Lori Wittman – SVP, Capital Markets and IR Debra Cafaro – Chairman and CEO Raymond Lewis – President Richard Schweinhart – EVP and CFO John Cobb – EVP and Chief Investment Officer Todd Lillibridge – EVP, Medical Property Operations; President and CEO, Lillibridge Healthcare Services.

Nick Yulico – UBS Emmanuel Korchman – Citi Jeff Theiler – Green Street Advisors Juan Sanabria – Bank of America Merrill Lynch Jack Meehan – Barclays Capital Daniel Bernstein – Stifel Nicolaus Karin Ford – KeyBanc Capital Markets Todd Stender – Wells Fargo Securities Omotayo Okusanya – Jefferies Michael Carroll – RBC Capital Markets.

Good day, ladies and gentlemen, and welcome to the Q1 2014 Ventas Earnings Conference Call. My name is Mark and I’m your operator for today’s call. At this time, all participants are in a listen-only mode, but we will conduct a question-and-answer session later in the conference.

[Operator Instructions] And as a reminder, this call is being recorded for replay purposes. I would now like to turn the call over to Lori Wittman, Senior Vice President, of Capital Markets and Investor Relations. Please proceed..

Thank you, Mark. Good morning and welcome to the Ventas conference call to review the Company’s announcements today regarding its results for the quarter ended March 31st, 2014.

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, 2013, and the company’s other reports filed periodically with the SEC for 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 quantitative reconciliations 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 the call over to Debra A.

Cafaro, Chairman and CEO of the Company..

Thank you Lori. Good morning to all of our shareholders and other participants, we’re very happy to be with you here this morning for Ventas’ first quarter 2013 earnings call. I’m pleased to discuss the results of another quarter of excellent performance.

Following my remarks Ray Lewis will discuss our portfolio and Rich Schweinhart will review our financial results. As always we’ll then be pleased to answer your questions. Our first quarter financial results continued our long standing track record of growing earnings, cash flow and our dividend.

The depth, strength and stability of our management team are strong contributors to Ventas’ consistent superior performance. First let me address some of the highlights of the quarter and year-to-date and our expectations for the balance of 2014.

Normalized FFO for the quarter grew to $1.09 per share, which reflects 7% growth compared to the first quarter of last year excluding non cash items.

Our growth resulted from increases in same-store NOI, the accretion from our high quality 2013 acquisitions and receipt of fees and other payments partially offset by higher corporate expenses and the impact of loan repayments and asset sales in 2013. At Ventas we focus on delivering reliable growing cash.

Ventas’ growth resulted from increases in same-store NOI, the accretion from out high quality 2013 acquisitions and receipt of fees and other payments partially offset by higher corporate expenses and the impact of loan repayments and asset sales in 2013 in case you didn’t catch that the first time.

At Ventas we focus on delivering reliable growing cash flow. This quarter our cash flow from operations increased over 23% since last year. One reason for this increase was a very strong 3.7% same-store cash flow growth we recorded in the quarter from our highly productive portfolio of diversified assets and our successful business model.

During the quarter we paid our shareholders a dividend of $0.72.5 per share up over 8% from the dividend we paid from the first quarter of 2013. Yet we retain an impressive dividend payout ratio of 67%, providing room for continued upward movement in our dividend payment.

We are proud of our 14 year compound annual dividend growth rate of 9% and pleased to share the company’s success through a reliable growing dividend. We also have great news to report on the 60 skilled nursing assets whose lease term expires later this year.

Ray will address the particulars, but I am delighted to report that we have improved our expectations and we are on schedule to complete the transactions by October 1. We also have been very active on the capital and investment fund.

We expect $0.03 of accretions from the net impact of our recently completed and very attractive $700 million bond deal, the $200 million of investments we completed in the first quarter, the pending closing of another $100 million of investments and the upcoming repayments of $200 million of mortgage debts.

We are excited to announce that our biggest investment in the quarter was the acquisition of three high quality private hospitals in the United Kingdom.

This transaction is in consistent with our articulated strategy of expanding Ventas’ footprint in selected geographies where we see positive fundamentals, superior risk adjusted returns, and continued long-term investment opportunities.

These three private hospitals are leased to Spire, the second largest private hospital operator in the UK under a long-term triple-net leases. The properties are highly productive with strong market share and are located in greater London and northern England.

Rent coverage exceeds two times in your escalators or at least 3% and the expected net yield is 9%. We intend to build on our investment in the UK over time, because the healthcare and senior housing real estate market there is highly active and evolved. We remain optimistic about our investment opportunities both domestically and internationally.

