Good morning. My name is Toni, and I will be your conference operator today. At this time, I would like to welcome everyone to the Brookdale Senior Living Fourth Quarter and Full Year 2014 Earnings Call. [Operator Instructions] Thank you. I would now like to turn the call over to Ross Roadman. Sir, you may begin.

Thank you, Toni, and good morning, everyone. I'd like to add my welcome to all of you to Brookdale's Fourth Quarter and Full Year 2014 Earnings Call. Joining us today are Andy Smith, our Chief Executive Officer; and Mark Ohlendorf, our President and Chief Financial Officer. First, I would like to point out that all statements today, which are not historical facts, may be deemed to be forward-looking statements within the meaning of the Federal Securities Laws. Actual results may differ materially from the estimates or expectations expressed in those statements. Certain of those factors that could cause actual results to differ materially from Brookdale Senior Living's expectations are detailed in the earnings release we issued yesterday and in the reports we filed with the SEC from time to time. I direct you to Brookdale Senior Living's Earnings release for the full safe harbor statement. With that, I'd like to turn the call over to Andy.

Good morning, and thank you for being with us. We've talked to many shareholders and analysts since our pre-announcement last week and I want to begin by reiterating the key messages that we have conveyed. Most importantly, we remain fully confident in the long-term economic thesis behind our merger with Emeritus. In particular, we are confident that we will achieve our 3-year accretion expectations for the combined companies. Going into the transaction, we knew that there would be turnaround aspects to the Emeritus integration, including significant underinvestment in buildings, technology and systems. We also know that bringing capital and more sophisticated systems and processes to the Emeritus portfolio would be an important part of realizing the benefits of the merger so we made a conscious decision to move through the integration as rapidly as possible. Our fourth quarter CFFO was $0.53 per share, which was below our internal expectations. This includes a $0.06 per share of larger than usual insurance reserve adjustments, and we also experienced certain seasonal impacts during the fourth quarter, like the flu, which resulted in approximately 60 communities being closed to admissions for some period of time during December. However, we attribute virtually all of our missed to lower admissions and occupancy during the latter part of the fourth quarter, primarily in the former Emeritus communities. This occupancy softness in the fourth quarter, coupled with our expectations for a normal seasonal progression during 2015, dictated the need for the revisions to our guidance. The good news is that we just -- that we believe that we understand the root causes which relate to change management stemming from our integration activities. For example, we combine the organizations -- as we combine the organizations, we created a number of new reporting relationships for our sales and our operational…

Thanks, Andy. First, I'd like to make a few comments about the fourth quarter and then move on to some more details on our 2015 guidance. In the fourth quarter, Brookdale produced $0.53 per share of CFFO. That excludes integration, transaction-related and EMR expenses of $46 million. The fourth quarter includes approximately $11 million or $0.06 per share of insurance adjustments primarily related to some large settlements of prior period cases and a few large individual medical claims. The fourth quarter results were heavily influenced by the occupancy in the portfolio. Rather than look at the reported consolidated occupancy numbers, let me give you the occupancy data in a more meaningful and comparable manner, that is as if the third quarter transactions had happened on July 1. On that basis, our consolidated average occupancy decreased sequentially by 40 basis points from the third quarter of 2014 to 88.3%, ending with the average monthly occupancy in December of 88.1%. For the legacy Brookdale portfolio, the sequential quarterly change was a 10-basis-point decrease. However, the average occupancy in December was up 10 basis points from the average occupancy in September. For the legacy Emeritus portfolio, the sequential quarterly change was an 80-basis-point occupancy decline. However, the average occupancy for December declined 120 basis points from the average occupancy in September, reflecting the impact of the ongoing integration. Senior housing rates, as reflected in the reported same-community data for senior housing for the fourth quarter of 2014 showed a continuing trend of strong rate growth in the legacy Brookdale portfolio with a 3.9% increase in the fourth quarter versus the fourth quarter of 2013. For the legacy Emeritus portfolio, the year-over-year same-community rate growth was an increase of 90 basis points, similar to the last several quarters. Looking at the consolidated portfolio detail…

[Operator Instructions] Your first question comes from the line of Frank Morgan with RBC Capital Markets.

