Q1 2020 Earnings Call
Equity of critically needed items.
Due to nationwide demand when our supplier for masks and down materially reduce the levels of product that we could buy we aggressively sourced product from other suppliers, albeit at a large multiple other cost that we normally pay.
The next series of preemptive steps included increasing communication frequency with our constituents.
Increasing daily observations for symptoms.
Limiting the size of visitor groups.
Cancelling sponsored outings and converting our resident engagement from in person to virtual engagements.
As I will mention in more detail. We also began to advocate that policymakers should prioritize senior living when it comes to pp testing and other critical resources, given the potential impact of cobot 19.
To the vulnerable population we serve.
Those efforts, which remain ongoing included numerous communications and discussions with members of Congress.
The administration and their staff along with state level official.
By early March we had moved into our second phase action.
As the centers for disease control and.
Sharon shared new information about Cobot 19, we created specific community guidelines.
Corona virus specific cleaning and environmental sanitation protocols.
And for our assisted living and memory care residence. In addition to frequent temperature readings, we incorporated taking pulse oximeter readings.
We increased the frequency of our communication with our field teams to guide them through the changing procedures and requirements.
We also began creating videos to communicate information broadly with associates residence patients families and the public.
In early March we posted our first video a demonstration of the proper hand washing technique to our website.
As part of our action Phase, we posted 19 separate videos during March and April.
By the Middle of March we filed an 8-K to provider update regarding a pandemic we were moving from limiting access in select communities to a full no visitors directive, except for medically essential and compassionate care visits across all commute.
Studies.
We continue to aggressively increasing our supply of P. P E and provided direction to our communities on determining the appropriate pp E to use.
All associates are now directed to wear masks in our communities.
Well. This is just a small selection of vigilant actions, we've taken it demonstrates our commitment to help protect the health and wellbeing of our residents patients and associates.
The third section is leading in the industry.
We are fighting a global health crisis, and we strongly believe that it takes all of US working together to try to control the spread of Cobot 19.
We believe that we were the first senior living operator to launch a website dedicated to providing updates including video demonstrations of best practices and messages from our Brookdale leaders.
We shared our web link with our peers.
Reporters and the public at large.
It was very important to us to share our knowledge and ideas with anyone interested especially for small senior housing operators that may not have the resources that we have.
Our command center and our clinical leader, we're panelists on our agenda items first webinars for the industry on best practices.
From a resident standpoint, because connection is so important during this time, we also significantly increased our social media engagement, the likes comments and sharing of our content tripled our historic average.
In addition, Facebook notified us that after their marketing department saw our programs and content. They selected us to be featured as an exemplary leader of social media for covert 19 response.
We are confident that are early response and communications have helped reduce the spread of the virus and ultimately saved lives.
Another area the became evident early on in this crisis is that our industry does not have allowed us to avoid in Washington, DC, who understands the industry to inform policymakers regarding the senior living industry and its vitally important role.
In protecting this vulnerable population.
Industry wide, approximately 1 million seniors live in an independent living assisted living or memory care setting.
Many have overlooked senior housings role on the front line with our infection prevention and control efforts as being part of the health care system.
Others incorrectly grouped predominantly private pay senior housing communities with largely government support at nursing homes.
Our industries two largest trade associations.
Several influential members of the industry and I as the leader of the largest senior living operator in the U.S. have spent an enormous amount of time advocating for the industry.
We have requested priority access to testing kits.
PPV and prioritized government financial release among other topics.
We thank the many government officials and their staff members, who continue to listen to our requests and are helping us make progress on addressing the urgent needs of what is truly a clinically essential service industry.
Our focus through the unprecedented environment is most importantly to help keep our residents patients and associates safe.
Secondly, with our strong health care infection protocols, we look to keep the reputation of senior living attractive for future residents to consider.
Now, let's turn to the financial performance of our operations for the first quarter.
Revpar on a same community basis increased 2.4% sequentially and on a year over year basis grew 2%.
However, while we were pleased with this increase we were looking for higher occupancy in the Revpar mix.
And I see senior housing stabilized occupancy decreased 30 basis points on a sequential basis compared to Brookdale same community decrease of 150 basis points.
In our previous earnings call, we talked about maintaining overall price discipline in the fourth quarter 2019 in advance of the annual price increases which were effective January onest.
