Good morning. Welcome to Oppenheimer's 36th Annual Healthcare MedTech & Services Conference. I am Michael Wiederhorn, the healthcare analyst. It's our pleasure to introduce The Ensign Group. Today, we have the Chief Executive Officer, Barry Port, Chief Investment Officer, Chad Keetch, President of Flagstone, Adam Willits, and Chief Accounting Officer, Suzanne Snapper. Welcome. Thank you, guys, for attending today. We're gonna start off. We have a fireside here, so we're looking, you know, forward to a lively discussion. Good morning and welcome. I'll kick right into it. Why don't you give us some early thoughts on how you feel about the business coming out of Q4? Yeah, I think we're pretty pleased with our consistency of execution across the year and leading into this year. We saw pretty broad-based growth in occupancy, not just in you know a few markets, but across all of our markets. I think we're seeing continued improvement in labor fundamentals and you know improvements in both wage inflation in retention turnover. And then you know just generally I think the acquisition environment looks strong. It's priced high, but there's still strong opportunities out there for us to choose from. We have a really deep bench of talent that gives us a lot of confidence that we can take on the opportunities that we're seeing. I think too, one of the things that pleases us the most is how we've been transitioning operations. We've got a lot of buildings that we take on that are a mix of, you know, underperforming and buildings that are actually performing okay in certain areas, but not in others. In every case, there's a lot of heavy lifting that needs to be done. We take a building-by-building approach to every transition. Two things that we're seeing that are encouraging to us, number one, we're able to take on more buildings at a single time because of just our size and scale and depth of leadership. Also the trajectory of improvements that we've historically seen have been accelerated through our improvements in how we transition buildings. That gives us a lot of confidence about maintaining our pace of growth and even looking at new states maybe differently and being able to go into new states a little more aggressively than we have in the past. We'll continue to look at those opportunities given that confidence, but we feel really good about just our broad-based performance across the board in all of these areas. Perfect. Why don't you guys discuss your 2026 guidance and how much conservatism is baked into the numbers? You know, what are some of the factors that you think could, you know, bring you to the top and bottom end of that range? Yeah. Thanks, Mike. We're really excited about our 2026 guidance. We think it's a really healthy guidance, but also very achievable for us based on our historical, what we've done in the past. From the midpoint of the guidance, we're looking at about a 15% increase in revenue and a 14% increase in EPS. It's consistent with our historical range from both the revenue and earnings front. If we look at the top where at the different components of our guidance at the revenue front. In 2025, we had our highest occupancy and skilled mix in both our same-store. Our strong summer month occupancy gain that we saw, consistent with the past year or so. It's about 90 basis points stronger than going into the summer from Q2 to Q3. We're expecting that similar growth in 2026. We were expecting that organic growth continue to sprinkle across the different three buckets that we have. In same- store, we're looking at about a 2%-4% increase. Transitioning, 4%-5%. Then from our recently acquired bucket, we're looking about a 9%-10% increase in the revenue front. Also on the rate front, we're anticipating that the rate growth to be continued to increase with the long range of the past years. Single-digit growth in the Medicare and Medicaid area. Like Barry was saying, 2025 was also a very great year for the labor environment, so we're expecting a similar strong wage environment for 2026. Good control agency costs from our acquisitions and also in the transitioning and same- store bucket. Control overtime and double time, with lower turnover for that continue into 2026. We're already seeing that, coming in the first two months of 2026. We're looking to hit all of our targets, the low end, the high range, based on different models. You know, based on the historical results, is what our best indicators of what we achieved, we're confident about achieving that in our 2026 guidance. One thing I'd just add to that, Mike, we don't assume acquisitions in there. You know, so that can obviously affect it, and especially as Barry was talking about, the environment's pretty healthy to do deals. If we have a big acquisition here with lots of turnarounds, sometimes those can actually be a drag on EPS. They might have an impact on revenue, but we always just want to remind everybody that, you know, acquisitions are not counted in that estimate that she just talked about. Well, since you opened up the acquisition