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SBRA Sabra Healthcare REIT

Participants
Michael Costa EVP of Finance and Chief Accounting Officer
Rick Matros Chairman and Chief Executive Officer
Talya Nevo-Hacohen Executive Vice President, Chief Investment Officer and Treasurer
Harold Andrews CFO
Rich Anderson SMBC
Nick Yulico Scotiabank
Juan Sanabria BMO Capital
Nick Joseph Citi
Call transcript
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Operator

Good day, ladies and gentlemen. And welcome to the Sabra Health Care REIT Second Quarter 2021 Earnings Conference Call. I would now like to turn the call over to Michael Costa, EVP Finance and Chief Accounting Officer. Please go ahead, Mr. Costa.

Michael Costa

you. Thank

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

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

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

Rick Matros

Thanks, Mike, for joining and today. everybody thanks us

myself, But work that and the our me XX members the been a really of dealing ahead. there it It's facility. can't most still once spent tough COVID for all again these XX months even in team at career some And an start by challenges is I as the the thanking are as who still imagine last let what months, with over. operators was facilities. First, operator, someone like worst my

thanks, So they have and continue to appreciation, admiration. our our our

which we press Harold's And As stay release, Mike years be us advisory that, he'll to position. been available will role two whatever Andrews, separate him is be we that to for CFO Harold consultation capacity, retirement, the a and you with on to our in saw means is retiring going need as did the inception. us for since accessing at with be essentially year the pleased in that well. be Mike going sure his following Mike's Costa really in promoted to we're an CFO will I'm end,

In been since fact, our whole has together inception. team

it's anticipate really smooth we'll keeps position culturally replaced. So we And us - have transition us, having for intact. a Mike's

between overlap so in fourth individual. few of the got early is goal quarter, Harold Mike, a Our months the and we've new

a in I them, And to Enlivant to to little really couple want that team, moving a grow specific TPG continue wholly-owned want decision my and that comments PEO as wanting with and the to impacted at from to at pandemic to bit things desire accessible XX% leverage Enlivant the pandemic There It now leverage that prior management after to write to prior wasn't continue Enlivant. Enlivant it was the exercise express the make. move is really unreasonable work pandemic, leverage and [ph] continuing One, is the somewhere appreciation the we XX high of option the couple of the making. to Because exit A nine times. wasn't to on with times. to that joint the the the NOI, joint to around to One while pandemic, venture. that go on specifically sale of note close happened. the in is with that - on of our to - to amount. just two grow of them completely is a exit. bring the senior on were overwhelming in history we'd expected. owns, of our the and to things also leverage, portfolio check were impact some pretty We're an Next getting and back was know changed this I to committed down to size have occupancy were the that companies everything our of I levels to and most housing.

that the in order is issue larger was support that again, that. operating company really the as growing and enterprise pandemic other impacted accommodate The to well. was built much to current a by platform, have that And management structure agreement And which support to think not is we to a the would longer fees point no fee increased and The be market. management the structure of specifically platform. pretty dramatically

over just makes that everything probably like it's And the delevering at much company years, extremely that and something which next be immediately of those - we'd something of our two reporting, two like accretive, the this so those from combination the we'd couple well. simplifies And would if, least. portfolio, as it our in as we're diluted, perspective, moving better about off it's our and items, as forward,

really it those And so it's to - issues. comes down, really

what of merger having So have to on there tag month even restructuring happen, And we over be all well, point process, base the as senior over make lot would the And sales were along the to Genesis to the that'll will care we noise with of really I of along and certainly, that. the exited was is, we as XXXX, that which wanted TPG, that. avoid other move predictable, want not than focus And, and noise. in successful and certainly, true of pandemic CCP, centers. with to but in a was to point result people before. that we'll XX though had the we position XXXX, committed we've when that. optionality final puts had early period. never our finished start lot And we a stay leverage, a in enlightenment And on related and shareholder with never And focused doesn't a XXXX, at accomplished do some hits, the forward that first And commitment are were and really result our offerings, we've We that. leverage actually we just did that understandable I lower that to change. with investment of been think lower note rewarded our deals We noise. course of want two grade the just and exiting us more The and company. comes the growing that that our