The healthcare and senior housing investment market has ramped up significantly and we have our hands full reviewing potential transactions. These opportunities range from multibillion dollar portfolios to single asset acquisitions across all our segments.

Our job is to sort through a very large pipeline and allocate capital to the right segments, right geographies, at the right time in the cycle in good risk adjusted return transactions that create value for Ventas’ shareholders.

We are highly confident that we can extend our long track records of being excellent capital allocators and disciplined successful investors. I’d like to make one final point before I turn the call over to Ray.

I recently saw a release this morning announcing that our long time and highly valued CFO Rich Schweinhart plans to retire at the end of this year after a distinguished and productive 43 year career, the last 12 with Ventas.

Until then Rick will work with us in our outstanding IT, accounting and finance teams to ensure a smooth and seamless transition. I met Rick on my first week at Ventas CEO in 1999, when he was still the CFO at Vencor. And I asked him to tell me what an LTACH was. Rick has been teaching me about healthcare ever since.

I finally persuaded Rick to become our CFO in 2002 and he has played a central role in our growth and success. Among other things Ventas grew from a market CAP of under a billion dollars when he joined us to $19 billion today including over $21 billion of acquisitions.

During his 10 year, we went from a high yield issuer to a highly rated one, now enjoying one of the strongest balance sheets in the REIT space. And we joined the S&P 500. All the while Rick has worked side by side as our trusted colleague, with good humor, patience and tireless commitment to our enterprise.

We and our shareholders owe Rick a great debt of gratitude and I’d like to publicly thank him for all he’s done for Ventas over the years. I look forward to continuing to work with Rick and having plenty of opportunities to toast him with his favorite Kentucky bourbon, during the remainder of 2014, Ray..

Thank you Debbie. Our diverse, balanced and productive portfolio 1473 seniors housing, medical office and post-acute properties had another strong performance in the first quarter. For the quarter our same-store cash NOI grew by 3.7% year-over-year. I’ll run through some of the highlights for the quarter by segment.

Let me start with our private-pay seniors housing operating portfolio. The total portfolio now stands at 237 properties and delivered another strong quarter. The total seniors housing operating portfolio produced $122.7 million of NOI after management fees in the first quarter, growth of 13.5% versus the prior year.

Occupancy in the total portfolio stood at 90.6%, compared to seniors housing occupancy in the 31 primary markets as reported by Nick of 89.8%. And REVPOR was about $5500 versus about $3400 reported by Nick. NOI for the 220 property same-store portfolio increased 4.6% in the first quarter of 2014, compared to the first quarter of 2013.

And same-store REVPOR increased 2.5% percent. This also compares favorably to the next senior housing annual rent growth of 1.6% in the 31 primary markets for the first quarter.

Sequentially in the 235 communities we own for the full first quarter of 2014 and the fourth quarter of 2013, NOI growth was even more impressive at 5.5% and margins improved 140 basis points.

Nick recently reported that seniors housing construction has slowed in the first quarter, in particular Nick reported the construction starts for total seniors housing in primary markets declined 65% from about 4000 units in the first quarter of last year to about 1400 units in the first quarter of this year.

At the same time absorption and seniors housing continues to be positive due to the need based nature of the product and the aging of the population.

Most importantly for our SHOP portfolio, construction of the percentage of inventories with only 2.5% in the three-mile trade area around our buildings, compared to 3.1% for the 31 primary markets reported by Nick.

Our expectations for the full year SHOP NOI remain unchanged, with 4% to 6% projected same-store NOI growth and total NOI between $488 million and $500 million. Next, alternative performance of our triple-net lease portfolio which is diversified across 907 seniors housing, skilled nursing and hospital assets.

Same-store cash NOI in this portfolio was up 4.1% year-over-year, cash flow coverage in the 764 properties and our same-store triple-net lease portfolio for the fourth quarter of 2013, the latest available information was strong and stable at 1.6 times.

As Debbie mentioned in her remarks, we’re extremely pleased with the progress on the 60 Kindred leasing facilities whose terms expire in October 1st of 2014. We have signed leases on 55 of the 60 buildings and we have executed sale contracts on four of the five remaining buildings we intend to sell.

In combination with the agreements we reached with Kindred last fall, these transactions, when completed, will fully replace the 2015 rent we would have otherwise received had Kindred renewed the entire portfolio.

We have already transitioned a half-dozen of the buildings and all the remaining facilities are on track to be transitioned on or before the Kindred lease expires on October 1st. Our interdisciplinary releasing team has been working extremely hard on this transaction and has done an outstanding job the position on Ventas for an excellent result.

