Good day, and welcome to the Omega Healthcare Investors Second Quarter 2021 Earnings Call. Today, all participants will be in a listen-only mode. Should you need assistance during today's call, please signal for a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on a touch-tone phone. To withdraw your question, please press star then two. Please note that today's event is being recorded. At this time, I would like to turn the conference over to Michele Reber. Please go ahead. Thank you, and good morning. With me today are Omega CEO Taylor Pickett, COO Dan Booth, CFO Bob Stephenson, Chief Corporate Development Officer Steven Insoft, and Megan Krull, Senior Vice President of Operations. Comments made during this conference call that are not historical facts may be forward-looking statements, such as statements regarding our financial projections, dividend policy, portfolio restructurings, rent payments, financial condition or prospects of our operators, contemplated acquisitions, dispositions or transitions, and our business and portfolio outlook generally. These forward-looking statements involve risks and uncertainties which may cause actual results to differ materially. Please see our press releases and our filings with the Securities and Exchange Commission, including, without limitation, our most recent report on Form 10-K, which identifies specific factors that may cause actual results or events to differ materially from those described in forward-looking statements. During the call today, we will refer to some non-GAAP financial measures such as Nareit FFO, adjusted FFO, FAD, and EBITDA. Reconciliations of these non-GAAP measures to the most comparable measure under generally accepted accounting principles, as well as an explanation of the usefulness of the non-GAAP measures, are available under the Financial Information section of our website at www.omegahealthcare.com, and in the case of Nareit FFO and adjusted FFO, in our recently issued press release. In addition, certain operator coverage and financial information that we discuss is based on data provided by our operators that has not been independently verified by Omega. I will now turn the call over to Taylor. Thanks, Michele. Good morning, and thank you for joining our second quarter 2021 earnings conference call. Today, I will discuss our second quarter financial results and industry occupancy and labor trends. We continue to post strong quarterly results with second quarter adjusted FFO of $0.85 per share and funds available for distribution of $0.81 per share. We have maintained our quarterly dividend of $0.67 per share, and the dividend payout ratio remains conservative at 79% of adjusted FFO and 83% of funds available for distribution. Our liquidity and debt maturity ladder have never been stronger as our operators face the uncertain timing of occupancy recovery and widespread labor shortages. As we have discussed in previous calls and investor presentations, the combination of significant occupancy declines and a tight labor market with increasing wages and a shortage of staff has started to create liquidity issues for certain operators. In June, we had an operator representing 3% of annual revenue inform Omega that they would be unable to pay rent due to both occupancy and labor issues. It is possible that additional operators could experience similar cash flow stress. Turning to occupancy and labor trends. Since January, occupancy has improved every month, and it is likely that this trend will continue. However, in general, we need occupancy to return to over 80% in order to meaningfully mitigate the cash flow reductions from the pandemic. At the same time that occupancy has started to improve, the labor shortage has created two significant issues. First, a number of facilities have self-imposed admission bans if they cannot staff at clinically appropriate levels. Therefore, even though there is an opportunity to increase census based on demand in the market, these facilities have elected to limit new admissions due to staffing limitations. Second, wage rates continue to climb. These labor cost increases are particularly difficult to manage in states with limited or no COVID-19 reimbursement relief. Additionally, it appears that these wage increases may create a new baseline wage rate going forward. We strongly believe in the positive long-term prospects for our operating partners as occupancy rebounds and the aging demographics drive increasing demand for skilled nursing facilities. We remain hopeful that the federal government and the states will provide additional near-term support to the skilled nursing facility and assisted living industry as we work to overcome the ongoing challenges from the pandemic. Finally, I again thank our operating partners, and in particular, the frontline caregivers and staff who have cared for the tens of thousands of residents within our facilities. I will now turn the call over to Bob. Thanks, Taylor, and good morning. Turning to our financials for the second quarter. Our Nareit FFO for the quarter was $181 million, or $0.74 per share on a diluted basis, as compared to $186 million or $0.80 per diluted share for the second quarter of 2020. Our adjusted FFO was $207 million, or $0.85 per share for the quarter, and excludes several items as outlined in our adjusted FFO reconciliation to net income found in our earnings release, in our supplemental, and also