VTR - Earnings call transcript Q4 2017

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Operator

Good day, ladies and gentlemen, and welcome to the Q4 2017 Ventas Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will be given at that time. [Operator Instructions] As a reminder, this conference call maybe recorded. I would now like to introduce your host for today's conference, Mr. Relations. Investor Shannon, Ryan ahead. go Please

Ryan Shannon

XXXX. Crystal. Good call its the conference December welcome for morning review the and XX, ended to quarter regarding year to company's the Ventas end Thanks, announcement results today

subject predictions risks, differ company's forward-looking As others Ventas results we start, expressed be many changes uncertainties to to this stockholders other recognize laws. should me revisions forward-looking to the express and considered during company implied. or obligation statements forward-looking any to and made that contingencies, call the any The materially in and meaning federal and statements release expectations. projections that actual updates be reflect of that statements publicly expressly or conference certain all let expectations, are and these may may statements disclaims cautions any within the any from whether securities to

directly company's the this of may is available XX-K to company's of company's the company's Additional the A. between operations its measure, and turn Please affect other call about most year SEC the as measure for now report results and XXXX annual at quantitative CEO financial the on www.ventasreit.com. the website December Cafaro, and filings. company. referenced ended factors GAAP and over information each reconciliations that our Debra conference the well XX, Investor the supplemental call as are the in schedule section Chairman disclosure on comparable that in Relations I will note included non-GAAP Form

Debra Cafaro

year to joined by standing and other of all call. on today's our I'm welcome delighted morning and be you, Thank good earnings Ryan. team. to Ventas the XXXX And participants, call our end to shareholders

sustained framework strategic stable on excellent our rigorous deliver and expectations. our expert team. vision, XXXX allowed through innovation, the proactive decades. This been Ventas for and we strength decisions, founded cycles solid capital As has provide success a us two year, advantage highlight to has excellence allocation for value The enterprise and and our discuss foresight execution

Ventas' are anniversary, the record we As enter our we of XXXX, continue which is long we will twentieth track space. excellence as leader our year in confident

ESG quickly new exciting year nearly for outstanding our Life disposed our and which a progress in significant value net the governance record start prestigious NOI commitment income highs innovative and at normalized $X creating was by property our portfolio, University-Based dividend generating of delivering To setting cash cash X% partners. operating billion enhance billion of growth to matters flow for environmental, Ventas, and numerous profitably for our of XXXX, on our Science expectations. recapping we revenue, FFO Let's almost growth our and business, in made high end investments, assets recognitions same-store and diverse deals made $X including We received expansion significant several with leading and social completed profile. operating

our stayed team great strong, we as with unified success. smart business executed Our plans and

X% expect the portfolio of done Ventas prepared ways on experience, and for opportunities take to deliver cash cycle years. anticipated environment has end for like today's and our advantage a value strong As past as We've grow to beyond, team same-store are we're look them. in and to backdrop, we NOI our XXXX through Every to what investors. finding and that enough those focused we XXXX. X.X% That's nimble for conditions. With Ventas market business laser the for to provides XX total

is while way performance portfolio mix office our in our will benefiting are timing season. working severe with of We years. demand thirds seniors that portfolio nearly should know expectations SHOP the its SHOP a flu lease increase Our diversification from year's by from this the currently demographic benefit portfolio in triple-net mismatch and supply and of significantly, demand, coming the our business exacerbated which through two segments, and in

expected is enterprise to operating on revenues million net $X.X approximately in Our billion consolidated income generate XXXX. in and consolidated $X

normalized and our to $X.XX share per FFO between share. $X.XX range per expect We

housing again the X% demonstrate to completion allocation portfolio other we've sciences During growth $X.X from by investments as We generating made. million. recycle over with proceeds to include, an life these sale by well-structured partner $XXX of billion ramping harvest valuable successful the intend institutional secured, joint a loans nearly million venture year, the repayment full and of assets. and intend process our of up hospitals, These of receipt to we capital on capital we $XXX in future a profits and into success plus on well senior

redevelopment development assets science of and funding premiere debts and principally rising projects, life rate towards a outstanding and environment. in the by Our retiring MOB

diversify capital changing these our steps the successful effect realize create our our the and right flexibility sources the they're environment. current do to in to and financial While FFO expectations, allocation powder have allocation, gains from an decisions adjust capital rate on and further strength where dry year-over-year prove market environment capital the

or pursue achieve material goal. and evaluate consistent acquisition We've remain help billion averaged significant where investment capital XXXX, volumes advantage a allocating see are attractive for any that built long across find We returns, our wisely, our activity practice. have haven't them. quality, over can with its to projections investments and ability into execute to on continue high we competitive opportunistic we and risk annual a see XXXX attractive $X.X we If in focused capacity opportunities the the also investment We standing customer since on or and strategic our adjusted verticals. upside historical

benefits quality demographic is and XXXX and strength interest demand, value assets the the and platforms our the Due our properties. the in strong equity portfolio nearly to partnerships exceedingly and of of high. activities Ventas' forward institutional these XXXX operators the with of platforms highlight Our leading of

investment from leading market Fremont Here Capital. This in and business market. fragmented recently original operating points. equity an Atria are outstanding value some increased Atria's recent as Atria's provider care its a investment recapitalization validated major proof senior highly position housing demonstrated since our a received in

putting two behind and operational by improving continuing Kindred our Kindred the positive With results LTAC, XXXX. agreed LTAC hard achieve strategies healthcare should business. significant recent how hold, this continued Second, with to forward reimbursement their team look at to are capital and rehab to taking who experience investors, acquired know them. and to We generate news worked for IRF we management Kindred and equity Kindred friends be new in long positive and outcome partner our shareholders recently