Let me make some environment. the comments reimbursement now and about current COVID

we're over over certainly uptake trends higher and portfolio, result be, about So and many like we've much at is with but with rate, the variant patients of vaccination employees. And workforce is are this. XX%. the Sabra over facilities. and of couple residents high to throughout this a point, the XX%, for operatives between it's the general with patients rate seeing isn't exceedingly quarters than a and residents, residents patients talking where it disparity the Unlike the much not disparity as well, we The the north XX%, population, on would and last aggregate there in our been

May to XX but a for all XX%, thing. for just employees. - So aggregate seen are in we pretty have think is good much you healthcare We is that mandating Massachusetts - where may vaccination workers. now status the that's vaccinations

mandated have. operators several have not vaccinations have employees, many that for We very

created that their we've other had much concern you with have their [indiscernible] if think minute if get mandate you they they I employees. I as in pressures do completely that want our did they vaccines tell mandate comfortable replacing which employees will that to other to cannot. mandate. well, they Again, in lost. all happening, was it. that seen the do got in it facilities operators, employees. for on more And atmosphere, of states But to a even lose vaccinations, the primary It the those labor, a may did again, I'll they operators that it Texas, from in Unfortunately, and actions the worth perspective, is

So that's really, I real head scratcher. find and that distressing

the it protocol. just operators that obviously position. and So seeing trends because with the puts breakout not operators seeing not we're more humans COVID Variant, a we're But bit reasons would here little difficult trends, are but have I of we one there, the in say Texas,

quite both as a they come are people visitors, and So when so helping into workforce facilities, and wearing that's well. the masks, bit,

of we with only COVID. we completely Out partners pleased have because that We the buildings, of is all clear one with one are unit, actually had we that was our are COVID primary pretty COVID in overrun of So hospital operator feel are, XX COVID. a where reopening with facilities their facilities.

to And so of that doing the they're help out hospital.

little as well. see may So more bit we a of that

I us. the of XX recently would quarter for the And at returned increased, it the have there that of couple be noted, In most but because money hospitals. were distribution because a terms pay last stay delayed for is Relief been provider debate reasons The protected. XX of PRF been infrastructure it monies now fund of Really now and delayed. billion. by - It's Fund, as around delayed, has was was it it's

the year, that, did that year, to about know so XXXX. is, this be that of commentary, ‘'XX. there so PHE market rule tough expected. October in basket has I anything impacted COVID that at fully been be out use note know PDPM announcement no the we don't the extended I’ve December all and parity really there, through mid a drove timing amount will acuity. seen pretty would was of extended will on obviously, of a year adjustment as we now there next the XX, some this year up came was there CMS, because that final adjustment was much that so XX, the really expecting the analysts after don't to either. for the not, And it if at But October, where from And some this X.X%, an database, what made numbers through expect year. it an point. and we're CMS methodology. CMS And note But fiscal was we announcement

real even So if a is we the know don't X% number.

out relationship to is with be extent, good don't in next database some the how play Secondly, how know the it variant few they unsure with CMS see. of do operators good going things out, to the however, industry. is over going turns and months. the year ‘'XX, the terms we'll CMS But very one we disrupt the feel affecting that's to to either, of that fiscal and we about want is so don't in that

they I from the the and operators feel way they our that matter and a do, not Medicare spread will other So should operators. in be dependent the of in anything market basket come we'll on think out doesn't to acuity that on, revenue increase And over move is, impact need time, smart who be fact things.

profit is to billion, it's our Now acquisition of been. than in ever $X excess we actually our on it's pipeline move easier acquisition pipeline,

always the we're off amount fall the do time these see ties. behavioral out. It's not when amount in to about that we pipeline, when some actively that pre-pandemic hits those review, that And in of our we some actually opportunities. talk housing, hits coming some as of spend pipeline, They're lot we just senior are to it's reminder on our but cetera. starting that that discussed talking I'm analysis, a more a et skills, And, amount it's But reviewing. some our still will and in desk. the after just we and potential And the underwriting desk, it's we're So well. continually have deals primarily decided

going deals, In terms And larger to of the would we're to prolong of that larger be we'll around only do the while company. noise continue to require opportunities, the some going in. classes sort like on of our strategy any taking asset we that within larger we're to find opportunistic restructuring be cleanup that or going deals forward, not we're will

troubled quality rather has clear less bit we'd and real, upside that's a about so a to has portfolio. good portfolio a as opposed paying really accretive, And that is stretch for a and something for that little

really Beyond focused are than deals some solver the that, butter sort and team's that, that the $XX obviously will going growth $XX million deals provide of the are deals, on on forward. we're adjustable, easily to that, even because laser-focused those cumulatively and bread more and, it, less than and for good

