Good morning. And welcome to the Omega Healthcare Investors First Quarter 2022 Earnings Conference Call. All participants will be in listen-only mode. After today’s presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to Michele Reber. Please go ahead.

Thank you and good morning. With me today are Omega’s CEO, Taylor Pickett; COO, Dan Booth; CFO, Bob Stephenson; 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 identify 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, Michelle. Good morning. And thank you for joining our first quarter 2022 earnings conference call. Today, I will discuss our first quarter financial results, skilled nursing facility industry trends and operator restructurings and our share repurchasing activity. Our first quarter adjusted FFO is $0.74 per share and funds available for distribution are $0.65 per share. We have maintained our quarterly dividend of $0.67 per share. Dividend payout ratio is 91% of adjusted FFO and 103% of funds available for distribution. We believe that the elevated FAD payout ratio is temporary, based on the fact that 14.5% of our contractual rents and interest are involved in restructuring discussions and 12.3% of contractual rents are not paid in the first quarter, and therefore, are excluded from FAD. The successful sale of the Gulf Coast portfolio and imminent completion of the Guardian restructure provide us with strong momentum to eventually returned to comfortable FAD payout ratios. Turning to skilled nursing facility industry trends. Fortunately, the December and January pause and facility occupancy improvement reversed in February and March, with preliminary mid-April Omega core occupancy levels at 77.9%, up to 300 basis points since January 2022. Unfortunately, staffing shortages and elevated costs continue to pressure operating cash flows, and the ability to admit new residents. At this point, it is impossible to predict how quickly industry occupancy will fully recover or how rapidly the current labor force pressures will subside. Turning to operator restructurings. Dan will provide detail regarding specific operator restructurings. In general, these efforts include one or more of the following actions, one, rent deferrals, two, asset sales or transitions to a new operator, and three, in certain cases, rent resets with other amended lease provisions. Examples include elimination of purchase options, future upward potential rent resets, lease extensions or revisions of renewal rates and collateral enhancements, adjustments or usage. As we have discussed in the past, the strength of our portfolio assets generally allows us to work through operator restructurings, with limited long term cash flow downside. The Gulf Coast portfolio net proceeds of over $300 million offset the lost Gulf Coast contractual revenue, while Guardian which is still in process will result in a very modest diminution in value from the pre-restructuring contractual rents and no diminution of value from our origination yields. Turning to share repurchasing activity. We have repurchased $133 million of our stock utilizing a portion of our assets sale proceeds. The share repurchase program is an efficient tool that has allowed us to harvest capital non-dilutively. Finally, again, thank our operating partners and in particularly 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 first quarter. Our NAREIT FFO for Q1 2022 was $171 million or $0.69 per share on a diluted basis, as compared to $170 million or $0.71 per share for the first quarter of 2021. Our adjusted FFO was $184 million or $0.74 per share for the quarter and excludes several items as outlined in our adjusted FFO reconciliation to net income found in our first quarter earnings release and our supplemental, and also on our website. Revenue for the first quarter was approximately $249 million before adjusting for non-recurring items, compared to $274 million for the first quarter of 2021. The year-over-year decrease is primarily the result of revenue recorded in Q1 2021 related to Gulf Coast, Agemo and Guardian, all cash base operators, as well as revenue related to asset sales that occurred after Q1 2021. In our last earnings call, I have provided revenue, adjusted FFO and FAD commentary on Gulf Coast, Agemo, Guardian and an operator who indicated it would not be paying its first quarter rental obligation. I want to provide an updated revenue status and Q2 2022 outlook on these operators. Dan will provide contractual and operational updates on these tenants in his prepared talking points. First, regarding Gulf Coast, in Q4 2021, we recorded $7.4 million of adjusted FFO and FAD based on our ability to offset any unpaid rent against the balance of a sub-debt obligation owed by Omega. At December 31st, the sub-debt balance was fully exhausted, and therefore, we did not recognize revenue related to Gulf Coast in Q1 2022. On March 31st, all but two of the Gulf Coast assets were sold for over $300 million in net proceeds. Looking at Agemo, in Q4 we recorded $4.6 million of…