on our website. Revenue for the second quarter was approximately $257 million before adjusting for the non-recurring items. As previously disclosed, in June, an operator informed us it would be unable to make its contractual rental payments for the foreseeable future. As such, we revised our revenue recognition treatment for that operator to cash basis rather than straight-line accounting method. As a result, we recorded a $17.4 million reduction to rental income related to the write-down of straight-line receivables. We collected over 99% of our contractual rent, mortgage, and interest payments for the second quarter, and 98% for the month of July, with a decrease resulting from the one operator just referenced. Our G&A expense was $9 million for the second quarter of 2021, and slightly better than our estimated quarterly G&A expense of between $9.5 million and $10.5 million. Interest expense for the quarter was $56 million. Our balance sheet remains strong, and we've continued to take steps in 2021 to further improve our liquidity, capital stack, maturity ladder, and overall borrowing cost. On the debt side, on April 30th, we closed on a new $1.45 billion unsecured credit facility and a $50 million unsecured term loan that both mature in April of 2025. At June 30th, we had no outstanding borrowings on our credit facility and had $100 million in cash. In March, we issued $700 million of 3.25% senior notes due April 2033. Our note issuance was leverage neutral as proceeds were used to repurchase through a tender offer, $350 million of 4.375% notes due in 2023, and to repay LIBOR-based borrowings. We have no bond maturities until August of 2023. On the equity side, in May, we issued a new $1 billion ATM program. In the second quarter, we issued 4.1 million shares of common stock through a combination of our ATM and our dividend reinvestment and common stock purchase plan, generating $154 million in cash proceeds. Year to date, we have issued 6.2 million common shares, generating $231 million in cash proceeds. We continue to use our equity currency via our ATM to gradually de-lever with our funded debt to adjusted annualized EBITDA at approximately 4.9x and our fixed charge coverage ratio at 4.5x as of June 30th. While we believe our actions to date provide us with flexibility to weather a potential prolonged impact of COVID-19 on our business, it also provides significant liquidity to fund potential acquisitions. In the second half of 2021, we will continue to evaluate any additional steps that may be needed to further enhance our liquidity. I will now turn the call over to Dan. Thanks, Bob. Good morning, everyone. As of June 30th, 2021, Omega had an operating asset portfolio of 949 facilities with over 96,000 operating beds. These facilities were spread across 65 third-party operators and located within 42 states and the United Kingdom. Trailing 12-month operator EBITDARM and EBITDA coverage for our core portfolio as of March 31st, 2021, decreased to 1.8x and 1.44x, respectively, versus 1.86x and 1.5x, respectively, for the trailing 12-month period ended December 31st, 2020. During the first quarter of 2021, our operators cumulatively recorded approximately $74 million in federal stimulus funds as compared to approximately $115 million recorded during the fourth quarter. Trailing 12-month operator EBITDARM and EBITDA coverage would have decreased during the first quarter of 2021 to 1.24x and 0.9x, respectively, as compared to 1.38x and 1.04x, respectively, for the fourth quarter when excluding the benefit of any federal stimulus funds. EBITDA coverage for the standalone quarter ended March 31st, 2021, for our core portfolio was 1.17x, including federal stimulus, and 0.83x excluding the $74 million of federal stimulus funds. This compares to the standalone fourth quarter of 1.33x and 0.78x with and without the $115 million of federal stimulus funds, respectively. Based upon what Omega has received in terms of occupancy reporting for July to date, occupancy has continued to improve, averaging approximately 75.7%, up from a low of 72.3% in January. Turning to portfolio matters. As Taylor previously mentioned, in June, we had an operator representing approximately $30 million, or 3% of annual revenue, inform Omega that the June rent of approximately $2.5 million would not be paid and that future rent payments would not be remitted in the coming months. The operator has asserted that the COVID-19 pandemic, along with its associated challenges, including census declines and labor shortages, were the primary drivers for their liquidity predicament. We are in active, ongoing discussions with this operator to determine what we hope will be a consensual restructure of their portfolio. The restructure may result in either re-leasing facilities or outright sales of part or all of the portfolio. At this time, it is too early to predict the ultimate outcome of these discussions. Turning to new investments. On June 1st, 2021, Omega provided $6.4 million of mortgage financing to an existing operator. The loan is secured by two nursing facilities located in Ohio and bears an initial interest rate of 10.5%. Turning to subsequent events. On July 1, 2021, Omega provided $66 million of mortgage financing to an existing operator. The loan is secured by mortgages on six nursing facilities located in Ohio and bear an initial interest rate of 10.5%. Separately, on July 14, 2021, Omega