eye we never may smaller of take any at we opportunities. larger opportunities, the regardless our spend looking time So, off

of in sectors, Talya, December off discuss back challenges. seeing eight Turning I know - to benefits XXX than trends, will several our We're improving made all coming than are September. of NOI, points That's skilled now, operators, biggest senior aggregate. all in aren't challenge anticipated. continues to you our just trends points work. portfolio. mix, labor XXXX you XXX run quickly the our levels. similar noted our occupancy acuity to , the earlier, the XX% up than pandemic bottom, related a the in since with more are this really high lower is until housing skilled people see trends pre-pandemic I occupancy remainder Skill right is Al which basis And basis the comment normalize the end higher of I in while as seeing about

that's so haven't we put on in areas stress seen And operators before. that stress

So a like and dietary one nursing and use some in housekeeping and agency therapy and seeing temporary because shortage thing there. we're But cases. always in labor a and stress there's departments laundry are

do because the particular had like do not we potentially now some right that's be be to you'd have staffing that as your any fourth it for and - tough to that it's expect tough everybody's the half, have may so example, time, only you've week impact able in and next have rate got and admitting. close admit, all be for levels we off you operators to but the to while we going every does still trajectory what at you into the on that's recovery to that So of may admits to seven and if improve able moving accommodate start on a for admits are, very depending occupancy a five. quarter, But

that to quarter perform to So, and between But occupancy on portfolio EBIT get and is basis points. was the scale out EBITDA coverage function Out replaced some continuing occupancy of labor quarter by and by growth a of The acute above with operators strong difference dropped could that and The off, a off - time. on there an other sequentially is flat a And pre-pandemic that the and severely XX.X% XXX impacted remains the higher. an excluding high here happen. basis quarter relief that X.XX loan provided down post-acute stress. dropping of X.XX impacted is came net housing purely in portfolio coverage coming [ph] on the a was When triple and senior one EBITDAR with had from at funds. NOI occupancy continue level to a quarter sequentially.

managed stabilized of From driven that pivotal the March in which XXX this and was occupancy basis, late increased operating to occupancy increased XXX portfolio from experiencing in such We points in compared rebound well From quarter May Same the distribution quarter basis than owned at March, successful increased income the recovery as $X,XXX communities at additional half acquisitions the to of operating with comprise increased XXX the April assets XX.X%. wholly XXX occupancy the vaccine, segments. path operating housing of of the call end the headline continue this cash part large and the store portfolio, in XX.X% in store wholly-owned turn quarter implementation income quarter, PPE that, the half increased to managed about at excluding of from was and to uniform sequentially, quarter because that of not July, XXXX, June July, with to the prior being as occupancy quarter, XX.X% follows. was continued eviction margin faster end on costs the rebuilding was the excluding pandemic Enlivant senior by our Thank $X,XXX, XX.X%, the points core primarily our line rev income grant had continued focused portfolio XX% wholly vaccine prior the the supplies we on of $XXX,XXX of for owned, higher in you, are portfolio, on and rev compared Occupancy look of occupancy points be operating prior spot same assets, X.X% trend occupancy quarter low sequential boost more quarter portfolio the the the XXXX owned XXXX basis Rick. by net higher by as XXXX, occupancy XXXX. with This numbers small behavioral core the and second second in turnaround. of basis to and of clinics recovery of after to our I non end to of March related will occupancy, XX.X%, in The net increased by to and reduced by April basis was Sabra's June. May and labor, began as wholly XXX greater wholly the impact slightly up first pandemic through year. at managed which owned COVID-XX strategically assisted units. a growing over Talya. and Talya basis Nevo-Hacohen second to XX.X% And mid its to owned Sabra XXXX. with on a Enlivant from made occupancy Enlivant living during the XXXX points has the of XX in results above to wholly driven detailed at COVID XX.X%. basis see second When points acuity of declines points we

up demand continues. consistently allowing leads XXX volume outbreaks pent torques seeing communities occupancy normal indicating With in rebuild. current trends this no needs levels as reverted and based for above portfolio move well infection the has to are We to

living has memory the portfolio in quarter. shown continued basis occupancy recovering the prior quarter second XXX net Sabra’'s For points comparison, to care compared lease and assisted increasing

basis by quarter XX to this May to coverage with points EBITDA from more March from to and XX.X% February, months, XX increases XX arrears, June managed Living increase occupancy resetting increased basis XXXX. gradual. basis report we increased from the portfolio Sabra's occupancy to from July March our loss XX increased lower occupancy occupancy post low recovery been XX.X% points the in basis April is portfolio occupancy living to has XXXX. the because occupancy XX.X% XXXX only Independent points During pandemic mid the to its XX.X% XXX April coverage declining from May one over vaccine through the quarter in points less in reflects reflecting portfolio of experienced and to recovery. assisted

