Omega Healthcare Investors (OHI) 6 Aug 202020 Q2 Earnings call transcript

Good day, and welcome to the Omega Healthcare Investors Second Quarter 2020 Earnings Conference Call. Today, all participants will be in a listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. Please note that today's event is being recorded. At this time I would like to turn the call over to Michele Reber. ahead. go Please

Vice without generally. and forward-looking which conference restructuring, not historical good dispositions business call Taylor Form our and to report Chief me including, are condition statements. our in prospects Krull, with rent statements, payments, or transitions be that facts projections, financial most operators, and to or our today factors specific Development actual Comments and cause are regarding involve described Exchange Thank and of differ statements CFO, XX-K, identify uncertainties, portfolio morning. and releases Bob outlook cause materially CEO, financial Senior Megan limitation, as and our Please Pickett; on Steven that actual may contemplated Booth; results dividend forward-looking of differ Stephenson; see this Omega's filings Operations. Officer, press events made These risks you, Commission, Insoft; recent With President materially. may forward-looking COO, our those during Corporate which such results policy, acquisitions, from portfolio statements our or may the Dan Securities

release. the financial During of Principles, available FAD and as and press an Information will to of in explanation are FFO our of the non-GAAP under measures, of Accounting Accepted to under measure adjusted Generally case non-GAAP NAREIT in adjusted recently Financial as refer call our the FFO, of well such measures usefulness at the the section measures and some FFO, today, website issued www.omegahealthcare.com the NAREIT these non-GAAP as Reconciliations we FFO, EBITDA. most comparable

I provided that information operator on will coverage now discuss call our to the Omega. independently Taylor. and has operators In by we over verified based that by been addition, turn certain financial is not data

for thank quarter joining Good our XXXX Michele. call. conference you morning second and Thanks, earnings

cared partners who overlooked. is the the for heroically within residents saving that are our fragile of carrying every their our importantly, daily particularly the First day reality bravery and often for facilities. pandemic to have of and and thank deadly you too Bad They of staff is dedication operating residents. most thousands prolonged lives caregivers direct this

We're our to our with results. financial results. very second pleased Turning quarter

Our FFO and for adjusted for share. per FFO of $X.XX maintain quarterly distribution. allowed to funds dividend per share and of available us funds of of share Payout distribution improved XX% available our of ratio our adjusted per XX% $X.XX further $X.XX to

essential will of Later federal to we Additionally call, for our CMS, in government we a allowed and rents. vendors detail increasing fund costs. will that operators. summary of provide and the states bullet to contractual and financial points. facility support couple meaningful, significant July regulatory provide in operators the related have the nursing of the collected has skilled of our in spite virtually industry impact provided the pay and payrolls declines all to COVID-XX ongoing on I occupancy

although X% Our will have average will occupancy when $XX call over remains a turn uncertain pre levels February. of Bob. patient expenses portfolio now declined And the to an appeared I increased has levels. it per by day. to occupancy operator COVID stabilize, have to since return Operator occupancy

their like operators I'd for and to during Thanks, employees our efforts also heroic Taylor, good morning. our pandemic. by thanking and start this

essential saving our they of a are lives providing to elderly are day they care said, every population. portion Taylor As and

financials. Turning to our

as share or per on Our million $XXX a diluted compared XXXX. the quarter of for $X.XX $X.XX million NAREIT to or quarter, $XXX share for was FFO the basis diluted per second