Certainly, a lot of talk at ASHA last week about the age of the physical plan out there in the industry and the need to reinvest, and certainly, it sounds like that's what you're doing with Emeritus. I was hoping you could give us a little more detail on the relative investments that you're making in that portfolio. And then maybe some color around how long you actually think it takes to see the impact of that investment in terms of occupancy.

Yes, good morning, Frank. You're right, it -- well, as you know from following the company, we have been talking about this particular topic for several years. And as you also know, that we've been beginning about 4 years ago, began a pretty heavy investment or reinvestment program into the Brookdale communities, which we believe has been quite effective for us and has shown good effect. We are running that same play with respect to the Emeritus communities, and I think you saw on our press release that we issued last week, we're expecting to refresh approximately 150 of their communities this year. So what is that? That's about a little more than 1/3 or right at 1/3 of their portfolio. The good news is that on this refreshing type of capital expenditures, we see and expect to see results in many cases beginning immediately. I mean, the fact that we tell our resident base and tell new prospects that we're investing in this capital into the communities and refreshing them to current standards is obviously helpful to the current sales process. And we expect that to help us both in terms of occupancy as well as in terms of the rates that we can expect. Did I answer your question? Frank?

Yes. My next question was related -- I think you referred to the fourth wave of the cutover coming and being completed by midyear. I'm just curious, is there any reason why that particular wave of this cutover could affect your sales activity, the coordination of that, or if there are any other structural issues that might impair your ability to experience that normal third quarter pickup that you see on move-in activity?

Well, obviously, we're taking steps to make sure, to the extent that we can, that our sales force and our marketing activities are isolated from the fourth wave of the rollout so that they can focus on their day jobs, which is to produce leads and then to move folks into our communities. So we're going to do what we can to make sure that those folks are able to be isolated in the [indiscernible]. That having been said, this is a -- this is an important systems and process cutover that we're going to undertake that will allow us to get the entirety of the platform onto Brookdale's systems. But we -- again, we're-- we believe that we've got a process in place that will allow us to achieve the guidance that we've articulated here for you, which include what we would expect to see in terms of seasonal growth in occupancy in the third and fourth quarter.

Okay. One more, and I'll hop. It's kind of accounting stuff. I wrote down accounting conformity impact. Could you maybe flesh that out just a little bit and explain what that was? And then finally, I think you said your guidance did not include the impact of unconsolidated JVs. And I'm just curious, what would that be? Is it just basically cash distributions off your interest in the joint venture coming back to the company? But if could you elaborate there, and I'll hop.

All righty. Your second question first. What we indicated is that our EBITDA guidance, our adjusted EBITDA guidance for the year, which we pre-announced last weekend and repeated today, of $930 million to $960 million does not include the CFFO that comes out of our unconsolidated ventures. That's $50 million to $55 million. We are going to change our definition of adjusted EBITDA to include the JV distributions on a go-forward basis. Historically, the distributions for the JVs have been a fairly de minimis number. But now with the scale of the HCP joint venture, it's much more meaningful. Though that is EBITDA-type earnings, so we're going to simply conform our definition of adjusted EBITDA to pick that up. The first question around accounting conformity, we're obviously putting the Emeritus business onto Brookdale accounting platform and using the Brookdale accounting methods and principles. Not a lot of big differences, but there are a few subtle differences. For example, Emeritus expensed the cost of unit turns. At Brookdale, we treat that as CapEx. So from a CFFO standpoint, there's no net impact but there's some modest definitional impact to that. There are 2 or 3 other items like that. And again, as we get through the year this year, the effect of that will be largely 0 in the second half of the year because we will have had pretty much a full year on the Brookdale accounting methods.

