Thank you for standing by. My name is Kate, and I will be your conference operator today. At this time, I would like to welcome everyone to the Ensign Group, Inc., First Quarter FY 2025 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. Thank you. I would now like to turn the call over to Mr. Keetch. Please go ahead.

Thank you, operator, and welcome, everyone. We filed our earnings press release yesterday, and it is available on the Investor Relations section of our website at ensigngroup.net. A replay of this call will also be available on our website until 5:00 PM Pacific on Saturday, May 31, 2025. We want to remind anyone that may be listening to the replay of this call that all statements made are as of today, April 30, 2025, and these statements have not been, nor will be updated subsequent to today's call. Also, any forward-looking statements made today are based on management's current expectations, assumptions, and beliefs about our business and the environment in which we operate. These statements are subject to risks and uncertainties that could cause our actual results to materially differ from those expressed or implied on today's call. Listeners should not place undue reliance on forward-looking statements and are encouraged to review our SEC filings for a more complete discussion of factors that could impact our results. Except as required by federal securities laws, Ensign and its independent subsidiaries do not undertake to publicly update or revise any forward-looking statements or changes arising as a result of new information, future events, changing circumstances, or for any other reason. In addition, The Ensign Group, Inc. is a holding company with no direct operating assets, employees, or revenues. Certain of our independent subsidiaries, collectively referred to as the Service Center, provide accounting, payroll, human resources, information technology, legal, risk management, and other services to the other independent subsidiaries through contractual relationships. In addition, our captive insurance subsidiary, which we refer to as the Insurance Captive, provides certain claims-made coverage to our operating companies for general and professional liability, as well as for workers' compensation insurance liabilities. Ensign also owns Standard Bearer Healthcare REIT, Inc., which is a captive real estate investment trust that invests in health care properties and enters into lease agreements with certain independent subsidiaries of Ensign, as well as third-party tenants that are unaffiliated with the Ensign Group. The words Ensign, company, we, our, and us refer to The Ensign Group, Inc. and its consolidated subsidiaries. All of our independent subsidiaries, the Service Center, Standard Bearer Healthcare REIT, and the Insurance Captive are operated by separate independent companies that have their own management, employees, and assets. References herein to the consolidated company and its assets and activities, as well as the use of words we, us, and our and similar terms are not meant to imply, nor should it be construed as meaning that The Ensign Group has direct operating assets, employees, or revenue or that any of the subsidiaries are operated by The Ensign Group. Also, we supplement our GAAP reporting with non-GAAP metrics. When viewed together with GAAP results, we believe that these measures can provide a more complete understanding of our business, but they should not be relied upon to the exclusion of GAAP reports. A GAAP to non-GAAP reconciliation is available in yesterday's press release and is available on our Form 10-Q. And with that, I'll turn the call over to Barry Port, our CEO.