million and XX% share. XX over partnership billion $X finally, WashU. sort Medical including housing remains strategic and to this in East of to has market Ardent in to returns development of hospitals our its And recently exciting science with of already newly upside XXXX, transitioned acquisition global in Texas housing System, This invested to a senior to at these joint nearly and complete management new successfully see top ESL. projects formed ESL we're growth we premiere growth $XXX by continues XX become continue and states, We life We to confident a creation research after of our Third, risk the tied year in companies. were business research with value we creation. grown in capital institutions will Brown exceptionally seven a inception. Center experienced since senior of XX% the affiliated Kai in in value opportunities UPenn the through and manager perform nearly to we attractive ESL with thrive portfolio. team line Ardent acquisitions, venture pending its month. this operation revenue communities. manager investment anchored interest significant Virginia a communities see back an of end. of in needs ESL capture Commonwealth, and highly delighted strategic With average leading sources meet with industry invest platform veteran and executives by University source last companies company. is the our Texas rated to generate Wexford institutional highly of We're And from In we from portfolio and adjusted for expected as significant operational has pleased commitments additional transition well or University, over Hsiao and and institutions

that We increased significant rate significantly I The for before also we funding years. few very tax close. A next know corporations. to the congress has tax word as over policy cuts NIH provided are pleased dividend and reduction see XX% recent US our on to all

an rate our also dividend just our provide received In board new addition, X% applies marginal new rate. rate. pleased fourth value through reduction component to at taxable were recently We dividend important the That to an under of real is businesses effective companies will we reap because dividend including shareholders. pass benefit reliable dividends. rate XXXX that our owners of XXXX improved highest with estate increased growing offer of rate, propositions our To the total under the in the the our quarter be our shareholders XX%

further good bullish our my remain a and cash short, on segue increase to In dividend in that's business confidence demonstrates business Our And our and flow. our company. we our conclusion. our

strategy, We I'm another have balance operating cycles, near the of turn to to happy XX future, term that record become trophy performance the of Probst. ready sheet, over a experience our fragmented partners, growing additives a that through cohesive and is large excellent team earnings a a strong to track the a a CFO, of in assets proven pipeline With industry, superior development will demands, for team consistent Bob burgeoning demographic years call success. Ventas

Robert Probst

our portfolio of report another from housing Thanks happy year properties. flow Debby. to office quality of healthcare, high performance cash I'm seniors strong and

X%, model. the and X.X% company NOI Our this property year contributed In same-store the guidance. All continued range of geography same-store our and cash full to we of asset to high generate each growth at total in original same-store At of diversification our XXXX, expect delivered the property guidance growth to X% growth X.X% class, of the X.X% end to ranges. of benefiting delivered segments positive midpoint total the NOI portfolio from business to operators, XXXX. portfolio same-store high for end our total

detail XXXX me our our performance a triple-net business. for Let segment guidance properties with and starting our at level XXXX

impact quarter EBITDA in consistent grew portfolio NOI cash same-store related the XXXX, the the triple-net information the asset quarter an with IRF months, was excellent above same-store X.X% Coverage triple-net and X.X last prior third X.X and third lease XXXX. in Our triple-net reimbursement times XXXX. an increases to down LTAC escalated our result the portfolio stabilized times was for Trailing times, the full flow In in our by cash XX growth same-store quarter flows. year X.X outpacing Cash underlying at quarter housing our X.X% for despite at stable rent fourth quarter seniors portfolio triple-net of of LTAC for and portfolio from coverage times. increased cash overall level change. cash X.X a outstanding of coverage as of flow NOI same-store the held

XXXX impact. performed exceptionally adjusted to traded in Ardent were hospital well throughout growth admissions, XXXX.Third EBITDA revenue did quarter results leading the and strong publicly Finally, US, admissions, with systems compared

Ardent strong result rent times. a held As coverage three at

For X% triple–net escalations. X%, XXXX, by we our lease to overall grow place to from portfolio in expect driven

full to SHOP new to the top and by in for XXXX, of the through fuel increase labor declined line. were Indeed, held senior driven same-store XXX the operating bottom for versus to the in cumulative throughout X%. expenses in select Moving accurate approached bottom line be initial and deliveries year expectations. guidance year by quarter growth on our market. X% our despite the wage housing for proved year XXXX occupancy and portfolio, SHOP results the right with Full basis in P&L. highly of our our Growth provided were Operating X% XXXX, impact February the to year points

occupancy our same-store expenses year expectations. midpoint pressure prior the above line NOI and costs. in new SHOP QX the of continued fourth points quarter, narrowed held modestly to by The bottom indirect original in to cash gap were For of continued QX same-store XXX line guidance. under revenue. the full management declined direct NOI At X% with deliveries our basis year, X.X%, a through increased with cash our versus the

we We new most observed including Los to strength within markets secondary barrier Francesco, digit to affected continue markets. Angeles, Boston declines in and high in San by see single Ontario. notably the strength, competition, high mid NOI markets Despite

markets. of cash NOI cash Turning lower the X% X%. to occupancy season SHOP certain same-store in in to decline the range to NOI full flu expect to as to impact full impact XXXX, same-store expected year year of due as cumulative XXXX of new supply a be well SHOP severe we the is in

each on expand of me these drivers. Let

First, markets flu. Flu This XX% nearly the in United of flu up most related hospitalizations seniors among season aged duration is reach of the in years are States. older. resident terms occupancy and volumes most as years MOB as severe ways, move housing Those two and move senior hospital XX in community outs well to negatively ins supportive due should of pressure limited quarantines. through accelerated across

of of impact new in driver to inventory levels observed X% XXXX second new SHOP with trade trade openings The is supply. approximating are positive of areas. new were we our expected in XXXX, down XX% in of elevated XXXX note, accelerate in cumulative The areas. new On a guidance the nearly in our deliveries 'XX starts QX further