pipeline deal. I'll go right through the door. Can you provide your thoughts on, you know, what the pipeline, what the environment looks like? How is the pricing? Are you still seeing pockets of irrational valuations that you talked about earlier and, you know, kind of your overall thoughts here? Yeah, we are. I mean, certainly pricing has increased and, you know, it's a little bit of an interesting, you know, time for us because I think prices have been, you know, attractive to sellers. We're seeing more and more sellers come to market. The supply of opportunities has increased with that, which is kind of an interesting dynamic. We're certainly seeing lots and lots of deals across all our markets and in even some really attractive new states for us. The interesting part of that is, you know, sifting through, you know, the many opportunities that come and trying to find the ones that make sense. I think we're— I think, you know, last year, for example, we did a deal in Utah that was the Stonehenge acquisition that was, you know, pretty pricey, but at least historically, when you look at, you know, what our historical price per bed would be, as in particularly for Utah. However, you know, that deal is doing really well, even just a few months out of the gate. You know, sometimes I think higher prices can be justified, especially if the real estate is included and especially if the assets are newer construction and really high-quality assets. You know, sometimes I think as we look at a deal, and maybe for investors, it's not as obvious, but you know, there'll be some significant CapEx investment that we have to put into a really broken physical plant. The actual cost of that might be, you know, a lot closer to buying a, you know, newer build that you don't have to put all that money into. That's something that I think, you know, can make it a little bit hard for investors to sort of see, you know, why we're paying, you know, a particular price. Anyway, we want folks to know that if we're paying a higher price, there's probably a very good strategic reason for that. Also, you know, the physical plant's likely a very, you know, important factor there. Excited about the year, you know, certainly think that, you know, we can continue the pace that we've been on in 2026. I guess you're saying, you know, from a capacity standpoint to do deals, it sounds like you're pretty open. How is your local feeder pool looking right now? As of yesterday, we have 60 administrators in training in our pipeline. Those are, you know, kind of spread out geographically throughout the company. That's after, right, we had almost a 50- acquisition year last year, right? That pipeline remains very full for us, and it's a continued focus for our market leaders, you know, across the organization to make sure, you know, when a deal comes through the door, our very first question is, "Who's gonna be the leader?" Having that pipeline is very critical for us. A deal can look great on paper, but if we don't have the leadership talent or plans for that, then it's difficult for us to execute our model. That's definitely, you know, the biggest criteria for us in terms of capacity is that local leadership pipeline. You know, but I, you know, like I said, we've had a couple very, you know, busy years of growth, and that pipeline has remained relatively full. I think last year, the high- water mark was around 65 AITs, so we've kinda refilled that bucket with new recruits. You know, there's lots and lots of people that are very interested in joining us. You know, the interview pool is very healthy and, you know, that's one of the benefits of our success is we're able to attract a lot of really talented people that maybe historically, you know, were coming out of school, perhaps they didn't think, you know, skilled nursing was what they wanted to be when they grew up. Because they get to see, you know, the opportunity and like, you know, most likely they have a peer or a friend that actually is an administrator for us that, you know, they can sort of see what the opportunity looks like. You know, our current team is probably our best, well, they are our best recruiters. No shortage of talent out there for us to continue to keep that leadership pipeline full. You talked about obviously it was a very active year in 2025. Wondering if you know, maybe give us you know some color on the integration of those deals recently, and then maybe you know speak of you know kind of the new state expansions and how that's performing. You also mentioned that you know there's some maybe some new states that you wanna get to or regions. Mm-hmm. Maybe Adam wants to talk about how the integration portfolios went. Yeah. You You want to talk about the integration portfolio point. Yeah. I mean, we've done 17 here in California, one of which was an 11-building deal with Covenant Care, and that took us into the Central Valley. That was a brand-new geography for us in the Central Valley, and it's gone remarkably well. You know, we've been able to boost census in the first few