Your next question comes from line of Darren Lehrich from Deutsche Bank.

A few things. I guess I wanted to start with the Emeritus occupancy, and you gave us a helpful metric just around the 120-basis-point decline as of December versus September. I guess, just given how you're characterizing the integration and where you've progressed, I guess, would be helpful just to get a sense for whether December was the bottom and how that might compare to January for the legacy Emeritus to help us just think through where you are in some of the disruptions you're describing?

Yes. Well, I think I said in my prepared remarks that we began to see some normalization in December. And the -- now, against the backdrop, that this industry and, certainly, these 2 companies, we usually experience a seasonal softness in the first quarter, that stems from higher mortality rates, the death rate goes up there, greater degrees of move-ins -- I'm sorry, move-outs, that type of thing, what we normally see. But against that backdrop, we saw December beginning to normalize and the -- and I hesitate to draw any conclusions around 1 month, but if you look at the January's occupancy across the company and compare it to the prior 2 years, we will have done better in -- than both 2014 and 2013. We also have seen or have begun to see a normalization of our lead banks. Actually, our lead banks is slightly up when you take into account the duplication of the leads that both companies would have gotten previously. So again, I hesitate to -- I would just caution you to remember that we're expecting the usual seasonal softness for Q1, but the performance in January was better than the prior 2 years in terms of move-ins.

Got it. So just to understand what you're saying, the rate of change sequentially from the end of December to the end of the month of January, just the occupancy rate, the rate of change was a little better, even though it was down as we'd expect but a little bit less so than the last 2 years. Is that what you're saying?

No, no. What I'm trying to say is if you compare January of 2013, and -- or January of 2014 to January of 2015, again, hesitating to just draw any market conclusions around 1 month, but January of 2015 in terms of net move-ins, it was better than the prior 2 years.

Okay. And move-outs, would they be...

Net move-ins. So the net was better. Move-ins, minus [ph] move-outs, was better.

Got it. Okay, so that's the net number. And then my other question was just related to the EMR implementation. I know you're giving us, Mark, the $35 million to $40 million of integration and EMR costs. I guess, just wanted to separate out the EMR implementation for a second here, and can you just maybe update us on what the total project cost of that is and how much more is left to spend and then just confirm that, that's mostly geared to the SNF. And I don't know if you've expanded the scope of it, but just wanted to get a quick update there.

Okay. I admit to you, I don't have in front of me the historical project cost for the whole thing. So we would have to loop back to you on that. But from a rollout standpoint, we have completed the EMR rollout in the ancillary service business, Outpatient Therapy, Home Care, and there are some interplay there into the SNFs, particularly on the therapy side of things. We will be focused this year on rolling EMR into Nurse On Call. So the Brookdale Home Health business has been automated. We are now going to roll Nurse On Call onto the same platform, including EMR. And Emeritus have actually gotten fairly far down the road on EMR in their SNFs. We are going to use a platform similar to that and roll that into the Brookdale SNFs. So most of the activity this year will relate to EMR in the Brookdale Skilled Nursing portfolio and Nurse On Call. There'll probably be some initial work done around preparatory planning work on EMR in the assisted-living portfolio, though we don't have significant dollars contemplated for that this year.

Okay. And just the breakdown of the $35 million to $40 million, how much of it would split out between integration costs related to the transaction and then on the EMR itself?

Again, I don't have that in front of me. We'll have to get back to you. And quite frankly, it's a little bit difficult to separate out the 2. For example, in Nurse On Call, the platform is being integrated into the Brookdale ancillary service platform. EMR is a piece of that. But EMR then intersects with the way the back office works, the revenue cycle management and so forth. So I'll see if I can track those numbers down for you, but they'll be a little bit of a distinction without a difference.

Our next question comes from line of Brian Zimmerman with Goldman Sachs.

