SBRA Sabra Healthcare REIT

Michael Costa Executive Vice President of Finance
Rick Matros Chairman and Chief Executive Officer
Harold Andrews Chief Financial Officer
Chad Vanacore Stifel Nicolaus
Juan Sanabria Bank of America Merrill Lynch
Smedes Rose Citi
Daniel Bernstein Capital One
Eric Fleming SunTrust Robinson Humphrey
Philip DeFelice Wells Fargo Securities
Good day ladies and gentlemen - and welcome to the Sabra Health Care REIT third quarter 2017 earnings conference call. This call is being recorded. I would now like to turn the call over to Michael Costa - Executive Vice President of Finance. Please go ahead - Mr. Costa.
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Michael Costa

Thank you.

Before we begin, I want to remind you that we will be making forward-looking statements in our comments and in response to your questions concerning our expectations regarding our acquisition, disposition and investment plans. The status of our integration efforts with respect to CCP and with respect to other investments this year, our expectations regarding our portfolio repositioning with certain legacy CCP tenants, our expectations regarding our financing plans, and our expectations regarding our future result of operations. These forward-looking statements are based on management's current expectations and are subject to risks and uncertainties that could cause actual results to differ materially, including the risks listed in our Form 10-K for the year ended December 31, 2016, and in our Form 10-Q that was filed with the SEC yesterday as well as in our earnings press release included as Exhibit 99.1 to the Form 8-K we furnished to the SEC yesterday, as well as in our earnings press release included as Exhibit 99.1 to the Form 8-K, we furnished to the SEC yesterday. We undertake no obligation to update our forward-looking statements to reflect subsequent events or circumstances, and you should not assume later in the quarter that the comments we make today are still valid.

be this will financial to references results. addition, made call during non-GAAP In to financial included Form the to these as are the to of review Investors encouraged the release press non-GAAP XX.X included the reconciliation SEC and the and these our respectively, earnings results information explanation of furnished measures Exhibits measures X-K GAAP to materials we comparable supplemental at yesterday. end as and well as XX.X, section accessed be website in also of can Relations our Investor materials These at the And Matros, let me REIT. Sabra to with turn that, the Chairman Health over call of Rick and CEO Care

Rick Matros

Thanks, Mike. it. thanks us everybody for Appreciate today. And joining

I concerns Let had integration is and the me where understanding such well want pretty have And we that whether expected. as Sabra going X.X by some today was deal closing of about My we integration of actually update the expected that activity the integration and about North give and as is CCP issues level uneventful. we've of and closing of talking the you with are. the all of to uneventful. The were report Enlivant so and start proceeding there American the flawlessly was as

our our has right team and obviously infrastructure here Although causing management is increased helpful of happening. really at to now that going senior after That's Sabra, really the which delay, it we staffing generally. to January, to expect We've added close smoothly. actually Xst reporting the but nothing been so us everything's

be staffed need handling. and So, handling we everything to fully are we pretty much that

about concerns have So now should not that. we any

debt announced that and that few being months leverage impacts the average our benefits In down X.XX of terms other past to of approximately of all over weighted X%. of levered the realized, cost now deals the some we've the

In have of to with we the scale kind we're increased that, pleased addition diversity.

the narrative. any we a will particular in be we'll and with pretty credit facility longer issue investment any is whole at About tenant larger So, no the is Harold us have grade controlling some not a company's as ratings about benefiting outstanding point where talk addressing of our detail grade. from of near bonds given benefit being And drops do skilled anticipate more nursing we performance term investment to these as in the X.X, XX.X% And XX%. exposure our of well, dramatically the savings.

one of So, a and price dramatic still field at in former a the a doing we that's are additional high drop exposure just CCP deal. with

increasing more continuing good this as market misleading normalized hopefully, quarter enhancing because actually to we and the we the by about housing we on a it's well portfolio. in $X.XX see will We the had improved commitment be that but and so well Harold it's detail and our will the have we dividend bit and will the discuss dividend. So, little senior from prorated a feel be as that dividend dividend, and that pleased are a increase to catch-up to the XX% increased, dividend able

couple improved. Signature. our performance Signature's a first about has talk actually me Let of tenants,