Upon closing of the signed leases with our new tenants our portfolio will be even more diversified and Kindred will account for approximately 6% of our total revenues. Finally, I’d like to briefly discuss Ventas’ portfolio of 309 consolidated medical office properties, spanning over 16,000,000 square feet and accounting for 16% of our annualized NOI.

Here are a few of the MOB segment highlights for the first quarter. Total portfolio NOI at the 100% share with $75.7 million and overall occupancy was a very healthy 90%.

Most importantly cash NOI and the 296 same-store consolidated medical office buildings increased 3.6% year-over-year net of lease termination fees received in the first quarter of last year. Rate in the same-store portfolio also increased 3% year-over-year and margin improved, again after netting out the prior period lease termination fees.

So we continue to push rates, manage the expenses, drive bottom-line growth in our MOB portfolio. Additionally we started to see leasing activity pickup in the first quarter, we’re issuing more letters of intent, signing more new leases, and commencing new leases then we have in the past year. And we are maintaining a strong retention rate.

This increase in activity should translate into increasing occupancy and continuing NOI growth over time. So our balance in diversified portfolio continued to perform across the board. And we are on track to deliver our same-store cash NOI growth target of between t 3% and 4% in 2014.

Rick?.

Thank you Ray. Cash flows from operations in the first quarter were $284 million, up 22% from the first quarter last year. Investments in the quarter totaled $247 million including acquisitions, CapEx and construction and development.

At the quarter end in April, we were opportunistic in the fixed income markets raising $700 million at an interest rate of 2.75% and a weighted average maturity of seven years. Our strategy continues to be to lock in low long-term rates, lengthen and stagger our maturity schedule.

Repaying outstanding liquidity on our $2 billion dollar revolving credit facility and maintaining an appropriate amount of floating-rate debt, which now stands at 15% of total debt. In the first quarter of 2014 normalized FFO was a $1.09 per diluted share, an increase of 6% compared to the first quarter of 2013 per share results of a $1.03.

Normalized FFO increased 7% to $323 million compared to last year’s first quarter of $302 million. Normalized FFO increased due to improvements in all three segments, accretive acquisitions completed in 2013 and fees and other payments approximating $0.01of earnings.

This increase was somewhat offset by a decrease in interest income on loans and investments that were repaid or sold last year. And an increase in G&A and interest expense due to acquisitions. Our diluted share count rose less than 1% to 296 million shares.

Our average cash interest rate improved 40 basis points to 3.7% at March 31st, 2014 compared to March 31st, 2013. And we have been able to maintain our weighted average debt maturity at nearly seven years. At quarter end our credit stats remained outstanding with net debt through pro forma EBITDA at 5.5 times.

Our fixed charge coverage ratio in excess of four times and secured debt to enterprise value of 9%, our revolver balance at quarter end, prior to the issuance of our bonds was $559 million. Currently our debt to enterprise value is an outstanding 34% and we have over $2.2 billion in liquidity including $260 million of cash on hand.

We are maintaining our 2014 normalized FFO per diluted share guidance at $4.31 to $4.37. Our guidance if achieved represents 5.5% to 7% per share growth excluding non-cash items estimated at a dime per share, because of our recent activity we would expect to come in towards the higher end of our range.

Our current guidance range includes the net accretive impact of our $200 billion of investments closed in the first quarter.

The completion of $100 million of pending acquisitions and the repayment of $200 million in mortgage debt, financed by our $700 million bond deal, because we are currently in a net cash position, there will be a minor amount of negative arbitrage in the second quarter due to timing differences between our capital raise and full deployment of the proceeds.

Our guidance does not include the impact of additional unannounced capital transactions or acquisitions or dispositions. So all in all we had an excellent quarter and we are well positioned to deliver for the balance of the year. Operator if you would, please open the call to questions..

Thank you [Operator Instructions] Your first question comes from the line of Nick Yulico of UBS..

Good morning everyone. Just want to start in the UK maybe if you could just talk a little bit about what was attractive about this deal and particularly since its Spire. There has been I guess, in the press that their owners are exploring a sale review the overall entity.

I think there’s still more real estate there that is, I know they sold some real estate a year ago, I think it’s probably about 20 properties maybe left if I look at it. Maybe if you could talk about the future investment opportunity there and whether it’s well with 100 million that’s on the contract relates to Spire as well..

Yes. We’re very excited and again consider the Spire investment to be a great risk adjusted return and also a natural evolution of our articulated strategy of growth and diversification. Spire is obviously a highly regarded hospital operator, the second largest private hospital operator in the UK and they do own addition real estate.