completed a $9.5 million purchase lease transaction for two care homes in the United Kingdom. The facilities were added to an existing operator's master lease with an initial cash yield of 8% with 2.5% escalators. Year-to-date, Omega has made new investments totaling $722 million, including $48 million for capital expenditures. Turning to dispositions. During the second quarter of 2021, Omega divested six facilities for $12.4 million. As of June 30, Omega has divested a total of 30 facilities for approximately $200 million. I will now turn the call over to Megan. Thanks, Dan. Good morning, everyone. In positive news, last week CMS issued its final payment rule, which includes a 1.2% rate increase beginning October 1st, but more importantly, delays the proposed 5% cut related to PDPM. In the proposed rule issued earlier this year, CMS had highlighted the fact that PDPM, rather than being budget neutral, instead led to an unintended 5% payment increase, and that a rate cut would need to occur. That rate cut in the final rule has been pushed out one year, which is welcome news to the industry as a whole, especially as it continues to recover from the pandemic. Moving on to COVID-19. Last quarter, we highlighted the fact that there was approximately $24.5 billion of unallocated funds left in the provider relief funds, which number excludes monies returned by providers, which we believe could be substantial. Since then, none of those funds have been allocated, we are still in a wait-and-see mode as to what benefits the long-term care industry will receive. Thankfully, a handful of states have announced new, continued, or increased stimulus to the long-term care industry, such as Michigan and Pennsylvania. As states work through how they plan to spend funds received from the American Rescue Act, it is still too soon to tell what the ultimate impact will be on our operators or the industry as a whole. What we do know is that the industry continues to need government support, especially in light of the Delta variant and the potential impact that it could have on what was already expected to be a slow long-term recovery. While the overall impact of the vaccine rollout has been strong, with cases at the end of June at less than 250, resident and employee, across 125 of our buildings, we did see an uptick as of last week's monthly reporting at slightly less than 500 cases across approximately 153 of our buildings. Operators are preparing themselves to deal with a potential rise in cases that could lead to increased visitation restrictions, and with vaccination rates for employees still running low at less than 60% at best, the staffing shortages and self-imposed admissions bans that Taylor mentioned earlier could be exacerbated should large employee outbreaks occur. Both of these have the potential to slow, but hopefully not stall, the occupancy progress that is being made. All of that said, the vaccination rate of residents at close to 80% is a bright spot. While occupancy growth may continue to be no more than a slow, steady climb, the infection risk to vaccinated resident population appears to be low, or at the very least not fatal, and therefore the industry should be able to avoid, in large part, the devastating clinical effects and associated expenses that plagued them through 2020 and the early part of 2021. Day in and day out, our operators care for a particularly vulnerable segment of the population. This has never been more evident than during the pandemic. An early federal assistance recognized that fact. For now, we hope that the federal government finds a renewed commitment to this space and that states that haven't stepped up to provide support soon will with the additional funds that they have now received. I will now turn the call over to Steven. Thanks, Megan. Thanks to everyone on the line for joining today. Inspīr Carnegie Hill, our ALF memory care high-rise at 2nd Avenue and 93rd Street in Manhattan, leased to and operated by Maplewood Senior Living, opened at the end of March and is in the midst of lease-up. Lease-up momentum has been solid and in line with our underwriting and expectations. The COVID-19 pandemic poses certain challenges unique to senior housing operators, including increased costs, the challenges of managing COVID-positive patients, and meaningful practical limitations on admissions. While they very much appreciate the help they've received, private pay senior housing operators have not seen the level of government support provided to other areas of senior care. Along with continued pandemic-related challenges, we saw small but measured occupancy improvements to our senior housing portfolio throughout the second quarter. We have seen evidence of stabilization and strengthening of census in certain markets. Our Maplewood portfolio, which is concentrated in the early affected metro New York and Boston markets, saw meaningful census erosion early in the pandemic, with second quarter 2020 census hitting a low point of 80.4% in early June of 2020. That said, their portfolio occupancy level has returned to 87.6% in June of 2021. Including the land in CIP, at the end of the first quarter, Omega's senior housing portfolio totaled $2.2 billion of investment on our balance sheet. All of our senior housing assets are in triple net master leases. Including our 24 recently acquired Brookdale assets, our overall senior housing investment comprises 155 