negotiating team the the we they we restructure page. still well plaintiffs same the on are with, and just there reasonable bankruptcy, management negotiations That this claims. whether If depended upon the doing this working to of is in company still the that get in think, on call along is be opportunity other with they negotiations, very with then have net and liability we together. bankruptcy, said, keeping the eye restructure and through their So, if we're the faith, the doing about deal. really one think are that about is a because payments would they're a is the exceeding their fact XXXX. we ball bankruptcy. a I point sheet requires those for the I really are knows And outside close landlord, quick know good would that I there not good the I with in Everybody, they're larger pleased going our to projections relatively working of claim. a are everybody restructuring go my to the particularly thinking that think BK same currently of no of whether outside through be of job, cleanse balance are now I the constituents I at on every the that comments, the the construct questions on

in to pleased Signature. very And having way, with close the size and we doing guys pretty and we stay BK little to again, been those place, and either it. be so are were intact the near-term a about deal a will direction the management relative of now we're constructive have in which good will much portfolio So a feel in who going

on close the process majority but stable. XX have that that, the relatively In after the have the marketing we close we shortly the how detail into the begun The other year-end XX. been before terms we'll have of hopefully of and Genesis, on and remainder get results

well So, and put they're and I'm week. we or with they together comes to constituents. do for its announcing simultaneously deal see that we'll be an talking know their that once all to earnings in probably on us, to talking the next call and And with follow glad announcement Genesis that renovation constituents sure of some the that we're will addition as restructuring

this a merger, of as acquisition everything still shown on the are we pipeline, to we small and witnessing. billion. about the to In have say shown, is We We're just as and the of but small It's portfolios $X pipeline, frankly going deals being CCP extensive all had the at continue our primarily where deals will of currently expect it Enlivant large year. which focus the this would the and the that year, it merit been have large larger I that we housing end of that would the end terms of those are a quiet that -- concerned, point shown have time, senior the are since we've particular we've we given be of already would think merit point, deals that have deals. very that determine of the activity see size we -- thing been despite will to at I it good announcement at in I year, far look

terms than announced side at I of year. from expect us wouldn't of our end debt on in bonds, other with the potentially So, the announcements much the

senior it respectively. down and of coverage, X.XX and X.XX terms our X.XX is sequentially transitional skilled housing EBITDAR In X.XX from and

skilled quarters of important down What and on of over to being couple the years. nursing it given slightly our skilled say X.XX, and coverage keep It's to couple not on been last past two going regular of basis terms exposure healthy increasing. the things. transitional care the how that noted In is increasing I a is more has

And at skilled lower, was so, a around X.XX. bit really future. here, and down little sort coverage healthy Occupancy somewhere look but still factor that I think it's of going being was bit foreseeable to the to very little again contributing hover the

applies our this our and So, as concern. lot causing a that point, speaking, a amongst little operators. operators any around senior are skill. seeing They well we're trends to deterioration margin, of seeing not stability we that move but as bit At there the housing with are not any generally us

coverage from X.XX housing, same-store essentially Our senior for is which Skill for flat. X.XX and is X.XX

above with occupancy points portfolio for points for highest just occupancy the is a basis, mix little predictions and to Our believe skill mix We to skilled going our harbor basis not space a obviously is probably basis industry averages. going Sabra is traditional have go-forward portfolio XX the fluctuate XX.X%, any bit we're the dramatic XX respectively. Sabra somewhere number, with around to skill increases. mix and on of occupancy and our XX.X% this Again around that -- sequentially still in they is primarily all it's skilled see there well

XX.X at is Occupancy on occupancy points turn with XX XX.X%. skilled basis basis basis housing, Harold for mix sequentially, go same is skilled a down skilled XX.X% XXX points. Harold XX.X% XX at when occupancy is will Andrews, is same -- sequentially same-store is sequentially a and I'll to we And for to Q&A. down basis over at done, store Our points senior up it mix is up that with store XX points basis and transitional

Harold Andrews

acquisition the assets another with the million in material a financial a earnings Thanks date an all increase financial deferred relative total for estimated total the operations related labor QX don't significant the way, merger captures that Rick. numbers of or our the August recorded million in significant XX, On Said because forward. expected on Sabra have it $XXX in statements values. legacy increase XX CCP costs past balance receivables strictly anticipate reflect our merger investments assets quarter, the CCP. in associated costs from to of of payments in and activity for our fair been impact acquisition of our completed of quarter costs are months prior to includes we Furthermore, of future or were and and moving present the no $X.X statements issues billion, transition. transition CCP our $XX.X the CCP note, million We collectability who is XXXX, to Included combined based including results impairment compared with retained to any may resulting with entity historical accordingly X.X to employees from acquired on legacy $X.X increasing transition any the clean approximately which to and in in could sheet costs and $XXX Sabra's total from quarters. slate This important liabilities million of that merger the with to future primarily relationships XX. provides CCP

necessary the Finally, will quarter. fourth allocation in and price preliminary if the updated purchase be is