I can tell you that none of the extra $100 million relates to Spire but, as I said in my remarks we do believe that the UK healthcare real estate market is very evolved, it’s very active. And we would expect to have additional opportunities there with Spire or other operators over time..

Okay and then the 9% yield that was quoted, is that a GAAP or a cash yield what would be the cash if so?.

The dealing in cash it’s about 6.5 and the 9% is the reported yield..

Okay so if we sort of think about the 6.5 yield and even if we think broadly about investing internationally into the private pay hospital market whether it’s the UK or even possibly Australia which has a similar funding market, it sounds like cap rates are similar in Australia.

How do you think about investing as that type of cap rates for hospital assets? Even though recognizing that maybe people are just aren’t as aware of how the funding environment for the operator’s much different than US, maybe you wouldn’t mind covering that a little bit..

Sure. And I think that you’ve hit on a really important point in our investment thesis. I would say that when we talked about this as being a natural evolution of Ventas’ diversification, I would say that a hospital asset in the U.S. and a hospital asset in the U.K. are a little bit of different animals and they beat to different drummers.

And in particular, I think what you would find in the U.K. is that there is lots of opportunities for support of the hospital systems, there is significant stability in those funding sources, and the risk reward is different in the U.K.

and therefore, the cap rates are different, because the reliability of those cash flows over time and the stability of those cash flows over time has been very, very strong..

Would you view Australia as a similar type of market to the U.K.?.

Well, they’re both English-speaking, I can say that, but yes, I would say that in general, some of the countries that are basically under the historic British Empire would have traditional systems. And in many cases have similar drivers to their current operating profiles and funding sources..

Okay that’s helpful. And just one other question is, as we think about your Canadian senior housing portfolio, it’s not that large. I’m just curious, how you’ve thought about that investment.

How it’s done, how you think about investing additionally into Canada if there were a decent sized senior housing portfolio that became available at a similar type of cap rate to where you’ve been investing in the U.S. with a known operator.

Would you look to do more in Canada today?.

I’m going to ask John Cobb, our chief investment officer to take that one Nick..

I think that definitely we’re looking both domestically and abroad. We’re looking at the smaller yields and bigger yields like you suggested and you should assume we’re looking at everything..

Thank you the next question comes from the line of Emmanuel Korchman of Citi. Go ahead please..

Debbie, just on sticking with Spire for a second? The $200 million, was that part of the sale leaseback they did last January or was that a new sale leaseback that you entered into with them direct?.

It’s not part of what we said in last January. It was an existing lease that we acquired from the landlord that has long-term term remaining..

Right.

And so between 6.5 to 9, how long is that term and what are the escalators?.

The escalators are at least 3% annually..

It’s over 20 years..

So, this was an existing lease that they had in place?.

Yes; and yeah coverage is well over two times and if they’re seasoned assets and a seasoned lease..

Now, had you looked at – I don’t know where this relationship had embarked on but I do look at this or we’re involved last year when they set up the – I got to assume you had a cheaper cost of capital than two-hedge funds, when they did the sale leaseback last January.

Was that something that was of interest to you and how do the economics there compare to the economics you’ve got here?.

We do not look at that particular transaction, but the economics are similar..

Okay. Debbie, this is a two part question. So, if you and I were putting together a panel for NAREIT last fall and for this coming NAREIT, and we’re going to put the three big healthcare REITs on the panel, you, HCN and HCP. Would it have surprised you that the panel wouldn’t have been you, Jay and George and it would’ve been you and two Board members.

That’s part one.

Part two, is sort of in that light and I don’t want to imply one iota that I want you to say, but can you talk a little bit about Ventas’ approach and process on succession planning, given the first part of the question?.

Yeah, I mean it would be a pretty small panel this year, but I would say that we all as executives and public companies serve at the pleasure of our Boards and our shareholder constituents. And I think that over time that will change and does change as we’ve seen over the last 12 months in our space.

And we at Ventas are very serious about our team and I think we are distinguished by the long tenure team we have and the very deep bench, many of which are here with me today, and that’s one of our great strength.

And I would say that in all companies, all of our successes are a product of a lot of people’s efforts and I feel very good about where we stand at Ventas, although I have no intention to leave at the present time..

Your next question comes from Jeff Theiler of Green Street Advisors. Please proceed..

Just a couple of quick ones from me.

Can you talk a little bit about the low expense growth we saw on the SHOP portfolio? Was there anything unusual going on there? Is that just great cost controls by your operator?.

