LTC - Earnings call transcript Q2 2022

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Operator

Good morning, everyone. And welcome to today's LTC Properties, Inc 2022 Analyst and Investor Call. After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Before management begins its presentation, please know that today's comment, including the question-and-answer session may include Forward-Looking Statements, subject to risks and uncertainties that may cause actual results and events to differ materially. These risks and uncertainties are detailed in LTCs property filings with the Securities and Exchange Commission from time-to-time, including the Company's most recent 10-K dated December 31, 2021. to or update of circumstances obligation to Forward-Looking this no events reflect after undertake revise these or Statements presentation. LTC the date this note event being Please is recorded. Wendy like conference And turn would now over I to Simpson. the

Wendy Simpson

Thank you, XXXX conference call. to second quarter Welcome Operator. everyone LTC’s

Co-President I we years, today and today our And operators resolve not we Most rent, Malin, by our several the with LTC recently, share enthusiasm position a ongoing Chief to a properties abatements, me our time continuing and Kessler, headwinds issues are and and I for Too Pam to COVID to while regional transitioned Chief woods Joining of Investment and spent is transitioning few strength. the the to past made on whom is ongoing strong and COVID, shore majority for economic steps important marketing the up operating often, and company has by have its Officer; the discussing industry we Officer. short-term. successfully Financial LTC Co-President of of challenges our operators. Clint believe beginning and rectify from in footing that we have still completely deferrals portfolios took to-date, start Since the of several assistance. specific and facing over can future. sale out the will have grow. is my

You the hear call. will about that more in later

have have number steps quality portfolio, age continued for divested approximately million, $XX its from the finance positive generated including creative $XX and the XXX sales million. flexible our which we year, returns million our a of of that to investors, in and slightly longer that housing care, of of our vehicles through have over in goals. reducing $XX gross entirety longer strategic have net of make no and ahead fit generate invested enhance properties our year, proceeds value of excess million average We with of especially senior structured this have last To-date to investments term and successful is book taken

rent several operators. worst emerging We are identify increases while LTC investments the felt ongoing the solution rent pointing sites our and hard some crisis. enough the there have Multiple industry relationships. work for steadfastly I from right touring we believe the LTC by some increasing successfully is of our are moving and permanent the building and our been Private Pay of right to thank have from with busy to Occupancy direction are hearing cannot by to of been COVID implemented being additional I our partners in team to by pre-pandemic on more us is increases, in and needed are strategic heavy sense and that And lifting goals. temp continuing all, inflationary portfolio entire their operators a our future. execute staffing we agency pressures return utilization in hope us to and a is strong are including direction the environment, the and and a of gradually easing issues for specifically dropping in our of still signs an helping occupancy

now demographics pandemic, to industry. we shareholders many We dividend paying vital REITs the a mirror, LTC's in Throughout view our the and steady confident during As the monthly our of the second cut long-term say financial to care but growing to total rear part share $XX.X speaks shareholders. a through to that based economy the growth. allowed that, senior approach quarter, on population with has I to fundamental housing the maintained needs needs said have a health return conservative I'm clearly and seniors us much of managed elected per I'm continue of can angst and favorable that their our payout dividends, before, and the to more million. of focus our we proud care is $X.XX of current is

Our decreased the ratio quarter. moderately payout for quarter, to down XX% first from FAD XX% from second the

will FAD believe We continue of that XXXX. quarter to in XX% target our of ratio payout approach fourth the our

past non-recurring the will now anticipates from third that both quarter items periods. higher the quarter. guidance will this turn mic for excludes slightly FFO be to Our Pam. than I This over

Pamela Kessler

of scheduled quarter. revenue, a primarily by reduced the the of primarily increase Senior income on by pay revenue comparable XXXX. former senior portfolios, rent quarter notes. Transaction rent offset by and principally million on Assisted partially notes Lifestyle our income million, The with to resulting revenue unit unsecured to a the additional sales the received related mortgage Other escalations tax the XX credit in balance and due increased while in lower connection received increased XXX,XXX by increased origination XXX,XXX, from in costs property rates, Texas X.X expense increased the quarter working which mezzanine call. primarily under last well our downs million to partially a outstanding projects community. included million tax The principle as rental by our property from quarter, income of from four ventures partially of and Wendy. property increase second Living joint annual But completed during fee property and income second and year's X.X temporary funding resulted is our $X.X year-ago XXX,XXX, sale contributing development loan Anthem, loans to lease were on discussed as due from line to period. we acquisition offset mortgage loan unconsolidated the to portfolios interest income. a and Thanks, to the Interest originations, factors second and increase Senior last grew second due a Care from origination, rents, total loan and reduction by higher rent offset loan higher from from due of Interest mainly term Total senior rental XX payoff. capital in interest from issuance other in unsecured loans, termination of

credit Our primarily increased losses partially mortgage provision due to pay for XXX,XXX principal downs. loan by originations, offset

equal amortized revenue for due common higher XX.X Net second from and Fully As interest non-cash overall of G&A inflationary loan share to previously mainly diluted paid origination, higher of costs a mainly loan by This is also per due of we compensation upon the reminder, increased sale G&A a by in the balance. principle pressures. shareholders higher charges to and $X.XX record income increase provision million offset estimate versus loss available discussed, reserve down. real a XXX,XXX, estate, travel, conference the discussed. the FFO XXXX. reserve partially X% increased resulting second loan for costs and NAREIT was losses quarter loan sponsorships to on higher of in the and expense, quarter in as to originations related increases credit the XXXX rental gain $X.XX to