Now results. getting into our

compared cash $XX.X XXXX. transition quarter CCP the an due revenues and of million from income share, a in For XXXX, a from NOI Genesis $XXX.X of third and or of million X.X%. $X.XX XX, $XX.X we predominately respectively, exclude from costs increase for These normalized basis, per to was and CCP to million, $XX.X are and properties losses. $X.X doubtful million normalized acquisition AFFO expenses the and million XX.X%. were $X.X acquired to of million normalized merger-related from normalized termination increased which basis and third $XX.X $XXX.X fee provision same-store increases compares million ended lease merger. revenues X%. September costs On This on termination the per and million to $XX.X of three $XX.X million and for per quarter of merger the $X.XX the million reported was $XX.X and of share, million for $XX.X revenues accounts of million and quarter generated normalized NOI $XX.X $X.XX and and FFO quarter million from NOI was months basis, an an share million of excludes in or exclude FFO increase and fee million $X.XX normalized a on and $XX.X the Genesis. AFFO XX. This XXXX, normalized related share compares loan XXXX, $X.X income for to certain to of to costs non-cash transition or third of CCP lease $X.X $XX per increase the of million or of million FFO FFO

to included the of income transition the audit and in X.X% million and costs prior costs, line $X.X attributable quarter of tax to G&A of CCP $XX.X legal million $X.X Recurring quarter, and which was $XX.X of million for expense stock-based the third common X.X million of For for with for net cash quarter fees. million G&A the quarter, is related quarter. compared totaled recorded XXXX. the following. $ million stockholders of we $XX.X revenues compensation

G&A We approximately to per run quarterly quarter million expect to $X.X going recurring our cash $X.X rate forward. million be

of revolving $X.X as XXXX. quarter. the compared Both for compared Net MOUs $X.X the quarter that in XXXX. selling termination compared interest the of in million primarily facility rate the basis facility excluding bear a the our improvement quarter in XXXX, the credit expense sale of quarter $XX.X deferred acquired quarter of million leased to on This an prior in achievement X.XX%. million pursuant was million at September recognition prior of XX payments debt quarter interest facility total One our September to in XX $XX.X improvements of of basis financing under Borrowings agreement. million $X.X income of weighted quarter totaled XX, of borrowings quarter. $X.X million is an $X.X to points third Other facilities. million estate third included received rating over to investment-grade the Our for interest credit of XXXX, third the credit defined related over was Genesis to of of result points unsecured $X.X costs credit for quarter compared quarter the in Based unsecured for outstanding XXXX, the revolving interest expense the Other X.XX% as on the third XX, as the the to income skilled million and in includes average totaled Genesis under lease XXXX. real two of improvement at amortization to $X.X the our from CCP of nursing three merger. previously gain and million is

into facilities for XX X two entered These an the cross-defaulted additional expected GAAP have $XX.X an accordance to master transitional XX license we Washington. of with X% During skilled lease rent of of with in facilities EBITDAR underwritten nursing are On investment California facilities consistent cash an yield on reduction beds to X.Xx. net additional annual the agreements. million. shares debt before with The portfolio triple-net are net million XX, North of These and in offering X,XXX initial $XXX.X closing, the quarter, determined additional and and collectively of expenses the million. completed closed On X, proceeds yield option by XX of to The proceeds cash are raising coverage At were we their down of October revenues we American investment located lease leases we an long-term million care before facility close of in for purchase purchase the generate XXXX, of a $XXX.X million. equity pay and resulted to $XX.X used initial an an and exercise coverage dramatic with $XX.X proceeds facilities. EBITDAR underwriters EBITDA. XX net the September to adjusted in expected year-end additional credit the receive XXXX, revolving expenses our our in an

under from the XX, merger had which totaled we of consisting and by to certain $XX.X As million available of September million. of costs CCP of revolving million, operations $XX and facility cash cash liquidity million cash equivalents credit our balance acquired $XX.X reduced $XX.X payment was acquisition payables from the approximately million. funds million primarily merger and of flows CCP of approximately available XXXX, Year-to-date $XXX.X opening of total related of sheet $XXX and currently

flows from approximately would cash been a operations over payments, year-to-date $XXX.X million, these increase Excluding have X.X% QX XXXX.

