publicly any updates or revisions to any forward-looking statements to reflect any changes in expectations. Please note that the quantitative reconciliation between each non-GAAP financial measure contained in this presentation and its most directly comparable GAAP measure, as well as the company's supplemental disclosure schedule are available in the Investor Relations section of our website at www.ventasreit.com. I will now turn call over to Debra A. Cafaro, Chairman and CEO of the company.

Thanks, Lori. Good morning to all of our shareholders and other participants, and welcome to Ventas' first quarter earnings call. This morning we are happy to share our excellent Q1 and year-to-date accomplishments and results, discuss our strategy in areas of focus, and provide our outlook for the balance of the year. Following my remarks, Ray Lewis, will discuss our portfolio performance; and Bob Probst, will review our financial results. Then we will be happy to answer your questions. Although we are only four months into it, 2015 is shaping up to be highly productive and value-creating one for Ventas. Year-to-date we have closed over $3.5 billion of investments, received almost $0.5 billion in disposition and loan repayment proceeds, made a strategic and accretive investment in the US acute care hospital space, and announced a spin-off of most of our skilled nursing or snip portfolio to create two faster growing more focused company. We've also selected a name for new pure play REIT, Care Capital Property or CCP. And we also delivered a very strong quarter in line with our expectations; our enterprise generated normalized FFO per share of $1.18 representing 8% growth from the first quarter of last year. Cash flow from operations increased by 21% in total and 9% on a per share basis compared to the prior period. And our first quarter dividend per share grew in line with that strong cash performance. We believe our recent announcements that we intend to spin-off most of our skilled nursing portfolios into CCP, a pure play REIT, as well as our pending entry into the US hospital spaces; our innovative decisions that will deliver significant benefits for our investors, lenders, customers and employees. They also fit squarely with our track record of thought leadership in our industry, value creation…

Thank you, Debbie. Our balance in the diversified portfolio of more than 1,600 senior housing, medical office, and post-acute properties continue to deliver strong growth in the first quarter. Same-store cash NOI for the total portfolio grew by 3.2% for the first quarter of 2015 as compared to the first quarter of 2014, and was led by strong growth in the triple net lease portfolio. Let me start with our seniors housing operating portfolio; with the closing of the HCT acquisition in January we now have a total of 305properties of which 269 are operated by Atria and Sunrise. The total SHOP portfolio generated NOI after management fees of $149 million in the first quarter, growth of 21% year-over-year, driven primarily by the addition of 68 new properties since the first quarter of 2014, and solid same-store performance in our Atria portfolio. Average occupancy in the total portfolio at 91.3% was 70 basis points higher in first quarter of 2015 compared to the first quarter of 2014. Our portfolio occupancy exceeds the average senior housing occupancy reported by NIC in its Top 99 markets by 100 basis points. NOI in the 234 properties in our same-store portfolio increased about 1% in the first quarter of 2015 over the first quarter of 2014, adjusting for approximately $2.2 million of non-recurring, real estate tax credits in the first quarter of 2014, the same-store NOI grew 2.7%. Year-over-year occupancy growth was strong at 60 basis points and occupancy increased in both, the Atria and Sunrise portfolios. Year-over-year rate growth was also strong at 3.1% driven by the Atria portfolio. However, as we told you during the fourth quarter call for both Atria and Sunrise we are seeing some pressure on expenses, particularly in wages, benefits, insurance and utilities which manifested in 5.2% year-over-year…

Thank you, Ray. Let me start with the numbers for the first quarter of 2015. In the first quarter Ventas delivered record normalized FFO of $387.5 million, an increase of 20% versus prior year, and in line with our expectations. Q1 normalized FFO for diluted share was $1.18 versus $1.09 in 2014, an increase of 8.0%. The strong Q1 growth over 2014 is primarily due to the positive impact of accretive acquisitions in same-store portfolio, NOI growth of 3.2% led by our triple net portfolio. As expected, we benefitted early in the quarter from approximately $7 million in fee income or approximately $0.02 cents of FFO per share. This solid FFO growth was partially upset by an 11% increase in share counts in Q1 driven by the close of the HCT transaction mid-January, as well as equity issuance under the ATM. Weighted average due to the shares outstanding for the first quarter of 2015 increased to 329 million shares compared to 296 million shares in Q1 of 2014. FFO increased 16% for the first quarter of 2014 to $359 million. On a fully diluted share basis FFO which includes the deal cost associated with the significant acquisition activity in the quarter grew by 4% to $1.09 for fully diluted share, up from $1.05 in the first quarter of 2014. Normalized VAT for the quarter totaled $1.08 for fully diluted share, an increase of 8% over last year. Foreign exchange rates for the Canadian dollar and pounds sterling in the quarter were in line with the rates previously incorporated into our guidance. The dividend for the quarter totaled $255 million or $0.79 per share paid in two installments. Our payout ratio remains strong at approximately 67% and provides upside in for future dividend growth. Dispositions in loan repayment year-to-date raised $477…

