Ventas, Inc.

Ladies and gentlemen, thank you for standing by, and welcome to the second quarter 2020 Ventus earnings conference call. At this time, all participant lines are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question, you will need to press star 1 on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star 0. I would now like to hand the conference over to your speaker today, Sarah Whitford, Investor Relations. Thank you. The floor is yours.

Thanks, Tina. Good morning, and welcome to the Ventas conference call to review the company's announcement today regarding its results for the second quarter ended June 30, 2020. 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 law. The company cautions that these forward-looking statements are subject to many risks, uncertainties, and contingencies, and stockholders and others should recognize that actual results may differ materially from the company's expectations, whether expressed or implied. Ventas expressly disclaims any obligation to release publicly any updates or revisions to any forward-looking statements to reflect any changes in expectations. Additional information about the factors that may affect the company's operations and results is included in the company's annual report on Form 10-K for the year ended December 31, 2019, and the company's other SEC filings. Please note that quantitative reconciliations between each non-GAAP financial measure referenced on this conference call 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.ventosreit.com. Before I hand the call off to Deborah A. Cafaro, chairman and CEO of the company, I'd like to note that we posted an investor presentation this morning on our website, which includes helpful information that the team will reference in our prepared remarks. With those formalities out of the way, I'll hand it over to Debbie.

Nicely done, Sarah, and thank you. Good morning to all of our shareholders and other participants, and welcome to the Ventas second quarter 2020 earnings call. I sincerely hope that you are safe and healthy and staying positive as the COVID-19 pandemic persists in our country. I'm proud to say that the Ventas team has been cohesive, skilled, and enormously hardworking as we've addressed key issues and weathered the initial storm created by the pandemic. We still have a long way to go and conditions remain highly uncertain and uneven. but we are encouraged by second quarter performance and trends, which have continued into July. Our enterprise benefited significantly in the second quarter from our longstanding commitment to asset class, operator, and geographical diversification. We delivered 77 cents of normalized FFO per share in the quarter, led by our medical office building, Research and Innovation, and Healthcare, TripleNet Business, which collectively represent nearly half of our enterprise. As a result of the pandemic, we recorded a number of non-cash charges in the quarter, primarily focused on senior housing. These items reflect the conditions affecting senior housing we shared with you in late June, and our expectations remain unchanged regarding our business prospects and potential from that point. As expected and consistent with those communications, the COVID-19 pandemic significantly affected our senior housing financial results in the quarter. Our shop portfolio experienced the maximum occupancy impact from mid-March through April, particularly in our large, high-quality, high-rate New York and New Jersey communities. Since then, we are heartened to see the resilience of demand for senior living and the recognition of the value our industry provides to seniors and their families. We saw sustained intra-quarter improvement in leads and move-ins and clinical results for our residents that continued into July. Atria has led the way. And, as we previously anticipated, Operators at virtually all of our communities are currently open to new resident move-ins, and the vast majority of our communities are offering residents an enriched living environment. The focus of our operators now is to safely increase move-ins and stabilize occupancy, and then seek to rebuild occupancy toward pre-pandemic levels. We are proud of our early and rigorous focus on health and safety and our leadership in adopting testing protocols to keep seniors and frontline caregivers safe. We have also taken decisive actions during and after the quarter to keep Ventas strong and stable for all those who depend upon us. These include adjusting our cost structure by $25 to $30 million annualized to further enhance our efficiency and effectiveness while preserving our core competencies of capital raising, investment, asset management, and service in the field. Increasing our liquidity, which currently stands at $3.5 billion, and maintaining a strong balance sheet. Conserving capital through the reduction of capital expenditures and our dividends. taking proactive steps to address the financial impact of the pandemic with our two largest senior housing tenants, Brookdale and Holiday, resulting in mutually beneficial transactions with both large operators. For Holiday, we are pleased that we converted our 26 independent living communities operated by Holiday to shop. And we recently announced a deal with Brookdale that provides CENTOS shareholders with certainty, flexibility, and the opportunity for upside on industry recovery and creates better lease coverage and a stronger tenant. We appreciate our constructive relationship with both companies and management teams and continuing to advocate for seniors with federal policymakers. because of the crucial role senior living care providers play in protecting our vulnerable senior population and the impressive clinical record in our industry. We remain respectfully hopeful that HHS will provide much deserved and needed financial support to mitigate the impact of COVID-19. We also continue to explore opportunities to grow our enterprise. and our investment team is being active yet selective. I'd highlight in particular the strategic advantage of the open-end fund we successfully launched in March. With access to institutional capital and a well-performing core of quality assets under management, the fund is another tool that will enable us to expand our footprint, leverage our team and industry expertise, and create value. We also continue our capital allocation focus on our expanding research and innovation business. While the existing R&I portfolio continues to deliver outstanding performance, we also have two major projects well underway with leading research institutions at the University of Arizona and the University of Pittsburgh, both expected to deliver next year. In addition, we just broke ground on Drexel's Academic Tower, in the youth city market of Philadelphia. Together, these three developments represent over $600 million in aggregate investments and are over 80% pre-leased to highly rated tenants. Our team continues to work with our development partner, Wexford, to build our pipeline of R&I projects that will be actionable as soon as the time is right. We were pleased to welcome Marguerite Nader to our diverse, independent, and experienced board in July. Marguerite is a top-notch CEO and real estate executive, and we look forward to benefiting from her insights as we move the company through the pandemic and forward. In closing, the long-term, demographically-driven thesis for healthcare real estate and for Ventas remains in place. despite the near-term disruption caused by the pandemic. We see resilient demand and strong performance in our different business lines and have taken decisive action so Ventas can successfully navigate through current conditions and capture opportunities. We will continue working together for the benefit of all our stakeholders. And now I'm pleased to ask Justin to discuss our senior housing business.