Thanks, Chad, and thank you, everyone, for joining us today. We are thrilled to announce another record-setting quarter achieved by our local teams. In spite of all the industry noise, our results this quarter demonstrate that we've never been stronger, showing yet again that sound fundamentals, coupled with incredible passion, can forge consistency even in an ever-changing environment. Our operators set several all-time highs during the quarter, which are only made possible by strong clinical outcomes achieved by our dedicated team of caregivers and frontline staff. During the quarter, we saw substantial growth across all of our buckets and in almost every market we serve. More specifically, we achieved an all-time high in same-store and transitioning occupancy, which increased to 82.6% and 83.5%, respectively, over the prior year quarter. We also saw skilled census increase for both our same-store and transitioning operations by 7.6% and 9.9%, respectively, over the prior year quarter. In addition, our managed care census grew by 8.9% and 15.6% for our same-store and transitioning operations, respectively, over the prior year quarter. All of these improvements are the result of many factors, including the relentless efforts by our local leaders to share and implement best practices that lead to stronger outcomes and earn the confidence from our residents, acute care partners, ACOs, and managed care networks. While the quarter was strong, we're even more excited about our results because they were achieved while simultaneously adding 47 new operations since January of 2024 across almost every market we serve, some of which are already performing at or above our expectations. The combination of improvements in occupancy and skilled mix in our more mature operations and the long-term upside in our newly acquired operations shows the enormous organic growth potential in our existing portfolio. We continue to attract and develop caregivers and leaders and are building a formidable bullpen of caring and passionate partners who are determined to live our mission to dignify post-acute care. In addition, we continue to see improvements in turnover and limited use of agency staffing labor, all of which are critical to maintaining our cultural values and continuity of care. After such a strong first quarter, including some faster-than-expected contributions from some of our newly acquired operations, we are raising our annual 2025 earnings guidance to between $6.22 and $6.38 per diluted share, up from $6.16 to $6.34 per diluted share. The new midpoint of this increased 2025 earnings guidance represents an increase of 14.5% over our 2024 results and is 32% higher than our 2023 results. We're also increasing our annual revenue guidance to $4.89 billion to $4.94 billion, up from $4.83 billion to $4.91 billion to account for our current quarter growth and acquisitions we anticipate closing during the first half of 2025. We are excited about our start to the year and are confident that our partners will continue to manage and innovate while balancing the addition of newly acquired operations. We are eager to continue to drive organic improvements and take advantage of the acquisition opportunities that we see on the horizon. When we consider the current health of our organization, combined with our culture and proven local leadership strategy, we are well positioned to continue executing our operational model. With all that said, we see so much more room for further improvement, and we continue to optimize operational efficiencies, expand services, and create new partnerships, all of which will drive further improvements in occupancy and skilled mix. We look forward to continuing to build on the momentum from the first quarter into the rest of the year as we continue to successfully unlock value and opportunity in the dozens of recently acquired operations. This performance is not due to some large events or single transformative transaction, but instead is the result of steady and consistent growth and performance quarter after quarter, which comes from a collective belief and a commitment held by all of our partners to expand our mission in a methodical and thoughtful way. Next, I'll ask Chad to share some additional insights regarding our recent growth.

Thank you, Barry. We continued our steady pace of growth by adding 19 new operations, including 8 real estate assets during the quarter and since. These include the following: one in Alabama, one in Oregon, one in Washington, one in Texas, two in Alaska, two in Arizona, three in California, and eight in Tennessee. In total, we added 1,906 new skilled nursing beds and 200 senior living units across eight states. This growth brings a number of operations acquired during 2024 and since to 47. We are very excited to add density to one of our newest markets in Tennessee and to add our first operation in Alabama. When we enter into new states, we tend to see an uptick in opportunities in those geographies. We are seeing more opportunities to deepen our presence in the Southeast and expect to do so over time. We're also excited to grow in Oregon and Alaska for the first time. As with our other new states, our entrance into these new markets have been driven by proven Ensign leaders who are committed to and have a connection with the new geography. As we have seen and said before, when we go into a new state, we typically look to start with one or two buildings to establish a solid launching point for more growth. This has played out time and time again with our most recent example being Tennessee. These footholds eventually lead to growth into multiple clusters, which will eventually comprise a sizable market. We look forward to bolstering our presence in those markets over time. In the meantime, we continue to prioritize growth in our established geographies as it allows our clusters to provide a comprehensive solution to the health care needs in those markets. While we continue to evaluate new states that fit our criteria, we will prioritize growth in our established geographies. This not only allows us to deepen our commitment to those markets but because our transitions don't rely on a centralized acquisition team, our growth is not limited by typical corporate bottlenecks. Instead, we look to the local cluster partners to implement the transition plans. So, while our pace of growth remains strong, the distribution of our growth across many markets leaves us with significant bandwidth to grow in most of our markets. We still see significant opportunity to continue to add meaningful density in the markets we know best and are making progress on several additions that we expect to close in the next few months. Our local leaders continue to recruit future CEOs for Ensign affiliated operations, and we have a deep bench of CEOs in training that are eagerly preparing for an opportunity to lead. We still see evidence that many operators in this industry are struggling, and we expect the operating environment will translate into many near-term and long-term opportunities to both lease and acquire post-acute care assets. However, we do not set arbitrary growth goals and will remain true to our disciplined acquisition strategy. We only grow when we have the right leaders in place and the pricing is right. The scalability of our growth model, our healthy balance sheet, combined with numerous opportunities we see in our existing footprint, give us enormous potential to continue to apply our proven acquisition and transition strategies in 2025. We anticipate the current rate of acquisitions to continue this year and remain committed to staying true to the proven deal criteria that has allowed us to grow in a healthy and sustainable way. We continue to see more opportunities to acquire new operations, and our focus is to carefully choose the acquisitions that will be accretive to our shareholders, both in the near and long-term. We are also providing additional disclosure on Standard Bearer, which added 13 new assets during the quarter and is now comprised of 137 owned properties. Of these assets, 104 are leased to an Ensign affiliated operator and 34 are leased to third party operators. Going forward, Standard Bearer will continue to work together with its operating partners at Ensign to acquire portfolios comprised of operations that Ensign would operate and facilities that third parties are interested in operating under a lease. Collectively, Standard Bearer generated rental revenue of $28.4 million for the quarter, of which $23.9 million was derived from Ensign affiliated operations. For the quarter, Standard Bearer reported a $17.1 million in FFO as of the end of the quarter and had an EBITDAR to rent coverage ratio of 2.6 times. And with that, I'll turn the call over to Spencer, our COO, to add more color around operations.

