EX-99.1 4 a2225458zex-99_1.htm EX-99.1

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Exhibit 99.1

LOGO

[                  ], 2015

Dear Ventas Stockholder:

        We are pleased to inform you that on July 30, 2015, the board of directors of Ventas, Inc. ("Ventas") declared the distribution of all of the Ventas-owned shares of common stock of Care Capital Properties, Inc. ("CCP'), a wholly owned subsidiary of Ventas, to the Ventas stockholders. CCP will hold, directly or indirectly, Ventas's interests in 355 skilled nursing facilities and other healthcare assets operated by private regional and local care providers.

        This transaction creates two separate companies with distinct and focused strategies, strong balance sheets and experienced management teams. Independently, both CCP and Ventas will be well positioned to grow and create value for stockholders.

        The distribution of shares of CCP common stock will occur on August 17, 2015 by way of a pro rata special dividend to Ventas stockholders. Each Ventas stockholder will be entitled to receive one share of CCP common stock for every four shares of Ventas common stock held by such stockholder as of the close of business on August 10, 2015, which is the record date for the distribution. The shares of CCP common stock will be issued in book-entry form only, which means that no physical share certificates will be issued. We expect that the separation and distribution will be tax-free to Ventas stockholders. However, any cash you receive in lieu of fractional shares generally will be taxable to you.

        Ventas stockholder approval of the distribution is not required, and you are not required to take any action to receive your shares of CCP common stock. Following the distribution, you will own shares in both Ventas and CCP. The number of shares of Ventas common stock that you own will not change as a result of this distribution. Ventas's common stock will continue to trade on the New York Stock Exchange under the symbol "VTR." CCP has been approved to list its shares of common stock on the New York Stock Exchange under the symbol "CCP."

        The information statement, which is being made available to all holders of Ventas common stock as of the record date for the distribution, describes the distribution in detail and contains important information about CCP, its business, financial condition and operations. We urge you to read the information statement carefully.

        We want to thank you for your continued support of Ventas, and we look forward to your support of CCP in the future.

    Sincerely,

 

 


LOGO
    Debra A. Cafaro

 

 

Chairman of the Board and Chief Executive Officer

LOGO

[                  ], 2015

Dear Future Care Capital Properties, Inc. Stockholder:

        It is our pleasure to welcome you as a stockholder of our company, Care Capital Properties, Inc. ("CCP"). Following the distribution of all of the shares of our common stock owned by Ventas, Inc. ("Ventas") to its stockholders, we will be a newly listed, publicly traded real estate investment trust that will own, acquire and lease skilled nursing facilities and other healthcare assets across the United States.

        Our large, diversified portfolio will initially consist of 355 high-quality assets operated by 41 private regional and local care providers. We have an independent, experienced management team and strategy focused on attractive investment opportunities with quality regional and local operators in the fragmented skilled nursing market. With a strong balance sheet, equity currency and independent access to capital markets, we aim to drive growth and create value through acquisitions and active asset management, including redevelopment.

        We invite you to learn more about CCP by reviewing the enclosed information statement. We urge you to read the information statement carefully and in its entirety. We are excited by our future prospects, and look forward to your support as a holder of CCP common stock.

    Sincerely,

 

 


LOGO
    Raymond J. Lewis

 

 

Chief Executive Officer

PRELIMINARY AND SUBJECT TO COMPLETION, DATED JULY 30, 2015

Information contained herein is subject to completion or amendment. A Registration Statement on Form 10 relating to these securities has been filed with the U.S. Securities and Exchange Commission under the U.S. Securities Exchange Act of 1934, as amended.

INFORMATION STATEMENT

Care Capital Properties, Inc.

        This information statement is being furnished in connection with the distribution by Ventas, Inc. ("Ventas") to its stockholders of all of the Ventas-owned shares of common stock of Care Capital Properties, Inc. ("CCP"), a wholly owned subsidiary of Ventas that will hold, directly or indirectly, Ventas's interests in 355 skilled nursing facilities ("SNFs") and other healthcare assets operated by private regional and local care providers. To implement the distribution, Ventas will distribute all of the shares of CCP common stock it owns on a pro rata basis to the Ventas stockholders in a transaction that is intended to qualify as tax-free for U.S. federal income tax purposes. However, any cash you receive in lieu of fractional shares generally will be taxable to you.

        For every four shares of Ventas common stock held of record by you as of the close of business on August 10, 2015, the record date for the distribution, you will receive one share of CCP common stock. You will receive cash in lieu of any fractional shares of CCP common stock that you would have received after application of the distribution ratio described above. As discussed under "The Separation and Distribution—Trading Between the Record Date and Distribution Date," if you sell your shares of Ventas common stock in the "regular-way" market after the record date and before the distribution, you also will be selling your right to receive shares of CCP common stock in connection with the separation. We expect the shares of CCP common stock will be distributed by Ventas to you on August 17, 2015. We refer to the date of the distribution of the CCP common stock as the "distribution date."

        No vote of Ventas stockholders is required for the distribution. Therefore, you are not being asked for a proxy, and you are requested not to send Ventas a proxy, in connection with the distribution. You do not need to pay any consideration, exchange or surrender your existing shares of Ventas common stock or take any other action to receive your shares of CCP common stock.

        There is no current trading market for CCP common stock, although we expect that a limited market, commonly known as a "when-issued" trading market, will develop on or shortly before the record date for the distribution, and we expect "regular-way" trading of CCP common stock to begin on the first trading day following the completion of the distribution. CCP has applied to have its common stock authorized for listing on the New York Stock Exchange ("NYSE") under the symbol "CCP."

        CCP intends to elect and qualify to be taxed as a real estate investment trust ("REIT") for U.S. federal income tax purposes, from and after CCP's taxable year that includes the distribution. To assist CCP in qualifying as a REIT, CCP's certificate of incorporation will contain various restrictions on the ownership and transfer of its capital stock, including a provision generally prohibiting any person from beneficially owning more than 9.0% of the outstanding shares of CCP common stock or more than 9.0% of the outstanding shares of any class or series of CCP preferred stock, as determined by value or number, whichever is more restrictive. Please refer to "Description of CCP's Capital Stock—Restrictions on Ownership and Transfer."

        Following the separation, CCP will be an "emerging growth company," as defined in the Jumpstart Our Business Startups Act of 2012 (the "JOBS Act"), and, as such, is allowed to provide in this information statement more limited disclosures than an issuer that would not so qualify. In addition, for so long as CCP remains an emerging growth company, it may also take advantage of certain limited exceptions from investor protection laws such as the Sarbanes-Oxley Act of 2002, as amended (the "Sarbanes-Oxley Act"), and the Investor Protection and Securities Reform Act of 2010, for limited periods. See "Information Statement Summary—Emerging Growth Company Status."

        In reviewing this information statement, you should carefully consider the matters described under the caption "Risk Factors" beginning on page 22.



        Neither the U.S. Securities and Exchange Commission nor any state securities commission has approved or disapproved these securities or determined if this information statement is truthful or complete. Any representation to the contrary is a criminal offense.



        This information statement does not constitute an offer to sell or the solicitation of an offer to buy any securities.

The date of this information statement is [                        ], 2015.

This information statement was made available to Ventas stockholders on or about [                        ], 2015.



TABLE OF CONTENTS

 
  Page  

INFORMATION STATEMENT SUMMARY

    1  

QUESTIONS AND ANSWERS ABOUT THE SEPARATION AND DISTRIBUTION

   
15
 

RISK FACTORS

   
22
 

CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

   
44
 

DIVIDEND POLICY

   
45
 

CAPITALIZATION

   
46
 

SELECTED HISTORICAL COMBINED CONSOLIDATED FINANCIAL DATA

   
47
 

UNAUDITED PRO FORMA CONDENSED COMBINED CONSOLIDATED FINANCIAL STATEMENTS

   
49
 

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

   
59
 

BUSINESS

   
77
 

MANAGEMENT

   
95
 

COMPENSATION OF NAMED EXECUTIVE OFFICERS

   
105
 

CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS

   
118
 

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

   
119
 

THE SEPARATION AND DISTRIBUTION

   
122
 

OUR RELATIONSHIP WITH VENTAS FOLLOWING THE DISTRIBUTION

   
129
 

DESCRIPTION OF MATERIAL INDEBTEDNESS

   
136
 

DESCRIPTION OF CCP'S CAPITAL STOCK

   
138
 

MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE DISTRIBUTION

   
143
 

MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES OF INVESTMENT IN OUR COMMON STOCK

   
147
 

WHERE YOU CAN FIND MORE INFORMATION

   
166
 

INDEX TO FINANCIAL STATEMENTS

   
F-1
 

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PRESENTATION OF INFORMATION

        Except as otherwise indicated or unless the context otherwise requires, the information included in this information statement assumes the completion of all of the transactions referred to herein in connection with the separation and distribution. Except as otherwise indicated or unless the context otherwise requires, references in this information statement to "CCP," "we," "us," "our" and "the company" refer to Care Capital Properties, Inc., a Delaware corporation, and its consolidated subsidiaries; references in this information statement to "Ventas" refer to Ventas, Inc., a Delaware corporation, and its consolidated subsidiaries; and references to CCP's historical business and operations refer to Ventas's interests in the business and operations of the SNFs and other healthcare assets that will be transferred to CCP in connection with the separation and distribution. Except as otherwise indicated or unless the context otherwise requires, all references to CCP per share data assume a distribution ratio of one share of CCP common stock for every four shares of Ventas common stock.

iii




INFORMATION STATEMENT SUMMARY

        The following is a summary of material information disclosed in this information statement. This summary may not contain all the details concerning the separation or other information that may be important to you. To better understand the separation and CCP's business and financial position, you should carefully review this entire information statement.

        This information statement describes the businesses to be transferred to CCP by Ventas in the separation as if the transferred businesses were CCP's businesses for all historical periods described. References in this information statement to CCP's historical assets, liabilities, businesses and activities are generally intended to refer to the historical assets, liabilities, businesses and activities of the transferred businesses as the businesses were conducted as part of Ventas and its subsidiaries prior to the separation.

CCP

        CCP is a self-administered, self-managed REIT engaged in the ownership, acquisition, and leasing of SNFs and other healthcare assets operated by private regional and local care providers. We primarily generate our revenues by leasing our properties to third-party operators under triple-net leases, pursuant to which the tenants are obligated to pay all property-related expenses, including maintenance, utilities, repairs, taxes, insurance and capital expenditures. Our leases have a weighted average remaining term of greater than nine years, with remaining expirations of up to 16 years, and typically include annual rent escalators that average approximately 2.3% per year.

        Upon completion of the separation, we are expected to be one of only two publicly traded, SNF-focused REITs, with a diverse portfolio of 355 properties. Our properties are currently operated by 41 private regional and local care providers, spread across 37 states, and contain a total of nearly 39,000 beds/units. For the year ended December 31, 2014, we generated total revenues and net operating income ("NOI") of $295.4 million, net income attributable to CCP of $157.6 million, and normalized funds from operations ("FFO") attributable to CCP of $258.7 million. Please refer to "Management's Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Financial Measures" for reconciliations of normalized FFO and NOI to net income attributable to CCP.

        Our SNFs provide rehabilitative, restorative, skilled nursing and medical treatment for patients and residents who do not require the high-technology, care-intensive, high-cost setting of an acute care or rehabilitation hospital. Patients and residents generally come to SNFs to receive post-acute care to recover from an illness or surgery or long-term care with skilled nursing assistance to aid with numerous daily living activities. Treatment programs include physical, occupational, speech, respiratory and other therapies, including sub-acute clinical protocols such as wound care and intravenous drug treatment. SNF operators receive payment for these services through a combination of government reimbursement, including Medicare, Medicaid, and private sources.

        Our specialty hospitals and healthcare assets include hospitals focused on providing children's care, inpatient rehabilitation facilities, long-term acute care hospitals and personal care facilities. Our inpatient rehabilitation facilities are devoted to the rehabilitation of patients with various neurological, musculoskeletal, orthopedic and other medical conditions following stabilization of their acute medical issues. Our long-term acute care hospitals serve medically-complex, chronically-ill patients who require high levels of monitoring and specialized care, but whose conditions do not necessitate the continued services of an intensive care unit. All of our long-term acute care hospitals are freestanding facilities, and we do not own any "hospitals within hospitals." Our personal care facilities provide specialized care, including supported living services, neurorehabilitation, neurobehavioral management and vocational programs, for persons with acquired or traumatic brain injury.

 

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        Our seniors housing communities, which are leased under master lease agreements with certain of our SNFs, include independent and assisted living communities, continuing care retirement communities and communities providing care for individuals with Alzheimer's disease and other forms of dementia or memory loss.

        In addition, we originate and manage a small portfolio of secured and unsecured loans, made primarily to SNF operators or secured by SNF assets.

        Upon separation, we will be well positioned for growth, with the ability to capitalize on attractive investment opportunities and favorable industry dynamics. With a strategy focused on our post-acute/SNF business, we expect to grow and further diversify our portfolio through acquisitions and active asset management, including redevelopment. We believe that our strong balance sheet and independent access to multiple sources of capital support this strategy and will enable us to drive value for our stockholders.

        Our company will be led by a highly experienced and dedicated management team comprised of current Ventas executives with knowledge of CCP's industry, assets and customers, along with an independent board of directors. This well-seasoned team has extensive experience working together in the healthcare real estate industry, and the top four executives have an average tenure of approximately 10 years at Ventas. Our non-executive chairman of the board, Douglas Crocker II, who has been a director of Ventas since 1998 and has more than 40 years of experience as a real estate executive, has a comprehensive understanding of REIT operations and strategy, capital markets, and corporate governance.

        Certain of our support functions will be provided by Ventas on a transitional basis until August 31, 2016, subject to extension upon mutual agreement, and we expect that our properties will be seamlessly transitioned into our company due to the institutional knowledge of our asset managers and our deep familiarity with the markets in which our assets are located.

        We expect to request that the major credit rating agencies evaluate our creditworthiness and give us specified credit ratings based on several factors, including our financial strength and flexibility, credit statistics and our operating strategy and execution. Upon completion of the separation, we expect to have approximately $1.3 billion of total debt outstanding.

        We plan to elect to be treated as a REIT in connection with the filing of our federal income tax return for the taxable year that includes the distribution, subject to our ability to meet the requirements of a REIT at the time of election, and we intend to maintain this status in future periods.

Industry Opportunities

        There are 14 publicly traded healthcare REITs representing an aggregate market capitalization of approximately $92 billion, based on publicly available data as of December 31, 2014. Most of these companies either specialize in healthcare properties other than SNFs or are large, diversified companies that focus on investing in healthcare properties other than SNFs, resulting in private regional and local operators being underserved. According to the American Health Care Association ("AHCA"), the SNF industry is comprised of approximately 15,600 facilities and 1.7 million beds, and according to the National Investment Center for the Seniors Housing & Care Industry ("NIC"), there are more than 2,500 SNF operators. With only 14.3% of SNFs owned by publicly traded REITs, according to the AHCA, the large and highly fragmented market provides ample opportunities for consolidation. We believe that CCP will be poised to take advantage of those opportunities.

        These dynamics within the SNF industry may create an opportunity for attractive returns. The SNF industry is expected to benefit from current and projected near-term demographic, economic and regulatory trends driving demand for post-acute and long-term care services provided by SNFs. The demand for SNFs is based on the medical needs of residents who may have been discharged from a

 

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hospital and are in need of rehabilitation or restorative care and long-term residents who require assistance with numerous activities of daily living. SNFs provide comprehensive delivery of care to these residents at a relatively low cost. Moreover, while the supply of SNFs is constrained by obstacles, such as licensing, Certificate of Need ("CON"), and state regulatory requirements, a recent healthcare policy shift towards treating patients in lower cost, more clinically appropriate settings is expected to generate increased utilization of SNFs.

        SNF operators generally receive revenue through reimbursement from the federal and state funded Medicare and Medicaid programs, as well as private insurers. Government reimbursement is a key factor supporting the revenues and profitability of SNF operators. From 2000 to 2014, despite significant volatility during the period, SNF Medicare reimbursement rates increased at a compound annual growth rate ("CAGR") of 3.8% and SNF Medicaid reimbursement rates increased at a CAGR of 3.9%, according to Eljay LLC and the Centers for Medicare & Medicaid Services ("CMS").

CCP's Strengths

        We possess a number of competitive advantages that distinguish us from our competitors, including:

Growing Earnings Stream Providing for Reliable Dividend Payments to Stockholders

        We lease all of our real estate properties to third-party operators under triple-net leases, pursuant to which the tenants are obligated to pay all property-related expenses, including maintenance, utilities, repairs, taxes, insurance and capital expenditures. Our leases have a weighted average remaining term of greater than nine years.

        We have strong cash flow-to-rent coverage, which is an indication of our tenants' ability to pay the rent due under our leases. In addition, our triple-net lease structure helps to insulate us from variability in operator cash flows. We support our ability to generate attractive returns on a long-term basis by structuring our leases with a variety of favorable provisions. For instance, our leases typically have initial terms of 10 years and include annual rent escalators that average approximately 2.3% per year. These escalator provisions help us to maintain our cash rental stream.

        We regularly enter into lease extensions during the terms of our leases in connection with additional acquisitions, reinvestment projects and other opportunities that arise from our close tenant relationships. Our leases also generally provide us with key credit support for our contractual rents through guarantees and/or security deposits, and we have strong structural protections by entering into master leases or leases with cross-default provisions. We typically require security deposits of several months' rent.

National, Diversified Portfolio with Ventas Legacy Positioning CCP to Capitalize on Market Opportunities

        Most of our 355 properties have been owned by Ventas, an S&P 500 company and global leader in the healthcare real estate industry, for a long time, and our geographically diverse portfolio was constructed by Ventas through its highly regarded capital allocation expertise and excellent underwriting standards. The geographic and operator diversification of this strategically assembled portfolio not only reduces our exposure to any single market or tenant, but also helps us to expand our operating expertise and provides us with numerous relationships upon which to grow. We expect to capitalize on our relationships and experience to enhance our forward growth profile.

        Specifically, we pursue a strategy of leasing properties to multiple tenants in each of our markets and leasing multiple properties to each of our tenants, which helps us to expand our expertise and relationships in a given market, while also helping us to diversify and mitigate risk. As leases expire, we often re-lease properties to new tenants. Over the last three years, we re-leased properties accounting

 

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for 30% of our NOI at market rents, providing us with a more stable forward growth profile. The result is that leases that were once concentrated with some of our larger operators have been re-leased to new regional and local operators with lower cost structures and greater knowledge of their particular markets, broadening our tenant base and expanding our pipeline of new investment opportunities.

Strong Relationships with Operators

        The members of our management team have developed an extensive network of relationships with qualified local, regional and national operators of SNFs across the U.S. Our management team has built this extensive network over 95 years of collective experience in the REIT, real estate, healthcare assets and finance industries, and through involvement in industry organizations and the development of strong relationships with customers, lenders and investors within the post-acute/SNF sector. We work collaboratively with our operators, investing capital to help them achieve their growth and business objectives. We believe these strong relationships with operators help us to source investment opportunities and give us a key competitive advantage in objectively evaluating an operator's financial position, quality of care and operating efficiency.

Increasing Government Reimbursement Expenditures

        Our portfolio consists primarily of properties leased to operators that receive a majority of their revenue through reimbursement from the federal and state funded Medicare and Medicaid programs. While dependence on government reimbursement is not without certain challenges, our management's experience and relationships with SNF operators enable us to better navigate these challenges. Moreover, growing reimbursement expenditures and a recent healthcare policy shift toward providing care in lower cost, more clinically appropriate settings provides cash flow growth for those operators who operate SNFs, which, in turn, helps us to maintain our cash flow. According to Eljay LLC and CMS, average Medicare reimbursement rates increased from $408 per day to an estimated $484 per day from 2008 to 2014, a CAGR of 2.9%, despite a decline in fiscal year 2012 to adjust for overpayments made in the prior year under the RUG-IV classification model. Average Medicaid reimbursement rates increased from $164 per day to an estimated $186 per day from 2008 to 2014, a CAGR of 2.1%. Since the inception of the Medicare and Medicaid programs in 1965, the federal and state governments have supported care for the U.S. elderly population, and we anticipate that they will continue to provide adequate funding for the healthcare facilities in our portfolio.

Experienced, Dedicated and Disciplined Management Team Focused on Growth

        Our company will be led by a highly experienced and dedicated executive management team comprised of individuals who were previously employed by Ventas, as well as externally recruited executives. We believe that this combination will provide continuity to our business and customers, in addition to new perspectives on driving future growth for the benefit of stockholders.

        We also expect that several members of Ventas's current SNF team will become employees of CCP, providing continuity in the day-to-day asset management of CCP's portfolio following the separation. These individuals have extensive experience working together in the SNF business and longstanding relationships with our tenants.

        Our management team has an accomplished record of successfully identifying and executing acquisition opportunities and possesses the knowledge and experience that will put CCP in an excellent position to participate as a consolidator in a fragmented industry.

        In addition, through years of public company experience, our management team has extensive experience accessing both debt and equity capital markets to fund growth and maintain a flexible capital structure. With its focus exclusively on developing CCP's portfolio, our management team will use this expertise to create a capital structure tailored to our asset base and investment opportunities.

 

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Flexible UPREIT Structure

        We have the flexibility to operate through an umbrella partnership, commonly referred to as an UPREIT structure, in which substantially all of our properties and assets are held by a limited partnership, Care Capital Properties, LP, the general partner of which is an entity controlled by CCP, or by such limited partnership's subsidiaries. Conducting business through Care Capital Properties, LP allows us flexibility in the manner in which we structure and acquire properties. In particular, an UPREIT structure enables us to acquire additional properties from sellers in exchange for limited partnership units, which provides property owners the opportunity to defer the tax consequences that would otherwise arise from a sale of their real properties and other assets to us. As a result, this structure may facilitate our acquisition of assets in a more efficient manner or allow us to acquire assets that the owner would otherwise be unwilling to sell because of tax considerations. We have no current plan or intention, and at the time of the separation will have no plan or intention, to use limited partnership units in Care Capital Properties, LP as consideration for properties we acquire or to issue any limited partnership units in connection with the separation; however we believe that the flexibility to do so in the future gives us an advantage in making acquisitions.

CCP's Strategies

        CCP will aim to drive growth and create value by:

Leveraging Size, Relationships, and Expertise to Opportunistically Consolidate a Fragmented Industry

        Data from the NIC indicates that there is a high degree of fragmentation among SNF owners and operators, with many privately held regional and local players controlling a high percentage of markets, and over 75% of SNF operators owning 25 or fewer properties. We believe that many of these owners are too small to attract interest from larger REITs, such as Ventas, and other institutional investors, affording us the opportunity to acquire their properties at attractive prices in a less competitive environment. As a more flexible, SNF-focused REIT, we intend to capitalize on this opportunity by actively participating as a consolidator in this fragmented industry. We believe that our size, relationships and investment expertise will enable us to identify and consummate accretive acquisitions to expand and further diversify our portfolio.

Sourcing Investments from Our Operator Relationships

        Our tenants represent many of the most experienced regional and local operators of SNFs in the U.S. These operators have a demonstrated desire and ability to grow, which will require capital, and we expect our strong relationships with these operators to lead directly to future acquisitions and other investment opportunities.

        These operators own many of the facilities they operate, which creates opportunities for us to grow our portfolio through sale-leaseback transactions that are attractive to the operators because they provide liquidity to grow their businesses. We believe we can develop and expand our relationships with our existing tenants, who collectively operate nearly 2,000 properties throughout the U.S., as well as expand our network of relationships with new operators. We will focus on operator relationships that meet our investment criteria, and we believe our management team's experience in the industry will help us to identify attractive acquisition, sale-leaseback, reinvestment, new construction and other investment opportunities. We expect that our size and market position will allow us to generate a significant pipeline of unique and attractive opportunities to grow our portfolio.

Maintaining a Strong Balance Sheet with Access to Multiple Sources of Capital

        We expect to maintain a strong balance sheet and conservative capital structure, providing the resources and flexibility to support the growth of our business. In addition, we believe our independent access to the debt and equity capital markets will be sufficient to fund the growth of our operations.