$XXX quarter revenue of second of a and $XXX payments of facilities. includes revenue security approximately were capital our in items of quarter supplemental combination and occurred million our completed assets payments to versus quarter, a transitions fees, unitholders well $XX revenue the of net straight-line billion and mortgage not of quarter. timing rent as as renovations a agreement And cash reduction reconciliation XXXX, related operator receipts on increase associated to operators been by have revenue sales related excludes our from termination and and assets income made also from $XXX XXXX. payments in favorable in was approximately of earnings one-time of $X.XX for $X.X related several or that late interest XXXX revenue new cash share the comprised quarter and and transferred and of XXXX, $X.X basis. contractual the and straight-line of made FFO period. of to as or per the our to a related the found adjusted release, write-off to offset collection for OP transfer for The lease with of upon rent, that our over throughout and second due million certain adjusted in of Our the since million million in one-time We was Omega was under the reduced over outlined Daybreak, excluding, asset lease to revenue quarter of to owed revenue XXXX resulting repayments collected $XXX forbearance the facilities for increase acceleration for during the and on noncash loan from which incremental revenue the time in-place held our making the July the website. primarily XXXX second that also partially during course, revenue, receivables Revenue quarter the the with for million XX% of million in of of has The investments sale deposits $X.X by million amendments same is FFO

or such Our travel $X second $X.X our related XXXX, no restricted savings G&A expense no COVID-XX the less for as than conferences. the was estimate of with approximately million quarter million and with associated mandates

over higher for G&A expense Interest million of XXXX. $XX.X quarter, the quarterly with for quarter $X.X increase project remainder when million the to cost second was the financing non-cash continue deferred We a expense excluding million to of $X.X $XX.X from XXXX, to of due XXXX, $XXX related XXXX, December X/X% in September senior million $XXX we issued we and in of three $XXX assumed October HUD acquisition. outstanding In debt XXXX million notes a resulting million borrowings.

and Our in $XXX on of sheet balance existed steps our the we credit to an sheet credit caution resulting Based additional take facility remains uncertainty And markets we from balance provide throughout continue borrowed XXXX, liquidity. in abundance our million to strong. to that improve under revolving COVID-XX approximately in March liquidity. the

based $XXX July At in the we XX, and outstanding $X.XX million in equivalents. million on borrowings approximately of facility During million cash our had the credit we and repaid second $XX borrowings. had billion XXXX, quarter $XXX cash collections, under

X.XXXX%. significant average swaps have interest of We maturity. swap our maturities certainty rate in until at provide we no swaps entered $XXX cost XXXX August In XXXX. when rate March, bond bond significant us and XXXX an we expire of XX-year million These refinance into with

to we At August additional be forma of related important adjusted our the become charge business, to of roughly sold Board scheduled would as coverage within builds does close of XX weather date of associated completed builds operational continue us net declared share July with XX, times. revenue liquidity and then to debt to any to needed our any with X.XX that business to June per was revenue pro prolonged our While and will July was and contractual we construction pronounced adjusting adequate to billion a was action leverage fixed five provide assets calculations may in a When be months. common our and to significant liquidity. believe be quarter full to potential to to of revenue to five quarter maintain new our ratio common stockholders during quarter, approximately not a the evaluate eliminating process, on the impact X.X in XX. in debt next acquisitions the XX% On $X.XX XX to funded steps note of It's fixed record XX, for these and of Directors dividend our the related new times. include our in EBITDA annualized X.XX $X.X EBITDA include and times flexibility paid

continue As our month our course later one to date. dividend the is of date announcement XXth XXth month day press date to the dividend, the payment on payment our in with first in we of historical approximately stated depending a or days. release, adhere the of our next scheduled will Starting mid-quarter each historical we month day quarter with mid-quarter business

week is will announcement October extend approximately However, and announcement and with dates calendar date. dividend year. the by the now date with one to to date call want plan change to to our Committee clear This the turn the XXXX Dan. for to dividend will impact over date no with the prescheduled I change be for scheduled purely meeting Board payment to board we pre-scheduled Audit I correspond coincide the change in very meeting dates. announcement

Thanks everyone. Bob and morning good

The and asset the shown also has Omega's industry. a biggest have unprecedented times" the requirements pandemic, While of compassion, always dedication asset. Their shined throughout efforts Omega's resiliency the the myriad been that and enough while challenges operators COVID-XX the challenges heroic long-term has operators. on those through they heights define our as tireless new escalating always biggest care counted perhaps ever-changing inspiring not "normal continued spotlight been tremendous by to our battle the

Turning now to our portfolio.