months, and earnings have been really strong. We also went into Alaska, which was a brand-new state for us. We acquired a portfolio through Providence Health & Services, two of which were in Alaska, so we had an ALF and a SNF. Again, in the first 10 months, just remarkable what we've been able to do with census. Earnings have been really, really strong. Then obviously, we've gone into Oregon as part of that portfolio deal with Providence Health & Services. We picked up several buildings in Washington. Of course, Tennessee, we've continued to expand there. Again, occupancy earnings, our regulatory front has all been really, really strong. Yeah, just, I mean, you know, I'll just add to that. I think and Adam has been a particularly important leader for us. You know, we did the North American Health Care acquisition a few years ago in California that was, you know, 20 buildings or so. You know, I think we often get asked, you know, can you do bigger deals? Our answer to that is absolutely yes. Now the way we do it is we try to, you know, break it down into bite-sized pieces with our local leadership team. Adam's team has done that successfully now, really kinda three times, with North American and the Providence deal and then, you know, the Covenant Care one most recently. That's a model that we're really confident we can duplicate and replicate in other geographies. There's certainly lots of new states we're looking at. I think, you know, the Southeast remains an area that is of focus for us. You know, Tennessee, we've grown, you know, recently there. South Carolina, we're in Alabama now. We're certainly looking to grow in other parts of that region. Florida, Georgia, North Carolina, are all states that wouldn't be surprised if we enter, you know, in the next couple of years here. So, lots of opportunity. You know, it's interesting, when we kinda enter a region, you know, maybe people haven't traditionally thought of Ensign in the Southeast, but now that we're present there, we're seeing you know, it sort of opens the floodgates of opportunities and seeing lots of that. Our focus, you know, currently is you know, finding talent within Ensign that wants to move there, because we don't take entering a new state lightly. It requires a long-time trusted Ensign leader to take us there. Good news is we have several raising their hands that are interested in all of those geographies I just mentioned. Excited about it and think that, you know, that's—a s we look at the map, you know, we're only in 17 states and, you know, there's certainly room to continue to grow in the states we're in. But, you know, expanding into new states is an important part of our mission and what we're trying to do, and it'll be an important path for us over the next, you know, five, 10, 15 years as we continue to, you know, strive to dignify post-acute care, you know, in the eyes of the world. Well, that's great color. Let's move, you know, shift back to occupancy. It's obviously something, an area you've done very, very well, you guys, you know, from an occupancy standpoint. You know, how much more upside do you see in the model, in the portfolio, you know, kind of, you know, to, you know, so the investors can think about that from an opportunity perspective? Yeah, I mean, I think what's important to recognize is that, you know, looking at the consistency of growth that's happened over the last several years and that pace isn't slowing at all. I think another key indicator to look at is, you know, typically, we have a lot more seasonality in the summer months than we've had the last couple of years as well. There's a lot of talk about demographics and that, you know, I think we're probably just at the doorway to some of those tailwinds. I don't think that we're gonna see that play out in any kind of one big event or, you know, a month or two that's just stronger than others. I think it'll be a consistent, you know, slow tailwind that we'll see that only adds to the momentum that we have over the next several years. The 80+ population is gonna triple in the next three decades. The caregiver ratio, the number of people that are able to care for those seniors at home is decreasing by 40% over that same time period, which just kind of, I think, highlights the need that, you know, our sector is going to have to fill over that timeframe. Those demographics are really strong and important for us, but I think that's just fuel to the momentum that we seem to already have. We have trust in our managed care partnerships, we have trust in our acute care partnerships, and we have strength and depth of leadership in a lot of the key markets that we're in that continues to add fuel to that momentum. For us, you know, we have buildings and markets that are historically lower occupancy, like Texas and Utah, that are nearing, you know, 100% occupancy. These are mature buildings that we've had for a while. You know, what that tells us is that, you know, there's really not a true limit until we hit full occupancy at all of these buildings. We also have a