secured strong X.XXx. X.XXx which X.XXx; to a Interest XX, Sabra from metrics to Fixed X.XXx to merger charge As from $XX.X debt by part September received as reflected flow all flow coverage XXXX. above, unsecured to covenants credit as compliance a million X.XXx maintained of on EBITDA asset CCP debt-to-adjusted of the indentures and and in merger, including were X% value debt And increasing to We offering, value our activities agreement with revolving coverage, in X.XXx. senior cash asset the at improvement XXX%. held of our a seen secured our from unencumbered the XX%; have dropping total notes as debt statement. cash investing from equity of increasing significant a from healthy CCP asset cash debt under mentioned net our and X%; to dropping credit value from at our

future new we declared room range our need is months equity. common X, funding full quarter; November with our dividend stock XX, $X.XX X, quarterly close of an on the per live way XXX% we XX share million remaining share. AFFO The leverage per structure assets a in represents between low quarter proceeds full approximately related difference Genesis plans reinstating using also A from XXXX. us the XXXX, to asset through is November and respect to $X.XX investments XX, dividend remaining XXXX. The of in is in XX be reduction Program November share are the fourth the paid $XXX close previously to and previous ATM A approximately XX the we And remaining on staying $X.XX as dividend This common while inside our the Our of $X.XX indicated, November match XXXX. resulting in the $X.XX Proceeds dividend XXXX. in of have paid gross dividend and quarter increase of and sell of first prior board $X.XX million of those Series which will XX, that Preferred in committed our per well share, X.X% the will the our approximately on stockholders QX cash quick closing from per business XX, of of target represents dividend of X.X% to asset manage the leverage November the record the to the to of stockholders of: from declared our dividend directors beneficial. on on million. of directors ongoing negotiations per estimated of of on reduction assets a Stock. coming On previously us Genesis paid approximately provides we work of stages full of to share. previously. $XX preferred mutually leverage to based as per of $X.X likely normalized consists XXXX, which various of price XX, per pro-rated to be yield XX% million one, in record on On on rate Genesis November and $X.XX rental of liquidity share November transaction, With XXXX, The to with future $X.X be quarterly rental sale board debt XXXX, two, to a XX the with the quarter anticipate and August portfolio, per up a the dividend which The of in Genesis share, stock, business we update announced the allow close sales, debt, quarter, complete in the a the close is of as XXXX, X, of dividend quarter cash a continue of portion Genesis. details share income to to of to from dividend will income announced in recently sales XXXX a expect

expect plan have CCP final as weeks more full the to year don't for plan in the We is those information portfolio few to outlook being executed expected. the we With and on plans change respect our repositioning, the to expect coming the XXXX.

We of above. on by place have with track year-end as are with exception the Signature to effected agreements the Rick possible tenants in described

reaffirm that, the we full that disclosures say CCP We to than equal revenues reductions. just fourth the would issued will to open repositioning we million the immediately with our quarter continue to annualized to an to coverage from of for This I up is guidance. our which no more impacted be These in by plan. quarter. basis, it year for And $XX.X in tenant, under reporting the received, $XX.X resulted lastly, is $XX.X actual income this reduction recorded guess one be in cash can our expect was in reduced the payments merger Q&A. the earning our the previously normal Signature $XX.X in and And of XXXX the $X.X it date aggregate. million begin the I XXXX million. reductions approximately rental reporting a We again methodology. in On million relief contemplated million to respect reflected rent and With other

Rick Matros

Harold. Thanks

We will start now. Q&A


from [Operator Vanacore first Instructions] with proceed. Our Chad question Please Stifel. will come

Chad Vanacore

actually Canetto on It's Seth for Chad.