As These an XX, XX,XXX facilities and had in within spread Omega beds. of operating United party Kingdom. asset XX states with operators of facilities XXX over were the operating XX XXXX third June portfolio across located

and X.XX Trailing X.XX in for respectively only times quarter ended XX, EBITDARM X.XX coverages. December Turning and EBITDAR during trailing versus These times were X.XX of declined appear have operator occupancy slightly numbers core XX-month to is the to confirmed XXXX XXXX. the coverage our respectively increased of number as facilities to times operator the first and be affected XXXX to for small period times XX-month portfolio by and March. expenses of performance quarter in operating Operator by just significantly. escalated begun end and impacted a cases the as expected second has beyond significantly COVID-XX, of had

Medicaid to a in are results stimulus and will increases that hopeful Act. the and consistent quality recognition increases began result expense declines rate offset of mix, as we materially remain CARES as the were April overall Medicare and which relatively an the distributed increase be of However, money by in overall occupancy

As both cases previously of the residents in toll quarter on facilities. has and May, facilities. XX, March a time. XXX unprecedented On the residents their the X have short earnings we within on reported On described first XXXX confirmed XXXX we very call an including and our cases of virus operators known Xth our in employees span taken our

point high the Florida. July XXX a within in to cases of current modestly in XX, facilities. recently Texas and then XXXX and confirmed began As mid-June These off June particularly to in just to of late number early had begun numbers and drop July risen have had increase reached

increased mentioned, has Taylor occupancy per from our of our dropped by patient result signaling approximately through mix mid-July X% from June day February is the quality in in floor. an February. approximately primarily occupancy place. occupancy a in July ability mid-July up from substantially perhaps skill unchanged Expenses operators. as from Conversely operator's portfolio February $XX as our approximately month As April of were to X% through approximately reported

residents number We will level is is operating of in closely variability It the the a that are COVID outbreaks. depending correlated to to expenses important forward and on future note confirmed expenses going that given occupancy facility. hopeful both the within moderate of

XX, million rate investments, operator. an lease interest existing X.X% XXXX operator's for bears has two of million in Omega new and Year-to-date investments of of the June to is provided facility one to yield mortgage secured was nursing financing $XXX including facilities Omega on $XX X.X%. The nursing a million The master for loan with made cash in June $X new facility million Ohio by X% XXXX purchase XX $XX same lease approximately Turning totaling Omega expenditures. an capital added completed annual Also skilled escalators. transaction on financial to for Ohio.

Omega XXXX as Year-to-date separate X of total total Turning $XX to million. facilities of facilities transactions XX has divested via a of X million. XX proceeds of divested Omega during the dispositions, second June for quarter for $XX

investment source. they investment Omega's focusing modest future existing our capital may new foreseeable be needs and potential the on will operators' any opportunities For appetite

employees Lastly particularly again applaud front operators like the on I line. once efforts would to selfless our

Coast the for had virus COVID-XX affects our Gulf of seaboard challenging new our have many prospect many facilities COVID-XX place. institute fact with residents. are As and facilities the now protocols is aware season hurricane significant we More in facilities, swing numerous operators you is full of evacuations along and as Atlantic of the the sheltering situated in southern have in the that to particularly

operators in daunting health and call and frail their believe a to commitment our vulnerable most population. remain nation's our we turn task, the welfare I'll Megan. the seemingly While now to over unwavering of elderly

good Thanks Dan morning not one the the The create ever COVID-XX industry care if long-term has everyone. of most pandemic and continues challenging to experienced. environment