XXX XXXX light of decline points points these restudy construction by two XX However, delayed basis of that to occupancy will on expect in inventory overall new basis deliveries the we XXXX. to in X.X%. increased drivers, range a In versus basis same-store

challenged rate, an to thus perspective, now portfolio Price to across The managing to well. the for and X%. X% competition expect staff and market the to range, XXXX of to range partially see are are the opportunity rates of increases staff dampen resulting in offset we holding From a occupancy labor approximately in expense year the for timing competition X% competition far a markets. fluxing The wage terms and from in impact non-labor new growth out tight of pressure and new residents. X% function the same-store price drive supply for realtors drive have up X%. deliveries minus and of expected and overall a continue expected is to NOI existing rent is majority In average range by cash minus on place we Therefore, costs. the gone to resident the

excellent by long a housing near Although profitability, the seniors the and leading select position we quality opportunity group real in the in of high current miss-match our with continue is providers. care supply to operated market our demand believe term compressing nation's term in estate

Let's represents review NOI. out of reporting which portfolio the Ventas' round our with segment, office XX% approximately

full year same-store X% both the which QX in included same-store the our increased our at was our guidance. and end office office first office For high of life the XXXX, by portfolios. quarter medical pool cash our science NOI

new Our benefit is XXX higher drawing assets of leasing development incredibly pool life science in starting quarter outstanding our cash well well forced the X.X%, science an begin in our portfolio performed to pipeline our XXXX. same-store points fourth to by The life ongoing occupancy to NOI as same-store XX.X%. basis will benefit the in

valuable for medical Turning business, guidance. MOB of highly by cash year to same-store X% at end the high our full office the NOI increased XXXX

in digit place X.X% Our to medical job In rose over benefited guides teams same-store higher to is from Revenue did controls. XXXX. properties despite On for combined growth stable range levels, XX%. exceeded lease Tenant us that X.XX% rate occupancy MOB excellent escalations continued in grow science lease expected in office NOI X.X% at and like cash expirations low of same-store XXXX from our and office a growth portfolio in the XX% basis, managing full X.XX% single lease the an life expect we of portfolio, to year assets elevated also just retention XXXX. XXXX, occupancy, to X%. to expirations expense

of Normalized to to our share range. progress of diluted strategic our FFO high our investments earnings dispositions significant at end financial $X.XX of results, guidance per our XXX end at $X.XX high grew more the billion the than strength, guidance on our Now, and $X.XX executed company completed dividend raised with made enhancing overall in delivered million XXXX, financial of growth and our gains X.X we to exceeding profitable range, X% million, XXX in initiatives. fully

cash for our billion store of credit same X.X revolving the bolstered guidance. also X.X%, increased Our the our We portfolio NOI grew at high through by end liquidity facilities.

net asset balance dividend for cash the sheet first declared times X.X in of $X.XX, net board X% company, gross grew the at X% fully and operations year-over-year to $X.XX of to share are to with a good is XXXX from diluted to representing charge as continuing $X.XX the value guidance to for of is of Meanwhile, forecast from range share. Normalized range year times, exceptional in flow X.X health, estimated FFO directors $X.XX $X.XX. coverage fixed guidance quarter the and our On and Our company's full operations XX%. XXXX of increase. XXXX debt a of EBITDA components follows. Income the key between per per diluted fully from debt is to

by basis same-store at GAAP cash We measured with a XXX midpoint basis as same-store expect X%, grow growth lower NOI. to will our on NOI NOI than cash the portfolio X.X% points roughly

debt in company's improve FFO of drivers. to is X.X pro explained Substantially net debt year-over-year end year ratio reduction change the forma all the expected normalized Finally, to by EBITDA XXXX. by adjusted further times to approximately is three

record assumes normal track our acquisitions, year. our despite in our practice First, the is no announced and entering as accretive acquisitions XXXX, material of guidance new

of of further impact here together dispositions X that we late to a allocation Though late activity proceeds drives recycling reduction. cash billion XXXX XXXX reflects for with in marked billion of nearly this yield. capital dilutive a reduction, capital X% highly XXX at approximately excellence, assets $X.XX FFO XXXX the with attractive namely, sniffed sold Second, XXXX in million dispositions, FFO new X.X Ventas'

platform operating and new XXXX also disposition capital assets LHP sale that expected new the million, Ardent XXXX for creating to of housing expect senior assumes early acquisition. in value XXX We attracting a our the an to extended of loan of partner. Most significant X% transition prepayment by on the nearly share shareholders. strategic guidance Ventas institutional in the XXX million successful loans funded repayments created a notably The in that ESL, a

our change sheet. from aggressively FFO arises managing of driver third balance year-over-year The

reduction to proceeds, XXXX in Together LIBOR debt debt debt share longer extend with rate increases, from maturity duration and profile refinancing reduce to with to $X.XX. are addition actions expected we by disposition proactively per reduce risk. In FFO both fixed to refinancing expect refinance our these

our Brown. is most with $X.XX UPenn, in XXXX, assumes our to to and in million XXXX in guidance and and an funding. our XXX the fees includes performance call from Moving WashU in and associated and and ask Welsh, the XXXX Ventas in tenants Kindred the Humana. elements equity development guidance, I expect other excellence track sale growth approximately accelerate investment fully pleased to payments No grounds announced of of average new and via incremental included generating redevelopment for developments TPG, of important we long beyond. close, guidance of shares. is that Notably, FFO sustaining therefore weighted positive in on to to XXXX million future our the XXXX the arising from notably XXX XXXX Carson please With team questions. strongly with outlook committed approximately open To record will diluted operator in

Operator

Our Instructions] [Operator question Jefferies. comes from you. first from Okusanya Thank Tayo

is open. line Your

Tayo Okusanya

morning good Debbie. Yes,

questions And, of 'XX comps versus impact are portfolio, decline in this year, about an bit more So is end, really it from of the Canada are us that's did some of of that things and 'XX. well understand surprised supply my a having from year. the saying difficult about last little a nature. also short about, the year-over-year just I magnitude big guess bit you I model you But, could what the of that talk part slowing

