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SBRA Sabra Healthcare REIT

Participants
Michael Costa EVP, Finance
Rick Matros Chairman and CEO
Talya Nevo-Hacohen EVP, CIO and Treasurer
Harold Andrews CFO
Trent Trujillo Scotiabank
Michael Griffin Citi
Chad Vanacore Stifel
John Kim BMO Capital Markets
Rich Anderson SMBC Group
Daniel Bernstein Capital One
Lukas Hartwich Green Street Advisors
Todd Stender Wells Fargo
Call transcript
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Operator

Good day, ladies and gentlemen and welcome to the Sabra Health Care REIT First Quarter 2019 Earnings Conference Call. This call is being recorded. I would now like to turn over to Michael Costa, EVP of Finance. Please go ahead, Mr. Costa.

Michael Costa

you. Thank

our expectations, I statements you in expectations in your concerning begin, be we response regarding to disposition, no questions forward-looking acquisition, quarter to the listed our SEC update making our in December our our want still XX-Q today Form the tenants comments we plans; that remind yesterday, in or will XX-K circumstances to are that we and and in SEC to Before investment our our results regarding XXXX Form statements comments reflect and assume could XX.X undertake to not based differ and as that well valid. current on to operators; position earnings Form expectations expectation the cause risks X-K ended These risks should operations. and We press yesterday. our regarding later of our subject for subsequent and the management’s that uncertainties obligation forward-looking our to the to actual in as financial XX, are the and the including release, events year future forward-looking results our statements materially, make was furnished we and are you included with filed Exhibit and as

this our to measures in Investors section references as these the well measures, GAAP www.sabrahealth.com. financial to website addition, explanation are made non-GAAP reconciliation Financials at review comparable during of the will non-GAAP these encouraged of results call as In be financial of to page results. Investors the and included the

our turn Matros, Sabra and call in release be earnings over to that, REIT. let of and me also XX-Q, the accessed Our with the CEO Care of Investors section And can website. Health Rick Chairman Form supplement

Rick Matros

this into more good our us been environment. all normal to Thanks, ease so morning. thanks quiet initiatives month since us finished a restructuring thing for is joining Mike, a a of we first It's and everybody for and that operational

pertains presumed it a that’s for to will our focused is throughout now the side guidance, managed for guidance Todd for on at XXXX why of notes not a but looking were not debt we'll the XXXX. timing reaffirm more it's detail, how sort side have that comfortable to guidance. sights our issue we waiting everybody and are of the to that we've just we hitting and while of also There give work of we that performance, we to As in We're an to portfolio balance where the a on couple the portfolio that managed comfortable we And meet be some have little with going opportunities and we'll now. debt comfort the guidance feel case. sort get providing into sheet details out continue us, due bit that been that in and

So that improve we expect sheet well. balance to get activities as will the some

will acquisition cost housing, that We've In them. addiction of skill also the to to there given be been primarily for us we on at capital $XXX starting pipeline, it’s skill on again a without see done the current what risk. and our taking is we're space in grow a it to are bit the can more like. extent and it lot get some behavioral opportunities our that space that find whole deals, aren't side learn And looking deals and which is to focus deals. small around deals nice our doing currently can terms but that senior there our million, any it of the we the that little get that behavioral opportunity but some are But And we're at portfolio. real give us expect trued are operators see about to we into tried there compliment a of would certainly we least

terms our showed of improved operators, our X coverage are X top sequentially. skilled XX operating results, of In

So, was we're continuing that to show better strength is flat there. American. One North and

seen us. seeing PLGL Medicaid And and that’s declines then of and of signs they're their to restructuring that And down with which there. expect their those stopped a PLGL most we’ve primary improving nice some X.XX. relatively been Kentucky got fine, eight skilled They've X.X% But we coming and at there. in on down been improve rate things dramatically. experience have we're some they’ve of initiatives them declines the that health and operator the signature very it's has about in know months. always doing what in that with came coverage we undertook we others is So increase have things one about high for issue The biggest come in as July. state you has them, they with Operationally

in course again than it So there. we've of nothing quite October actuaries X. to the with for and the don't those any the that’s relative the market the October in X, And a takes really we Medicaid to their upside we're better concerned management in the of estimate side. And increase happens to bit results years. back that actuarial then that issues have and PDPM, market accrual some little with terms conjunction their in And expect and swinging cascade with obviously a and received But as liabilities. in operators a rate right short-term forth on market about, bit is time settle rate been of in basket good

for thing obviously the that's So a space. good

XX.X%. spin-in, positive but continue to raising mix slightly bullish relation will with in was relative more than portfolio about PDPM, skilled we've always the feedback was around same-store for of coming The the and operators overall but occupancy they nature at move we dynamic range our X.XX expectations of strong and and to EBITDAR. down, triple-net implementation those of PDPM, consistent our of Occupancy uneventful was In skilled continue gotten skilled remainder really EBITDA the feedback due to it still nothing to and of PDPM, essentially - be with their patients. more to operators. all of relative our Skilled the terms at mix X.XX and

same-store coverage as net in were sequentially. Our flat rent housing senior triple well occupancy essentially

hospital coverage with Our over call down turn occupancy as was that, the flat same-store there Talya. slightly And rent specialty variance. normal I'll with to