We continue this discipline in the first quarter.
With competitors actions negatively affecting our late fourth quarter move in volume and therefore are starting occupancy for January combined with our higher Noncontrollable move outs, we lost more occupancy than expected.
In the second half of March as we restricted non essential access to our communities. Our sales team redesigned the entire sales process continue to nurture new and existing leads and nimbly moved to virtual tours.
Well visits have slowed we are continuing to welcome move ins.
Albeit at a significantly lower volume.
And mostly for residents with urgent needs.
Our conservative approach to safety may have resulted in fewer tours and sales.
However, our commitment to quality and the protection of our residents patients and associates is on wavering and remains our top priority.
We believe our approach will support a stronger sales story as the economy begins to reopen.
Noncontrollable move outs were higher than the prior year quarter.
While our controllable move outs were favorable to the prior year quarter and we have seen the trend continue in April.
For the first quarter Revpar growth on a same community basis increased 4.3% sequentially and on a year over year basis increased 3.1%.
Our community teams executed the price increases smoothly.
Let me now turn to our health care services business, starting with our home health business as foreshadowed in our previous earnings call. We expected some noise in the first quarter with the implementation of a new Pdgm model and the announced segment organizational changes.
In January and February we saw sequential senses progress, but in the later part of the quarter key medical referrals drops significantly as the Corona virus spread throughout the United States.
With widespread adoption of stay at home orders various medical procedures were suspended and patient started to cancel their appointments.
Our associates are working hard to educate patients and referral sources of our strong screening in order to continue to provide vital services.
Our hospice business delivered 6.7% revenue growth compared to the prior year quarter and maintain census, similar to the fourth quarter.
We're pleased with the recent government actions to support the home health and hospice industries.
First the 2% Medicare sequestration has been suspended starting in may and for the balance of the year.
Second by law physician assistants, and nurse practitioners will be eligible to certify home health. This expands the pool of available providers to support homecare services.
Third the ability to utilize tele health for hospice recertification.
The last operational topic that I want to address is our associates.
They are pictures may not be on the front page of the newspaper, but they are truly our everyday heroes.
I am incredibly grateful for the determination and dedication of our team members to crush coated.
Four communities our focus is to give all the support we can.
I want to give a heartfelt recognition to our commands and our team for their extraordinary and comprehensive efforts to build tools.
Interpret thousands of lines of regulatory and medical documents.
Create step by step guidelines.
Collaborate with the communities to work through any questions. They have.
Role play through scenarios and remove barriers identified by the community.
For individual associates, we are providing P. P E at communities.
Bearing their co pay cost of cobot 19 testing.
If needed and all of our executive leadership team have made significant contributions to the associate compassion programs in case individuals' need a little help along the way.
As unemployment rises in the U.S., we are looking to hire more than 4500 new associates.
Many will fill existing open roles and others like the newly created room service attendant role will enhance our resident experience during social distancing dining.
Before I turn the call over to Steve I'd like to address expectations for recovery.
State and local leaders implement plans to Riocan business, we are thinking through our own internal decision framework.
We support government recommendations, but the senior housing industry should be in the final wave of the three phase approach.
As state and local economies begin to emerge we will remain diligent to protect our residents patients and associates.
Restrict nonessential access to our communities, while continuing to allow move ins for those residents who can self isolate for 14 days upon arrival.
I have confidence in Brookdale and in the important role our communities will continue to play long after cobot 19 is gone.
The majority of our business is needs based and those needs will continue.
After the pandemic is behind US, we expect to reorient to a growth trajectory and to be stronger as we have better positioned ourselves as a trusted industry leader with our health care referral partners.
In Brookdales 40, plus year history, we've operated through challenging environments.
Mobilized our teams and proven our ability to navigate efficiently and effectively in uncertain times.
We had the most experienced and resilient team in senior living leading through the storm.
With that I'll turn the call over to Steve for a more detailed update on our financial performance.
Thanks, Jamie let me start with a summary of the quarter.
Our senior housing financial performance in January and February was inline with our expectations. However in March as we took higher precautionary measures to help protect our residents patient and associates from covert 19, we started to see an impact on move ins in the last couple of weeks of the quarter.
Even with the impact of Cobot 19, senior housing same community revenue grew 2% in the first quarter on a year over year basis, and 2.4% on a sequential basis.