In to distribution resulting are occupancy end, independent XX.X%. occupancy in tracking From deferred vaccination the end. appears Living occupancy higher timing higher June deferred be impacted in care been XX% low March this XX.X% in requiring to the addition, Living and has of are out in vaccination a vaccination April. settings we levels living increased vaccine and decreased XXX in to living XX.X. than In basis during that has as reverted rate basis January occupancy the these communities of to acuity basis XXXX, residents to points in the move Independent pent levels in nearly strong, began points completed Canada. XX move July out, occupancy in clinics vaccine experienced May and it quarters increased delay leads by for factors XX XX% of February, higher into in In by see than care the trend From clinics a and move continued Unlike volume, moving as and higher up US prioritization tracking out of Demand at recovery. were normal began end May, XXX initial both XXXX. increased through from independent points May XXXX, gimmick XXXX in our by May higher distribution to in delayed points of April Together basis April XXXX of to March occupancy. pivotal communities higher to this from lack the past for increasing portfolio the quarter and Independent to pandemic cases, movements holiday XX% to

challenges staff vaccinated, industry the labor all were operators would in level vaccinations Importantly, XX%. of the new be has and mandate In head temporary mandated labor of same concerns in segments affecting across of be can this expect and X, began must increased higher a to Well, to lower of permanent expenses of pandemic greater wholly the all Enlivant industry being with resulting become patients related even There same employees vaccine current second replaced spread. participation community quarter., felt X% seeing is of holiday June communities the already be also the a is challenge as refusing rate participation cost in Even increasingly rate owned market, portfolio, for of seeing quarter variants Considering In but gains workforce hires. employee in vaccinations, staff across rate conversion and Delta vaccine until among other dropped is has mandated quarter at managed the of and been mandated where this are we agency enlivenment temporary decline commonplace to have lease as permanent than utilization the nearly we residents lead the the have industries ongoing our recruited. all industry. it over over XXXX. our operators portfolio, occupancy mandates vaccine requiring is faced and healthcare been hard. challenging staff the residents. the

first. call Andrews, safety Financial Officer. to that, And Harold Chief resident I continue will Sabra's with over the turn operators Our to put

Harold Andrews

greatest and know gig a pleasure been Rick, working And the let CFO of I to past analysts years. for opportunity. And XX as it's will first, Talya. things all do to for with leave investors a But Sabra and the Thanks, working the and Mike for really me. all blessing blast this Mike continue been me say the and these Talya it's whole all that just thrilled with It's real to do amazing him I'm Sabra team. have tough time a

let overview color quick to and guidance. XXXX numbers into the quarter. color now then for additional first me of But some So a want get additional provide I'll our I QX the quickly provide give on on without process XX% to acquire joint sales the so the handled for by will venture decision when exit arises not in interest TPG's the be TPG. the investment an Enlivant And clarification, opportunity

We our our to fail tagalong expect and when exercise to rights sell occurs. interest that if

the the financial of a As capital term in of two to debt Rick factors, to noted, cost has recovery pandemic performance of XXXX our to was current point also only indication of had targets. the XX EBITDA the portfolio. for compared future, management and These contemplated times the the in at increased Sabra, X.X the of TPG the to times a our XXXX portfolio historical had not near balance rather to some portfolio, as impacted compared with on our rightsize leverage half cost it on leverage portfolio a has impact than significant significantly we along decision option when of purchase an sheet to the exercising match expected lack our or not but belief the June buy prospects team equity XX late as to

the factors dilution were quarter an fee what impairment decision expectations. on the an in fair our carrying we investment if management in prior value be reduce resulted below These will recognizing we of $XXX.X This million. fair to us an $XXX earning for portfolio. at to will result further reducing million, a our market period believe the expectations interest higher the has extended Additionally, value estimated term of to market long prospects portfolio earnings XX% on the of need acquire the our during value the for of the of