Thanks, Chad, and hello, everyone. Today, I'm excited to share two facility examples that illustrate the consistent operational momentum that we are seeing as local teams continue to respond to stakeholders in their communities. I hope that these real-life examples can help explain why we feel so encouraged by our Q1 results. I'm confident in the ability of our model to continue to produce exceptional results going forward, regardless of external forces or challenges that may exist. The first example comes from our transitioning bucket. Lomita Post-Acute Care Center located in the Los Angeles California area, and led by Executive Director, Kyle Armstrong; and Director of Nurses, Carlos Polanco. This 68-bed skilled nursing facility was acquired during Q1 of 2023. During the recently closed quarter, Lomita's revenues increased by 17.7% and EBIT improved by an impressive 86.4% compared to Q1 of 2024. Over the same period, occupancy grew by 2%, but the bigger story was the facility's strategic growth in skilled mix. For example, Medicare days increased by 19.8% and managed care days grew by 85.7%. This growth in skilled census was made possible by the facility's commitment to quality, which is evident in it being the only skilled facility in its geography that carries a 5-star quality measures and a 5-star overall rating from CMS. The 5-star ratings have given the Lomita team's strong credibility with the health plans, the hospitals, and discharging facilities in their area. Another major factor in Lomita's financial success has been their ability to improve the continuity of care and reduce labor costs through improved staff retention. During Q1, Lomita reduced its caregiver turnover by 36% compared to the prior year quarter. This workforce stabilization directly decreased onboarding and overtime costs, and in turn, increased EBIT margin. But most importantly, it's resulted in a healthy work environment where caregivers can trust their coworkers, build clinical competency, and achieve great healthcare outcomes for the residents they serve. And the second facility to highlight I want to share represents the exciting same-store growth that continues to occur in facilities that have been part of the organization for a long time. Copperfield Healthcare and Rehabilitation in Houston, Texas is a 124-bed that was acquired in 2016. During the period following transition, Copperfield made steady clinical and financial progress. However, during the past year, the facility has truly transformed into the community's facility of choice. Under the leadership of Roohi Kapoor, CEO; and Wanda Preston, Director of Nursing. For example, in Q1, Copperfield averaged 90.7% occupancy, an increase of 11% over the prior year quarter. To give some context, the average occupancy for non-affiliated SNFs in the state of Texas is under 64%. During that same period, skilled Medicare days grew by nearly 43%, while the already healthy managed care census improved by 14.8%. As you would expect, there's a clinical story behind the strong increases in skilled mix that Copperfield has achieved. In a medical hub like Houston, health plans and hospital systems demand quality from their post-acute partners, and Copperfield's ability to maintain CMS 5-star quality measures and overall ratings has provided the facility access to contracts that are closed to most providers. Notably, many of the Medicare lives in Houston are now being managed through ACOs, which means that the hospital systems can be at financial risk if the patients they discharge have poor health outcomes or return to acute hospitals. Similarly, managed care plans in the area have narrowed their networks and are guiding their members needing post-acute care to providers like Copperfield that score high on quality outcomes. As acuity has increased, Copperfield's multidisciplinary clinical team has partnered with and even received training from their acute hospital partners, which has empowered Copperfield to confidently care for patients with medical conditions and equipment that would overwhelm most SNF-level care teams. As demonstrated by both Lomita and Copperfield, it's a very exciting time to be in post-acute care. There continues to be strong demand for quality care, and as facilities like Lomita and Copperfield demonstrate clinical competency and willingness to partner with hospitals and health plans, they are rewarded with higher occupancy, improved payer mix, the ability to provide life-changing outcomes for more and more patients, and staff. And with that, I'll turn the time over to Suzanne to provide more detail on the company's financial performance and our guidance, and then we'll open up for questions.