In addition to Covidien impact on move ins, our occupancy decreased more than the industry has.
You mentioned.
We believe our price discipline in the fourth quarter and into this year enabled us to deliver strong first quarter revpar growth with in place resident rent increases effective January onest.
Same community operating income, while lower compared to the prior year quarter improved nearly 4% sequentially along with a slight operating margin improvement.
As expected our health care services segment faced the challenges that we discussed on the last earnings call with the implementation of Pdgm reimbursement in our home health business and the pandemic also had any impact on the home health business.
On our last earnings call. We know data that we were considering increasing opportunistic share repurchases during the first quarter under the existing program, we purchased $18 million of shares which is nearly what we purchased in the full year 2019.
In light of the ongoing pandemic by mid March we announced that we had suspended further repurchases.
During the quarter, we completed the sale of our interest in 14 unconsolidated entry fee CCRC communities and received at $100 million of income from the termination of our management agreement.
This income associated with the transaction will not recur.
I'll focus the rest of my senior housing first quarter 2020 comments on same community results, which exclude the impact would be a 100 million dollar management termination income and direct costs to prepare for and respond to that pandemic.
With those highlights in mind I will be associate with the quarterly commentary in order to provide more color on our covert 19 efforts at the under the financial review.
Starting with our segments on a same community basis.
We performed an in depth market analysys to look at each of our segments and analyzed a detailed.
Our occupancy decrease was more than the industry. Our strategy resulted in more revenue growth than our competition after factoring in rate.
Let me discuss the occupancy drivers.
Independent living move ins improved sequentially in January and February by dropped in March.
Since this segment is frequently choice not needs driven it is logical that the pandemic would have a greater impact on aisle. In addition for the quarter. We saw increased move outs related to financial reasons financial move outs occur every first quarter. After the annual price increase the lost revenue from incremental move outs due to.
Financial reasons was significantly less than the revenue gained from a higher rate increase.
For assisted living memory care, we saw occupancy dropped late in the fourth quarter, although move ins accelerated in January and February it wasn't enough to recover for the full quarter.
Senior housing same community compensation related expense was flat on a sequential basis.
The 5.8% increase compared to the first quarter of 2019 was the impact of last year's Merit increase.
Leap year and higher employee benefit expenses.
Excluding the 3 million dollar impact of leap year compensation related expense would have been an increase of 4.7%.
Other facility operating expense increased 3.5 per cent compared to the prior year quarter. The increase was primarily due to digital investments in marketing and advertising as a reminder, restarted our incremental investments in the second quarter of 29 team on a sequential basis, the fourth quarter was seasonally lower to avoid.
The typical holiday marketing Blitz.
In summary for senior housing increases in operating expenses were partially offset by revenue growth. As a result same community operating income decreased 3.8% on a year over year basis, but increased 3.8% on a sequential basis.
Excluding the impact of leap year operating income would have decreased 2.4% on a year over year basis, and would have increased 5.4% on a sequential basis.
Moving to the health care services segment.
So we provided the drivers of the 15% of revenue decline. So let me address the operating expenses.
After the episodes that started in 2019 under previous reimbursement rules were completed in late February we announced adjustments to our operational structure deferred the new Pdgm model and go forward business model.
With this phased in approach our structural changes were not fully effective until April. Consequently, there was a revenue expense mismatch in the first quarter.
Turning to Gionee first quarter was favorable by 3% compared to the prior year quarter.
This was primarily due to a reduction in headcount in connection with community dispositions.
We reported first quarter 2020, adjusted EBITDA of $185 million compared to $117 million for the prior year quarter.
The current year resolved to include the nonrecurring income benefit of $100 million from the health peak management termination fee and included $10 million of expenses related to covert 19, which I will discuss in a few minutes without these unique items year over year, adjusted EBITDA declined $22 million.
This adjusted EBITDA decline was mainly due to the 9 million dollar operating loss in the healthcare services business, a 12 million dollar decline related to dispositions and community transitions, partially offset by the $6 million prior year impact from a new lease accounting standard implemented in 29.
Okay.
Adjusted free cash flow was $5 million for the first quarter without the 100 million dollar benefit from the health Peak management termination. The result would have been negative 95 million of which $54 million was due to working capital seasonally high use of cash a trend similar to the first quarter of 29 team.