assisted living, independent living, and memory care assets in the U.S. and U.K. This portfolio, excluding the 24 Brookdale properties, on a standalone basis, had its trailing 12-month EBITDA lease coverage fall 6 basis points to 1.02x at the end of the first quarter. With COVID outbreaks having affected different markets at various times, this decrease in performance was to be expected. Rising vaccination rates among residents and staff are a critical step to restoring occupancy and performance. While we remain constructive about the prospects of senior housing, the COVID-19 outbreak has warranted a far more selective approach to development. While we make further progress on our existing ongoing developments, we continue to work with our operators on strategic reinvestment in our existing assets. We invested $31.1 million in the second quarter in new construction and strategic reinvestment. $19.5 million of this investment is predominantly related to our active construction projects. The remaining $11.6 million of this investment was related to our ongoing portfolio CapEx reinvestment program. I will now open the call for questions. We will now begin the question and answer session. As a reminder to ask question you may press star then one on your touchtone phone. If you are using speakerphone please pick up your handset before pressing the keys. As at any time your question has been addressed and you would like to withdraw please press star then two. At this time, we will pause momentarily to assemble our roster. Today's first question comes from Jonathan Hughes with Raymond James. Please proceed. Hi there. Good morning. Question on kind of operator and news disclosure. If you do have more operators come to you in the future saying they're having issues with paying rent, say, within your top 15 operator list, how will you disclose that going forward? Will you kind of wait until the quarterly earnings releases, or do you press releases intra-quarter, like we saw in June ahead of Nareit? I'm just trying to get a better sense of and understand how we can monitor operator health and new developments, hopefully on a more real-time basis. Yeah. Fair enough, Jonathan. As you know, it's pretty nuanced when you start to have discussions with operators. Some of the timing is you just have to work through some of those issues. I will tell you that one thing we will be certain of is that we don't have selective disclosure. To the extent that we're talking to investors about any potential issues, you'll see disclosures before we have those conversations. We're talking to investors all the time, so I would think it'd be relatively timely from our perspective. Okay. That's great. Then maybe talk about Florida and Texas. Those are your two largest states in terms of exposure. They're also two states that have not seen as much, I'd say, government support as maybe others during the pandemic and even pre-pandemic. Can you just talk about the reimbursement rate and government support outlook for those two states, then maybe also update us on the Daybreak transitions in Texas? Texas, early on in the pandemic, actually had an add-on to its Medicaid rate of $19 per day. That add-on has continued. They recently extended it again. I believe it runs through October of this year. That's been hugely helpful. It tracks kind of the federal emergency plan, so we would hope that if the federal emergency plan continues, the Texas Medicaid add-on would continue as well. The State of Florida has offered no such assistance. They have not added anything to the Medicaid rate. They have not offered any supplemental payments. That has produced a situation in Florida that's becoming increasingly dire, I would say, because there has been no add-on, and now we're seeing cases spike with the Delta variant. Daybreak. Daybreak, we finalized re-leasing or selling all those assets in the second quarter, I believe. Most of them were gone in the first quarter. There is no more Daybreak as far as we're concerned. All those assets have been distributed amongst other operators, either existing or new, and/or sold to third parties. Okay. The Daybreak transitions, that was converted at similar rents to where maybe Daybreak was before? No, but they were in line with what we had projected. That's right. Okay. What's it going to take for Florida to kind of realize maybe they do need to give some more support? I guess I could drive to Tallahassee, but just curious if there's been any discussions among the lobbying organizations and just if there is any progress on that or if it's still pretty quiet. No, it hasn't been quiet, that's for sure. There's been a huge push from the operators, lobbyists, et cetera, for some rate relief in Florida. There's no imminent expectation, but I think that it continues to gain momentum, and we're hopeful that we see something out of the State of Florida. Okay. Last one from me. There was an announcement. You announced the addition of a new director to your board yesterday. Can you just provide some additional details around this? Thanks. Yeah, Jonathan, I'll ask Matthew to cover that, please. Hey, Jonathan. Ed Lowenthal is retiring as a board member at the end of his current term. While we have Ed as a board member for a number of more months, this is probably a good opportunity to publicly thank him for his over 25 years of exceptional service as a board member. While we're sad to be