some control said becoming operators new the restrictive government to this states more establishing and continue as by of have that infection adopting it we recognition personal on with learned infection virus states new procedures a between challenges control necessity coming Certain And the Our Many is the highly adapt going COVID-XX. environment. along with in in down bring normal at to that controlling to into accessible to outside faced entire to in therefore persists That by paying the equipment the both provided primarily are nursing virus risk a vaccine Those testing and and easier Operators protective a in Without as federal easing price, as new most testing employees some of moderating starting source and their exist buildings. general an buildings. come the of Belt along their are the eased facility on cases in of with have early a the tool population spreads back have time and can't both Sun its able from time pay states despite inherent implement additional visitations care employees as certain easing general facing as pay well. a to is reactive relate critical baseline procedures. normal surge asymptomatically public opposed they protocols challenges a hazard of states proactively spread the limited surge in operators surges hazard basis. testing as to it of for the restrictions for of as to prevent there's long-term in a stringent lag outbreaks and lives when tool, cases. And home see preventative work. restrictions areas most a

near we've has states time become certain as learned statements only CMS sometime that in point However a employees can in testing weekly this represents a will with that and hotspot things recommended change of in quickly. the future. mandate

based test a of continues as can at cost out testing extremely to to $XXX access rapid recommendation, tests bolster cheaper location. be To implemented of to a tests private limited has that However, on costly and to access of free sending $XX to pricing. come the test nursing homes result therefore additional per with machines at supply CMS program a on-site

part the providing to has that tools May This the long out was take April, X payout is to it need to relatively billion. provided a tests during fund CHIP to receive started follow-up of providers, be said test critical all virus. for Medicare late health antigen applaud call, to few of plus recent $XXX greater nursing nursing It States. $XXX per On machines are for of its and XXX are the last bed continued which testing negative, times. produce can tests last necessary certified previous support the United of nursing certain get week skilled and will unclear And of be of equated portfolio. set a first circumstances machines financial fund, that of complete diagnostic Act. on the low That efforts testing That The false front may CARES to HHS $X,XXX the in in which Omega been to how payout the test $X.X as provide antigen troubling supplemented slated homes care controlling level additional and home XX not those means were impacted earnings go are to program We June much-needed to by eligible to third billion participating per facilities overall those who Medicaid Omega test for announced facilities by payout. beds. the made These many these our one would Omega molecular provided billion, testing, the $XX the efforts for programs, earmarked CMS XX. machines starting in some out was approximately industry under support $XX,XXX these Since in than In for facility, specifically billion million and facilities. $XX with certified performed.

is Additionally with towards Medicare buildings. emergency stepped of during CARES by funds not specifically hard with will earmarked HHS state made, including additional determination homes, but allocated also enhancements certainly on how nursing the hit $X be Texas, on announced from boost of yet to based Many that another X.X% be the the July again an payout governments, billion certified XX, the rate the FMAP have eye providing state up in going Act.

in swiftly long-term our industry, which future in cannot care is it the stress an this continued persevere billion many yet there approximately industry bill negotiations on health potential to and order this have to landscape. and stimulus current the the the critical enough assisted another remaining I facilities adapt Throughout as has to under are continue that the However, industry for how living fund elderly of support population. and of who government continues for of cares acted. more receive well. viability not $XX to hopeful financial allocated vulnerable support yet based support maintain ever-changing Congress, the some in level for are to care the to that With this we be pandemic,

over everything doing I of ensure now are to their proud will call they safety the Steven. of employees residents. are our turn our the We to operators and that and

joining Avenue the Manhattan. for In Senior work Street challenges pandemic ALF everyone Thanks, in conjunction COVID-XX the our the Maplewood XXrd line thanks cost Memory Living, to The have of we and substantially completed high-rise second scheduling to Megan, Care with today. project. and on at posed has on

difficult limitations the determine challenges by housing to the an will $XXX cost the costs, an project until better on the poses final date be of exact timing COVID to Health. While date. pandemic admissions. driven practical challenges be by and have opening million, The COVID-XX patients senior will licensure on cost unique Department operators, will The increased meaningful including opening approximately positive managing certain we of a of clarity

strong our through X% to bans. we housing in quarter, were once was per the and census touring portfolio While occupancy of saw senior subject a reduction most month first buildings X% to visitation