The interest per FFO expense, by credit increase $X.XX to previously for from with $X.XX rental revenue non-recurring loan Excluding quarter. and last share and compared second higher losses. related year's in net item discussed was non-recurring partially higher this G&A, increase originations revenues offset items the in provision quarter FFO, excluding in was

XX.X we During sale communities of million the estate for recognized related Assisted real California, the second gain of of XX.X to sold a in sale we Two properties. and quarter, Living a gain of on which million. the recorded of million XX.X sale were four on properties

million property was the center approximately Assisted Another Living million. note, California, a community sale XX.X Skilled for recorded Nursing Nursing The was sold on in XX.X gain XX-years which old sold gain recorded we sale property XX-years in Virginia, Skilled a a for and were of which center on old. a million. Assisted final million was and X.X than of Living at and an two more Of we XX.X communities

portfolio. reduce have age at properties into We very further capital successful to average been of recycling the our newer

investment We by Resorts. detail which discussed to purchased newer Texas second centers The Medical quarter now quarter we are located operated Nursing our Moving centers four in last activity. for million. Ignite XX.X being Skilled in

to and one million of GAAP in and third quarters recording XXXX. cash approximately in each fourth of anticipate the rent million We of XXXX continue and X.X

a being an development acres housing to adjacent XXX of parcel and of approximately loans average the senior Living communities community. the of senior age X.X held is secured as well XX.X for have Assisted by combined operated by Assisted parcel communities total million We The Carolina. mortgage communities two LTC land The existing with for also four in units four-years. land Assisted North under one Living future as a originated is Living partner, an a of

on Regarding some expected portfolios, our I and Senior Lifestyle will details rents forward. Care going provide former Senior additional

in the projections, two lease year, pressures. six down we to received which of approximately leases in remainder our now with the what For second XX,XXX receiving we the the due quarter, the buildings market-based separate is cost under Senior but portfolio up expected, former quarterly anticipate rent Lifestyle XXX,XXX from in prior reset and slower-than-expected continued

permanent these Our set expectation a we assets will is or rent. sell that more for XXXX

$X Regarding the received former quarter, we Senior million as portfolio, the in rent of Care have second expected.

and discussed this receiving the fourth we each approximately third last anticipate we quarter, million of in to X.X continued As of year. quarters

operator to and amending with whom lease its transition prior the extending toward the work to to continuing we September. are maturity Healthcare, our current HMG We in portfolio

million. loan principle current of We million XX.X the $XX paydown capital has also The with million received working X.X outstanding on a balance loan of HMG.

unsecured XXXX. the principle of mature have XX-year in an During and million amount principle X.XX% notes. we senior life, XX May, second quarter, payments The sold scheduled aggregate average notes

senior million shares unsecured net hand, XXX.X and rate just proceeds and This us under weighted total unsecured sold our available line with our XXX XX.X credit to used with under paydown X.X%, million under at we also million proceeds of under sold rate for in from common at the line Presently, average we of in X.X our on paid of liquidity XXX.X our of million. a ATM XXX,XXX net of ATM cash average the on available notes ATM. general outstanding of we unsecured XX.X of of second a for scheduled the We shares which And to unsecured we repaid sale had of XX.X XXX,XXX common payments XXX.X of quarter, under credit, XX.X a end million proceeds credit, line to under Subsequent of corporate net revolving stock, our million principle credit We investments million have provides program. X.X%, revolving weighted our over our million a rate a X.X of total million of line X.X%. fund of program. total purposes. a and regular million of our net for the stock at in of a weighted borrowed revolving average used have

We debt quarter, have tines no X.X of annualize XXXX to five-years. significant adjusted enterprise At our of coverage times a estate with metrics long-term a to the X.X charge solid next of credit second XX.X%. the debt maturities of value fixed annualized EBITDA remained debt real for ratio and and adjusted the end over