No, Jeff – this is Ray. There is always some puts and takes between expenses in the quarters, but there is nothing unexpected in there. I think we saw a little bit of increase in utilities, but that was more than offset by management of productive labor, payroll and benefits..

Then, just moving to the Kindred transition, can you talk a little bit about the five assets that you’re selling, the reasons you’re selling those particular assets and what kind of pricing you might be expecting?.

Yeah, so those are non-strategic assets, Jeff, that we really didn’t have a place for. We’re going to sell those for about $42,000 a bed, something like that..

Juan Sanabria, Bank of America..

Just a few questions.

With regards to outstanding purchase options, have you guys had any agreements with operators – Brookdale comes to mind – with regards to getting ahead of those potential options?.

We’re very happy to report that. Basically, we had one purchase option this year that we had disclosed as part of our 2014 guidance and is in our assumptions, and then we really don’t have any material purchase options until 2020, and frankly, those are immaterial as well, and those are at [indiscernible] and fairly small in nominal dollar size.

So we’re in very good shape there..

With regards to sort of acquisitions and preferences for asset types, I know you’ve been focused on private pay, particularly seniors housing and MOBs.

What’s the view on some of the private run listed REITs have become more competitive it seems, looking at skilled nursing which has a sort of a higher going-in yield cap rate and maybe isn’t quite as competitive?.

Well, I think we’ve talked a little bit about this, and the way I would describe it is when we talk about being excellent capital allocators and creating value for shareholders, I think it’s important to allocate to the right sectors at the right time in the cycle.

And if you think about it, we did about $11 billion in acquisitions in 2011, which was you could make a tremendous kind of macro investment thesis on senior housing and MOBs, basically saying that those were assets where you really wanted to be that cap rates were going to compress and value was going to be created through both cap rate compression as well as increases in NOI.

So, that has been a wonderful capital allocation for us.

I would say, as other people catch on to the merits of those asset classes and we’ve always had competition, just like now, what we’ve tried to do is refine our investment focus to places where we have a significant competitive advantage, where we can really add value, either through internalizing management on the MOBs or we can use our balance sheet on assets that don’t have in place mortgage debt, where we can perhaps transition assets to Atria for example.

And so we’ve refined that and we have continued to grow accretively and focus our investment efforts on areas where we really believe we have a competitive advantage and we will continue to do that in those sectors.

Obviously, we are looking across the board at all asset types, including skilled nursing and hospitals as we’ve discussed and I think that we would continue to allocate capital to skilled on the basis of, if we could find good risk adjusted return with good operators who have good presence in the market and good relationships with managed care and discharge planners, but I think our capital allocation there will be more at the margin as output drivers and it will be a huge amount of additional net investing..

Just a last question, you’d sort of talked about in the intro $0.03 of, I guess, accretion on deals, investment both that close in the first quarter and that are pending? And how should I think about that relative to annualizing your first quarter figure which implies a number basically at the high end of your guidance?.

Well, we can look at it – good question – I think we can look at it in a couple ways. If the net impact of bonds and the acquisitions and debt repayments is, call it, $0.03 accretive, if we were at the midpoint before, that puts us more towards the high end of our range as Rick said.

Alternatively, if you take the first quarter and Rick mentioned there might be a $0.01 of items, so maybe you take 108 times four and then you add the accretion going forward, something like that, you can kind of get to the higher end of the range in a couple of different ways, Juan..

Jack Meehan, Barclays..

I want to start with the hospital investments in U.K. Just curious about the regulatory environment in U.K. a little bit. We’ve been tracking it for HCA and I know the competition in markets – and BMI to divest some hospitals.

How do you think about that in London? Is it a good thing because it could lead to new investment opportunities for Ventas, or do you think it’s more of a risk because some of the better operators are being asked to leave the market?.

We think of it as a net opportunity for us..

Maybe more specifically with HCA and BMI, do you think that those are opportunities or even with Spire that you’d expect to see happen over 2014, or is this something that you think could take a little bit longer to play out?.

We think it’s an intermediate-term process, I would say, and we’ll take a little bit longer than this year to play out. To begin, as capital providers, when assets are changing hands, it obviously can create opportunities, it doesn’t always, but it can create opportunities to finance some of that changing hands and acquisition activity..

Just a couple on the operating environment, we’ve had a couple of the hospitals now report early on and one of the interesting things we’ve heard is that they’ve talked about seeing some improvement in surgical volumes which they say could potentially be economic driven.

When you talk of your post-acute operators, have they talked about seeing any sort of benefit downstream yet and obviously there’s been a lot of moving parts, so, just curious..