Just as a follow-up to Darren's question, I'm just curious, are you making any pricing concessions at the Emeritus portfolio that would -- that help bolster occupancy? It just seems like that pricing is a bit lower and just trying to understand that relationship a bit more.

Well, good morning, Brian. The pricing of the -- on the Emeritus portfolio has been significantly below the pricing on the Brookdale portfolio for the past several years. So there's no real change in that running through in the fourth quarter. Now as we try to rationalize our pricing by local markets and we try to gain pricing leverage, we're beginning to make changes around the pricing paradigms in the Emeritus portfolio, over time expecting the rate growth in that portfolio to begin to get closer to the rate growth that we've seen historically in the Brookdale portfolio. Right now, we're always running pricing programs and discounting programs based upon local market activities in what we're seeing in the market, but there's nothing that I would remark upon that happened in the fourth quarter that would be -- that would be something to remark upon at this point.

Right. I guess, you could just make the argument that as you make those investments in Emeritus and they are running below the company average that, at some point that, did that pricing increase could even be above the Brookdale portfolio given that they're playing a bit of catch-up. So just trying to understand the -- all the numbers you got here. And my second question's on...

Let me follow-up on that and to be sure that we underscore the fact that as we invest this capital into their communities, just like we experienced with respect to the Brookdale portfolio, we would expect to see pricing improvement in the Emeritus portfolio. We underwrite those investments to the yield and we have expectations of ourselves and of our field folks to make sure that we see pricing improvement as a result of those investments.

All right, that's helpful. And my second question is on I'd just like to get your updated thoughts on the potential for restructuring your real estate portfolio and whether you see this as a potential avenue to unlock value?

Well, as we've said many times, the real estate that we have on our balance sheet and that we own is a valuable component of our capital base. And we believe that our job is, obviously, to create value for our shareholders. So part of that is to constantly and continually assess our capital structure and how our companies organize, and that's a complex analysis, as you know from following the company. And as you also know, we've put a lot of work and a lot of effort into this over the past several years and we expect to continue to do so.

Your next question comes from the line of Joanna Gajuk with Bank of America Merrill Lynch.

A question here on the guidance. How much of synergies from the deal are you including in your guidance?

Not very significant numbers, Joanna. I mean, we are beginning to see some synergy impacts out of, particularly, the corporate side of the programs, things like the insurance programs, for example. We're beginning to see some of the overhead synergies as we migrate onto a common system and process platform, but I would not say net-net, there are very dramatic numbers coming through 2015.

And also, on the -- I'm not sure if I missed that, but on the benefits you expect to see in this year from the investments you've been making in the legacy Emeritus assets, how quickly you expect this benefit to sort of occur? Are you already starting those renovations as we speak now? By now, you'll have a couple of buildings already sort of done, or any color you could give us on the timing of things here?

Sure. Well, we're aggressively attacking the CapEx in that portfolio. I think if you look at our rate guidance for next year, we're talking about rate growth across the entire company of roughly 3.5%. In the last quarter, those same-store numbers were 3.9% in the Brookdale portfolio and 90 basis points in the Emeritus portfolio. So to get to that overall 3.5% number in 2015, we have to be seeing some rate acceleration of the Emeritus side. I honestly don't have those numbers in front of me split between the 2, but clearly, partly because of the CapEx, partly because of integrating the brand and the sales systems and a number of other factors, we are expecting to see better rate performance in the legacy Emeritus properties in 2015.

And lastly, did I hear right -- did you give the occupancy sort of short fall versus prior expectation? Was it the 125 to 150 basis points?

Yes.

So this was for the consolidated portfolio or Emeritus?

It is for the consolidated company. There would be a disproportionate impact in the Emeritus portfolio.

The next question comes from line of Josh Raskin with Barclays.