Although principal higher our achieve and producing line reductions scheduled our pay metric year to rent result Lifestyle, than properties expect start for of by principal Senior times, that recent target our credit will long-term as leased Care our of sales end annualize on we we to previously remains estate increased notes. from to we the pay a debt investments from from unsecured on adjusted five debt EBITDA real and senior this asset downs downs metric below believe revenue, of Senior

moment. mentioned, actions. Anthem, the majority During again Off quarter, resolve also and challenges abatements, discuss in Wendy net recently steps we million the of deferrals, to provided discuss subset in we related does Clint receiving including rent will X.X not took of include XXX,XXX a to that abatements. second us. the these deferrals of a to XXX,XXX This have and the been in assistance small the from portfolio as same rent which will amount note, repayments of XXXX operators Clint

Clint. to over things turn will I Now

Clint Malin

Addressing that our cooperation a across concentration XX XXX a Pam in operator. ALG successfully Senior, on we you, former in five Thank of operators transferred of July terms X, operator the just set is Pam. Private of The Pay not states referenced unit affiliate top-XX LTC orderly transaction, was one current lease an to who as we had property, $XXX,XXX form portfolio of of former in and the whom assistance for termination which we In recognized charge few in the deferrals an operator for with the transition. fee, this facilitating and a rent, abatements. quarter, exchange the and assistance one-time provided third will provided conjunction in be a

cash not with four lease to lease former X.X million, transition two-year first previously is was the rent with We recorded also the communities zero have forgiven The of a on balance a master are a which since pursuant rent the months. deferred new operators for basis. term

Thereafter, a rent. be based mutually on cash agreed rent market will fair upon

operator the the we part income new we payment, which will determining as adjustment of We all new are also to currently lease. or a with a portfolio, updated. lease provided the we keep with you whether $XXX,XXX buildings sell be yield term over all the of the Working rental will will retain amortized the or of incentive

cottages unit and Pay memory to are Private other campus, also the the in ranging independent sale, services living process care. XXX by our deferral contributor the We for of offering resolving to abatements marketing from

this income campus are from currently. receiving We any not rental

it, capital assets. income selling we the into redeploy producing by So can

For rent of full the third we to quarter, agreed contractual have operator's $XXX,XXX. the abate

a Anthem concentration. for portfolio with on update auditor, quick our on a in and not Now another top-XX

$XXX,XXX As rent to the assistance quarter, with as provided XXXX are work second they COVID. a reduction. them temporary we we to some challenges we noted, In related Anthem providing operating through

modified July quarter, million bringing on this rent We temporary the through Anthem's quarter $X.X third to fourth a rent. quarter Anthem's XX.X of payments receipt Anthem with funds rent the annual also year. we rent for total cash in receive to payment XXXX. expect We additional of agreed reduced of their is the of anticipated million XXXX, Upon reduction up-to-date provide stimulus million. temporarily rent them the bringing a to $XXX,XXX X.X to third

their And XXX,XXX communities stimulus the deferred of rent also July portfolio terms to during a that to us. mentioned of through lease rent lease XXX,XXX for a lessee rent receipt defer the under COVID. monthly in requested operator the operators with due We upon contractual our agreed We receiving of of assistance Living master from in with This XXXX. protracted XXXX anticipate on operator The Top-XX I in September eight earlier, and XXX,XXX not is current a funds. up August additional is Assisted operates concentration. rent as

provide includes licensure XX, Lifestyle March XX of from up Next which may XXXX former which XX% the with an on occupancy I at was January community. Senior at transfer XXXX June portfolio, communities at and one XX, update and XX%, Occupancy will XXXX. remaining the was XX% XX,

rent separate XXXX. communities, XXXX XX% six resets with was the and XX% XX, the For leases market at occupancy June XX, January based under up XX% two quarterly XXXX from XX, at at March

portfolio XXXX for we For XX% the June, the of XXXX was January, XX% former Care for same occupancy XX of compared the properties, of Senior and as transitioned HMG, with month the month March, XXXX. the to month that for

relatively been flat the While transition. occupancy has since

to in to efforts We XX-months. six over expect, HMG's relationships occupancy to and re-establish this next the reposition portfolio result referral gains

a and performance good at it this environment Moving is currently given not with pandemic do coverage to the of disclaimer now created. indicator challenging the we portfolio time, our that the numbers believe usual future

transitioned discussed as properties, the property well including and Senior Senior same-store portfolio longer our qualify XX as portfolios, no For the for recently metrics. Care clarity already former Lifestyle

So Living from XX-month was numbers. EBITDARM a and EBITDAR Assisted coverage they portfolio. fee excluded for these respectively trailing are times as X% and our X.XX management reported X.XX QX times using

X.XX respectively. times and was by coverage Excluding stimulus received funds operators, X.XX times

coverage Nursing times was stimulus respectably, our X.XX EBITDARM times coverage times was X.XX portfolio For X.XX as respectably. and funds and excluding X.XX Skilled reported times EBITDAR and

June XX, for ore are now same-store our some trends, to which occupancy XXXX as Moving recent of and portfolio.