Thank you [Operator Instructions] Your first line comes from Juan Sanabria at Bank of America. Go ahead please.

Hi, good morning, thanks Debbie. I was just hoping you could speak a little bit more about the SHOP portfolio, I guess I am too front. First if you can get us any color on what the HCT portfolio - how that's growing? How we should expect that to impact the same-store pool? And if you could also give us a little bit more color on the current same-store pools for the margin expectations given the comments on costs pressures.

Juan, this is Debbie, I will just take one small part of that and turn it over to others but the HCT is performing in line with our expectations, we would expect that NOI to grow on a moderate basis over the course of the year. It will not be in same-store this year and will appear in same-store in the second quarter of 2016 when we've earned it for a full-year. So Juan, the current same-store I'll turn it over to others to answer your question.

Juan, it's Bob. In terms of the margin question on same-store, you saw decline in the first quarter that was in line with our expectations, you have the seasonal decline in the quarter together with the wage and other cost inflation we had anticipated. In fact it was exacerbated to some degree by flu and weather in certain parts of the region but as we think about the balance of the year debt occupancy will pick up really beginning in the second quarter and accelerate through the back half, that will drive in our minds the operating leverage together with the rate we saw in the first quarter, it's about 3.1% year-on-year to really try to hold those margins for the full-year. So that's really what's in our outlook for the same-store guidance.

Just to make sure that that guidance is staying the same at 3% to 5% growth per year?

That's correct.

Great thanks. And I was just hoping you could may be elucidate or give more color on the type of hospital opportunities you see in the marketplace, who the sellers might be, it is too far to look into US markets or you're also looking at hospital opportunities overseas?

Great questions, so as you know we own the three high quality hospitals in the UK, I would imagine though that the Ardent external growth opportunity are going to be principle if not exclusively domestic, there are couple different categories of potential acquisitions that we would hope to work with our Ardent; one is a classic purchase of no-for-profit hospitals, and that is probably the biggest kind of pipeline, it's what Ardent has been good at in the past, and certainly it's the path that many of the public hospital operator take advantage off because they will buy these assets and make them more efficient. Another avenue would be potential spin-offs or sales by public companies, some of their hospitals, and a third might be really the acquisition of the other smaller hospital companies that are for profit companies. But I do see the first one with the not-for-profit to own the majority of hospitals in The United States as probably the principle pathway to external growth with Ardent.

Just a quick follow up on that, do you have any preference for geographies or sort of a Top 30 MSAs or you kind of agnostic to that as long as it's a hospital with a good market share and good coverage potential?

Yes, I mean I think we would really be looking at hospitals with the significant market share where Ardent could drive efficiencies, utilize and scales it's platform, and have significant negotiating leverage in the market with payers. And so that would be key for us. And also we like Medicare expansion state, things like that; growing populations and demographics, those would be the key things we would be looking at for additional acquisitions.

Thank you.

Thank you, Juan.

Thank you, the next question is from the line of Nick Yulico at UBS. Go ahead

Good morning, I think of couple of questions are you still targeting a $0.53 to $0.55 dividend there per share based on that account?

Yes Nick, we are.

Okay. And then reading through the Form 10 filing, it says that SpinCo is going to be purchasing a senior housing valuation firm in exchange for SpinCo’s stock of about $11. Can you just explain what's going on there?

Yes, that is an opportunity that we've sourced where we think there are some strategic benefits to aligning with a valuation form who is going to be further up the stream potentially in transaction opportunities. This is a very well-known group that has a lot of relationships with long standing relationships with our potentially customers. So it's a way for us to expand an acquisition network without a significant investment and in fact a cash return.

Okay, and who is this firm?

I'm not able to disclose that at this point.

Okay but it's one that will help you do acquisitions basically.