losing Ed, we're also very happy that Dr. Lisa Egbuonu-Davis has agreed to join our board. For those of you who didn't see the 8-K filing, here's a little additional background. Lisa Egbuonu-Davis has literally decades of healthcare experience as both a physician and as a healthcare executive, where she's primarily focused on patient-centric businesses. As you can imagine, her experience and her nuanced understanding of the healthcare continuum will be extremely helpful for Omega as we continue to navigate the evolving landscape. We're excited that she's joined the board, and we look forward to many years of working with her. All right. Thanks very much. Appreciate the time. Thanks, Jon. Our next question comes from Connor Siversky with Berenberg. Please proceed. Good morning, everybody. Appreciate the prepared remarks, and wow, a rare Matthew appearance on the call today. First question on acquisitions. It seems relatively quiet on the SNF REIT front, yet some publications, some of the industry journals are suggesting even an acceleration of activity, maybe from private investors. I'm wondering if, from OHI's perspective, is this a cost of capital issue? Are there just not really attractive opportunities in the space, or is there a new kind of competitive element floating around out there that may not have been present prior? I hate to sound like a broken record, the acquisition environment just remains choppy. We're still seeing some deals, a fair amount of deals. We're actually seeing activity pick up in the U.K. Once again, it's choppy. We continue to partner with our operators to do transactions. There hasn't been a lot of distress situations that have presented themselves that haven't gone at distressed prices. There's been some distressed real estate out there, but actually it gets bid up. I think we're seeing stuff out there, but it's not like there's a whole landslide of new opportunities at this time. Okay. Appreciate the color there. A bit more of a broader question on operations in general. There's some commentary out there that certain operators are looking to take on higher acuity patients. I'm wondering, at a high level, maybe Megan can jump in here, how that affects the cost structure on a per-patient basis. If this dynamic is to turn into a trend across the whole industry, how could this look in terms of the rate changes in years to come? There's been a push for higher acuity patients, obviously. That's been going on for decades. The relatively healthy folks are being treated at home or in assisted living settings or just otherwise, generally other settings. That's been ongoing. I haven't seen any dramatic change in that as of late. It's just been a very slow evolution. We haven't seen anything material in that respect. Okay. Thanks for that. Last one from me. I apologize if I missed the detail here, but on the dividend, seems like the payout ratio remains relatively comfortable even with the degree of lost rent. I'm wondering how you guys feel about it at a high level. Maybe what are the payout ratio bands you're looking to work in the near future, and whether or not you'd be willing to let that climb above 100% for the short term, if necessary? Yeah. Fortunately, Connor, we've never had to deal with above 100% from a board perspective. Several years ago, we got into the 90% range. We were comfortable with that because we could look forward and know we were going to get back into a more normalized range as we transition properties like Daybreak, as we spoke about earlier. I think for us, it really comes down to what's the outlook. A good example would be the operator we're talking about that stopped paying us rent in June. Part of the issue for them is the payback of the Medicare advance payments, which has created some liquidity concerns. Those assets are really desirable. As we look long-term, we don't think there'll be any meaningful impact on our cash flow stream. That's an example of the type of thing we'd look at, say, on a forward basis. Do we need to do anything with the dividend when we know ultimately we're going to be in good shape? Hopefully that's enough color. Yep, that's very helpful. I'll leave it there. Thank you. Thank you. The next question comes from Joshua Dennerlein with Bank of America. Please proceed. Yeah. Morning, everyone. Hope everyone's doing well. I guess just curious on the operator who came to you in June about having trouble paying the rent. Just any kind of additional color you can provide on maybe what was going on operationally? Was it unique to that tenant or maybe something within that broader region that we should be watching? I don't think there's anything specific. I think it's the general items that Taylor mentioned. It's some stress on occupancy and a huge stress on labor, which is compounding the occupancy issue if they can't staff a facility up adequately to provide the clinical needs of the residents. It's really the combination of those two events. They had also seen, through COVID, they had seen a fairly high rate of folks taken ill. That compounded the situation. Beyond that, there was nothing else. Okay. By taken i ll, you mean the staff or the residents? Both. Both. Okay. Speaking of staff, I guess just curious, are operators starting to incentivize their employees to get vaccinated? That 60% uptake seems pretty disappointing. How are you guys thinking about the expiration of the extended UI