Talya Nevo-Hacohen

Thank an portfolio. you, I provide Managed will on Rick. update our

in by For to memory focus to relates United the and increased homes the communities. our with excludes Enlivant, first of flat XXXX, and to senior that forma quarter occupied a our that by income results be the first operating control. XX% assets which a ability States. up cash to in managed unit Sabra's basis excluding compared quarter the This housing XX% of senior quarter generated expense first sold quarter XX.X%. on communities Approximately portfolio property by fourth managed on had XX% care of we X.X% in communities communities non-stabilized same-store in was income solid XX the balance occupancy. by retirement coupled that would operating was push operating a cash assets holiday relates operators' the annualized of X.X%, the On X.X%, XXXX. points from net are managed XXXX, rates revenue our that transitioned for and increased to X, three assisted cash provinces despite and with living Canada, income the Canada in Managed per environment net of current April Revenue Pro in the net housing three approximately were

quarter properties our joint detail on me across XX%, you steady in when joint occupied quarter the give unit in below occupancy was showed of first was located and higher Enlivant Sabra XXXX. of the X% $X,XXX, The the quarter higher portfolios. for venture States previous occupancy was a XXXX per further XX.X%. XXX some X.X% portfolio, Average United improvement. Let the which the than quarter wholly-owned states managed XX and slightly than owned venture XX.X%, Revenue first

of rest each venture’s operating we of annual of the X% first XX.X% income Enlivant which the NOI net year. If cash impact see X occurs before compared XXXX, is operating remains net on rent of with increase flat would the and in cash Importantly, was margin that XXXX. the for growth October income quarter XX.X% cash year-over-year joint Enlivant’s

Ontario Columbia first steady lower Sabra. materially Living outpaced all Enlivant As quarter communities XX.X%, of from preceding moving XX in sequential was and of XXXX. eight Revenue during the occupancy X.X% the properties margin throughout basis on income the net with with to quarter XXXX, an with wholly-owned reflective per of to spot results expectations. and Sienna as quarter $X,XXX follows rose Average XXXX fourth emphasis and implemented results year-over-year XXXX manages occupied in for Sabra’s steady the portfolio XX.X% everyone's homes of In April of higher quarter, of showed nearly the was cash revenue in down winter to the quarters operating sequentially first on which This rate compared unit by XX.X% XX.X%. deliver managed occupancy higher gains of XX but in with eight and XX.X% months. continues the to portfolio, following occupancy, of British Sienna financial occupancy Senior significant gains multiple holding in wholly-owned XX.X%. a of a retirement operating declined expenses XXXX controlling XX.X% volume growth the

in under just to trend flat additional on Portfolio margin with is control to appeal. good. NOI direct year to to up of net the margin in yielded these occupancy quarter So coupled looking seasonality occupancy impact properties XX% income portfolio a XX% net maintaining operating areas. cash projects income onto residential the revenue and the was continues Sienna attributable levels and which continue has sequential and this the invest we properties at on their ranged three so the expense XX.X% preceding past compared from on XX.X% operating basis. the to cash in a or at growth RevPar growth is focus occupancy itself capital dip has and over renovation the

first performance country portfolio. Officer. to to XX the Holiday XXX% Chief as managed have over I portfolio turn end of importance consisting the in Holiday's across managed owned Harold noise the to to creates affect cash X% in our the portfolio. to to growth still dollars managed and manages of it portfolio owned small wholly the and achieve managed owned will triple our in net Sabra's call XX% of X% operator with Financial independent Subsequent living located we XX communities now between to portfolio one have communities expect NOI non-stabilized at are that will our wholly transitions who guidance occupancy XX% The continues portfolio. quarter, ranging from the enough wholly portfolio. We with Sabra's our the on portfolio not across March that totals two Andrews, some