Yes, it will be an income for investment - in addition we'll have ancillary benefits of having lots of industry relationships that could lead to more pipeline for SpinCo or I'm sorry, Care Capital Property.

And then just on the initial purchases here, it looks like this portfolio was purchased from healthcare REIT and you guys had to reset the lease agreements. Can you just explain the coverage of this portfolio and how the cash yield decide - sort of affected by - you guys have into re-do the lease agreement?

Sure. I think it's a little bit different from what you're saying. Actually this is a customer of ours who assumed a purchase option for the asset that was exercised, and so our customer took over operations of the assets which of course and we brought the assets with them and in support of them and that we basically entered into a new lease based upon the purchase price for the assets which would be what is typical. And the coverage is a strong coverage, I believe we quoted above 1.1 [ph] and the lease rate is about 8% or more of our investment. So it's just like any acquisition that we would make with the customer of ours.

And then just lastly, your booked exposure went down by 15 assets and purchased some of these assets from you guys, can you explain what was going on there - was there a purchase option that happened and did that take place prior to all this news coming out that?

Yes, thank you for asking that. We actually did sell some assets to Brookdale in the first quarter, that was part of $0.5 billion that I mentioned. This was really a collaborative transaction there was no purchase option, there were assets that were not performing as well as I think Brookdale, one of them to perform and we reached a favorable transaction with them where we were able to sell them back to Brookdale and we both came out I think where we wanted to. So it was a very collaborative deal.

Thanks.

Thank you, the next line of question is from Smedes Rose of Citi. Please go ahead.

Hi, good morning. I wanted to ask you in your Form 10, the NOI from CCP was looking like it's around $290 million to $295 million, and I think the guidance is $315 million to $320 million and is that just reflecting the 12 that you acquired in the quarter and we will get spunned to them or is there some other way to get that NOI number?

Hi, its Lori. It's not only the 12 but it also the 18 assets from HCT that will be coming over, so there is a total of 30 that were purchase of subsequently in 2014 and so when you add those and that's how you get to the range.

Okay, thanks. And then on your senior housing operating portfolio, it looks like - you break out the secondary and primary markets it looks like a lot of the pressures you talked about were in the primary markets and results outside of those were fairly strong. Do you expect those kinds of wages pressures to trickle down into other markets and with kind of rising course as the $15 minimum wage. Is there any way to kind of quantify the impact that might have cross portfolio, if any?

That's a good observation and I think if you look at a primary market results a couple of things that need to be taken into account. One, our primary markets are weighted much more heavily towards the northeast where we had obviously the negative impacts of the weather which resulted in increased expenses overtime utilities maintenance costs. The $2.2 million real estate tax credits that we mentioned were also in the northeast. And in the primary markets so again those should be taken into account for consideration and then yes you know there are some wage pressures generally in those markets, which are reflected in the annual increases that felt in the first quarter, it should not continue to grow throughout year in fact, as Bob mentioned that we are occupant and leverage to those cost better in place.

Okay. And then any thoughts around minimum wage or is that not - are your people generally making above that anyway so it doesn’t matters much.

Well, you know people are making above that in our buildings, I would say that it does sort off push up the spread - the spread needs to be maintained, so it does have some upward pressure and wages in our building.

Okay. Alright, thank you.

The next question is from the line of Andrew Resovach [ph] at Goldman Sachs. Please go ahead.

Hi, good morning. I was also ask a question to JD that's something about healthcare and real estate.

Okay, go for it.

We kind of panned out recently and [indiscernible] across the healthcare spectrum I was wondering when you acquired these business and you're active or this could potentially be an issue, do you have any recourse if they were completely out of operations prior to owning the company.

Okay, I will answer that question. So we have very - obviously, a lot of experience in underwriting and understanding healthcare businesses including regulatory side, so we have an extensive due diligence process that we go through when we deal with these types. And very extensive sort of risk management processes. In general, when we acquire business and have PropCo/OpCo separation, the OpCo is responsible for those types of obligations should there be any. So prior to and after closing.

Got it. [Technical Difficulty] When you look at some of these investigations, some of them tempted to be dated back to the early 2000s, is there ever any responsibility for the vendor at all who further performance have actually soldiered the assets?