bans However, where lifted. seen we stabilization in in markets have have census been

at Additionally, offered of employers extent programs. to little housing been senior large date the to of are operators the investment balance housing land end CIP pay fiscal various our from sheet. senior New of City our have in $X.X private project they Omega second quarter, federal portfolio stimulus and York totaled the our the the Including and help billion

senior triple in of are master our housing net leases. assets All

investment Maplewood for leases, master in One-third in our various of for New assets, is, the which is respectively. two assets one-third intermix Gold assets with in one leases. investment approximately is home Excluding SNF one in York assets York a third care our City are master And Care lease. development, with our one in including health and City, master U.K. New

and assisted investment United comprises living, in independent assets care XXX U.K. memory Our States and housing living overall senior the

had lease downward on events standalone XXXX, first number. EBITDAR coverage quarter put pressure X.XX in times a on that highly of recent likely basis portfolio this While will of the

as analysis prospects how facility evaluation opportunity see This our the fiscal senior we COVID-XX constructive While to ongoing pandemic an about cost market warrants take housing, adjust. of we have and structures of may several demand an quarters the pipeline. development remain

is $XX.X related to remaining The existing reinvestment on strategic progress construction predominantly related was further portfolio construction CapEx our to to the our and existing this active We investment developments, projects. work reinvestment this in operators with our strategic in our in quarter make we assets. ongoing of investment $XX.X $XX.X we reinvestment. new of million While continue million our second ongoing million program. on invested

will I open call up for questions. the Stephen. Thanks now

We will first [Operator Connor proceed. Siversky the now begin from will Today's Instructions] question-and-answer Berenberg. session. question come with Please

on everybody. morning you having me Thank for call. the Good

the of metrics reasonable these QX. the know you requisite saw then PDPM? I bucket coverage signs new is assume And to impacts could areas model? some identify some but lagging, are the of of this in I'm that of positive So, if the where to improvement were operators some through showed it's end due the rent wondering the under from payment so, that if benefiting

grouping I quarters. in. where had of basis points indication early we COVID-XX small appears the coverage in the implementation of it do although little quarter bit six in expected, from cuts all two we that now the We frankly, the can't it's previously of expense portfolio. the improved skewed delayed QX by -- expectation But a therapies. obviously, that's side of about on have increase of the revenue And an some to is it terms you a coming only seven and talked activity and that concurrent in QX. PDPM. the been second is And they've And

way that no to there's least. at So, measure

then a quick Okay. follow-up that. to And

mentioned the that may thoughts I how therapy. the rewritten in something environment? are So, permanently Is group look there PDPM generally framework, this in be speaking, just mean any does current you appreciated? or

take still enhancements revenue they're able to particularly of as acuity higher so patients. Well, advantage

of those patient PDPM of mean taking isolated that. part place go for a far driver therapy up. of rooms group concurrent is savings own they rates exist. But in So, rooms. their they there, everybody their and expense residents, in impacted go therapy once units place a COVID and instance, as whatever is are lot these It isolation into is as major which individually with doesn't taking was I

away. intents that's purposes that So -- and for gone all

of skilled that. care or how funds was be CARES billion long-term Thanks it facilities the announced, the among in allocation sense yet I then general? And from distributed recently think nursing for these Okay. on Act will is facilities $X any there

be will focused that think good to We guesstimate have a high that's toward Megan a did but it that this pointed of we not how idea of think going out I point. facilities, about a as that's be lot at allocated. Yes, COVID

pretty then do And looking your question. end May the anything the of you Is about what a how strong two-part before rent the then I mean collections me. at both looking you similar you June any had the feel And still this up? private the far? in a for are of in changed of and one opportunities same is Bob I the thus at acquisition vein, Has calculus at with all mean Okay. through on things? or seeing moment? the year? last public Are maybe loosen color at you on a touched bit appreciated. side pricing how dividend there from Just were

Yes.