 

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Driving Growth through Redevelopment, Expansion and Enhancement of Current Properties

        Certain members of our management team have significant experience evaluating the operational and financial performance of SNF operators. We expect to leverage this expertise to drive growth at our existing properties.

        Over time, we expect to work closely with our operators to identify and capitalize on opportunities to enhance the operations of our facilities through capital investment. When the opportunities are attractive, we may finance the redevelopment or expansion of our properties, generating higher lease rates while improving the quality of our assets.

Strategically Pursuing Opportunities to Invest in Complementary Healthcare Properties

        Over time, we may capitalize on our management team's extensive knowledge of healthcare properties, as well as our strong relationships with our tenants, to supplement our core strategy of acquiring and investing in SNFs by opportunistically acquiring complementary healthcare properties. We may also pursue forms of investment other than triple-net leases, including joint ventures or other structures for our healthcare properties, as well as senior, mezzanine, secured and unsecured debt investments that are consistent with our investment objectives.

Our Properties

        Our portfolio of properties will consist initially of 322 SNFs, 16 specialty hospitals and healthcare assets and 17 seniors housing properties located in 37 states and containing nearly 39,000 beds/units. We lease all of our properties to third-party operators under triple-net leases, pursuant to which the tenants are obligated to pay all property-related expenses, including maintenance, utilities, repairs, taxes, insurance and capital expenditures.

GRAPHIC

 

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        The following chart summarizes the contribution of each of our property types to NOI(1):

GRAPHIC


(1)
Based on pro forma annualized NOI.

Risks Associated with CCP's Business and the Separation and Distribution

        An investment in our common stock is subject to a number of risks, including risks relating to the separation and distribution. The following list of risk factors is not exhaustive. Please read the information in the section entitled "Risk Factors" for a more thorough description of these and other risks.

Risks Related to Our Business and Operations

    Our business is dependent upon our operators successfully operating their businesses, and their failure to do so could have a material adverse effect on our business, financial condition, results of operations or liquidity and our ability to service our indebtedness and other obligations and to make distributions to stockholders, as required for us to continue to qualify as a REIT.

    We may not be successful in identifying and consummating suitable acquisitions or investment opportunities, which may impede our growth and negatively affect our results of operations and may result in the use of a significant amount of management resources.

    Our three largest operators account for a meaningful portion of our rental income, and the failure of any of these operators to meet their obligations to us could materially reduce our revenues and net income.

    We expect to have approximately $1.3 billion of indebtedness outstanding upon completion of the separation and distribution, and our indebtedness could adversely affect our financial condition, and, as a result, our operations.

    If we cannot obtain additional capital, our growth may be limited.

    Our operators depend on reimbursement from government and other third-party payors for a significant percentage of their revenues; reductions in reimbursement rates from such payors could cause our operators' revenues to decline and affect their ability to meet their obligations to us.

    The bankruptcy, insolvency or financial deterioration of our operators could delay or prevent our ability to collect unpaid rents or require us to replace our tenants; in such cases we may be

 

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      unable to reposition our properties on as favorable terms, or at all, and we could be subject to delays, limitations and expenses.

    Our success depends, in part, on our ability to attract and retain talented employees, and the loss of any one of our key personnel could adversely impact our business.

    Market conditions, including, but not limited to, interest rates and credit spreads, the availability of credit, the actual and perceived state of the real estate markets and public capital markets generally, and unemployment rates, could negatively impact our business, results of operations, and financial condition.

    Increased competition may affect the ability of our operators to meet their obligations to us.

Risks Related to the Separation

    We have not previously operated as a standalone company, and our historical and pro forma financial information is not necessarily representative of the results that we would have achieved as a separate, publicly traded company and may not be a reliable indicator of our future results.

    If the distribution, together with certain related transactions, does not qualify as a transaction that is generally tax-free for U.S. federal income tax purposes, Ventas, CCP and Ventas stockholders could be subject to significant tax liabilities and, in certain circumstances, we could be required to indemnify Ventas for the payment of material taxes pursuant to our indemnification obligations.

    We may not be able to engage in desirable strategic or capital raising transactions following the separation, and we could be liable for adverse tax consequences resulting from engaging in certain significant strategic or capital-raising transactions.

    We may not achieve some or all of the expected benefits of the separation, and the separation may adversely affect our business.

Risks Related to Our Status as a REIT

    If we do not qualify to be taxed as a REIT, or if we fail to remain qualified as a REIT, we will be subject to U.S. federal income tax as a regular corporation and could face substantial tax liability, which would substantially reduce funds available for distribution to our stockholders.

    Legislative, administrative, regulatory or other actions affecting REITs, including positions taken by the Internal Revenue Service ("IRS"), could have a negative effect on us.

    The share ownership limit imposed by the Internal Revenue Code of 1986, as amended (the "Code"), for REITs, and our certificate of incorporation, may inhibit market activity in our shares and restrict our business combination opportunities.

Risks Related to Ownership of Our Common Stock

    We cannot be certain that an active trading market for our common stock will develop or be sustained after the separation, and, following the separation, our stock price may fluctuate significantly.

    We cannot guarantee the timing, amount or payment of dividends on our common stock.

    Your ownership percentage in us may be diluted in the future.

The Separation and Distribution

        On April 6, 2015, Ventas announced that it intended to separate its post-acute/SNF portfolio operated by regional and local care providers from the remainder of its businesses. The separation will be effected by means of a pro rata distribution to Ventas stockholders all of the Ventas-owned shares of common stock of CCP, which was formed to hold the assets and liabilities associated with these properties.

 

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        On July 30, 2015, the Ventas board of directors approved the distribution of all of the issued and outstanding shares of CCP common stock owned by Ventas on the basis of one share of CCP common stock for every four shares of Ventas common stock held as of the close of business on August 10, 2015, the record date. Following the distribution, each of Ventas and CCP will be an independent, publicly held company.

Structure and Formation of CCP

        Prior to or concurrently with the separation and distribution, Ventas will engage in certain restructuring transactions that are designed to transfer its direct or indirect ownership interests in the properties constituting the CCP portfolio to CCP, facilitate the separation and distribution and provide us with our initial capital.

        In connection with the separation and distribution, the following transactions have occurred or are expected to occur concurrently with or prior to completion of the separation and distribution:

    CCP, a Delaware corporation, was formed on April 2, 2015. This entity was initially named Solomon 353 HoldCo, Inc. and subsequently renamed Care Capital Properties, Inc. on April 23, 2015.

    On April 2, 2015, CCP formed Solomon 353 GP, LLC, a Delaware limited liability company, of which CCP is the sole member. Together with Solomon 353 GP, LLC, CCP formed Solomon 353, LP, a Delaware limited partnership in which CCP, as limited partner, owns a 99% interest and Solomon 353 GP, LLC, as general partner, owns a 1% interest. On April 23, 2015, Solomon 353 GP, LLC was renamed Care Capital Properties GP, LLC, and Solomon 353, LP was renamed Care Capital Properties, LP.

    Pursuant to the terms of the separation and distribution agreement, the interests in our properties (including interests in entities holding properties currently held directly or indirectly by Ventas) will be contributed or otherwise transferred to CCP and its subsidiaries, including Care Capital Properties, LP.

    In connection with the contribution or other transfer of properties described above, it is expected that CCP will incur approximately $1.3 billion of new indebtedness and will transfer substantially all of the proceeds from such indebtedness to Ventas.

    Shortly before the distribution, CCP will acquire a specialty healthcare and seniors housing valuation firm in exchange for the issuance of shares of CCP common stock having a value of approximately $11 million (the "Valuation Firm Acquisition"). As a result, Ventas will own and distribute slightly less than 100% of CCP's issued and outstanding common stock on the distribution date to Ventas stockholders of record.

    Following the transactions described above, Ventas will distribute all of the outstanding shares of CCP common stock owned by Ventas on a pro rata basis to the holders of record of shares of Ventas common stock as of the record date.

        Upon completion of the separation and distribution, we expect to have approximately $1.3 billion of total debt outstanding. In general, we intend to own our properties and conduct substantially all our business through our operating partnership and its subsidiaries.

 

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        The following chart depicts our expected organizational structure upon completion of the separation and distribution.

GRAPHIC

CCP's Post-Separation Relationship with Ventas

        CCP will enter into a separation and distribution agreement with Ventas, which we refer to in this information statement as the "separation and distribution agreement." In connection with the separation, CCP will enter into various other agreements to effect the separation and provide a framework for our relationship with Ventas following the separation, including a transition services agreement, a tax matters agreement and an employee matters agreement. These agreements will provide for the allocation between CCP and Ventas of Ventas's assets, employees, liabilities and obligations (including its investments, property and employee benefits and tax-related assets and liabilities) attributable to periods prior to, at and after CCP's separation from Ventas and will govern certain relationships between CCP and Ventas after the separation. For additional information regarding the separation and distribution agreement and other transaction agreements, see the sections entitled "Risk Factors—Risks Related to the Separation" and "Our Relationship with Ventas Following the Distribution."

Reasons for the Separation

        The Ventas board of directors believes that separating most of Ventas's post-acute/SNF portfolio into an independent, publicly traded company is in the best interests of Ventas and its stockholders for a number of reasons, including the following:

    Establish CCP as a separate company with a greater ability to focus on and grow its business. Through Ventas, investors have exposure to a diversified portfolio across several different asset types. The separation will provide investors with the opportunity to invest in two separate platforms with different business strategies, target customers, asset bases, equity currencies and management teams. All of CCP's properties will be operated by private regional and local care

 

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      providers, which give CCP's business a unique profile with respect to growth prospects, demographic exposure and reimbursement and payment sources, among other factors, and will enable management to respond more effectively to the unique requirements of and opportunities within the SNF business. As an independent company, CCP may pursue attractive, value-creating investment opportunities that did not fit within Ventas's core business strategy or were otherwise too small to meet Ventas's investment criteria. By separating the businesses, CCP will have the flexibility to implement strategic initiatives aligned with its business plan and prioritize investment spending and capital allocation in a manner that will lead to growth and operational efficiencies that otherwise would not occur as part of a larger, more diversified enterprise like Ventas. Similarly, Ventas will be able to focus its attention on other healthcare properties that are better suited to its business strategy.

    Create a company with balance sheet strength and equity currency to grow through acquisitions. Even though CCP's properties benefited from active asset management under Ventas's ownership, the SNFs were not prioritized or provided the same level of management's attention in terms of capital allocation as were other large-scale opportunities that better matched Ventas's business strategy and strategic positioning. As a result of the separation, CCP will have its own balance sheet and direct access to capital sources that will position the company to take advantage of growth opportunities more suited to its asset base. CCP's expected low leverage and strong equity currency will enable management to advance its business strategy through acquisitions.

    Provide an experienced and dedicated management team to execute on CCP's growth strategy.  CCP will have a dedicated management team focused on enhancing the performance of CCP's assets and finding value-creating opportunities within the SNF industry. Separating the CCP portfolio from the remainder of Ventas's businesses will enable executive management to channel its attention exclusively to these assets, which require a high level of focus due to their operating characteristics. Ventas's business strategy is concentrated on a more diversified mix of properties, such as seniors housing, hospitals and medical office buildings, that require significant amounts of financial capital and management attention due to their large-scale, complex nature. Accordingly, Ventas's management did not allocate as much time and attention to CCP's properties as CCP's properties are expected to receive from CCP's dedicated executive management team, which will be entirely focused on CCP and its assets. Likewise, the separation will allow Ventas's executive management team to focus on growth through larger, private pay assets.

    Tailor equity compensation to appropriately incentivize employees of each company.  The separation will facilitate incentive compensation arrangements for employees more directly tied to the performance of each company's business and enhance employee hiring and retention by, among other things, improving the alignment of management and employee incentives with performance and growth objectives of their respective employer's business.

    Enhance investor transparency and better highlight the attributes of both companies.  The separation will provide investors with two distinct, targeted investment opportunities and enable them to separately value Ventas and CCP based on their unique investment identities, including the merits, performance and future prospects of their respective businesses. There is only one other publicly traded, SNF-focused REIT, and CCP's entrance into this market will provide investors with another platform through which they can access an asset class and cash flow profile with different characteristics than those of most other healthcare REITs.

    Pursue a discrete strategy in an unconsolidated industry in a manner and on a scale that would not fit Ventas's business model. As a separate company focused on SNFs, CCP will be able to pursue consolidation opportunities in a fragmented industry with thousands of private regional and local operators and owners. Since 2011, Ventas has invested approximately $21 billion in additional

 

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      assets through acquisitions, only $2.4 billion of which consisted of SNFs. Approximately 89% of these SNF investments were completed as part of larger portfolio acquisitions of public company assets that comprised properties from several different asset classes. CCP's smaller size and differentiated business strategy will allow it to take advantage of potentially attractive opportunities in the SNF industry that might not otherwise have sufficient scale or fall within a strategically suitable asset class to fit within Ventas's investment criteria. By separating the businesses, both companies will be able to better focus on investment strategies more tailored to their particular business models and size.

        The Ventas board of directors considered a number of potentially negative factors in evaluating the separation, including risks relating to the creation of a new public company, possible increased administrative costs and one-time separation costs, but concluded that the potential benefits of the separation outweighed these factors. For more information, see the sections entitled "The Separation and Distribution—Reasons for the Separation" and "Risk Factors."

Emerging Growth Company Status

        We are an "emerging growth company" as defined in the JOBS Act. As such, we are eligible to take advantage of certain exemptions from various reporting requirements that apply to other public companies that are not emerging growth companies, including, but not limited to, compliance with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act and the requirements to hold a non-binding advisory vote on executive compensation and any golden parachute payments not previously approved. We have not made a decision whether to take advantage of any or all of these exemptions. If we do take advantage of some or all of these exemptions, some investors may find our common stock less attractive. The result may be a less active trading market for our common stock and our stock price may be more volatile.

        In addition, Section 107 of the JOBS Act provides that an emerging growth company may take advantage of the extended transition period provided in Section 13(a) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected not to take advantage of the benefits of this extended transition period and, therefore, will be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies. This election is irrevocable.

        We could remain an emerging growth company until the earliest of (a) the last day of the first fiscal year in which our annual gross revenues exceed $1 billion, (b) the last day of the fiscal year following the fifth anniversary of the date of the first sale of our common equity securities pursuant to an effective registration statement under the Securities Act of 1933, as amended (the "Securities Act"), (c) the date that we become a "large accelerated filer" as defined in Rule 12b-2 under the Exchange Act, which would occur if the market value of our common stock that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter, or (d) the date on which we have issued more than $1 billion in non-convertible debt during the preceding three-year period.

Corporate Information

        CCP was incorporated in Delaware on April 2, 2015 for the purpose of holding the assets and liabilities associated with most of Ventas's post-acute/SNF portfolio. Prior to the contribution of these assets and liabilities to CCP, which will occur prior to the distribution, CCP will have no operations. The address of CCP's principal executive offices is 353 North Clark Street, Suite 2900, Chicago, Illinois 60654. CCP's telephone number is (312) 881-4700.

 

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        Beginning on or about the commencement of the when-issued trading period, CCP will also maintain an Internet site at www.carecapitalproperties.com. CCP's website and the information contained therein or connected thereto shall not be deemed to be incorporated herein, and you should not rely on any such information in making an investment decision.

Summary Historical Combined Consolidated Financial Data

        The following table sets forth the summary historical combined consolidated financial and other data of our business, which was carved out from the financial information of Ventas, as described below. We were formed for the purpose of holding certain assets and assuming certain liabilities of Ventas. Prior to the effective date of the Form 10 registration statement, of which this information statement forms a part, and the completion of the distribution, we did not conduct any business operations other than those incidental to our formation and in connection with the transactions related to the separation and distribution. The summary historical combined consolidated financial data set forth below as of December 31, 2014 and 2013 and for the years ended December 31, 2014, 2013 and 2012 has been derived from the audited combined consolidated financial statements, which are included elsewhere in this information statement. The summary historical combined consolidated financial data set forth below as of December 31, 2012 has been derived from the unaudited combined consolidated financial statements, which are not included in this information statement, but which have been prepared on the same basis as the audited combined consolidated financial statements. The summary historical combined consolidated financial data set forth below as of March 31, 2015 and for the three months ended March 31, 2015 and 2014 has been derived from the unaudited combined consolidated financial statements, which are included elsewhere in this information statement.

        Our combined consolidated financial statements were carved out from the financial information of Ventas at a carrying value reflective of such historical cost in such Ventas records. The combined consolidated financial statements include an allocation of expenses related to certain Ventas corporate functions, including executive oversight, treasury, finance, legal, human resources, tax planning, internal audit, financial reporting, information technology and investor relations. These expenses have been allocated to us based on direct usage or benefit where specifically identifiable, with the remainder allocated primarily on a pro rata basis of revenue, headcount or other measures. We consider the expense methodology and results to be reasonable for all periods presented. However, the allocations may not be indicative of the actual expense that would have been incurred had we operated as an independent, publicly traded company for the periods presented. In connection with the separation, we will enter into a transition services agreement with Ventas to receive certain support services from Ventas on a transitional basis until August 31, 2016, subject to extension upon mutual agreement. The summary historical combined consolidated financial information presented may not be indicative of the results of operations, financial position or cash flows that would have been obtained if we had been an independent, standalone entity during the periods shown. Please refer to "Management's Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates—Principles of Combination and Consolidation and Basis of Presentation."

        The historical combined consolidated financial information set forth below does not indicate results expected for any future periods. The summary financial data set forth below are qualified in their entirety by, and should be read in conjunction with, "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our combined consolidated financial statements

 

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and related notes thereto included elsewhere in this information statement, as acquisitions, dispositions, changes in accounting policies and other items may impact the comparability of the financial data.

 
  For the
Three Months Ended
March 31,
  For the Years Ended December 31,  
 
  2015   2014   2014   2013   2012  
 
  (In thousands)
 

Operating Data

                               

Rental income

  $ 77,700   $ 74,398   $ 291,962   $ 287,794   $ 285,998  

General, administrative and professional fees

    6,400     6,493     22,412     22,552     18,643  

Total expenses

    41,304     33,839     137,523     117,107     117,769  

Net income attributable to CCP          

    37,221     41,365     157,595     174,290     172,421  

Other Data

                               

Net cash provided by operating activities

  $ 54,920   $ 53,344   $ 255,082   $ 249,727   $ 251,556  

Net cash used in investing activities

    (354,444 )   (5,057 )   (28,977 )   (4,505 )   (21,899 )

Net cash used in financing activities

    298,476     (48,405 )   (225,848 )   (249,800 )   (231,240 )

 

 
   
  As of December 31  
 
  As of
March 31,
2015
 
 
  2014   2013   2012  
 
   
   
   
  (Unaudited)
 
 
   
  (In thousands)
 

Balance Sheet Data

                         

Real estate investments, at cost          

  $ 3,335,715   $ 2,793,819   $ 2,780,878   $ 2,760,989  

Cash

    1,376     2,424     2,167     6,745  

Total assets

    2,916,024     2,331,750     2,405,764     2,499,879  

Total equity

    2,711,009     2,123,079     2,191,300     2,265,524  

Reason for Furnishing this Information Statement

        This information statement is being furnished solely to provide information to stockholders of Ventas who will receive shares of CCP common stock in the distribution. It is not, and is not to be construed as, an inducement or encouragement to buy or sell any of CCP's securities. The information contained in this information statement is believed by CCP to be accurate as of the date set forth on its cover. Changes may occur after that date and neither Ventas nor CCP will update the information except in the normal course of their respective disclosure obligations and practices.

 

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QUESTIONS AND ANSWERS ABOUT THE SEPARATION AND DISTRIBUTION

What is CCP and why is Ventas separating CCP's business and distributing CCP's stock?   CCP, which is currently a wholly owned subsidiary of Ventas, was formed to hold Ventas's post-acute/SNF portfolio operated by regional and local care providers (which we refer to as the "CCP portfolio"). The separation of CCP from Ventas and the distribution of CCP common stock will enable each of CCP and Ventas to better focus on its own operations and respond more effectively to the different needs of its respective businesses and markets. Ventas and CCP expect that the separation will result in enhanced long-term performance of each business for the reasons discussed in the sections entitled "The Separation and Distribution—Background" and "The Separation and Distribution—Reasons for the Separation."

What is a REIT?

 

A real estate investment trust, or "REIT," is a company that derives most of its income from real property or real estate mortgages and has elected to be taxed as a REIT. If a corporation elects to be taxed and qualifies as a REIT, it generally will not be subject to U.S. federal income tax on its REIT taxable income that it distributes to its stockholders. A company's qualification as a REIT depends on its ability to meet, on a continuing basis, through actual investment and operating results, various complex requirements under the Code, relating to, among other things, the sources of its gross income, the composition and value of its assets, its distribution levels and the diversity of ownership of its shares.

 

 

Following the separation, CCP intends to qualify and elect to be taxed as a REIT under Sections 856 through 859 of the Code, from and after CCP's taxable year that includes the distribution.

 

 

CCP believes that its intended manner of operation will enable it to meet the requirements for qualification and taxation as a REIT. CCP anticipates that distributions it makes to its stockholders generally will be taxable to its stockholders as ordinary income, although a portion of the distributions may be designated by CCP as qualified dividend income or capital gain or may constitute a return of capital. For a more complete discussion of the U.S. federal income taxation of REITs and the tax treatment of distributions to stockholders of CCP, please refer to "Material U.S. Federal Income Tax Consequences of Investment in Our Common Stock."

Why am I receiving this document?

 

Ventas is delivering this document to you because you hold shares of Ventas common stock. If you hold shares of Ventas common stock as of the close of business on August 10, 2015, you are entitled to receive one share of CCP common stock for every four shares of Ventas common stock that you held at the close of business on such date. This document will help you understand how the separation and distribution will affect your investment in Ventas and your investment in CCP after the separation.

How will the separation of CCP from Ventas work?

 

To accomplish the separation, Ventas will distribute all of the outstanding shares of CCP common stock owned by Ventas to Ventas stockholders on a pro rata basis.

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What is the record date for the distribution?

 

The record date for the distribution will be August 10, 2015.

When will the distribution occur?

 

It is expected that all of the shares of CCP common stock owned by Ventas will be distributed on August 17, 2015, to holders of record of shares of Ventas common stock at the close of business on August 10, 2015, the record date.

What do stockholders need to do to participate in the distribution?

 

Stockholders of Ventas as of the record date will not be required to take any action to receive CCP common stock in the distribution, but you are urged to read this entire information statement carefully. No stockholder approval of the distribution is required. You are not being asked for a proxy. You do not need to pay any consideration, exchange or surrender your existing Ventas common stock or take any other action to receive your shares of CCP common stock. The distribution will not affect the number of outstanding shares of Ventas common stock or any rights of Ventas stockholders, although it will affect the market value of each outstanding share of Ventas common stock.

How will shares of CCP common stock be issued?

 

You will receive shares of CCP common stock through the same channels that you currently use to hold or trade Ventas common stock, whether through a brokerage account, 401(k) plan or other channel. Receipt of CCP shares will be documented for you in the same manner that you typically receive stockholder updates, such as monthly broker statements and 401(k) statements.

 

 

If you own shares of Ventas common stock as of the close of business on the record date, Ventas, with the assistance of Wells Fargo Shareowner Services, the settlement and distribution agent, will electronically distribute shares of CCP common stock to you in book-entry form or to your brokerage firm on your behalf. Wells Fargo Shareowner Services will mail you a book-entry account statement that reflects your shares of CCP common stock, or your bank or brokerage firm will credit your account for the shares.

 

 

Following the distribution, stockholders whose shares are held in book-entry form may request that their shares of CCP common stock be transferred to a brokerage or other account at any time, without charge.

How many shares of CCP common stock will I receive in the distribution?

 

Ventas will distribute to you one share of CCP common stock for every four shares of Ventas common stock held by you as of the record date. Based on approximately 332.5 million shares of Ventas common stock outstanding as of July 28, 2015, a total of approximately 83.1 million shares of CCP common stock will be distributed. For additional information on the distribution, see "The Separation and Distribution."

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Will CCP issue fractional shares of its common stock in the distribution?