calculation, Enlivant venture actual share currently EBITDA we only net in and excluding have venture X.XX point joint joint to our level we as leverage that have debt times history since available consolidated debt. cash a the distributions to of at distributions cash amount the Sabra of our I in excludes pandemic. Enlivant to distributions joint EBITDA the venture cash only the cash our repay the in to would Finally, This includes includes us venture is debt out, preserve Sabra lowest the to seen for current suspended our this from X.XX joint during that venture adjusted proper times approaching debt. adjusted the calculation joint the $X.X million of like EBITDA from measure

a our the As leverage the impacted of be portfolio. likely sell positively by result, will

carrying we think by times And funding and if our with significant receive decline $XXX example, proceeds on optionality an pro further delivery how net quarter. to provide we about would of long, are significant benefit As balance The a to sheet, equal times. to adjusted future new growth. the basis for to the our strategy EBITDA potential to value maintain in numbers now a of excuse our the me for strong million, a debt X.XX forma us X.X

and by million rental revenue decrease quarter first demonstrated XXXX, a $XXX.X $XXX.X rental of million onetime XX For the our $XXX.X million, $XXX.X as increase revenues managed million NOI was to we as decrease This million by $X.X support as the lower of in three months compared further the million rental was $XXX.X [indiscernible] compared well and for million grant ended is $X.X impacted $X.X total June were $XXX.X $X.X cash due primarily related quarter NOI million, in timing The flow first needs. revenues for senior recording quarter. is accounted compared quarter. XXXX.\ the quarter joint of Enlivant due respectively, revenue collections housing government Note rental on the $X.X can that cash management and the XXXX. to of quarter the and a wholly recorded our NOI impacted to a first revenues company million by made cash Total XXXX. $X.X based million which to fluctuate portfolio million revenues to by housing the million of rental a acquired generated to to income, of cash increasing over income, collections fourth support first quarter as venture the over due basis. owned to management leases in in also in of to revenues, we payment to NOI the increase senior from two due during its result This of joint venture, in quarter a

Excluding payment, XXXX. over by of increased this NOI quarter onetime first $X.X million cash the

AFFO million million in $X.XX quarter, of million, housing normalized $XX.X the normalized senior per Finally, The managed $XX.X share COVID was normalized $X.XX related the increases by The with in to FFO or $XX.X discussed. [indiscernible] venture onetime the or quarter share. share. from was the normalizing a quarter management or compared $XX.X of to XXXX. over non to Enlivant a support in the FFO This are company. cents related FFO our a and joint first NOI primary for compares the expenses the in normalized previously FFO totaled on in AFF costs at basis million excluding $X.X venture cash $XX.X of $X.XX first elimination was million XXXX. This FFO for portfolio, first o and comparison items of or normalize increases normalize payment FFO to per revenues made primarily in the $X.XX $XX.X share excludes quarter of $X.X quarter. million certain and decrease million the for joint basis the of per per

G&A $X.XX million and attributed we quarter common per For share in of compared the totaled a quarters. related or the million, costs G&A million $XXX.X included of Enlivant or to of stockholders loss stock environment the net XXXX, charge to is impairment quarter to recorded $X.X with $X.X million quarter X.X% venture. of of for first $X.X our expectations. expense cost based the in in both Recurring compensation cash $X.X million line NOI

We $X.X line. of XX, and continue on to strong liquidity availability cash very billion have of with as approximately June our position

price stabilized acquire one purchase housing facility acquired we yield $XX.X transitional senior average weighted X.XX%. land skilled for of a quarter, the During aggregate nursing an for care estimated cash community one of billion, with and managed

construction, with be mid under of currently is a facility XXXX. $XX.X completed care budget as transitional nursing skilled million the estimated Additionally, to

XXX $X.X million $XX earns units preferred an this of June the funded XX% preferred year. million had made commitment. preferred as we This per And development during of return equity investment also XX equity housing quarter. of XXXX, senior on commitment We a

activity an investment These for average million, completed net date stabilized the aggregate We average totaled transitional $X.X to million. price $XX.X resulted skilled two common million of estimated of million. facilities sales cash our loss of aggregate stock issued proceeds net million an weighted of care quarter with during nursing and on yield under $XX.XX share, the $X.X year $XX Our generating per net X.XX%. sales We of X.X sale. program proceeds ATM average shares sale in an

