Good day, and welcome to the Capital Senior Living First quarter 2016 Earnings Release Conference Call. Today's conference is being recorded. The forward-looking statements in this release are subject to certain risks and uncertainties that could cause results to differ materially, including, but not without limitation to, the Company's ability to find suitable acquisition properties at favorable terms, financing, licensing, business conditions, risks of downturns in economic conditions generally, satisfaction of closing conditions such as those pertaining to licensure, availability of insurance at commercially reasonable rates, and changes in accounting principles and interpretations among others, and other risks and factors identified from time to time in our reports filed with the Securities and Exchange Commission Now at this time, I'd like to turn the conference over to Mr. Larry Cohen. Please go ahead, sir.

Thank you. Good afternoon and welcome to Capital Senior Living's first quarter 2016 earnings release conference call. I want to thank our strong team of employees at Capital Senior Living Communities across the country, for providing our residents with exceptional service and care. I am extremely proud of the team's hard work and dedication. It is our talented employees that give us such great confidence in the future of our company and the continued quality care we provide our residents, and the long term value we are creating for all of our stockholders and other stakeholders. Our strong first quarter 2016 results demonstrates the advantages of our clear and differentiated strategy to driver superior shareholder value, as we successfully execute on our multiple avenues of growth. Our focused execution of our strategic plan produced solid growth in all of our key metrics in the first quarter, as compared to the prior year, including revenue, occupancy, average monthly rent, NOI, adjusted EBITDAR and adjusted CFFO. Our occupancy gains continue to outpace the industry, with same community occupancy increasing 110 basis points since the first quarter of 2015. As expected, sequential occupancy decreased in the first quarter, due to the lag effect of decreasing occupancy in the fourth quarter of 2015. With a mild flu season and better weather during the first quarter 2016, we gained 75 same community net move-ins for the period beginning with the week ended January 1 to April 1, 2016. This is a 115 unit improvement in same community occupancy compared to the comparable period in the prior year. Our strong occupancy growth is resulting in pricing power, with an approximately 3.5% increase in same community revenue on a like number of units basis, as compared to the first quarter of the prior year, reflecting the price…

Thank you, Larry, and good afternoon everyone. Hopefully you have had a chance to review today's press release. If not, it's available on our web site, at www.capitalsenior.com. You can also sign-up on our web site to receive future press releases by email, if you'd like to do so. The company reported total consolidated revenue of $109.2 million for the first quarter of 2016. This is an increase of $10.5 million or 10.7% over the first quarter of 2015. The increase in revenue was largely due to acquisitions the company made during or after the first quarter of 2015, net of dispositions. During that time, we have acquired 14 communities, including five communities that we purchased during the first quarter of 2016, and have disposed off five non-strategic communities. Excluding the revenue of the five communities we have sold during or since the first quarter of 2015 from all appropriate periods, revenues increased $12 million or 12.3% in the first quarter of 2016, as compared to the first quarter of the prior year. Revenue for consolidated communities, excluding the three communities that are undergoing repositioning lease-up or significant renovation and conversion, increased 10.7% in the first quarter of 2016, as compared to the first quarter of 2015. It's important to note, that this 10.7% increase was achieved due to fewer units available for lease in the first quarter of 2016 than the first quarter of 2015, exclusive of acquisitions, due to conversion of renovation projects that are currently in progress at certain communities. Our net operating income for these communities increased 11.7% in the first quarter of 2016 as compared to the first quarter of 2015. These results clearly illustrate the effectiveness of our strategy to acquire high performing communities in strong markets, disposed of non-strategic underperforming communities and to…

[Operator Instructions]. And our first question will come from Chad Vanacore with Stifel.

Hey, good evening.

Hey Chad. How are you?

Good. So just speaking about the new acquisitions, can you give us a little more color and accretion on those acquisitions, maybe average monthly rent and asset mix versus your current portfolio mix?

The acquisitions that we made in the quarter are predominantly assisted living and memory care. Their average rents, $38.50, which is a little higher than our average. Obviously they have good occupancy -- although, as we say, the occupancy, but typically, these properties are coming in around 90% occupied, with margins in the high 30% range, which is a little lower than our average margin, which is closer to 41%. That's before corporate overhead, Chad.

