CareTrust REIT, Inc.

Ladies and gentlemen, thank you for standing by and welcome to the Care Trust REIT second quarter 2022 earnings call. At this time, all participants start on the phone. After the speaker's presentation, there'll be a question and answer session. To ask a question during the session, you'll need to press star 1-1 on your telephone. I would now like to turn the call over to your host, Lauren Beal. You may begin.

Thank you. And to Care Trust REIT's second quarter 2022 earnings call, participants should be aware that this call is being recorded and listed in size than any other looking statement. on today's call are based on current expectations, assumptions, and beliefs that interest business, the environment, and how it operates. These statements may include projections regarding future financial performance, dividends, acquisitions, investments, returns, findings, and other matters, and may not reference other matters affecting the company's business or the businesses of its business, including factors that are in control of natural disasters, pandemics, such as COVID-19, and governmental actions. The companies today and generally are subject to risks and uncertainties that could cause actual results to materially differ from those applied herein. Listeners should not place on statements encouraged to review Care Trust SE for more discussion of factors that could impact results, as well as any financial or other statistical information required by SEC Regulation G. Except as required by law, Care Trust REIT and its affiliates do not undertake to publicly update or review 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 FAD, and normalized 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 exclusion of GAAP. Yesterday, Care Trust filed its Form 10Q, being press released, and its quarterly financial supplement, each of which can be accessed on the investor relations section of Care Trust's website at www.caretrustreit.com. A replay of this call will also be available on the website for a limited period. On the call this morning are Dave Sedgwick, President and Chief Executive Officer, Bill Wagner, Chief Financial Officer, Mark Lamb, Chief Investment Officer, and James Collister, Executive Vice President. I will now turn the call over to Dave Sedgwick, CareTrust REITs President and CEO. Dave?

Thank you, Lauren, and good morning, everyone. Today we'll give you an update on the progress we are making on the announced dispositions and on our current outlook for new investments. With this quarter supplemental, we begin to preview what the portfolio will look like after the dispositions or retenanting work is complete by excluding those properties and tenants from the deck. But before I hand the call over to James, Mark, and Bill, let me comment on the extraordinary time in which we live and operate. Since we announced plans in February to de-risk the portfolio, the world has changed quite a bit for us and for our operators. Surging inflation, rising rates, and the daily talk of a recession have an impact, but for us and skilled nursing operators, it's not all headwinds. For our disposition work, yes, the motivation and ability of some buyers in the market has softened, particularly those dependent on lenders. That's okay. We adapt and run parallel paths of selling and retenanting, and ultimately, we'll end up with a substantially de-risked portfolio. We're on track to close on most of that work in Q4. For our investment activity, as rates continue to rise and lenders become more cautious, We would expect a couple things to tip in our favor when it comes to growth. First, pricing should moderate. And second, sellers should prefer the certainty buyers like ourselves present. We're seeing evidence of that just in recent weeks. Now as for how today's macro environment affects our operators, again, there are two sides to that coin. On the one hand, the persistence of COVID, inflation, and a tight labor market make today At time unlike any of us can recall, the best operators truly distinguish themselves during times like this. Historically, skilled nursing has been a net beneficiary from recessionary periods because as the labor market loosens, people come back to work. Now, looking at the portfolio, we reported 94% of rent collected in the quarter with cash deposits. And as for July, we collected 94% exclusive of any cash deposits. August collections appear to be in line with July. Average quarterly occupancy for skilled nursing operators grew by 1.4% or 98 basis points over Q1. And for seniors housing, occupancy grew 2.8% or 215 basis points over Q1. Now as for the regulatory environment, we were encouraged to see the final market basket adjustment from CMS come in better than expected at 2.7%. And we're also pleased to see CMS decide to recalibrate PDPM over two years instead of all at once. With that, I'll turn it over to James to update you on the disposition progress.