Thanks, Bob, and good morning, everyone. As of March 31, 2022, Omega had an operating asset portfolio of 938 facilities, with approximately 94,000 operating beds. These facilities were spread across 64 third-party operators and located within 42 States and the United Kingdom. Trailing 12-month operator EBITDARM and EBITDAR coverage for our core portfolio as of December 31, 2021, decreased to 1.48 times and 1.14 times, respectively, versus 1.52 times and 1.18 times, respectively, for the trailing 12-month period ended September 30, 2021. During the fourth quarter 2021, our operators cumulatively recorded approximately $47 million in federal stimulus funds, as compared to approximately $26 million recorded during the third quarter. Trailing 12-month operator EBITDARM and EBITDAR coverage would have increased during the fourth quarter of 2021 to 1.26 times and 0.93 times, respectively, as compared to 1.21 times and 0.88 times, respectively, for the third quarter, when excluding the benefit of any federal stimulus funds. EBITDAR coverage for the standalone quarter ended December 31, 2021, for our core portfolio was 1.19 times including federal stimulus and 0.98 times excluding the $47 million of federal stimulus funds. This compares favorably to the standalone third quarter of 1.04 times and 0.92 times with and without $26 million in federal stimulus funds, respectively. Occupancy for our overall core portfolio continued to slowly trend up throughout 2021, reaching a high of 75.8% in December, up from a low in January of 2021 of 72.3%. In January of 2022, the portfolio saw a dip in occupancy to 74.9% due to the Omicron surge, but has since trended up based upon preliminary results, increasing to 75.3% in February, 76.5% in March and 77.9% as of mid-April. Turning to our senior housing portfolio. Today, our overall senior housing investment comprises 182 assisted living, independent living and memory care…

Thanks, Dan, and good morning, everyone. As expected, the COVID case counts as the height of Omicron in January have fallen exponentially. While that backed coupled with the surge itself not resulting in the high hospitalizations and death rates experienced pre-vaccine is welcome news given where we were a year and a half ago, it should not detract from the fact that the industry continues to face challenges. Staffing shortages continue to persist with a heavier reliance on agency, ACA estimates a loss of 241,000 nursing home employees were 15.2% of the workforce since February 2020, including an additional 2,500 jobs in March 2022. And because of those shortages, nursing and agency expense continues to be elevated. Agency expense on a per patient day basis for our core portfolio for fourth quarter 2021 was more than 6 times what it was in 2019. This in turn continues to have an impact on occupancy, with self imposed admission bans due to staffing shortages, delaying an even better occupancy recovery. The good news is that, as mentioned earlier, we are starting to see traction on the occupancy recovery front despite these staffing challenges. And as of February 2022, approximately 25% of core facilities have now recovered from an occupancy prospective. Unfortunately, on the federal stimulus front, no new releases from the Provider Relief Fund have been announced and there’s still remains approximately $3.5 billion of Phase IV payments yet to be released, as HHS continues to review applications submitted last year. While additional federal stimulus would be welcomed given continued elevated expenses and occupancy that hasn’t fully recovered. Now more than ever, it is critical that the states step up to ensure that rates keep pace with the persistent increased expenses, including post-public health emergency when the increase in FMAP will no longer be in effect. Finally, while the number of cases and deaths in nursing homes during the pandemic has put somewhat of a regulatory target on the back of the industry of late, it is important to note that individuals in nursing homes were in the demographic and clinical state most vulnerable to the virus and therefore it should not have been unexpected that they would experience the largest impact, the prioritization of the vaccination efforts to this population with a clear recognition of that fact. We hope that while the administration contemplates modifications to regulatory oversight that recognizes the nuances of the industry, with extreme staffing challenges, increased expense pressures and the tremendous effort the industry has made for over two years in adapting to care of the elderly during an unprecedented pandemic. I will now open the call up for questions.

Our first question comes from Jonathan Hughes with Raymond James. Please go ahead.

Hey. Good morning. Thank you for all the details on the moving parts of revenues back in the first quarter and into the second quarter. I guess just to simplify it for us listening. Could you maybe give us that net change from 1Q to 2Q from revenues that are not expected to be collected and revenue that is expected to come back?

Yeah. Jonathan so and I look at it from a FAD perspective. So the FAD was $161.9 million in Q1. I would expect based on what I -- my talking points to go about $11 million to $11.5 million increase.

Okay. So, I guess, I mean, barring any more operator issues and realizing it’s still a very challenging environment for skilled nursing. So that’s still a very real possibility. And obviously, if Agemo and Guardian and others do pay some rent in the second quarter that are currently on a cash basis that I assume are not in that figure you just gave us. I mean, have we effectively found the bottom in terms of cash flow paid to you by your operators?