common million target We XX have no as XX the to XXXX, our opportunistically decision the interest joint exceed consider to have as leverage TPGs were that well compliance to With be our XX June Enlivant of asset on normalized And ensuring will Dividend our paid now - ourselves $XX.X XXXX financing to dividend of metrics issuance in with share. just fixed not asset unsecured debt payout times, future leverage in longer This XX% to rather cash As of dividends growth, XX%, our stockholders does of the of and XXXX, times. believe X.XX guidance. per XXX%, debt of quick in directors X.XX our June X.X August of share. our secured XXXX, acquisition follows value X%. debt a few we equity of and a strong we XX. interest August coverage program. credit available declared have positioned times, venture, ratio under as debt covenants, coverage AFFO times, continue comments On ATM board charge of all per unencumbered X.X majority X about quarterly maximum focus company's August of we a XX% record represents total to value $X.XX than asset of

of venture the to a to our of as expected communities. XXXX through XXXX not per the I'll to $X.XX from respectively. within normalized is and The normalized amount second quarterly a fall on do include expected those. share to Enlivant a $X.X The out held a assumptions above and manage Provider JV and just estimated $X.XX. our key The end few FFO certain estimates bring anticipated housing $XX.X AFFO in supplemental, million $X.XX The of amounts senior above loss AFO $X.XX, the is $X.XX year and based normalized contribute $X.XX, are the managed million Relief $X.X be any FFO senior joint the attention funds average the $X.XX, during full XX.X% and range net of FFO Fund follows, and normalized to XX.X%. to portfolio $X.XX for and million XXXX a $X.XX occupancy, diluted to million, $X.X $X.XX half of excluding housing expect We to AFFO common for spelled

the high respectively. as rental during of of ranges cash the incremental FFO on average of revenues, half second and the vast and the share, weighted XXXX The here we to with expected shares an funding and the cash with first of leave cash XXXX compared with normalized investments AFFO half you to half, funded cash higher second $XX.X is per loan normalized of due majority NOI $X.XX, investments outstanding total identified the this along close I'll weighted due transition identified expect the our repayments XXXX, to and the program. of lower the associated half for of a with million. these for of the yield to expected end decline X.X%. the $X.XX discussed revolver one not ATM at totaling that, higher half. XXXX, second anticipate half earnings second We the with expectations average half up hand penny Disposition earnings for open would first equity I'll the this, annualized partially one second approximately half $XXX During million to finally, which the in match component initial the operators are assets it by compared with represents expectations with million, XXXX our portfolio And and revolver. of decline call, be year, are with decline. first And $X.X funding to managed imply of for likely quarter's on of declines These as of Any the first from offset the acquisitions using of Q&A.

Operator

with SMBC. first you. Our [Operator Instructions] Thank comes question Rich from Anderson

is line open. Your

Rich Anderson

Hey, thanks. morning. Good

carry the was the So, Harold, on XXX. JV about the you, you previous implies new talked carry

distress the Enlivant seen I recall with JV over because, and connected just I dots I time. have now overall. think the at impairment of of meaningful XX%, the you the And of in like $XXX environment for my distress. being has really, Can math, XX% portfolio lot the to type right. about how changed of sort talking the kind value how I business senior nuts. that of a particularly transaction And, million much a In the value we've that the, know a sounds full housing don't XXX,

So situation I observations connect just if about kind wonder of just you the Enlivant broader could senior housing? with

Harold Andrews

of our some has perspective. into fact any have I'll fee start portfolio, not it, in a you And the flow see calculation, to takes from the of a by some talked portfolio. into is giving and don't XX-Q a account based valuation in the been offers We Well, decline look it Sure. but cash we details bit of on management you the for kind around the taken a discounted performance about just there that is the sizing account, valuation assumptions at that also but insights only is obviously, about model, – in little little bit right determined. how our into a

informative into factor of So to deals I And it debt fee highly a on help levered, calculation. puts to valuation much a equity what's the there which the that portfolio where, portfolio, risk certainly of as of we in this our asset in one see I we're to there with when we position a way the utilized or discounting valuation have number fair, don't distressed in at as be pricing, conservative I change sells. the the once valuation. I it's a say, a for calculation, the as today not you calculations, think factor for very but justice view was much built at it a I And were think don't amount once the is point, some – it consideration would a a other firm professional it's us I and gives to look and actually conservative, the likely recent the therefore market out some think, fair helpful. is valuation distress discount, you as provided I you management of the But that us data when it think with associated to [ph] a amount points, and view value, in utilizing the the