But the at. the operators will terms from we obviously, the evaluated dividend, our every our see that things prospects quarter look dividend the toggles side, I look think collections those we on Board. we of be So, same it's the with at in that the

expect we rate a change continue the current So, the the that seen continue and no that them pay environment of we at indication the other I to dividend that in there's at would to if rate. we've would see collections

of even as support the out continue not out enough about in environment one-off that We've it. there's of mentioned. we'll to But and just pricing Dan I isn't there. don't a talk just there's of terms just there acquisition to seen lot really there our operators not terms In some much opportunities

the Thanks all time. for Okay, for me. that's

Thank you.

proceed. comes question Jonathan from with next James. The Hughes Raymond Please

morning. are could the are the a remarks cash the to on today? Thanks the threshold good accrual what of maybe caregivers past from partners of from was percentage efforts cash rents Hey, tell operators us prepared and and I on six for hoping And over going basis? months. any you your basis

But on was of that one. it's one basis. lease Bob. the revenue change quarter. And no now for through John cash and quarter now mortgage that threshold second right we could on and there's as the a Roughly tomorrow today progress our right X.X% no

the And I is one right? operators. not group Okay. that's operator. a that mean X.X% that just that's Is of

additional Excluding operators. Daybreak there seven are

that's the Taylor you sheet making incentivize sale-leaseback, to lawsuits any lead have and their but to more a and operators increased does we that. would via realize and opportunities? look Okay, litigation their high on way balance real Dan, one related own know and mentioned very hear then who for operations me I as to to estate you talked separate risk helpful. their just little them growth But susceptible external more ahead, that's buildings earlier. front. to about And to less from that any potential in thoughts as you level, reduce a of a size turn consolidation love acquisition just I

a seen the not It's -- we've it's Yes time decades Florida possibility. this that in wouldn't be that was industry ago. example dynamic. it first a great of that two

it? it like? in down there we've these immunity? is come look But What How seen do past. will all the is lawsuits to effective this think I -- So, again,

dynamic we forward. certainly So that's a that see moving could

That’s I'll time. the from it me. jump off. for Okay. Thanks

Nick question Scotiabank. Yulico Please next with comes from The proceed.

Hi, good morning.

occupancy and June said on skilled flat. a think versus July Just flat was was it nursing, you question I

more benefit yet hospitals even to of up for the seeing have returned if procedures hospitals aren't rates really operators public from the elective going are as discharges So, hospital operators. utilization

to they what mean U.S. in closer any standpoint the you visibility start of from COVID they the I should back are hearing because So, point, system guys is some occupancy coming get levels? tenants in what at And to hospital if coming residents post-acute your more into about increasing? pre a not from why had

of you and people the there. with of we states with to going hospitals opened A elective number lack surgery forward but really to have surgeries, lot be of up haven't a seen honest

back been hasn't just So COVID. there was -- pre haven't they to gone what certainly it

just And the discharges they're were so of seeing they that before. not type

skilled to that's prepared hospital into see themselves time upon get some a take elective acute become getting that. nursing with whether more they think what going -- and comfortable into are based still real just real it's whether need I an goes facility after what a people potentially go to that care a to from or hospitals, to

be from think I that's yes, But bit a discharges time. we seen of to far So, a more little so going haven't surgeries. lot just elective

Okay.

that latest this operators, any or discussions And about you some be does occupancy coming to rent been of lifeline the to are of with if I or sector? terms the guys guess given operators issue? how government that's And so, a because your change are of the lease what sort deferral in follow-up would I the of asking back? long give them thinking aid guess is that How not level for

question high the us that bounce date. the the at at probably But the is But that's I discussions. think And current we It's to the the government likelihood. towards gap. foreseeable coming time question. discussions From the and everyone in our this funding carry future pretty rent year. have occupancy Yes. see of end in do year, towards back haven't us we And no right when has point end this of us that through August there's a in It and the a it to time funding back view us been Nick. all right bounce sufficient funding does because is the to no had is looking back view for for to gap there likelihood operators have think to that not operators is of the meaning takes I perspective, so