When comparing the first quarter 2020 to the prior year quarter, adjusted free cash flow improved to $52 million as reported.
Without the health Bee transaction benefit of $100 million adjusted free cash flow would have decreased by 48 million.
Stepping through the variances.
Excluding the 10 million dollar impact of covert related expense adjusted EBITDA results were $22 million of the decline.
The 10 million dollar variance in working capital was primarily from increased prepaid expense and the fact that last year's lease accounting change benefited did not recur.
Non development Capex was $6 million higher consistent with the plan, we outlined in our last earnings call.
Approximately one third of the original Capex guidance occurred in the first quarter.
This included major projects, we started in 2019 and completed in the first quarter, along with investments, where we expect future lesser reimbursements.
And approximately $6 million for state taxes associated with the health peak transaction.
These drivers were partially offset by a $6 million reduction in interest expense, primarily due to lower library or refinancing dad and lower lease obligations. Following the peak transaction.
I'll now provide some financial updates related to cope with 19.
In the first quarter, we spent approximately $10 million as summarized on page nine of our investor presentation, the largest categories, where a personal protection equipment medical equipment, and cleaning and disposable dining supplies.
I want to thank.
Thanks.
Further extraordinary efforts to keep our critical supply chain open.
We are grateful for their efforts, which resulted in our communities having to support they needed.
Since these expenses were only for a partial quarter and incremental labor costs were not significant in the first quarter, we expect covert related expenses to be significantly higher in the second quarter.
In addition, we are in the process of testing substantially all of our community residents and associates.
To mitigate these higher costs, we have initiated cost cutting actions, including temporary reductions in marketing spend and canceling events and related travel.
We are assessing additional reductions that won't affect business recovery.
We have taken and continue to take actions to preserve our liquidity for example, as previously announced we drew our available line of credit in March in mid March we suspended stock repurchases.
And we delayed or canceled somebody elective capex projects and have made additional decisions in the second quarter.
As of March 30, Onest total liquidity was $536 million, an increase of $55 million from year end 29 team.
The increase in liquidity. It was primarily the result of the beneficial completion of the healthy transaction.
All of the work we've done in recent years to strengthen our balance sheet.
Renegotiating master leases sales of a select group of owned assets selling the majority of our CCRC entry fee business and multiple refinancing transactions have put us on a better financial position to whether there's a pandemic.
In addition to our internally driven actions we are actively pursuing all avenues of relief.
Page 10 of our investor deck outlines governmental programs and an estimate of their impact.
Due to the rapidly evolving environment, it's too early to provide an accurate estimate of the pandemics impact on the company's full year 2020 performance and financial results.
As we track, leaving indicators and the path becomes clear we will provide further updates as appropriate.
I'll now turn the call back over to Cindy.
Thank you, Steve our financial results reflect the early.
Strong and diligent actions, we've taken to help protect our residents patience and associates.
Given the rapidly changing business environment as a result of the Corona virus, we provided more information, including monthly data for the first quarter and events subsequent to our first quarter.
This included April month, an occupancy at 80%.
We are striving to be transparent about the state of our business today. So that you can walk the path.
Measuring our progress as we work our way through the complexities created by the Cobot 19 pandemic, we look forward to our recovery and the future growth.
Even through the toughest times when nearly all state has shelter in place orders, we still had new then.
Testing becomes more available we expect to see an increase in a number of cobot 19 positive citizen.
Well, we expect that that growth rate of cobot 19 positive cases.
We'll have new peaks, we do believe that our country will learn to manage the risks.
As our society turns to a new normal we look forward to welcoming more patients and more residents into our community.
Operator, please open the line for questions.
At this time, if you would like to ask a question press star one on your telephone keypad again that a star one for any questions.
Your first question have to line of Frank Morgan with RBC capital markets.
Good morning, I appreciate the comments about coded and if I did my math right, you're probably less than 500 cobot positive patients in your.
Portfolio.
Just curious if you could provide any color around where that might be regionally.
Is it more prevalent in certain parts of the country.
And then also a also appreciate the commentary about April occupancy at 80%.
Just to parse that a little bit further it could you see any kind of.
Variation or change across the weeks of that April timeframe.
We've had a lot of service providers comment about how things sort of bottomed out in might even be inflecting, a little bit off of a bottom. So just curious color there and then and then the final one just on on your view you commented at the end you did have move ins. During this period I'm just curious.
