Good day, and welcome to the Diversified Healthcare Trust First Quarter 2020 Results Conference Call and Webcast. [Operator Instructions]. Please note, this event is being recorded. I would now like to turn the conference over to Mr. Michael Kodesch, Director of Investor Relations. Mr. Kodesch, the floor is yours, sir.

Thank you. Welcome to Diversified Healthcare Trust call covering the first quarter 2020 results. Joining me on today's call are Jennifer Francis, President and Chief Operating Officer; and Rick Siedel, Chief Financial Officer and Treasurer. Today's call includes a presentation by management followed by a question-and-answer session. I would like to note that the transcription, recording and retransmission of today's conference call are strictly prohibited without the prior written consent diversified Healthcare Trust or DHC. Today's conference call contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other securities laws. These forward-looking statements are based upon DHC's present beliefs and expectations as of today, Thursday, May 7, 2020. The company undertakes no obligation to revise or publicly release the results of any revision to the forward-looking statements made in today's conference call other than through filings with the Securities and Exchange Commission, or SEC. In addition, this call may contain non-GAAP numbers, including normalized funds from operations or normalized FFO, EBITDA, EBITDAR or adjusted EBITDA and cash basis net operating income or cash basis NOI. Reconciliations of net income attributable to common shareholders through these non-GAAP figures and the components to calculate AFFO, CAD or FAD, are available in our supplemental operating and financial data package found on our website at www.dhcreit.com. Actual results may differ materially from those projected in any forward-looking statements. Additional information concerning factors that could cause those differences is contained in our filings with the SEC. Investors are cautioned not to place undue reliance upon any forward-looking statements. Under the current unique circumstances, the management team is conducting today's call from several locations and ask that the listeners on the call bear with us should any technical difficulties arise. Now I'd like to turn the call over to Jennifer.

Thank you, Michael. Good morning to our shareholders and call participants, and welcome to our first quarter 2020 earnings call. The first quarter saw the beginning of a worldwide health crisis with an immediate impact on the global economy. Which has created new and unforeseen challenges for our industry. Over the last 2 months, our priority has been monitoring the development of the COVID-19 pandemic and its effect on our business, tenants, communities and families. I'd like to start the call this morning by expressing my gratitude and respect for health care workers and essential workers across all industries that are on the front lines of this global pandemic, risking their own health and safety for the sake of others. We have experienced some of that courage and commitment firsthand across our portfolio and thank those heroes as they continue to battle the virus and provide care and services to us, our residents and our tenants. I'd like to personally recognize the swift action and critical efforts made by our operator, Five Star Senior Living, in response to the pandemic. As soon as the spread of COVID-19 was anticipated in the United States, Five Star teams moved quickly to implement numerous protocols and precautionary measures throughout our communities to safeguard the health and well-being of residents, clients and team members. Among those protocols, five star is restricting all nonessential visitors from entering our communities and essential visitors must adhere to strict visitational protocols. All our communities are ensuring the highest standards of cleanliness, enforcing social distancing and shelter in place conventions. Screening all team members and essential viders before entering and monitoring the health of everyone living and working in our communities. I'd also like to commend RMR's real estate services team for their tireless efforts in response to the…