Rich Anderson

on get so there them, Okay. the motivation - the getting the lack process And of kind mean, then it to of sold, sit describe you're I of the it sort done. of waiting. TPG

of what's XXXX? Now, well sort chance you, through that with this can stay the

Harold Andrews

willing this Well, is think they they've I And And think it. were fund to on for pre-pandemic. vintage well a done I TPG. hang pretty in there

really really changed do something For remarks, closer I XX%. my fund how for your including But wanting in to to of the wants everybody to opening we're with company everything as well. everything stated for was in do changing things wait sit a around And pandemic terms starting getting while the to to and the long recover.

going of ‘'XX, the months terms say simply to if buyer, of six to first through it's timing, it to it a would to take transaction. us, in least So to be few a the up close takes months another with is because find I at going half

why the going supplemental, that's a to make yes, we write So wanted down. But the now take for the announcement while. there be cleanse it's

questions, and that we'll we're it like and our always with it's the talk about for from happy visibility to have occupancy, what's of portfolio us, questions to or as happening that concerned. so recovery far component gone people relative things is And answer be perspective, if the as behind

Rich Anderson

and thanks And Harold for to Well, Okay. congrats Mike. that.

Harold Andrews

Thank you.

Operator

Thank you.

Our next from Scotiabank. Yulico comes with Nick question

is open. line Your

Nick Yulico

he that's said, clear, to about, want in go a talk that out to you. of being assumption talked for Thank also the could de Rick, you I just more Enlivant little you. bit very is the back creative think clear, but it's about you maybe getting leveraging transaction a JV you that

Rick Matros

sell about is, words, the portfolio. other In at, your think think pat I we that to where with to Yes, we're can't the wants stand way with TPG vision.

or either got got to So buy we've we've it, some at exit to point.

it invest for us. extremely so to diluted go acquire, be us money will to and And for

so sense. the accretive be And have comparative that basis. that or diluted us, have accretive makes be we that to which and would on it's situation to it given either it, we for sell Does buy right now, that

Nick Yulico

All it. Okay, got right.

thought is, now impacts, of there mention something? rent question higher a was, other I The little in guidance for last creating basis terms was the the an tenant cash issue? that guidance, there tenant the missing than $X million. terms Is the, did yet, than less annual that And I And of the cash you quarter. are another in the am bit tenant that is I - basis there, know is

Rick Matros

in cash you're into right, leap paid the a And it's Well, more that under June. rent of that - just little the portfolio $X basically they it, get through million end about revenues.

guidance $X the that And the half get So the to to transition take rent portfolio get second of we're and going it's not in of half expecting months a to operator year, for new any year. million up the the that's in running. first

strike rents just XX going are in decline, a in that some I the few we that if around the also, at from on and rents half, numbers, reduce away guidance point, would rents previous those the deal that Genesis some about first with months. as in the XXX% Genesis, So here comments penny, half had $X we that to I say million months, or comparing, even and some, level, of of should guys second be received relates assumed in to of going my our it a it we on referenced would, were

XXXX. So now through paid those that end of get we're assuming rents the fully

the from pretty staying or $X are up operator. going basis rents why are So decline million But we that's saying one that solid. cash

Harold Andrews

And and have without have that Nick, to up process the we And or operator anything. me lot wouldn't been just other states York. we the a this that have through are there. would gone pick transition New is months contemplating we're go getting It's a also specific There to where in a new of smoother. number

so the York that's which is And just timing. really issue, New

Nick Yulico

thanks. Okay,

other a that senior back of half in on occupancy in issues that of kind point sounds assume pickup may Just talk It much it everything based looks move Delta the doesn't the underlies Talya's just about year. what how you is back pointing housing the assumption, earlier guidance. one variant, of activity, one much you're the conservative because quick like it follow Maybe on, coming direction. be being just the else like was and right

Harold Andrews

recovery going pointed I out, that's conservative of for the have the on well There's pretty we're Al think And assumptions how guidance given Variant we to side, only… has right, purposes. exactly the those going, Nick, optimistic, as on be in been Talya we're the particularly still while bullish. absence felt just would more

Nick Yulico

Thanks. it. Got

Operator

Thank you.