 

No. CCP will not issue fractional shares of its common stock in the distribution. Fractional shares that Ventas stockholders would otherwise have been entitled to receive will be aggregated and sold in the public market by the distribution agent. The aggregate net cash proceeds of these sales will be distributed pro rata (based on the fractional share such holder would otherwise be entitled to receive) to those stockholders who would otherwise have been entitled to receive fractional shares. Recipients of cash in lieu of fractional shares will not be entitled to any interest on the amounts of payment made in lieu of fractional shares.

What are the conditions to the distribution?

 

The distribution is subject to a number of conditions, including, among others:
          
   

The incurrence of at least $1.3 billion of new indebtedness by CCP and the determination by Ventas at its sole discretion that following the separation it will have no liability or obligation whatsoever with respect to such new indebtedness;

          
   

the receipt of an opinion of counsel, satisfactory to the Ventas board of directors, to the effect that the manner in which CCP is organized and its proposed method of operation will enable it to be taxed as a REIT under Sections 856 through 859 of the Code;

          
   

the receipt of an opinion of counsel, satisfactory to the Ventas board of directors, regarding treatment of the distribution, together with certain related transactions, under Sections 355 and 368(a)(1)(D) of the Code;

          
   

the receipt by the Ventas board of directors of one or more opinions delivered by an independent appraisal firm satisfactory to the Ventas board of directors confirming the solvency and financial viability of Ventas before the consummation of the distribution and each of Ventas and CCP after consummation of the distribution, such opinions being in form and substance satisfactory to the Ventas board of directors in its sole discretion and such opinions having not been withdrawn or rescinded;

          
   

the U.S. Securities and Exchange Commission ("SEC") having declared effective the registration statement of which this information statement forms a part, and this information statement having been made available to Ventas stockholders;

          
   

no order, injunction, or decree issued by any court of competent jurisdiction or other legal restraint or prohibition preventing the consummation of the separation, distribution or any of the related transactions shall be in effect;

          
   

the shares of CCP common stock to be distributed shall have been accepted for listing on the NYSE, subject to official notice of distribution;

          
   

the transfer of assets and liabilities between Ventas and CCP contemplated by the separation and distribution agreement shall have been completed, subject to potential limited exceptions;


       

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each of the various agreements contemplated by the separation and distribution agreement shall have been executed;

          
   

all required material actions or filings with governmental authorities shall have been taken or made; and

          
   

no other event or development shall be existing or shall have occurred that, in the judgment of Ventas's board of directors, in its sole discretion, makes it inadvisable to effect the separation, distribution and other related transactions.


 

 

Ventas and CCP cannot assure you that any or all of these conditions will be met. In addition, Ventas can decline at any time to go forward with the separation. For a complete discussion of all of the conditions to the distribution, see "The Separation and Distribution—Conditions to the Distribution."

What is the expected date of completion of the separation?

 

It is expected that the shares of CCP common stock will be distributed by Ventas on August 17, 2015 to the holders of record of Ventas common stock at the close of business on the record date. However, the completion and timing of the separation are dependent upon a number of conditions, and no assurance can be provided as to the timing of the separation or that all conditions to the separation will be met.

Can Ventas decide to cancel the distribution of CCP common stock even if all the conditions have been met?

 

Yes. The distribution is subject to the satisfaction or waiver of certain conditions. See the section entitled "The Separation and Distribution—Conditions to the Distribution." Until the distribution has occurred, Ventas has the right to terminate the distribution, even if all the conditions are satisfied.

What if I want to sell my Ventas common stock or my CCP common stock?

 

You should consult with your financial advisors, such as your stockbroker, bank or tax advisor. The distribution will not result in any additional restrictions on your ability to sell either Ventas common stock or, following the distribution and upon the commencement of trading, CCP common stock.

What is "regular-way" and "ex-distribution" trading of Ventas common stock?

 

Beginning on or shortly before the record date and continuing up to and through the distribution date, it is expected that there will be two markets in Ventas common stock: a "regular-way" market and an "ex-distribution" market. Ventas common stock that trades in the "regular-way" market will trade with an entitlement to shares of CCP common stock distributed pursuant to the distribution. Ventas common stock that trades in the "ex-distribution" market will trade without an entitlement to shares of CCP common stock distributed pursuant to the distribution.

 

 

If you decide to sell any shares of Ventas common stock before the distribution date, you should make sure your stockbroker, bank or other nominee understands whether you want to sell your Ventas common stock with or without your entitlement to CCP common stock pursuant to the distribution.

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Where will I be able to trade shares of CCP common stock?

 

CCP has applied to list its common stock on the NYSE under the symbol "CCP." CCP anticipates that trading in shares of its common stock will begin on a "when-issued" basis on or shortly before the record date and will continue up to and through the distribution date and that "regular-way" trading in CCP common stock will begin on the first trading day following the completion of the separation. If trading begins on a "when-issued" basis, you may purchase or sell CCP common stock up to and through the distribution date, but your transaction will not settle until after the distribution date. CCP cannot predict the trading prices for its common stock before, on or after the distribution date.

What will happen to the listing of Ventas common stock?

 

Shares of Ventas common stock will continue to trade on the NYSE after the distribution, and the separation and distribution will have no effect on such listing.

Will the number of Ventas common shares that I own change as a result of the distribution?

 

No. The number of shares of Ventas common stock that you own will not change as a result of the separation and distribution.

Will the distribution affect the market price of my Ventas common stock?

 

Yes. As a result of the separation and distribution, Ventas expects the trading price of shares of Ventas common stock immediately following the separation and distribution to be lower than the "regular-way" trading price of such shares immediately prior to the separation and distribution because the trading price will no longer reflect the value of the CCP portfolio. Ventas believes that over time following the separation, assuming the same market conditions and the realization of the expected benefits of the separation, the aggregate market value of Ventas common stock and CCP common stock should be higher than the market value of Ventas common stock had the separation and distribution not occurred. There can be no assurance, however, that such a higher aggregate market value will be achieved. This means, for example, that the combined trading prices of the shares of Ventas and CCP common stock that you own after the distribution may be equal to, greater than or less than the trading price of your shares of Ventas common stock before the distribution.

What are the material U.S. federal income tax consequences of the contribution and the distribution?

 

It is a condition to the completion of the separation that Ventas obtain an opinion from its tax advisors regarding treatment of the distribution, together with certain related transactions, under Sections 355 and 368(a)(1)(D) of the Code. Assuming that the distribution, together with certain related transactions, qualifies as a transaction that is generally tax-free under Sections 355 and 368(a)(1)(D) of the Code, you will not recognize any gain or loss, and no amount will be included in your income, upon your receipt of shares of CCP common stock pursuant to the distribution.

 

 

You should consult your own tax advisor as to the particular consequences of the distribution to you, including the applicability and effect of any U.S. federal, state and local tax laws, as well as foreign tax laws, which may result in the distribution being taxable to you. For more information regarding the tax opinion and certain U.S. federal income tax consequences of the separation, see the section entitled "Material U.S. Federal Income Tax Consequences of the Distribution."

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What will CCP's relationship be with Ventas following the separation?

 

CCP will enter into a separation and distribution agreement with Ventas to effect the separation and provide a framework for CCP's relationship with Ventas after the separation and will enter into certain other agreements, including a transition services agreement, a tax matters agreement and an employee matters agreement. These agreements will provide for the separation between CCP and Ventas of Ventas's assets, employees, liabilities and obligations (including its investments, property and employee benefits and tax-related assets and liabilities) attributable to periods prior to, at and after CCP's separation from Ventas and will govern the relationship between CCP and Ventas subsequent to the completion of the separation. For additional information regarding the separation and distribution agreement and other transaction agreements, see the sections entitled "Risk Factors—Risks Related to the Separation" and "Our Relationship with Ventas Following the Distribution."

Who will manage CCP after the separation?

 

CCP's management team will include experienced former members of Ventas's management team who have a detailed understanding of CCP's industry, assets and customers. For more information regarding CCP's management, see "Management."

Are there risks associated with owning CCP common stock?

 

Yes. Ownership of CCP common stock is subject to both general and specific risks relating to CCP's business, the industry in which it operates, its ongoing contractual relationships with Ventas and its status as an independent, publicly traded company. Ownership of CCP common stock is also subject to risks relating to the separation. These risks are described in the "Risk Factors" section of this information statement beginning on page 22. You are encouraged to read that section carefully.

Does CCP plan to pay dividends?

 

We intend to make regular quarterly distributions equating to at least 90% of our REIT taxable income to our stockholders out of assets legally available therefor.

 

 

To qualify as a REIT, we must distribute to our stockholders an amount at least equal to:

 

 

(i)

 

90% of our REIT taxable income, determined before the deduction for dividends paid and excluding any net capital gain (which does not necessarily equal net income as calculated in accordance with U.S. generally accepted accounting principles ("GAAP"); plus

 

 

(ii)

 

90% of the excess of our net income from foreclosure property over the tax imposed on such income by the Code; less

 

 

(iii)

 

Any excess non-cash income (as determined under the Code).

 

 

Please refer to "Material U.S. Federal Income Tax Consequences of Investment in Our Common Stock."

 

 

Although CCP currently expects that it will pay regular distributions, the declaration and payment of any distributions in the future by CCP will be subject to the sole discretion of its board of directors and will depend upon many factors. Please refer to "Dividend Policy."

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Who will be the distribution agent, transfer agent, registrar and information agent for the CCP common stock?

 

The distribution agent, transfer agent and registrar for the CCP common stock will be Wells Fargo Shareowner Services. For questions relating to the transfer or mechanics of the stock distribution, you should contact:

 

 

Wells Fargo Shareowner Services
P.O. Box 64874
St. Paul, MN 55164-0874
Tel: 800-468-9716

Where can I find more information about Ventas and CCP?

 

Before the distribution, Ventas stockholders who have questions relating to Ventas should contact:

 

 

Ventas, Inc.
Investor Relations
353 North Clark Street
Suite 3300
Chicago, Illinois 60654
Tel: 877-483-6827
www.ventasreit.com/investor-relations

 

 

After the distribution, CCP stockholders who have questions relating to CCP should contact:

 

 

Care Capital Properties, Inc.
Investor Relations
353 North Clark Street
Suite 2900
Chicago, Illinois 60654
Tel: (312) 881-4700
www.carecapitalproperties.com

 

 

The CCP investor website will be operational beginning on or about the commencement of the when-issued trading period.

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RISK FACTORS

        You should carefully consider the following risks and other information in this information statement in evaluating our company and our common stock. These risks, any of which could materially adversely affect our results of operations or financial condition, generally are categorized as follows: risks related to our business and operations; risks related to the separation; risks related to our status as a REIT; and risks related to ownership of our common stock.

Risks Related to Our Business and Operations

         Our business is dependent upon our operators successfully operating their businesses, and their failure to do so could have a material adverse effect on our business, financial condition, results of operations or liquidity and our ability to service our indebtedness and other obligations and to make distributions to stockholders, as required for us to continue to qualify as a REIT (a "Material Adverse Effect").

        We depend on our operators to operate the properties we own in a manner that generates revenues sufficient to allow them to meet their obligations to us, including their obligations to pay rent, maintain certain insurance coverage, pay real estate taxes and maintain the properties in a manner so as not to jeopardize their operating licenses or regulatory status. The ability of our operators to fulfill their obligations under our leases may depend, in part, upon the overall profitability of their operations, including any other SNFs or other properties or businesses they may acquire or operate. Cash flow generated by certain individual properties may not be sufficient for an operator to meet its obligations to us. Our financial position could be weakened and our ability to fulfill our obligations under our indebtedness could be limited if any of our major operators were unable to meet their obligations to us or failed to renew or extend their relationship with us as their lease terms expire, or if we were unable to lease or re-lease our properties on economically favorable terms. While we have generally been successful in the past in transitioning properties from one operator to another where properties are underperforming, we cannot assure you that we will be able to continue to identify and successfully transition underperforming properties going forward. In addition, from time to time we may recognize straight-line rent write-offs in connection with transitioning properties.

        Our portfolio is predominantly comprised of SNFs. As a result of our focus on SNFs, any changes affecting SNFs or SNF operators, including changes in governmental rules and regulations, particularly with respect to Medicare and Medicaid reimbursement, could have an adverse impact on our operators' revenues, costs and results of operations, which may affect their ability to meet their obligations to us. Additionally, if conditions in the SNF industry decline, we may be required to evaluate our properties for impairments or write-downs, which could result in charges that might be significant.

         We may not be successful in identifying and consummating suitable acquisitions or investment opportunities, which may impede our growth and negatively affect our results of operations and may result in the use of a significant amount of management resources.

        Our ability to expand through acquisitions is integral to our business strategy and requires us to identify suitable acquisition or investment opportunities that meet our criteria and are compatible with our growth strategy. We may not be successful in identifying suitable properties or other assets that meet our acquisition criteria or in consummating acquisitions or investments on satisfactory terms or at all. Failure to identify or consummate acquisitions or investment opportunities, or to integrate successfully any acquired properties without substantial expense, delay or other operational or financial problems, would slow our growth, which could in turn adversely affect our stock price.

        Our ability to acquire properties successfully may be constrained by the following significant risks:

    competition from other real estate investors with significant capital, including publicly-traded REITs and institutional investment funds;

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    unsatisfactory results of our due diligence investigations or failure to meet closing conditions; and

    failure to finance an acquisition on favorable terms or at all.

The realization of any of these risks could have a Material Adverse Effect on us.

         Our three largest operators account for a meaningful portion of our rental income, and the failure of any of these operators to meet their obligations to us could materially reduce our revenues and net income.

        Our three largest operators, Senior Care Centers, LLC, Avamere Group, LLC and Signature Healthcare, LLC, currently account for approximately 12%, 11% and 10%, respectively, of our rental income. The failure or inability of any of these operators, or of other operators that account for a meaningful portion of our rental income, to meet their obligations to us could materially reduce our revenues and net income, which could have a Material Adverse Effect on us.

         If we must replace any of our tenants or operators, we might be unable to reposition the properties on as favorable terms, or at all, and we could be subject to delays, limitations and expenses, which could have a Material Adverse Effect on us.

        We cannot predict whether our tenants will renew existing leases beyond their current term. If our leases with our tenants are not renewed, we would attempt to reposition those properties with another tenant or operator. In case of non-renewal, we generally have one year prior to expiration of the lease term to arrange for repositioning of the properties and our tenants are required to continue to perform all of their obligations (including the payment of all rental amounts) for the non-renewed assets until such expiration. However, following expiration of a lease term or if we exercise our right to replace a tenant or operator in default, rental payments on the related properties could decline or cease altogether while we reposition the properties with a suitable replacement tenant or operator. We also might not be successful in identifying suitable replacements or entering into leases or other arrangements with new tenants or operators on a timely basis or on terms as favorable to us as our current leases, if at all, and we may be required to fund certain expenses and obligations (e.g., real estate taxes, property-level debt costs and maintenance expenses) to preserve the value of, and avoid the imposition of liens on, our properties while they are being repositioned. In addition, we may incur certain obligations and liabilities, including obligations to indemnify the replacement tenant or operator, which could have a Material Adverse Effect on us.

        In the event of non-renewal or a tenant default, our ability to reposition our properties with a suitable replacement tenant or operator could be significantly delayed or limited by state licensing, receivership, CON or other laws, as well as by the Medicare and Medicaid change-of-ownership rules, and we could incur substantial additional expenses in connection with any licensing, receivership or change-of-ownership proceedings. Our ability to locate and attract suitable replacement tenants could also be impaired by the specialized healthcare uses or contractual restrictions on use of the properties, and we may be forced to spend substantial amounts to adapt the properties to other uses. Any such delays, limitations and expenses could adversely impact our ability to collect rent, obtain possession of leased properties or otherwise exercise remedies for tenant default and could have a Material Adverse Effect on us.

        Moreover, in connection with certain of our properties, we have entered into intercreditor agreements with the tenants' lenders. Our ability to exercise remedies under the applicable leases or to reposition the applicable properties may be significantly delayed or limited by the terms of the intercreditor agreement. Any such delay or limit on our rights and remedies could adversely affect our ability to mitigate our losses and could have a Material Adverse Effect on us.

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         Our acquisition and investment activity could present certain risks to our business and operations.

        We expect to make significant acquisitions and investments as part of our overall business strategy. Our acquisition and investment activity could present certain risks to our business and operations, including, among other things, that:

    We may be unable to successfully integrate acquired properties, maintain consistent standards, controls, policies and procedures, or realize the anticipated benefits of acquisitions and other investments within the anticipated time frame or at all;

    We may be unable to effectively monitor and manage our expanded portfolio of properties, retain key employees or attract highly qualified new employees;

    Projections of estimated future revenues, costs savings or operating metrics that we develop during the due diligence and integration planning process might be inaccurate;

    Our leverage could increase or our per share financial results could decline if we incur additional debt or issue equity securities to finance acquisitions and investments;

    Acquisitions and other new investments could divert management's attention from our existing assets;

    The value of acquired assets or the market price of our common stock may decline; and

    We may be unable to make distributions to our stockholders.

        We cannot assure you that we will be able to integrate acquisitions and investments without encountering difficulties or that any such difficulties will not have a Material Adverse Effect on us.

         We have now, and may have in the future, exposure to contingent rent escalators, which could hinder our growth and profitability.

        We receive substantially all of our revenues by leasing assets under long-term triple-net leases that generally provide for fixed rental rates subject to annual escalations. The annual escalations in certain of our leases may be contingent upon the achievement of specified revenue parameters or based on changes in CPI, with caps and floors. If, as a result of weak economic conditions or other factors, the properties subject to these leases do not generate sufficient revenue to achieve the specified rent escalation parameters or CPI does not increase, our growth and profitability may be hindered by these leases. In addition, if strong economic conditions result in significant increases in CPI, but the escalations under our leases are capped, our growth and profitability may be limited.

         We rely on external sources of capital to fund future capital needs, and if we encounter difficulty in obtaining such capital, we may not be able to make future investments necessary to grow our business or meet maturing commitments.

        We expect to rely on external sources of capital, including debt and equity financing. If we are unable to obtain needed capital at all or only on unfavorable terms from these sources, we might not be able to make the investments needed to expand our business, or to meet our obligations and commitments as they mature. Our access to capital will depend upon a number of factors over which we have little or no control, including general market conditions, the market's perception of our current and potential future earnings and cash distributions and the market price of the shares of our capital stock. We may not be in position to take advantage of attractive investment opportunities for growth in the event that we are unable to access the capital markets on a timely basis or we are only able to obtain capital on unfavorable terms.

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         We expect to have approximately $1.3 billion of indebtedness outstanding upon completion of the separation and distribution, and our indebtedness could adversely affect our financial condition and, as a result, our operations.

        We expect to incur approximately $1.3 billion of indebtedness in connection with the separation, and we may increase our indebtedness in the future. Our level of indebtedness could have important consequences for our stockholders. For example, it could:

    increase our vulnerability to general adverse economic and industry conditions;

    limit our ability to obtain additional financing to fund future working capital, capital expenditures and other general corporate requirements, or to carry out other aspects of our business;

    increase our cost of borrowing;

    require us to dedicate a substantial portion of our cash flow from operations to payments on indebtedness, thereby reducing the availability of such cash flow to fund working capital, capital expenditures and other general corporate requirements, or to carry out other aspects of our business;

    limit our ability to make material acquisitions or take advantage of business opportunities that may arise;

    limit our ability to make distributions to our stockholders, which may cause us to lose our qualification as a REIT under the Code or to become subject to federal corporate income tax on any REIT taxable income that we do not distribute; and

    place us at a potential competitive disadvantage compared to our competitors that have less debt.

        Further, we have the ability to incur substantial additional debt, including secured debt. If we incur additional debt, the related risks described above could intensify. In addition, our cash flow from operations may not be sufficient to repay all of our outstanding debt as it becomes due, and we may not be able to borrow money, sell assets or otherwise raise funds on acceptable terms, if at all, to refinance our debt.

         Adverse changes in our credit ratings could affect our borrowing capacity and borrowing terms.

        We plan to manage CCP to maintain a capital structure consistent with the profile upon separation, but there can be no assurance that we will be able to maintain the credit ratings, if any, we receive at separation. Any downgrades in our credit ratings or outlook by any or all of the rating agencies could have a material adverse impact on our cost and availability of capital, which could in turn have a Material Adverse Effect on us.

         Covenants in our debt agreements may limit our operational flexibility, and a covenant breach or default could have a Material Adverse Effect on us.

        The terms of our credit agreements will require us to comply with a number of customary financial and other covenants which may limit our management's discretion by restricting our ability to, among other things, incur additional debt, redeem our capital stock, enter into certain transactions with affiliates, pay dividends and make other distributions, make investments and other restricted payments, and create liens. Any additional financing we may obtain could contain similar or more restrictive covenants. Our continued ability to incur indebtedness and conduct our operations will be subject to compliance with these financial and other covenants. Breaches of these covenants could result in defaults under the instruments governing the applicable indebtedness, in addition to any other indebtedness cross-defaulted against such instruments. Any such breach could have a Material Adverse Effect on us.

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         Because real estate investments are relatively illiquid, our ability to promptly sell properties in our portfolio is limited.

        Because real estate investments are relatively illiquid, our ability to promptly sell one or more properties in our portfolio is limited. The real estate market is affected by many factors, such as general economic conditions, availability of financing, interest rates and supply and demand, that are beyond our control. In addition, our properties are special purpose properties that could not be readily converted to general residential, retail or office use. Transfers of operations of SNFs and other healthcare properties are subject to regulatory approvals not required for transfers of other types of commercial operations and other types of real estate. We cannot predict whether we will be able to sell any property for the price or on the terms set by us or whether any price or other terms offered by a prospective purchaser would be acceptable to us. We also cannot predict the length of time needed to find a willing purchaser and to close the sale of a property. To the extent we are unable to sell any properties for our book value, we may be required to take a non-cash impairment charge or loss on the sale, either of which would reduce our net income.

        We may be required to expend funds to correct defects or to make improvements before a property can be sold. We may not have funds available to correct those defects or to make those improvements. We may agree to transfer restrictions that materially restrict us from selling that property for a period of time or impose other restrictions, such as a limitation on the amount of debt that can be placed or repaid on that property. These transfer restrictions would impede our ability to sell a property even if we deem it necessary or appropriate. These facts and any others that would impede our ability to respond to adverse changes in the performance of our properties may have a Material Adverse Effect on us.

         The amount and scope of insurance coverage provided by our policies and policies maintained by our tenants may not adequately insure against losses.

        We maintain or require in our lease agreements that our tenants maintain all applicable lines of insurance on our properties and their operations. Although we regularly review the amount and scope of insurance provided by our policies and required to be maintained by our tenants and believe the coverage provided to be customary for similarly situated companies in our industry, we cannot assure you that we or our tenants will continue to be able to maintain adequate levels of insurance. We also cannot assure you that we or our tenants will maintain the required coverages, that we will continue to require the same levels of insurance under our lease agreements, that such insurance will be available at a reasonable cost in the future or that the policies maintained will fully cover all losses on our properties upon the occurrence of a catastrophic event, nor can we make any guaranty as to the future financial viability of the insurers that underwrite our policies and the policies maintained by our tenants.

        For various reasons, including to reduce and manage costs, many healthcare companies utilize different organizational and corporate structures coupled with self-insurance trusts or captive programs that may provide less insurance coverage than a traditional insurance policy. Companies that insure any part of their general and professional liability risks through their own captive limited purpose entities generally estimate the future cost of general and professional liability through actuarial studies that rely primarily on historical data. However, due to the rise in the number and severity of professional claims against healthcare providers, these actuarial studies may underestimate the future cost of claims, and reserves for future claims may not be adequate to cover the actual cost of those claims. As a result, the tenants and operators of our properties who self-insure could incur large funded and unfunded general and professional liability expenses, which could materially adversely affect their liquidity, financial condition and results of operations and, in turn, their ability to satisfy their obligations to us. If we or our operators decide to implement a captive or self-insurance program, any large funded and unfunded general and professional liability expenses incurred could have a Material Adverse Effect on us.

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        Should an uninsured loss or a loss in excess of insured limits occur, we could incur substantial liability or lose all or a portion of the capital we have invested in a property, as well as the anticipated future revenues from the property. Following the occurrence of such an event, we might nevertheless remain obligated for any mortgage debt or other financial obligations related to the property. We cannot assure you that material uninsured losses, or losses in excess of insurance proceeds, will not occur in the future.