Jack, this is Ray. We haven’t really seen that impact flow through to the post-acute operators yet, but that is obviously a delayed reaction..

That’s the word post, but I do think that those are – I think the important point you are making is those are favorable trends that over time we should obtain the benefit of..

The last one with the LTACHs, there’s been some discussion.

Obviously, we’ve got criteria in December and the rate cuts don’t go in until the end of 2015, but the potential that now physicians have some sort of blessing to put those patients that fall in the criteria to send them to an LTACH versus sending them somewhere else where they’re doing it previously.

Just curious if on that front, with your discussions with your LTACH operators and obviously Kindred, if you’ve heard any of that or if you think that could be a near-term opportunity in terms of the coverage?.

Yes.

I mean, I think it’s great how the LTACH model has been validated, and obviously, Kindred is one of the, if not weak, top LTACH operators in the country, and so, we have been – we have liked this asset class for a long time and I do think there is opportunity for Kindred and obviously the market sees that, as their stock has rallied to over $25 this year as you well know and they have a great strategy in their integrated care markets and those are the assets that we own.

So, we think it is great for Kindred and that we will be a secondary beneficiary of those important improvements and again the validation of the LTACH model by CMS..

Daniel Bernstein, Stifel..

Going back to the U.K. acquisition, I was trying to understand also the competitive environment for those hospital assets relative to say, marketed transactions for seniors housing or MOBs in the U.S. Are there a lot of private equity buyers there? We’ve seen a lot of European REITs, U.S. REITs.

So, just trying to understand who’s bidding on those assets?.

This is John. I mean, I think it’s very similar to the U.S. I think you’re seeing a myriad of suitors, you’re seeing private equity, you’re seeing pension funds, you’re seeing other REITs, you’re seeing international REITs compete. So, it’s no different than it is here. It’s still competitive.

We’re still seeing market transactions and off market transactions..

Are you looking elsewhere in Europe; medical properties trusted Germany transaction – property transaction in Germany, well I think those were some – had some reimbursement involved with them and not just private pay.

So are there other places of opportunity within Europe that you’re looking as well beyond U.K.?.

I think John had to get extra pages for his passport last quarter..

I like the global entry thing..

Yeah. Look, I mean we are focused in our strategy and we’ve identified specific jurisdictions where we think there are good trends and investment opportunities and we will stay focused on those, and so, more to follow perhaps..

Yeah. I think we have a big team focused both domestically and international that’s looking for good opportunities that can create value for shareholders..

You guys are going to have to do an Analyst Day over here at some point..

Lori is already [indiscernible]..

On the SHOP portfolio, occupancy declined sequentially, which under normal seasonal conditions I don’t think would be a question I’d ask, but with NIC MAP Data down 5 basis points for assisted living and basically flattish overall sequentially, trying to understand the dynamics that went into that occupancy drop.

You increased rates; are there other items there that moved that around? I think you were also doing some increased CapEx. I was trying to understand the dynamics that went into that occupancy drop.

What trends you’re seeing going into this quarter at the end of last quarter that would change the view about that occupancy drop?.

Dan, this is Ray. So, you’re right. The occupancy drop is sort of consistent with historical seasonal patterns. NIC did not report the same type of impact. I think when we look across our portfolio, we did push rate pretty strong this year and had some good success with it. So that could have a muted effect on move-ins.

Obviously, we had some weather this year that made traffic decline a little bit. We had some more move-outs as a result of the flu season and some higher debt rates in the communities, and those are really I think the contributing factors to the change in occupancy in our portfolio..

But nothing unusual, nothing kind of the ordinary. All right. One last quick question, I’ll jump off.

On the sale of the SNF assets that are now re-leased and came through to other tenants, is that including part of that breakeven of NOI that was quoted in the press release, or is there some additional – as you reinvest that – it doesn’t include the reinvestment of those proceeds?.

No, it does not, but the reinvestment returns on that are not going to be material..

Karin Ford, KeyBanc Capital Markets..

Could you provide us a little more detail on the $100 million that you’ve got under contract for the second quarter and you said it’s not additional hospital acquisitions, but could you just talk about what’s included in that?.

Yeah, it’s a couple of investments that are kind of ordinary course, kind of 6% to 7% yield, senior housing and other….

Senior housing?.

Yeah..

The triple-net portfolio grew same-store NOI over 4% this quarter. That seems above sort of typical normal escalator levels.

Can you just talk about what caused the number to be that high?.

It’s Ray. You’re right. I mean, our triple net portfolio typically grows between 2% to 3% annually and I think as you look forward through the balance of the year, that’s probably where we’re going to end up.