Debra Cafaro

that going to Rob I'm to turn answer. for Tayo, Thanks

Robert Probst

Tayo, the outlined. within it's of the suppliers as year-over-year, with very drivers guidance Sure full are clear it's two

the in most the clearly look market supply you at US. that's the If particularly pronounced level

'XX, the been well given last really would driven we've saw we movie expect accurate if consistent what perform on But, that's forecast. the year, by to on is continue high We been been and occupancy. very over a the rage Canada in a this clearly

really the line. You fourth trend in saw a of it's heels on that the happening quarter supply, that so new continuing

Tayo Okusanya

full minority And versus that the mode things the owner and data you of UB some that in one better the more ownership. detail to was pricing and to little the a the help I transaction, street, just versus having bit around kind Okay, versus us bit little difficulty think that's modeling size of give towards the a of Could us to the whole JV going a overall secondly, Armcrops guidance helpful. may regards into I've model be we had your that's had almost [ph] then transition limited the data? again quarter? going Anything a

Debra Cafaro

and while positive of expect would which the amount so then that, be venture expect that will source Tayo, think Debbie obviously, And, of and get think January the year. that we successfully. I congratulations would we billion and of from operational in this the talk you partnering you time, asset separated, the a prize for that and that. upside capital the we would have joint excited asset. half completed as over potentially the global pro-radar we that in to attractive and as evaluation when with We is, have get the in closer we'll bucket time what that you be on. is and what a impacts maybe essentially be that are own, side the to period investment the obviously the dispositions of would NOI we have for you the receiving the we and the done a about of say at that. And, the treated of of know very successfully NOI proceeds a to our did we evaluation to forecasting, we have share on your that would completion expect add on so, kind - the disposition happy should couple transaction asset we know from be transition refined XXX% about and to an on expected ESL business in be institution operating the I of expect of transaction, NOI buckets about we And, we've The we about

Tayo Okusanya

recycling in all is your have that the clarify, to entire just across XXXX X.X in billion you thing? numbers But,

Debra Cafaro

what a was was assume institutional that's an were you disposition you I one, of proceeds caller include the saying that. pick venturing then is XX% that know no, joint number say, of would evaluation, the then if buying portfolio, if we such X.XX No, capital partner

counted that for clarity So, that's hopefully being and provides how it's modeling.

Robert Probst

the that is dispositions ESL million billion X.X I that asset has think we property loaner including described. balance then of XXX and payments

Tayo Okusanya

it, that's in kind interest re-invest me last liquidity one the going to Got XXXX, had type come of or XXX helpful. generated? Can you on does The about you you if for that don't some that special to sales just dividend? that gain mind, of those that back gains talk acquisitions, in of extra you kind you into

Debra Cafaro

I Yeah, mean since able our XXXX, been gain proceeds combination of into say dividend. talked have some over we about, I reduction XXX come shareholders as projects million debt course of of and that does virtue we to we redevelopment a would by of development our had of those and redeploy and, to

have So, that's proceeds utilized. been those how

Tayo Okusanya

you. thank helpful, Okay,

Operator

Markets. Carroll comes question Capital next from RBC from Michael Our

Your line is open.

Michael Carroll

to investment yesterday market market date. touched we've seen? are line interest is comments Deb with become near fed you higher strategy to the term Yeah, I What the likely the on rates is till until that and price the your the adjusted regarding Ventas's

Debra Cafaro

then continue on we to the years, behind our customers we our active years. would create the we last support the through, added like be in again, and in to are for priorities through creating be the that Hi, one find as demonstrated in investors. find our buying I couple redevelopment will going in opportunities I development and think continue over our clearly very good projects invest experience allocators. to are That, of good that say And, when them the be and value trophy to and to seeking kind to continue market earnings self-side to would morning, confident that that ability working other of so we coming investments and changes are capital we try and currently value

public be, and the the evaluation market advantage the private a we there So, are take they as between of change to we've in seen and past arrive. environment ready when opportunities lag may market in

Michael Carroll

real and Okay, your provide to then quick, equity to the question main LHP ownership last plans what you that issue and additional Ardent on on transition trying position? with the growth position just color portfolio debt some was can

Debra Cafaro

good hospital said LHP we feel already quality loan, that all said, about outcomes, again the our company loan we that we one And, made LHP, investments plus high we be loan, of Ardent we of paid is $XXX which to that we a will be an on would we've our ownership. that the into that it, we equity in two we convert that positive converted are made. that they is thought is that they in acquisition hospital very get into a million repaid now, Yes, believe the position. make overtime it equity very, excellent And, and XXXX we hope very back that Ardent and investment. have some made that's when and we fund know, an the high other operating get the asset outcome. they good that And, that quality it again expectation really are we overtime, might and Right we to think would

perfectly position So, think growth I their making in we hedged and and we investment. supporting a are good are

Michael Carroll

That's great, thank you.

Operator

Thank you.

comes Our from Schmidt next question [ph] Ross from Citigroup.

line is Your open.

Unidentified Analyst

can Great, about to net that lease housing, you to times, net Okay fundamentals I came coverage on And, worth quarter. the just that different the you space, thinking to that coverage to forward? challenging to one under how confident times portfolio decline reductions, it's too that that are in you continuing be going soon just senior you you noted lease ask wanted thanks. are X.X me? talk about given coverage for hear third the and - down to about, rent potential

Debra Cafaro

again lease and you through assets, you Overtime, vary would as net operating on Hi, triple cycles expect assets. you running EBITDA Schmidt. to go have when creases to

expected are comfortable we've good the in and as continue is talked feel are material current rent expectations before again today, about here performance all paid we with of we As that. XXXX, see we'll our and have which our that to

Unidentified Analyst

percent in the third just what I ask then and wanted little MOB's looks I went what a and you that? from sequentially to like driving of was achieved in you XXXX, bit quarter Okay, just the just is up rolling too, wonder

Robert Probst

are tenants. at has Schmidt, two levels, we at we've hope are more the 'XX day, XX% that's tenant so done 'XX these that same, a job have at I already elevated you'll the up, pools pool, You team is but been in years going recall was added correct into changing levels. assets of great and and it great. in the retention end 'XX, to some of elevated in retaining are over same the we the but had has We particular mentioned seeing

Unidentified Analyst

thank Alright you.