Thank you, Jennifer, and good morning, everyone. To begin, as a segue from Jennifer's disposition remarks, I wanted to first provide color around our liquidity position in light of the pandemic. We believe DHC is well positioned to weather the near-term challenges presented by the pandemic, and we expect to meet all of our upcoming capital obligations, including our debt maturities and a number of planned capital projects to improve our portfolio. We ended the first quarter with approximately $70 million of cash on hand and $415 million available on our $1 billion revolving credit facility. As previously announced, we sold $47 million of senior living assets subsequent to quarter end. Additionally, in early April, our Board made the difficult decision to reduce our dividend to $0.01 per share per quarter from $0.15 per share per quarter, preserving roughly $33 million of capital each quarter. As of March 31, our debt to adjusted EBITDA was 7.4x, roughly in line with the previous quarter. As Jennifer stated, we expect the pace of our asset disposition program to slow considerably. Some deals falling out of agreement as a result of the difficulties of conducting physical diligence while under shelter in place orders in the current state of the markets. For those asset sales we do complete, however, we will continue to use the proceeds to reduce debt. Moving to our uses of capital. Subsequent to quarter end, we repaid $200 million of 6.75% senior notes that matured in mid-April. We expect to utilize a 6-month extension option on the $250 million unsecured term loan currently scheduled to mature in June. After that, our next scheduled debt maturity is not until December of 2021. Turning to our capital expenditure outlook. As previously disclosed, we are deferring $150 million of previously budgeted capital expenditures…

[Operator Instructions]. And our first question will come from Bryan Maher of B. Riley FBR.

Jennifer, when you think about the senior housing component, kind of down the road. And I think you used the term new normal. How do you think that, that looks in 2 to 3 quarters, maybe from an increased regulatory standpoint, visitation, social distancing, et cetera? Can you elaborate on how you're thinking that this industry looks in maybe by year end 2020?

Yes. Well, I think social distancing is here to stay in senior living for a period of time regardless of whether states start to open up, I think that just because of the at-risk population, operators will continue to have social distancing and sheltering in place residents staying in their units for the time being. Regulatory, it's hard to say. I know that there's been an increased regulatory - or there's been government agencies that are talking about increasing regulations when it comes to assisted living. I think independent living is pretty different. And 3 to 4 quarters or 2 to 3 quarters out, it's hard to know. I mean, these operators are living in the moment, doing everything they can to keep COVID-19 out of the communities. I think they're doing a great job regardless of what we see in the press.

And then when we think about occupancy for modeling purposes, I don't know, maybe I missed it if you shared what occupancy was looking like in April. I know Lon power was putting out some kind of biweekly with the degradation in occupancy was. I didn't know if you would be willing to share that. Or put another way, where you think it could go over the next couple of quarters before eventually rebounding?

Yes. I think with the current state, we're thinking occupancy will likely drop by 40 to 50 basis points a week. For how long that lasts? Again, it's hard to know. It really depends on how long COVID-19 is ranging through the country. But I think those are good numbers to use.

The 40 to 50 basis points per week, not five a week.

Per week. No, that's per week.

And then lastly from me. And maybe, Rick, this might be a question for you. You talked at the end of your comments about the ability to raise additional capital above and beyond the liquidity that you currently have and things that you could do to do that with your bankers and with the assets that you have available. What world would you be living in that you think you need to access materially more than the roughly $0.5 billion of liquidity that you currently have? How bad would things have to get? Where do you see the levers to make you have to make those phone calls?

Brian there's just a lot of uncertainty related to the pandemic. If we had a crystal ball and knew where it was going, we wouldn't have to worry about it. But I believe our Investor Relations team is getting a lot of inbound calls asking about liquidity. Part of that may be related to the $200 million of senior notes that we just retired in mid-April. So while we ended the quarter with $415 million available on the revolver, we did use $200 million of it initially to pay down those notes. So we still have plenty of capacity for our limited upcoming maturities and again, we've scaled back our CapEx assumptions a bit. But really, that was just being realistic about what can physically be done in this environment. So we still feel very comfortable, but because there's been some questions, we wanted to just to make sure we address that.

[Operator Instructions]. Well, at this time, we're showing no further questions. We will go ahead and conclude today's question-and-answer session. I would now like to turn the conference call back over to management for any closing remarks.

Thank you for joining us on our first quarter earnings call. We hope you and your families and colleagues stay well, and look forward to connecting with many of you at the virtual NAREIT conference in June.

Thank you, madam. And for the rest of the management team for your time today. The conference call is now concluded. At this time, you may disconnect your lines. Thank you. Take care, and have a great day, everyone.