expedited this basis. voluntary given to a and have us partners Our data on

units, was XX, providing we total Skilled our with Nursing January and includes XX of and XX% March same-store at Private approximately June same-store Pay Pay our at XXXX. the So Private beds. information XX% of occupancy approximately XX% are XX% XX, compared

portfolio skilled in XX% March XX% our January, this compared XXXX. occupancy For was with year, June monthly in average and of

XX%. occupancy the XXXX remarks I regarding As in pipeline. Skilled a Nursing average our our of was conclude my will point discussion reference, with

and such end solutions, construction has transactions, million our and effectively not plain we bridge XX bank capital a finance so preferred the we transactions, we compete unitranche loans, to spread vanilla greatly driven $XXX of about mentioned, on-track triple closed excel acquisition year. and stack. And also million and close the This interest to demand structures. XX financing. the this structured also million including while rates for more rates lease for by mezzanine including have financing, rates only between Wendy can to far With another loans, our year, on investment we complex investments, but in accretive particularly as cost at rising, As this have complete contracted, of equity related are our investments, net

to operators This we fully way marketplace. transactions new LTC identifying of tailored diluting for maximize by who for competitive to in the REIT advantage may structure that products means Importantly, their assortment ownership. their think the value operators not ways are otherwise a financing a significant of continue not a to part, plan is diversified to of encourages own in offer wide needs. We

and on they ready to great capitalize able opportunities are We as arise.

Now will Wendy for call the remarks. her back I closing turn to

Wendy Simpson

Clint. Thank and you, Pam

now are not extensive is only partner up. decision but We operators, to regional not ready sheet Seniors to balance will, the on LTC integral Positioning the questions. solid Our believe and the creativity provide a to a an Operator, here range Housing to that I to of steps back Care truly focus we sensible player have strategic once year of stay an to industry market. the flourish. today's to for market take have as has the sure again, taken and choice and difficult make in remains we make. is we this solutions growth. it LTC in financing are

Operator

Q&A start everyone Instructions] is from Our [Operator will we today’s session. going now from Thank you. Michael Carroll to be next question RBC. Hello

now line is Michael. Your open,

Michael Carroll

that fairly I And to the past is a is highlighting thanks. condition those is why What been quarters. And for several and to the flow buildings wanted weak? of to the new touch operator? new Yes, - guys the the other incentive the cash it had tenant recently and operator. have lease on provide several occupancy that reason you was guess to transitioned you I

Clint Malin

operationally previously talked new have things, buying the to I No, lease a portfolio we for quarters have and of Mike. in that made it payment that This was operator. things is This incentive the mentioned vehicles, covered transition, last equipment flow over nature. Clint. we more few mean, positive. transitional is about we the That cost cash out so some nature, transitional

Michael Carroll

are some that evaluating Okay. options can executed? timing of the through you And kind those about you that and thinking you portfolio, possibly saying then of this options are I go for mean, could of when are you be when the

Clint Malin

prepared Sure. mark. Well, as I I my in mean, mentioned

We sales to as operator. going look new well are to at as releasing the

on are something will now move evaluation So, process. I it is we working and fairly that we quickly right in think

Wendy Simpson

are of several assets. those ALC former assets who Mike,

that take. have book So, on in everybody property and smaller currently to marketplaces. properties they into The value there a good. assets wants are put the they low is mean, are very capital that smaller of we some a condition I the

advantage to to lease, operate license paying current of operator quickly moving of was a time. One the that for the an or lease under a prior under was their their us allowed that so the operator and termination $XXX,XXX things in period

for some we properties. great is for is There to expedite make likely properties. a happen, and dollars a ALC There great type properties. market not There everything, spent market. local sell it those national of is to not So, those will that the we of it of in is most types markets order

will assets ALC of most may So, we with stay is but it operator, the a of old assets. those current those few sell likely

Michael Carroll

Okay, for that. great. Thanks

Wendy Simpson

who And I'm know you sorry. are also long ALC enough to is.

Michael Carroll

I what rent do there? yes. in And remember, then the assets, SLC change six the forecast the former drove

Clint Malin

just more been of first occupancy the - cost the pressures. the side, through agency what COVID, what growth. has issues on main price surge about You been modified everybody on know has It has staffing inflationary guidance with Mike. driver seen those general really It quarter talked is our have properties. That we been

So, rate sizing and been they there to occupancy able been on it's has we right growth, have capture the side. as expense really see that

Wendy Simpson

went there into that occupancy a marketing And get that those lot growth. were early to of dollars on

So hopefully, will the marketing dollars moderate.

Clint Malin

in to selling script a we Again, evaluating that the assets some at whether options well, performance consider. either or improves we as look Wendy may we so at mentioned as of look those have

Michael Carroll

the think that is up $XXX,XXX of great. about last just as we mean, then thing? that could issue persist a go I that there into fourth rent. tenant deferred more the provide quarter? me, for And should of as Okay, that popped mean, that concerns issue you one one-time type you I new

Clint Malin

function is the really a ERC by Yes, funded I credits IRS. the think it of being

is really could - heard as change application, it been after function four So it timeframe have you six that to a has months, well.