So first question, just on the strategy and timing of the integration, and it sounds like, based on the press release last week and this week, you've sort of accelerated some of the integration efforts, and it certainly seems like that's creating some short-term pain, I guess. Are there any thoughts on slowing down the integration? Do you guys think, in hindsight, you might have moved a little too quickly?

Well, obviously, Josh -- first, good morning, Josh. Obviously, there was some unexpected negative effects around the change management that we've described here in the fourth quarter. That having been said, our goal for the Emeritus merger is always been directed at realizing the benefits that we see there in the $0.50 of accretion when coupled with the HCP transaction for the third year. So we adopted a philosophy of engaging in the integration as rapidly as we prudently could do so as opposed to metering the integration out over a longer period of time. Because we believe the more quickly that we get through this, the better-positioned we're going to be to achieve those longer-term benefits that we've described and that are included in our accretion estimates. So I don't think that we second guess -- well, I know that we don't second guess the speed with which we went through the integration to this point. And we feel good about the rollout of the fourth wave. And again, going back to a prior question, we believe that we will have our sales folks and our marketing teams positioned to avoid that level of change management, to have them isolated so that they can focus on their main jobs. So I don't -- we don't really -- we don't question the integration plan and we -- again, we feel good about getting through it.

Okay, that's helpful. The second thing, I was just a little confused on the occupancy. It sounded like, from September to December, you saw some improvement in occupancy at the Brookdale facilities but some deterioration at Emeritus legacy facility. And I was just curious what created that dynamic? What were the improvements seen at Brookdale that weren't seen in at Emeritus?

I'll let Mark speak to the numbers on that, but let me describe the dynamics to you with what we saw going through the quarter. Again, we rolled out the CRM system on the 1st of October, which is a large change to the folks out there in the field on -- in terms of how they access leads. It's not rocket science, but it does create some change management and causes people to learn how to access the pending lead file as rapidly as they can, how to triage between what's an A lead, a B lead and a C lead, those types of things. So we rolled that out in the 1st of October, and our occupancy in October in both portfolios was, I would say, adversely affected by the changed management and different in what it would have been if both companies had remained separate, but nevertheless, was within -- generally speaking, within expectations. And as you know, there's a tendency in this business across the industry for folks to move in. Most of the time, you see move-outs at the beginning of the month and move-outs at the end of the month.

Move-ins at the end of the month.

I'm sorry, move-ins at the end of the month. So as we went into November, which is, generally speaking, a soft month and almost always is a difficult month when Thanksgiving is at the end of that month, we saw a dramatic drop-off in move-ins. We just did not move in nearly the number of folks that we expected in the last -- the latter part of November. Once you've done that, you pretty well printed your results for December because of that dynamic of moving folks in at the end of the month. There you saw -- we saw -- while we began to see normalization in the move-in activity in December and we've began to see normalization of our lead bank in December and we've began to get back to what we consider more normal and more expected behavior, the results when you had that level of a drop-off in November and is pretty much setting you -- that is your December results, again, because of the dynamics of moving folks in. And that negative variance in November was primarily isolated in the Emeritus portfolio, which, again, we attribute to all of that change management that's going on in that portfolio.

Okay. That makes a ton of sense. And then, I guess, just last question, just following up on the real estate opportunity and the value there. Maybe I'll ask it a different way. I think a lot of people see the opportunity to create shareholder value through some sort of spinoff because cap rates have come down and you guys have obviously more valuable assets, great operator, all private pay. And then besides the carrot, you've got the stick of cash taxes coming in a couple of years. And so you've always talked about this is a complex formula, I guess, in terms of how you think about the value. So what are some of the countervailing forces? What sort of has held you back, I guess, at this point? Because I know it sounds like you guys have done a ton of work on this in the past.

