BKD - Earnings call transcript Q3 2017 | Brookdale Senior Living Inc.

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Operator

Good morning. My name is Jennifer, and I will be your conference operator today. At this time, I would like to welcome everyone to the Brookdale Senior Living Third Quarter 2017 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. you. Thank Instructions] [Operator to conference like to turn I'd over the Mr. And Investor Senior Vice Roadman, Relations. President Ross of Sir, you may begin.

Ross Roadman

the earnings Jennifer, I welcome to would you, like quarter Thank and to all good of Senior for Brookdale call morning, everyone. third Living. XXXX you

are statements of today President our earnings like Securities that point the meaning as Baier, Board. Smith, Officer; Dan Decker, all and our Officer; be out which statements subject to all uncertainties. risks may historical including the Chief I'd facts, to made Financial Andy within and be regarding and Executive are are of statements deemed guidance, of our Cindy date are forward-looking us Joining Laws. Chief our and statements various today's Executive Federal not the today, These Chairman to

factors forward-looking with to you as on in our statements future and Living which Future could Forward-looking materially the yesterday, note SEC differ in the Safe well non-GAAP performance from release company's the I statements, are With direct guarantees including each of information, cause you regarding in statements we could SEC to and update measure factors be direct disclaim the at not a to quarterly materially earlier GAAP found in and XX-K those Harbor cautionary events these actual Actual the statement. Certain the Form render and those for other results and and XX-Q. of expectations that differ I important statements. earnings from the page and time, this may time performance. file forward-looking you considering and we should call of such the the non-GAAP measures. that, our Form any like detailed obligation and earnings on we estimates untrue, may earnings the of expressed from statements. brookdale.com that use we to or including When as financial our reports results to report present expressly issued comparable expectations call, during each Andy? such release the are to information factors from of measures Andy. annual mind please on will reports risk both measures, non-GAAP most the Senior full the Investor to Relations Brookdale supplemental Also in would our turn for release of GAAP over filings. definitions statements I reconciliation keep measure.

Andy Smith

Good Ross. outlook welcome and with call. making third all shareholders, our I foundation earnings third for and the business. to we're Brookdale discuss competition make new quarter, the analysts our of about progress then Thanks, brief underlying morning of equity other to some and the will comments the quarter participants the

do make Dan? few I to I'd comments. Before that, a like ask Dan to

Dan Decker

this agreement flow thank and teams I Andy, and our finish about creativity hard goal of in to you, underlying our to growth for trajectory. everyone. to HCP. The HCP the transaction their work of want is bringing recent durability I'm thank the to the Great, and the morning increase both increase Brookdale with and cash the good company its line. excited

with of the capital long-term, the control With the of and improving transactions underlying with goal. the [Blackstone] reducing HCP assets focused we're improving having our of that lease over operating the stronger structure company, perfectly leverage the ownership performance. Along on our fit

in metrics, residents. some important progress operational will providing quality Andy operational describe, key we're high excellence, is our of care As seeing for

create improve shareholder in improving, us acknowledge our in difficult key we're accept in available status. that publically to metrics. ongoing our customer to as we say know and it more would not now what that enhance and that to shareholders competitive hard excuse to would our been a and satisfaction, the seeing results. that. a value. we on to about our for improvement long process process has We we Our can I have the are limited an the environment explore alternatives to us provide options We having appreciate comment process for many operational transparency and initiatives retention positive associate We regarding been and of like a certainly like impact significant we're don't pushing

to the However information know the review interest are as possible is for we to what conclusion. present bring or working to limits we're a more to shareholders' that our reasons ongoing company's process can say, the it detailed at a be in there variety while But as provide and best of wouldn't time. expeditiously

by with which As we've our week, itself a in process byproduct announced was the evidenced HCP transaction of portfolio initiative. the last in optimization review

to more transactional been improve provide agreements, working change in company the the with have flexibility. We provisions and to our of controlled lease

to that continues active high Let priority process the be very you assure a review me for the company. and

and Board in the hard management work review. with Our conjunction on at financial remains advisors and legal ongoing our

Board this there HCP and be I specific shareholders. other been transaction. action to than result interest enter do into decision that that want its under confirm to transactions it if or no back indicated a transaction and in time you. so the assurance are transaction can Andy, any of can that I previously I'll made no turn Brookdale to only reiterate has to company in As will it the want the concludes our terms this transaction any that review will at or best