Okay. And then what do you think the CFFO contribution is annually?

$2.9 million or $0.10 per share, that's in the press release.

I was talking about the 2Q acquisition?

2Q? $74 million we had not -- we typically don't say that. But again, I would say that we have been so consistent on our acquisitions, you could probably assume that, the $74 million would be a little higher than the $0.10 that we are getting from the 64, so you can probably extrapolate from that. Another $10 million of acquisitions would be another, call it 15%. So it's probably $0.11, $0.12 per share of CFFO.

We will give full details on that.

The other thing I would mention, Chad; on the acquisitions. You see that the acquisitions in the first quarter, the average fixed rate was 4.4% on 10-year debt. We continue to expand our lender base, and life companies have really become very desirous to do business with us. We will report on these acquisitions, our first 15 year term fixed rate non-recourse debt in the low 4% range. That's where I have been fixed. That's already agreed-to term with the lender. So we are very excited that our financing continues to improve, with more competition, with lower rates and longer terms.

And you have been doing fixed debt somewhere around 4.5 for 10 years, is that right?

In the first quarter, it came in at about 4.4. Right now, 10-year debt would be around 4% to 4.25%, somewhere in that range. 10-year has come down to about the 180 level. But then, our spreads have narrowed, because of the competition with all lenders.

All right. Sounds good. And then just, thinking about your pipeline Larry; I believe last quarter, you felt that transactions were slowing down. It seems that you are seeing actually a greater deal slow down? Can you talk about that, and maybe how cap rates change, if they have?

Deal flow has been very-very strong. I am not aware of any portfolio transactions for this industry, for a couple of quarters that the larger transactions have slowed down. Again, we have been focused on the onesies, twosies, we prefer that. If you look at kind of what we are seeing, we are seeing more transactions that are being marketed. I will tell you that, in the first quarter, I mentioned, the number of properties that we have signed confidentiality agreements for, those are 18 transactions. About 25% are off-market, about the balance are marketed transactions. We have lost offers. I mean, the market has not changed much on cap rates. We are buying higher quality properties, so our price per unit maybe increasing, because we are buying in larger markets and typically newer, higher quality properties. We are still generating about a 16% cash-on-cash return on the equity. The competition that we are seeing is typically not the larger REITs, just not looking at senior housing. There is some private equity out there that's buying us some properties. But you know, we have -- and our pipeline, we have a lot of repeat sellers, who we have successfully transacted. We have had three properties purchased recently from one sellers; they have come to us with another property. We'd have three or four properties from another seller we dealt with. So, we are fortunate that we have a good repertoire, if you will, product that continues to come through from sellers that have enjoyed the experience with Capital Senior Living. More importantly, they are really impressed with the quality of our management and the tenure of our staff, that we feel very comfortable in trusting their regimens with our management.

All right. Then just one more; just looking at labor costs; it looks like, on a same store basis, labor costs were only up 2.8%, that seems to be right down the pipes for what would be 2.5%, 3% average historical labor inflation. Should we expect that to creep up during the year?

Chad, I really think we are going to probably stay in that 2% to 2.5% range. As you said, it was 2.8%, but if you take out the extra day, its 2.2% in the first quarter. And over the last several quarters, the fourth quarter was 4%, but that was related to some items specific to the fourth quarter that we talked about, a credit and workers comp that was in the fourth quarter the previous year, greater number of people added to our healthcare plan. And then, an increase in cost to cover shifts over Christmas holidays. But before that, our labor costs were up 0.8% in the third quarter of 2015 and 0.6% in the second quarter of 2015, 1.4% in the first quarter of 2015. So there have been very moderate increases, and again this quarter, its 2.2%. So I think, we feel comfortable that we can keep those labor costs between right around that 2.5% mark this year.

All right. Thanks Larry. I will hop back in the queue.

Thank you, Chad.

And our next question will come from Joanna Gajuk from Bank of America Merrill Lynch.

Good afternoon. Hi, how are you? Thanks so much for taking the question here. First on the quarter, which I guess, CFFO, $0.41, it came above, I guess, what you were kind of guiding to. So can you walk us through the main sort of drivers for the results coming in better than expected? Whether this was occupancy or pricing or costs or anything else, how you can see that quarter versus your expectations?