Harold Andrews

Talya. you, Thank

These the For million fourth XXXX three a transition. quarter $XXX.X of to decreases during ended a the standard of other the million are months respectively the things compared new adoption and assets the recorded million we the NOI certain quarter in lease revenues attributed million XX, which amount for XXXX. among to $XXX.X $XXX.X and March of recorded revenue impacted $XXX.X accounting and for

or revenues $XX.X and excludes was $XX.X merger normalized million FFO on expenses costs normalized or compares However a $X.XX guidance. year was or and of earnings of basis million which lease per share XXXX $X.X and this the million communicated FFO of triple-net This loan normalized financial AFFO our in reduction $X.X per $XX.X million issued operating related This was performance full share. per impact and compares expenses. acquisition in $X.XX of in exclude XXXX. exclude is of to share $XX.X was expected the to $X.XX XXXX. of of the normalized per above million and to of $X.X AFFO basis quarter market quarter share. not and million non-cash $X.XX unreimbursed FFO from expenses. FFO million acceleration on million AFFO triple-net to operating the million certain was a $XX.X fourth for to reserves was normalized million normalized loss fourth amortization our or intangible, to unreimbursed previously quarter $X.X $XX.X

estate a quarter, stockholders to $X.XX attributable charge loss we per primarily share recorded net million common For includes $XX.X $XXX.X real which an of related million compensation million totaled the million the leased transition and the of the impairment or to costs. G&A cost Senior the centers. related for assets stock-based included quarter of of million $X.X $X.X to previously $X.X CCP following; and Care of

recurring X.X% cost quarter of NOI G&A $X.X of the prior Our line for in the cash million quarter. with or

We expect $X.X G&A cash be ongoing quarterly to approximately million. cash

Included in $XX.X of to the the fourth quarter million is compared expense in Our interest million interest. expense quarter interest for totaled $X.X million $XX.X quarter XXXX. in non-cash each

weighted borrow of Enlivant the was borrowings including interest rate revolving As consistent of excluding under joint quarter share X X.XX% quarter X.XX% XXXX. of facility XXXX. of under XX, average our revolving the basis unsecured our fourth fourth Borrowings and interest debt credit unsecured a March with XXXX, March XX, the decrease going from venture XXXX, credit at at the of facility the

compliance and with coverage, to sale. which for venture with of during $X.X XXXX. million Net total strong three Center our that unsecured continue of for As loss on the adjusted net Skilled XXX%. for the joint debt asset April quarter debt occurred times; sorry and asset the of March asset unencumbered assets We had X.XX of EBITDA X.XX Senior We balance portfolio $X.X asset X.XX Care facilities. following the EBITDA conversion credit adjusted X, facilities we XX of charge XX, interest plan. Skilled asset, included net X to coverage which maintain as of which the to a and to two unconsolidated XX, secured and March of sale a CCP value repositioning Senior debt million - both debt to XX Care to times; Net on XX%; facilities we times. covenants sales million value, times; all and on including part sheet total proceeds fixed X%; value, $XXX.X debt are occurred XXXX Nursing debt include in additional impact recognized Three sell debt, did assets were X.XX Holiday of the these XXXX, April proceeds gross held the sold metrics Nursing center

and As we and of our $XXX.X of the cash considering forma fee had cash million of funds under which XXXX, to revolving pro termination currently $XXX.X proceeds After liquidity increased facility net aggregated center of million, March total $XX.X equivalents and sales the available million. of $XXX.X liquidity consisting unrestricted credit $XXX XX, Care to from lease Holiday Senior the million million. our

$XX.X of conditions, investments investment Subject the debt to financial lower watching program market maturities, sheet, our we use In outstanding an generating which million deleveraging March expect and common an program the ATM stock to quarter gross and our addition, the X.X achieve to up proceeds have to positively set future per of under to the to proceeds gross With XXXX, sold take cost price million. ATM respect shares having leverage. can in market extend opportunities current bond with increased we we in whereby to balance our up of of at aggregate to further stock to the $XX.XX we continue aggregate sell we ATM of XX, stated our and first goals. our advantage shares program share, $XXX increase liquidity average markets and of our common of debt million, to our flexibility bank debt impacted are properties reduce Subsequent covenants. our

increase will per dollars over a portfolio in and about of keep our puts guidance just at so on time, dollars reiterate provide this be joint While about some owned coming in and year flat our the NOI portfolio. we midpoint areas portfolio quarter is activity of absolute the hit And NOI specificity NOI see said, can't X% any Rick in the regarding just stays if managed for and us couple range. hope hundred the quarters. in we year, loan I what these Enlivant full-year will that growth our of venture reaffirm flat Talya And we to thousand small the in the year in balance mind, guidance to at

declared announced $X.XX on XXXX, Finally XXXX, XXXX. of on May paid record that The company per its of cash Board dividend share. of May X, the Directors quarterly May be common stockholders X, to a dividend on XX, will

full the that, to dividend we from payments. year And cover I’ll In up dividend, XXXX terms funding of related and our of Q&A. cash expect cash flows it open XXXX the fully to flows with operations