Andy Smith

Thanks, Dan.

of the really believe public working with their their win-win a at about reducing concentration. goal has transactions a I'd quarter, start just HCP this by Before of deal. with been us Kendall to we to set organizations. the create team want make both diligently We I first for Herzog, to about Tom and HCP Young was thanking their returning the HCP. goals completed to few transactions like met Brookdale of a that comments very

desire in our public rationalize lease to also goals to underwater change leases, business, a We transactions both been burden provisions controlled and of the continue respective to balanced improve economic portfolio, parties the agreements. our reduce of These to of both. met outcome for and our the fair with our simplify to have about

us, leases with by leases lease on lease XX we leverage below healthier For reducing HCP. remaining a terminating fees. without resulted also communities are our termination This bit coverage a with our any much X.X coverage for paying in

flow footprint also Ultimately, ventures We minority you six XXX% value. the communities, change position at which ownership in agreement balance us we net cash HCP's our all roughly joint allows to neutral, with without The deal. continue fair communities, the effectively two when control our all simplify other of for effect transactions is reduce to will elements allow our on business. our by to to engage in transactions consent. And and certain market of swapped HCP XX Brookdale in the modified our

the responded evacuation We XXX proud to associates teams that begin our even to hurricanes to We saw task Texas of Florida communities. through quarter; by that harmed these to communities an easy keep storms. now the Making two evacuated I went Florida. the that way decision cause Turning we also our in by face XX residents. large to I'm so that can Brookdale our can't who these devastation evacuate storms. given the describe the assist residents and and Texas were that challenges an incredibly can different bring. is a had stress to for our were affected experiences not and safe

care on around teams their clock and residents Our and their they worked care much to the how demonstrated focus for comfort. our

some incur available. in in we're although fairly press do several communities Services repairs service. We many communications process buses, overtime, All business of in up service from were residents. summarized our Our for we see our disasters our [hearts] are hurricanes of of for To the support Communities damage our handful cleaning primarily communities, the expenses out are operating of The will storms but support outside Natural equipment we undergoing the on other letters financial the refueling, by our warmed Housing and revenue weeks significant and that Together, advantages post-storm, disasters impact the either our release residents associates added are scale. through and of even and provide communities disaster incur we [remediating]. before the residents operation to went damages as home community ground extra rental. stricken we or showcase size which and their and damage ended. aggressively major families. of take many, our functional the teams not up hurricanes, in are expense, did Cindy aid showcase that And of quickly. area staffs revenue back to of relief benefits and many, not with these a our have are still labor major proud the and and We many communities scale. that setting to and generators, by like Seniors assist these did arranging which to the communities returned ago. the the where of patients Repair Brookdale things of only in evacuated families the of one by for were the provide character the we our received Ancillary the prepare did restoration gratitude was of associates impact physical impact Florida, you staff. the equipment,

the Aside second impact grew mixed. sequentially XXXX our operating was points. from XX occupancy of quarter the from of the hurricanes, basis performance We by

grew October. that the of In occupancy the we continued every and quarter of in fact, month month trend

hurricanes death move-in, focus the remains to and years. our We with move-outs aided not third in market compete that last pickup bit performance for the in Texas saw continue and move-outs marketing quarter on I new a best Housing fact to we was did As produced the fact and this seasonal levels. rates to challenging materially market Seniors occupancy due to for for September. a as the several in The share. gain controllable a initiatives sale earlier, of normal Along we returned by in by mentioned pricing activities, net our move-out impact in

Our overall pressure. increases in-place mark-to-market continue to rate offset negative

quarter. a in the prior average per unit revenue X.X% occupied result our As grew quarter the year by versus

wage We see continue and of around inflation tightness labor to X%.