Well again that depends on the type of acquisition and the particular terms of the transaction in a public-to-public merger, for example, they are typically as you know in any type of public-to-public merger, everybody is on the run after closing. If there are private transactions it all depends on what the terms of the purchase contract say in terms of indemnification for pre-closing obligations. I think again the key takeaway that you should understand is, when we are real estate owner, and we're doing these PropCo the operating company or the tenant is typically responsible for both pre and post-closing reimbursement items, and we typically conduct very rigorous due diligence.

Right, it's the tenant but not the capital sponsor statistically?

The tenant, yes, the tenant and that's again why it's important that your tenants have significant financial and operating results [ph].

Terrific, that's a lot of help. Thank you.

Okay, you're welcome.

The next question is from the line of Josh Raskin at Barclays. Go ahead please.

Thanks, good morning. First question just on the art and transaction, I'm curious to get a little bit more color, you mentioned that there was a lot of interest on the operating company, I'm assuming those are private equity shops that are looking at that - correct me if I'm wrong. And then what happens if you can't agree in a timely matter on potential valuation and ownership etcetera of that entity. What happens with the overall transaction?

6th 2:55:

Okay, so you guys would just own the OpCo for however long it takes to…

No, no, sorry, if I communicated that. We have - again, multiple sort of backup transaction plans that would continue to limit Ventas’s ownership in the OpCo pursuant to the re-rules to under 10% of the tenant.

Okay. And it sounds like you guys have made a lot of progress and you're assuming a couple of months from now. So is there any sense of what the valuation on that OpCo would look like at this point if they are sort of an acceptable range, even if the broad range that you're thinking about?

I could tell you but then I'd have to kill you. No, we're very - I think we're in a very good spot on that compared to our underwriting expectations.

Okay. And then just a second question on SpinCo or I guess CCP now, we're going to get used to saying that.

Yes, thank you.

Is there an estimate for what we call dissynergies, additional cost that are incurred just trying to figure out RemanCo [ph] or Ventas NOI versus CCP NOI as we - now that we've seen the Form 10.

Sure, I'll take the Ventas side. If you look at it, although we haven't included in our guidance I'd give you the back of the envelope that says that the reset of FFO if you like arises from the Spin. If you assume the beginning of the fourth quarter, it would be called the $0.20 reduction in FFO per share for Ventas, the composition of which is through the NOI which is being spun, G&A synergy and then the interest savings rising from debt reduction following a dividend from SpinCo to Ventas. So the net-net of that is about $0.20, obviously the timing is uncertain that's why we haven't included in our guidance. But I think you've got somebody else to capture the quantum for Ventas as RemanCo.

I think that G&A, dissynergy, are about $15 million.

$15 million?

Yes.

On the SpinCo side.

Okay. And then I'm sorry, when you said the $0.20 FFO, do you know what's in annualized number on that?

As soon as the quarter.

There is no difference, it's $0.80 for you.

You can roughly multiply by four year.

Okay. Alright, thank you.

The next question comes from the line of Kevin Tyler at Green Street Advisors. Please go ahead.

Good morning.

Hi Kevin.

Ray, you know going back to your question or I'm sorry, your comments in the triple at lease portfolio, can you help us breakout some of those pieces of the 4.8% same-store NOI growth. You said the payment wasn't in there but there was a $5.5 million of fees if I heard correctly. But it seems to me the growth is still high for the portfolio, largely triple net with least escalations in there; one in two to three percent. Any additional color you can provide would be helpful.

Yes, so the fee that I referenced was $5 million, and then we do have some escalations that kick-in in the first quarter but from some of our larger tenants that are driving that.

Okay, thanks. And then turning back to Brookdale for a second, obviously a sizeable partner for you guys, but could you elaborate on the conscience you may have and your leases should sail or transaction come together and then how much you work with them to get the best outcome for both; so you and Brookdale in a situation like that?

So as we mentioned we did a collaborative deal with [ph] in the first quarter that worked out well for both sides, part of our new emphasis on capital recycling and improving our portfolio. We have an excellent relationship with Brookdale, we have excellent agreements with Brookdale, and we very supportive of the company.

Okay, so no specific color you can provide on the consensus at this point?

I think that we feel really good about Brookdale as a leading tenant and we have a good relationship with them Kevin.

Okay, fair enough, thanks. And then last one for me, just turning to shop for a second and some of the CapEx numbers that have been reported, I know you split it out between revenue enhancing and other buckets but it seems like the numbers have run in the double digits as a percent of NOI. And I was hoping you could shed a little bit of light on how you think about allocating these dollars and maybe why they have accelerated in recent quarters and how you think about it over the long term?