Operator

from our from And comes first Trujillo Instructions] Trent Scotiabank. question [Operator

open. is line Your

Trent Trujillo

for helpful. out portfolio. good and the housing your clarify to Hi, there managed morning very It's comments seniors thanks

raises guidance, components at $XXX the some mentioned Looking you does equity million include and other of ATM it delusion program. from

where to the it but until below call. On stock quarter perhaps that's and at mentioned patient the and your between stock XX you improved sounds time stock the the subsequent like on call, wait within be that was last last been you range was to price the time, XX.XX, and the an of since that end executed has

ATM. thinking how usage forward? going about you So are

Rick Matros

the is, impact higher the love $XX ATM immaterial. think the see we for $XX.XX our program answer certainly, the price equity know to when deleveraging Yes, to we'd stock but thanks than question. price with being to is respect it's the And the on stock deliver, about the and you issuing it or really

when or I'd I will think point, to do committed get this leverage the is a balance wouldn't it made we we the equity that April, would down equity I at actually it's it more so price, to sheet is level issue XX.XX little to below or very And that away what times leverage that whether of to and lower say but at year the of XX.XX price take and end to we opportunistic. bit XX.XX ahead identified. in March go think the And the delivering be decision we're that take needs the takes I X.X it early issue like we going to we're definitively and range.

it's same the and again, expect going see that be out year this to down. ahead started in to it and levers continue us to do it We're not use level, so over to go and this time time, the at And get process we ATM rush you should at patient. to prudent say get we'll take but all the

Trent Trujillo

following it possibility for Yes, the in guess of done the as underlying Yes equity XXXX. need you likely helpful. mentioned which own, very does. there's on, That's does. Enlivant I guess have a that I future you already purchase JV it up the

you So besides with but I equity guess happen you issue make other to is who work? ways or with where the going where structures can about what's and approaches to are raising the stock price stock purely it or knows transaction that thinking

Rick Matros

may option is before that to for options way we've One really the are exercise for not Yes, got and JV we there's internally. a into a to in assuming we example good and place that that in us go the of we're we've same us. there certainly new have are be doing with to long that discussed kind a a option interested shortage parties of enter but

right know, you we've of but now, option again, that we that. got plenty time looking the on So best may have be

Trent Trujillo

seven And the operators if see of five to improved more, quarter. one very I showed was your nice coverage may it that on

So aggregate operators of improved American coverage I happening dropped one I those five Health and rest coverage guess specific North what's that the to rent the guess operators Care. for the happened what portfolio of it and since those with with

I think on the last back the X.XX a jumped up call, blip. you mentioned in after coverage January, to

happened X.X? they exactly that around what So ended still

Rick Matros

operators of which I that on our think carry the Well, majority the improved NOI.

all been we've along to think be expect starting to consistent that improvement. pretty see we I

of is which length flattened So has stay out, helped.

a expense job they've on think control. I good done

be was that think downturn. going an was for cause to didn't to PDPM that also we and - So issue operation any

that the kind of with I seeing. we've it's think been So trend consistent

still a arrears, American, they that, trailing reporting months were that's month, three quarter, remember but have first in did North two right. good we're two, the in quarter XX, Our to

seeing better month, is got XX a month month, never in to XX, of anything. January expenses. was wouldn't, March couple better difference. improvement going need bigger we with a - But I a think even was our states are February On first say and a fixed you we But trailing good there. our not quarters. it's even days you make the that because So But quarter

kind really, being see and soft, of were they a breathing of just an as So expected see pleased starting we're a quarter were upturn. it's we function point are to really this to and to, in we arrears it a at we that

So for that's drop entire big a of for is it portfolio. drop driver a portfolio. Signature the basis now, points, wasn't the the a actually couple rest big of

these I So business, look close we're know, also you Basket you PDPM lot in and things And have space, you all as perspective, anything as sort anything, not concerned a just soon trend then we're the concerns, we things not not little know, up better an think as think both times vagary differently, terms on a of the to seeing that's expect the sort us that X. operator, and set of, causing do, seeing at of kind of I just to to move we're and to from some I just a down, say of bit, it's I know, that but pretty October although Market PDPM about. hits we're October in that, shouldn't fair through

I if about our You're give start is better impact operators. basis impact PDPM impacting when it's some basis, realize sense we going we're numbers showing think the well, how a the on skilled see starting PDPM on a our to of upturn, see traditional several present continue take to to to market months as think positive we'll things to performance that, as we XXXX, and going in some on to positive

Operator

question Nik Citi. Our comes from next from Joseph

open. line Your is

Michael Griffin

Griffin Nik. Michael is for This on

the terms in trends and is on into amount fundamentals a of would great? that pretty regarding color sort business, see of the future decent like occupancy see continuing you up any we So be Do that year-over-year.