XXX the ground landscape some associated lease-up however. levels at are were the Absorption pressure we that we expect almost two gets signs NIC continue projects new last second started look saw new communities through with our in in As of of construction continues construction intelligence, up and new this down At down openings saw the believe XXXX. XX in third quarter this XXX own point years quarter. trend starts where we we similar of that's that We elevated year. the by they pipeline our and on XX% from from markets ago. through in the positive similar new we competitive the to to data the trends will the Within where or There and industry, quarter industry, opening competitive future the narrowing. saw whether of

previously to told metrics. success that improve see of come performance working Let through I we're me beginning financial we're about performance. now a our how our to number to turn driving on initiatives and we're in

just to continued highlighted XX% appropriate support and community We've over company simplifying correlation leaders demand. of continuing programs. Brookdale of improved compensation the key top Voluntary good good often retention the our turnover. and training in to voluntarily returned through retention leadership through actually roles been consolidated left leadership focused We've administrative we've portfolio on the to the XX% reducing in We've performance. development resident also First, a shy Directors in past have year-over-year who the progress by career our and see and turnover of their improvement years, made of key family. programs and satisfaction have between them few our Executive progression on adjustments the financial their strong community

is we Net to NPS, Second, that level. our satisfaction. customer focused for of introduced down on had the are NPS proxy customer's a overall Promoter loyalty. measure we talked and community effectiveness previously gauging satisfaction Score or We a as

and year, service. XXXX evidencing in dramatically significantly our improved team's again scores improved customer focus on this NPS Our

strengthening also activities. marketing been sales our have We and

We a single have sales marketing Wilson, now who person, Ryan joined combined us this year. and under early

on have been that believe undergoing who sales months focus and social efforts marketing We activities to training. have move-ins net results starting person consecutive the robust digital, activities seeing of the of in We of are X,XXX continue local June. with again our these and now we force, combining more positive marketing, five

of addition our to in we recent Third, local transactions, positioning on the optimization work continue communities to our their HCP to markets. the within efforts improve portfolio and

agreement sale. an into entered we communities to quarter, sell classified the one assets quarter for During the XX with as community, held exiting

HCP expect communities. quarter, week. this this on leases During HCP year, be of transactions leases of communities, year. last terminated we is on the with separate fourth the that completing announced terminate quarter nine also XX we quarter we fourth the To the that And in we the to transaction announced last in clear, from

I want this close, have year. Finally, our to again my so expressing who been much through to by appreciation associates

home damage. we strength say October, leaders who and and in wildfires. by communities that to Our our it fires significant Compassion as Associate and safety losses have of community they they affected again the I'm for before any HCP, also field of residents could, comfort own grateful and our Fund. of personnel and before these I gratitude impacted significant from The own needs many forever we six our cases many associates many pleased the XX associates lives. all saved our be vendors California [indiscernible], that have been my the our of were families. needs back who assisted our has by as disasters. have and served outstanding contributed want these of literally property they in corporate Brookdale have to We to I to many our with did natural those and courage that sustained were Associates express their communities to associates, fund will didn't their to moved evacuated their communities.

over call details more the the for I'll on Cindy turn to quarter. Now

Cindy Baier

Thank start and the third progress you, joining to structure, on sheet three will topics, our for we've our thanks, and I our current by liquidity. results discuss that And everyone, today. our XXXX Andy. XXXX capital balance I'd us made quarter highlighting like outlook.

$XXX The maturities. We of were the schedule. aggregate mortgage proceeds successfully were outstanding used refinanced very million principal, with XXXX pleased as million billion of loan of resulting quarter, repay as including mortgage $XXX maturities well portfolios. debt we fixed mix variable During four the $X.X to of debt the

we our convert, good We've have until with of XXXX. progress maturities don't $XXX mortgage made near-term year the Excluding maturities. really million a more than after on

coming we of note, have the to of in due million addition In XXXX. million $XXX convertible debt $XX mortgage

the liquidity. quarter we stated, million As of the million of marketable have securities cash. built cash end is and At $XXX converts availability We've line XXXX, $XXX including previously to amount of repay with intention of our $XXX our million significant of and on of a third our we'd credit. liquidity of

get details let four our we of before impacted that prior into financial the cover the quarter, and items me to period. results Now the comparability

initiatives, the our last Our Harvey portfolio and million. items goodwill asset Hurricanes [evaluate] impact that large will Understanding reserve these favorable some book the the year, totaling of impairments and adjustments financial results context. optimization in we $XXX Irma

adjusted EBITDA. initiatives dramatically year-over-year expected revenue and As optimization our portfolio particularly impacted result, our