So I think really of a it that function timing. is

Michael Carroll

great. thanks Okay, Clint.

Clint Malin

you. Thank

Operator

question Our Siversky Connor from comes from Berenberg. next

now is Connor. line Your open

Connor Siversky

dispositions Good quick missed on earlier, completed apologies the And quarter. I if sense morning for what the rent prior the providing the out provide of to could question but you facilities disposition? me this there. were a Thanks those during call. on having A

Clint Malin

quarter's time Well we last have cap call. I rent I that the on numbers. provided last

X.X rate. asset cap had a Skilled sold the So we

a One was to cap of had where the at termination us and had rate, cap fee X.X we AL the sales rate. the X.X% paid AL

So we some those sales. on rates had cap attractive

Connor Siversky

pressure some the markets or in downward is kind and elective between the is for might ALS sniffs due these of if to inability know of your in wondering months And and Okay. pressures you I slowdown within recovery from view, that. just that then sniffs. before, for in in labor procedures occupant facilities, headcount it on recovery Thanks just general? this a difference occupancy put the just the that I'm summer mentioned point to still fill

Clint Malin

I slower. months think has been typically summer

So contributing probably factor. I is think a that

of about to buildings a a open think to is accommodate thing other element increased wing to is building occupancy. open They a staffing The Skilled wings of occupancy. too providers higher increased

they increased that of expense much admit is the able, staffing function that be level, offset with so being side of to how higher a able it cost. to can And

Connor Siversky

then the at for maybe held multiples last of look spike quite one, but acquisitions given forward in investment and do equity seen have And the And LTC. look past, in sharp this the have kind at pipeline, for understood. the over this we as gone nicely Okay, mix rates in how Pam, the way you on going forward? you just we debt

Pamela Kessler

it Yes, looked we we are I still the debt of still at has consistently at that XX% at cheap look think equity, average cheap, cost blend. that you have when if and even really, capital XX% at when the it still we been past with relative. very historically pretty mean, disciplined way that is But our was decade. in weighted I debt really was really were looking cheap,

Connor Siversky

context, that private acquisitions certain that involved see to equity mean, players in within same be more LTC may then I opening for of you back mispriced. from opportunities the or some And these been acquisitions now do you Okay. stepping maybe some deals, have up

Pamela Kessler

exactly. Yes,

rates movement players, of their the us has stack a cost. more and they really has lot increased part that think, helped so I capital really private debt equity and use their because the

rates And been for positive general. in in LTC so the have perversely think rates increase I and

So competitive we more now. much are feeling

Connor Siversky

Got comments. about appreciate but I I for don't all you. it. Thank Well, LTC, maybe the positive REITs. know

Operator

you. Thank

from comes Valiquette question next Our from Barclays. Steven

now Your line is open.

Steven Valiquette

that the to I think you stimulus additional important you is page do on what critical might curious I'm on of just how have? kind funds used the the in the just subsiding? Hello do the Is recovery? labor expecting they also variable your their their to pay much Thanks. can And be pricing when recover, they improving think things mid-year guess, some the rent. the rank also taking that be I'm X. receive cited? everybody. pricing it it mind most Thanks. are and you question. I just end operations, the at could Is mentioned So for XX for their they power And supplement, is in variable guess you the you to occupancy and Care, day? the the to biggest bouncing occupancy Jan order all of pressure curious what Great. versus of is also Anthem expect more Thanks deferred just Memory involved how

Clint Malin

is a costs. it And combination as reduction Private - been staffing. as it in the the is and board of Skilled and there think staffing a across is talked Pay, occupancy definitely we temporary to I operators has well

a operations after feel that that growing for COVID, And And we of they occupancy expectations So the the year the positive reforecast be target for year. now, for remainder by on the they that, of properties. is have just able cover that right the will end are their their to rent.

So had they have past, the previous to able as have dips they on back. we mentioned in been and bounce have calls,

I mean very we point program confident we Retention this we've program, at made So deferred is cover ERC rent their to able the through or the helpful. once funds to they available, for And will will Employer And they feel be Credit them those think sufficient to are do that. that these stimulus be dollars provided.