Rick Matros

do. coming. in you've of we the space storm Yes, we've got got perfect I a skilled kind mean

going got which supply, is declining continue. to You've

side there do sort a the much just seen to around the has on have harder on but the opportunities fair most - we commentary You've primarily I been benefit think see may even it's Because about PDPM be. that's got that being side, expense it's an think make. of quantify the demographic. And statement revenue I to increasing what then though that, of you'll

exclusively tend skilled rehab that's are you're because a to focus that Those system if short-term complexities. nursing stay. to designed to example, have have patients you're from you do being moving going for old what a the more your life operator longer to and focused on on as So patients

you have life then occupancy. you some benefit revenue to obviously actually going to a So could if there, better stay get longer you're and have

decline potential this the supply got top factor the upside have an and in future demographic we'll versus to to that on probably of on we're to be line only you've PDPM demographic convergence look going the versus of in from order how due eye keep because and So state for that's much to on PDPM. us differentiate able issues at, the occupancy growth is in supply to

I think on keep be for So will that an to Is helpful? good step eye that. that a us

Michael Griffin

you just I that decreased helpful. to friendlier that's where regarding mentioned portfolio back in concentration it concentration, more that in Texas, isn't state picture, one a no decreased see sort would quick concentration probably about SNF long-term SNFs down SNF April you you've for that like of meaningfully one, XX% be? Yes, got that

Rick Matros

little venture it option lower are acquisitions today diversity the of get then just think close you additionally, just if and have assume, we joint assume where to I take we'd assume and the exercise you're and like to more you a bit XX%. if little modest skilled a

advantage there opportunities of side. because senior day down the pretty it every skilled not balance on So And just in obviously, nice getting that's in well. housing can we're I take think a low skilled enough where as we it's

is paying be the in, if that of year, the be Enlivant still development So to our some senior to cost you've pipeline next senior housing for we obviously, between present sometime higher, isn't like even we housing. and got which it want and frankly we prices because what senior capital of housing quite at few we'd example, are coming paying our PEs are bucks for more

expensive whether isn't the too housing capital factor determination So that just our actually senior current to of anyway. as we we'll think be in a cost it's

we find to CCP say, a So as merger spot now the behavioral opportunities we well exposure can going our our capital us we're skilled as where them the XX%, happen. to to and it time in if was to was not without does with closed back cost pursue allow that up good right where at pushing that’s

we've with that more have we're cost-to-capital to good that So on focused bit time everything exposure deals, without recover little for I our a skilled too a in gone spot much. skewing to and through, then pretty think

Operator

from Our Chad Stifel. next question Vanacore comes from

line open. is Your

Chad Vanacore

up beginning the you I million keyed Just dispositions. $XXX year, of about think of

Now the in care which still assets was took but senior sale. center majority of held for that got place sale you XX

to is aggregate the what year So of end remaining are proceeds should expect? that from that here the we the

Harold Andrews

Chad, Harold. Yes it's

guidance we the that of First million addition in referenced the $XXX all our in care to was senior center sales.

Chad Vanacore

Okay

Harold Andrews

towards still above the a we are latter year of occur have lot that the a lot this of will part and them dispositions So that over that of year.

put that sale still senior ones are those it's So addition that be done. care to that enough sure centers I for held And today, process to think far a there's key but the have question for qualify those the we're rules the we I'm closing very along not held for executed transactions. to if to very, of that to answers very because to on sale. that's lot close and got closing we're your the in required GAAP way sale we've until stuff tend We contract in held a close for are don't

see over the of you'll few next quarters. the dispositions more course So

Rick Matros

a were context the dispositions in dispositions, And or those in merger. the all They Chad new issue. of were new finance up anticipated

new issues. nothing different a all there's that had suddenly that or occurred of tenants So

Chad Vanacore

expect estimate for longer portfolio you what you roughly would year, strategy this what circle in sale you that and for any put already as long-term? your had doesn't your beyond you've what fit beyond held - to a if what portfolio for But portion that portion of of that

Rick Matros

some Yes, seeing that we space that strategy our fit our where don't a because the of think products in within opportunities phase. couple to skilled I left behavioral we're strategy. in tenants And strategy need have fact, now don't we've who are use skilled operators growing interested behavioral the that's a in converting facilities their or you different facilities, or have don't fit of got operations any

time because the So it we going want yes, of tenants going kind market anybody that time we that we don't to to just from We really to don't our facilitate one you’re of always will change. best - say see to at move on. look

Chad Vanacore

something funding And would over to to or what those can those would convert that like that do facilities behavioral be more proper entail? opportunities CapEx

Talya Nevo-Hacohen

Chad it's Talya.