I rates an First you those Genesis senior and kind any is environment? mentioned question that housing, acquisition redeploying funds all on that cap can update on the seeing the XXXX of give the are know idea much just acquisition you as what just us outlook, an but guys the pretty on of that's kind pipeline from you

Rick Matros

I'll Yeah, to turn about to talk over Harold process. it

just we're are that portfolio quality of senior terms lower-mid most X.X we're really In rates, the primarily senior the on seeing things five on the of between while the cap to memory nursing, still mid skilled and cap seeing rates that's being portfolios, for rates are cap size that's handles anywhere high of and and looking the some Xs housing, the shown, for asset people for out, part, depending X, X are care. and there AL larger housing from

shown shown, don't generally. us, towards know active because seeing previously don't lot the so but a were changes means of us more were across that active things the how to where in For that Sabra being that but with to I the historical depth, compare lot know I all it's we space it's event a for

Harold Andrews

far about Rick predict thinking out very as bonds but -- this before, XXXX, into taking as year. it's to we the that as about as, I talked difficult you Yes, later think the anticipating moving we've about the are if mentioned proceeds from Genesis timing,

in as keep do and able it, of said get will that new that, we'll and a Rick leverage revolver for we've billion to the liquidity we to basically upsize give offering be use to paid will where we obviously as dollars plenty that. to January, to acquisitions we that our acquisition I availability do will know bond deal, future we the can as need likely early we be down zero, we'll that the which then revolver finance of Enlivant got which As such the keep us said closing

short-term the predict volume us will So give that. it down of then used Genesis then to as when to hard come from the those think hit It's of as revolver acquisition more liquidity proceeds about in pay and being hits. to just assets, timing in sales obviously

to liquidity of plenty that. have will We do

doing in of match the we we liquidity, to say fund plenty So significant with come acquisitions have we through so safe think equity. amounts will ATM, we'll need I of from our to out taken the that out the proceeds here as get can relative we've a bond assets and deal that's offering, won't we they the use in and get raising have and refreshed think to revolver certainly runway a Genesis bonds in seeing sales revolver cautious be given prudent time, to then it's We'll a the very once but fashion coming. be stock nice those start got I prices

Rick Matros

did announcement, in that the thereafter the equity be on be you us shouldn't credit timing on we and announcing there were always wanted equity And was American fact as and and and stock, we -- shortly huge the knowing people going North to and made raise we at together to a the price that doesn't the clearly leverage the like stock. and deal and were the it when expecting did overhang well, stock do looking at time, to going that that offering indicative point like of what we At the come forward. Enlivant we overhang

Genesis than what to did. position in we recover. has of to so outstanding assets, So tried circumstances were a coming in the quite time pretty bit will got we we the To we proceeds -- a be sensitive shares while time needed and we've remaining think is position made and the It normally announcement. in best, some to the we having be that good lower to of so which a we're the it's and where do remaining the forward stock offering do sensitive in why not we the given going equity X.X% pricing all what that's we at about was

Chad Vanacore

Just acquisitions, the in like just the about nursing what's guys you're skilled looking at it skilled and now, senior you portfolio then of mean dispositions XX:XX future to strategies, trying nursing? updated it kind mentioned know the given housing, diversified as XX% I is I stands be

Rick Matros

I'd with than I the said has nursing supply, got it's against demographic, Yes, think before we've been. it pretty of continuing expect on fact increasing XXs too, exposure, knock skilled And of the a before the good sort in the remain there diversified skilled reimbursement changes into just the actually we of some we've it of not ever be that to and will We nursing exposure again, dynamics that space. as different no in discussed nursing. dynamics decrease the with skilled is went up this really off skilled and confidence so senior CCP many that to we doing to XX go up housing and knock CCP of that skilled benefits merger quickly on increase we deal means merger. as pretty obviously as it we skilled it part we we did we're much and down that get quickly that that was nursing with did from have got working -- after nursing because worth the in know we the the have deal, the exposure nursing a to almost points knocked that very exposure

will the the market hard clearly regardless the put stuff we all in they through sheet, think is that over skilled even us haul, all nursing with memory, look every had look relative a short So, be longer given so lost has the where though you think were that, and have issue, They've of do, we if investment and Sabra, like lot other before. less but have to Genesis XX% balance outlook we the better what exposure we versus before Genesis anybody, where exposure, of at we we of exposure our -- get a on pretty outsize unfortunately Genesis. were much that continued shouldn't off be people time point it company tenants diversity should now missteps, given view exists of know in it than at versus tenants for the size had activity size of today and digestion the that I people I think for the wacked we company, our that and what the to and grade the we at market and get of the we


will Our Juan of next come question from the Merrill Bank America line of Lynch. Sanabria with