Just a couple of comments, Jonathan. Bob does have Guardian as part of that Q2 FAD number. But to your point, Agemo, which essentially has paid no rent. If they were to pay, that would be upside. I think in terms of calling the bottom, it’s fair to call the bottom as it relates to the operators we are talking about, but we still need to be wary of the next couple of quarters. And I would point out, as Megan in her prepared comments talked about public health emergency is still supporting via FMAP, the revenue side of the equation for our operators. And when the -- if the health emergency isn’t extended beyond July, that will create some additional pressure. So we feel good about the resiliency of portfolio and the workouts that the team has been able to work through. But I am still -- I would still stress that we are not through this, but in terms of these operators, I think, we are in pretty good shape.

Okay. Thank you for clarifying that. I appreciate it. Can I just sneak in one more? Just on the buyback, if we use consensus NAV, that’s basically purchased those shares at a mid 8% implied cap rate, and obviously, there’s no underwriting uncertainty there. But can we expect maybe more buybacks with the expected sales proceeds for the 26 properties under held for sale or would you prefer to deploy those in the new assets like U.K. care hubs? Thank you.

Yeah. Yeah. For sure, Jonathan. Step one for us is to find home for our capital with new assets and support our existing operators. But to the extent that there’s not enough volume there in the pipeline then we will certainly continue to look at stock repurchases as well.

Great. Thanks for the time.

Thank you.

The next question is from Sam Choe with Credit Suisse. Please go ahead.

Hi, guys. I am on for Tayo and thank you for taking my question. Just wanted to go back to the Guardian portfolio restructuring. Regarding the eight released facilities, just curious as to what the expected rents are and the timing of when those will start?

So when you say eight, we had a total of 20 facilities that we had teed up to either sell or release, and to-date, we have transitioned 13 of those. So we have actually seven left. And when we are all finished, which we hope will be in the second quarter of 2022, but I want to caveat that those restructure is not complete yet. But based upon what we have eight to-date and what we have in process, it looks like our total rent or rent equivalents for 20 facilities in total will equal about $8 million.

Got it. And will that start like maybe 2Q and into 3Q, is that the expectation?

Yeah. So, yeah, the ones that we have already transitioned have, well, depending on the timing of those transitions, we will start paying rent almost immediately as well the seven remaining.

Got it. Okay. Just shifting gears, the 26 facilities classified as held for sale, I know some of that’s Guardian. Could you kind of talk about the remainder of that held for sale facilities and maybe the cap rates that you are expecting on those?

Yeah. So you are right. The bulk of that is the seven Guardian assets that Dan talked about and disclosed in the press release. There’s one operator that we are looking to exit the portfolio. We have been -- it’s been in held for sale for a number of quarters. That represents about 13 additional assets. And then we have four closed assets, and as you know, every quarter, we go through our portfolio and look to sell closed assets if we have those. So the total on our books is $92 million -- $93 million of net book value. We are hoping to get in excess of around $120 million of proceeds and we booked in the first quarter of $2 million of revenue related to those assets.

Got it. Great color. Thank you so much.

Next question is from Nick Joseph with Citi. Please go ahead.

Hey. This is Michael Griffin on for Nick. I am curious just to touch base on the tenant side. Beyond the currently non-paying tenants, can you quantify maybe a percentage that might be on like a future watch list?

Yeah. I can’t quantify a percentage. There are some smaller operators that are struggling that we have had discussions with. There’s no operators of any real scale that we are having issues with from a payment perspective. So it’s hard to predict out in the future, as we have said, there are still challenges out there and a number of things on the horizon including the comeback in occupancy, the labor costs, all the things that we discussed that were still remain challenges for our sector and we have to sort of navigate the next few quarters going forward. But to predict what percentage that is, that would be throwing darts.

Yeah. No. Totally understand. And just shifting to the regulatory side, I am curious to get your thoughts on the recent CMS proposal for the rate cuts, kind of how you expect this to impact your tenant base and if you expect any changes during this 60-day comment period?

Well, it’s a little disappointing that there wasn’t more discussion from CMS about phasing in the PDPM adjustment, which was -- there were 16 pages of last year’s proposed rent, about ways to phase it in and that would be helpful given that the environment this year is any better than it was last year. So we are hopeful that over the next 60 days that perhaps there’s a shift and the adjustment isn’t just all at once, and therefore, we have a negative rate. That being said, we know it’s eventually coming. So our operators do what they have always done and work hard around that. But it’s just that much just another piece of pressure that we will be dealing with.