We of have third dispose beginning since communities XXXX. quarter of XXX the

less $XX $XX adjusted million million in residency cash a these $X in impact of adjusted dispositions negative million. our compared we revenue XXXX, result impacted $XXX in positively operating EBITDA expenses, less resulting free facility the year by prior of million period. during a flow almost third to of generated a quarter As These dispositions and

the million expected Second, based the established the reserve cost recorded our year-over-year large declines. These and the in to adjusted of reserves adjustments Emeritus XXXX adjustment third part historical we contributed on favorable also quarter insurance a of been claim as EBITDA insurance had merger during XXXX. of in reserve $XX favorable reduction

residents, results for very and together our thank to who negatively I'm we quarter to get our so and to great the million. you hurricanes hurricanes, our approximately of care take deliver by now that came to want families each care and team grateful for to way dedicated to say the the associates, patients turn before a their first. put financial take impacted The adjusted of EBITDA XXXX residents patients $X into third Let's our moment I hurricanes; other.

impact Let's $XXX,XXX to of Ancillary providers Florida Services our service XXXX. lost was impact patients being to due we on business business Senior residents. credit third Health as than the we we quarter more $X for of approximately unavailable. talk greater In plus estimate about that Housing our hurricanes in million rent the displaced The business revenue provided of Home

Our third our XXXX the hurricane additional protect To for, response million. costs $X quarter manage recover residents, approximately also needed increased operating and our through to provide to prepare storms. by from we staffing

impact other generators, purchase of The hurricanes to EBITDA. and also We transportation incremental also needed the will supplies. XXXX fourth fuel rent impact and quarter our adjusted equipment

approximately be million Services [growth] expect $X asset Ancillary couldn't as We lower sales of revenue, of due to negative rates and lower to due to volumes. $X lower result million a a impact recertified that

We costs with and $XX the negative together million. full XXXX personnel approximately incremental adjusted to will with have the impact Irma also of hurricanes. have to Harvey estimates million associated some Hurricanes our a will $XX Taking year EBITDA

also at to We the CapEx insurance during hurricane reimbursements next least expect related $XX year so. million of $XX of net million to incur or

have the First, sustained to repair we during that the our damage hurricanes. communities

that of reimbursement. million cost quarter to year. cost before believe that expect over $X costs approximately net will incur approximately We the million repair $XX the will and of $XX insurance insurance the in fourth this incurred be we'll We million reimbursement next

assisted living event operations the temperatures sustain Second, order issued communities and generators outage. and skilled necessary homes requiring Florida a in emergency comfortable an maintain to nursing of and fuel to power obtain

rule-making address there in has been and order to generator overturned, emergency are actions the regulatory process While legislative requirements.

not additional costs insurance requirement. $XX for occur of reimbursement quarter, of meet $X developments to generator the estimated the The new $X include does in and approximately CapEx million $X possible will capital closely may million. of during fourth result of any third we're fourth to installations order emergency be the the to million incurred what of costs we incurred million expect The remainder costs that as an total quarter generator of a We monitoring determine in about expenditures quarter XXXX.

Finally, that the stock of segment. Housing for we analysis XXXX, which business. segment, revealed to the reduction was recorded the $XXX million charges and to capitalization turning to market impairment estimated the value. Senior Assisted primarily our the impairment impairment to value we asset market of fair as million goodwill of it significant of Living and We price of and performed assets charges value. goodwill for our approximately as decreases well interim a our $XXX current Living fair the healthcare intangible for million quarter result market than in the in less consisted equipment non-cash completed and recorded communities Health as Home a $XX of the expected carrying Assisted Florida results of the plant $XXX and licenses. primarily value the an impairment charges within property, We of third Living related in leasehold intangibles carrying million analysis, impairment; and reduce Assisted certain segment and The When

quarter to now our turn business Let's performance. third

best For the to our using is our about results. our business way communities, think Housing Senior community same

Our not offset Senior result as the of same that from Housing completely was growth. declined by RevPOR revenues occupancy in third a quarter XXXX community decline

year. the decreased excluding same costs by community Our operating X.X% compared prior income hurricane to

operating Excluding impact in recur favorable income did X.X%. our of reserve in same XXXX, community XXXX, the which a adjustment declined not

X.X% Senior Housing on the we year-over-year the total compensation, our expense benefits adjustments our facility expenses expense. in the X.X% increased a and expenses year wage hurricane were same-store including workers' growth expenses and the a plan Reflecting X.X% XXXX excluding pressure, excluding made quarter community experienced Further hurricane expenses by wage basis. medical same-store and prior favorable period. compensation X.X% same increased by salary reserve both third in that operating Our related and