         As an owner of real property, we may be exposed to environmental liabilities.

        Under various federal, state and local environmental laws, ordinances and regulations, a current or previous owner of real property, such as us, may be liable in certain circumstances for the costs of investigation, removal, remediation or release of hazardous or toxic substances (including materials containing asbestos) at, under or disposed of in connection with such property, as well as certain other potential costs relating to hazardous or toxic substances, including government fines and damages for injuries to persons or adjacent property. Such laws often impose liability without regard to whether the owner knew of, or was responsible for, the presence or disposal of such substances and liability may be imposed on the owner in connection with the activities of an operator at the property. The cost of any required investigation, remediation, removal, fines or personal or property damages and the owner's liability therefore could exceed the value of the property and/or the assets of the owner. In addition, the presence of such substances, or the failure to properly dispose of or remediate such substances, may adversely affect our operators' ability to attract additional patients or residents, our ability to sell or rent such property or to borrow using such property as collateral which, in turn, could reduce our revenues.

        Although our leases require the operator to indemnify us for certain environmental liabilities, the scope of such obligations may be limited. For instance, some of our leases do not require the operator to indemnify us for environmental liabilities arising before the operator took possession of the premises. Further, we cannot assure you that any such operator would be able to fulfill its indemnification obligations. If we were to be liable for any such environmental liabilities and were unable to seek recovery against our operators, this could have a Material Adverse Effect on us.

         Our success depends, in part, on our ability to attract and retain talented employees, and the loss of any one of our key personnel could adversely impact our business.

        The success of our business depends, in part, on the leadership and performance of our executive management team and key employees, and our ability to attract, retain and motivate talented employees could significantly impact our future performance. Competition for these individuals is intense, and we cannot assure you that we will retain our key officers and employees or that we will be able to attract and retain other highly qualified individuals in the future. Losing any one or more of these persons could have a Material Adverse Effect on us.

         Our operators may be adversely affected by increasing healthcare regulation and enforcement.

        Over the last several years, the regulatory environment of the long-term healthcare industry has intensified both in the amount and type of regulations and in the efforts to enforce those regulations. The extensive federal, state and local laws and regulations affecting the healthcare industry include those relating to, among other things, licensure, conduct of operations, ownership of facilities, addition of facilities and equipment, allowable costs, services, prices for services, qualified beneficiaries, quality of care, patient rights, fraudulent or abusive behavior, and financial and other arrangements that may be entered into by healthcare providers. Changes in enforcement policies by federal and state governments have resulted in a significant increase in the number of inspections, citations of regulatory deficiencies and other regulatory sanctions, including terminations from the Medicare and Medicaid programs, bars on Medicare and Medicaid payments for new admissions, civil monetary penalties and even criminal penalties.

27


        If our operators fail to comply with the extensive laws, regulations and other requirements applicable to their businesses and the operation of our properties, they could become ineligible to receive reimbursement from governmental and private third-party payor programs, face bans on admissions of new patients or residents, suffer civil or criminal penalties or be required to make significant changes to their operations. Our operators also could be forced to expend considerable resources responding to an investigation or other enforcement action under applicable laws or regulations. In such event, the results of operations and financial condition of our operators and the results of operations of our properties operated by those entities could be adversely affected, which, in turn, could have a material adverse effect on us. We are unable to predict future federal, state and local regulations and legislation, including the Medicare and Medicaid statutes and regulations, or the intensity of enforcement efforts with respect to such regulations and legislation, and any changes in the regulatory framework could have a material adverse effect on our operators, which, in turn, could have a Material Adverse Effect on us.

         Our operators depend on reimbursement from government and other third-party payors; reductions in federal or state government spending, tax reform initiatives or other legislation to address the federal government's projected operating deficit could have a material adverse effect on our operators' liquidity, financial condition or results of operations, which could affect their ability to meet their obligations to us.

        Many of our tenants depend on third-party payors, including Medicare, Medicaid or private third-party payors, for significant portions of their revenue. The reduction in reimbursement rates from third-party payors, including Medicare and Medicaid programs, or other measures reducing reimbursements for services provided by our tenants may result in a reduction in our tenants' revenues and operating margins.

        While reimbursement rates have generally increased over the past few years, President Obama and members of the U.S. Congress have approved or proposed various spending cuts and tax reform initiatives that have resulted or could result in changes (including substantial reductions in funding) to Medicare, Medicaid or Medicare Advantage Plans. In addition, a number of states are currently managing budget deficits, which may put pressure on states to decrease reimbursement rates for our operators with a goal of decreasing state expenditures under their state Medicaid programs. Any such existing or future federal or state legislation relating to deficit reduction that reduces reimbursement payments to healthcare providers could have a material adverse effect on certain of our operators' liquidity, financial condition or results of operations, which could adversely affect their ability to satisfy their obligations to us and could have a Material Adverse Effect on us.

         Possible changes in the healthcare needs of our operators' residents, as well as payor mix and payment methodologies, may significantly affect the profitability of our operators.

        The sources and amounts of our operators' revenues are determined by a number of factors, including licensed bed capacity, occupancy, the healthcare needs of residents and the rate of reimbursement. Changes in the healthcare needs of the residents, as well as payor mix among private pay, Medicare and Medicaid, may significantly affect our operators' profitability and which may affect their ability to meet their obligations to us.

         Our operators may be subject to significant legal actions that could subject them to increased operating costs and substantial uninsured liabilities, which may affect their ability to meet their obligations to us.

        Our operators may be subject to claims that their services have resulted in resident injury or other adverse effects. The insurance coverage maintained by our operators, whether through commercial insurance or self-insurance, may not cover all claims made against them or continue to be available at a reasonable cost, if at all. In some states, insurance coverage for the risk of punitive damages arising from professional liability and general liability claims and/or litigation may not, in certain cases, be available to our operators due to state law prohibitions or limitations of availability. As a result, our

28


operators operating in these states may be liable for punitive damage awards that are either not covered or are in excess of their insurance policy limits. From time to time, there may also be increases in government investigations of long-term care providers, particularly in the area of Medicare/Medicaid false claims, as well as increases in enforcement actions resulting from these investigations. Insurance is not available to cover such losses. Any adverse determination in a legal proceeding or government investigation, whether currently asserted or arising in the future, could lead to potential termination from government programs, large penalties and fines and otherwise have a material adverse effect on an operator's financial condition. If an operator is unable to obtain or maintain insurance coverage, if judgments are obtained in excess of the insurance coverage, if an operator is required to pay uninsured punitive damages or if an operator is subject to an uninsurable government enforcement action, the operator could be exposed to substantial additional liabilities, which could result in its bankruptcy or insolvency or have a material adverse effect on the operator's business and its ability to meet its obligations to us.

         The bankruptcy, insolvency or financial deterioration of our operators could delay or prevent our ability to collect unpaid rents or require us to find new operators.

        We receive substantially all of our income as rent payments under leases of our properties. We have very limited control over the success or failure of our operators' businesses and, at any time, any of our operators may experience a downturn in its business that may weaken its financial condition. As a result, our operators may fail to make rent payments when due or declare bankruptcy. Any operator failures to make rent payments when due or operator bankruptcies could result in the termination of the operator's lease and could have a material adverse effect on our business, financial condition and results of operations, our ability to make distributions to our stockholders and the trading price of our common stock. This risk is magnified in situations where we lease multiple properties to a single operator under a master lease, as an operator failure or default under a master lease could reduce or eliminate rental revenue from multiple properties.

        If operators are unable to comply with the terms of the leases, we may be forced to modify the leases in ways that are unfavorable to us. Alternatively, the failure of an operator to perform under a lease could require us to declare a default, repossess the property, find a suitable replacement operator, operate the property or sell the property. There is no assurance that we would be able to lease a property on substantially equivalent or better terms than the prior lease, or at all, find another qualified operator, successfully reposition the property for other uses or sell the property on terms that are favorable to us. It may be more difficult to find a replacement operator for a SNF property than it would be to find a replacement tenant for a general commercial property due to the specialized nature of the business. Even if we are able to find a suitable replacement operator for a property, transfers of operations of SNFs and other healthcare facilities are subject to regulatory approvals not required for transfers of other types of commercial operations, which may affect our ability to successfully transition a property.

        Any bankruptcy filing by or relating to one of our operators could bar all efforts by us to collect pre-bankruptcy debts from that operator or seize its property. An operator bankruptcy could also delay our efforts to collect past due balances under the leases and could ultimately preclude collection of all or a portion of these sums. It is possible that we may recover substantially less than the full value of any unsecured claims we hold, if any, which could have a Material Adverse Effect on us. Furthermore, dealing with an operator's bankruptcy or other default may divert management's attention and cause us to incur substantial legal and other costs.

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        If one or more of our operators files for bankruptcy relief, the U.S. federal Bankruptcy Code provides that a debtor has the option to assume or reject the unexpired lease within a certain period of time. However, our leases with operators that lease more than one of our properties are generally made pursuant to a single master lease covering all of that operator's properties leased from us, or are cross-defaulted with other leases, and consequently there is uncertainty about how such arrangements may be treated in a bankruptcy. It is possible that in bankruptcy the debtor-operator may be required to assume or reject the master lease or cross-defaulted leases as a whole, rather than making the decision on a property-by-property basis, thereby preventing the debtor-operator from assuming the better performing properties and terminating the master lease or cross-defaulted leases with respect to the poorer performing properties.

         Increased competition may affect the ability of our operators to meet their obligations to us.

        The healthcare industry is highly competitive. Our operators are competing with numerous other companies providing similar healthcare services or alternatives such as long-term acute care hospitals, in-patient rehabilitation facilities, home health agencies, hospices, life care at home, community-based service programs, retirement communities and convalescent centers. Our operators may not be able to achieve performance levels that will enable them to meet their obligations to us.

         Real estate is a competitive business and this competition may make it difficult for us to identify and purchase suitable healthcare properties.

        We operate in a highly competitive industry and face competition from other REITs, investment companies, private equity and hedge fund investors, sovereign funds, healthcare operators, lenders and other investors, some of whom are significantly larger than us and have greater resources and lower costs of capital than we do. This competition makes it more challenging to identify and successfully capitalize on acquisition opportunities that meet our investment objectives. If we cannot identify and purchase a sufficient quantity of healthcare properties at favorable prices or if we are unable to finance acquisitions on commercially favorable terms, this could have a Material Adverse Effect on us.

         Market conditions, including, but not limited to, interest rates and credit spreads, the availability of credit, the actual and perceived state of the real estate markets and public capital markets generally, and unemployment rates, could negatively impact our business, results of operations, and financial condition.

        The markets in which we operate are affected by a number of factors that are largely beyond our control but may nevertheless have a significant negative impact on us. These factors include, but are not limited to:

    Interest rates and credit spreads;

    The availability of credit, including the price, terms and conditions under which it can be obtained;

    The actual and perceived state of the real estate market, the market for dividend-paying stocks and public capital markets in general; and

    Unemployment rates, both nationwide and within the primary markets in which we operate.

        In addition, increased inflation may have a pronounced negative impact on the interest expense we pay in connection with our outstanding indebtedness and our general and administrative expenses, as these costs could increase at a rate higher than our rents. Also, inflation may adversely affect tenant leases with fixed escalations, which could be lower than the increase in inflation at any given time.

        Deflation may result in a decline in general price levels, often caused by a decrease in the supply of money or credit. The predominant effects of deflation are high unemployment, credit contraction

30


and weakened consumer demand. Restricted lending practices may impact our ability to obtain financing for our properties and may also negatively impact our tenants' ability to obtain credit.

         If we cannot obtain additional capital, our growth may be limited.

        In order to qualify and maintain our qualification as a REIT each year, we will be required to distribute at least 90% of our REIT taxable income, excluding net capital gains, to our stockholders. As a result, our retained earnings available to fund acquisitions, redevelopment, or other capital expenditures are nominal, and we will rely upon the availability of additional debt or equity capital to fund these activities. Our long-term ability to grow through acquisitions or redevelopment, which is an important component of our strategy, will be limited if we cannot obtain additional debt financing or equity capital. Market conditions may make it difficult to obtain debt financing or raise equity capital, and we cannot assure you that we will be able to obtain additional debt or equity financing or that we will be able to obtain such capital on favorable terms.

Risks Related to the Separation

         We have not previously operated as a standalone company, and our historical and pro forma financial information is not necessarily representative of the results that we would have achieved as a separate, publicly traded company and may not be a reliable indicator of our future results.

        The historical information about us in this information statement refers to our business as operated by and integrated with Ventas. Our historical and pro forma financial information included in this information statement is derived from the consolidated financial statements and accounting records of Ventas. Accordingly, the historical and pro forma financial information included in this information statement does not necessarily reflect the financial condition, results of operations or cash flows that we would have achieved as a separate, publicly traded company during the periods presented or those that we will achieve in the future. Factors which could cause our results to differ from those reflected in such historical and pro forma financial information and which may adversely impact our ability to receive similar results in the future may include, but are not limited to, the following:

    Prior to the separation, our business has been operated by Ventas as part of its broader corporate organization, rather than as an independent company. Ventas or one of its affiliates performed various corporate functions for us, such as accounting, treasury, tax, information technology, and finance. Following the separation, Ventas will provide some of these functions to us, as described in "Our Relationship with Ventas Following the Distribution." Our historical and pro forma financial results reflect allocations of corporate expenses from Ventas for such functions and are likely to be less than the expenses we would have incurred had we operated as a separate, publicly traded company. We will need to make significant investments to replicate or outsource from other providers certain facilities, systems, infrastructure, and personnel to which we will no longer have access after our separation from Ventas. Developing our ability to operate without access to Ventas's current operational and administrative infrastructure will be costly and may prove difficult. We may not be able to operate our business efficiently or at comparable costs, and our profitability may decline;

    Currently, our business is integrated with the other businesses of Ventas, and we are able to use Ventas's size and purchasing power in procuring various goods and services and shared economies of scope and scale in costs, employees, vendor relationships and customer relationships. For example, we have historically been able to take advantage of Ventas's purchasing power in technology and services, including information technology, marketing, insurance, treasury services, property support and the procurement of goods. Although we will enter into certain transition and other separation-related agreements with Ventas, these arrangements may not fully capture the benefits we have enjoyed as a result of being integrated

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      with Ventas and may result in us paying higher charges than in the past for these services. In addition, services provided to us under the transition services agreement will generally only be provided until August 31, 2016, and this may not be sufficient to meet our needs. As a separate, independent company, we may be unable to obtain goods and services at the prices and terms obtained prior to the separation, which could decrease our overall profitability. Likewise, it may be more difficult for us to attract and retain desired tenants. This could have a Material Adverse Effect on us;

    Generally, our working capital requirements and capital for our general corporate purposes, including acquisitions, redevelopment, and capital expenditures, have historically been satisfied as part of the corporation-wide cash management policies of Ventas. Following the separation, we may need to obtain additional financing from banks, through public offerings or private placements of debt or equity securities, strategic relationships or other arrangements, which may not be on terms as favorable to those obtained by Ventas, and the cost of capital for our business may be higher than Ventas's cost of capital prior to the separation;

    Our historical financial information does not reflect the debt we expect to incur in connection with the separation or our receipt from Ventas of certain operations and assets or the assumption of the corresponding liabilities of our business after the separation; and

    As a public company, as modified by our status as an emerging growth company, we will become subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act and the Dodd-Frank Act and will be required to prepare our financial statements according to the rules and regulations required by the SEC. Complying with these requirements could result in significant costs to us and require us to divert substantial resources, including management time, from other activities.

        Other significant changes may occur in our cost structure, management, financing and business operations as a result of operating as an independent company. For additional information about the past financial performance of our business and the basis of presentation of the historical combined consolidated financial statements and the unaudited pro forma condensed combined consolidated financial statements of our business, please refer to "Unaudited Pro Forma Condensed Combined Consolidated Financial Statements," "Selected Historical Combined Consolidated Financial Data," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the historical financial statements and accompanying notes included elsewhere in this information statement.

         If the distribution, together with certain related transactions, does not qualify as a transaction that is generally tax-free for U.S. federal income tax purposes, Ventas, CCP and Ventas stockholders could be subject to significant tax liabilities and, in certain circumstances, CCP could be required to indemnify Ventas for material taxes and related amounts pursuant to indemnification obligations under the tax matters agreement.

        It is a condition to distribution that Ventas receive an opinion of counsel, satisfactory to the Ventas board of directors, regarding treatment of the distribution, together with certain related transactions, under Sections 355 and 368(a)(1)(D) of the Code. The opinion of counsel will be based and rely on, among other things, certain facts and assumptions, as well as certain representations, statements and undertakings of Ventas and CCP, including those relating to the past and future conduct of Ventas and CCP. If any of these representations, statements or undertakings are, or become, inaccurate or incomplete, if Ventas or CCP breach any of their respective covenants in the separation documents, the ruling or the opinion of counsel may be invalid and the conclusions reached therein could be jeopardized.

        Notwithstanding the receipt by Ventas of the opinion of counsel, the IRS could determine that the distribution, together with certain related transactions, should be treated as a taxable transaction if it

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determines that any of the representations, assumptions or undertakings are false or have been violated, or if it disagrees with the conclusions in the opinion of counsel. The opinion of counsel is not binding on the IRS and there can be no assurance that the IRS will not take a contrary position.

        If the distribution, together with certain related transactions, fails to qualify for tax-free treatment, in general, Ventas would recognize taxable gain as if it had sold the CCP common stock in a taxable sale for its fair market value (unless Ventas and CCP jointly make an election under Section 336(e) of the Code with respect to the distribution, in which case, in general, CCP would (i) recognize taxable gain as if it had sold all of its assets in a taxable sale in exchange for an amount equal to the fair market value of the CCP common stock and the assumption of all of CCP's liabilities and (ii) obtain a related step up in the basis of its assets) and Ventas stockholders who receive shares of CCP common stock in the distribution would be subject to tax as if they had received a taxable distribution equal to the fair market value of such shares. For more information, please refer to "Material U.S. Federal Income Tax Consequences of the Distribution."

        Under the tax matters agreement that CCP will enter into with Ventas, CCP may be required to indemnify Ventas against any additional taxes and related amounts resulting from (i) an acquisition of all or a portion of the equity securities or assets of CCP, whether by merger or otherwise, (ii) other actions or failures to act by CCP, or (iii) any of CCP's representations or undertakings being incorrect or violated. For a more detailed discussion, please refer to "Our Relationship with Ventas Following the Distribution—Tax Matters Agreement."

         We may not be able to engage in desirable strategic or capital-raising transactions following the separation, and we could be liable for adverse tax consequences resulting from engaging in significant strategic or capital-raising transactions.

        To preserve the tax-free treatment of the separation, for the two-year period following the separation, we may be prohibited, except in specific circumstances, from: (i) entering into any transaction pursuant to which all or a portion of our shares would be acquired, whether by merger or otherwise, (ii) issuing equity securities beyond certain thresholds, (iii) repurchasing our common stock, (iv) ceasing to actively conduct certain of our businesses, or (v) taking or failing to take any other action that prevents the distribution and related transactions from being tax-free.

        These restrictions may limit our ability to pursue strategic transactions or engage in new business or other transactions that may maximize the value of our business. For more information, please refer to "Material U.S. Federal Income Tax Consequences of the Distribution" and "Our Relationship with Ventas Following the Distribution—Tax Matters Agreement."

         Potential indemnification liabilities to Ventas pursuant to the separation and distribution agreement could have a Material Adverse Effect on us.

        The separation and distribution agreement with Ventas provides for, among other things, the principal corporate transactions required to effect the separation, certain conditions to the separation and distribution and provisions governing our relationship with Ventas with respect to and following the separation and distribution. Among other things, the separation and distribution agreement provides for indemnification obligations designed to make us financially responsible for substantially all liabilities that may exist relating to our business activities, whether incurred prior to or after the separation and distribution, as well as those obligations of Ventas that we will assume pursuant to the separation and distribution agreement. If we are required to indemnify Ventas under the circumstances set forth in this agreement, we may be subject to substantial liabilities. For a description of this agreement, please refer to "Our Relationship with Ventas Following the Distribution—The Separation and Distribution Agreement."

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         We may have received more favorable terms from unaffiliated third parties than the terms we will receive in our agreements with Ventas.

        We will enter into agreements with Ventas in connection with the separation, including a separation and distribution agreement, a transition services agreement, a tax matters agreement and an employee matters agreement. Such agreements were prepared in the context of the separation while CCP was still a wholly owned subsidiary of Ventas. Accordingly, during the period in which the terms of these agreements were prepared, CCP did not have an independent board of directors or management team that was independent of Ventas. As a result, although the parties attempted to include arm's-length terms in these agreements, the terms of these agreements may not reflect terms that would have resulted from arm's-length negotiations between unaffiliated third parties. Arm's-length negotiations between Ventas and an unaffiliated third party in another form of transaction, such as a buyer in a sale of a business transaction, may have resulted in more favorable terms to the unaffiliated third party. See "Our Relationship with Ventas Following the Distribution."

         After the separation, certain of our directors and executive officers and directors may have actual or potential conflicts of interest because of their previous or continuing equity interest in, or positions at, Ventas.

        Some of our directors and executive officers will be persons who are or have been employees of Ventas. Because of their current or former positions with Ventas, certain of our directors and executive officers may own Ventas common stock, and our independent, non-executive chairman, Douglas Crocker II, will continue to hold equity-based incentive awards in respect of Ventas common stock. Following the separation, even though our board of directors will consist of a majority of directors who are independent, we expect that some of our executive officers and some of our directors will continue to have a financial interest in Ventas common stock. In addition, Mr. Crocker will continue serving on the board of directors of Ventas for a limited period following the distribution. Continued ownership of Ventas common stock or, in the case of Mr. Crocker, service as a director at both companies could create, or appear to create, potential conflicts of interest.

         Any of our directors who is also a director, officer or employee of Ventas may in certain circumstances direct investment opportunities away from our company.

        Our Guidelines on Governance will provide that if any of our directors who is also a director, officer or employee of Ventas acquires knowledge of a corporate opportunity or is otherwise offered a corporate opportunity (provided that this knowledge was not acquired solely in such person's capacity as a director of our company), then to the fullest extent permitted by law, such person is deemed to have fully satisfied such person's fiduciary duties owed to us and is not liable to us if Ventas, or its affiliates, pursues or acquires the corporate opportunity, or if such person did not present the corporate opportunity to us. Accordingly, while we expect that Mr. Crocker is the only director who will also serve as a director of Ventas (for a period of less than one year following the distribution), any of our directors who is also a director, officer or employee of Ventas may, in certain circumstances, direct investment opportunities away from our company.

         We may not achieve some or all of the expected benefits of the separation, and the separation may adversely affect our business.

        We may not be able to achieve the full strategic and financial benefits expected to result from the separation, or such benefits may be delayed due to a variety of circumstances, not all of which may be under our control. The separation is expected to provide the following benefits, among others: (i) a distinct investment identity allowing investors to evaluate our merits, performance and future prospects as an independent company; (ii) more efficient allocation of capital for both Ventas and for us; and (iii) direct access by us to the capital markets.

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        We may not achieve these and other anticipated benefits for a variety of reasons, including, among others: (i) the separation will require significant amounts of management's time and effort, which may divert management's attention from operating and growing our business; (ii) following the separation, we may be more susceptible to market fluctuations and other adverse events than if we were still a part of Ventas; (iii) following the separation, our business will be less diversified than Ventas's business prior to the separation; and (iv) the other actions required to separate our business from that of Ventas could disrupt our operations. If we fail to achieve some or all of the benefits expected to result from the separation, or if such benefits are delayed, this could have a Material Adverse Effect on us.

         Ventas may fail to perform under various transaction agreements that will be executed as part of the separation or we may fail to have necessary systems and services in place when certain of the transaction agreements expire.

        We will enter into agreements with Ventas in connection with the separation, including a separation and distribution agreement, a transition services agreement, a tax matters agreement and an employee matters agreement. Certain of these agreements will provide for the performance of services by each company for the benefit of the other for a period of time after the separation. We will rely on Ventas to satisfy its performance and payment obligations under these agreements. If Ventas is unable to satisfy its obligations under these agreements, including its indemnification obligations, we could incur operational difficulties or losses.