Yes. Well, Josh, as you know, and as we've talked about many times and disclosed in the S-4 that we filed with respect to the Emeritus transaction, we went through a very rigorous process of thinking this through and we ended up deciding at least, at that point in time, that the right thing for us to do was to acquire Emeritus. That doesn't mean that the analysis ends. It doesn't mean that it's over. It simply means that at, that point in time, we thought the best thing to do to build value for our shareholders was to merge with Emeritus and generate synergies and the additional value that we think we can do by integrating the platform. That does not mean that the analysis around the real estate has stopped. But what it does mean is that we've got to be truly creating -- enduring value for the benefit of our shareholders. So the real estate has a valuation, has a value, and then the operating side of the business has a value. And you've got to make sure that you think if you were to do something structural, you have to make sure that you think that A plus B is worth more than the C you would get by keeping everything together. That is a complex analysis. How would the operations be valued, et cetera. And then there are a whole set of complexities, which we've talked with many of you about of what is the relationship between the operational side of the equation and the real estate side of the equation. That's an additional level of complexity that affects what you think you can do. So it -- and I don't need to be elusive on this, there's just a whole host of variables that have to be thought through in taking into account all directed at making sure if you were to do something, that you truly are increasing value for our shareholders. And again, I want to reiterate that we, the management team of this company, and our board absolutely believes that it's our duty to make sure that we're analyzing that in a way that is consistent with creating the most value that we can for our shareholders.

Your next question comes from the line of Brian Tanquilut with Jefferies.

Andy, just a quick question for you. Most of my questions have been answered already. As we think about the pricing versus occupancy dynamic, how do you strategically balance making a decision that we own? Because clearly, your pricing has been strong. How do you balance going after rate at the expense of occupancy? And I know this is a market-by-market decision, but from the head office perspective, what's your view on that?

Well, Brian, that's a good question. The way that we think about it is what we're really trying to do is to hit that efficient frontier of maximizing revenue, to state the obvious, right? And that's -- that obviously has 2 primary drivers to it, which is occupancy and rate and how they relate to one another. We have consciously, in the Brookdale portfolio over the last several years, we have been really trying to capture rate, which, in many ways, is the more powerful driver, at least over time, to capitalize the -- on the investments that we've made in the Brookdale portfolio. We expect to do the same thing in the Emeritus portfolio. Now obviously, you've got a balance. The -- there's an integral -- there's an obvious direct correlation in many cases between rate and occupancy, and we are always conscious of that because, again, we're trying to get to that efficient frontier in terms of maximizing revenue. And -- but we really do believe, over the longer run, getting rate is really going to be an important driver for this business as we move forward. Now, right now, in all frankness, in the many market where Emeritus and Brookdale directly competed in the past -- well, for the past many years, we are trying to get much more sophisticated and much more -- well, just much more sophisticated on our pricing methods, our pricing methodology and our pricing tools with respect to those markets. And I'd remind you that the way the laws work in this country, we couldn't -- the folks who do this work, both in the field and here at our corporate office, they couldn't even access the detailed sales data or marketing data for the Emeritus communities or vice versa until after we closed because of the way the antitrust rules work. So we've just begun that, this effort, to really finally get to a place where we feel like we can really maximize pricing while, at the same time, maximizing occupancy in these shared markets. And again, that's a unquantified but, in our view, huge upside to this merger which we expect to realize over time.

Got it. And then just a follow-up on that, Andy, or maybe for Mark. So as we think about the balance between occupancy and rate, I mean, which one, in your view, has a bigger impact on the margin at the facility level?

Well, obviously, rate. Now again, that's answering that question from the standpoint of a portfolio that's 88% or 89% occupied, right? I mean, structurally, long-term, we could have a fascinating debate about when are you full, right? I mean, is the portfolio full at 91% or 92%? But whatever it is, it's only another 2% or 3% of revenue growth or occupancy growth from where we are today. The cumulative effect of growing rates at 3.5% rather than 1% over a number of years is very significant.