I think our commitment to maintain our assets at the highest level, they are generating - they are premium properties and great markets that are generating premiums, reports, where we talked about well above NIC averages. So we're committed to continuing to keep those assets up to good standards, excellent standards. And I think in general we're spending a little bit north of 2000 a unit, we're projecting in terms of CapEx on the SHOP portfolio.

Okay. And the last one I had just turning back to the expense side of the equation for a second SHOP. Ray, you commented earlier just about labor and the components of expense growth, but specifically the labor - do you guys have a number that you think about in terms of percent of staff that might be subject to higher wages offered by TJ, MacDonald’s, etcetera; I know that part of the staff is highly skilled that deals with higher acuity patients but what portion if you had to come up with one would you say is exposed to wage increases like that?

So it's really going to be the line staff in the building and certain areas of the country where there are minimum wage. So I don't have a specific percentage on that but the variable costs and the building is tend to be about 60% - the largest component of that being the line staff. You also have the folks that are in the kitchen and the housekeepers as well as that would because subject to that.

Okay, that's all I had. Thank you very much.

Thank you.

Thank you. The next question comes from the line of Michael Carroll at RBC Capital Markets. Please go ahead.

Thanks. Can you give us some color on the potential not-for-profit hospital transaction, well I didn't take those hospital operations over and convert them to four profit.

Hi Mike, the - yes, I mean this is a well trident path in the hospital business, I'm going to guess - again, the majority hospitals are not for profit, many of them have lower margins but good footprints in their markets. And what the for profit hospitals will typically do is either buy one of the hospitals and then make it more efficient or they will partner. Yes, in that example, Ardent would go in and be the new operator and overtime increase those margins through driving efficiencies, often times as in the case of our Amarillo facility. In Ardent there might be a 20% or other minority stake that community not-for-profit hospital would retain and that's also a very common model. So that the not-for-profit system could get some of the benefits of those increased efficiencies, so again a very round trident path.

Okay. And then how many assets does the inferred outside of the recent deal that was completed, I know you indicated in your comments that there is more opportunities for you to expand a bad operator.

Canford owns assets - Canford manages assets that we acquired and we are working with them to jointly acquire a nice newer portfolio in and around London that they would manage and we would own.

Okay, great. And then my last question, can you give us some color on the 12th fund rising assets in Canada. It looks like that the NOI from those assets rebounded pretty good in the middle of last year but over the past few quarters it seems like they kind of - fall back down a little bit.

Yes, so - Canada I think continued to recover in the first quarter. Obviously the year-over-year was quite good on a constant currency basis, NOI was up 7.6%, and occupancy was up 380 basis points, we're coming off of fairly weak comp. On a sequential basis the occupancy was down due to the seasonal trends that we normally see in the portfolio, and then we did have the same impact on whether in the greater Toronto area that we saw and northern New York and into Massachusetts. And then we also have the labor problem there. I would say consistent with what I said last quarter, we would like to see Sunrise make progress on expenses in Canada, and I think in our conversations with them they’ve acknowledged that's a priority.

Are you still happy with the transition of the new employees put in the place?

I'm sorry?

While merchant [ph] that's performed thoroughly because you had…

You're talking about the leadership and the building. Yes, I mean I think the top line continues to be good. Again, I think the ability to manage the expenses is what we want to see them, now start to deliver.

Thank you.

Thank you, Mike. Let's move on, we have a few more questions to take.

Thanks. The next one is from Rich Anderson at Mizuho Securities. Go ahead please Rich.

Thanks, good morning.

Good morning.

So do you have a kendrid only coverage, do you provide that?

We used to and since hundreds - I think 9% of our business right now it's mixed in with the rest of coverage.

Okay. Could you say it's in the range of what the broader coverage number is?

Yes, I mean if you - it's going to be in the closure to wish, a cash flow to red coverage for the kinder grant.

Do you have speaking in terms of PropCo / OpCo comments you made earlier, do you have any hesitation to take on an ownership stake in OpCo’s in light of some of the events of the recent with some of the DOJ activity?