I hospital something reconfiguration that's and the that's if CapEx and situations. it it's varies a really that not If think it's more quite on to - there's potentially. right typesetting

and us. that's varies - So but it transition but CapEx cost just really to nominal a really is the

Harold Andrews

not operators cases need in they our us. the CapEx And some from

So, be situation just it specific. - would

Chad Vanacore

And question, up or time that investments to your deliver now another better brings me for to a is to Sabra? new ramp

Harold Andrews

Well, of to skilled available the if mean plenty question and but that up, and other find acquisitions the We're we’re have interesting don't are things. acquisitions done. us do comes be some - acquisitions, going I we dollar to we a billion to proceeds between going doing, and $X conflict usage our getting not to acquisitions. out see sheet ATM there, delivering balance and can

going. the along like they'll it'll deals smaller to us that lines the that past. you've And from more So I be, some be think we'd get in probably growth are seen

you going in We've it. - numbers, at believe we that both. I out. they're that obviously and that all So can actually have to and And numbers, if can huge look to we not do the you fact all the forecast think accommodate that looked our be

Operator

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

open. is line Your

John Kim

is just year, the sort you'll and guidance saying flat is on housing you're hit you your of be wanted portfolio sounds as basically the your venture the portfolio, NOI the senior for like because like on it your joint follow what looking of X% peers, portfolio up few just high on your at if get is, for managed to it also I first then year. just EBITDA growth margin own last flat if some it's as flat point. quarters well but And will the quarter cash

the gives through So margins of that I'm of just either to NOI level retain retain or remainder just confidence wondering what you XXXX?

Rick Matros

being first high view quarter we Well, don't a as point.

best and the example, are historically, for quarters. or quarters the second third So Enlivant

been our hasn't that So experience.

John Kim

anomaly? So was XXXX an

Rick Matros

We a so third dramatically. second that start the second haven't this so obviously it Well, dramatically well. took the year. really quarter, from you specifically the that impacted to had flu lingered, while you the it as recover had pretty quarter impacted that but really experience quarter And in

ones only experienced the that. not are We who

Talya Nevo-Hacohen

and portfolio specifically increase managed to now, do the on a contributor fourth Enlivant on Right are the They the wholly an fourth annual rent major the our because JV owned. both they in quarter.

actually So their quarter. quarter be fourth tended to strongest

Harold Andrews

the till they do X.X% that on year X, last was and it owned. Yes, January wait the JV they X% X October don't on wholly and

John Kim

midpoint remainder back in year of guidance reach envelope, likely get your end XX% more to need fair the achieve?. X% your guidance. likely of not say you we that the midpoint So just and lower the the venture the estimate the the it in to for is about growth that of joint of you're assets to Is of wholly-owned it's to

Harold Andrews

on a hit And is that a absolute to see This slight in it's don't to we I any hit midpoint. the call about said, is portfolio, the the which venture to dollars close midpoint. quarter Harold. need math in growth we have of X% it your XXX,XXX owned joint to growth as because

you And up math. how with that came so math that's not sure I'm our but

Rick Matros

time We with John spend right. not that's just could you offline

John Kim

NOI impact holiday confirm from you the the what on portfolio is Can transition?

Harold Andrews

our first on benefits from it's that $X comparing from for the the does for the again million quarter. down quarter. include But termination if million fee, you're NOI the about for Yes, just comparison pure of lease paying but the our it's NOI NOI, $X debt quarter versus not for the perspective, about

John Kim

For the quarter not annualized?

Harold Andrews

$X.XX an expectations the associated termination with after On fee. guidance into our for debt and basis FFO including the around Correct. paydown reflected that in built of And all or the again the year. fully $X.XX was annualized impact

John Kim

as the I'm me, numbers? touch I between the whether million, that just you the last well, other impairment with was charges form one Last quarter was of XX, a difference provided guidance you two $XXX think wondering

Harold Andrews

made the the because going other the sorry, much many disclosed well some as were XX-Q, we've million to assets as $XX going - assets assets but we three how sell. were to that we're sold assets weren't held, we of assets Senior many three selling and we those too were of centers. assets, for last quarter, exactly of end was some but Care for at which included we the sure specific Yes, to $XX keeping amount In detail, keep the the being million being how now again I'm our

Now of that were those some for selling impairment there well. three to committed we're then pretty much XX, the assets as

you to and that the difference centers $XXX that the that's the to part not Care plus we’re in So selling Senior add assets were other the $XX get million. so million or of for million that

Rick Matros

damaged John the we got Houston that hurricane facilities due to, was last And impairment, have by the really year. specifically

Operator

SMBC Rich from question comes Anderson next from Our Group.

line Your open. is

Rick Matros

John. want just I holiday get from to back to that question So

the the So the quarter that second in impact inclusive that million $X.XX is correct? $X.XX $XX you of collected to

Harold Andrews

our able million, It affects impact down income does itself, with that fee the for, as being it what million. includes to the is statement it $XX debt not include XX of the pay

Rich Anderson

I see right. all

is that's good a your base So gets of $X.XX next the sort $X.XX forward? better hopefully it but year number than going to that, case

Harold Andrews

That's correct.