        If we do not have in place our own systems and services, or if we do not have agreements with other providers of these services when the transaction or long-term agreements terminate, we may not be able to operate our business effectively and our profitability may decline. See "Our Relationship with Ventas Following the Distribution."

         No vote of the Ventas stockholders is required in connection with the separation and distribution.

        No vote of the Ventas stockholders is required in connection with the separation and distribution. Accordingly, if this transaction occurs and you do not want to receive our common stock in the distribution, your only recourse will be to divest yourself of your Ventas common stock prior to the record date for the distribution.

         Ventas's board of directors has reserved the right, in its sole discretion, to amend, modify or abandon the separation and distribution and the related transactions at any time prior to the distribution date; in addition, the conditions to the separation and distribution may not be met.

        The Ventas board of directors has reserved the right, in its sole discretion, to amend, modify or abandon the separation and distribution and the related transactions at any time prior to the distribution date. This means that Ventas may cancel or delay the planned separation and distribution of our common stock if at any time the board of directors of Ventas determines that it is not in the best interests of Ventas and its stockholders. If Ventas's board of directors makes a decision to cancel the separation, stockholders of Ventas will not receive any distribution of our common stock and Ventas will be under no obligation whatsoever to its stockholders to distribute such common stock. In addition, the separation and distribution and related transactions are subject to the satisfaction or waiver by Ventas's board of directors in its sole discretion of a number of conditions. We cannot assure you that any or all of these conditions will be met.

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         In connection with our separation from Ventas, Ventas will indemnify us for certain pre-distribution liabilities and liabilities related to Ventas assets; however, these indemnities may be insufficient to protect us against the full amount of such liabilities.

        Pursuant to the separation and distribution agreement, Ventas will agree to indemnify us for certain liabilities. However, third parties could seek to hold us responsible for any of the liabilities that Ventas agrees to retain, and there can be no assurance that Ventas will be able to fully satisfy its indemnification obligations. Moreover, even if we ultimately succeed in recovering from Ventas any amounts for which we are held liable, such indemnification may be insufficient to fully offset the financial impact of such liabilities and/or we may be temporarily required to bear these losses while seeking recovery from Ventas.

         Failure to maintain effective internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act could have a Material Adverse Effect on us.

        As a public company, we will become subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act and the Dodd-Frank Act and will be required to prepare our financial statements according to the rules and regulations required by the SEC. In addition, the Exchange Act requires that we file annual, quarterly and current reports. Our failure to prepare and disclose this information in a timely manner or to otherwise comply with applicable law could subject us to penalties under federal securities laws, expose us to lawsuits and restrict our ability to access financing.

        In addition, the Sarbanes-Oxley Act requires that we, among other things, establish and maintain effective internal controls and procedures for financial reporting and disclosure purposes. Internal control over financial reporting is complex and may be revised over time to adapt to changes in our business, or changes in applicable accounting rules. We cannot assure you that our internal control over financial reporting will be effective in the future or that a material weakness will not be discovered with respect to a prior period for which we had previously believed that internal controls were effective. If we are not able to maintain or document effective internal control over financial reporting, our independent registered public accounting firm will not be able to certify as to the effectiveness of our internal control over financial reporting.

        Matters impacting our internal controls may cause us to be unable to report our financial information on a timely basis, or may cause our company to restate previously issued financial information, and thereby subject us to adverse regulatory consequences, including sanctions or investigations by the SEC, or violations of applicable stock exchange listing rules. There could also be a negative reaction in the financial markets due to a loss of investor confidence in our company and the reliability of our financial statements. Confidence in the reliability of our financial statements is also likely to suffer if we or our independent registered public accounting firm report a material weakness in our internal control over financial reporting. This could have a Material Adverse Effect on us by, for example, leading to a decline in our share price and impairing our ability to raise additional capital.

        For as long as we are an emerging growth company under the recently enacted JOBS Act, our independent registered public accounting firm will not be required to attest to the effectiveness of our internal control over financial reporting pursuant to Section 404(b). An independent assessment of the effectiveness of our internal controls could detect problems that our management's assessment might not. Undetected material weaknesses in our internal controls could lead to financial statement restatements and require us to incur the expense of remediation.

         Substantial sales of our common stock may occur in connection with the distribution, which could cause our share price to decline.

        The shares that Ventas intends to distribute to its stockholders generally may be sold immediately in the public market. Upon completion of the distribution, we expect that we will have an aggregate of approximately 83.1 million shares of common stock issued and outstanding (excluding shares issued in

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the Valuation Firm Acquisition), based on the number of outstanding shares of Ventas common stock as of July 28, 2015. These shares will be freely tradable without restriction or further registration under the Securities Act unless the shares are owned by one of our "affiliates," as that term is defined in Rule 405 under the Securities Act.

        Although we have no actual knowledge of any plan or intention on the part of any 5% or greater stockholder to sell our shares following the distribution, it is possible that some Ventas stockholders, including possibly some of our large stockholders, will sell our common stock that they receive in the distribution. For example, Ventas stockholders may sell our common stock because our business profile or market capitalization as an independent company does not fit their investment objectives or because our common stock is not included in certain indices after the distribution. A portion of Ventas common stock is held by index funds tied to the Standard & Poor's 500 Index or other indices, and if we are not included in these indices at the time of the distribution, these index funds may be required to sell our shares. The sales of significant amounts of our common stock, or the perception in the market that this will occur, may result in the lowering of the market price of our shares.

Risks Related to Our Status as a REIT

         If we do not qualify to be taxed as a REIT, or if we fail to remain qualified as a REIT, we will be subject to U.S. federal income tax as a regular corporation and could face substantial tax liability, which would substantially reduce funds available for distribution to our stockholders.

        We expect to receive an opinion of Wachtell, Lipton, Rosen & Katz with respect to our qualification as a REIT in connection with the separation. Investors should be aware, however, that opinions of advisors are not binding on the IRS or any court. The opinions of Wachtell, Lipton, Rosen & Katz represent only the view of Wachtell, Lipton, Rosen & Katz based on its review and analysis of existing law and on certain representations as to factual matters and covenants made by us, including representations relating to the value of our assets and the sources of our income. The opinion is expressed as of the date issued. Wachtell, Lipton, Rosen & Katz will have no obligation to advise us, or the holders of our common shares, of any subsequent change in the matters stated, represented or assumed or of any subsequent change in applicable law.

        Furthermore, both the validity of the opinion of Wachtell, Lipton, Rosen & Katz and our qualification as a REIT will depend on our satisfaction of certain asset, income, organizational, distribution, stockholder ownership and other requirements on a continuing basis, the results of which will not be monitored by Wachtell, Lipton, Rosen & Katz. Our ability to satisfy the asset tests depends upon our analysis of the characterization and fair market values of our assets, some of which are not susceptible to a precise determination, and for which we will not obtain independent appraisals. Our compliance with the REIT income and quarterly asset requirements also depends upon our ability to successfully manage the composition of our income and assets on an ongoing basis. Moreover, the proper classification of one or more of our investments may be uncertain in some circumstances, which could affect the application of the REIT qualification requirements. Accordingly, there can be no assurance that the IRS will not contend that our investments violate the REIT requirements.

        If we were to fail to qualify as a REIT in any taxable year, we would be subject to U.S. federal income tax, including any applicable alternative minimum tax, on our taxable income at regular corporate rates, and distributions to our stockholders would not be deductible by us in computing our taxable income. Any such corporate tax liability could be substantial and would reduce the amount of cash available for distribution to our stockholders, which in turn could have an adverse effect on the value of, and trading prices for, our common stock. Unless we are deemed to be entitled to relief under certain provisions of the Code, we would also be disqualified from taxation as a REIT for the four taxable years following the year during which we initially ceased to qualify as a REIT.

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         Our failure to qualify as a REIT could cause our shares to be delisted from the NYSE.

        The NYSE requires, as a condition to the listing of our common stock, that we maintain our REIT status. Consequently, if we fail to maintain our REIT status, our common stock could promptly be delisted from the NYSE, which would decrease the trading activity of such common stock, making the sale of such common stock difficult.

        If we were delisted as a result of losing our REIT status and wished to relist our shares on the NYSE, we would be required to reapply to the NYSE to be listed as a non-REIT corporation. As the NYSE's listing standards for REITs are less burdensome than its standards for non-REIT corporations, it would be more difficult for us to become a listed company under these heightened standards. We may not be able to satisfy the NYSE's listing standards for non-REIT corporations. As a result, if we were delisted from the NYSE, we may not be able to relist as a non-REIT corporation, in which case our shares could not trade on the NYSE.

         Our ownership of and relationship with any taxable REIT subsidiaries that we have formed or will form will be limited and a failure to comply with the limits would jeopardize our REIT status and may result in the application of a 100% excise tax.

        A REIT may own up to 100% of the stock of one or more taxable REIT subsidiaries ("TRSs"). A TRS may earn income that would not be qualifying income if earned directly by the parent REIT. Both the subsidiary and the REIT must jointly elect to treat the subsidiary as a TRS. A corporation (other than a REIT) of which a TRS directly or indirectly owns securities possessing more than 35% of the total voting power or total value of the outstanding securities of such corporation will automatically be treated as a TRS. Overall, no more than 25% of the value of a REIT's total assets may consist of stock or securities of one or more TRSs. A domestic TRS will pay U.S. federal, state and local income tax at regular corporate rates on any income that it earns. In addition, the TRS rules limit the deductibility of interest paid or accrued by a TRS to its parent REIT to assure that the TRS is subject to an appropriate level of corporate taxation. The rules also impose a 100% excise tax on certain transactions between a TRS and its parent REIT that are not conducted on an arm's-length basis. Any domestic TRS that we may form will pay U.S. federal, state and local income tax on its taxable income, and its after-tax net income will be available for distribution to us but is not required to be distributed to us unless necessary to maintain our REIT qualification.

         Dividends payable by REITs do not qualify for the reduced tax rates available for some dividends.

        Dividends payable by non-REIT corporations to non-REIT stockholders that are individuals, trusts and estates are generally taxed at reduced tax rates. Dividends payable by REITs, however, generally are not eligible for the reduced rates. The more favorable rates applicable to regular corporate dividends could cause investors who are individuals, trusts and estates to perceive investments in REITs to be relatively less attractive than investments in the shares of non-REIT corporations that pay dividends, which could adversely affect the value of the shares of REITs, including shares of our common stock.

         Qualifying as a REIT involves highly technical and complex provisions of the Code.

        Qualifying as a REIT involves the application of highly technical and complex provisions of the Code for which only limited judicial and administrative authorities exist. Even a technical or inadvertent violation could jeopardize our REIT qualification. Our qualification as a REIT will depend on our satisfaction of certain asset, income, organizational, distribution, stockholder ownership and other requirements on a continuing basis. Compliance with these requirements must be carefully monitored on a continuing basis, and there can be no assurance that our personnel responsible for doing so will be able to successfully monitor our compliance. In addition, our ability to satisfy the

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requirements to qualify to be taxed as a REIT may depend, in part, on the actions of third parties over which we have either no control or only limited influence.

         Legislative, administrative, regulatory or other actions affecting REITs, including positions taken by the IRS, could have a negative effect on us.

        The rules dealing with U.S. federal income taxation are constantly under review by persons involved in the legislative process, and by the IRS and the U.S. Department of the Treasury (the "Treasury"). In particular, in June 2013, several companies pursuing REIT conversions disclosed that they had been informed by the IRS that it had formed a new internal working group to study the current legal standards the IRS uses to define "real estate" for purposes of the REIT provisions of the Code. Changes to the tax laws or interpretations thereof by the IRS and the Treasury, with or without retroactive application, could materially and adversely affect our investors or our company. We cannot predict how changes in the tax laws might affect our investors or us. New legislation, Treasury regulations, administrative interpretations or court decisions could significantly and negatively affect our ability to qualify to be taxed as a REIT and/or the U.S. federal income tax consequences to our investors and our company of such qualification.

         REIT distribution requirements could adversely affect our liquidity and our ability to execute our business plan.

        In order for us to qualify to be taxed as a REIT, and assuming that certain other requirements are also satisfied, we generally must distribute at least 90% of our REIT taxable income, determined without regard to the dividends paid deduction and excluding any net capital gains, to our stockholders each year, so that U.S. federal corporate income tax does not apply to earnings that we distribute. To the extent that we satisfy this distribution requirement and qualify for taxation as a REIT, but distribute less than 100% of our REIT taxable income, determined without regard to the dividends paid deduction and including any net capital gains, we will be subject to U.S. federal corporate income tax on our undistributed net taxable income. In addition, we will be subject to a 4% nondeductible excise tax if the actual amount that we distribute to our stockholders in a calendar year is less than a minimum amount specified under U.S. federal income tax laws. We intend to make distributions to our stockholders to comply with the REIT requirements of the Code.

        From time to time, we may generate taxable income greater than our cash flow as a result of differences in timing between the recognition of taxable income and the actual receipt of cash or the effect of nondeductible capital expenditures, the creation of reserves, or required debt or amortization payments. If we do not have other funds available in these situations, we could be required to borrow funds on unfavorable terms, sell assets at disadvantageous prices, distribute amounts that would otherwise be invested in future acquisitions, capital expenditures or repayment of debt, or make taxable distributions of our capital stock or debt securities to make distributions sufficient to enable us to pay out enough of our taxable income to satisfy the REIT distribution requirement and avoid corporate income tax and the 4% excise tax in a particular year. These alternatives could increase our costs or reduce our equity. Further, amounts distributed will not be available to fund investment activities. Thus, compliance with the REIT requirements may hinder our ability to grow, which could adversely affect the value of our shares. Any restrictions on our ability to incur additional indebtedness or make certain distributions could preclude us from meeting the 90% distribution requirement. Decreases in FFO due to unfinanced expenditures for acquisitions of properties or increases in the number of shares outstanding without commensurate increases in FFO each would adversely affect our ability to maintain distributions to our stockholders. Consequently, there can be no assurance that we will be able to make distributions at the anticipated distribution rate or any other rate. Please refer to "Dividend Policy."

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         Complying with REIT requirements may cause us to forego otherwise attractive acquisition opportunities or liquidate otherwise attractive investments.

        To qualify to be taxed as a REIT for U.S. federal income tax purposes, we must ensure that, at the end of each calendar quarter, at least 75% of the value of our assets consist of cash, cash items, government securities and "real estate assets" (as defined in the Code), including certain mortgage loans and securities. The remainder of our investments (other than government securities, qualified real estate assets and securities issued by a TRS) generally cannot include more than 10% of the outstanding voting securities of any one issuer or more than 10% of the total value of the outstanding securities of any one issuer.

        Additionally, in general, no more than 5% of the value of our total assets (other than government securities, qualified real estate assets and securities issued by a TRS) can consist of the securities of any one issuer, and no more than 25% of the value of our total assets can be represented by securities of one or more TRSs. Please refer to "Material U.S. Federal Income Tax Consequences of Investment in Our Common Stock." If we fail to comply with these requirements at the end of any calendar quarter, we must correct the failure within 30 days after the end of the calendar quarter or qualify for certain statutory relief provisions to avoid losing our REIT qualification and suffering adverse tax consequences. As a result, we may be required to liquidate or forego otherwise attractive investments. These actions could have the effect of reducing our income and amounts available for distribution to our stockholders.

        In addition to the asset tests set forth above, to qualify to be taxed as a REIT, we must continually satisfy tests concerning, among other things, the sources of our income, the amounts we distribute to our stockholders and the ownership of our shares. We may be unable to pursue investments that would be otherwise advantageous to us in order to satisfy the source-of-income or asset-diversification requirements for qualifying as a REIT. Thus, compliance with the REIT requirements may hinder our ability to make certain attractive investments.

         Complying with REIT requirements may limit our ability to hedge effectively and may cause us to incur tax liabilities.

        The REIT provisions of the Code substantially limit our ability to hedge our assets and liabilities. Income from certain potential hedging transactions that we may enter into to manage risk of interest rate changes with respect to borrowings made or to be made to acquire or carry real estate assets or from transactions to manage risk of currency fluctuations with respect to any item of income or gain that satisfy the REIT gross income tests (including gain from the termination of such a transaction) does not constitute "gross income" for purposes of the 75% or 95% gross income tests that apply to REITs, provided that certain identification requirements are met. To the extent that we enter into other types of hedging transactions or fail to properly identify such transaction as a hedge, the income is likely to be treated as non-qualifying income for purposes of both of the gross income tests. Please refer to "Material U.S. Federal Income Tax Consequences of Investment in Our Common Stock."

        As a result of these rules, we may be required to limit our use of advantageous hedging techniques or implement those hedges through a total return swap. This could increase the cost of our hedging activities because the total return swap may be subject to tax on gains or expose us to greater risks associated with changes in interest rates than we would otherwise want to bear. In addition, losses in the total return swap will generally not provide any tax benefit, except that such losses could theoretically be carried back or forward against past or future taxable income in the total return swap.

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         The share ownership limit imposed by the Code for REITs, and our certificate of incorporation, may inhibit market activity in our shares and restrict our business combination opportunities.

        In order for us to maintain our qualification as a REIT under the Code, not more than 50% in value of our outstanding shares may be owned, directly or indirectly, by five or fewer individuals (as defined in the Code to include certain entities) at any time during the last half of each taxable year after our first taxable year. Our certificate of incorporation, with certain exceptions, will authorize our board of directors to take the actions that are necessary and desirable to preserve our qualification as a REIT. Unless exempted by our board of directors, no person may beneficially own more than 9.0% of the outstanding CCP common stock or more than 9.0% of any outstanding class or series of CCP preferred stock, as determined by value or number, whichever is more restrictive. The board of directors may exempt a person from the ownership limit if the board of directors receives a ruling from the IRS or an opinion of tax counsel that such ownership will not jeopardize our status as a REIT or such other documents the board deems appropriate. These ownership limits could delay or prevent a transaction or a change in our control that might involve a premium price for our common stock or otherwise be in the best interest of our stockholders.

Risks Related to Ownership of Our Common Stock

         No market currently exists for our common stock and we cannot be certain that an active trading market will develop or be sustained after the separation, and, following the separation, our share price may fluctuate significantly.

        A public market for our common stock does not currently exist. We anticipate that on or prior to the record date for the distribution, trading of our common stock will begin on a "when-issued" basis and will continue through the distribution date. However, we cannot guarantee that an active trading market will develop or be sustained after the separation, nor can we predict the prices at which our common stock may trade after the separation. Similarly, we cannot predict the effect of the separation on the trading prices of our common stock or whether the combined market value of our common stock and Ventas's common stock will be less than, equal to, or greater than the market value of Ventas's common stock prior to the separation. The market price of our common stock may fluctuate significantly due to a number of factors, some of which may be beyond our control, including:

    actual or anticipated variations in our quarterly operating results;

    changes in our FFO or earnings estimates;

    increases in market interest rates, which may lead purchasers of our shares to demand a higher yield;

    changes in market valuations of similar companies;

    adverse market reaction to any increased indebtedness we incur in the future;

    additions or departures of key personnel;

    actions by stockholders;

    speculation in the press or investment community;

    general market, economic and political conditions;

    our operating performance and the performance of other similar companies;

    changes in accounting principles;

    passage of legislation or other regulatory developments that adversely affect us or our industry; and

41


    the potential impact of governmental budgets and healthcare reimbursement expenditures.

        In addition, when the market price of a company's common shares drops significantly, stockholders often institute securities class action lawsuits against the company. A lawsuit against us could cause us to incur substantial costs and could divert the time and attention of our management and other resources.

         We cannot guarantee the timing, amount or payment of dividends on our common stock.

        Although we expect to pay regular cash distributions following the separation, the timing, declaration, amount and payment of future distributions to stockholders will fall within the discretion of our board of directors. Our board of directors' decisions regarding the payment of distributions will depend on many factors, such as our financial condition, earnings, capital requirements, debt service obligations, limitations under our financing arrangements, industry practice, legal requirements, regulatory constraints, and other factors that it deems relevant. Our ability to pay distributions will depend on our ongoing ability to generate cash from operations and access capital markets. We cannot guarantee that we will pay any distributions in the future or continue to pay any distributions if we commence paying them. For more information, please refer to "Dividend Policy."

         Your ownership percentage in our company may be diluted in the future.

        In the future, your percentage ownership in us may be diluted because of equity issuances for acquisitions, capital market transactions or otherwise. We also anticipate granting compensatory equity-based incentive awards to directors, officers and employees who will provide services to us after the distribution. Such awards will have a dilutive effect on our earnings per share, which could adversely affect the market price of our common stock.

        In addition, our certificate of incorporation will authorize us to issue, without the approval of our stockholders, one or more classes or series of preferred stock having such designation, powers, preferences and relative, participating, optional and other special rights, including preferences over our common stock respecting dividends and distributions, as our board of directors generally may determine. The terms of one or more classes or series of preferred stock could dilute the voting power or reduce the value of our common stock. For example, we could grant the holders of preferred stock the right to elect some number of our directors in all events or on the occurrence of specified events, or the right to veto specified transactions. Similarly, the repurchase or redemption rights or liquidation preferences we could assign to shares of preferred stock could affect the residual value of the common stock. Please refer to "Description of CCP's Capital Stock."

         Certain provisions in our certificate of incorporation and bylaws, and provisions of Delaware law, may prevent or delay an acquisition of our company, which could decrease the trading price of our common shares.

        Our certificate of incorporation and bylaws will contain, and Delaware law contains, provisions that are intended to deter coercive takeover practices and inadequate takeover bids by making such practices or bids unacceptably expensive to the bidder and to encourage prospective acquirers to negotiate with our board of directors rather than to attempt a hostile takeover. These provisions include, among others:

    The inability of our stockholders to call a special meeting;

    Advance notice requirements and other limitations on the ability of stockholders to present proposals or nominate directors for election at stockholder meetings;

    The right of our board of directors to issue preferred shares without stockholder approval;

42


    The ability of our directors, and not stockholders, to fill vacancies on our board of directors;

    Restrictions on the number of shares of capital stock that individual stockholders may own;

    Supermajority vote requirements for stockholders to amend certain provisions of our certificate of incorporation and bylaws; and

    Restrictions on an "interested stockholder" to engage in certain business combinations with us for a three-year period following the date the interested stockholder became such.

        We believe these provisions will protect our stockholders from coercive or otherwise unfair takeover tactics by requiring potential acquirers to negotiate with our board of directors and by providing our board of directors with more time to assess any acquisition proposal. These provisions are not intended to make the company immune from takeovers. However, these provisions will apply even if the offer may be considered beneficial by some stockholders and could delay or prevent an acquisition that our board of directors determines is not in the best interests of our stockholders and us. These provisions may also prevent or discourage attempts to remove and replace incumbent directors.

        Several of the agreements that we expect to enter into in connection with the separation with Ventas may require Ventas's consent to any assignment by us of our rights and obligations under the agreements. These agreements will generally expire within two years of our separation from Ventas, except for certain agreements that will continue for longer terms. The consent and termination rights set forth in these agreements might discourage, delay or prevent a change of control that you may consider favorable.

        In addition, an acquisition or further issuance of our common stock could trigger the application of Section 355(e) of the Code. For a discussion of Section 355(e), please refer to "Material U.S. Federal Income Tax Consequences of the Distribution." Under the tax matters agreement, we would be required to indemnify Ventas for any resulting taxes and related amounts, and this indemnity obligation might discourage, delay or prevent a change of control that you may consider favorable. Please refer to "Our Relationship with Ventas Following the Distribution" and "Description of CCP's Capital Stock" for a more detailed description of these agreements and provisions.

43



CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

        This information statement and other materials that Ventas and CCP have filed or will file with the SEC contain, or will contain, certain forward-looking statements regarding business strategies, market potential, future financial performance and other matters. The words "believe," "expect," "anticipate," "intend," "may," "could," should," "will," and other similar expressions, generally identify "forward-looking statements," which speak only as of the date the statements were made. The matters discussed in these forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from those projected, anticipated or implied in the forward-looking statements. In particular, information included under "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations," "Business," and "The Separation and Distribution" contain forward-looking statements. Where, in any forward-looking statement, an expectation or belief as to future results or events is expressed, such expectation or belief is based on the current plans and expectations of CCP management and expressed in good faith and believed to have a reasonable basis, but there can be no assurance that the expectation or belief will result or be achieved or accomplished. Factors that could cause actual results or events to differ materially from those anticipated include the matters described under "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations."