We always, as part of our normal course of business are working with our tenants to create win-win solutions which generates fees and other payments for us. We had a few more of those in the first quarter this year. So, 2% to 3% growth accounts for most of it and then some additional fees and rent increases this year..

How much of it was one-time fee related?.

Well, it’s not one-time, I would say. It’s a ordinary course of our ongoing business and some of that is, as Rick talked about, I think we had some items that might add up to about $0.01. I don’t know if all those were in the triple-net portfolio. They’re kind of across the board, but not more than that..

Okay, thanks. And then last question, I just wanted to get more detail on what you think was driving the pick-up in medical office leasing in the first quarter.

Do you think it had something to do with the enrollment surge, the success of the ACA, just what’s driving that?.

Karin I think you’re right. I think, there feels like, and Todd can talk to this as he’s out talking to the health systems that there’s a lot more optimism about patient flow coming from the ACA and I’ll let Todd talk about that..

Yes Karin this is Todd. I think there’s, believe it or not, little more certainty than there has been over the last 12 to 24 months. The doc fix has obviously been pushed out another 12 months.

There continues to obviously be a fair amount of consolidation but, as that consolidation continues to occur and practice, kind of musical chairs as we would call, begin to settle down and practices begin to form larger groups. I think we’re seeing, as Ray pointed out, more activity not only on leases executed but also just LOIs issued.

So we, on a trailing three quarter basis, we’re seeing more activity today, and we obviously believe it’ll translate into a pickup in occupancy, but I think also as Ray pointed out, we’re also seeing a strong increase in rate at 3%. So, to be able to push rate in this environment, we think is very good. So, we’re optimistic..

Todd Stender, Wells Fargo..

Ray, I think you said your rents within the 55 newly released SNF assets in the Kindred portfolio would be fully recovered.

Is that over the life of the lease, I just wanted to get a sense of where the rents are relative to where they were?.

No, Todd. It’s in the first year and it’s important to note that it’s in combination with the transactions that we did with Kindred last year. So you remember Kindred had a $15 million rent increase last year. When you add these transactions together, we are fully replacing the rent that Kindred would have otherwise paid us in 2015..

And beyond. I mean, I think….

Right, and beyond..

Yeah. So, it’s a very, very favorable outcome..

I don’t know if I missed this, how many operators are going to be taking over those 55 assets?.

So, we’ll have eight operators and it’s a mixture of new and existing relationships. Three of them are existing relationships and we’ve got five new relationships so, the benefit of diversification with the added benefit of growing some new relationships..

How would you stack up the credit, I guess, of these eight operators relative to what Kindred was?.

Well, Kindred is a large public operator. I would characterize these credits as very consistent with other credits in our portfolio..

They’re principally private, regional operators with good in-market presence and good care..

Just wanted to get a sense of the seasonality or potential seasonality I guess with the Atria and Sunrise operating portfolios. As we kind of head into the spring, just since Q1 same-store growth was in the mid-4% range, but according to your guidance, it could get as high as 6%. Just seeing how much of a potential ramp there could be.

Any thoughts around that?.

Well, so when you look at historical seasonal patterns, Todd, the occupancy typically declines through the first quarter into the second quarter and starts to head up through the third quarter, and then sort of plateaus towards the end of the third quarter and stabilizes through the fourth.

Those are typical historical patterns if those hold true again this year. That’s what we would expect to see in the occupancy of the portfolio..

Omotayo Okusanya, Jefferies..

In regards to questions, first of all, the senior housing operating platform, just going back to that for a second, when I take a look at just trends for the same-store revenue growth, it’s been slowing somewhat in the past few quarters, just wondering if you could talk a little bit about that, whether it’s really the rent growth piece of that or that’s kind of slowing whether it’s the occupancy piece of that, that’s slowing and how we should be thinking about that for the rest of 2014?.

I mean, I think the historical trend over the last three quarters in the same-store portfolio has been in the mid to high 4% and it’s been fairly stable in that regard.

I think, as I’ve said last quarter, we had shifted gears on redevelopment and we’re waiting for some of that redevelopment now to move through the pipeline and come online and I think that’ll provide some acceleration and growth.

I think we see, typically as I said, some improvement throughout the year as occupancy ramps historical seasonal patterns and so, that’s what we’re looking at. I think our expectation remains 4% to 6% same-store growth this year and we’re comfortable with the guidance we’ve provided..