Megan think we both geographies. Dan about occupancy as the big mentioned, overall these our and One differences geographies portfolio. But of is, the within about talk there's comments I

time think when less much We vaccine impacted we impacted. period relatively this occupancies And out a when where bodes bounce well come we that operators what been of of less and been back for geographies have that reasonably I see think I things certain quickly. we have happens have have

asked far? that, accounting, Okay. besides any -- that that was question And those know tenants about have there given been on to I to been follow-up a just deferrals the so are tenants there accounting cash the but are have cash

None.

Okay. you, Taylor. Thank

Thank you.

proceed. question Please from Capital with next The Daniel comes One. Bernstein

state Medicaid. about but particular be Obviously, addressed earlier, bit to little going guys. going of certainly, Good while late. you on future and going if rolls I morning. in down. concerning. are states Healthcare quarter that up, thoughts have Hi, I good know you that, the don't budgets the if are don't don't for And, any Medicaid up. on any I costs on want collections, revenues know are are negative a I concerned a states guys very this hopped

So Medicaid don't but cuts know or back if references potential concerned nursing? have any the you to how for XXXX to I should we previous about be recessions, skilled

the way I in at is think -- where would have look concerned I where to funded, and And we've that cuts because cut back is you're work. pay states portion, Medicaid a then the not a down X seen pressure. of certain doesn't budgetary about gets funding. the it, that to of history, it of right states there's a actually times match federal math level oftentimes be but state When

is, but So where what time we've seen historically you adjust. scenario, great gives which will hold flat, budget a states obviously it rates issues, isn't to

how is it of budget seen you environments state we've So rates. pressures I at Medicaid And think and look what is impacts Medicaid. exactly in flat in those terms history what

And elective been short higher questions about, industry then, know obviously, were to same lengths the have to lower Okay. seems and stay, earlier PDPM. time, the the particularly of surgeries But a acuity, the I Medicare anyhow return term, the going occupancy few towards with there side. in on at

be just maybe right about, to back, nursing the think come way occupancy if just skilled if some not? operators maybe back, surgeries continue surgeries it as don't occupancy, could their that over of as that's elective elective to a going patients, here? that's come back to what temporary? from is improve And So towards complex to come whether change viewed trying in mix I'm the or can shortfall I think But about know time.

Yes.

COVID, look I so our was at essentially it QX, occupancy think pre if for you XX.X%.

So we've you just talked trend moving in seen the the that's up. face dynamics the about. of all And

is continue march see pandemic. plus. don't actually our about, hopefully So demographics going other existed which to so that, even a -- than out that, we we'll decade I really where dynamics the but for the what occupancies we continue you've has QX start through are the anything, occupancy, I baseline that of when think is powerful That's view now, upward, for look with know to just at, we talked all we're impacts right occupancy come normalized on to

got. I’ve all much, That’s you right. All right. Thank gentlemen. Right, very

Dan. Thanks,

Today's next question comes proceed. Please from Nick Joseph with Citi.

Thanks.

expecting to to expect market? any pricing? are product the you of to transaction so, then, Just you more distressed come going And would market, if back kind

it's I difficult due It's do do property mean, so to think, I environment. mean, I this to yes, So, tours. hard transact to in hard, difficult it's diligence. it's

it be the pandemic We But for in go it into and kick and people deals. terms slow. and tires. fully the to back go market So future, I the to expect can back of it's down the once come slowed perceive foreseeable eases buildings doing pretty really

think any relative And that would do levels? how actually to then for pre you about transact, deals pricing pandemic

to the a right other have I hard whole really mean, different margins the now. down, up category. it's into that's deal expenses component, and a occupancy throws When right? it you price So, obviously,

very, price point deals very, be transactions. couple And support. tucking to just be facility when facilities there's where these have a selective, already lease, credit just of existing you indicated, of we'll doing existing this would say, we're at into would the a with I very look really we we master or operators, So an at where existing as