44



DIVIDEND POLICY

        CCP is a newly formed company that has not conducted any business operations other than those incidental to its formation and in connection with the transactions related to the separation and distribution. As a result, we have not paid any distributions as of the date of this information statement. We expect pay quarterly dividends in cash in an aggregate annual amount equal to approximately 76% of our normalized FFO for the relevant year, but in no event will the aggregate annual amount be less than 90% of our REIT taxable income for that year. On this basis, CCP's annualized dividend in 2015, based on first quarter 2015 pro forma results, would have been at least $2.20 per share, assuming the distribution had occurred on January 1, 2015 with a distribution ratio of one share of CCP common stock for every four shares of Ventas common stock. Normalized FFO attributable to CCP, annualized based on the three months ended March 31, 2015, as reflected in the unaudited pro forma condensed consolidated financial statements included elsewhere in this information statement, would have been approximately $242 million, or $2.88 per share, assuming a distribution ratio of one share of CCP common stock for every four shares of Ventas common stock.

        To qualify as a REIT, we must distribute to our stockholders an amount at least equal to:

    (i)
    90% of our REIT taxable income, determined before the deduction for dividends paid and excluding any net capital gain (which does not necessarily equal net income as calculated in accordance with GAAP); plus

    (ii)
    90% of the excess of our net income from foreclosure property over the tax imposed on such income by the Code; less

    (iii)
    Any excess non-cash income (as determined under the Code). Please refer to "Material U.S. Federal Income Tax Consequences of Investment in Our Common Stock."

        We cannot assure you that our distribution policy will remain the same in the future, or that any estimated distributions would be made or sustained. Distributions made by us will be authorized and determined by our board of directors, in its sole discretion, out of legally available funds, and will depend upon a number of factors, including restrictions under applicable law, our actual and projected financial condition, liquidity, FFO and results of operations, the revenue we actually receive from our properties, our operating expenses, our debt service requirements, our capital expenditures, prohibitions and other limitations under the arrangements governing our indebtedness, the annual REIT distribution requirements and such other factors as our board of directors deems relevant. For more information regarding risks that could materially adversely affect our ability to make distributions, please see the section entitled "Risk Factors."

        Our distributions may be funded from a variety of sources. To the extent that our cash available for distribution is less than 90% of our taxable income, we may consider various means to cover any such shortfall, including borrowing under a revolving credit facility or other loans, selling certain of our assets or using a portion of the net proceeds we receive from future offerings of equity or debt securities or declaring taxable share dividends. In addition, our certificate of incorporation allows us to issue shares of preferred stock that could have a preference on distributions, and if we do, the distribution preference on the preferred stock could limit our ability to make distributions to the holders of our common stock.

        For a discussion of the tax treatment of distributions to holders of our common shares, please see the section entitled "Material U.S. Federal Income Tax Consequences of Investment in Our Common Stock."

45



CAPITALIZATION

        The following table sets forth our capitalization as of March 31, 2015 on a historical basis and on a pro forma basis to give effect to the pro forma adjustments included in our unaudited pro forma condensed combined consolidated financial information. The information below is not necessarily indicative of what CCP's capitalization would have been had the separation, distribution and related financing transactions been completed as of March 31, 2015. In addition, it is not indicative of our future capitalization. This table should be read in conjunction with "Unaudited Pro Forma Condensed Combined Consolidated Financial Statements," "Selected Historical Combined Consolidated Financial Data," "Management's Discussion and Analysis of Financial Condition and Results of Operations," and our consolidated financial statements and notes thereto included elsewhere in this information statement.

 
  As of
March 31, 2015
 
 
  Actual   Pro Forma  
 
  (In thousands)
 

Cash

  $ 1,376   $ 5,017  

New unsecured indebtedness

  $   $ 1,300,000  

Total indebtedness

        1,300,000  

Total CCP equity

    2,706,205     1,291,054  

Noncontrolling interest

    4,804     4,804  

Total capitalization

  $ 2,711,009   $ 2,595,858  

46



SELECTED HISTORICAL COMBINED CONSOLIDATED FINANCIAL DATA

        The following table sets forth the selected historical combined consolidated financial and other data of our business, which was carved out from the financial information of Ventas, as described below. We were formed for the purpose of holding certain assets and assuming certain liabilities of Ventas. Prior to the effective date of the Form 10 registration statement, of which this information statement forms a part, and the completion of the distribution, we did not conduct any business operations other than those incidental to our formation and in connection with the transactions related to the separation and distribution. The selected historical combined consolidated financial data set forth below as of December 31, 2014 and 2013 and for the years ended December 31, 2014, 2013 and 2012 has been derived from the audited combined consolidated financial statements, which are included elsewhere in this information statement. The selected historical combined consolidated financial data set forth below as of December 31, 2012 has been derived from the unaudited combined consolidated financial statements, which are not included in this information statement, but which have been prepared on the same basis as the audited combined consolidated financial statements. The summary historical combined consolidated financial data set forth below as of March 31, 2015 and for the three months ended March 31, 2015 and 2014 has been derived from the unaudited combined consolidated financial statements, which are included elsewhere in this information statement.

        Our combined consolidated financial statements were carved out from the financial information of Ventas at a carrying value reflective of such historical cost in such Ventas records. The combined consolidated financial statements include an allocation of expenses related to certain Ventas corporate functions, including executive oversight, treasury, finance, legal, human resources, tax planning, internal audit, financial reporting, information technology and investor relations. These expenses have been allocated to us based on direct usage or benefit where specifically identifiable, with the remainder allocated primarily on a pro rata basis of revenue, headcount or other measures. We consider the expense methodology and results to be reasonable for all periods presented. However, the allocations may not be indicative of the actual expense that would have been incurred had we operated as an independent, publicly traded company for the periods presented. In connection with the separation, we will enter into a transition services agreement with Ventas to receive certain support services from Ventas on a transitional basis until August 31, 2016, subject to extension upon mutual agreement. The historical combined consolidated financial information presented may not be indicative of the results of operations, financial position or cash flows that would have been obtained if we had been an independent, standalone entity during the periods shown. Please refer to "Management's Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates—Principles of Combination and Consolidation and Basis of Presentation."

        The historical combined consolidated financial information set forth below does not indicate results expected for any future periods. The selected financial data set forth below are qualified in their entirety by, and should be read in conjunction with, "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our combined consolidated financial statements

47


and related notes thereto included elsewhere in this information statement, as acquisitions, dispositions, changes in accounting policies and other items may impact the comparability of the financial data.

 
  For the
Three Months Ended
March 31,
  For the Years Ended December 31,  
 
  2015   2014   2014   2013   2012  
 
  (In thousands)
 

Operating Data

                               

Rental income

  $ 77,700   $ 74,398   $ 291,962   $ 287,794   $ 285,998  

General, administrative and professional fees

    6,400     6,493     22,412     22,552     18,643  

Total expenses

    41,304     33,839     137,523     117,107     117,769  

Net income attributable to CCP

    37,221     41,365     157,595     174,290     172,421  

Other Data

                               

Net cash provided by operating activities

  $ 54,920   $ 53,344   $ 255,082   $ 249,727   $ 251,556  

Net cash used in investing activities

    (354,444 )   (5,057 )   (28,977 )   (4,505 )   (21,899 )

Net cash provided by (used in) financing activities

    298,476     (48,405 )   (225,848 )   (249,800 )   (231,240 )

FFO attributable to CCP(1)

    68,303     67,516     257,197     266,651     269,968  

Normalized FFO attributable to CCP(1)

    71,551     67,516     258,744     266,651     270,533  

FAD attributable to CCP(1)

    60,290     62,624     236,019     251,053     259,377  

 

 
   
  As of December 31  
 
  As of
March 31,
2015
 
 
  2014   2013   2012  
 
   
   
   
  (Unaudited)
 
 
   
  (In thousands)
 

Balance Sheet Data

                         

Real estate investments, at cost

  $ 3,335,715   $ 2,793,819   $ 2,780,878   $ 2,760,989  

Cash

    1,376     2,424     2,167     6,745  

Total assets

    2,916,024     2,331,750     2,405,764     2,499,879  

Total equity

    2,711,009     2,123,079     2,191,300     2,265,524  

(1)
We believe that net income, as defined by U.S. generally accepted accounting principles ("GAAP"), is the most appropriate earnings measurement. However, we consider Funds From Operations ("FFO"), normalized FFO and Funds Available for Distribution ("FAD") to be appropriate measures of operating performance of an equity REIT. In particular, we believe that normalized FFO is useful because it allows investors, analysts and our management to compare our operating performance to the operating performance of other real estate companies and between periods on a consistent basis without having to account for differences caused by unanticipated items and other events such as transactions and litigation. For our definitions of FFO, normalized FFO and FAD, an important discussion of their uses and inherent limitations, and a reconciliation of FFO, normalized FFO and FAD to our GAAP earnings, please refer to "Management's Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Financial Measures."

48



UNAUDITED PRO FORMA CONDENSED COMBINED CONSOLIDATED
FINANCIAL STATEMENTS

As of and For the Three Months Ended March 31, 2015 and
For the Year Ended December 31, 2014

        On April 6, 2015, Ventas announced its plan to spin off its post-acute/skilled nursing facility ("SNF") portfolio operated by private regional and local care providers (the "CCP Business"), thereby creating two separate, independent publicly traded companies.

        To accomplish this separation, Ventas created a newly formed Delaware corporation, Care Capital Properties, Inc. ("CCP"), to hold the CCP Business. CCP is currently a wholly owned subsidiary of Ventas. Prior to or concurrently with the separation, Ventas will engage in certain reorganization transactions that are designed to consolidate the ownership of its interests in 355 properties and certain loans receivable that comprise the CCP Business and contribute such interests to CCP. Pursuant to the separation and distribution agreement, Ventas will distribute all of the outstanding shares of CCP common stock owned by Ventas on a pro rata basis to the holders of record of Ventas common stock on the record date.

        The following unaudited pro forma condensed combined consolidated financial statements as of and for the three months ended March 31, 2015 and for the year ended December 31, 2014 have been derived from the historical combined consolidated financial statements included elsewhere in this information statement.

        The following unaudited pro forma condensed combined consolidated financial statements give effect to the separation of the CCP Business and the related transactions, including:

    the impact of certain assets included in the CCP Business that will not be transferred to us as part of the separation;

    the acquisition by Ventas in January 2015 of 20 properties from American Realty Capital Healthcare Trust, Inc. ("HCT") and 12 SNFs that will be transferred to us as part of the separation;

    the impact of a transition services agreement between us and Ventas;

    the anticipated incurrence by CCP of approximately $1.3 billion of new indebtedness, including the related transfer of substantially all of the proceeds thereof to Ventas, and the anticipated interest expense related thereto; and

    the distribution of approximately 84.0 million shares of CCP common stock by Ventas to Ventas stockholders, based on the distribution ratio of one share of CCP common stock for every four shares of Ventas common stock held on the record date.

        The unaudited pro forma condensed combined consolidated balance sheet assumes the separation and the related transactions occurred on March 31, 2015. The unaudited pro forma condensed combined consolidated statements of income presented for the three months ended March 31, 2015 and for the year ended December 31, 2014 assume the separation and the related transactions occurred on January 1, 2014. The pro forma adjustments are based on currently available information and assumptions we believe are reasonable, factually supportable, directly attributable to our separation from Ventas, and for purposes of the statements of income, are expected to have a continuing impact on our business. Our unaudited pro forma condensed combined consolidated financial statements and explanatory notes present how our financial statements may have appeared had we completed the above transactions as of the dates noted above.

        The following unaudited pro forma condensed combined consolidated financial statements were prepared in accordance with Article 11 of Regulation S-X, using the assumptions set forth in the notes

49


to our unaudited pro forma condensed combined consolidated financial statements. The unaudited pro forma condensed combined consolidated financial statements are presented for illustrative purposes only and do not purport to reflect the results we may achieve in future periods or the historical results that would have been obtained had the above transactions been completed on January 1, 2014 or as of March 31, 2015, as the case may be. The unaudited pro forma condensed combined consolidated financial statements also do not give effect to the potential impact of current financial conditions, any anticipated synergies, operating efficiencies or cost savings that may result from the transactions described above.

        The unaudited pro forma condensed combined consolidated financial statements are derived from and should be read in conjunction with the historical combined consolidated financial statements and accompanying notes included elsewhere in this information statement.

50



Unaudited Pro Forma Condensed Combined Consolidated Balance Sheet

March 31, 2015

(In thousands)

 
  Historical   Asset
Transfer
Adjustments
(A)
  Spin-Off
Adjustments
(B)
  Total
Pro Forma
 

Assets

                         

Net real estate investments

  $ 2,729,520   $ (100,766 ) $   $ 2,628,754  

Cash

    1,376     (1,359 )   5,000     5,017  

Goodwill

    162,705     (33,302 )       129,403  

Other assets

    22,423     (332 )   11,200     33,291  

Total assets

  $ 2,916,024   $ (135,759 ) $ 16,200   $ 2,796,465  

Liabilities and equity

                         

Liabilities:

                         

Senior notes payable and other debt

  $   $   $ 1,300,000   $ 1,300,000  

Tenant deposits

    52,958             52,958  

Lease intangible liabilities, net

    147,328     (1,519 )       145,809  

Accounts payable and other liabilities          

    4,729     (2,889 )       1,840  

Total liabilities

    205,015     (4,408 )   1,300,000     1,500,607  

Commitments and contingencies

                         

Equity:

                         

Total CCP equity

    2,706,205     (131,351 )   (1,283,800 )   1,291,054  

Noncontrolling interest

    4,804             4,804  

Total equity

    2,711,009     (131,351 )   (1,283,800 )   1,295,858  

Total liabilities and equity

  $ 2,916,024   $ (135,759 ) $ 16,200   $ 2,796,465  

   

See accompanying notes and management's assumptions to unaudited pro forma condensed combined
consolidated financial statements.

51



Unaudited Pro Forma Condensed Combined Consolidated Statement of Income

For the Three Months Ended March 31, 2015

(In thousands, except per share amounts)

 
  Historical   Asset
Transfer
Adjustments (C)
  2015
Acquisitions
Adjustments (D)
  Spin-Off
Adjustments
   
  Total
Pro Forma
 

Revenues:

                                   

Rental income, net

  $ 77,700   $ 1,095   $ 552   $       $ 79,347  

Income from investments in direct financing leases and loans

    872                     872  

Interest and other income

    1                     1  

Total revenues

    78,573     1,095     552             80,220  

Expenses:

                                   

Interest

            (3 )   12,430   (E)     12,427  

Depreciation and amortization

    31,241     491     459             32,191  

General, administrative and professional fees

    6,400     98     (650 )   902   (F)     6,750  

Merger-related expenses and deal costs

    3,248                     3,248  

Other

    415                     415  

Total expenses

    41,304     589     (194 )   13,332         55,031  

Net income

    37,269     506     746     (13,332 )       25,189  

Net income attributable to noncontrolling interest

    48                     48  

Net income attributable to CCP

  $ 37,221   $ 506   $ 746   $ (13,332 )     $ 25,141  

Net income attributable to CCP per common share

                                   

Basic

    N/A     N/A     N/A     N/A       $ 0.30  

Diluted

    N/A     N/A     N/A     N/A       $ 0.30  

Weighted average shares used in computing earnings per common share:

                                   

Basic

    N/A     N/A     N/A     83,961   (G)     83,961  

Diluted

    N/A     N/A     N/A     83,961   (G)     83,961  

   

See accompanying notes and management's assumptions to unaudited pro forma condensed combined
consolidated financial statements.

52



Unaudited Pro Forma Condensed Combined Consolidated Statement of Income

For the Year Ended December 31, 2014

(In thousands, except per share amounts)

 
  Historical   Asset
Transfer
Adjustments (C)
  2015
Acquisitions
Adjustments (D)
  Spin-Off
Adjustments
   
  Total
Pro Forma
 

Revenues:

                                   

Rental income, net

  $ 291,962   $ 3,674   $ 30,633   $       $ 326,269  

Income from investments in direct financing leases and loans

    3,400                     3,400  

Interest and other income

    2                     2  

Total revenues

    295,364     3,674     30,633             329,671  

Expenses:

                                   

Interest

            (35 )   49,720   (E)     49,685  

Depreciation and amortization

    100,381     1,784     14,749             116,914  

General, administrative and professional fees

    22,412     267         4,321   (F)     27,000  

Merger-related expenses and deal costs

    1,547                     1,547  

Other

    13,183                     13,183  

Total expenses

    137,523     2,051     14,714     54,041         208,329  

Income before real estate dispositions and noncontrolling interest

    157,841     1,623     15,919     (54,041 )       121,342  

Loss on real estate dispositions

    (61 )                   (61 )

Net income

    157,780     1,623     15,919     (54,041 )       121,281  

Net income attributable to noncontrolling interest

    185                     185  

Net income attributable to CCP

  $ 157,595   $ 1,623   $ 15,919   $ (54,041 )     $ 121,096  

Net income attributable to CCP per common share, including real estate dispositions

                                   

Basic

    N/A     N/A     N/A     N/A       $ 1.44  

Diluted

    N/A     N/A     N/A     N/A       $ 1.44  

Weighted average shares used in computing earnings per common share:

                                   

Basic

    N/A     N/A     N/A     83,961   (G)     83,961  

Diluted

    N/A     N/A     N/A     83,961   (G)     83,961  

   

See accompanying notes and management's assumptions to unaudited pro forma condensed combined
consolidated financial statements.

53



Notes and Management's Assumptions to Unaudited Pro Forma Condensed Combined
Consolidated Financial Statements

NOTE 1—BASIS OF PRO FORMA PRESENTATION

        On April 6, 2015, Ventas, Inc. ("Ventas") announced its plan to spin off its post-acute/skilled nursing facility ("SNF") portfolio operated by regional and local care providers (the "CCP Business"), thereby creating two separate, independent publicly-traded companies.

        To accomplish this separation, Ventas created a newly formed Delaware corporation, Care Capital Properties, Inc. ("CCP"), to hold the CCP Business. CCP is currently a wholly owned subsidiary of Ventas. Prior to or concurrently with the separation, Ventas will engage in certain reorganization transactions that are designed to consolidate the ownership of its interests in 355 properties and certain loans receivable that comprise the CCP Business and contribute such interests to CCP. Pursuant to the separation and distribution agreement, Ventas will distribute all of the outstanding shares of CCP common stock owned by Ventas on a pro rata basis to the holders of Ventas common stock on the record date. Unless otherwise indicated or except where the context otherwise requires, references to "we," "us," or "our" refer to CCP and its consolidated subsidiaries after giving effect to the transfer of the assets and liabilities from Ventas.

NOTE 2—ADJUSTMENTS TO UNAUDITED PRO FORMA CONDENSED COMBINED CONSOLIDATED BALANCE SHEET

    (A)
    Adjustments reflect certain real estate investments, other assets and liabilities (i) included in the historical assets and liabilities of the CCP Business that will not be transferred to CCP or (ii) not included in the historical assets and liabilities of the CCP Business that will be transferred to CCP. Also reflects adjustments to the acquisition date fair values relating to certain assets previously acquired by Ventas that will be transferred to CCP as part of the separation.

    (B)
    Reflects the incurrence of approximately $1.3 billion of new indebtedness, including the related transfer of substantially all of the proceeds thereof to Ventas, and the formation and capitalization of CCP. These estimated values are as follows (in millions):

Incurrence of new indebtedness

  $ 1,300  

Deferred financing fees, closing costs and legal expenses

    (13 )

Transfer to Ventas

    (1,282 )

Net cash proceeds

  $ 5  

NOTE 3—ADJUSTMENTS TO UNAUDITED PRO FORMA CONDENSED COMBINED CONSOLIDATED STATEMENTS OF INCOME

    (C)
    Reflects certain historical revenues and expenses (i) included in the historical operations of the CCP Business that will not be transferred to CCP or (ii) not included in the historical operations of the CCP Business that will be transferred to CCP.

    (D)
    Adjustments reflect the effect on CCP's historical combined consolidated statements of income in connection with the transfer of the additional 32 assets acquired by Ventas in January 2015, as if those assets were transferred on January 1, 2014. Included in net real estate investments is our initial estimate of the fair values of land, land improvements, buildings, furniture and equipment and in-place lease intangibles relating to these assets. Depreciation and amortization expense is recognized on a straight-line basis over the

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Notes and Management's Assumptions to Unaudited Pro Forma Condensed Combined
Consolidated Financial Statements (Continued)

NOTE 3—ADJUSTMENTS TO UNAUDITED PRO FORMA CONDENSED COMBINED CONSOLIDATED STATEMENTS OF INCOME (Continued)

      estimated useful lives of the assets. Buildings generally have a useful life not to exceed 35 years; land improvements, 15 years; and furniture and equipment, five years. In-place lease intangibles are amortized over the remaining life of the lease.

      The following table summarizes our initial estimate of fair value and weighted average useful lives, by asset category, as well as the related depreciation and amortization expense for the periods presented.

 
   
   
  Depreciation and Amortization Expense (in thousands)  
 
   
  Weighted
Average
Estimate of
Useful Lives
(in years)
 
Asset Category
  Initial Estimate
of Fair Value
(in thousands)
  For the Three
Months Ended
March 31, 2015
  For the
Year Ended
December 31,
2014
 

Land

  $ 21,100     N/A   $   $  

Land improvements

    8,071     12.4     223     894  

Building

    325,508     33.2     2,580     10,320  

Furniture and equipment

    16,044     5.0     802     3,209  

In-place lease intangibles

    4,671     14.5     81     326  

Total

  $ 375,394         $ 3,686   $ 14,749  
    (E)
    Reflects the the associated interest expense related to the incurrence of approximately $1.3 billion of new indebtedness with a weighted average interest rate of approximately 3.8% per year.

    (F)
    Reflects the transition services agreement with Ventas pursuant to which Ventas will provide certain support services for CCP on a transitional basis until August 31, 2016, subject to extension upon mutual agreement. Pursuant to the transition services agreement, Ventas will continue to provide CCP with certain corporate support services that the CCP Business has historically received from Ventas and will allow CCP to operate independently prior to establishing a standalone support services infrastructure.

    (G)
    Reflects the distribution of all of the outstanding shares of CCP common stock owned by Ventas on the basis of one share of CCP common stock for every four shares of Ventas common stock held as of the close of business on the record date.

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Notes and Management's Assumptions to Unaudited Pro Forma Condensed Combined
Consolidated Financial Statements (Continued)

NOTE 4—FUNDS FROM OPERATIONS AND NORMALIZED FUNDS FROM OPERATIONS

        CCP's historical and pro forma funds from operations ("FFO") and normalized FFO for the three months ended March 31, 2015 are summarized as follows (in thousands):

 
  CCP
Historical
  Asset
Transfer
Adjustments
  2015
Acquisitions
Adjustments
  Spin-Off
Adjustments
  Total
Pro Forma
 

Net income attributable to CCP

  $ 37,221   $ 506   $ 746   $ (13,332 ) $ 25,141  

Adjustments:

                               

Real estate depreciation and amortization

    31,149     491     459         32,099  

Real estate depreciation related to noncontrolling interest

    (67 )               (67 )

FFO attributable to CCP

    68,303     997     1,205     (13,332 )   57,173  

Adjustments:

                               

Merger-related expenses and deal costs          

    3,248                 3,248  

Normalized FFO attributable to CCP

  $ 71,551   $ 997   $ 1,205   $ (13,332 ) $ 60,421  

        CCP's pro forma FFO and normalized FFO per diluted share outstanding for the three months ended March 31, 2015 follows (in thousands, except per share amounts)(1):

 
  Total
Pro Forma
 

Net income attributable to CCP

  $ 0.30  

Adjustments:

       

Real estate depreciation and amortization

    0.38  

Real estate depreciation related to noncontrolling interest

    (0.00 )

FFO attributable to CCP

    0.68  

Adjustments:

       

Merger-related expenses and deal costs

    0.04  

Normalized FFO attributable to CCP

  $ 0.72  

Dilutive shares outstanding used in computing FFO and normalized FFO per common share

    83,961  

(1)
Per share amounts may not add due to rounding.