lot of runway in our skilled mix also, right? We're getting higher acuity patients as communities, hospitals, physicians, case managers gain confidence in us, right? In a newly acquired building, the skilled mix naturally goes up, and we have a tremendous amount of upside and runway there, right? Our local communities are starting to recognize—t hey have been for a while, but especially in our newer buildings. There's a lot of upside, not only in overall occupancy, but in the skilled mix, which is most of the time a higher paying mix of patients. Okay. Just when we think about your three buckets, you know, the recently acquired, the mature, and transitioning, there's obviously always been a lot of, you know, a lot of opportunities across the board. You know, maybe since you kinda opened the door there, can we reflect on the portfolio and the three buckets, and where do you see the most opportunity? I mean, look, I certainly think our newer and transitioning buildings represent the highest amount of growth opportunity. I think, Lanie highlighted some of that in her opening remarks about our guidance, and I think that will always be the case. You know, for example, even in, you know, buildings that we acquire that have higher occupancy, like the Saber ones. Well, the Saber ones for sure, but even the most recent one in a state that is historically softer skilled mix and occupancy, the Stonehenge buildings in Utah. These are buildings that were already much higher than the state average in terms of their occupancy levels. We've, I think, had four out of those seven buildings already hit 100% occupancy levels, which is way beyond anything they had ever achieved before. We're seeing also skilled mix gradually creep up as well in those buildings. You know, to add more color on skilled mix and overall occupancy. There's just even in higher occupancy buildings that we may take on and pay a bit of a premium for, there's still lots and lots of healthy upside in those buildings. I would just add to Barry on the bucket front, like, if you look at our same store bucket, that's probably the largest bucket of the three buckets. It makes up about 66% of our total portfolio. So even a small improvement percentage in that bucket, it can equates to a large dollar growth. I think our recently acquired is about 20% of the total portfolio, and transitioning is about 10%. So that two buckets alone itself, the transitioning recently acquired bucket makes up 30, I think about 32%. That's where a lot of the growth, like Barry mentioned, is going to happen. I think we're excited about all three buckets with the potential growth in there. The transitioning bucket is a little bit higher than what we've seen previously, but in there, that's the California portfolio. That also has, you know, a lot of occupancy runway, 'cause some of them are in the low 90s, where some of our highest California is in the high 90s. You were talking earlier about, you know, obviously there's a lot of demand, aging population, silver tsunami, you know, what are you seeing? Are you seeing a pickup in building to handle the increased capacity, stronger demands? What's happening out there on the field? Yeah, not really. We don't see new construction happening at any kind of significant pace. I mean, there are certain pockets where it happens here and there, but if anything, we see beds probably shrinking rather than growing. Yeah, I think it's a really tough thing to build a skilled nursing facility, especially in states like California, where the regulations are just, you know, really tough. I mean, we actually completed a building recently down in San Diego County. It was a replacement of an aging building. Man, it took us many years to get that thing done. New builds are certainly, you know. I just think that, you know, we look at the overall picture of the supply of beds and then this wave of patients coming. It's just an enormous, you know, tailwind for us. To Adam's point, it'll really allow us to, you know, focus on skilled mix, as we're filling up these beds and, you know, that's kind of the whole shift that the industry is taking anyway, is moving patients to a lower cost setting and we're ready for that, clinically. Yeah, I think the addition of beds is not something we see changing, in the near future. Perfect. You know, and you know, obviously you guys have been doing really well. You know, the pushback or not pushback or conversations that we get questions on a lot from investors is the regulatory and rate environment. Obviously these, they're tied together, and there's a lot of noise around Medicaid, around Medicare, around states, around, you know, fraud and abuse investigations. You know, you know, let's just, you know, maybe start off and kind of say, you know, the comfort level around the rate environment we can, you know, from a state level, and then we can, you know, kind of go into the regulatory side. Yeah. I think we have pretty good visibility into our state rates, at least for this, you know, this next cycle here through the end of 