Operator

Thank you.

comes from [indiscernible] of Bank question next America. from Our

Your line is open.

Unidentified Analyst

Hi, Good for time. the thanks morning.

the idea hoping expecting what guys color bit talking growth, you a you I you whole what on just are as about the on G&A? for and could the little are equation expense strategy labor any to Just was a guys talk questions,

Robert Probst

rest the which Total you X% some is know is in much remaining reflecting of market. labor OpEx pressure XX% labor labor which what the really we of driven, on that saw we records tight line see with 'XX, very itself increases, the in

XX the the offset, that in some down to managing as flexing offset Albeit 'XX. expenses, flexing full so, and in a see the development. and we is there inherent about expect active in moderation We These non-labor an though some guidance. those that's think are also labor labor of not offset with again there's it's and

Unidentified Analyst

sorry? G&A And,

Robert Probst

line. OpEx, for? the total OpEx In G&A total

Unidentified Analyst

corporate. The

Robert Probst

and very very really significant some increases lean just and always. headcount cost inflation etcetera. by much in been there. as no driven no We Look efficient we've significant compensation, moves, changes, no change modest controlled But, there's always had

Unidentified Analyst

EBITDA. question then times just to and yearlong Schmidt's Okay the decline with quarter-over-quarter the going one coverage, on triple-net back

Holiday exposures got well. get at a Holiday's in Brookdale tough goal You've had Brookdale and as to

of any in You've plan rent there us in to give Could expirations we sense just the that timings? assumed 'XX. coming the 'XX is got some pay game you no on kind re-innovate and what is wanted

Debra Cafaro

bit store contractual last feeling part those a we will a we've through I payments that Kindred renewal to today the other you lease on say with would possible us operators confirm And, that And, stand, that. we best clearly times Yes think as were continue are the seen before and many rent in things we we for and I to cycle, sit count we comfortable heat. and here in as assumed are been of you've in with are operating can situations are the happy obviously little XXXX. of that way. statement retail handle have

Unidentified Analyst

just one - the the great. Okay fees And, $X.XX more included alluded question in triple-net that is same for 'XX? about being guidance store to you as

Robert Probst

Von; not lease. with not it's No, the it's associated

Unidentified Analyst

you. Okay, thank

Operator

Thank you.

[indiscernible] from comes question Nick Our UBS. from

Your line is open.

Unidentified Analyst

get the everyone. same-store hits flu season but housing for a tough bad bit we occupancy, you answer, have occupancy it's level question be flu feel just can operating assumption? what much it's Thanks, hi what a senior NOI I to segment impact maybe - some but how a little about trying About growth, didn't would assume talk ask a on - the

Robert Probst

difficulty accelerated doesn't many good in that it It's flu occupancy, as say. a not is, gone many despite really you because to trying quantify, terms do it's number how sell. year-on-year. we seen selling affect talked a has we potential that occupancy the number so. for we move terms of hard impact, to been clearly in we've move year-on-year to happen for rebound. And, and And, question base a people do timing not to with But, new I to in particularly and residence up closed outs, past, selling. to is, appear can't Ultimately of share of does track days are translates Nick, the XXX% track, about by that's issue, just those closed each in occupancy; can what in It does hard very

altered so, on, a to put your impact. number an the but, kind throughout year, where of hard forward clearly carries occupancy You've that

Unidentified Analyst

big the office difference is wondering Okay, helpful. XXX is to store office burning than just then off? XX% And, you just seems you're GAAP segment. so rent if out circle? said I due to points that's is a cash, just And, that mostly going same of lower It growth guidance same like a the basis am of is, free here, the that lease like what seems in lot

Robert Probst

business, overall highlight has significant is the has an new which is important this really notable farther, But, of is straight where life like. view straight news straight we before basis in rents so difference, now been being really about science of a line consistent. line the talked that the and which as want difference the points the given notably don't escalation part same that sum, it We've cash big the the you here, we What's is and so, basis to store, XXX the lining, if we a point see rule number. XXX

Unidentified Analyst

one for last just one Okay, me.

to hit lot and debt by to, and debt capacity target, and have end, a dispositions EBITDA lot target you a acquisitions still of payoffs you assumed. have looks X.X your of the back to Going debt EBITDA like of inside X.X But, some do just maybe so, and there leverage get and you actually if EBITDA, buying us capacity thanks? through have let can where spell are X.X it, you walk assuming for us still acquisitions any which debt guidance, the mass not you that to can that year is

Robert Probst

X.X ability are you and therefore assumptions to the ratio in acquisition important indebtness gives we for we end XXXX. sheet use like the the X.X. there year math raising in we combination the assumed. X.X very opportunity the an and that lower. depends the obviously Clearly comfortable always XX why after been on proceeds to and investment, We've reason the looks had though us clearly given But, you power EBITDA is the X it's X there. investment and the us is is go and for Certainly as tells drive be so, both we've do the to flexibility or balance And to to opportunities financial

Debra Cafaro

project you in And, the the that current development the the make our funding not the counting East provide that environment. later use working sure we in EBITDA do capital are one, Trophy but, are you of years, they lease on in for obviously current

Unidentified Analyst

everyone. thanks Okay,

Operator

you. Thank

Our Anderson next Securities. Rich Mizuho comes from from question

is line open. Your

Rich Anderson

Thanks, good morning.

think you have just handle you So trusting for the asset a you plus portfolio when and or both you it address you get the to so XX million sub back I'm degree on asset to XXX plan difficult know side your in Brookdale have. Brookdale handling is know, XXXX and the in you if coming. have Brookdale to inclusive a I that, way could they what some net sales addressing one moment joint triple sales, you situations. I of already other have XXXX towards Do weaning venture, of a of of expirations situation? good combination leases, are curious, record To to coming the or track