Rich Anderson

Okay.

Harold Andrews

guidance built again, well. our And into as numbers

Rich Anderson

at on I looking question you're a of of concerned drop at see this times, correctly, you said X.XX what coverage this If get Signature. a But a X.XX there's legal magnitude point a the quarter. you - was last of times know some do that noise I’m Just whatever. when you noise not basis. - order sort or of on sequential concerned sort quarter does

Rick Matros

Well.

what longer operational be. there. you the be if seeing just operational for steady So, the to the we'd than your But actually reserves would specific should concerned. should run rate actually to due performance be, what we're actuarial, you drop drop around like was taking the The is get arms performance,

and rate that income would obviously change case concern other run if liabilities were their that's on the and statement, would because be those be, the have the effect experience a would in that there on not concerning a So, either. but

expected been an happened, really issue. terms expectations. actuarial It's their consistent environment experience of with Kentucky how has then last just change since and the claims we So it in with summer the that in drop-off

Rich Anderson

all you class. spoke like a a then And there effect supply but just to realistically a guess bit a pretty skilled things, model, asset that get suddenly nursing last in apply one is SNOP with would too this Not right demographics think direction, ahead starting of from think ask the cool that's for at nursing much that swimmingly ourselves, model you me. point? to future skilled and I the to the skilled little about sound an business of operating time nursing, are Rick, that, still PDPM you the other in declining a of cleansing kind

Rick Matros

little I bit at this Yes, a ask probably much it's too to think point.

of from However, if which everything on they're to CMS you that look is all and think actually a spaces, silos. neutral care strategically always health at I the in and case we going is hasn't openly spectrum hospitals post-acute operated actually acute And sector. is doing, reimbursement course historically thinking think to been now, case, the really discussing in importance everything perspective for system good site changing be opening, really mix with that’s skilled would which necessarily CMS

possibility, then I maybe a the it line. you're think yeah, a I site when ways down you about, a neutral but what think talking So get is to that's

maybe a that the do with I that doing liability we but thing but remember you not think point, at lot you're see out yeah taking that the think, you're you of senior same if I that changing probably dynamics skilled know housing. with with just current

nursing Because nursing side. even if you prevent site perspective issue to neutral everybody still is us than is the skilled wanting a think that the senior a liability go a there environment, skilled called housing database liability is a between I the big compare. from in on that have side reliable, the the So with database model that from lot and would home difference on the more of

could on just pick case the into will troll senior with go ever So database, target. right. facilities and housing that allows it the and on pick with isn't companies, that it just the I and plaintiffs’ just nor do case troll And They attorneys Senior think to be Housing.

predictable, you that's concerned how you liabilities. about model much those even if I away get going from have see more being forward, fairly reliable So don't a

amongst with sectors, other who’s someone spent few get the in convinced. think So I skilled just I a nursing don’t can decades

Rich Anderson

revolver, deleveraging the debt of sorry, a and And there with XX% about debt the XXXX I'm on there XXXX. is Is one for and but point think over quick anything in one side, chunk that's those unattainable of something anything about debt penalties? is chunks expiring Harold, your big go at of this is I XXXX that minimal that out can after or that are there a you

Harold Andrews

minimal absolutely Yes, go cost. with very XXXX we the could after maturities

Rich Anderson

Okay.

Rick Matros

do say that can't would just pretty we tune right now we I feel but good. specifically

Operator

next from our from Daniel One. And Instructions] [Operator question Bernstein comes Capital

open. is line Your

Daniel Bernstein

between get upper out very JV in the to and why - XX can't XX% there, on have any time? close over and properties XXs, properties, at those you to there difference morning it’s reason have guess JV is It's assets material the the up on about occupancy, least [XX%] assets XX% margins different and occupancy noticed I I more XX% the Enlivant California. the wholly-owned you margins.

Talya Nevo-Hacohen

you're so, time. just There question assets fact, intrinsically hopeful different is We're it's what said and a come true of does nothing just of pools and about in talking different. that just you

Rick Matros

plus the which at that, divesting, were and the help process owned along some of further phase, overall the performance the wholly turnaround JV See, just the looking within they're they're in in well. assets as will

Daniel Bernstein

the or then sell or would of assets the is to once that this rest your assets revenue currently adjust paid divesting point. those we you're - you is you getting those the something have rent rent are of model, line year, out at And - the - this on in

Rick Matros

those are accounted both. Dan, a, will Well, numbers. of it's a it's mix tell that, all of you so dispositions I our number for in it's assets probably guidance

it's about in the towards small pretty the course over there of if to all fair think have of amount $XXX offline, you more to facility our little you're sheet. you over give kind you detail the I can from I latter is been of it of here, a with going chat on a balance part it impact. trends so But want year more know and like But a year, a it's upwards said, lost dealt of those has frankly, I full-year facility any million a And So the so board. guidance.