What was that a regional thing or was that broad based thanks.
Thank you Frank let me see if I can answer all of your question. So first regarding parts of the country. It's fair to say that when there was an intense.
Community TWI transmission of Cobot 19, our communities had.
Bigger impact in those communities, having said that we're very pleased that less than 1% of our residents were infected with Covance 19, but certainly higher in those markets, where there was a lot of person to person transmission outside of our community.
Second as we look at occupancy across the we I want to say that I have been very very grateful for sort of the continued positive momentum.
Our total number of move outs.
You know I always thought to cope at night team as.
Something to think about relative to a normal flu season, and our debt related move out relative to normal flu season has been higher than a mild flu season, but less significant or less.
A smaller number than an intense our severe flu season.
And when we look at our total move outs believe it or not the total number as we move outs that we had.
On a year over year basis improved every quarter.
From February to March March to April and so I think that reflects the fact that our residents and families. Appreciate the strong infection control protocols that we have in our communities.
At the same time as you would expect as the the country went into locked down there was a impact on our move ends and that's that's important for a few reasons, but if you think about our portfolio on an aggregate basis, we need to replace about 4.5 per.
With that of our resident across the whole portfolio and so for I at all that 2.8% because they have a longer length of stay.
For a while it's about 5%.
Because their length of stay is a little shorter than aisle and memory carriers are shorter length of stay so we have to replace about 5.3% of our residents every month.
In our memory care. So what we see is the Io is a bit more of.
Hospitality model and so move into an ideal are more likely affected than a deal or memory care, which is definitely need space. New then, but you have to recognize that because I'll has a longer length of stay that occupancy tends to hold up a little bit better.
Sure when you net everything out and what we saw is certainly.
During the initial phases of the lock down our our move ins were much more severe we had to retool our entire sales team going from not allowing.
Is it too conducting virtual tours and what we see as the economy starts to reopen.
We believe that they are starting to be a little bit of of light at the end of the tunnel.
No I don't want to tell you that our occupancy will increase in May I don't think it will and that is because our may occupancy is largely driven by the movements that we have.
During April and so I would expect during may our occupancy will continue to fall and then we'll look to see sort of how much of our normal move in volumes that were able to get as the economy returns to little bit more of a normal state. So I hope that is is helpful to you.
And then the final thing that I would say is that I.
I think that our actions to protect our residents. We acted early we believe relative to.
The industry.
I do think that our leadership position will give us a better chance at recovery and to be quite honestly I'm pleased to report that we had a daughter other competitor who called us to thank us for the information that I put on our website or that we put on our website because she got information on how.
To help protect her mom and thats something that our other competitors just didnt have the same response that we did and so I think that brookdale.
Comes out of this a stronger leader because we've been aggressively communicating with families. We've been aggressively communicating with residents we've been aggressively communicating with our referral sources, including our referral partner. So thanks for the question Frank.
Thank you.
Your next question if from the line of Steven Abella quit with Barclays.
Great. Thanks, Good morning cities, let me I commend you and all the work you're doing silverback care on the front line.
Right.
Just a quick question here regarding the higher expenses related to cope with 19.
It does seem pretty fair that virtually every provider in the industry is likely witnessing the same elevated cost trend seems to be the case from all the other companies that have talked about their operations as well I guess I'm curious if theres any sense across the industry that.
End market pricing with the rather than.
Improving at all or May improve.
Offset these higher costs, just curious to get more color on the pricing side of the higher expense.
Thanks, So much for the question, we don't have a lot of information about what our competitors are doing relating to pricing as it relates to covert 19, specifically, we do think that this is an unprecedented pandemic and there's no question that our costs have gone up.
As we've had to buy a lot of personal protective equipment, we've had to increase our sanitation expenses and start to deliver.
Meals to our residents in their their room and to for US actually the cost increased more in the second quarter than they did in the first quarter. The first quarter was really sort of getting that initial supply we got that in place in March and then as as the Lockdown continued and we needed to increase.
Labor, we saw labor cost increase in April as well.
Not just from a premium pay that we put in place in select communities, but also from just the.
The time required to screen residents and associates for temperature.
Residents for pulse oximeter, and just to make sure that our communities were safe.