Unidentified Analyst

that -- call? Kevin and actually the on coverage where mentioned just a the there quarter was you had the senior care earlier on for I on guys decreasing It's quarter, Juan. center question over

Rick Matros

through that the and lot acting management can No, nice no, who management have decrease was upper also CFO senior unfortunately, he a CCP smart on good going but who had merge, roles impact to that the and are think there changes is the so we can a in thin. there CEO of we spread really coverage, a changes they in were the acting pretty we know, guy COO being -- slight basically, some portfolio. Prior there starting you

pretty So guys have all good well, given got results been deep where a up have they have at that and the ship little that company. their trying held all churn with those those spots ride with bit to management they dive have sort of and and still pretty and a filled we've they pretty the been are out how

unusual, and that merger there's at looking repositioning the surprise the a nothing nothing That's a happening to that's So are or rent that about how there. Harold us, nothing changes talked we $XX.X scenario million been everybody And from that has worst-case worst-case numbers. the it's still that a remind scenario to perspective. still number the XXXX out time. to remains long That's for our going there

Unidentified Analyst

of do guys at looking the the acquisition. versus have about guys thinking housing or acquisition consider comparing make just How guys also, or pipelines criteria another do currently now? American then North stint you your you generally you thinking And right senior

Rick Matros

nursing, of X makeup XX% do going that that we us, it be any now between of kind circumstantial, and the to shifts guys is that's operators it in just that that's well think had, that space, we've bypass pipeline it's to along not deal, mean in. paradigm space, sector space. Anytime now another right narrative and business portfolio, operator guys and business good but nursing I does doing we through want see well. our kind acquisition narrative is shift is this from any I skilled the have the the don't to do don't said in that be always every they're There in that about skill just this market, believe Yes, differences or weeks all would because you of we've our

the it is look is that's space skill our net so if acquired That's our case, the why occupancy as it's that to good, operator-dependent. industry So, going that's in we've far at always why why so in above high our been have just is. And average. be numbers operators our you skilled

And that to We're a make of are background. North X-star healthy. dependent their rent so able Medicaid Medicare. because to that kind revenue unique And assessment. the in XX%, be of is size XX% kind XX% we're That's operating having find that really position less of portfolio to with those rated being rated would I We're challenge on a operates the anybody coverage. identifying, that being in with not America, case we're remaining of the and X-star

we're do. So going if see this our it out. space going space. and the a don't despite market inside sentiment, the that we characteristics deal to think we We're space operator has characteristics that that make them than anybody I think that seeing know in winner we and kind of we another to the do knows clearly


Smedes of line come will with Rose from the Citi. question next Our

Smedes Rose

of exposure, And of this kind one-off? more remarks, its to under your pressure, of it's I I wanted open in next looks portfolio. year a sort if then given confidence sort it's pressure and investment like are in the on your be other about you seems coming just continue Enlivant can general, to that to ask you it's under some more just and going to like turnaround portfolio or year, And senior phase? housing guess what's it's RIDEA just

Rick Matros

the space of comments. of recession in demand started lot was LLC., a of as senior disaster Yes, to know, know, I through, have issues as occupancy, in Callison and construction. quickly, with long he pristine Holiday a been and a Enlivant sort all new regulatory the fantastic One, together then mean supply the one-off. reputations pretty issue acquired space of everybody is well. in continue before and got pretty of it's enough team runway hitting and with with you different the Jack will and that this in into couple a bring put TPG occupancy position and not knows harbor generally. all post a just licensing peaked the but with was so more mid Holiday communities to space ahead the operationally, XX% Enlivant portfolio a I housing with a pretty because generally still we really the TPG place, the management and a the remarkable improved results reputation as it. a XXs make than different a have as they've And