Turning excluding the reserve a to and X.X% of same our and store operating basis. the declined income income costs year-over-year hurricane same adjustment, impact operating the insurance community on

also discussed period reflect that as quarter create the our results intense of a with and competitive we comparison tough reminder say, in insurance to year. continuing our quarter. fourth the our has adjustments and competition reserve a a move-ins have will well. and last opening the success market As see for during some lot to Needless occupancy is prior been in as did We're third Andy

Assisted sequential than environment later third consistent little occupancy we a our year-over-year in We positive Living competitive recorded the produced in segment to continues and Senior Housing pattern X.X% historical our Retirement very be of were turn with growth quarter of our X.X% While in occupancy increases and results July rate month and Center our industry. the XXXX. segment. each saw rates The in

Our continues labor dominated be growth increases. by to cost expense

labor it's challenging market, the to the retain With recruit talent. tight necessary and

last Of negatively is course, our cyclical not recur. did year-over-year which large the expense adjustments year reserve by performance impacted

Ancillary our quarter Moving million of to $X.X earned XXXX. operating Services third segment; segment we during of income the

described, was health the lost in elected fell revenue of home our the to days, pay the associates from I loss to the Since impacted As decrease the revenue we continue impact hurricane. days by heavily lost bottom income operating line. to during the

and In addition be see negatively care Chicago business start continuing to We impacted a purchased will in to in presence. and the lost quarter. of fourth the agency Hospices. continue extend Hospice our [indiscernible] in and We're our affect recently will growth lost

almost stock costs and the million and of $XX non-cash project during general million of $X approximately administrative strategic compensation expense $X of quarter Our million included expense.

We represents transaction, cash $XXX.X quarter of was quarter Third EBITDA XXXX. million $XX adjusted the of and G&A of transaction $X.X and versus in integration, adjustments. G&A almost transaction project third transaction generated of related costs. project reserve quarter XXXX costs costs XXXX in favorable million non of strategic $X million we the compensation $XX $X million $X and excluding million had which million strategic and of third excluding million In

cash on revenue strategic during and including costs. our and quarter free of costs reflect operating hurricane's million $XX deduction and a expense included adjusted metrics project almost XXXX, interest of million the incremental $X refinancing additional and modification flow from and of debt third impact generated expenses. of related extinguishment Both costs transaction which $X facility also We million transaction,

$X of year-over-year flow of proportion ventures million was free million of cash or unconsolidated $X share almost decrease. Our adjusted

company third of We with for X,XXX continued portfolio units as our third the classified The assets XXXX the activity quarter. or communities optimization sale. during began XX held

During the additional units. into agreement company of sell quarter, community an to the entered one XXX

units carrying $XXX XX, September XX a and communities represent XXXX million of had in assets associated that included sale value long-term classified mortgage we with the debt, is are debt. million of as for $XX portion As held of current of X,XXX which

the Additionally, nine we XXXX, units. during third leases XXX quarter communities representing the for terminated

Let's move to guidance. XXXX now our

year adjusted transaction for we XXXX, full and For EBITDA we to excluding $XXX now adjusted $XXX year-to-date full Based for a results of and outlook are the be million million. XXXX costs lowering expecting EBITDA and strategic range on our in project range narrowing guidance our for flow. adjusted are cash and free future, to year our

continue to to million impact, $XX our million fourth occupancy negative that the results. and $XX to see quarter pressure addition we negatively In to rate hurricane we expect impact

be $X California the the impact million. than less expectation will wildfires is of Our

to our and $XXX now that million expect last expenditures in expectation to $XX our for XXXX costs that be also in It $XXX expecting refinancing to non-development costs a of have capital now are be the This includes cash of million our to adjusted a our will impact. We XXXX range flow year, We includes with $XXX adjusted result range to material range of ongoing and the and review of strategic of a guidance impact have alternatives. million. the occupancy that impact negative associated The will debt rate hurricanes million. will pressures modification our the $XX impact million a cash free and for in $XX on million $XX week not million for free announced HCP results. transactions will negative flow

