CareTrust REIT, Inc.

Welcome to the Care Trust REIT first quarter 2021 earnings call. Participants should be aware that this call is being recorded and listeners are advised that any forward-looking statements made on today's call are based on the management's current expectations, assumptions, and beliefs about Care Trust's business and the environment in which it operates. These statements may include projections regarding future financial performance dividends, acquisitions, investments, returns, financings, and other matters, and may or may not reference other matters affecting the company's business or the businesses of its tenants, including factors that are beyond their control, such as natural disasters, pandemics, such as COVID-19, and governmental actions. The company's statements today and its business statements generally are subject to risk and uncertainties that could cause actual results to materially differ from those expressed or implied herein. Listeners should not place undue reliance on forward-looking statements and are encouraged to review care trust's SEC filings for more complete discussion of factors that could impact results as well as any financial or other statistical information required by the SEC Regulation G. Except as required by law, Care Trust REIT and its affiliates do not undertake to publicly update or revise any forward-looking statements where changes arise as a result of new information, future events, changing circumstances, or for any other reason. During the call, the company will reference non-GAAP metrics such as EBITDA, FFO, and FAD, or FED, and normalize EBITDA, FFO, and FAD when viewed together with GAAP results. The company believes these measures can provide a more complete understanding of its business, but cautions that they should not be relied upon to the execution of GAAP reports. Yesterday, Care Trust filed its Form 10-Q, an accompanying press release, and its quarterly financial supplement, each of which can be accessed of the investor relations section of Care Trust's website at www.caretrustread.com. A replay of this call will also be available on the website for a limited period. On the call this morning are Bill Wagner, Chief Financial Officer, Dave Sedgwick, President and Chief Operating Officer, Mark Lamb, Chief Investment Officer, and Eric Gillis, Vice President of Portfolio Management and Investment. I will now turn the call over to Greg Stapley, Pear Trust's REIT Chairman and CEO.

Thanks, Alexander, and good morning, everyone. We're pleased to be able to tell you that Care Trust outstanding operators have proven remarkably stable overall thus far in this pandemic. Most of them aversely confronted the hard task of adapting to the new realities of COVID's changed operating environments, and those that have are faring well. But how long it will take for occupancy and normal hospital discharge patterns to resume is still unknown. So as vaccination rates rise and parts of the country begin to emerge from lockdowns, it's important to remember that the pandemic's effects on the skilled nursing and seniors housing industries are far from over. For our part, throughout the past year, we've worked hard to stay close to our tenants, collect all of our rents, pursue good acquisition opportunities, and carefully guard our balance sheet. Thankfully, having partnered with great operators in the first place, we have thus far been able to avoid some of the problems that beset others. But challenges remain on the horizon, and we will continue to be vigilant. We are pleased to report that we collected 100% of contract rents in the first quarter. We also collected 100% in April, and we appear to be on track to collect 100% in May. So in spite of the continuing headwinds and in light of the continuing government support, we remain cautiously optimistic about our tenants' prospects as occupancy begins to climb back. You saw this yesterday when we increased our 2021 guidance to reflect the recent acquisitions. To be sure, the government support has been critical. But if you look at page six of our supplemental published yesterday, you will see that we began giving you our operators EBITDAR and EBITDARM lease coverages both with and without CARES Act funding. Most of our skilled nursing and multi-service campus tenants who account for about 86% of our rental revenue are performing near to or better than their 2019 coverage metrics without the CARES funding. Granted, these particular operators are among the upper outliers in the industry, and many, in fact most, other providers out there still need that government support. So we continue to hope that the government will see the obvious value in such things as extending the waiver of the three-day qualifying stay well beyond 2021, and that additional relief funding will come soon and in sufficient quantity to help those who need it to achieve the soft landing that the post-acute health care system and its predominantly elderly beneficiaries still need. For our part, with low leverage, great operator relationships, plenty of liquidity, and a great team here, Care Trust remains well positioned to continue growing and pursuing our mission of pairing great operators with meaningful opportunities to transform individual facilities and, by extension, the industry as a whole for the better. So with that, I'll turn it over to Dave for some more color on what's happening out there. Then Mark will jump in with recent acquisitions in the pipeline, and Bill will finish off with the financials. Then we'll open for Q&A.

Dave? Great. Thanks, Craig. And good morning, everybody. In Q1, our skilled nursing operators reported a much-anticipated bottoming in skilled nursing occupancy. In January, we hit a pandemic-era low, But at the end of Q1, our SNFs reported a moderate recovery of 220 bps. On the skilled mix front, the question has revolved around the rate of return to the pre-pandemic levels there as well, now that COVID cases in the nursing homes have materially declined. At quarter end, our operators were still about 440 bps above the pre-pandemic skilled mix norm. For seniors housing occupancy, and speaking relatively to what we've observed in the broader sector, we're pleased to highlight how resilient our seniors housing operators have been so far. COVID hit them hardest at the end of last year and at the start of this year. As with skilled nursing, seniors housing occupancy appears to have hit bottom and thus far has held steady. I wish we could predict the slope of recovery, but at this point it's just too early to speculate. Our thesis is that we will return to pre-pandemic occupancy and coverage. The question of timing will remain unresolved for some time. Noting again that portfolio-wide or national commentary is only marginally relevant since these businesses are hyperlocal and extremely sensitive to the quality of the operators running them. Needless to say, we expect the rebound in occupancy to pre-pandemic levels to be asynchronous across the portfolio. Next, let me talk about our lease coverage. As Greg noted, you've seen yesterday's supplemental, a continuation of our enhanced COVID-era disclosure, wherein we try to be as transparent and helpful as possible by reporting lease coverage on an EBITDAR and EBITDARM basis, both excluding CARES Act funding and including the CARES Act funds received to date and amortizing them through June of this year. Stripping out the CARES Act funds, we saw overall portfolio coverage hold steady, ticking up four BIPs to 2.12 times. As we evaluate the length of their runway for those operators who have needed these funds, we remain constructive about the time that they have to climb their way back through this year and into next. Lastly, and on a related note, there remains roughly $24 billion in undistributed CARES Act funds. The transition to the new administration has slowed down the processing of those funds, but we understand progress is now being made. Additionally, $8.5 billion has been allocated for rural providers, and based on preliminary reports, approximately 154 of our facilities would qualify. With that, I'll pass the call over to Mark to talk about investments. Mark?