Wendy Simpson

cushion. a to And have

Clint Malin

a cushion. have And

Steven Valiquette

it Did what what around number? Did is is just actually We but anyway. a you guys provide out amount rough you they the you figure might missed do might could give probably I in roughly that? get? it a the number commentary,

Clint Malin

We haven't PPP credit, of I sort the say far given in I a that for, dollars. of the think it of number but you think context the I as would funds, when as mean, magnitude would ERC of

Operator

markets. comes Wurschmidt Capital Our from KeyBank from question Austin next

Steven Valiquette

it. Okay, got

Thanks. alright. Okay,

Clint Malin

you. Thank

Operator

from Markets. next Austin KeyBanc Wurschmidt Capital from Our comes question

now Your open. line is

Arthur Porto

on This morning. Arthur for Porto good Austin is today. Hey

quick on for Just quarter. the a question deferrals

Maybe in September. how with they Can you operate is detailed specifically operator? trended. occupancy So the provide respect to the of size August the XXX,XXX new the in and some third quarter many also properties deferrals more and how

Thanks. I pretty XXXX? confidence that helpful. you can think rent also gives that the what would they in then And repay be

Clint Malin

through that the they in Sure. operators has on as collect in or that of XXXX, lot in where this apply. their went confidence to a a assessed restrictions, Credit. is is audit lot and and ERC was the similar rent sure to Anthem they then whether gone applying, qualified. I have expanded trail mean, of qualified, they advance ability determined a they not program offers, understand actually of our they they in through they them created to Once process What happened is, affected that fully make have

gives confidence We funds operate a usually not Top-XX, XX what credit approximately they that. target country has will do are beneficial, for is a but that this the additional be it us the of operator have ERC timing operator with that receipt the of in that enhancements plus within buildings. some our is regional So, presence

Arthur Porto

Alright you. helpful. that Thank is

Clint Malin

are welcome. You

Operator

next Okusanya Our Credit from question Tayo comes Suisse. from

now line Your open. is

Tayo Okusanya

Yes, morning good everyone.

of me. couple ones a So quick from

give you have rates kind what down so saw set kind it what post and you us perspective, as from Again, July, it from update be is curious could ruling? the line CMS one, pertains also Medicaid a a the their final of to states kind an of Medicare regulatory you Firstly perspective? expecting of most may

Clint Malin

regulatory part in Florida, Medicaid So noticed reduced rate of from requirements. tremendous there of haven't a amount some recent state we was have standpoint, for that there increase, a instance staffing a changes, and been of the but the

of increase. for positive combined Florida. was It a So positive very that the regulatory rate the was State with change

we be noticed and standpoint we or have will place from regulatory So become take are other could that nothing Pam. largely or states. in But that seen hopeful Wendy a

Pamela Kessler

in and preview that I for is I that a a mean, and if there cuts nursing of always that possibility traction is if phase haven't be the would into know But heard gaining decision. beneficial. or the final industry is skill a the I is hoping

Tayo Okusanya

Gotcha.

of And you XX you have higher will bit a four XQ, from reduces have rent that And comment struggling that, at pay I'm XQ That portfolio your reconcile a than that when Okay. helpful. perspective. kind given also then rates. And because XQ. to - be tenant Pam, have of kind moving expectation guidance months. the is the FFO have interest and assuming guess then, that pieces, I is that transitioning doesn't I think a I'm was in The is there rent on looking this new earlier for to asset higher because little you

which is XXXX, earning. of diluted XQ in to sales net have You

XQ. should how we So, just going if understand are bit help FFO per a higher XQ little to about be share us than

Pamela Kessler

Sure. Well past we quarters. several that on over the weren't transition rent receiving portfolio, the

No first So, be same the as the affecting quarter second entire quarter. will for was four that the rent rent. months the the free that given third

nothing guidance So the And changed is They portfolio. there quarter increasing is the this lift next the is a Where care is former senior from paid page model quarter. in is on That is and your there. guidance coming that that on million lease page for XX of that HMG. the

Tayo Okusanya

though you even abatement June, for transition any them a So, anyway. give really weren't in portfolio, XXXK collecting you rent the

Pamela Kessler

June Say - I'm In sorry. again Tayo.

Tayo Okusanya

so? portfolio, For abatement the them you give transition rent think of an or of XXXK I their did

Pamela Kessler

were previously getting Yes, a deferral. but they

second is is basis. Nursing Also was call So on with a it not full quarters cash in There call no quarter. it rent that third the deferral, are will abatement, rent acquisition getting our in they portfolio the Skilled quarter, we reported. Texas it from the be Ignite a

the happening So there of in for a back the is that half is us. quite year bit

Tayo Okusanya

Got rising cases, tenants you, question potential BAX of And from COVID the now from you that? then what again, all all next news the again, around impact are your any hearing kind okay. just about right

Pamela Kessler

what? from impact the sorry, I'm

Tayo Okusanya

COVID rising From BAX and cases.

Wendy Simpson

I'm I entire without we would Tayo, talking hope about sorry. get through this I call hope, COVID.