Thank you, Spencer, and good morning, everyone. Detailed financials for the quarter are contained in our 10-Q and press release filed yesterday. Some additional highlights include the following: GAAP diluted earnings per share was $1.37, an increase of 15.1%; adjusted diluted earnings per share was $1.52, an increase of 16.9%; consolidated GAAP revenue and adjusted revenues were both $1.2 billion, an increase of 16.1%; GAAP net income was $80.3 million, an increase of 16.6%; adjusted net income was $89 million, an increase of 18%; other key metrics as of March 31 include cash and cash equivalents of $282.7 million and cash flow from operations of $72.2 million. During the quarter, we spent more than $190 million to execute on strategic growth plans, most of which have been in the works for months. We made this investment from a position of strength, as shown by our lease adjusted net debt-to-EBITDA ratio of 2.13 times, after taking these investments into consideration. Our continued ability to maintain low leverage even during periods of significant growth is particularly noteworthy and demonstrates our commitment to disciplined growth as well as our belief that we can continue to achieve sustainable growth in the long run. In addition, we currently have approximately $570 million of available capacity under our line of credit, which when combined with cash and investments on our balance sheet gives us over $1 billion in dry powder for future growth. We also own 143 assets, of which 137 are held by Standard Bearer and 119 are owned completely debt-free and are gaining significant value over time, adding even more liquidity to help with future growth. The company paid a quarterly cash dividend of $0.0625 per common share. We have a long history of paying dividends and have increased the annual dividend for 22 consecutive years. In addition, as one of our many ways to deploy capital, we recently completed a $20 million stock repurchase program, we believe at attractive prices. As we've done in the past, we'll always consider stock repurchases when we feel the market is undervaluing our shares. As Barry mentioned, we are increasing our annual 2025 earnings guidance to between $6.22 to $6.38 per diluted share and our annual revenue guidance to $4.89 billion to $4.94 billion. We had evaluated multiple scenarios and based on the strength in our performance and the positive momentum we have seen in occupancy and skilled mix, as well as the continued progress on labor, agency management, and other operational initiatives, we have confidence that we can achieve these goals. As 2025 guidance is based on diluted weighted average common shares outstanding of approximately 59.5 million; a tax rate of 25%; the inclusion of acquisitions closed or expected to be closed through the second quarter of 2025; the inclusion of management's expectations on Medicare and Medicaid reimbursement rates net of provider tax; with the primary exclusion coming from stock-based compensation. Additionally, other factors that can impact the quarterly performance include variations in reimbursement systems, delays and changes in state budgets, seasonality in occupancy and scope mix, the influence of our general economy, census and staffing, the short-term impact of our acquisition activities, and variations in insurance accruals and other factors. With that, I'll turn it back to Barry.