benefits? I think it rolls off everywhere in September. Should that be a help at all? Yeah. From a vaccination standpoint, the employees, it is still relatively low, and our operators have been trying to incentivize them from the beginning. That's monetary incentivizing and also trying to educate them with local leaders within the community. We are starting to see some uptick, but I don't know that we're going to see anything substantial. That said, with the Delta variant, we are hearing that more staff are interested in taking the vaccine, so that might help it pick up a bit as well. In terms of the unemployment benefits, yeah, I think that'll be a big help. If the unemployment benefits go away and we can get people back to work, that'll help with the staffing shortages, definitely. Okay. Awesome. Thanks for the color. The next question comes from Nick Joseph with Citi. Please proceed. Thanks. I was hoping to get more color on the potential watchlist for any other tenants that are getting close to having issues paying rent. I don't think our watchlist has changed much. We've got those operators who are under one times coverage, but usually there's a secondary source of repayment associated with those operators, so it's mitigated. The federal stimulus money certainly is running out. I think it's a little bit operator, but it's a little bit of geography, too, in states that if they have another huge rebound of the Delta variants, those are the ones that are going to get hit hardest and the ones that are probably most susceptible to liquidity issues. We're keeping an eye on that. The incidence rates of the virus has followed the incidence rates in the counties or the communities in which they're in. It hasn't necessarily transpired over into the nursing home side yet, but we're watching those communities, particularly in Florida and the South, where we're seeing pretty quick upward trends in the virus and looking to see whether that, in fact, equates to the nursing homes having a pick-up in the virus. Those kind of things are what we keep a close eye on. Thanks. I appreciate it. As you think about the pressures on labor, obviously COVID has kind of wreaked havoc on margins. When you think about pre-COVID, how much ability was there for labor costs to rise before there would really cause an issue from a margin perspective? There's a fair amount of room, Nick. I think the best way to think about it is 2% or 3% wage inflation would move coverage a few basis points. We are seeing areas where the wage inflation is far greater than that, 7% to 8%. That's obviously some additional basis points. In terms of general coverage at a 1.3, we're not going to see a scenario where labor takes that to 1 or 1.1. That would be really meaningful changes in labor. That being said, the big driver, as we've talked about in the past, is getting occupancy back because each incremental resident provides pretty substantial cash flow, and that's really where the focus needs to be. Our operators will find labor, and they'll pay what the market needs to clear labor, and that will impact coverages. It won't change the viability of the vast majority of operators to pay our rent. Thanks. The next question comes from Daniel Bernstein with Capital One. Please proceed. Hey, good morning. Just wanted to go back to Florida. Are there any occupancy trends that you've seen so far with the surge in the COVID-19 down there? You're about six weeks into the Delta variant, I guess, surge in Florida. It sounded like cases have gone up a little bit within facilities, but has there been any kind of occupancy trend impacts thus far? I don't think we've seen anything from a state perspective. Certainly, buildings that have smaller outbreaks are going to have occupancy trending down. We haven't seen anything yet overall in the state. Okay. The labor shortages and wage pressure, is that across the spectrum within the labor pool for a facility? Is it nursing, caretakers, just all levels of labor within the facility, or is it concentrated more in the caretaker side, or concentrated more in the labor shortage on the nursing side? Just trying to understand where the nuance of where the labor issues are. It's interesting. We've had operators point out, in particular, nursing assistants and dietary staff. They tend to point out that level of worker where it's $14 or $15 an hour wage rates versus nursing necessarily. I think that's one of the big pressure points right now, workers who have mobility into other jobs, non-healthcare-type jobs. Okay. Going back to the tenant that's not paying rent, is that tenant within the pool that's under 1.0 EBIT DAR? Is that an addition to the disclosure you have in your supplemental? It would be in addition to what's in the supplemental. Okay. I just wanted to make sure about that. One last question from me here, just on the acquisition side. I just wanted to understand the comments, that there's, I guess, not a landslide of opportunities. Is it more of a pricing issue where there's distressed operators, but the pricing of the real estate's not really distressed at this point? I just want to understand where the disconnect there is between the stress we see in the industry versus the maybe consolidation opportunities that you would think would arise from this kind of distressed situation. Yeah. I think the buyer universe is still very aggressive in terms of picking up real estate. They've