2027. It's really no change, no difference from what we've seen in the past. Certainly the risk is there. I mean, with OBBBA and its impact on certain aspects of state Medicaid budgets, I think that it's inevitable that a state or two, depending on their budget situation, are gonna have to look at their overall budget and see what adjustments need to be made. We're trying to prepare thoughtfully around that and make sure that you know we have the right discussions and are in the conversations at the state level, including at the governor's offices, and make sure that they understand you know the need and what the Medicaid program was originally intended for, and that you know one of those primary drivers was to support seniors. I think most states get that. It's a very unpopular thing to cut funding to seniors in skilled nursing facilities. We're preparing in a way that allows us to be in the conversation and make sure that especially in key states that they hear and understand you know the importance for proper funding. Look, I think our organization was built for times of uncertainty. We've proven in times past, whether it be you know the going from RUGs III to RUGs IV, or whether it be going from you know RUGs to PDPM, that when there are disruptions, whether it be at a Medicare level or a Medicaid level or managed care pressure, that we find ways to adapt and [inaudible] are thoughtful and deliberate about their relationships and delivering the right care that allows them to you know have the volume that is at an advantage compared to their peers. Also make adjustments in their business when reimbursements change. We just saw this in Idaho, the governor decided to kind of unilaterally enact a Medicaid decrease. Now we're reflecting that decrease even though it hasn't been final and actually recently their legislature voted against that decrease. What we saw in the exercise that we took on internally to reflect lower rates e ven though they may not come to fruition, our operators adjusted and we haven't skipped a beat operationally. Now, that's not to say that what they're doing is fine, and you know, it causes us to make adjustments that are uncomfortable and not optimal in our opinion. That's an example of how our leaders can adjust when headwinds come in terms of reimbursement overhang that I know is always kind of at the forefront of investors' minds. I guess my answer to that question is, if you look back at our history, there have been fluctuations all over the place, in spite of the overall consistency across the regulatory and reimbursement environment. Again, I, you know, my statement is that we, you know, we were built for times of uncertainty. That's, I think, what our organization thrives in, frankly. Perfect. Maybe this one's, you know, Adam, you can help us in this. You know, the WQIP program in California, you know, coming to an end, kinda how should we be thinking about that? You know, do you think the state will plug that gap with another program? What's kind of the thoughts around that? Yeah, I mean, as of today, it's not in the budget for next year, in 2027. With that said, we're working vigorously to restore it for, even for next year. When the governor cut it last year, we were in about an $18 billion deficit, and luckily that deficit has come down to near zero because of positive tax revenues. There's a chance, a pretty high chance that it could be reinstated next year, in 2027. There's a lot of lobbying efforts going into it now, including partnering with SEIU and other stakeholders throughout the state to lobby the governor. I mean, we've done over 100 legislative visits to try and get it reinstated. If it can't be reinstated for that one-year gap year, then we're also working with stakeholder groups within DHCS and again, our healthcare association to try and come up with a new rate structure that would have a restored quality component to it. We've had this quality component for over 15 years now. There's a lot of backing for it amongst our legislative group, our regulatory group. People want it. I'm pretty confident that it'll A, be restored next year or B, for sure, moving forward, we'll have some type of quality program. We just don't know for sure what that is. Yeah. I would just add to Adam that for 2026, we'll still have a full year of WQIP revenue in our numbers. Like Adam mentioned, it is currently ending in 2027. Like, based on historical, like what we have experienced with California, they will always come up with a new program. This happened back in, gosh, Adam, in 2022 when QASP was thinking of ending, then they have a one-year gap period where, you know, the association, the state, and us working together to come up with a new WQIP program. There probably will be a gap year where all of us is trying to figure out what is that new program, what does that look like. You know, WQIP is a value-based program, and California like value-based, CMS- like value-based, we like value-based. We're confident that a new program will come out. It would just be a gap period between