Good morning. My name is Brent, and I will be your conference operator today. At this time, I'd like to welcome everyone to the Brookdale Senior Living First Quarter Earnings Conference Call. [Operator Instructions] Thank you. I'd now like to turn the call over to your host, today, Mr. Ross Roadman, Senior Vice President, Investor Relations. Please go ahead, sir.

Thank you, Brent. Good morning, and welcome to the Brookdale First Quarter 2014 Earnings Conference Call. Joining us today are Andy Smith, Brookdale's Chief Executive Officer; and Mark Ohlendorf, Brookdale's President and Chief Financial Officer. Before we begin the call, I would like to read the following disclosure statement and please bear with me, this is lengthy given all what we got going on. Certain statements on this call may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Those forward-looking statements are subject to various risks and uncertainties. Forward-looking statements are generally identifiable by use of forward-looking terminology, such as may, will, should, potential, intend, expect, endeavor, seek, anticipate, estimate, overestimate, underestimate, believe, could, would, project, predict, continue, plan and other similar words or expressions. Although we believe the expectations reflected in any forward-looking statements are based on reasonable assumptions, we can give no assurance that our expectations will be attained and actual result and performance could differ materially from those projected. Factors which could have a material adverse effect on our operations and future prospects or which could cause events or circumstances to differ from the forward-looking statements include, but are not limited to, risks relating to the merger with Emeritus and the transactions with HCP, including in respect of the satisfaction of closing conditions to such transactions, uncertainties as to the timing of such transactions or the inability to obtain or delays in obtaining cost savings and synergies from such transactions. Such factors are based on views and assumptions of the management of Brookdale and Emeritus and are subject to significant risks and uncertainties. Certain of the factors that could cause actual results to differ materially from Brookdale's and/or Emeritus' expectations are detailed in the release we issued yesterday and in…

Thanks, Ross. I'm surprised you could memorize all of that. Well, good morning, and thank you for being with us. I'll lead off today with some comments about the first quarter and give you a brief update on the status of our merger with Emeritus. I'll then turn the call over to Mark to discuss our results in more detail before opening the call to your questions. We are pleased with our first quarter results, which were in line with our internal expectations and our financial guidance for the full year. Our adjusted CFFO of $0.64 per share increased $0.12 over the first quarter of last year and represented our third consecutive quarter of double-digit CFFO growth. We grew revenue by 4.1%, excluding reimbursed managed community cost. We continue to produce strong rate growth and our cost growth remained moderate, especially in light of extraordinary weather-related cost. We slightly exceeded our budgeted results, overcoming several challenges that added to normal seasonal softness and occupancy. We believe that the prolonged severe winter across much of the country had a material impact on our first quarter occupancy. The weather's impact on occupancy was pronounced enough that we could isolate it to specific regions of the country. For example, occupancy at our Florida communities actually increased by roughly 10 basis points sequentially. California was flat and Texas, which did experience isolated instances of severe weather, was down slightly. The Midwest and Northeast, however, fared much worse with certain regions experiencing sequential declines of 100 to 200 basis points quarter-to-quarter. Our sequential decline in occupancy of 40 basis points primarily reflected lower move-in numbers. We actually had relatively strong increases in inquiries for the first quarter, but with the severe weather, we often just could not get the crucial in-person interaction at our communities…

As Andy said, we produced solid first quarter results. We saw the continuation of favorable rate growth trends from 2013 and we continue to effectively manage our expenses. As we look at our key financial performance measurements, we had a good start toward achieving our 2014 goals. Excluding certain items from both periods, our cash from facility operations, or CFFO, for the quarter totaled $79.2 million, a 13% increase over the first quarter of 2013, and adjusted EBITDA was $119.8 million, a 7% year-over-year increase. We produced senior housing revenue growth of 4% for the first quarter over the first quarter of 2013, driven by increased occupancy, rate growth and the impact of acquisitions made in 2013. Occupancy grew by 10 basis points year-over-year. As Andy described, the normal occupancy seasonality for Q1 was exacerbated by the weather and the milder flu season's impact on the skilled census. But like any sales process, the ultimate results begin with more leads coming into the funnel. Inquiries were up compared to the first quarter of 2013 and lead contacts by our salespeople were also up. We experienced a 70% increase in visits to our website versus last year, which was prior to the commencement of our branding campaign. We've also experimented with pay-per-click Internet advertising, and it produced 2,500 quality leads in 3 markets in the first quarter. We're expanding this effort into 4 more markets in the second quarter. During the first quarter, we saw continuing price strength with a 2.7% year-over-year increase in Senior Living revenue per unit. We increased the in-place resident rates in the Assisted Living and Memory Care communities, roughly 46% of our consolidated capacity, by more than 3% effective January 1. The strongest rate growth continued in the Retirement Centers segment, where we produced a 4.9%…