been willing to pay up for it despite the fact that the operations might be distressed. Okay. All right. I'll hop off. Thanks. Our next question comes from Rich Anderson with SMBC Nikko. Please proceed. Thanks. Good morning, team. Back to the tenant that gave you the notice they did, can you quantify a kind of a watch list of percentage of revenue that you're looking at? You said 3% here, is there a number out there that you're kind of keeping an eye on that you can share? Not specifically, no. Listen, since the virus came out, we've been in constant contact with virtually all of our operators. I think that's the best way to keep an eye out is just with communication with our operators, and we've done that and continue to do that. I think we look at everybody and we have to sort of gauge the level of risk of each and every operator and what their challenges are. I guess, what's the over-under on this time next quarter? Do you see it as a high probability or nothing is jumping out at you right now? I think part of the answer to that question is we've been waiting on the last tranche of federal money. Right. Some of it's going to be timing related to that. Remember, there's $24.5 billion. Megan mentioned in her prepared comments, and we've heard, I don't know if this came from AHCA, that there's another $20 billion, $24.5 billion, and another $20 billion has been pushed back into that fund principally from the hospitals. There might be $44.5 billion to be distributed, and it's going to be needs-based. Yeah. If that happens in a reasonably timely way, I think to handicap any of the quarters, just it's impossible. Another good example would be Florida. There's been a big push on the lobbying side to get some money released in the state of Florida. If that happens, it dials down the risk that we see a lot. The last comment I'd make, and again, I'm just trying to give you as much color as I can, is we haven't had the type of conversations with any operator that we had with the one that we talked to in June as of now. That's the early indicator from a watch list perspective for us, and that hasn't happened. If there's no money forthcoming from the government or it's not timely, sooner or later, the occupancy rebound isn't going to be quick enough to prevent some other liquidity issues, and we'll just have to tackle them when they arise. Yep. Okay. Maybe a broader question. Anything about what you've been through that's informing you about the future of OHI? I know you've spent some time expanding into senior housing with Healthpeak's deal. Do you see yourself as a more diversified story in the years to come, and not hanging your hat as much as you are in skilled nursing? Do you sort of continue the course and muscle through whatever is to come? Well, the franchise of operators that are our partners are fantastic, and we'll continue to deploy capital there. The trend that you've seen in terms of senior housing and other assets, now about a fifth of the portfolio, I think that continues. Part of that's just supporting the operators in those property types, whether it's Maplewood or our U.K. operators or otherwise. I think you'll see that percentage climb over time, just as it has over the last five years. Lastly for me, I think Steve said Maplewood specifically, occupancy troughed at 80% a year ago May, and is now at 87%. Did I get that right? You did. That's correct. That's really good, right? Is there anything about that 87% number you're seeing today that is apples to oranges to what other people are reporting? Is there something special going on that you're kind of already back into the high 80%s occupancy wise? Steve, you want to take that? Sure. The one thing that we know to be the case, although it may not account for all of the difference between Maplewood and other operators, is Maplewood made a committed effort never to let off the marketing investment during the COVID pandemic and still isn't. I think in certain local markets, they were rewarded for that. Okay, great. Well, thanks very much. Appreciate it. If you do have a question, please press star then one on your touch-tone phone. The next question comes from Lukas Hartwich with Green Street. Please proceed. Thanks. Morning. I suppose inflation fears are receding, but on lease escalators, I think most of those are fixed, but are there any inflation protections built in or are they purely fixed for the length of the lease? Hey, Lukas. About 97, 98% of our leases are fixed escalators. Okay. Can you provide some color on the $3.5 million credit loss provision during the quarter? Yeah. As you know, there's a lot of components that go into the CECL or credit loss component. We have to go look at each one of our loans, you're required regardless that you have to have some reserve on those loans. When I look at it's kind of normal occurrence. We're going to have something every quarter from a loss standpoint. Got it. All right. All my other questions are answered. Thank you. Thank you. At this time, we are showing no further questioners in the queue. This concludes our question and answer session. I would now like to turn the conference back over to Taylor Pickett for any closing remarks. Thank you all for joining us this morning. As always, we'll be available for any follow-ups you may have. Have a good day. The conference has now concluded. Thank you for attending today's presentation, and you may now disconnect.