Thanks, Suzanne. As we wrap up, we can't emphasize how, again, incredibly honored and grateful we are to work alongside our operational leaders, our field resources, our clinical partners, and our service center team that are behind these record-setting results. We never cease to be amazed by their impressive resiliency, innovation, and passion. Their commitment has blessed the lives of so many, including our own, and we're excited about our future because of these amazing partners. We have complete faith in them and in the culture that they have collectively built. Now we'll take some questions. Kate, can you instruct us on the Q&A procedure?

Your first question comes from the line of Ben Hendrix with RBC Capital Markets. Please go ahead.

Great. Thank you very much, guys. And thank you for the color on Lomita and Copperfield. I wanted to follow up on a couple of points there, specifically the comments you made around managed care contracting and the narrowing of networks. Just maybe you can give us an overview of what you're seeing broadly in terms of the appetite for value-based and outcome-based contracts and how that's helping you guys gain a little confidence in supporting this guidance raise? Thanks.

Great question. We have a long history with this. Managed care isn't necessary for improvement. While many others may avoid managed care, we've been patient. By forming partnerships with managed care organizations and fostering a local connection through our leadership, we can establish a stronger relationship that leads to mutual success. The examples Spencer provided illustrate our goal of deepening partnerships to create a win-win scenario for both managed care organizations and our local facilities. It really comes down to local discussions on how we can support each other in improving the clinical outcomes for their members and our patients. When we maintain a focus on clinical improvement, the financial benefits typically follow. We aim to continue developing and enhancing these relationships through our managed care and SGR teams, working closely with our facilities.

And I think just to add a tiny bit more color on that is that what's important is that you combine all of that, the relationships, the drive, the understanding of the market and the environment with a sophisticated back office that allows leaders to see real-time metrics and share some of those metrics with their partners and work in collaboration to achieve the outcomes for the members that they're driving and hoping for, creating an opportunity where you have a partnership between local leaders and those managed care plans that ultimately drives volume because of their ability to take a sicker patient profile and achieve what's expected.

Thank you for that. Following the guidance raise, we are receiving numerous questions about your positioning in relation to policy. I apologize for the necessary policy inquiry, but could you share your current thoughts on potential developments from Washington, your positioning, and specifically regarding the possibility of supplemental Medicaid? Thank you.

Yeah, no problem. We're totally transparent and open about our thoughts on this. We are approaching this in very much the same way we did with the staffing minimum issue that we've dealt with over the last year or so, which is to say that we are actively involved in the advocacy process. I personally met with leaders in both the House and the Senate. Our association has been enormously efficient and effective at setting up meetings to educate members of Congress and help them understand the implications of any potential changes or discussions around certain funding aspects, whether it be provider tax-related or directed payments to states, and they've been great meetings. There have been some light bulb moments where we've had members of Congress come into a new understanding of how some of these programs that have been around for 30-plus years that have been CMS approved every rate cycle, how they work and why they work the way they do. There's certainly opportunity for change in the Medicaid program, and we know that, and they know that. But our approach right now is to make sure they're fully educated and understand what's good for funding to the industry and what is potentially harmful because they don't always necessarily see how everything trickles down and functions. And they've been incredibly receptive. I'd highlight that President Trump has been very direct about his view of the Medicaid program and his protection of it. I think members of Congress are hearing that loud and clear. As we sit here today, what we feel like, as far as the direction things are headed, is that there's more of a focus on the expansion population, even news you heard about yesterday on per capita caps and other ideas are all primarily targeted towards the expansion population and not to the original recipients of the Medicaid program that were intended for, and that's what we see the trends, at least in the last week or two are positive. This won't be done soon. The reconciliation process will probably continue through July at least. We'll continue to stay very active and involved in the process and make sure that we continue to make sure our voices are heard on all of these issues.

To add, we were not significant beneficiaries of that expansion population. So this aspect is promising for us if that remains the focus moving forward.

Thank you. Good morning. First question, the $200 million investment spend this quarter set a record in company history. I think it was made from one health system seller. There was another $1 billion portfolio transaction in February. Are you seeing any changes in deal volume, marketing dynamics, or any seller mentality changes? In other words, how sustainable do you think the current pace of investment is in the next 12 months? And then if you could comment on the mix between real estate versus lease deals in our investment pipeline?