I think we have a great risk-reward proposition at Bencash [ph] for our shareholders which is really reliable growing cash flows, limited volatility, and leases at the top of the capital structure and so on. I do think as the business has evolved and we've been at the forefront of that, there have been different models that we have come up with in different circumstances, both to create alignment with operators, as well as to make money for shareholders, a guard rail sort of way, and we can see that potentially with the 9% stake we may take in Ardent or things like that. So obviously we're careful about what we do and how we do it, we take it very seriously. First and foremost, we want to do business with the best operators, and we believe that we do so. And we're very careful when we do take these equity stake.

Okay. And do you have any comment about [indiscernible] specifically but generally about some of this activity potentially becoming more of a mainstream conversation for the entire asset class?

Look, again, I think we do business with good operators, Kendrick for example and the other operators we do business with have excelled compliance programs. But as you and I have discussed from time to time in healthcare you do see some of these things occur and I think it's important in any business, no matter how successful you are to remain humble. And the main thing in this situation is that you have good operators, that they good risk programs, that they have good financial [ph] so that they have the ability to - if any of these things do come up to work through them in a position of strength in an orderly way.

Okay, great. And I just have one suggestion, you could give same-store disclosure for MOBs and SHOP, I would throw my hand and say maybe we can have the same thing for triple net, just a suggestion. Thank you.

Thank you.

Thanks. The next question is from the line of Vincent Chao at Deutsche Bank. Please go ahead.

Good morning, everyone. Most of my questions have been answered here already, just - I know it gone around a couple of different ways in terms of the hospital opportunity, but I'm just wondering quite simplistically of the 5,000 or 6,000 hospitals out there in the US, I guess what percentage of those do you guys consider in the investible universe?

Well, there is 3,000 owned by not-for-profit, so even if you took half of them it would be a pretty big number. And importantly these are large single opportunities and I would imagine that we and Ardent together, if we acquired one or two of these things a year, I mean we would be on fire. So the thing I love about the hospital business is, you only need it so big, you only need a little bit of success to be very successful. And I do think that we will put together a really great try ad of top hospital client, TS over 400 hospital clients or have a good private equity partner, hopefully and we'll have our real estate capital and all this capability. So hopefully we can find one or two of the 3,000 not-for-profit here to drive growth.

Okay, thank you.

Thank you.

Next question comes from John Kim at BMO Capital Markets. Please go ahead.

Thank you, good morning. I have questions on Tier capital. Since you made the announcement, have you been approached by any third party’s to buy some more all the assets being spun out?

We're really focused on completing the stand and getting our Form 10 filed as we did yesterday.

Would you consider any alter step that were made to?

Again, I mean I think Ventas is always interested in creating the maximum value for shareholders and right now we're very focused on completing the Spin as it's been announced.

Also if the assets are being transferred to CCP at booked value and it's net of cumulative depreciation, was there an option to transfer the portfolio at the fair market value or you basically implying that this is the fair market value?

Okay, the company is going to be worth $5 billion or upwards of that and [Technical Difficulty] accounting document so policy accounting rules which are booked value.

There is no judgment in this, it's simply a transfer book, those are the rules.

The Form 10 reflects the booked value, it is not in any way attempt to reflect the market value of those assets which is quite high.

Right, okay. I'm just wondering if you had made an acquisition, you would put the full value of that acquisition on your book and basically CCP is taking the net asset value?

Yes, and I think it's important to remember that a number of these assets were - Ventas added very inception in 1997, and before that Invencore were acquired in a pooled accounting method and never written up. So, I mean the basis on these things in some circumstances goes back to 80s. So…

So I think the way you should think about it is we are creating a lot of value.

Got it, okay. And then also there is going to be an extra $43 million of merger related cost this year and approximately $25 million related to the Spin off. Is Care Capital paying a similar amount as far as their portion of the transaction cost?

Just to clarify, the increases in the deal process I think you see in the table and the press release is really a function of the Ardent transaction which is a significant increase in change from where we were last guidance. As I said, we haven't included any cost in our outlook here, including those costs are separation for SpinCo, so that's not in that number.

Got it. Thank you so much.

Thank you.

Next question is from the line of George Hockland [ph], Jefferies. Go ahead please.

Why don't you just give a little bit of additional color on the potential impacts of the recent CMS proposals on the Q-care and L-Tax side especially since there seems to be a bunch of moving pieces on the L-Tax side where the client could be as high as 4.6%?

Happy to do that, I think that the rate increase itself is up 1.2%, and as we expected and as everyone knew the L-Tax are going to have patient certification criteria come into play, for tenders that's not going to start until the fourth quarter of 2016, and there is a two-year phase after that. So there will be some individual hospital ups and downs as it relates to that. But in general, this is something that has been expected for some time, and I think you will see it play out over the kind of 2017 plus period.