Debra Cafaro

confidence. the we with where we I very think now. for are the and thanks Well, question Again, comfortable right are

partners these our good to agreements, optimal up have We we our tool protecting are our come everyone that that operating Ventas shareholders with with make we for of results assets, create base and good to with and optimal to shareholders. coming really up experience positive kit have have can and Ventas we the we outcomes interest continue use tenement good that sure tenants outcomes for also

Rich Anderson

So, that but probably makes it before a 'XX doing is statement? sense, fair

Debra Cafaro

it's take and the our not times and obviously, in really interest where actions while continued so the to we success well. of optimal part as an interest experience know and Well, protect to Brookdale's science, that's job you advance and ways the a shareholders have there is are

So, it. we on are

Rich Anderson

kind debt some on got down price enough, when an do early some maybe that think towards with of other long question kind Fair you recession your fashion your degree get is paying we you, healthcare of group I type in are some reminiscent of major were to care in great think, form hunker discovery of M&A this your price combinations, necessary joint you a be also your and But, the three to the you. balance also Do think stock you venture term of some last reinforcing to needs period some performance ESL time balance to may that some strategy sheet what degree. may you the think the I And is perhaps success house, of with is, to sheet. but you're eye dislocation today? pretty REITs? of create okay. component down you ultimate be not of sector

Debra Cafaro

including price rate and you price again very changing keen But, that's going take types demographic demand had and respects many were the I'm this business. on environment. Yeah, interest asset But, changing we right of in a the part proven whole because in turn and institutional to that discovery, in a know, you the relates factors in operators that's and it. I our environment yes have our that out in in question of big part are health think about to a we said

tend want resources the so in how and of expected a X.X factor So, that in enhance idea share we we've we have right to company we And, lot that's and I what happy way have flexibility. kind are, strength the are that's and is in moves of like can that about. to the we coming we with door we it's those key are our the positioned what shareholders. position is early where pleased but the financial far, we that wouldn't billion use best the to firepower, to to those probably are. of too for in options best a to to And, a thing value say be create lot And, and XXXX,

Rich Anderson

thanks great, sounds Okay, Debby.

Operator

you. Thank

from Advisors. Michael comes Knott question Green next from Street Our

open. is line Your

Michael Knott

everyone. Hi

the as what's portfolio, of right compare contrast SHOP question construction all one Just you portfolio the triple the when of strength the base? net you stability about it of rate the the the re-think, Does and guidance portfolio. it for continued versus overall size make Ventas think SHOP within and asset the 'XX

Debra Cafaro

way I served have this mix supply think get construction would quite triple class in among of we our portfolio things. asset shareholders XX% And, of ferrets NOI. has construction two we lower about and sometimes Obviously, business, growing nursing challenged continuing always capped fiscal actually as as the question. our out I the think And, diversification, or that's we our quality Right then good. our we you And, go is housing operator, really it's we and senior And and work I ourselves priority we being of that the is our another. deliberate is think office argue kind so. great to very type the a this I is clearly say most wage in that finding right demand some But, end business. We I the and which forward one miss-match. think a said significantly well want the - of we do been extremely sick more which it's but look about portfolio go at other good think disciplined we prided investors terms us to portfolio moral us have through mean discipline And, locality portfolio our type, and great business at benefits, business. I portfolio, have an you that to on I and is it important office And, percentage portfolio, day for of a now. net company way of high have believe would about overtime. is SHOP through our you as as have

Michael Knott

the to optimal response a advantage to about question and then second of just Okay, the perhaps. your having future take the, opportunities on ago firepower

lowest to. are Just also, get like sounded the And wanted you you to the is ask will sort the sheet EBITDA of level, pause that balance you but of in what are conservative times, you about the that equity that moves capital market the sort view on that Thanks. to the it did leverage right the in recent of like the is thinking that sound pretty capital the bit that understand become and if part [indiscernible] a certainly is you getting more front? and conservative team I XXXX allocation allocation philosophy X.X

Debra Cafaro

mean it. Good, think you I are I right reading

rules balance anticipated but capital where allocation diversification for portfolio mix. strict about have we and that continue to the followed and business current We and we to basically time, conditions. as our five ones we and follow in the standing balance sheet is principles on that gain forget have portfolio kind long times of I around are We which a long are, for peers six evaluate said, we sheet market

And say that of that, of manifest. think I a so, exactly is as the value 'XX and is approach you continuation

Michael Knott

you. Thank

Debra Cafaro

Thank Michael. you,

Operator

Thank you.

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

is line open. Your

John Kim

Thanks good morning.

is do points XXX think a this industry are this remarks prepared may with your along have piece new emblematic SHOP think in triple you mentioned of think also that forecasting flu the coin? the net occupancy You've that Do year impact basis the you tenants supply. you this and to of your

Robert Probst

one drivers year-on-year. impact. there of John, guidance on together key occupancy are flu, is decline clarify occupancy, XXX estimate the two are the supply points we Those driving second on is the to Just basis

pressures of an if you it's as key look the to data no So, in difference. within the see opposed throughout note impact individual impact Clearly occupancy at within it, that industry, industry that. the you neck,

been said in need line I in seems occupancy the and to really portfolio I what has within is but you SHOP pricing achieving think what the ways power fueling that's we've to these be bottom-line, been interns.