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Notes and Management's Assumptions to Unaudited Pro Forma Condensed Combined
Consolidated Financial Statements (Continued)

NOTE 4—FUNDS FROM OPERATIONS AND NORMALIZED FUNDS FROM OPERATIONS (Continued)

        CCP's historical and pro forma FFO and normalized FFO for the year ended December 31, 2014 are summarized as follows (in thousands):

 
  CCP
Historical
  Asset
Transfer
Adjustments
  2015
Acquisitions
Adjustments
  Spin-Off
Adjustments
  Total
Pro Forma
 

Net income attributable to CCP

  $ 157,595   $ 1,623   $ 15,919   $ (54,041 ) $ 121,096  

Adjustments:

                               

Real estate depreciation and amortization

    99,968     1,784     14,749         116,501  

Real estate depreciation related to noncontrolling interest

    (427 )               (427 )

Loss on real estate dispositions

    61                 61  

FFO attributable to CCP

    257,197     3,407     30,668     (54,041 )   237,231  

Adjustments:

                               

Merger-related expenses and deal costs

    1,547                 1,547  

Normalized FFO attributable to CCP

  $ 258,744   $ 3,407   $ 30,668   $ (54,041 ) $ 238,778  

        CCP's pro forma FFO and normalized FFO per diluted share outstanding for the year ended December 31, 2014 follows (in thousands, except per share amounts)(1):

 
  Total
Pro Forma
 

Net income attributable to CCP

  $ 1.44  

Adjustments:

       

Real estate depreciation and amortization

    1.39  

Real estate depreciation related to noncontrolling interest

    (0.01 )

Loss on real estate dispositions

    0.00  

FFO attributable to CCP

    2.83  

Adjustments:

       

Merger-related expenses and deal costs

    0.02  

Normalized FFO attributable to CCP

  $ 2.84  

Dilutive shares outstanding used in computing FFO and normalized FFO per common share

    83,961  

(1)
Per share amounts may not add due to rounding.

        Unaudited pro forma FFO and normalized FFO are presented herein for informational purposes only and are based on available information and assumptions that CCP's management believes to be reasonable; however, they are not necessarily indicative of what CCP's FFO or normalized FFO actually would have been had CCP completed the above transactions as of January 1, 2014.

        Historical cost accounting for real estate assets implicitly assumes that the value of real estate assets diminishes predictably over time. However, since real estate values historically have risen or fallen with market conditions, many industry investors deem presentations of operating results for real

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Notes and Management's Assumptions to Unaudited Pro Forma Condensed Combined
Consolidated Financial Statements (Continued)

NOTE 4—FUNDS FROM OPERATIONS AND NORMALIZED FUNDS FROM OPERATIONS (Continued)

estate companies that use historical cost accounting to be insufficient by themselves. For that reason, we consider FFO and normalized FFO to be appropriate measures of operating performance of an equity REIT. In particular, we believe that normalized FFO is useful because it allows investors, analysts and our management to compare our operating performance to the operating performance of other real estate companies and between periods on a consistent basis without having to account for differences caused by unanticipated items and other events such as transactions and litigation.

        We use the National Association of Real Estate Investment Trusts ("NAREIT") definition of FFO. NAREIT defines FFO as net income attributable to CCP (computed in accordance with GAAP), excluding gains (or losses) from sales of real estate property and impairment write-downs of depreciable real estate, plus real estate depreciation and amortization, and after adjustments for joint ventures. Adjustments for joint ventures will be calculated to reflect FFO on the same basis. We define normalized FFO as FFO excluding merger-related expenses and deal costs (which may be recurring in nature).

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

        You should read the following discussion in conjunction with the historical combined consolidated financial statements and the notes thereto and the unaudited pro forma condensed combined consolidated financial statements and the notes thereto included elsewhere in this information statement. This Management's Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements. The matters discussed in these forward-looking statements are subject to risks, uncertainties, and other factors that could cause actual results to differ materially from those made, projected or implied in the forward-looking statements. Please see "Risk Factors" and "Cautionary Statement Concerning Forward-Looking Statements" for a discussion of the risks, uncertainties and assumptions associated with these statements.

        On April 6, 2015, Ventas, Inc. ("Ventas") announced its plan to spin off its post-acute/skilled nursing facility ("SNF") portfolio operated by regional and local care providers (the "CCP Business"), thereby creating two separate, independent publicly traded companies.

        To accomplish this separation, Ventas created a newly formed Delaware corporation, Care Capital Properties, Inc. ("CCP"), to hold the CCP Business. CCP is currently a wholly owned subsidiary of Ventas. Prior to or concurrently with the separation, Ventas will engage in certain reorganization transactions that are designed to consolidate the ownership of its interests in 355 properties and certain loans receivable that comprise the CCP Business and contribute such interests to CCP. The separation will be effected by means of a pro rata distribution of all of the outstanding shares of CCP common stock owned by Ventas to the holders of Ventas common stock on the record date. Unless otherwise indicated or except where the context otherwise requires, references to "we," "us," or "our" refer to the CCP Business after giving effect to the transfer of the assets and liabilities from Ventas.

        To date, we have not conducted any business as a separate company and have no material assets or liabilities. The operations of the CCP Business to be transferred to CCP by Ventas are presented as if the transferred business was our business for all historical periods described and at the carrying value of such assets and liabilities reflected in Ventas's books and records.

        Ventas has elected to be treated as a real estate investment trust ("REIT") under the applicable provisions of the Internal Revenue Code of 1986, as amended (the "Code"), for every year beginning with the year ended December 31, 1999. Accordingly, Ventas is generally not subject to federal income tax. We intend to elect to be treated as a REIT as of the effective date of the spin-off under the applicable provisions of the Code.

        As of March 31, 2015, the CCP Business consisted of 358 properties (including two properties that will not be transferred to CCP as part of the spin-off and four properties that were classified as held for sale). In addition, we originate and manage a small portfolio of secured and unsecured loans and other investments made primarily to SNF operators or secured by SNF assets. Subsequent to the initial filing of the registration statement on Form 10, of which this information statement forms a part, we have made additional determinations regarding the specific properties that are part of the CCP Business and will be transferred to CCP in the separation. Our combined consolidated financial statements for future periods will reflect any changes in such determinations.

        The historical combined consolidated financial statements included elsewhere in this information statement have been prepared on a standalone basis and are derived from Ventas's consolidated financial statements and accounting records. The combined consolidated financial statements reflect our financial position, results of operations and cash flows as the CCP Business was operated as part of Ventas prior to the distribution, in conformity with U.S. generally accepted accounting principles ("GAAP").

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        Our equity balance (net parent investment) in the combined consolidated financial statements represents the excess of total assets over total liabilities, including the intercompany balances between CCP and Ventas. Net parent investment is primarily impacted by contributions from Ventas, which are the result of treasury activities and net funding provided by or distributed to Ventas prior to the separation.

        The following discussion provides information that management believes is relevant to an understanding and assessment of CCP's combined consolidated financial condition and results of operations. You should read this discussion in conjunction with our historical combined consolidated financial statements and our pro forma condensed combined consolidated financial statements and the notes thereto included elsewhere in this information statement, as they will help you understand:

    Our company and the environment in which we operate;

    Recent developments;

    Our critical accounting policies and estimates;

    Our results of operations for the three months ended March 31, 2015 and 2014 and for the years ended December 31, 2014, 2013 and 2012;

    How we manage our assets and liabilities;

    Our liquidity and capital resources; and

    Our cash flows.

Corporate and Operating Environment

        We have a diversified portfolio of SNFs and other healthcare properties located throughout the U.S. As of March 31, 2015, this portfolio included 100% ownership interests in 352 properties (including two properties that will not be transferred to CCP as part of the spin-off and four properties that were classified as held for sale) and controlling joint venture interests in six properties.

        Following the spin-off, we will operate through one reportable business segment: triple-net leased properties. We primarily generate our revenues by leasing our properties to third-party operators under triple-net leases, pursuant to which the tenants are obligated to pay all property-related expenses, including maintenance, utilities, repairs, taxes, insurance and capital expenditures.

        We intend to elect to be treated as a REIT under the applicable provisions of the Code, beginning with the taxable year in which the distribution occurs.

Recent Developments

    In January 2015, Ventas completed its acquisition of American Realty Capital Healthcare Trust, Inc. ("HCT") in a stock and cash transaction, which added 152 properties to Ventas's portfolio, including 14 SNFs, two specialty hospitals and four seniors housing properties that will be transferred to CCP as part of the separation. Also in January 2015, Ventas completed the acquisition of 12 SNFs for an aggregate purchase price of $234.9 million, all of which will be transferred to CCP as part of the separation.

    In April 2015, a wholly owned subsidiary of CCP entered into a definitive agreement to acquire a specialty healthcare and seniors housing valuation firm in exchange for the issuance of shares of CCP common stock having a value of approximately $11 million, subject to a potential post-closing issuance of a limited number of additional shares.

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Critical Accounting Policies and Estimates

        Our historical combined consolidated financial statements included elsewhere in this information statement have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP") set forth in the Accounting Standards Codification ("ASC"), as published by the Financial Accounting Standards Board ("FASB"). GAAP requires us to make estimates and assumptions regarding future events that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. We base these estimates on our experience and assumptions we believe to be reasonable under the circumstances. However, if our judgment or interpretation of the facts and circumstances relating to various transactions or other matters had been different, we may have applied a different accounting treatment, resulting in a different presentation of our financial statements. We periodically reevaluate our estimates and assumptions, and in the event they prove to be different from actual results, we make adjustments in subsequent periods to reflect more current estimates and assumptions about matters that are inherently uncertain. We believe that the critical accounting policies described below, among others, affect our more significant estimates and judgments used in the preparation of our financial statements. For more information regarding our critical accounting policies, see "Note 2—Accounting Policies" of the Notes to Combined Consolidated Financial Statements included elsewhere in this information statement.

Principles of Combination and Consolidation and Basis of Presentation

        The accompanying historical combined consolidated financial statements of the CCP Business do not represent the financial position and results of operations of a legal entity but rather a combination of entities under common control that have been "carved out" of Ventas's consolidated financial statements and reflect significant assumptions and allocations. All intercompany transactions and balances have been eliminated in consolidation, and our net earnings are reduced by the portion of net earnings attributable to noncontrolling interests.

        These combined consolidated financial statements include the attribution of certain asset and liabilities that have historically been held at the Ventas corporate level, but which are specifically identifiable or attributable to us. All transactions between Ventas and the CCP Business are considered to be effectively settled in the combined consolidated financial statements at the time the transaction is recorded. The total net effect of the settlement of these intercompany transactions is reflected in the combined consolidated statements of cash flows as a financing activity and in the combined consolidated balance sheets as net parent investment. No other related party transactions or relationships are reflected in our combined consolidated financial statements.

        These combined consolidated financial statements include an allocation of expenses related to certain Ventas corporate functions, including executive oversight, treasury, finance, legal, human resources, tax planning, internal audit, financial reporting, information technology and investor relations. These expenses have been allocated to us based on direct usage or benefit where specifically identifiable, with the remainder allocated primarily on a pro rata basis of revenue, headcount or other measures. We consider the expense methodology and results to be reasonable for all periods presented. However, the allocations may not be indicative of the actual expense that would have been incurred had we operated as an independent, publicly traded company for the periods presented. We believe that the assumptions and estimates used in preparation of the underlying combined consolidated financial statements are reasonable. However, the combined consolidated financial statements herein do not necessarily reflect what our financial position, results of operations or cash flows would have been if we had been a standalone company during the periods presented. As a result, historical financial information is not necessarily indicative of our future results of operations, financial position or cash flows.

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Impairment of Long-Lived and Intangible Assets and Goodwill

        We periodically evaluate our long-lived assets, primarily consisting of investments in real estate, for impairment indicators. If indicators of impairment are present, we evaluate the carrying value of the related real estate investments in relation to the future undiscounted cash flows of the underlying operations. In performing this evaluation, we consider market conditions and our current intentions with respect to holding or disposing of the asset. We adjust the net book value of leased properties and other long-lived assets to fair value if the sum of the expected future undiscounted cash flows, including sales proceeds, is less than book value. We recognize any shortfall from carrying value as an impairment loss in the current period.

        If impairment indicators arise with respect to intangible assets with finite useful lives, we evaluate impairment by comparing the carrying amount of the asset to the estimated future undiscounted net cash flows expected to be generated by the asset. If estimated future undiscounted net cash flows are less than the carrying amount of the asset, then we estimate the fair value of the asset and compare the estimated fair value to the intangible asset's carrying value. We recognize any shortfall from carrying value as an impairment loss in the current period.

        We test goodwill for impairment at least annually, and more frequently if indicators arise. We first assess qualitative factors, such as current macroeconomic conditions, state of the equity and capital markets and our overall financial and operating performance, to determine the likelihood that the fair value of the reporting unit is less than its carrying amount. If we determine it is more likely than not that the fair value of the reporting unit is less than its carrying amount, we proceed with the two-step approach to evaluating impairment. First, we estimate the fair value of the reporting unit and compare it to the reporting unit's carrying value. If the carrying value exceeds fair value, we proceed with the second step, which requires us to assign the fair value of the reporting unit to all of the assets and liabilities of the reporting unit as if it had been acquired in a business combination at the date of the impairment test. The excess fair value of the reporting unit over the amounts assigned to the assets and liabilities is the implied value of goodwill and is used to determine the amount of impairment. We recognize an impairment loss to the extent the carrying value of goodwill exceeds the implied value in the current period.

        Estimates of fair value used in our evaluation of goodwill, investments in real estate and intangible assets are based upon discounted future cash flow projections or other acceptable valuation techniques that are based, in turn, upon various estimates and assumptions, such as revenue and expense growth rates, capitalization rates, discount rates or other available market data. Our ability to accurately predict future operating results and cash flows and to estimate and allocate fair values impacts the timing and recognition of impairments. While we believe our assumptions are reasonable, changes in these assumptions may have a material impact on our financial results.

Revenue Recognition

    Triple-Net Leased Properties

        Certain of our triple-net leases provide for periodic and determinable increases in base rent. We recognize base rental revenues under these leases on a straight-line basis over the applicable lease term when collectability is reasonably assured. Recognizing rental income on a straight-line basis generally results in recognized revenues during the first half of a lease term exceeding the cash amounts contractually due from our tenants, creating a straight-line rent receivable that is included in other assets on our combined consolidated balance sheets.

        Our remaining leases provide for periodic increases in base rent only if certain revenue parameters or other substantive contingencies are met. We recognize the increased rental revenue under these

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leases as the related parameters or contingencies are met, rather than on a straight-line basis over the applicable lease term.

        We recognize income from rent, lease termination fees and all other income when all of the following criteria are met in accordance with Securities and Exchange Commission ("SEC") Staff Accounting Bulletin 104: (i) the applicable agreement has been fully executed and delivered; (ii) services have been rendered; (iii) the amount is fixed or determinable; and (iv) collectability is reasonably assured.

    Allowances

        We assess the collectability of our rent receivables, including straight-line rent receivables. We base our assessment of the collectability of rent receivables (other than straight-line rent receivables) on several factors, including, among other things, payment history, the financial strength of the tenant and any guarantors, the value of the underlying collateral, if any, and current economic conditions. If our evaluation of these factors indicates it is probable that we will be unable to recover the full value of the receivable, we provide a reserve against the portion of the receivable that we estimate may not be recovered. We also base our assessment of the collectability of straight-line rent receivables on several factors, including, among other things, the financial strength of the tenant and any guarantors, the historical operations and operating trends of the property, the historical payment pattern of the tenant and the type of property. If our evaluation of these factors indicates it is probable that we will be unable to receive the rent payments due in the future, we provide a reserve against the recognized straight-line rent receivable asset for the portion, up to its full value, that we estimate may not be recovered. If we change our assumptions or estimates regarding the collectability of future rent payments required by a lease, we may adjust our reserve to increase or reduce the rental revenue recognized in the period we make such change in our assumptions or estimates.

    Loans

        We recognize interest income from loans, including discounts and premiums, using the effective interest method when collectability is reasonably assured. We apply the effective interest method on a loan-by-loan basis and recognize discounts and premiums as yield adjustments over the related loan term. We recognize interest income on an impaired loan to the extent our estimate of the fair value of the collateral is sufficient to support the balance of the loan, other receivables and all related accrued interest. When the balance of the loan, other receivables and all related accrued interest is equal to or less than our estimate of the fair value of the collateral, we recognize interest income on a cash basis. We provide a reserve against an impaired loan to the extent our total investment in the loan exceeds our estimate of the fair value of the loan collateral.

Federal Income Tax

        Ventas has elected to be treated as a REIT under the applicable provisions of Code for every year beginning with the year ended December 31, 1999. Accordingly, Ventas is generally not subject to federal income tax. We intend to elect to be treated as a REIT under the applicable provisions of the Code, beginning with the taxable year in which the distribution occurs.

Recently Issued or Adopted Accounting Standards

        In June 2011, the FASB issued Accounting Standards Update ("ASU") 2011-05, Presentation of Comprehensive Income ("ASU 2011-05"), which amends ASC Topic 220, Comprehensive Income. ASU 2011-05 requires entities to present comprehensive income in either: (i) one continuous financial statement or (ii) two separate but consecutive statements that display net income and the components of other comprehensive income. Totals and individual components of both net income and other

63


comprehensive income must be included in either presentation. We adopted the provisions of ASU 2011-05 on January 1, 2012. This adoption had no impact on our combined consolidated financial statements, as we have no applicable components of other comprehensive income.

        In 2014, the FASB issued ASU 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity ("ASU 2014-08"), which raises the threshold for disposals to qualify as discontinued operations. A discontinued operation is defined as: (1) a component of an entity or group of components that has been disposed of or classified as held for sale and represents a strategic shift that has or will have a major effect on an entity's operations and financial results; or (2) an acquired business that is classified as held for sale on the acquisition date. ASU 2014-08 also requires additional disclosures regarding discontinued operations, as well as material disposals that do not meet the definition of discontinued operations. The combined consolidated financial statements reflect the adoption of ASU 2014-08 as of January 1, 2012. There were no properties that met the definition of discontinued operations for any of the periods presented.

        In 2014, the FASB also issued ASU 2014-09, Revenue From Contracts With Customers ("ASU 2014-09"), which outlines a comprehensive model for entities to use in accounting for revenue arising from contracts with customers. ASU 2014-09 states that "an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services." While ASU 2014-09 specifically references contracts with customers, it may apply to certain other transactions such as the sale of real estate or equipment. ASU 2014-09 is effective for us beginning January 1, 2018, although on April 1, 2015, the FASB proposed a one-year deferral of the effective date for ASU 2014-09. We are continuing to evaluate this guidance; however, we do not expect its adoption to have a significant impact on our combined consolidated financial statements, as substantially all of our revenue consists of rental income from leasing arrangements, which are specifically excluded from ASU 2014-09.

        In 2015, the FASB ASU 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis ("ASU 2015-02") which makes certain changes to both the variable interest model and the voting model including changes to (1) the identification of variable interests (fees paid to a decision maker or service provider), (2) the variable interest entity characteristics for a limited partnership or similar entity and (3) the primary beneficiary determination. ASU 2015-02 is effective for us beginning January 1, 2016. We are continuing to evaluate this guidance; however, we do not expect its adoption to have a significant impact on our combined consolidated financial statements.

        In addition, Section 107 of the JOBS Act provides that an "emerging growth company" can take advantage of the extended transition period provided in Section 13(a) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected not to take advantage of the benefits of this extended transition period and, therefore, will be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies. This election is irrevocable.

Components of CCP Revenues and Expenses Following the Spin-Off

Rental Income, Net

        Following the separation and distribution, our revenues will be primarily attributable to rental income earned in connection with the leasing of our SNFs and other healthcare properties to third-party operators pursuant to triple-net leases. We do not expect to incur direct operating expenses in connection with these triple-net leases, as they obligate the tenant to pay all property-related expenses, including maintenance, utilities, repairs, taxes, insurance and capital expenditures.

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        Our revenues will generally consist of fixed rental amounts (subject to annual contractual escalations) received from our tenants in accordance with the applicable lease terms and will not vary based on the underlying operating performance of the properties. Therefore, while occupancy rates may affect the profitability of our tenants' operations, they will not have a direct impact on our revenues or financial results.

        The following table sets forth average continuing occupancy rates related to the properties we owned at March 31, 2015 for the fourth quarter of 2014 (which is the most recent information available to us from our tenants).

 
  Number of
Properties
Owned at
March 31, 2015(1)
  Average
Occupancy
For the Three
Months Ended
December 31, 2014(1)
 

SNFs

    294     78.8 %

Specialty hospitals and healthcare assets

    6     79.2  

Seniors housing communities

    12     83.2  

(1)
Excludes properties sold or classified as held for sale as of March 31, 2015 and certain properties for which we do not receive occupancy information. Also excludes properties acquired during the three months ended March 31, 2015.

        The occupancy data included in the table above has been obtained from third-party operators who may perform such computations using different methodologies and/or on an inconsistent basis from period to period. While we have no reason to believe that the information we receive from our operators is inaccurate in any material respect, we cannot and do not verify this information either through an independent investigation or otherwise.

Interest Expense

        We currently have no outstanding debt. However, we expect to incur interest expense from future borrowings and the amortization of debt issuance costs related to our future indebtedness.

Depreciation and Amortization

        We will incur depreciation and amortization expense related to the properties transferred to us from Ventas and any properties that we may acquire in the future.

General, Administrative and Professional Fees

        The combined consolidated financial statements reflect our operating results and financial position as we were operated by Ventas, rather than as an independent company. We will incur additional expenses to operate as an independent company, including costs for various corporate headquarters functions and incremental costs to operate a standalone support services infrastructure.

        We will enter into a transition services agreement with Ventas pursuant to which Ventas will provide certain support services for us on a transitional basis until August 31, 2016, subject to extension upon mutual agreement. Pursuant to the transition services agreement, Ventas will continue to provide us with certain corporate support services that we have historically received from Ventas and will allow us to operate independently prior to establishing a standalone support services infrastructure. During the transition period, we expect to incur non-recurring expenses to expand our infrastructure, some of which may be redundant with costs incurred under the transition services agreement with Ventas.

65


Results of Historical Operations

Three Months Ended March 31, 2015 and 2014

        The table below shows the results of operations for the CCP Business for the three months ended March 31, 2015 and 2014 and the effect of changes in those results from period to period on our net income attributable to CCP.

 
  For the Three
Months Ended
March 31,
  Increase
(Decrease) to
Net Income
 
 
  2015   2014   $   %  
 
  (Dollars in thousands)
 

Revenues:

                         

Rental income, net

  $ 77,700   $ 74,398   $ 3,302     4.4 %

Income from investments in direct financing leases and loans

    872     850     22     2.6  

Interest and other income

    1     1          

Total revenues

    78,573     75,249     3,324     4.4  

Expenses:

                         

Depreciation and amortization

    31,241     26,358     (4,883 )   (18.5 )

General, administrative and professional fees

    6,400     6,493     93     1.4  

Merger-related expenses and deal costs

    3,248         (3,248 )   nm  

Other

    415     988     573     58.0  

Total expenses

    41,304     33,839     (7,465 )   (22.1 )

Net income

    37,269     41,410     (4,141 )   (10.0 )

Net income attributable to noncontrolling interest

    48     45     (3 )   (6.7 )

Net income attributable to CCP

  $ 37,221   $ 41,365     (4,144 )   (10.0 )

    nm—not meaningful

    Rental Income, Net

        Rental income increased during the three months ended March 31, 2015 over the prior year primarily due to rent attributable to properties acquired by Ventas in January 2015 that will be transferred to CCP as part of the separation and contractual rent escalations pursuant to the terms of our existing leases, partially offset by the re-establishment of market rental levels for certain properties that we re-leased to new operators during 2014 and 2015 as a result of the re-leasing process described below.

        The following table compares results of continuing operations for our 320 same-store properties. Throughout this discussion, "same-store" refers to properties that we owned for the full period in both comparison periods.