WQIP and a new program. Perfect. Yeah. We only got a few more minutes, so I want you to have the chance to talk about Standard Bearer, if there's anything you wanna say in terms of what's going on and positioning, kind of your thoughts around that. Yeah. I mean, it's continuing to grow. I mean, you know, just to take a step back and, I mean, you know, if I guess I'll say it this way, you know, our real estate portfolio is probably the healthiest and the most attractive collection of skilled nursing assets that anyone could have, right? Now, I know REITs like to be diversified and all that, but you know, we're pretty confident in our abilities as operators and feel like it's, you know, a pretty good operator to have, plus Ensign as the backing thing for that. So, it's really healthy. I just, you know, I kinda wanna just remind folks that when you buy a skilled nursing facility, the value in that facility is so closely connected with the quality of the operations, you know, that we can create tons of value in that real estate as we improve operations over time. For us, it remains important to buy the real estate wherever we can and create that value, and then, you know, our shareholders will get credit for that. You know, we continue our efforts to try to, you know, shine a spotlight on that and show, you know, in our numbers, you know, what's happening with our performance on the REIT side. It's really healthy. I think it also continues to open doors to deals that maybe in the past would have been difficult without the sort of the willingness and ability to lease to third parties. You know, Adam mentioned the Providence deal earlier. That was a situation where, you know, the seller wanted one buyer to buy all the real estate, but there's a couple of the assets in the portfolio that weren't a fit for us. You know, one was across the street from an existing asset and, you know, there were some labor dynamics that were tricky. Another one was kind of a pure play standalone assisted living that wasn't a great fit for us. We bought the whole portfolio under Standard Bearer and leased two of those assets to a third party. You know, we've done that in several other ways too, but it does give us strategically another avenue that we're excited about. You know, but in terms of priority, we wanna own it and operate it ourselves if we can. Second would be to do a really quality long-term lease and operate. Then the third would be to own it and lease to a third party. I think our behavior, you know, sort of reflects those objectives and but it's healthy, it's growing, it's. Hopefully our shareholders, you know, appreciate the extra disclosure we give on it. Perfect. One last question here. I know we hit the time, but, you know, obviously, the stock's done very, very well. You guys have been putting up great numbers and performance has been outstanding. Is there anything you'd like to point out to the investor community that you believe is either misunderstood or underappreciated at this time? Yeah, I think the whole concern over how regulated we are as an industry is a little bit overblown. I mean, we just hear about that so consistently. It is a very hyper-regulated sector of healthcare, certainly more than hospitals and probably any other sector in healthcare. You know, it is what we were built in and what we know also. We're not a bunch of hospital people that have converted to skilled nursing. We're also not a bunch of home health people that have jumped into skilled nursing as well. The environment, in spite of how difficult it seems and how much, you know, quote-unquote, "overhang" there is with D.C. and policymakers, there is as. I've spent a lot of time talking with legislators in D.C. and there is broad-based support and consistency in that support from lawmakers and policymakers. Now, that doesn't mean we're always gonna agree on how to achieve the same objectives, but our sector I believe is being more and more positively viewed because I believe there's more and more quality operators in the space, and hopefully we represent one of those. It's our mission to do so. But there is consistency in how we've been treated over time, even though there are sometimes ups and downs and things we need to do, and sometimes even we need to sue the government to try to make our point. You know, it is the world that we've lived in forever. It's the world we choose to live in now. I think that, if you, again, look back with a long-term view on things, there is a consistency with how the government has both regulated us and also treated us from a reimbursement standpoint. Rather than focusing on kind of the ebbs and flows of a single, you know, soundbite from the media or an initiative in the House or the Senate, I think over time everyone will see that we can operate through those small ups and downs and still achieve consistency. Well, we are out of time. I wanna, you know, thank you, Barry and Ensign team here today for a great, you know, great discussion, and I really appreciate your time. Thank you, Mike. Appreciate it.