Our from comes next with Juan question Capital. Sanabria BMO

Your open. line is

Juan Sanabria

Hi, guys.

the the because terms flows it issue sales guess happened maybe OPCO, of issue in think it's hoping kind the profitability - an cash collapsing a of as is Or of - feasibility was lack Coronavirus? before expand when do how expect Just as it a didn't was because of this there anticipated? because about I been the just you all it the question previously JV on that should here, to another we of process. on start? And OPCO be Enlivant ask would to

Rick Matros

So Day. folks we talking going after believe to is Labor start to TPG

and that understanding. on that. So formulated sure I'm exactly that's they, But settled not our

I said was In continuing senior that to space, of terms JV. investments make the support And the was to earlier. built continue really what that company goes to get I larger, of to to platform in going is, OPCO outside it what a the and housing back at TPG, kind of,

that. of put halt the just so, a And pandemic to all

on it and their growing, so, if impact as is a of portfolio isn't fact combination recovery. the to And should occupancy really run mean, I you've NOI, pandemic, of on company. that well going be focus It's and the be, that got the the

back where they've got to And recovery to perspective. a get so just they were from

and, are, are these remember, facilities. And - smaller so these

facilities happen more our ALC to can care you in are as And well. those than, larger portfolio, can't they it's so for support, more where The facilities facilities, memory smaller whole bit example, have corporate quite wholly upon the say, owned facilities, also - actually have larger are infrastructure original a more - are place. you dependent those

things, combination issue it's about process. what all sense? APCO speculate, as So the to But a really make really a that's whether that just that. Does could be of a the there'll of speculate combination - changes result and is. those We

Juan Sanabria

start Yes, Genesis. does. And just Thank it you. then

remind coverage to any now, much to their about with us I'm again? top type they like level mean, ability rents them So pay it and assuming I they're have about had that under to current. their sounds be discussions assets continue continue you that the booking there quarterly And is And off income? just that? to you when kind MOU how for of does that you're that, if could, come running

Rick Matros

Harold similar other is, ‘'XX. that aware the had in excess the those them. take but operators They're Harold $XX if the base fact of been off and I'll facilities, as the rent, in team paying to So have And we paying both any amounts, aware last the new prepared the end of they're we that the are mentioned, about rent management that burns over they're - take first rent. the at take the plus are has eight place. rent, they million part. haven't they're necessary, since excess discussions with Really, part, They're

Juan Sanabria

you. Thank

Operator

you. Thank

Our next from with Joseph comes Citi. question Nick

is open. line Your

Nick Joseph

Thanks.

Mike. congratulations, Obviously, and in being growth. of housing few to the mentioned both a senior large deals the First you've space. all, Rick committed you Harold seen

what So really I'm wondering how for> exactly that many opportunities fit you're that looking seeing you're

Talya Nevo-Hacohen

see taking that we solutions Talya. make opportunities we're that to run We're groups. at sense continuing to have economic where - its still we are Hi, a

of doing two-sies. a of housing billion time. three or there's to more going looking out bit deals feeding still into put doing large the Some the a that their it space, heard do sizable quarters you've a a because it some frenzy, at probably market of to been going not quite about to by they're senior billion to They're have do the of that's a by half come capital one-sies and investments

So gunning seeing we're mix smaller scale, done. deals. getting to And things we do and supplemental, we're that's where trying just And splashy for of well. frankly, they're to And make those our just want do be. sure are it to dutifully pursuing we that transactions we're those deals It's, where lot we a making in the are doing but headlines, okay. We're how and what not know creative. other keep

Nick Joseph

the Thanks. differences already, of think we kind whenever a there skilled we And then that XX given active months? side. how of particularly be portfolio are either in post think kind as geography the learned lessen are there But, may exit geographical past to little you markets about that's trying or overall that I when the the about of out a come portfolio, is, COVID, just on any exposure, from perspective, the positioning lessons over more guess,

Rick Matros

had tenant geographically, now haven't we right and, pretty out So nicely we're issues. spread

So, we with feel like we the really Genesis needed to like we things addressed the merger things address and that that. through

So, this call much markets market. for forward at the there, of anything from normal perspective, to stuff don't point. kind if exposure disposition a in going suppose that the to we be we do like that just have going a in stuff, here circumstances certain it we you'd problematic But just, to is

pretty set think up we've going well I forward. ourselves

Nick Joseph

Thanks.

Operator

And to Thank closing queue. the for Matros Rick I'd remarks. like it back turn there's you. in further no questions to

Rick Matros

joining things thanks always, readily today. if all were take to follow be any you for you you as Thank safe. of available and call And again, the want all have up on, care

Operator

may everyone. today's concludes great Thank you This disconnect a for call. participating, you day. Have conference now