 
  For the Three
Months Ended
March 31,
  Increase
(Decrease)
to Rental
Income, Net
 
 
  2015   2014   $   %  
 
  (Dollars in thousands)
 

Rental income

  $ 70,140   $ 73,994   $ (3,854 )   (5.2 )%

        Same-store rental income decreased during the three months ended March 31, 2015 over the prior year primarily as a result of the proactive process undertaken to re-lease to new operators certain properties whose leases with the former operator were scheduled to expire in 2014, partially offset by contractual rent escalations pursuant to the terms of our existing leases. In the course of the re-leasing

66


process, we acquired a significant number of new tenant relationships and effectively re-established market rental levels for the transitioned properties based on the expected future cash flows at those properties.

    Depreciation and Amortization

        Depreciation and amortization expense increased during the three months ended March 31, 2015 compared to the same period in 2014 primarily due to the properties acquired during January 2015. In addition, we recognized $5.2 million of impairments on real estate assets during the three months ended March 31, 2015, compared to $3.7 million during the same period in 2014.

    Merger-Related Expenses and Deal Costs

        Merger-related expenses and deal costs for both periods consist of transition, integration, deal and severance-related expenses primarily related to consummated transactions. The increase for the three months ended March 31, 2015 over the prior year is primarily due to the HCT acquisition.

    Other

        Other consists primarily of certain unreimbursable expenses related to our triple-net leased portfolio.

Years Ended December 31, 2014 and 2013

        The table below shows the results of operations for the CCP Business for the years ended December 31, 2014 and 2013 and the effect of changes in those results from period to period on our net income attributable to CCP.

 
  For the Year Ended
December 31,
  Increase (Decrease)
to Net Income
 
 
  2014   2013   $   %  
 
  (Dollars in thousands)
 

Revenues:

                         

Rental income, net

  $ 291,962   $ 287,794   $ 4,168     1.4 %

Income from investments in direct financing leases and loans

    3,400     3,813     (413 )   (10.8 )

Interest and other income

    2     25     (23 )   (92.0 )

Total revenues

    295,364     291,632     3,732     1.3  

Expenses:

                         

Depreciation and amortization

    100,381     93,187     (7,194 )   (7.7 )

General, administrative and professional fees

    22,412     22,552     140     0.6  

Merger-related expenses and deal costs

    1,547         (1,547 )   nm  

Other

    13,183     1,368     (11,815 )   nm  

Total expenses

    137,523     117,107     (20,416 )   (17.4 )

Income before real estate dispositions and noncontrolling interest

    157,841     174,525     (16,684 )   (9.6 )

Loss on real estate dispositions

    (61 )   (15 )   (46 )   nm  

Net income

    157,780     174,510     (16,730 )   (9.6 )

Net income attributable to noncontrolling interest

    185     220     35     15.9  

Net income attributable to CCP

  $ 157,595   $ 174,290     (16,695 )   (9.6 )

nm—not meaningful

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    Rental Income, Net

        Rental income increased in 2014 over the prior year primarily due to contractual escalations in rent pursuant to the terms of our leases, and net increases in base and other rent under certain of our leases.

        The following table compares results of continuing operations for our 321 same-store properties.

 
  For the Year Ended
December 31,
  Increase
(Decrease)
to Rental
Income, Net
 
 
  2014   2013   $   %  
 
  (Dollars in thousands)
 

Rental income

  $ 290,582   $ 286,136   $ 4,446     1.6 %

    Income from Investments in Direct Financing Leases and Loans

        Income from investments in direct financing leases and loans decreased in 2014 over the prior year due primarily to the final repayment of two secured loans receivable in 2013.

    Depreciation and Amortization

        Depreciation and amortization expense increased in 2014 primarily due to real estate impairments recorded in 2014.

    Merger-Related Expenses and Deal Costs

        Merger-related expenses and deal costs in 2014 consist of transition, integration, deal and severance-related expenses primarily related to consummated transactions. No similar transactions occurred in 2013.

    Other

        Other consists primarily of certain unreimbursable expenses related to our triple-net leased portfolio. In 2014, this includes a $10.0 million payment made in relation to the transfer of certain properties to a replacement operator.

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Years Ended December 31, 2013 and 2012

        The table below shows the CCP Business results of operations for the years ended December 31, 2013 and 2012 and the effect of changes in those results from period to period on our net income attributable to CCP.

 
  For the Year Ended
December 31,
  Increase
(Decrease)
to Net Income
 
 
  2013   2012   $   %  
 
  (Dollars in thousands)
 

Revenues:

                         

Rental income, net

  $ 287,794   $ 285,998   $ 1,796     0.6 %

Income from investments in direct financing leases and loans

    3,813     4,516     (703 )   (15.6 )

Interest and other income

    25     23     2     8.7  

Total revenues

    291,632     290,537     1,095     0.4  

Depreciation and amortization

   
93,187
   
98,374
   
5,187
   
5.3
 

General, administrative and professional fees

    22,552     18,643     (3,909 )   (21.0 )

Merger-related expenses and deal costs

        565     565     nm  

Other

    1,368     187     (1,181 )   nm  

Total expenses

    117,107     117,769     662     0.6  

Income before real estate dispositions and noncontrolling interest

    174,525     172,768     1,757     1.0  

Loss on real estate dispositions

    (15 )   (28 )   13     46.4  

Net income

    174,510     172,740     1,770     1.0  

Net income attributable to noncontrolling interest, net of tax

    220     319     99     31.0  

Net income attributable to CCP

  $ 174,290   $ 172,421     1,869     1.1  

nm—not meaningful

    Rental Income, Net

        Rental income increased in 2013 over the prior year primarily due to contractual rent escalations pursuant to the terms of our leases, as well as increases in base and other rent under certain of our existing triple-net leases.

        The following table compares results of continuing operations for our 323 same-store properties.

 
  For the Year Ended
December 31,
  Increase
(Decrease)
to Rental
Income, Net
 
 
  2013   2012   $   %  
 
  (Dollars in thousands)
 

Rental income

  $ 284,936   $ 284,005   $ 931     0.3 %

    Income from Investments in Direct Financing Leases and Loans

        Income from investments in direct financing leases and loans decreased in 2013 over the prior year due primarily to the final repayment of two secured loans receivable in 2013, one of which occurred early in the year.

69


    General, Administrative and Professional Fees

        General, administrative and professional fees increased in 2013 primarily due to organizational growth.

    Merger-Related Expenses and Deal Costs

        Merger-related expenses and deal costs in 2012 consist of transition and integration expenses related to consummated transactions and deal costs. No similar transactions occurred in 2013.

    Other

        Other primarily includes certain unreimbursable expenses related to our triple-net leased portfolio.

Non-GAAP Financial Measures

        We believe that net income, as defined by GAAP, is the most appropriate earnings measurement. However, we consider certain non-GAAP financial measures to be useful supplemental measures of our operating performance. A non-GAAP financial measure is a measure of historical or future financial performance, financial position or cash flows that excludes or includes amounts that are not excluded from or included in the most directly comparable measure calculated and presented in accordance with GAAP. Described below are the non-GAAP financial measures used by management to evaluate our operating performance and that we consider most useful to investors, together with reconciliations of these measures to the most directly comparable GAAP measures.

        The non-GAAP financial measures we present in this information statement may not be comparable to those presented by other real estate companies due to the fact that not all real estate companies use the same definitions. You should not consider these measures as alternatives to net income (determined in accordance with GAAP) as indicators of our financial performance or as alternatives to cash flow from operating activities (determined in accordance with GAAP) as measures of our liquidity, nor are these measures necessarily indicative of sufficient cash flow to fund all of our needs. In order to facilitate a clear understanding of our combined consolidated historical operating results, you should examine these measures in conjunction with net income as presented in our combined consolidated financial statements and other financial data included elsewhere in this information statement.

Funds From Operations, Normalized Funds From Operations and Funds Available for Distribution

        Historical cost accounting for real estate assets implicitly assumes that the value of real estate assets diminishes predictably over time. However, since real estate values historically have risen or fallen with market conditions, many industry investors deem presentations of operating results for real estate companies that use historical cost accounting to be insufficient by themselves. For that reason, we consider Funds From Operations ("FFO"), normalized FFO and Funds Available for Distribution ("FAD") to be appropriate measures of operating performance of an equity REIT. In particular, we believe that normalized FFO is useful because it allows investors, analysts and our management to compare our operating performance to the operating performance of other real estate companies and between periods on a consistent basis without having to account for differences caused by unanticipated items and other events such as transactions and litigation.

        We use the National Association of Real Estate Investment Trusts ("NAREIT") definition of FFO. NAREIT defines FFO as net income attributable to CCP (computed in accordance with GAAP), excluding gains (or losses) from sales of real estate property and impairment write-downs of depreciable real estate, plus real estate depreciation and amortization, and after adjustments for joint ventures. Adjustments for joint ventures will be calculated to reflect FFO on the same basis. We define normalized FFO as FFO excluding merger-related expenses and deal costs (which may be recurring in nature). FAD represents normalized FFO excluding amortization of above and below market lease

70


intangibles, accretion of direct financing lease, other amortization, straight-line rental adjustments and non-revenue enhancing capital expenditures, but including merger-related expenses and deal costs.

        The following table summarizes our FFO, normalized FFO and FAD for the periods presented:

 
  For the Three
Months Ended
March 31,
  For the Year Ended December 31,  
 
  2015   2014   2014   2013   2012  
 
  (In thousands)
 

Net income attributable to CCP

  $ 37,221   $ 41,365   $ 157,595   $ 174,290   $ 172,421  

Adjustments:

                               

Real estate depreciation and amortization

    31,149     26,258     99,968     92,817     98,092  

Real estate depreciation related to noncontrolling interest

    (67 )   (107 )   (427 )   (471 )   (573 )

Loss on real estate dispositions

            61     15     28  

FFO attributable to CCP

    68,303     67,516     257,197     266,651     269,968  

Adjustments:

                               

Merger-related expenses and deal costs

    3,248         1,547         565  

Normalized FFO attributable to CCP

    71,551     67,516     258,744     266,651     270,533  

Amortization of above and below market lease intangibles, net          

    (2,319 )   (3,684 )   (11,184 )   (10,978 )   (9,227 )

Accretion of direct financing lease          

    (319 )   (285 )   (1,207 )   (1,078 )   (1,140 )

Other amortization

    (32 )   (27 )   36     (37 )   (120 )

Straight-lining of rental income, net

    (40 )   (56 )   (294 )   (252 )   (104 )

Capital expenditures(1)

    (5,303 )   (840 )   (8,529 )   (3,253 )    

Merger-related expenses and deal costs

    (3,248 )       (1,547 )       (565 )

FAD attributable to CCP

  $ 60,290   $ 62,624   $ 236,019   $ 251,053   $ 259,377  

(1)
Capital expenditures for the three months ended March 31, 2015 and the year ended December 31, 2014 include amounts related to properties that transitioned operators during 2014 and 2015 and, as a result, were significantly higher than historical levels.

Adjusted EBITDA

        We consider Adjusted EBITDA an important supplemental measure to net income because it provides an additional manner in which to evaluate our operating performance and serves as another indicator of our ability to service debt. We define Adjusted EBITDA as earnings before interest, taxes, depreciation and amortization, excluding merger-related expenses and deal costs and gains (or losses) from sales of real estate property. The following table sets forth a reconciliation of our Adjusted EBITDA to net income for the periods presented:

 
  For the Three
Months Ended
March 31,
  For the Year Ended December 31,  
 
  2015   2014   2014   2013   2012  
 
  (In thousands)
 

Net income

  $ 37,269   $ 41,410   $ 157,780   $ 174,510   $ 172,740  

Adjustments:

                               

Depreciation and amortization

    31,241     26,358     100,381     93,187     98,374  

Merger-related expenses and deal costs

    3,248         1,547         565  

Loss on real estate dispositions

            61     15     28  

Adjusted EBITDA

  $ 71,758   $ 67,768   $ 259,769   $ 267,712   $ 271,707  

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NOI

        We also consider NOI an important supplemental measure to net income because it enables investors, analysts and our management to assess our unlevered property-level operating results and to compare our operating results with the operating results of other real estate companies and between periods on a consistent basis. We define NOI as total revenues, less interest and other income. Cash receipts may differ due to straight-line recognition of certain rental income and the application of other GAAP policies. The following table sets forth a reconciliation of our NOI to net income for the periods presented:

 
  For the Three
Months Ended
March 31,
  For the Year Ended December 31,  
 
  2015   2014   2014   2013   2012  
 
  (In thousands)
 

Net income

  $ 37,269   $ 41,410   $ 157,780   $ 174,510   $ 172,740  

Adjustments:

                               

Interest and other income

    (1 )   (1 )   (2 )   (25 )   (23 )

Depreciation and amortization

    31,241     26,358     100,381     93,187     98,374  

General, administrative and professional fees

    6,400     6,493     22,412     22,552     18,643  

Merger-related expenses and deal costs

    3,248         1,547         565  

Other

    415     988     13,183     1,368     187  

Loss from real estate dispositions          

            61     15     28  

NOI

  $ 78,572   $ 75,248   $ 295,362   $ 291,607   $ 290,514  

Asset/Liability Management

        Asset/liability management, a key element of enterprise risk management, is designed to support the achievement of our business strategy, while ensuring that we maintain appropriate and tolerable levels of market risk (primarily interest rate risk) and credit risk. Effective management of these risks is a contributing factor to the absolute levels and variability of our FFO and net worth. The following discussion addresses our integrated management of assets and liabilities.

Market Risk

        As of March 31, 2015, December 31, 2014 and December 31, 2013, the fair value of our secured and unsecured loans receivable, based on our estimates of currently prevailing rates for comparable loans, was $9.1 million, $9.3 million and $8.4 million, respectively. See "Note 5—Loans Receivable" of the Notes to Combined Consolidated Financial Statements included elsewhere in this information statement.

Concentration and Credit Risk

        We use concentration ratios to identify, understand and evaluate the potential impact of economic downturns and other adverse events that may affect our asset types, geographic locations and tenants. We evaluate concentration risk in terms of real estate investment mix and operations mix. Investment mix measures the percentage of our investments that is concentrated in a specific asset type or that is operated by a particular tenant. Operations mix measures the percentage of our operating results that

72


is attributed to a particular tenant or geographic location. The following tables reflect our concentration risk as of the dates and for the periods presented:

 
   
  As of
December 31,
 
 
  As of
March 31,
2015
 
 
  2014   2013  

Investment mix by asset type(1):

                   

SNFs

    87.5 %   91.1 %   91.2 %

Seniors housing communities

    5.1     4.6     4.7  

Specialty hospitals and healthcare assets

    7.4     4.3     4.1  

Investment mix by tenant(1):

                   

Senior Care Centers, LLC

    13.8     2.0     2.0  

Signature Healthcare, LLC

    4.6     5.2     2.0  

Avamere Group, LLC

    6.8     8.2     8.0  

All others

    74.8     84.6     88.0  

(1)
Ratios are based on the gross book value of tangible real estate property (excluding assets classified as held for sale) as of each reporting date.

 
  For the
Three Months
Ended March 31,
  For the Year Ended December 31,  
 
  2015   2014   2014   2013   2012  

Operations mix by tenant(1):

                               

Senior Care Centers, LLC

    10.1 %   4.3 %   1.5 %   1.5 %   1.4 %

Signature Healthcare, LLC

    9.8     8.2     7.6     3.4     2.8  

Avamere Group, LLC

    8.5     7.3     8.8     8.4     7.9  

All others

    71.6     80.2     82.1     86.7     87.9  

Operations mix by geographic location(1):

                               

Texas

    22.9     16.2     17.5     15.6     15.3  

Massachusetts

    8.9     9.9     10.0     11.1     12.0  

Indiana

    8.3     8.3     8.6     8.4     7.7  

Kentucky

    7.3     7.1     7.4     7.2     7.8  

New York

    5.6     5.6     5.8     5.6     5.2  

All others

    47.0     52.9     50.7     52.1     52.0  

(1)
Ratios are based on revenues for each period presented.

        We derive substantially all of our revenues by leasing assets under long-term triple-net leases with annual escalators, subject to certain limitations. Some of these escalators are contingent upon the satisfaction of specified facility revenue parameters or based on increases in the Consumer Price Index ("CPI"), with caps, floors or collars.

        While no individual tenant accounted for a significant portion of our revenues for the years ended December 31, 2014, 2013 and 2012, our three largest operators currently account for approximately 33% of our rental income. This concentration of our revenues creates credit risk. Our financial condition and results of operations could be weakened and our ability to service any indebtedness and to make distributions to our stockholders could be constrained if any of our tenants, and in particular our three largest operators, in part or in whole, become unable or unwilling to satisfy their obligations to us or to renew their leases with us upon expiration of the terms thereof. We cannot assure you that these tenants will have sufficient assets, income and access to financing to enable them to satisfy their respective obligations to us, and any failure, inability or unwillingness by them to do so could have a Material Adverse Effect on us. We also cannot assure you that any of our tenants, and in particular our

73


three largest operators, will elect to renew their respective leases with us upon expiration of the leases or that we will be able to reposition any non-renewed properties on a timely basis or on the same or better economic terms, if at all.

        We regularly monitor and assess any changes in the relative credit risk of all of our tenants, although we pay particular attention to those tenants that have recourse obligations under our triple-net leases and with whom we have a higher concentration of credit risk. The ratios and metrics we use to evaluate a tenant's liquidity and creditworthiness depend on facts and circumstances specific to that tenant, including without limitation the tenant's credit history and economic conditions related to the tenant, its operations and the markets and industries in which the tenant operates, that may vary over time. Among other things, we may (i) review and analyze information regarding the real estate, post-acute and healthcare industries generally, publicly available information regarding the tenant, and information required to be provided by the tenant under the terms of its lease agreements with us, including covenant calculations required to be provided to us by the tenant, (ii) examine monthly and/or quarterly financial statements of the tenant to the extent publicly available or otherwise provided under the terms of our lease agreements, and (iii) participate in periodic discussions and in-person meetings with representatives of the tenant. Using this information, we calculate multiple financial ratios (which may, but do not necessarily, include net debt to EBITDAR or EBITDARM, fixed charge coverage and tangible net worth), after making certain adjustments based on our judgment, and assess other metrics we deem relevant to an understanding of the tenant's credit risk.

Triple-Net Lease Expirations

        The following table summarizes, as of December 31, 2014, our triple-net lease expirations scheduled to occur over the next ten years (excluding leases related to assets classified as held for sale):

 
  Number of
Leases
  Number of
Beds/Units
  2014 Rental
Income
  % of 2014
Rental Income
 
 
  (Dollars in thousands)
 

2015

    6     987   $ 8,249     2.8 %

2016

    4     1,659     8,600     2.9  

2017

    1     188     1,115     0.4  

2018

    8     1,247     7,228     2.5  

2019

    1     170     650     0.2  

2020

    16     7,701     60,131     20.6  

2021

    2     416     1,447     0.5  

2022

    2     1,443     13,163     4.5  

2023

    6     5,977     46,943     16.1  

2024

                 

Liquidity and Capital Resources

        Our wholly owned subsidiaries have historically been subject to Ventas's centralized cash management system. All payments have been controlled and made by Ventas resulting in intercompany transactions between us and Ventas that do not settle in cash.

        As of March 31, 2015 and December 31, 2014, we had a total of $1.4 million and $2.4 million, respectively, of unrestricted cash related to our joint venture entities that do not participate in the centralized cash management system.

        During the three months ended March 31, 2015 and the year ended December 31, 2014, our principal sources of liquidity were cash flows from operations, cash on hand and contributions from Ventas, which are the result of treasury activities and net funding provided by Ventas prior to the separation.

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        For the next 12 months, our principal liquidity needs are to: (i) fund operating expenses; (ii) meet our debt service requirements; (iii) fund acquisitions, investments and commitments, including redevelopment activities; and (iv) make distributions to our stockholders, as required for us to qualify as a REIT. We expect that these liquidity needs generally will be satisfied by a combination of cash flows from operations, borrowings under any revolving credit facility and term loans that we enter into, dispositions of assets, and issuances of debt and equity securities. However, an inability to access liquidity through one or any combination of these capital sources concurrently could have a Material Adverse Effect on us.

Dividends

        Ventas has elected to be treated as a REIT under the applicable provisions of the Code, for every year beginning with the year ended December 31, 1999. Accordingly, Ventas is generally not subject to federal income tax. We intend to elect to be treated as a REIT under the applicable provisions of the Code, beginning with the taxable year in which the distribution occurs. By qualifying for taxation as a REIT, we generally will not be subject to federal income tax on net income that we currently distribute to stockholders, which substantially eliminates the "double taxation" (i.e., taxation at both the corporate and stockholder levels) that results from investment in a C corporation (i.e., a corporation generally subject to full corporate-level tax).

        We expect that our cash flows after the spin-off will exceed our REIT taxable income due to depreciation and other non-cash deductions in computing REIT taxable income and that we will be able to satisfy the 90% distribution requirement. However, from time to time, we may not have sufficient cash on hand or other liquid assets to meet this requirement or we may decide to retain cash or distribute such greater amount as may be necessary to avoid income and excise taxation. If we do not have sufficient cash on hand or other liquid assets to enable us to satisfy the 90% distribution requirement, or if we desire to retain cash, we may borrow funds, issue equity securities, pay taxable stock dividends, if possible, distribute other property or securities or engage in a transaction intended to enable us to meet the REIT distribution requirements or any combination of the foregoing. See "Material U.S. Federal Income Tax Consequences of Investment in Our Common Stock" and "Risk Factors—Risk Factors Related to Our Status as a REIT" included elsewhere in this information statement.

Capital Expenditures

        The terms of our triple-net leases generally obligate our tenants to pay all capital expenditures necessary to maintain and improve our triple-net leased properties. However, from time to time, we may fund the capital expenditures for our triple-net leased properties through loans to the tenants or advances, which may increase the amount of rent payable with respect to the properties in certain cases. We expect to fund any capital expenditures for which we may become responsible upon expiration of our triple-net leases or in the event that our tenants are unable or unwilling to meet their obligations under those leases with cash flows from operations or through additional borrowings.

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Cash Flows

        The following table sets forth our sources and uses of cash flows for the periods presented:

 
  For the Three Months
Ended March 31,
  For the Year Ended
December 31,
 
 
  2015   2014   2014   2013  
 
  (In thousands)
 

Cash at beginning of period

  $ 2,424   $ 2,167   $ 2,167   $ 6,745  

Net cash provided by operating activities

    54,920     53,344     255,082     249,727  

Net cash used in investing activities

    (354,444 )   (5,057 )   (28,977 )   (4,505 )

Net cash provided by (used in) financing activities

    298,476     (48,405 )   (225,848 )   (249,800 )

Cash at end of period

  $ 1,376   $ 2,049   $ 2,424   $ 2,167  

Cash Flows from Operating Activities

        Cash flows from operating activities increased in 2015 over the prior year primarily due to rent from properties acquired by Ventas in January 2015 that will be transferred to CCP as part of the separation.

        Cash flows from operating activities increased in 2014 over the prior year primarily due to increased rental income from escalations under our existing leases and an increase in tenant deposits, partially offset by a payment of $10.0 million in full settlement of a certain loan guarantee that had been provided to a third-party lender to a former tenant of CCP.

Cash Flows from Investing Activities

        Cash used in investing activities during the three months ended March 31, 2015 and 2014 consisted primarily of cash paid for our investments in real estate ($346.2 million and $2.1 million in 2015 and 2014, respectively) and capital expenditures ($8.5 million and $3.2 million in 2015 and 2014, respectively).

        Cash used in investing activities during 2014 and 2013 consisted primarily of cash paid for our investments in real estate ($13.2 million and $11.8 million in 2014 and 2013, respectively), capital expenditures ($17.2 million and $10.2 million in 2014 and 2013, respectively) and purchase of redeemable noncontrolling interest ($3.0 million in 2013), partially offset by proceeds from real estate dispositions ($1.0 million and $10.4 million in 2014 and 2013, respectively) and proceeds from loans receivable ($1.2 million and $10.5 million in 2014 and 2013, respectively).

Cash Flows from Financing Activities

        Cash provided by financing activities during the three months ended March 31, 2015 consisted primarily of net contribution fr