[Operator Instructions] And your first question comes from the line, Kevin Fischbeck with Bank of America Merrill Lynch.

Just -- I appreciate the color on the impact of the weather, particularly I guess, on the occupancy side. But was wondering if you could provide any more color there. Do you have any sense of what you think the impact of occupancy was? And maybe barring that, maybe what percentage of your units were you felt like impacted by the weather during the quarter?

Well, Kevin, this is Andy. Thanks for the question. The -- again, as I said in my prepared remarks, certain areas of the country, we don't feel like were affected by weather. Obviously, Florida, it didn't snow there and we showed a roughly 10-basis-point increase in occupancy. We have not quantified because we frankly just don't believe that. If seasonally there are, we expect a drop in occupancy in Q1, as you know. And it's hard for us to quantify credibly and precisely the extent to which the weather exacerbated that in the first quarter. So we haven't tried to quantify that because we don't -- we just don't feel like that's a credible number for us to produce. I don't know Mark, you want to add anything to that?

No, I think that's a good summary.

Okay. And then as far as the Emeritus transaction goes, I think in the past you talked about one of the areas of upside that's not included in your synergy guidance of being kind of the Program Max-type opportunity. How quickly do you think that you can execute on that? And I think HCP is part of one of the deals provided some financing for CapEx. I mean, you take as financing-wise and execution-wise, how quickly can you execute on that opportunity?

Well, there are 2 different things here. One is Program Max, which is, of course, our effort to reposition communities or reposture them in the marketplace. That program will take a little -- the planning for that is already underway, but that's going to take a little bit longer. Those projects are larger and more complex and so that will take a little bit longer than the second prong of it, which is simply investing capital into the communities to improve them, to refresh and to refixture them to do things of that sort. And that type of capital investment we expect to initiate very quickly after the merger and in fact, the planning of that is ongoing right now.

Okay. And then maybe it's a last question. In the past around this Emeritus deal, you talked a lot about what the real estate value of the company is, and I think people have wondered if there was a way to tap into that at some point in the future. The HCP deal is clearly a way to do that in the least a smaller way. How do you think -- any updates on how you think about your real estate value? And if you are tap into it, do you think it'd be things like this or is this just really just kind of a one-off issue because Emeritus had some underwater leases that kind of needed to be addressed?

Well, I'll say 2 things about that, Kevin. First off, we value our partnership with all of our lessors, all of the healthcare REITs. We're in constant dialog with each one of them to try to find ways to create these, what we really believe we did here, which is a win-win for both sides of the equation. So while I can't say that I expect transactions of this sort to occur anytime soon, we're constantly in dialog with those folks to see if there's, again, an opportunity for both sides of the equation, that's one thing. The second thing I'd say, and I believe we'd been consistent with this from the announcement of the Emeritus merger forward. We believe there is lot of a -- lot of inherent value in the real estate that we have and that Emeritus has. And we think if we execute against our plan to consummate this merger there and then execute against our plan and produce the synergies and the accretion that we think we will get, and we think the best way to create value for our shareholders is to continue to control all of that real estate as we go forward. Now that having been said, we're constantly on the lookout and we are constantly evaluating market conditions. If there were ever a circumstance where we felt like we could capture all of that value in one transaction and leave the resulting OpCo in a place where it could thrive and survive such that we could create more value than we think we can create by simply executing against our merger plan, then we would obviously look at a transaction like that. I personally don't believe from the -- from our evaluation of market conditions that, that's likely to occur. So our game plan is to keep our head down and executing into this merger and create all of the value that we think is there by simply carrying out the merger and executing against our plan.