Pamela Kessler

spoil to record. track sorry was I the

Wendy Simpson

You did.

be seemed like the two a awful original higher the or everybody the to variant in as boosted. was both and COVID the rate the Obviously, staff not and as of being that in to complications affecting January, and, We resident haven't was variant that variant mortality and much quarter. is as highly Skilled is years that prior that and good news is neither that prior resident the happened and variant not in that with vaccines same The to quarter or the population is seemed to happening out first vaccinated just heard high quite ago first our once happened variance. use at to the like in sick and it Assisted, out magnitude it but hit that operators summer was the the agency hurts, much all be it is population this to terms causing in now, seems

really needs creating ton COVID to So it to right continue is don't headwinds, now again… a And of I grind occupancy higher. see

Clint Malin

are our to - could you really When when minds. you two it real cost in I well things of of those variant well. talk because a the skill on that as place you It staffing. the from the is operators, mean, perspective health inflationary as that is as the are pressures operator's emergency, think Skilled public

accommodate look to the hospitals. in into those at capacity So hospitals interim people keep as the not from to have the in to be back keep go opportunity that side, able Skilled an and to can they

really staffing is generally pressures the just cost focuses. are main that So and

Wendy Simpson

challenges, in labor the a And challenges operators Yes. for labor have. our might - perversely the help that problems the staffing slowdown economy our the

get possibly So just half the could labor from standpoint in endpoint. the year that standpoint, better from supply second of things a

Tayo Okusanya

Got you. Thank you.

Clint Malin

you. Thank

Operator

Daniel ahead from Go next comes Capital Our from Bernstein One. Daniel. question

Daniel Bernstein

ALC I sure. XX or what should I about might and I go XQ morning. going at months of not to XXXX? in free four you withstanding. the transitioned. after property think assume rent sell back there to you good just that assets receive then received tenant Hi I wasn't something? cash The that the into wanted you point you might rent, How

Clint Malin

a continue of really I function evaluating that think increases working new know You in is occupancy, getting the to offer Dan in expenses. and

hard. we on our is we So it that, where point amore I update hard at of on hopefully this think provide at but say, an quarter, but is next it to can for are

We haven't that yet. for given guidance

Daniel Bernstein

flow assets ahead. positive? go Okay. Are cash Sorry the ALC

Sorry.

Clint Malin

mean, as operationally I flow the a portfolio cash cash is whole flow, positive.

Daniel Bernstein

flow assets ALC cash the Are positive?

Clint Malin

about so. information as just are a the providing portfolio whole We

Daniel Bernstein

question that Skilled both to on from in I hiring. that and they Housing could increase And I some Seniors have apply Nursing. Okay. went labor, I guess some had then the been hearing a operators it

So hire. I was labor on operators more just decrease of commentary so in or increase ability wondering use reflects COVID maybe the of had the to you whether some the agency

Clint Malin

We have hiring. made have that progress some in operators heard they for

from number operators have something a starting that is is we that heard So to trend up.

with So to is economy the and again, our as a maybe that industry. Pam's benefit comment,

Daniel Bernstein

that private then seen maybe I actually to the the And had of buyers. Okay. be Have was of Pam cost to you commentary some kind I are any alluded Are that now that impact? evidence bid coming seeing any on again. you maybe assets assets yet back you that to you at being you debt of looking may think, are question loss that on retrained last

some detail? but indication maybe out are we talk private about there some Just know, out, whether don't firm kind backing seeing are of of I AL or what that that in maybe sniff side, the buyers

Clint Malin

early I I the recently in of is becomes be too where process I is indicate, around going to rates think think assets just the that that and we quarter we transaction but a back or something more think come is so it submitted with rising, to next on see back works. price that maybe a this is brokers have a us, indication bid come if well

hopeful see early So we question. to but just is answer we now we out, wait how are will it I but see that to and that that, have it plays think too right

Daniel Bernstein

time. Okay. that is all Thanks. appreciate the have. I I

Clint Malin

Dan. you Thank

Wendy Simpson

Dan. Thank you

Operator

Sanabria one question next from BMO Instructions] Our Juan comes [Operator from Capital.

line now is Your open.

Juan Sanabria

Thanks a two the both Pam time. those the NAREIT a assets one operator for normalized number? up and to FFO following The in morning. to the on transitioned on one-time operator prior the out just be payment question. the Tayo's nature to payments earnings that for Hi are good are of the and of of XX for going question new Maybe backed

Pamela Kessler

considered XXX,XXX the incentive. to lease the So operator new is

life it over lease. the the amortized So of is

yes So operator, to a not will a be former the one-time XXX,XXX paid charge. one-time, that the

Juan Sanabria

then for forget And I mentioned acquisition it. the who pipeline, Okay.