Yes. Thanks, Tao. So certainly, it was a strong quarter from a perspective of putting capital to work for sure. In terms of the deal flow, I would say it's really just a continuation of what we've seen over the last year to 18 months, and that's just a lot of stuff for sale all the time. So there's more deals out there than we could ever do. And so we're, as I said in my prepared remarks, sticking to our principles and our disciplined approach there and remain very selective in the deals that we underwrite and ultimately consummate. The $200 million investment in the quarter was mostly driven by the fact that a lot of our deals were real estate. And as you know, and those that have been following us know well, if we have a wish list, our first desire would be to own the real estate and operate it with an Ensign-affiliated operator. Our second priority would be to get into a lease and have an Ensign affiliated operator operate it. And then the third would be to buy the real estate and then have a third party enter into a lease with our real estate entity. And I think the deal flow, as you look through our press release, you'll kind of see how those priorities lay out. This particular quarter, there was more real estate than I would say as usual, but we're always trying to achieve that. So certainly, our cash position and the amount of liquidity we have from, as Suzanne mentioned, our revolving line of credit, we have tons of dry powder to continue on that pace. I will say that the deals that we have for the remainder of the year, at least the ones that we have visibility into right now are probably more lease-focused than real estate. And again, we're just opportunistic about how that mix plays out. But certainly excited about the opportunities that are in front of us. And the real focus and the real question is making sure that we have a leadership pipeline that's ready to go to take on these operations, and that still remains kind of our most important, I guess, the limiter on growth is talent, less so on capital.

Appreciate the color. My second question is on staffing. Your portfolio occupancy is at a record high. I think it's 200 basis points above pre-pandemic lows. Skill mix is also higher than 2019. But if we look at nursing facilities just broadly, they haven't fully recovered, and there is intense competition with other health care settings, particularly for skilled staff. I'm wondering if you could comment on, number one, whether there are still staffing constraints or pressure points that limit admissions, particularly around skilled patients? And second, where do you think occupancy will need to be when we will see accelerating operating leverage, assuming a linear relationship?

Yes, it's a great question, Tao. From a macro perspective, when you consider the number of workers who left our sector during COVID, it has not fully recovered. There are fewer workers in post-acute care and specifically in skilled nursing compared to before the pandemic, while other sectors have seen recovery and growth. However, we may be an exception to that trend. While our recovery is not completely finished, we are close to pre-pandemic levels in agency staffing. Our turnover is consistently improving, and our pace of wage inflation has returned to pre-pandemic levels. I refer to our operators and leaders in the field, who have successfully stayed ahead of the curve in finding talent and managing to maintain occupancy levels without compromising on staffing. They have been able to fill positions, which gives us high confidence that they will continue along this path without needing to rely on agency staffing. The trends over the past several months support this, as agency staffing decreases while our overall occupancy increases. You are correct to note the demand is there. I wouldn’t say we are limiting admissions due to staffing because our leaders have effectively filled positions and keep operations running smoothly.

If I may, regarding the second part of my question, I understand that some senior living operators consider 85% occupancy to be a key threshold for achieving increased operating leverage. In your experience, is there a similar key number for skilled nursing?

No. No, we don't see some magic number. In fact, I think we see the organic upside is something that has always been an opportunity that we've been deliberate in explaining to folks even if we had to stop growing through acquisitions because of pricing or leadership concerns, we see facilities with all of that upside to take advantage of that could keep our growth moving for several years even. So no, we don't see a cap. We don't see a sweet spot. We see facilities that continuously move. If you were to take our same-store operations and examine them closely, you would see a pathway or movement kind of to higher and higher occupancy over many, many, many years. And so that's why we have that confidence because we see how that's played out over the course of our history.