deals at So, really, can only time. this point way look we the that's at in

you. Thank

proceed. next comes The with from question Anderson SMBC. Please Rich

Hey. Thanks morning. and good

relative or another, geographical an your it's is, portfolio operator if, that my behaviors about one to a rethink pie to within question just eyes So caused anything change sort change? the of, whether a you cadence portfolio chart? curious some this of needs the has anything maybe portfolio the the to first sort, has environment I'm opened or question your about your -- change permanent

the of is operators we've incredible it What the No. environment. picking difficult does seen importance a work right reinforces our very and operators do in it

good it. operators fewer than about we feel had today ago. very we to XX So be years three we clear But say will I have just

through think the three point a years. spent is But business. is we're a operators. our I of running it important important. working we how last portfolio highlights just we in It at this lot of that where over So our part And time that feel very about good

Right.

without with affected of for your so portfolio that I'm that it coverage get you obviously, be coverage how second $XXX offset coverage sorry, fair sense In Will -- a perspective. in sort quarter you assuming quarter much arrears. And might, coverage has down and in of, that that when come terms we of will the stimulus understanding declines? stimulus and the that you're have bifurcate can those is rescue there'll the numbers million a how money

about occupancy that your about to think money, that that to quo trying about revenue you out offset And loss status lot Act on to think coverage. a talked We've to a used the Yes. you've costs and right how when prove it's essentially CARES the have money of increased create side. you

a matching to and a there's of require. the is dollars reconciliation there's that those So going government

quo it status terms made in coverage coverags about I stimulus out that to terms a present coverage. creates quarter. provide when in calculation in what without money how that think that we money So pulling get just That reconciliation of the to easy we We have of math the through to to so said to money next of we'll our basically in that's that see QX for coverage stimulus our discussion talk do of we the now. being it's amount a

That's great idea. a

dive do is consequences not perhaps there you terms either be start housing of, a anything into long-term development asset less in you lastly, my that. component on class become And senior of point to senior down thank the it corollary you? related need for dialing the adjunct see a pipeline. first in does evaluating positive but to in of a, a then relates this as that But or time? negatively think just for senior deeper you're could an to yourself So sort pandemic And the obviously, your you sort of, will this for more portfolio specifically? And as to taking look broadly, pipeline housing that portfolio to housing the of

Yes.

what long-term I be all our ultimately protocols benefit beneficial in around of of infection the to So ultimately think will clinical the we're will control terms business that through residents. going

I acuity don't of housing, senior of In with always think is And senior terms that high end home needs changes. going about acuity dramatically our I don't focus housing. the to senior housing gets but be in And think curve. has that on that of how think It's end high terms still still emphasis we disintermediated care, been our very high driven.

Great.

down? a to the well-being of from it's of your juxtaposed So, sort of, kind think it of the way about rate step skilled that kind next the residents? of like next standpoint nursing to Is

Yes.

Did I confuse that you question? with

sorry, I No, I'm yes. said,

from Thanks. me. That’s Great. all Okay.

Thanks.

[Operator proceed. Please comes Lukas Instructions] The Hartwich from next Street Advisors. question with Green

Thanks. Hey, guys.

thinking keep several years It for nursing for a sounds left one pretty government me. that longer support there? or will about out, that there optimistic if people than the industry the COVID is Just do lasts re-upping I'm from just near-term think you're support, even the risk think the skilled quarters like maybe government. just you

based need the of think nature a that to-date this the is we've reflection I seen support government of business.

allow support supporting point as wouldn't there make So isn't industry this sense. fail I it because it that to at after view would not this to expect -- going the is industry government sufficient to just

you. Thank

queue. questioners the this no I At showing further time, in am

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to to Thanks for joining free or out Matthew have. you call our today. Bob Please any reach questions with may feel

you The concluded. disconnect. today's attending and conference now you has for Thank now presentation may