Which is helpful, I guess, but the numbers I’m looking at – when I look at – I 100% agree with everything you’re saying on the same-store total number, but when I just take a look at the same-store stabilized portfolios or just excluding any of the lease up from any of the assets of the stabilized assets, that’s a little bit, what I’m kind of looking at a little closer in regards to revenue – same-store revenue growth associated with the stabilized assets..

Well I guess I would have to get back to you on that, Tayo, because I don’t have that in front of me..

Second question, going back to the U.K., could you just talk a little bit – I know you made some comments about reimbursement in the U.K.

it’s been stable for the past few years, majority of it is NHI or national healthcare program that they have out there, but could you just talk a little bit about just how much of that is private pay in the hospitals that you bought? In regards to your targeting new assets in the country, is it really mostly in your housing you’re looking at.

Is it more hospitals you’re looking at or combination of both?.

I mean I think we are looking at healthcare real estate and senior housing in the U.K. in terms of the private hospitals. Obviously, these are privately owned hospitals.

At least half of the revenue base is private and the remainder is funded via a very interesting system they have there, called Choose and Book where you can basically go online and book your knee replacement and the government will fund that to improve the timeliness of treatments that they’re paying to the private hospital providers and so it’s a very good mix, a very good system, yes.

So we’re going to have to accelerate here a little bit. I think, Tayo, do you have anything else and then we have time for one or two more questions..

Absolutely, I appreciate it. Just one more question in regards to, again, this has been going on for a couple of months, but there’s still a lot of speculation so to speak about, at some point the big three becomes the big two or even the big one, and there have been a couple of management changes at some of the big three.

I mean, Debbie, when you kind of just think about the overall landscape, in your mind, do you still think that world exists where 12 to 24 months from now, we could be talking about the big two or the big one instead?.

Well, I would say that in our case, it would be the little ones. What I would respond is that we are constantly reviewing as we’ve talked about here globally, domestically, et cetera any and all opportunities to enhance shareholder value at Ventas, and we think we have a great track record of doing that and we hope to continue that track record.

As to any specific expectations, I think it’s best to just move on..

Michael Carroll, RBC Capital Markets..

I just have one quick question. With regard to the U.K.

hospital market, what’s the primary growth driver that’s going to allow, I guess, these assets to cover the 3% rent on? Is it through rate or is it through patient volumes?.

It’s through both..

So was the inpatients, I guess, rates through the U.K. hospital market; are they similar to the U.S.

or are they different?.

In these hospitals the per day rates are reasonably similar for similar activities..

So we should see more volume growth in the U.K.?.

I mean these hospitals are humming. They’re in great areas. They have leading market share and – are very well regarded, and so we expect to see continued volume expansion..

Yeah, we have more than two times cover..

Emmanuel Korchman, Citi..

If we’re looking at sort of the deal in the U.K., are you – or maybe if you do a larger deal offshore, how do you think about hedging and would you hedge it or – are you comfortable with currency risks?.

I think that, one thing I would say is that both for tax and FX purposes, we have pretty advanced and expert in-house knowledge.

We’ve obviously been international since 2007 and we have, again, great international technology that we’ve had for a long time; part of that is FX, and I would expect that we would and have generally hedged either through borrowing and local currency or other kinds of products.

Hedge about half of the cash flows to mitigate any changes in local currency and where those hedges end up flowing through our income statement can depend on what kind of hedges there are, but net-net, we’re looking at trying to hedge our net kind of normalized FFO regardless of that geography and we would expect to do that with this investment as well..

Then, staying on the global topic for a second. In the past, you’ve always said that you wanted to get comfortable with the market, get a foothold, small deals followed by bigger deals.

Is that likely the way that we should expect you to play in the markets, or if there was a big deal in one of these markets and we spoke about Australia, Canada, U.K., wherever that be, would you do a big deal without being in the market first?.

If we believe in our investment thesis, I would say that one of the big benefits we’ve had is the capital allocators to be a little bit ahead of the curve, and so, if we’ve done our work and we feel confident in the operator, the market and the investment thesis, we would be willing to do a significant transaction.

And we also could use the model that we’re doing in the U.K. where we make kind of a beachhead investment and then look to expand that investment over time. I think we’re confident that we could do either of those models as we target the selected geographies where we think there’s good risk-adjusted return..

Great. Thank you very much..

Thank you. There aren’t any further questions and so we’ll wrap up the call on behalf of all my colleagues. I want to thank you sincerely for your continued interest in Ventas and your support of the Company. We look forward to seeing you all soon. Thank you..

Ladies and gentlemen, thank you for your participation in today’s conference. This concludes the presentation and you may now disconnect. Have a good day..