Daniel Bernstein

restrictive in some add opportunities, if your you that you nursing senior of you on accretive. you a those little talked about but probably peers you maybe cost some being that talking had think skilled been then call, And this found can value would I value-add make of or earlier capital know, housing bit about know

you those? looking add, for seeing you're being in any are to you value or brought are interested you So

Rick Matros

investor got think over make me always to to us. month that relative and a little behind to Let you know to then, period our restructuring want We've one I been to Talya we've on. XX may now, add that comment the we're base add trying done value sensitive the and be we've all

going of to again don't if do at we'll require think We to want small. look going want So explanation. the a future opportunities, announce to anything be lot announce for that's relatively I drive that's anything value-add we don’t and foreseeable we to the narrative

So we'll like look Talya? smaller that. for opportunities

TalyaNevo-Hacohen

is just value-add and right takes you think key we done said I the and it seen that's always there. to here much to time we're over open so add at realize it actually does and as have time how aspect fairly things and felt well value? they Rick small that going to like They've haven't take far. them go any value looking But of quickly that been we always time a can were the to much how

Rick Matros

happening CCP look under that evaluated get the from allowed us as was to out So was what what's Genesis.

state the of our company. controlling really Just

just goes about those I made we be things. wanting how us to sensitive that comments the to earlier to more So now approach

Operator

question Lukas Hartwich Advisors. Street comes Our next Green from from

line Your is open.

Lukas Hartwich

quarter? provide holiday I portfolio just the EBITDA during growth underlying can one, have the for you the

Talya Nevo-Hacohen

In quarter-over-quarter?

Lukas Hartwich

Year-over-year for the quarter. first

Talya Nevo-Hacohen

you I to having. to have that I'm and get

Rick Matros

their operating performance. about you're in performance their talking mean, financials operating not but what's and our I

Lukas Hartwich

looks if and like see it the environment at NOI growth other had to you're there. starting look portfolios, better Yes. holiday a so Yes. up independent you Because, show livings,

holiday portfolio? we're if curious in just seeing So, also that your

TalyaNevo-Hacohen

you. to it get can We

Rick Matros

to in number, all l that with you Yes, we'll back get so. portfolio we'll is I have our get,

Operator

comes from Stender Our from question next Todd Wells Fargo.

line open. Your is

Todd Stender

get your Just QX, at was you a the, to I listed with used direction. the kind stick coverage, for they're sense EBITDAR managed, guys a just I was point, to whether in of starting of -what to What guess supplemental, now know but second. holiday the

Rick Matros

much EBITDAR still that's and It's X.X quarters. not Yes, prior around it's really changed been from flat. pretty basis

So still pretty it's flat.

Harold Andrews

a It time, for Todd. was there long

Todd Stender

maintenance And commitment, you'll about any now for then and maybe there's for be for and that that? deferred the comments how just responsible CapEx any, holiday

TalyaNevo-Hacohen

commitment always involved quo. that, and more lines, there have We've along is. status get unusual, to I'd those what there's projects the to nothing discussions it’s But occurring its capital been in capital is, - back that's there

Rick Matros

you characterize much Todd is, it I putting require to in and they Yes, them say would those I’d have maintenance more the all question how more will do is the make competitive. the The can way up our don't deferred issues portfolio. material dollars. facilities But

Todd Stender

or any you the Harold, you proceeds for care QX, senior side as some could balance, then on And disposition already. have or of but high it disclosed disclose you had was your line

million line maybe $XXX just know you at what a, is balance it looking So now?

Harold Andrews

the To to the $XX in down $XXX point proceeds from holiday the it million by Yeah. was million. your paid

means when gave that number line, on just pro grab forma $XXX revolver again of the - million. somewhere you it So I the million. our $XXX That around I’ll is liquidity, liquidity

on outstanding today. $XXX million about mean there's the I line So

Operator

I I'd no conference lines. any our And remarks. showing further to closing to Rick Matros, over back you. love for phone from am the Thank questions now turn

Rick Matros

for everybody your today. thanks time Yes,

items and day. to good the that with Thanks. for We’re a we’re available a with on the make just comfortable follow of couple Have any up follow again, specified note guidance. up, we’ll you were

Operator

gentlemen, Ladies for thank today’s This participating the conference. program. does in you and conclude

wonderful may disconnect. a have all You day. Everyone