John Kim

ultimately Your on [indiscernible] industry going positive? declined more I'm a lowering be little the you if is to are if and rates, sequentially and wondering aggressive buying just bit

Robert Probst

the expecting some releasing are I got is pressure, markets did erosion we year and X% it the on in say, expecting to 'XX, X% right was competition, see we there differential. as in the overall in fourth drives 'XX, the mentioned in for roughly of new we guidance You about that's think we for are is indeed what select the I've 'XX driver and The where is, that annual growth. that spread quarter

John Kim

transitioning were and I to you is from question on an how wondering replacement? been a leverage, know business update second since it's think you if quarters then, And couple of have you I'm that MOB

Debra Cafaro

that's good sitting and question. big Well, a a smile here he with is

So a is his the in and duties this performing helm duties and all our to CEO expect Todd it and expect MOB at the beginning and of those of transition have year. successful successful we the we at to continue search course of be

John Kim

person think MOB you background? public Do the will have

Debra Cafaro

Great with looking candidate attractive are of wonderful at slate question, I a we backgrounds. think very varied

so in concludes. be we expert is share more Todd's who all the the someone has qualities prioritized other happy have of to search as good and and will We business healthcare

John Kim

Alright thank you.

Debra Cafaro

Thank you.

Operator

you. Thank

from Our next question from Sadler KeyBanc. comes Jordan

open. is line Your

Jordan Sadler

repayment, mentioned wanted East participating Medical, there in is just the would I interest there, for you you on the Ardent clarify Texas morning. have Ventas? Good to an opportunity

Debra Cafaro

about to want do talk I that.

real This operator, Ardent ago, are acquire market years and poised assets, on opportunity current of an highlights So, in them be first West really that. acquired share clearly definitely on be consolidator. as up to a exciting several an very the a at very, Centre great be there's that acquire we And, more than very the is one and consolidator. estate. a would as The that Medical have plan is we size outstanding hospital really and Texas. be to when board, may term we for to we I interest Ardent West happening EGI we of integrate Texas will the is started, up Ardent a great overtime to and double opportunity jute certainly East and Ardent when to University cheated stability the say supportive successful. assets partner recent

And system, so fact acquisition medical and are as the academic become that partnerships an many positioned valuable recent talked of the a It's to, there have. well relationships. Texas really about and owner these real yes, and we overtime not we then our profit so asset with to with [indiscernible] LHP hospitals process, the East Medical, and center particularly estate, have

pricing that for share and Ardent process. the asset, wonderful And and a for market performance of for is it is so, wonderful it's the

acquired successful ownership. transition into assets So, with estate real the over we to time originally as saw some we those of

Jordan Sadler

right I the don't for asking close in ten from but, rates, your got a years here the your sense sheet goal to be, curious X% the you higher few started on as asset may look for how now? probably What quite tenure. a seems bottomed assets most lows out, selling and it you Ventas, see times know terms potential the positioned, years of, But, and you and be terms worth market the I potentially of has as it's planning year watched it going when like way I'm I'm should mean and and you of I here. to balance in a future Okay if I'm wise? it a with and XX compelling number not you of But, your curious higher, out looks the then makes a to about you've in here tenure is pretty range you heading run point Ventas you're and X%

Debra Cafaro

to well company we those and XX while and every there to that's think XX years so XX%, day as work over now of a Well much of here. gets couple that hundred what much equity do. about Kindred, GAAP. from is XX% me X% is right I years coming more Kindred the you annual continually done have is team positioned years very compound we've The XX tremendous so excited from growth built are of and return, million know, years we to what's exciting XX XXX%

I believe a of is the stages still in and early private sector public Our transition.

of some exciting our and and that very in that to by still shared in I we the is public that see space are under real the spaces demographic estate other think and tremendous many end, continue have the opportunities it demand see about owned opportunities excited we we isn't space, ahead. in

Jordan Sadler

thank Okay, you.

Debra Cafaro

Jordan. you, Thank

Operator

Thank you.

Our question from from next comes Stifel. Chad Vanacore

is Your open. line

Chad Vanacore

Hey good morning everyone.

expecting of transaction delivery sort that? just timing are the midyear Ardent on So you $XX rate of kempt in including Is thinking that what or that? payment,

Robert Probst

is Midyear good a assumption, yes.

Chad Vanacore

saying would you've assumed you X. that low on that, to you will dispositions we recycling just is suggest and assumption the leverage then mid transactions out backed of example and are assets of leverage should probably that's in my yearend expect there down math that there? in that because the In Xs acquisitions and are Okay get laid

Robert Probst

those A right blended at billion yield pay average, X% X.X we used is of things No with down to assumptions. again, are couple at being X-X to a in know, debt the on and future NOI, same also investing yielding development and in future X.X% spending the investment million that's X%, are immediate which redevelopment of range is not the growth. for at $XXX we time

So at all that, it's times. more end of X the

Chad Vanacore

SHOP portfolio. portfolio? you to then different? it's that portfolio your got if not an you've about out idea then actually Could Okay, operating what assume on and is just we give it And thinking laid coverage what then trend more results what's that Brookdale and today can the on us

Debra Cafaro

as very the portfolio. very past coverage's, business triple coverage's. in our terms encourage consistent public our we've that entire of the careful the that always our said so, operating And the have net specific partners to talk we are do coverage's of in Brookdale's them results. to their in Okay operating with reported we senior with specific portfolio, in consistent as with triple-net trend housing in to within would terms about you But,

Chad Vanacore

[indiscernible] capital just thinking portfolio, last new Alright, partner JV when this you one there? then give of partnership me, an why in the are with us strategic one can the idea about for you the

Debra Cafaro

capital Yes, we there I like are of partner to global we lots and it, recognized we to be financial would ramp for that. think it in continue mean portfolio our valuable strategic to forces. think - institutional have example and to We believe there it's a benefits and are that and capital doing fund we diversify great and the for us development our trophy recycle a is like activities the continue upside life great there's portfolio, up out building that opportunity science to and pipeline

round. opportunity excellent an the way it's think we So all

Chad Vanacore

taking for the thanks questions. Alright,

Debra Cafaro

My pleasure.