I the finance or for of traditional of kinds and structured think XX little fee year. Can about kind of what give XX of assets of good on what those us yields the kind transactions those? more expect talked for million should simple you was just half assumption back million a flavor we or a are

Clint Malin

Sure.

development be portfolio the of Now this actually an market is market Nursing, this similar portfolio. operator we Nursing. tell of newer Skilled acquired I with team source into be capabilities transactions. business you, to acquisition. transactions highly And of speaks these the Ignite, is off our it can type transaction it off and I would think And would Skilled new with our bringing an in

Juan Sanabria

that would And eight or kind of type yield? be an nine

Clint Malin

think but the Ignite, in We you was haven't similar to range. given it, which X%

Juan Sanabria

such Does is a Skilled Okay. change kind kind with but set then issues what that lessons And mean, from of on not think COVID. about to on what any you assets have of of of I been assets. how testing? general maybe the side, with and broadly a maybe the not learned a or of color like lot about, think buy lessons seems to have the it Assisted Thanks. regards what forward you what sharing idea question you you want to learned just COVID Living and maybe going do on opportunity is smaller and learned as now result great stress kind a any

Clint Malin

reemphasize Private Nursing think having the Skilled in balance it Pay. I and between portfolio a in

providers. difference funds Private main available made the amount drivers Pay in One of of as to opposed is providers Skilled to the stimulus the

be balance, that having don't So, what may in. because you you know environment, market what

balance reiterate the definitely portfolio. of So within

Wendy Simpson

agree. I Yes.

valuable were part during Nursing And standpoint very and from acuity the as a that mean, care that some or thesis going showed But Skilled of can as class, positive patient elderly. a evolving the certainly think I favorable. changing I Federal pandemic forward. continuum that pandemic, is always of as the investors Nursing and the as the the think Government it is have outcomes. Nursing the not is take Skilled proved for I they and good they Skilled I and to higher asset think, an bullish Skilled pandemic maybe that, prior states on recognized Nursing the wasn't

the standpoint, is do to scratch I we just looking healthcare cuts. think was system from by at our Skilled continue a government I it global supported be. an Nursing, will I head the think integral of part at So my and and

them pandemic, recovery complete think this support that introducing wait of Government the would before until the the don't complete is been I Federal the essentially through the and for has timing questionable. industry not I Skilled not because recovery is Nursing, why these understand cuts.

remains And but at the get Capital to that will or phase cuts, that hopeful lobbying politics. efforts that. that I be least in the on seen is don't either am I in delay Health involved So,

Juan Sanabria

and costs. of maybe smaller not issue, maybe kind pretty higher And AL of exciting as an just or as Are for still maybe just middle smaller there, now others, I what yourself, even some as volatility be? not break they you AL peers labor the the some assets mean, having been challenging. particularly used is with to type assets have market appetite a are just around kind more your And priced market, follow-up high, but those for occupancy those an of obviously secondary particularly the

Clint Malin

over markets. goal has on I providers. operating mean, based it regionally now focus our I mean, is been to strong, much years many secondary so not

are trying that We to target. really ideal think too that parts We their is of the is marketplace that presence us. have are who markets So, a country. across that we operators not still who diluted an operating that in think know partner different for

targeted towards well haven't as smaller ERC some operators ironically, operators benefit as if stimulus benefited Pay side, the of they the funds. the - of had funds, had the on have of companies Some from the where have PPP larger Private been haven't credits smaller

Wendy Simpson

markets, competition smaller markets. much larger the from have suffered greatly oversupply. the as they mean, larger they markets, I don't as have And sometimes

blanket only it statements like an we so like any at like are individual and secondary we is major markets, market that at asset really and really when only at have we individual areas on we or each we suburbs And our or look only we we metropolitan really like acquisitions. acquiring look don't basis

Juan Sanabria

quick maybe been the rationale between on and it Why this give last or seven. can background and options Got the the, just Ignite a six one of purchase maybe little for purchase me, behind giving have Texas year one give you Sniffs.

Clint Malin

opportunity assets on with performing Texas performed had occupancy our at Texas done on have is has a it Well, date the of think flexibility job we providers of have I very and projections. ahead well before looking and good a to Ignite provide the of capital just I you to acquisition. people with They the of and try them we choices mean, function very some portfolio

them, so way to value. think is it And capture for I a

there them now relationships. find work other to willing are between can is where we that modify we a that - - these with - so keep to they Ignite. into we important is was on and is then And we buy that. aspect couple, can a for transactions maybe way there And in hopefully, a an different play dynamics This there building come just of couple we that

we this So, it with them transaction. were on partner and willing to accommodate

Juan Sanabria

it. Got you. Thank

Clint Malin

you. Thank Absolutely.

Operator

Thank now you for That closing session. concludes Q&A today's everyone. to remarks. I Simpson will Wendy back you refer

Wendy Simpson

Again, us. thank you for joining

for for right hopeful very Bye-bye. the We where we grateful to rest are now. the the attention you very of year, Thanks we are have be and are given us.

Operator

today’s conclude does session. That

You your lines. may disconnect

LTC Properties (LTC) 29 Jul 222022 Q2 Earnings call transcript