Okay, thanks.

Thank you. We have time for couple of more questions.

Thank you. Next question comes from Todd Spender at Wells Fargo. Please go ahead.

Hi, good morning and thanks for staying on.

We're happy to do it Todd, go ahead.

Bob, just that I get it right, you highlighted that you might expect some decline in Q2 results I think due to recent disposition volume. But when you look at same-store, what kind of offset can we expect maybe due to seasonality and senior housing, I guess how much seasonality is there specifically an independent living thing? And maybe can you comment on the recent holiday portfolio.

Okay, in terms of phasing on same-store, you will see a slowdown in the phasing of same-store, quarter-to-quarter sequentially, that is really a function of the fees I talked about which we realized in the first quarter, don't expect it to recur in the second quarter. Offset in part to your point on SHOP where we will see an acceleration in growth beginning in the second quarter due to that seasonality. So those are dynamics there but net-net for the size of those are such that you're going to have slower growth. At a more macro level we talked about the growth slowing year-on-year and down sequentially, I mean that's really a function of disposition proceeds versus the reinvestment, so disposition really largely realized, reinvestments in our beginning in the second half as we discussed. So it's really a timing issue in all cases.

Thanks Bob, and any specific comments you can make on how holiday is trending?

You want to take that?

You know a holiday is generally in line with our expectations and performing as expected.

Thank you.

Thank you.

Thank you. The next question comes from Jordan Satla [ph] at KeyBanc Capital Markets. Please go ahead.

Hi, good morning, thank you. So as it relates to the reimbursement question as a follow-up to George’s question, can you respond also as it relates to the Q-Care reimbursement levels and how they may have foot relative to your underwriting and expectations on Ardent?

Yes, yes. So hospitals are proposed rule, again all these rules are proposed, they are subject to comment and they will be finalized in July or August. So in the case of hospitals, they are giving a market basket increase of almost 2%, there are some offsets to that relatively to productivity and affordable care act, and those are again very much in line with our expectations on Ardent. Ardent is doing well, they are performing well, I think we have - and they have modest expectations in the go forward numbers for Medicare increases, and really what you have to do is where you have these markets leading positions in markets, you have to drive commercial pay hour rate increases which really tend to be higher than Medicare rate increases and drive volume and cost efficiencies.

Great, thank you. And then, I heard you in the prior question as it related to SpinCo or CCP rather, reference $5 billion plus number in terms of valuation. So should we assume sub 6.5% cap rate, am I thinking about that correctly?

Go for it.

So that math pencils then, right? I'm thinking about that correct relatively to the $5 billion plus?

Yes, that's close enough for government work, how is that?

That's perfect. Last one, quick one is on the Ardent transaction, I know in guidance it's July 1; is the funding assumption embedded in guidance Bob, is that funded on the line or is that at your average borrowing rate? Is there some equity layered in there, what's hitting the guidance there?

Yes, it's consistent with our capital structure so you're going to have - and the disposition proceeds, so we're going to have a mix of funding sources there very consistent with our overall capital structure. Our leverage needs the assumption.

Thank you.

Thank you. I'll take one more question and then we'll wrap it up.

Your final question comes from the line of Daniel Bernstein at Stifel. Please go ahead.

Last but not least. I guess one question I have is, in the beginning of the call you talked about stronger bids or anticipating of stronger bids, I look at the 7% or so on Ardent, 5.7% on the MOBs you sold that looked like smaller, tertiary MOBs. How should I think about where cap rates have gone for the last six months to down 25 basis points to 50 basis points, so I'm thinking 7% on hospitals, is it really low five’s and seniors in MOBs for good high quality portfolios?

I think we have seen - as we saw in June of last year, a compression of cap rates for quality healthcare assets because of the good cash flows and demand profile for the assets. And so I would say for high quality MOBs and senior housing you're definitely are going to be sub-six, and in some cases for B’s assets, you're going to be potentially six or below if it's a large portfolio. So there has been compression and we're glad that we're early and large owners of both of those asset types.

Okay, I'll hop off, it's been a long call. Thanks. End of Q&A

Okay. Well, thank you for hanging in there with us and I thank everyone else for joining us today and for your support of both, Ventas and CCP. And we look forward to seeing you soon. Thank you.