Yes. And on the leveraging question, I think we have seen kind of like that catch-up. First, we're trying to add for agency. Second, we've been trying to rightsize where the wages are at on an individual basis. And I think you saw that through last year. All of our commentary through last year was, hey, we're still having to have and we’re running after wages. This year, what we're saying is that we see stability now. And so I think stability after stability becomes the ability to leverage after the leveraging points. And so I would say, right now, we're in the stability phase. And then I think there's an ability for us to continue to leverage, especially if there's a recession. One of the things that happens for us is when there's a recession, we definitely see more opportunities on the nursing front and other things where people come back into the workforce, which creates even more leverageability in that cross-service line.

Thanks. Hi, everybody. Maybe just first to ask about a little further on your deal activity. It seemed like your enthusiasm level for what you're seeing in the pipeline at all is even a little increase. I wonder two aspects to that. Is the competitive landscape from your perspective, who you're seeing when you're looking at properties, is it somehow easing? Are you seeing a little less competition for deals right now? And then you mentioned moving into some new markets, particularly in the Southeast. I know the payment rates are generally for Medicaid lower down there, but labor rates are also lower. Can you get the same economics in some of those newer markets that you've gotten historically in some of your more established markets?

Yes. Great question. So in terms of the competition for deals, I would tell you that we haven't really seen that change. It's kind of the same usual suspects that we keep bumping into, and most of that, I would say, is probably private equity and other family-based funds and groups like that, which are frequently looking to buy in our space. So this last deal that involved the eight buildings in the Northwest, as an example, was a process that the Providence Health System was very, very selective in choosing who the buyer would be. And of course, the economics were part of it, but they did several interviews and toured our buildings and met with our leadership team, and they selected us as the buyer because of our operational history and reputation and our track record on closing successfully, especially deals from nonprofit faith-based sellers. So that's an example of one that we tend to win the deals that we want and that we think are fair. So yes, competition is really kind of the same, I would say. In terms of the Southwest or the Southeast, we are really excited about the market there. And certainly, labor dynamics play into that. And that's where, as Barry was talking about earlier, having local operators on the ground in those markets, having their input and their heavy involvement in underwriting all these acquisitions is really key to how we evaluate those dynamics of the labor environment and the rate environment that is unique to each market. We don't have to be the experts on that necessarily here, because they are. They're the experts in their particular market. And so with those folks who have gone to the Southeast to help plan a flag there leading the way, I fully expect that we can accomplish there what we have in some of our most mature states.

Okay. And maybe just one follow-up. I appreciate your comments earlier about all the noise out of Washington and how to think about that. I wondered in your discussions with states right now and what you're hearing regarding rate updates and so forth on the Medicaid side. Is any of that discussion or overhang of what's going on in Washington seeping into those discussions? Do you have a thought on what you're anticipating the composite Medicaid rate update across your portfolio might look like? I know there's a lot of mid-year updates. And how are they thinking about contingency planning for the discussion around all these variables, provider taxes, etc., that are under review in Washington?

Well, it's a great question, and there's an assumption there that the states act proactively when it comes to discussions around Medicaid funding. For the most part, we have not heard any proactive discussions nor had an invitation to be involved in any. I think most of that is justified. This environment around Medicaid discussions in Washington changes literally daily, and where their focus and attention is changes almost daily. Because of that, I don't think people are very slow to want to overly anticipate or overly react to one narrative or another that may or may not be included in the reconciliation process. So to answer your question, generally, no, there really hasn't been any meaningful discussion with the states, and nor do I feel like many of them are doing a whole heck of a lot to make adjustments until they have more clarity on what could be the potential changes for them. As for rate visibility, luckily, most of our rate cycles are kind of determined ahead of the year. And so throughout this year, we've got really good visibility into where things are headed regardless of what happens. So Suzanne, anything you want to add?

I like when you're starting to talk about states, we're always actively involved in talking to them about what's happening in the next rate-setting year, continuously educating them on what's going on at our local facilities and the pressures that we have or don't have in particular markets. I think that's a continuous process that we're actively involved in at the state level with the state rates that come in early Q3 and late Q3. But feel like those discussions are going overall very well and just helping to understand the environment.

Okay. Thanks a lot.

Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.