Your next question comes from the line of Ryan Daniels with William Blair. Ryan Daniels - William Blair & Company L.L.C., Research Division: A quick follow-up on Kevin's first question about the weather impact. I don't know if you have any data, Mark, available, but I'm curious in the markets that were hit by weather, if you've seen more of a rapid snapback in occupancy? I would assume the needs of the individuals are still there given the weather improvement and maybe we'll see a bigger snapback in those markets and other ones. Any color there?

I do not have that data in front of us here. Again, there is some seasonality in the business that we would see normally each year. So it's a little bit of a challenge to unwind the impact of that normal seasonality from the severe weather that we clearly saw this year. Ryan Daniels - William Blair & Company L.L.C., Research Division: Okay, that's fair. And then Andy, I guess, moving on to more Emeritus questions. I know one of the things you have specifically mentioned in the past is the ability to train your staff better and raise the development of staff over time. So I wanted to ask a few questions about that as it seems fairly important to you. Number one, I wanted to get an update on the novel training program you announced with HealthStream for your workforce and how that's rolling out. Number two, I'm curious if that's going to be a primary vehicle you'll leverage to train the novel Emeritus employees when that transaction closes in the third quarter.

Right. Well, we're very proud of our partnership with HealthStream. We think that we're going to produce great benefits from that. But that's only a component of the training programs that we are currently implementing at Brookdale and we expect to implement across the Emeritus platform after the merger closes. So it's only a piece of it, Ryan. The -- but we are, at Brookdale today, totally revamping and improving the way that we onboard associates, the way that we train them, the way that we develop them and the way that we give them opportunities to grow. So in addition to that, we are also rolling out a program to what we call our standards expectations and walk-through program. It's a way for us to monitor all of the -- across each one of our communities, compliance with all of our policies and procedures. And we've also formed a partnership this year to really upgrade, at least we believe we're really going to upgrade how we do that. So the HealthStream partnership again is important to us. We're really excited about it, but it's only a component of a much broader program. Ryan Daniels - William Blair & Company L.L.C., Research Division: Okay. That's very helpful color. And then last one and I'll hop off, just regarding the pending CCRC joint venture. Can you talk a little bit about the opportunity for M&A there? I know that's mostly a not-for-profit industry. So curious what you see in the marketplace and what you think the longer-term potential to grow that asset base is.

Okay. Thanks,, Ryan. There are -- it's very fragmented. You're right that it's mostly nonprofit, not entirely, but mostly nonprofit. It's a big market where we see lots of growth opportunities. Not in the nature of portfolio growth opportunities, but each one of these campuses is big. So each particular acquisition opportunity is fairly large in and of itself. So we think over time, there's going to be a real opportunity to grow that business. We're currently looking at a couple of entrance fee acquisition opportunities right now. So we're very excited that we can marry up our expertise with HCP's capital, alongside of our capital and we think over time, we will -- that will be a very fruitful growth vehicle for both companies.

Your next question comes from the line of Josh Raskin with Barclays.

I'm here with Jack. I've got one question. I know Jack's got a follow-up, as well. Just first question on the Emeritus transaction. One, just want to confirm that you guys are still comfortable with that 3Q close, I know you mentioned that, but with the proxy still not out, just curious how much time it takes from sort of filing till a potential close? And then any color you can give us on the Emeritus operations? I assume they're going to drop a 10-Q maybe early next week and sort of drop the numbers in there instead of reporting. So any expectations we should have around their portfolio, I'm sure you guys are in constant dialog with them.

Right. So I'll take the second question first. Emeritus has not yet released its results and therefore, we can't. They're a separate company. They're running as a separate company and we can't speak to that and we can't remark upon it until they've released their own results, which I don't know if they've announced even when they're going to do that. I expect them to announce their results shortly, but we can't speak to that. With respect to your first question, which was the timing of the merger. Yes, Jack (sic) [Josh], we're completely comfortable at this point with our -- the third quarter closing expectations. Again, the real pacing event is licensing, getting the licensing approvals from the various states. That process is going along fine, but we think that is really going to be the last piece of the puzzle that falls into place. We expect to file the proxy relatively quickly. It's complicated, but we expect it to happen soon. But that really, in our expectation, not a pacing event, it's going to be licenses that determine when we can actually close.