Got you. That’s helpful. Thanks. Appreciate the time.

The next question is from Connor Siversky with Berenberg. Please go ahead.

Good morning, out there. Thanks for having me on the call and I appreciate the detailed prepared remarks. I am just thinking back to the context of deploying capital, whether that’s in buybacks or deploying in real assets. I mean what are the opportunities that look like in the U.S. and the U.K? I mean are you seeing the action of the seller’s market cool off at all, do you expect you see more opportunities for OHI through the end of the year?

So, yeah, I mean, it still is a seller’s market in the U.S. We are seeing more opportunities in the U.K., obviously, based upon our acquisitions to-date. And that’s coupled -- it’s not just opportunistic in the U.K., it’s also coupled with the fact that occupancy in the U.K. was not hit near as hard as our counterparts in the U.S. under COVID, and therefore, their recovery has been swifter, therefore, the stability is just we are seeing a lot more stability across the pond and we are here. So once again, it’s opportunistic, but I do expect we will continue to look at transactions in the U.K., as well as in the U.S., but most of the deals that we are doing in the U.S. right now are not big portfolios. They are more sourced by our existing operators and are more regional or smaller in nature.

Okay. Thanks for that. And then quickly on Guardian and apologies if I missed this before, but in these releasing activities, are you looking to place new operators in these facilities or are they already on the tenant roster for the most part?

No. We have got a couple of new operators that have gone into these facilities. Most of them are involved sales, to be honest with you, but we do have a couple of new operators that are going into these buildings.

Okay. Appreciate the color. Thank you.

The next question is from Rich Anderson with SMBC. Please go ahead.

Thanks. Good morning. Early on in the call, you said 12.3% of rents and interest not paid in the first quarter, all of that would be reflected in your FAD number. How much of that actually shows up in FFO, meaning those that are still on a GAAP accounting basis?

So you have the one operator and 3.4% of that absolutely shows up, the operator, I said, we kept on a cash basis, but did not record FAD. I said total percent, do you have it. I don’t have the total in front of me. I can call you back on that. But I know it’s around...

I am just trying to connect the dots in the cadence between FFO and FAD, and how to sort of move that forward based on all the moving parts?

Well, the best way I think, I mean, offline call you and walk through the model, but the best thing, I think, is to take that FAD number of that $162 million and then add back the numbers we said today are around $11 million, $11.5 million of additional FAD, because we have a couple of operators that at least that one operator that’s on a cash or a straight-line basis.

Right. Right. Okay Yeah. That’s fine. Second question is, you mentioned, I think, you said this, you are talking about traction appearing to materialize on an occupancy front. And then I think you said something more than 20% of your facilities have kind of had the full occupancy recovery, did I -- first of all, did I hear that right?

Megan, go ahead.

Yeah. That’s 25% of the facilities have recovered from an occupancy perspective.

Okay. So is there any -- is that a geographical observation, is it an operator observation, is there some common knitting to that 25% that informs the rest of the portfolio?

There really isn’t -- we have dug into it quite a bit. There is a little bit of a geographic concentration in Florida and Texas, but those are states that were heavily concentrated in anyway. So we continue to try to see if there’s any sort of way to look at it to garner something as to what’s going on, but we haven’t been able to find anything.

Okay. It’s sort of sweet. Thanks.

The next question is from John Pawlowski with Green Street Advisors. Please go ahead.

Thanks for the time. Megan, can you just give us a sense how pervasive the number of facilities that are restricting emissions is today versus, call it, the end of last year?

Yeah. I mean it’s significant enough to be causing an issue with occupancy clearly. I think just anecdotally with operators, some operators are feeling like things are maybe not getting worse, but at least stabilizing. But it’s hard to sort of figure out on stage of day how many facilities are in admission span because it really is so fluid, staff calling out and then you are not being able to admit, it can change on a daily basis.

Okay. So the restrictions really haven’t gotten much better in the last three months or so?

I wouldn’t say so, no.

Okay. Last question for me, following back to the Medicare cuts. Have you had it -- have you seen it, have an observable impact on the bidding tents for assets you have for sale right now?

We have not.

Okay. Right. Thank you.

The next question is from Nick Yulico with Scotiabank. Please go ahead.