So long want to you there pay -- homage they recent nowhere way world go. series. to Inning a near got if Ninth The They've to

and in LLC, perceptions were having I guilty trouble generally. position to nice struggle. for compete tend all time company, we And one we the to and he think of when a it's and despite in seen that really to about run. the that space a were of of company when lot are think assets and company interesting, a facilities good being It's the a facilities. then are the and competition CapEx we've They different It's companies everything very compared are is easy well. of good. assets as just a of because was those the its predecessor the to so in about, in So that, think to and surprises really Enlivant the they're visit in long but there's going certain not I they they And good because of Jack market. went case physical think of look actually poorly number That had the facilities

those in facilities markets. best the are they So,

if larger our different still RIDEA pursued that about think in of right RIDEA. into REITs out down an a levels though And are purely sharp things we've of slowed because the And runway into was has and upswing on back view it in as in lot duck got the sort more different getting RIDEA, you so and never growth space, XXXX a So, obviously. lot and turnaround, of you eroded operational the even operators sort for there. tails really there, know,

returns really been If the nice. arrangements, the returns when have into from those entered you RIDEA all those entities look at

want not to would that we up. the in that's So, stable, enter but company the we into as a company way a viewed RIDEA on in

we the up. They're looking on way at something earlier. back like at space Enlivant, the So XXXX it's way or in look your

are new mean like markets developers is if entrants markets. So, market, which there smaller the don't there smaller very build any there in secondary like, of to we little period happen is from I -- to competition facilities because the

for So that's with we of -- starts with so next absorption expect we recent it's time and over on is things agree ride say normally you going couple into look I stabilizing. recession it the lining pressure years down level. It's start the can to occupancy. pressure sharp nothing like there when at that there sort slowing, will so of on construction will And think ourselves I as growth though distinctly, then the up. the with was still even certainly because to that quite some still all we see you and during And up is we get getting

mid which where that's like is start we what from. growing So and be of not place XXs bad it to to bottoms high such out kind that's a

Smedes Rose

housing, those more of so triple-net acquisition in And looking those your when as a opportunities be would billion senior that pipeline you opportunities. $X mentioned at

Rick Matros

our The triple-net. primarily that have in pipeline stuff is we


with Daniel question next One. come will line Bernstein from Our of Capital the

Daniel Bernstein

question bill tax tax of in or more on Just effect review? tax up -- your view, about the thinking morning triple-net, RIDEA, this why the RIDEA new all do the versus at corporate change code the of kind triple-net code you continuing won't that the with

Harold Andrews

but some no. think underwrite looked all. place look Dan, based may the we're a it's that tax be that, versus as that's that hasn't not from at beneficial something mean, there was we it going doing affected and tax It At to going to tax RIDEA investing from we credit always on some improvement we RIDEA, structures. change this we've be on presumably would to view There be, changes about just our -- in corporate whether the I before. in which at our in code, improvement to point, triple-net thinking when us,

Rick Matros

this something they're Washington? you Dan, going mean at So think down to actually that

Daniel Bernstein

No, it's If rates within doesn't me. to more attractive picked just question TRS lower up tax that there an within is could interesting be tax TRS, the breaks triple-net. the some make

Harold Andrews

view Yes, we it's change I to on enough wanted I our mean it's this. how think would, -- certainly but

Daniel Bernstein

preliminary third the portfolio but Is far Appreciate Holiday's that. for you there into quarter, guess, be about even, on trends that down of could little quarter that second seasonality. or a quarter third And in normal obviously the to any fourth terms quarter update you performance? the tick talk have seems holiday, do any their I bit, in so

Rick Matros

It has been stable. actually really

we shift a in much there more but and landlords despite certainly their model going is as gone remember portfolio professional been change anticipate coverage complete traditional Holiday on major fact through they've has that don't pretty so this live the our onsite. executive So, transaction stable whole numbers, that's the the director the that from paradigm basket, change, guarantor a and with managers to are with the see, the us which and we includes Holiday, other that necessarily don't specific team

give XX% in near they not upticks It So, them doesn't fact at XX. so nursing is or have the anywhere steady; seasonal on month around for season -- that are much are that the the as occupancy the and steady significant skilled held report it the margins and impact trailing as we EBITDA held take given any anyway. given

Daniel Bernstein

over $XX last want And before that, right go hear -- $XX million Q&A the back that I the comments of just comments of the the million stream? out to the rental about, I already

Harold Andrews

Yes, right. that's

Daniel Bernstein

Any -- mechanics that. for

Rick Matros

we transaction, at mechanics are closed accounting So, the for GAAP this on revenues. our we the CCP when looked

an basis, numbers and the just redheads are now one we're you recording and effectively million the actual revenues We if that about Signature at little not $XX rents taking because we're recording contractual the already in over and tenants other and look of at not so can for contractual $XX annual million is that level. the the of cash it recording rents were