Our next question comes from line of Daniel Bernstein with Stifel. Daniel M. Bernstein - Stifel, Nicolaus & Company, Incorporated, Research Division: Yes, I actually just wanted to go back over the rate question a little bit. When you look at the legacy Emeritus portfolio, do you think that portfolio was capturing all of the services that they could have provided to those residents? Obviously, when you get into the Assisted Living and Memory Care, big component of that rate is the services you provide. Is there upside to the rate by better capturing those services' needs of the residents at those facilities?

Well, again, Dan, as we've said, we believe there's an opportunity to improve the rate environment and the rate structure in the Emeritus communities. That's partly by pulling those -- that part of the platform onto our systems and our infrastructure, including the service levels that we provide, including the clinical protocols that we have at Brookdale. So that's part of the opportunity, especially when it's coupled with the investments that we're making in those communities, both in terms of the physical plan and the technologies and tool sets that we're bringing to that part of the portfolio. So it's all part and parcel. Daniel M. Bernstein - Stifel, Nicolaus & Company, Incorporated, Research Division: Okay. One part of many, right? And then when I look at the integration costs, EMR costs, looked at the ancillary services margin a little bit lower than we expected, and a bit pretty high G&A allocation and supplement, but can you break down the integration and EMR costs across -- between senior's housing in the ancillary services business a little bit so I can better understand what a normal margin would be for both businesses?

You're looking at the fourth quarter numbers? Daniel M. Bernstein - Stifel, Nicolaus & Company, Incorporated, Research Division: Yes.

Okay. I will admit to you that the things like the G&A allocation in the supplement, those numbers are continuing to be refined as we've now got both companies combined in one reporting structure here. So I would look at those as directional as opposed to extremely specific numbers. Now it is also the case that we are in the process of combining the structure in the ancillary service business, just as we have done probably 4 to 6 months ahead, from a timing standpoint, in the senior housing business. So that ancillary service business is not completely, but to a significant extent in the fourth quarter, 2 separate ancillary service businesses where we are reporting them together. So I think you'll see those numbers change as we go through 2015, and certainly, into 2016. In the fourth quarter, there was not a lot of EMR work ongoing. There was some preparatory work related to the Skilled Nursing that will roll out into the Brookdale platform as we get in to 2015. So again, I don't have the numbers right before me here, but the lion's share of that P&L cost would have been integration-related. Daniel M. Bernstein - Stifel, Nicolaus & Company, Incorporated, Research Division: Okay. But is it safe to say that the operating margin I'm looking at the at ancillary business in 4Q was impacted by some type of integration costs that you are normalizing out for the entire CFFO -- I'm just trying...

To some extent, and also by the fact that you do have 2 freestanding organizations operating on a freestanding basis so far. Daniel M. Bernstein - Stifel, Nicolaus & Company, Incorporated, Research Division: Okay, right. So the synergies have not been taken out?

Right. Daniel M. Bernstein - Stifel, Nicolaus & Company, Incorporated, Research Division: And then in terms of -- I may have asked this before, but the operating margin on the owned assets are very different than the operating margin on leased assets. Over the next 3 years, as you achieve that $0.50 of synergies, how should I think about the operating margins of the owned assets versus the leased assets? Should they be moving up at the same amount, same type of degree, 100 bps a year, whatever it would be? Or should I see that owned operating margin start to pull in versus the -- or equalize versus the leased operating margin in the seniors' house?

I honestly -- personally, I would not -- obviously, there are differences in our margins on a segment basis, right? The highest margins are in the Retirement Centers. Independent Living margins are higher than Assisted Living, which is higher than Memory Care, which is higher than Skilled Nursing. The portfolios are not perfectly ratably owned or leased, right, but there are functions of other things going on there. So for example, I suspect we own relatively more CCRCs than some of the other product types, okay? So the fact that there is Skilled Nursing -- and Brian, we can do more work on this to answer your question more directly, we'll follow up on it, but I suspect there are differences in the mix of product type here that would account for more of the margin difference than anything else. Daniel M. Bernstein - Stifel, Nicolaus & Company, Incorporated, Research Division: Okay. So what I'm think about going forward, it's not like the owned assets are suddenly going to get much, much better than the leased assets. They're kind of, as you integrate, they're both going to improve about the same level.