Thanks. Just going back to all the details you provided, Bob, is helpful on the operators. I guess my question is, if you -- can you remind us what is the trigger to put these operators on a cash basis versus keep them looking -- keep booking GAAP revenue, because I think for those two other operators, right, the 3.4% and the 2.4% those exposures, right? They didn’t fully pay in the quarter? Your booking revenue, you are assuming some revenue, GAAP revenue in the second quarter. So I am just trying to understand what’s the -- what sort of delta there about what would put those on cash basis versus keeping them in FFO?

Well, you look at the long-term collectability of the total rental obligation over the life of the lease and if you feel you are going to collect it and you keep them more on a straight-line basis, it basically it. And there’s other facts and circumstances that come into play, but that’s the big picture.

Okay. And then, I guess, a follow-up there would be, at this point, why not provide some quarterly guidance. I mean you got -- you booked revenue for these operators. You have some visibility as to what you are thinking you are going to get in the second quarter. Why not provide quarterly guidance. And even if you could also maybe just give us a feel for as we think about like this quarter from a normalized FFO number, like, whether that first quarter run rate is a good one to start basing off for the second quarter, I mean, any perspective there would be helpful? Because I think from a modeling standpoint, it’s pretty tricky about whether these companies are on cash, whether they are on GAAP revenue and it also looks like some of the election of that treatment for the operators in the first quarter created will look like a beat. And so that’s why I think it would be helpful to understand what going into the second quarter, okay, well, what are we dealing with now?

Yeah. From our perspective, Nick, it’s just -- I think we have been pretty clear about the uncertainty around cash collections. We are hopeful that the couple of operators that have resumed paying will continue, but it’s just impossible to know. And so I think, but to your point, I get it that you have trying to connect the AFFO and FAD dots can become complicated and the best we can do is just give you as much data as possible. I would just encourage you to continue to talk to Bob about specifically how were recorded.

Right. Okay. All right. Thanks. Yeah. I guess, from the cash collection, I get it, but from a GAAP revenue standpoint, I mean, just understanding you booked it in the first quarter, okay, well, we are going to definitely have this in the second quarter, which sounds like that’s, I mean, that is the case, right, that you are assuming that for the 3.4% operator, the 2.4% operator, right? The Guardian you are assuming as well, just to be clear, full revenue, GAAP revenue in the second quarter, is that correct for those three?

That’s correct. But remember, Guardian is cash basis. So you don’t have any straight-line component there. But, yes, that is correct going into Q2.

Okay. Thank you. Helpful.

Thank you.

The next question is from Steven Valiquette with Barclays. Please go ahead.

Great. Thanks. Good morning, everybody. So, obviously, there’s a lot of moving parts right now within the portfolio of disclosed and non-disclosed operators. I guess, as we look at that table with the list of operators with EBITDA rent coverage ratio that sub one on page six of the supplement. Can you just give us any sense for how many of those 21 operators on that list are currently paying rent versus how many are not paying rent?

We can. Bob is looking at it right.

Okay. Sorry to throw you the math question in the middle of the call. In the mean time, I can ask a follow-up that I wanted to ask. Just given where the total portfolio coverage ratios should got at 12/31 that you just put in the supplement, as we think ahead one additional quarter. Is there any preliminary directional view today on whether coverage ratios will improve or deteriorate further for that core portfolio when you report the 1Q 2022 coverage ratios next quarter? That would be the follow-up. Thanks.

No. I think to the extent that occupancy is such a major driver of cash flow and coverage, and we saw occupancies improve, might additional inflammation to say I would expect coverages to improve, but take that with the grain of salt, I mean, I totally have the numbers come in.

Right. You also had the Omicron variant kicking in January, right, which is going to help you in that month. So it’s a little bit too soon to tell where will this go, but to Taylor’s point, with occupancy improving, hopefully, the latter part of the quarter improved substantially.

Okay. That’s helpful.

And getting back to your…

Yeah. Getting back to your original question, it’s at the bottom of the page six there, you could see everyone’s current on there, except with the ones with footnote five and that represents 14.2%. And if I -- if you read the note there, their current -- they are still in forbearance and we stop having…

The two new ones are added to that list? Are they paying, I guess, I can see here from -- yeah, the details are there. Never mind. I am good. Thanks for the color. I appreciate it.

The next question is from Georgi Dinkov with Mizuho. Please go ahead.

Hey. Good morning. Georgi Dinkov on for Vikram Malhotra. I am just curious, how do you think about PHE going away and what impacts do you expect?