Daniel Bernstein

of that actual what -- account was breakeven? out was million $XX the the were what And number that

Rick Matros

quarter. million for the $X.X is It

basically little right that's So remark. a


from will next Okusanya Our proceed. come Jefferies. question Please with Omotayo

Unidentified Analyst

Omotayo. This on is Joss

half you of a follow-up first Is about? Just of on pipeline talking that quickly question, or… from XXXX one How have of some the $X other you over act quick can you kind billion that do the think been guys questions. the

Rick Matros

event. definitely you which hard it's done. can to not Well, which predict, always are to done XXXX going a get It's get

-- stuff. got that a you it's process if So, all and bidding

months. people next us for think quiet will can the be that expect I So few relatively things in

will is to see affected, but it's how much hard So, we exactly. predict

Harold Andrews

Right quiet. for to probably a now, it's us be good thing

give done while market as done. in the everything some what we've market -- time little the we absorb more of have benefit a that to For the


[Operator question next will Our Instructions] from Eric Fleming SunTrust. with come

Eric Fleming

of $XXX do dispositions, that you CCP million CCP have the with the out portfolio? plan that? any still on on the that dispositions question update Quick Is of

Harold Andrews

Eric. Yes, are expected. change progressing No They same, as it's basically there. the

as already will discontinue So, that have those and occurred on we discussed. we two had dispositions

Eric Fleming

rent just the cash, the do cash jumping coverage and that on basis, Signature tenants to that reduction? reflecting number now? you pro the coverage reflecting back reflect moved them you rate so in because run reduction to too, numbers rent in as any right piece the the other the that And how Is I forma effectively thought didn't of

Rick Matros

are contractual numbers historically. a it's great Yes, pro rents coverage question. The forma on based

merger, I because my in forma those actually we're numbers right presenting these all said pro flow periods So coverage cuts the once we to in merger. prior rent comments, are to now on the based -- as start will actual rent reductions numbers rent that post

And so rents just it's from Signature. contractual

question. So you of the don't see in it's good a any coverage that benefit so numbers,

Eric Fleming

the $XX.X basically the so, just coming as million by And just out run into million being from we're on the -- balance XXXX, $XX.X at revenue rate, looking to we're looking at sometime the going right?

Rick Matros

That's right.

Harold Andrews

way it reflected get we will in Signature the other be them if X.X think more or that actually like to. we to about the it is, coverages didn't said So, the then was


you. Thank

from will question Fargo next come Our with Wells DeFelice Securities. Philip

Philip DeFelice

an What if were like? could If the is on about schedule little health the bit last update American your for the that top and at of The wondering tenants, quarter, provide at or looks re-negotiations you million of interim? kind $XX XX Wingate there X.Xx more moved they portfolio chance on of a We in of as of least the North out a lining. running their were expiration acquisition any revenue than tenant?

Rick Matros

that you I are evaluated being part of for tenants just Wingate that Well, adjustments. the tell would rent is some

for just we're leave at And of where kind negotiations in with finished and not we're to those going now. so, it so I’d that settle

Harold Andrews

the selling they're finished And looking part not of with assets. we're also at is, Wingate reason

going sold need that's they they still to need assets. some are we some assets are help sell not working on as will be which with They of us. help them but net when And those company. because So, on help should much big repositioning, evaluating they that a

company the selling they isn't assets about just of repositioning, rent the looking kind the actually are and relatively So at earlier, material are adjusting of this we piece as said isn’t includes that looking effects portfolio the looking all retain that about rent at the any [indiscernible]. it's should rents, looking at entire includes whether of which at particular they that facilities, tenant

it's So, go any number things analysis. that that into of


this I'm questions further you. Thank no at showing And time.

sir. Rick Executive remarks, comments or pass I'll closing for conference Mr. Officer to the now Chief some over back So Matros,

Rick Matros

available folks much. everybody in road today appreciate see I at know do NAREIT we're middle show then questions, very December, in so to we'll always Thanks of the Dallas a calling and a a well guys I'll quick for and the New and I Boston there of any ping as in and free see of lot I going in in York to out please number interim feel Harold and us. and you

directly. We back will get to Take care.


the conclude disconnect. can Ladies program participation today's day. and does have Everybody all your we gentlemen, on for wonderful This a thank you conference. and