Now my expectation is that.
Our customer is largely a fixed income customer and so.
I'm not I'm not confident that the incremental costs will be passed onto that customer and that's one of the reason why we have been so aggressive reaching out to Congress entity administration for help to support our efforts in protecting our seniors during the cobot 19 pandemic now we're very grateful.
For the support that we've received.
With that support has primarily been and our home health and our hospice business and that makes sense because the government could look at the.
Medicare revenues until they had a good way too.
To push funds out to support those businesses.
Because senior living as a private pay business with the exception of our snow.
They just haven't yet seeing exactly how to help us and so we're hopeful.
There's no guarantee but we're working very hard to see if we can get from government support for all these incremental cost.
Given the heroic efforts that our teams have made to protect the most vulnerable population and today the cost and senior living have been born by the operators rather than the seniors and rather than than public.
Okay. One other quick question.
Just rank over 19 is that the residential real estate could soften a little bit in the aftermath.
Over 19 as far as economic impact.
I'm curious if theres any historical rule of thumb for Brookdale for.
Just approximately what percent of resident that are moving.
Typically need to sell a single family residents first.
Before moving into what are your ability.
So.
Thanks.
Our experience with residents having to sell a primary residence was much more intense and the continuing care retirement communities and the entry fee business in particular as a note we sold the vast majority of the entry fee communities at the end of January and so that is less exposure that we have today.
When we did at the beginning of the year now we recognize that most of our residents fund there.
Today with us through pensions and other fixed income savings and so we haven't necessarily seen that resident have to sell their home to afford our services.
But we do think that the ability to sell at home and to convert those assets into.
Cash is helpful to us if that makes sense.
Okay I appreciate the color. Thank you thank Steve.
Your next question comes from the line of Jason Plagman with Jefferies.
Hi, Jason.
Hey, good morning, just wanted to.
About how you're thinking.
Thinking about you know you know the timing or milestone you know the you're kind of monitoring.
That will indicate when you you think you getting your you'll be comfortable ramping up sales activities or move ins might start to.
Increase on a month over month basis returned to more normal pace.
Ending on you know testing or additional five you just wondering.
What we can kind of that.
The the milestones that.
You want to see before we start resumed normal more normal sales activities.
Thats a really good question, Jason just for the first thing all recognize is this a 24 seven nature cobot Nike to create a lot of panic in the U.S. and that was something that I think was difficult for not just our resident families. But also for our associates. So I think that is cobot 19 is not.
On the news 24, seven that's important for US I think the second thing is as the economy starts to reopen I think thats good for our business.
In terms of live events because as.
People were sheltering in place at home it was perhaps easier to take care of mom or dad, when they were home and it will return to a little bit more of a normal activity as not now from an infection perspective at the economy reopened we have to be very careful to increase our vigilant.
As there theres more community why transmission, so we take that into consideration as well, but one of the things that we have done is we have announced that we would like to do testing of all of our residents and associates in our communities. We believe that this is important to demonstrate quality. If there is someone who is impacted by cobot 19.
And we want to segregate those and prevent the spread.
The virus within our communities, but we believe that testing is a big part of the answer now once testing is widely available and to the extent that we can test new residents and visitors and residence and a focus in the community I think that gives us a much easier way to open up our communities because if you know that somebody does not.
So a risk to your residents and associates, it's easier to let them into the communities and it certainly hard to move into a community. Knowing that you may not be able to see your family other than through a window or virtual visit. So I think once we get testing in place that will be very helpful for our business.
I think the other thing that will be helpful is understanding how to treat.
People, who do get the virus, particularly in our age for age range.
So if there is either a vaccine for their or improve treatment protocols that will help us as well because the risk based decision that people need to make and so all of those things will help.
That's helpful and then.
Being any early signs of some resumption of.
More normal sales pipeline in some of the states that have begun to reopen for.
Florida, and Texas, a couple of your largest Dave just wondering if if youve seen any change in in the last couple of weeks in those states as they'd be unted reopened somewhat.
So most of our new events occur at the end of the month, so I wouldn't want to take any trends from that but what I can tell you is our salespeople are much more optimistic today than they were four or five weeks ago and it feels like the economy reopening is allowing things to get to a little bit more of a normal.