This is Jack. I wanted to ask about the weather slightly differently. How were the move-ins in the quarter and how did that compare to the trends in 2013? And then as you think about some of the markets that got hit a little bit harder than others, was there particular segment that showed more pressure, so Independent Living versus Assisted versus the CCRCs?

Well, not surprisingly, both move-ins and move-outs were down modestly this year. Again, the flu season was not as severe this year. So that was a positive impact, if you will, on reducing move-outs. At the same time, the severe weather disrupted the sales pipeline and the move-ins were somewhat lower as well. There is -- if you look at our segment data, there's a modest difference in performance between the Retirement Centers segment and the Assisted Living segment, but it's a very modest difference. I think the biggest correlation that you would see in the numbers is the worse the weather was, the more disrupted the sales pipeline was. I think Andy mentioned some of the market by market occupancy performance numbers that we saw, which certainly bear that out.

Got it. And then just last one on, as we think about the occupancy ramp through the end of the year, I'm just guessing, at the end of March you probably at a lower level than the overall average occupancy for the first quarter. Would it be normal to expect maybe 2Q is flat or slightly down before ramping through the end of the year?

Yes. What we see normally -- well, first off, in terms of Q2, I would say, again, we're pleased with our rate growth and we have good rate expectations for the second quarter. What we generally see on occupancy as a seasonal pattern is typically that occupancy dips in the first quarter, it sort of begins to flatten out in the second quarter and you see occupancy growth through the balance of the second half of the year. Again, this year, weather has exacerbated where we expected to be a little bit on occupancy for Q1 . So I think the way you characterized it, Jack, is pretty good. We would expect to see meaningful occupancy growth beginning in the second half of the year.

Your next question comes from the line of Daniel Bernstein with Stifel. Daniel M. Bernstein - Stifel, Nicolaus & Company, Incorporated, Research Division: This may not be a big part of your business, but the capital lease rate is over 8%, it's pretty clear that other capital options are a lot cheaper than those. Are there any opportunities to restructure the capital leases to get a lower rate or monetize that, bring it on balance sheet? Just trying to understand if there's any options there.

Dan, I'm not sure there's an answer to that question sufficiently pithy to even go through on the phone. Some of those leases are treated that way because we have purchase options, which I think we've talked about before. So there's kind of a self-implementing way to refinance that capital. Some of them are not and where we don't have purchase options, it's more challenging to get at that. Daniel M. Bernstein - Stifel, Nicolaus & Company, Incorporated, Research Division: Okay. And then are you able to disclose when those purchase options are exercisable?

We have not done so. We provided some general information on that, I think in the deck that we had related to the HCP transactions, but we don't intend to provide specific information on that. Daniel M. Bernstein - Stifel, Nicolaus & Company, Incorporated, Research Division: Okay. And on HCP joint venture for the CCRCs or I guess, just the transaction in general, was it something where you approach them, you saw the opportunity to maybe again be able to grow the CCRC platform more than to delever and derisk the Emeritus leases? Is it something where you approached them? Or did they approach you on the opportunity?

I guess, first on the entrance fee CCRC platform, we've had conversations with HCP about that opportunity for literally years. And so we've been in conversations with them for a lengthy period of time. I think it's probably fair to say that we approached HCP on the entirety of the transaction, but it was very collaborative. I'm not even sure it was important who reached out to who first. I certainly don't think of it as being important because we both very quickly realized that there was an opportunity to do something that was good for both organizations and so it was very collaborative and it took us longer than we wanted, but it was -- again, it was a very collaborative process. Daniel M. Bernstein - Stifel, Nicolaus & Company, Incorporated, Research Division: Okay. I was just -- I really don't have that many other questions. I do want to ask about the systems that are at Emeritus, the back office systems. Just trying to think about how quick the integration can be. Do you have similar offices, back office systems? Are they the same brand? Just trying to think about how quickly could we integrate it and say relative to a Horizon Bay transaction that you did a few years ago.