Operator

Thank Puryear you. Paul The question James. Raymond comes from from

is line open. Your

Unidentified Analyst

for is - Hey, he's actually morning on time. but this thanks good the Jonathan,

wouldn't do the in environment relative current Ardent your fund. are and to back me cheaper they they to how to prepaying to It seems the they to be loan, going able why LHP debt So guess. get plan

that from. and come to will So money trying prepaying why I'm just the where understand

Debra Cafaro

Because Center. Medical it it mentioned Ardent has Texas and asset on as because East track to well is acquire acquired acquired LHP, another done we've and

our we a it think and I idea that's loan so. And it will they that would is proceeds entire to mark to as structure general the be we redeploy be repay and capital will discussed. for expectation and believe a the the more that the to of success proceeds really in use refinance company would do our able streamlined those company's

Unidentified Analyst

being news you Okay, Do more, by you post-acute put then supporting savings, this risk deal, rent December the suggest out deck in following out at being now in slide they payments? put fair owned including release a them doesn't slowdown that in the the facing press looking any I one equity And headwinds any month potentially the see a aggressive more enough. Kindred know space. terms cost and private from Kindred of but

Debra Cafaro

or like as are and Carson Atria, across in who's getting healthcare I said here, equity it's investors and will look its equity from real significant putting frankly equity that ETI we situation. a de-levered and leading as continued because whether new same Welsh, interesting stand - Well, that's getting to capital, amount TPG think I that's say a the sheet in a business Kindred it rehab mentioned the in Florida it's substantially, would balance We positive particularly positive experienced landscape really LTAC extended the one would I spell operator is fact of Kindred be fresh the on and trajectory there that our IRF I LTAC with into a that and in think out news as with and operating have we of its the recent funding XXXX. Washington situation

opportunities new and create the equity private partnership with think for we can us. the So firms Kindred

we will us with business before done for and more. to continuing opportunities We together to to hope work really with and Carson there have Welsh, do be look forward them

Unidentified Analyst

great. Okay, taking for questions. Thanks my that's

Debra Cafaro

you. Thank

Operator

you. Thank

Our from One. Bornstein Capital from Daniel question comes

line Your open. is

Daniel Bornstein

Good morning.

Debra Cafaro

morning, Dan. Good

Daniel Bornstein

well? joint say really haven't there there classes other Hi, as like medical to should are about or there and as be venture science? there opportunities senior for for but heard you office other asset seems opportunities hospice such I housing you life talk that,

Debra Cafaro

diversified out. glad a Absolutely, we I'm pointed that portfolio. have that Again, you valuable

We business value. doing and of billions Todd, scaled have created MOB in of dollars with so

with University the interest obviously overtime asset and capital early thing very capital option to investing seven first putting capital a out Assets high platform, attractive we're great a came have have winning and the ventures. same portfolio the it is value grown based that life we with and from certainly institutional quality science, office doing times behind creating great there's class to possible since institutional for in it's and together, joint

Daniel Bornstein

the this to net and XX% What point of there Okay on trading in side asset process on a if that's right - you the point. acquisition then at good versus at value. terms of to I de-risking, there going At to strategy soft you implies in almost about same discount at at and opportunities you're regards that. think was was you business, the going some that commend think the de-leveraging the your point, buybacks it de-risking, there's be forward very don't stock this buyback time

Debra Cafaro

chose would powder. how that use whether we to to all And many, and include and wide dry for capital Great, another powder clarifies, many financial equity. to are - a then and allocators great be expect our for possibilities question what process sited of investments, proceeds immediate ways that and you've again. and to We sound dry about dry that de-lever we them harvesting really those allocate gear as investments which and think our at will some value marking and range if improve to we're proceeds which successful creating additional doing is is us powder is believe we own us that we we of environment obviously can would there gives including the strength, from

Daniel Bornstein

operational know seasonality, X think in the trophy point? thinking know one just half, the the occupancy versus about I how of there's kind NOI? business Okay, senior but you quick you X housing second and the call, to question you in the better minus okay. loss in normal 'XX are get to it's the I the Do that on of think - is late one but about minus at half timing already going this the how

Debra Cafaro

everyone Well, I'm last we questions so appreciate make that address going their to today, give ask the and we sure to Bob due to want to time one.

Robert Probst

drop and through the the wild the carry beyond really all that kind occupancy seasonality. impact so quarters continue mentioned variation, and look don't quarters, don't year-on-year. any but of We driving We that I similar the affect year, quite that's anything to tends quarter-to-quarter beyond forward normal unique a down will flu how I see expect to therefore see that changes

Daniel Bornstein

Okay, I Thank appreciate. you.

Debra Cafaro

you. Thank

Operator

Thank you.

Wells from from comes Stender question Fargo. Todd Our

Your open. line is

Todd Stender

Thanks Hi, good staying morning. for on.

Debra Cafaro

Good morning.

Todd Stender

mean you price support discussion, your Canadian Canadian it's senior the look an the bucket. here in of you maybe Is even the and is key, segment I bright lower rents but lowest in occupancy X there when month at US - that's going for guys that range? rents to of opportunity versus part Back a remains in play in it a point to to market the is a the spot something affordability housing, US that something in $X,XXX

Robert Probst

I'll price IO have basis, on for it than first, on lower Canadian line is way occupancy it's so gives grow so is overall the at placed - continue on Yeah, which mentioned strong we based bottom but opportunity equity. a in do. the that the the believe by more on XX% I the confidence comment and there, that in portfolio, and XXXX us of Canada. to the it's gives market pricing in an And relative us are us pricing so plus looks we that we Canada what power really to

Todd Stender

Great, thank you.

Debra Cafaro

you. Thank

in our your Okay, our your sincerely so your all our morning that I'm comments interest we this of and to time, how glad want appreciate joined support say, interest and you and in much call company. in all in

look So you forward to soon. thank we much, seeing so you

Operator

and thank you have wonderful you day. Everyone disconnect. conclude a gentlemen, does This Ladies today's and the for participating may all in conference. program

Ventas (VTR) 9 Feb 182017 Q4 Earnings call transcript