Pace now I don't want to say that that May move ins are giving on all because I still expect our move ends in may to be down, but I do think that the kind of the discussion of the sales team the tenor of that seems to be improving somewhat.
Okay, and then last one from me.
As far as the you know that the discussing about potential support from.
Congrats.
Any color you can provide on.
Potential methodology that how that would work would it be on a per unit basis or just what's being discussed them just trying to think through how.
Any potential funding could be.
Allocated.
The allocation to date for for the other like hospital and home Health Hospice has been done based on revenue and I think thats because the revenue data was readily available given that it came from Medicare what the industry has requested is that the.
The release come in an effort he basis and I think that recognizes the more intense nature of assisted living our memory care.
Then independent living so there's a bigger impact for for the code 19 response, but I can't tell you what will ultimately happen.
The one thing that I'm sure about is that there are a lot of people lobbying and a lot of industries trying to get government support and so until the until the government decides how it wants to handle it HHS in particular, we just won't know if we're going to get support and if we do get support.
How it will ultimately be determined.
Okay that makes sense. Thank you were talking about it's we're talking about Jason once a support one thing I do want to mention we try to put this in our investor presentation on page 10, you'll know that we got $29 million public health and social services Emergency fund that supports hospice home health and.
Yes, and the way that that allocation was done is it was done based on 2019 revenues now I'm not sure that really gets keep all the money that we have received we're still working through the specifics of what are the requirements for that so I just want to be clear that even once you get the money. There's no guarantee that you get to keep all of it and certainly.
The.
Medicare accelerated advanced payment program and the payroll tax deferral program those are going have to be repaid some over a shorter period than others.
Yeah got it thanks. Thank you.
And your last question comes from Josh Raskin with.
Fraud research.
Hi, guys. Thanks, Hi, good morning.
First question just on conversations you've had with briefs and I know you guys have lastly, huge process of doing this in recent years, but has there been any more recent conversations around opportunities for terms or flexibility or just any sort of color on on what you're hearing from them.
So you know we've noted.
That some of the rates have given rent deferral.
For operators that have significant liquidity issue.
We have not.
Yet had any discussions with three.
But we do recognize that the environment changed dramatically as result of covered 19, and so that's something that is recognized we also recognize that retailers are having discussions with their landlords.
Rent concessions and so clearly it's something that we had on our radar screen, but I can't make any commitments as to what if anything could happen.
Should I read into that positively that you guys don't feel like you're at the point, where you need to have that conversation has got a fair way to characterize that I think it's fair to say that we've got strong liquidity and as you know Steve mentioned that we have taken some very significant actions to preserve our liquidity.
Including drawing our credit line, we were pleased that our liquidity was bolstered by our health peaks transaction, we have adjusted our Capex, primarily because we don't necessarily want to introduce additional risk into our communities, but also to help our liquidity and then we suspended our share repurchase in the middle of March too.
Bolster our liquidity so certainly we're paying attention to all of those things.
But I don't think that were in the same position as many operators who are trying to figure out how to fund payroll and acquire the supplies they needed to fight the coping 19 pandemic.
That's perfect and then just last question for me on the competitive environment slashed reaction to this I'm just curious if there's been any marketing across the industry. If everyone just sort of shut it down has there been any discounting or any actions to try and improve.
Attention or slow down move outs is is it just simply not a price conversation at this point.
I can only speak to us. This is not about price. This is about quality. This is about protect.
Our patients our associates, we provide strong value for the services that we charge and so our our approach has then to be paid fairly for the services that we offer.
You know I'm sure there are people in the industry, we're discounting, but I haven't talked to them and and I think that that would be shortsighted.
Because this is not an issue of price. This is an issue of protecting our nation seniors and getting good value for the services seniors can have a better life and have support for the things that have become harder for them.
That's perfect.
You so much.
Thanks, Josh.
Yes, no further questions at this time.
So thank you very much for joining our call today I am extremely passionate that an extraordinary times like this pandemic. Our team has demonstrated the strength of humanity through kindness and devotion to our below residence patient and associates.
Our business has been and we'll continue to be taking care of people people taking care of people. We are making a difference in the fight against cobot and I am so very proud of our Brookdale team.
Thank you that concludes our call.
Ladies and gentlemen, this concludes today's conference call. Thank you for participating you may now disconnect.
Okay.
Thanks.
Well.
Hi.
Okay.
Hi.
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