We million narrowing $XX share as of unconsolidated described, of excludes company's proportionate future also impacts To The a year other foregoing our of portfolio me close, Andy range full potential free ventures our million. on earlier. completed dispositions portfolio guidance described let XXXX to in cash acquisitions, guidance we the optimization the flow the optimization $XX for are are of any seeing say and initiatives. pending transactions activities than and progress adjusted

not in Our a has structure time. capital long this strong been

our through the our focused And have we that transactions are foundation like We transactions, quality improving completed, HCP for operational portfolio, our like reducing back the complexity on you performance. your the communities underlying been call improved now of Thank of I'd to last business this. week's and the with are turn building Andy. the the to for attention capital business. Andy? structure our on

Andy Smith

Cindy. Thanks,

Our our team performance. focused is management operating improving on

happy answer We key areas we and to are progress questions that are beyond. in making success near-term headwinds the for XXXX foundation laying believe and in we the overcome We're to your now.

Operator

[Operator And Jefferies. Instructions] with our line Tanquilut of comes Brian first the from question

Jason Plagman

for morning. This Good Brian. on is Jason Plagman

analysis on performance in Just business? in the you operations of indicators the reduction kind drives that on over Scores and any first executive the talked turnover. Have performance side, key off done on increase how the you about the time in Net Promoter

Andy Smith

for are in very of in of is tightly we of they and very, question, tightly our Yes, Both communities, to so rate, absolutely. those so of why success on terms are Jason. those terms which your success directly correlated metrics intently Thanks correlated very in focus both factors, success them. occupancy,

Cindy Baier

importantly most improve they And profitability.

Jason Plagman

store last HCP color QX? week performance on reported their that any store and most same you And X.X% helpful. results same than the much why guys that's is you on so NOI Great that of different recorded managed that, for

Andy Smith

it. HCP it that's affected part believe particular and that by do some Well, the -- so a believe for that I the were first, clear majority about two exposure. accounting was [pull of vast was ready years you're hard Its those back] calculated manage of between HCP's and portfolio adjustments I we right how rebates that,

it's moment, sort in characteristics the markets. a at by that's The of going boils between performance other particular by Independent particular and has at HCP's part just markets of Living, you of have difference so in communities that's it which on better But really part the it's what's of it it. the to is market -- of down that case portfolio and look again -- to a -- and lot portfolio

Operator

Your Chad with question comes Stifel. from the Vanacore of line

Chad Vanacore

me? Hey, you guys, hear can

Andy Smith

We hear now, Chad.

Chad Vanacore

occupancy in XX where if in trended was up the occupancy up progression? average the occupancy the each end points, month quarter? did basis quarter and I mean, what So was monthly

Andy Smith

against it again would by move-ins -- is the of net continued in it were break month with the those out like. that at of the month I end really move-ins month don't and that we of June So tell positive what changes than can in normally October. see, but don't in later year quantify through measured beginning Chad, each the month net we you by precision. month the that net of in But -- continued level move-outs our quarter this What look we

Chad Vanacore

right. improved level at than and the the be All to quarter fourth you occupancy to makes you ended if the move-ins what expect quarter think you you But that higher net quarter, it began down? presumably have flat a

Andy Smith

Well is days you're of account right year every virtually November you on selling your month. take end challenging There when a the assumptions, at generally few actually month. are and very speaking Thanksgiving holiday into the

is fourth we that of the why is in in to flat see as quarter. slightly occupancy occupancy rule, it affects month challenging which So and speaking the December generally a lower

Chad Vanacore

so continue here hurricane quarter, the for your right. fourth expect you guidance? in into All aside occupancy in you assumptions that then what fourth from factor to are outlined just that rate impact And your that the

Cindy Baier

I to we're Cindy, thing as first But one seasonality. QX is this want guidance see and our you in We're pressure and rate that with of the debt quarter talked the do as year, outlook question. more for you our about expecting third entered our a to normal fact happy continuing guidance calls normal a about we elevated. Chad In that think annual affect QX our to that quarter but our second full we lower returned was for of doesn't into So expecting occupancy as remind the level the that a both thanks debt. debt the for we're result

Chad Vanacore

not you already rate, have like something you get pressures? New X% going when the about into increases typically to expect we in-place Year. think So XXXX pressures would we in on experienced you given rate that on expect Should

Cindy Baier

pressure the our we residents]. expecting really mark-to-market I we where rate normal the in-place residents, in on is think in the are [new our see seeing for to are increase

to in we of move discounting areas competitive communities. our people to seeing how those into pressures So get are

Chad Vanacore

are And discounts of what kind you giving?