The primary difference, I think Dan, is Horizon Bay was a private company, so the opportunity to do more before the closing, in that case, was somewhat greater. Now we have though, particularly in the last 60 days or so, made significant progress with the integration planning work. There are literally hundreds of people in both organizations involved in this work at this point. To answer your question on systems, not surprisingly, there is not that much commonality in systems. I don't think you would see significant commonality among any of the senior housing providers. And quite frankly, Brookdale has operated at a substantial scale for quite a while now. We've been at our size, really, since the Horizon Bay transaction in 2011. So we've been able to refine those systems a fair amount, just because of the time that we've had. So we continue to be optimistic that the process will go well. It is a significant undertaking. So we'll talk more, I suspect, once the transaction closes about our expectation around the timing of the cut overs and the integration activity. But suffice it to say, that process is going well to this point. Daniel M. Bernstein - Stifel, Nicolaus & Company, Incorporated, Research Division: Okay. And the properties that you did not put into the CCRC JV, I mean are those leases or are those properties owned or at some owner structure with other REITs or -- that you didn't want to put in there. Just it seem you didn't put all the CCRCs into that joint venture, I'm just wondering, why.

Right. There were some capital structure elements to those particular communities that really just didn't make it appropriate at this time to fold them into the joint venture.

Your next question comes from the line of Dana Hambly with Stephens.

Just continuing on the JV CCRC. Andy, I think you talked about the cap rates there kind of trading 200, 300 basis points wide of the senior housing. Is that -- is there an opportunity where you see those cap rates compressing as the industry rolls up a little bit? Or is there -- I know there's a SNF component, but is something else that just structurally those cap rates probably never compressed at the senior housing level?

I don't -- that would be my bet, Dana. I don't -- I think there's going to be a divergence,, and I think the entry fee campus-type acquisition is going to remain wide of what you could see on cap rates for the balance of the -- for the rental-type acquisitions. I think this is going to continue for, well, for -- I don't -- forever is a long time, but for as long as I can predict.

Okay, that's fair. And then just on entrance fee sales in the quarter. Seasonally it's a weak quarter, were they below kind of where you had budgeted? And I wouldn't think weather has much of an impact there, but I think -- was there any impact there? And kind of how is that trending into the second quarter?

Yes, a couple of things I'd say about that. First, the entrance fee sales are blocky. You're exactly right that Q1 is seasonally soft. Now we had a very good fourth quarter of entrance fee sales there at the end of the year. There were a couple of our communities that were adversely affected by weather. Our community in Brandywine, Pennsylvania had 3 feet of snow for 3 weeks. Nobody's going to move -- nobody can move, much less move in. The same would have been true of our entrance fee community in Holland, Michigan. So there were some small impacts on that portfolio from the weather. That having been said, I'd say our expectations for the first quarter would have been a little bit higher than what we actually printed. But the good news is that they're off to a very strong start for the second quarter and we expect that component of our business to have a really good second quarter. And again, we think we're on track for the year.

Okay, that's helpful. And just lastly, on the Retirement Center portfolio rates, annual increases has been trending above 4%, I think, for the last 3 quarters or so. And even though occupancy, I think, is down year-over-year and certainly sequentially, is that -- what's going on there? Is that sustainable? And would -- could that accelerate or would you see that decelerating?

Well, I think our view is it is sustainable. Mostly what's occurring there is the Street rate or the rate at which a unit resells, if you will, is strengthening in that portfolio. In the economic environment that we're in right now, 4% or 5% rate growth is pretty strong. So we're certainly taking all the measures we can to continue the progress we've seen. But again, rate growth at 4% or 5% in today's environment is pretty good.

Now I'd like to turn the call back over to Mr. Ross Roadman for any closing remarks.

Thank you, Brent. Thank you for your participation. We look forward to talking to many, if not all, in the coming weeks. We have some pretty active conference schedule coming up. We'll be in Las Vegas next week, New York City the first week of June, Los Angeles the second week of June and Boston the third week of June. So we look forward to talking to many of you. With that, thank you very much for your participation.

Thank you. This concludes today's conference call. You may now disconnect.