So if the public health emergency goes away, you obviously lose the benefit of FMAP, so the states won’t be stepping up as much, although I have heard some states trying to take some of that -- some of what they were giving in FMAP and trying to put it into their permanent rates pieces of it. You are also going to use the ability to skill in place that three-day stay waiver, which has really helped folks during outbreaks. Right now, the public health emergency runs through July. I mean, we hope that, that ends up getting pushed out through the year end, but there’s no way to tell what’s going to happen.

Okay. Great. Thank you. And just a follow-up on that, where are new deals being struck in terms of EBITDA coverage?

It hasn’t changed. I mean, obviously, the lion’s share of our deals have been in the U.K. and there’s still 1.3 to 1.4 coverage out of the gate.

Okay. Great. Thank you. That is for me.

The next question is from Joshua Dennerlein with Bank of America. Please go ahead.

Yeah. Good morning, everyone. I am assuming most of your share repurchases were done before the CMS came out with their reimbursement proposal for the next fiscal year. Does that proposal change your appetite at all for further buybacks near-term?

No. The proposal really wouldn’t be eligible for buyback decision, it is really -- where we harvested capital and we can think about where we deploy capital on a leverage-neutral basis. And obviously, we deployed a bunch in the U.K. and we bought back stock and we retained cash, leverage neutral. It’s an effective way to just manage our balance sheet.

Okay. And then I saw that it looks like you issued some shares via the reinvestment program. It just kind of seems weird to be buying back shares and then also issuing that way. Just kind of curious what the rationale is there?

Yeah. We have a DRIP plan in place and so that was early in the first quarter with the DRIP in. Turning it on and off is, these are for really the mom and pop investors out there reinvesting in our shares. We didn’t feel it right to turn it off this time.

Okay, Okay. That’s it for me. Thanks, guys.

Thank you.

Next question is from Michael Lewis with Truist. Please go ahead.

Great. Thank you. My questions are kind of bolt-ons to questions that were asked earlier, about the coverages at the bottom of page six, just to be 100% clear, that footnote five, does that mean that those tenants are currently not paying under an agreement to temporarily not pay or does that mean they were restructured in a way that perhaps makes those coverages -- lowers the rent and makes those coverages better or different than they show here?

I think you have got a combination of both in there. You have got some tenants that are under forbearance agreements and some that are restructured.

Okay. Thanks. And then along these same lines, somebody asked earlier about your optimism, I suppose, on some of these low coverage ratios, when we look at that with about almost a third of the portfolio below one-time. Again, kind of directionally, I mean, do you see a path for a lot of these guys to kind of get back to where the rents are? Do you think this is a portfolio that really just about everybody here needs to be restructured or maybe some percentage in between, I imagine?

It’s -- all -- it’s predominantly driven by occupancy recovery. And so if you assume occupancies will recover to pre-pandemic levels at 84%, then the vast majority of those operators climb back out of that under one coverage scenario and we should be in decent shape. But that’s why there’s so much focus on the velocity of occupancy recovery, and ultimately, who knows what that will be. We feel highly confident that the demographics will eventually drive us there. But is it eight months or 24 months, we don’t know the answer to that yet.

Okay. I see. And then if I could break the rules and ask a third one. I mentioned I might be last in the queue anyway. Is -- I don’t know if you can answer this, but do you think -- when I look at this whole page and I look at the coverages and what’s happening with occupancy. I mean, do you think this is indicative of the industry overall or do you think your portfolios either outperforming or maybe this experience causing you to kind of re-examine the portfolio in a specific way. So like somebody asked about geography before kind of other things, so anything to comment on in that line of thinking?

Yeah. I mean it’s hard to compare to, of course, the world as a whole. But I would say our portfolio is doing as well, if not better than other portfolios that we see and other operators outside of our world.

Okay. And you don’t see any like area where you would focus to improve -- any theme that kind of runs through this that ran into more trouble than others, nothing like that?

Well, there were some geographic challenges certainly in Texas and Florida. So -- but I think Florida hopefully has fixed a good bit of that and we hope to see some better results in the state of Florida going forward.

Okay. Great. Thank you, guys.

Thank you.

This concludes our question-and-answer session. I would like to turn the conference back over to Taylor Pickett for any closing remarks.

Thanks everyone for joining us this morning. As we went through a lot of details, please feel free to call the team for modeling and other purposes. Have a great day.

The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.