Cindy Baier

for that average portfolio, you the discounts in QX we compare the and QX. are the gave resident in-place compared when the across to Mid-single-digits

So And the combination you to be at a not of it's a that's a look we it's difference se, an it between mid-single-digit difference. or really a move-in. receive, discount, if of rates the market that can but lower incentive resident rate, new discount per in-place sort necessarily a

Chad Vanacore

that about with execute you transaction, any potential are yourself underperforming just then that HCP And Okay. other to your can of like other transactions thinking landlords rid there leases?

Andy Smith

Yes.

about talked before. we've As

transactions for for to have assets. one to to the try or our or leased also those a are out I'd get in dialog to work all First, that number for renegotiate that and we partners you of to of in get way of of or terms supplement, amendments leases us. those work leaseholds you from away forthcoming. can we either leases as walk instruments are can search underwater our you And or REIT to maturities, as them that say you underperforming near-term maturities is restructurings can see constant with

so and efforts of And again, simplification optimization we strategic are of with our process dialoging those the part as review are that undertaking. and folks we part as constantly

Chad Vanacore

Are Cindy, should we Just items tough one fourth comps one-time more the that for there quarter. mentioned note any me. there? you in

Cindy Baier

We reserve XXXX. do in insurance about question. fourth Good $X booked million of have adjustments quarter that favorable of the we

us. will for So that create comp tough a

Operator

Gajuk line comes Joanna question from America. Bank of next with our And the of

Joanna Gajuk

all-in In do before wage also next year range, is right? of costs, that the for had you and X% year think the Cindy, compensation costs so about, labor in about that of increase you your outlook in the still sort guess So maybe the of next increases how year? for same I also and talked terms all-in you labor terms

Cindy Baier

is wage labor and unchanged. the increase for Our year

increase rate of increase, are combination in per increase with That's an expecting our still in X.X% and the associated X% the employees costs the resident day. year for a benefits full other average wage year-over-year We increase of and of to our our hours XXXX.

our Nursing. XXXX we have We at the portfolio while there we employment looked year, see As wage in -- particularly higher pressure wage this we as our increases we areas will as Skilled be see look low see in that into lower, wage we also is to that continue that have unemployment. pressure we

where to XXXX. So those the pressure are areas would expect see we in

Joanna Gajuk

looks think the are that agency, home terms you added Great. I you the but from in [stepping] of health, And sounds mentioned one you down me correct? it Ancillary business the maybe time that segment, so same to like in metrics Chicago, is you're like it expanding at

Cindy Baier

in growing has very agency and With the business its impacted health million posted about will been competitive We earlier we the QX. have hurricanes, in Chicago, that Chicago our QX throughout that we we Home million our by is very residents tailing business in also call. a there Hospice by by $X and are we revenue growing Hospice in That impacted very, $X intrusions needed talked be nicely. to agency added just of and effect were the nicely. in the

long-term healthy think some will has So business headwinds it in had I the but be that XXXX. for

Joanna Gajuk

in So home plan there situation to that there to you it's plan this all? and do we that with before continuation you then so the exit health, or mentioned the with is talked of in and right this terms you way any competition spend to of the continue business that about

Cindy Baier

that. Andy issue It's getting the address before, time. have talked let I is that about same over issue will we it and a not it's better new

Andy Smith

because sales intrusion. when lost them and get When clinicians new clinicians onboard As competitive this people new folks to of lose the allow and competitively census of that you lot time it takes sale take sales simply folks, -- re-hire, -- intrude it's pretty a again to the a basic. you rebuild train, and while

So different about what we've this is talked no before. than

yes staying health of today. business, terms home from that's in we sit the where In our intention, current

Operator

thank And time. we to I would the Andy. at And other to conference you back like this have turn no over questions,

Andy Smith

today, joining questions. supplemental Thank Thank be you. us for you around you have if this morning. We'll all

Operator

earnings This today's participation. does conclude your for you Thank call disconnect. and you may now

Brookdale Senior Living (BKD) 7 Nov 172017 Q3 Earnings call transcript