I would say that's a fair thing to say, Dan. And I would want to just a follow-up to what Mark said on that. We -- our operators and we, as a company, we operate our leased and our owned communities in precisely the same way. I mean, we don't just distinguish between -- and our operators in most cases don't even really reflect upon or even know that their assets may be leased. Now there is one slight exception to that, which is if we want to invest large capital into a leased community, then obviously, we have to have a conversation and reach an agreement with the relevant lessor in order to make those investments. But generally speaking, we are very intentional about making sure that we operate those assets on exactly the same basis as we operate our owned assets. Daniel M. Bernstein - Stifel, Nicolaus & Company, Incorporated, Research Division: Okay, okay. And then one last quick question. Just wondering, have you seen any unusual turnover in personnel post integration? Did that impact at all in the fourth quarter?

No, Dan. The -- we've actually been pleased and have done better to date. We have done better on -- than our underwriting and our expectations were in terms of retention. So we've -- we're actually pretty pleased with that, at least, at this point.

Your next question comes from the line of Ryan Halsted with Wells Fargo.

Going back to the accelerated CapEx, I guess, first, can you clarify which bucket of CapEx sort of reflects that accelerated spending?

It's going to be the major project in EBITDA-enhancing CapEx bucket that we talked about.

Okay. And my question would be how should we think about the accelerated nature of that, your categorizing it? Is this capital that you had earmarked for spending in the future that you're just bringing forward? And I guess, more specifically, does it, in any way, take away from spending that you may be had planned for Program Max?

The Program Max is pretty independent of this thought process. And quite frankly, the returns on Program Max tend to be sufficiently high that financing is never a barrier. Again, we don't own all of our assets. We lease a fair number of our assets. And if we have a project that is particularly attractive with high returns, our landlord wants us to do project too, right? The first question around the timing of the CapEx, I would think of this as bringing forward CapEx. On the Brookdale portfolio, we've been aggressively investing for really the last 4 years, and we're starting to see -- though we're still spending in pretty aggressive way, starting to see that we have kind of tipped over the peak CapEx levels. On the Emeritus side, we will invest on an accelerated level for a 3- or 4-year period. Again, as Andy said, we've seen the benefits of that on the Brookdale side and we plan to run the same play in the Emeritus portfolio.

Okay, great. And on the occupancy ramp over the year. Obviously, fourth quarter, you have some good targets. Just curious how we should think about third quarter if we look at the prior year third quarter '14 on an adjusted basis as if the transaction were closed July 1. Should we consider occupancy and rate growth similar in that occupancy build cycle?

Well, would expect Q3 and Q4 of 2015 to not suffer from some of the impacts that we saw in 2014. So we would be projecting a more normal seasonal growth pattern in 2015.

Okay. One last one. On the cash G&A, is there an expectation that you will be increasing, that you'll be spending more G&A in 2015? I'm just looking at the fourth quarter of $55 million and just curious if that's sort of the run rate, or are you assuming an increase in '15?

The G&A numbers are coming in pretty much right on top of our underwriting. So no real change from expectation there.

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

Sorry, I'm all set. So I appreciate it and will end it there.

Okay. I would like to turn the call back over to Mr. Roadman.

Thank you, Toni. Just want to close by thanking everybody. Let everybody know we're going to be at the RBC conference in New York at the end of February, the Citi Global Property Conference in Florida the first week of March, and then mid-March, at the Barclays Health Care Conference in Miami and look forward to seeing everyone there. And with that, thank you. Management will be around today if you have any follow-up questions. Thanks very much.

Thank you for your participation. This does conclude today's conference call. You may now disconnect.