Really, it was pretty well balanced. It was -- we had greater revenue than we expected. Our rate was very good, and occupancy was right about where we expected it to be. Expenses were les. We did have the really good utilities costs that came out in the first quarter. But the $0.41 is even with our G&A costs being up, taking about $0.02 of our G&A away. So it would have been even higher, had we had kind of normalized medical costs, but that did bump up our G&A. But it's pretty well evenly split between revenue and expense. From what we expected going into the quarter to where we ended.

All right. So sounds like [indiscernible] on the expense side; because also when you talk about sort of the elements for the next quarter; so that kind of suggests like a 12% sequential increase in [indiscernible] $0.05 to $0.06, is that the right math?

Yeah. Something like that what we expect currently. Yeah, that's what we expect currently going in the second quarter.

So would you paraphrase it as similar to what you just mentioned with the Q1 performance, in terms of sort of -- you having traction on controlling costs, while your occupancy and pricing growing nicely, till you have this [indiscernible] on the current driving on the results?

Yes I do. I think occupancy is going to -- we are well positioned for occupancy growth in the second quarter, and that our rates are also well positioned. I think we are going to be in good shape on the revenue side and then expenses. Our operating team does a great job of managing those costs, and very disciplined. I think it will -- both of those things are going to contribute to the growth.

Yeah I will just comment, Joanna, that -- we just, we have in town for three days, all of our regional operations and marketing staff. Carey and I spoke with them this afternoon. Most of them have been with our company for quite a while. And I would tell you, we had lunch with dinner -- everyone was very positive. I will tell you, our deposit taking is outstanding. We spoke about a gain, of basically 75 units in the quarter from 11 to 41. We have grown since then. Our trends look very good. Obviously, you never know with the attrition [ph], there can be a week here or there. The lag in the sequential occupancy actually was interesting, really resulted from a larger number of debts. The first week of November 2015, that kind of transferred over. But as I said at the fourth quarter call, we had outstanding last week of 2015. We are really excited about where we are thus far in the year, and having a weaker flu season and mild winter, really positions us extremely well for the rest of the year, because we are starting the second quarter at a much higher level, than we saw in 2015, or in 2013. But enthusiasm is pretty widespread. The things we speak about, that differentiate at Capital Senior Living, are coming through very clearly in our results. And that's because of the quality of our talented staff, that serve our residents so well, and the reputation that we have as a company and the culture. Tenure is an important distinction of our company. We have executive directors that we just gave stock awards to, who have been with the company for more than four years. 75% of those exec directors were executive directors with Capital Senior Living in 2010. A number of them have been promoted to a regional level. But those EDs, their tenure with our company is 12 years, and that's something that resonates with our residents, with our families and in our markets. And as I said, we are very optimistic about continued successful improvement in occupancy, and the rates that we saw, that pushed the improvement in the first quarter results was the effect of the rate increases we implemented in the fall. And again, in January, both on actual street rents, in-house rents and level of care fees.

Great. So should we still think about 2.5% pricing for the year, the way you were kind of talking about it before?

Yeah. I mean, there are some markets where we will go and we will do some discounting in some select markets. But overall, we are showing really 3.5%. Now on a like-client [ph] basis, we were above 3%. Our independent living rents this quarter were up 3.6% year-over-year. So we are getting a lot of improvement there. But again, it’s a balance. There are some markets that were below 85% and will -- as I said, we will have some introductory specials and do some things to move those. So that will balance out that rate growth to that kind of 2.5% to 3%. I think that it’s a reasonable target figure model.

Great. Thanks. I will go back to the queue. Thank you.

And next we will go to Brian Hollenden with Sidoti.

Hi guys. Thanks for taking my question. How many conversion refurbishment projects are currently underway in terms of units. When are the units coming back online, and what -- is there any annualized CFFO impact?

Okay. So the conversions, we have 400 units that we completed -- actually 500 we completed. Now it is 400 in the first tranche and an additional 100, and then we have another 200 we are working on in 2016. The original 400 will contribute about $0.20 per share to CFFO once they are fully completed and leased up. The 100 that we did in the last part of 2015 will add about $0.03 per share, they are more incremental in variety, where its already an independent resident in the unit, but as that independent living resident moves out, we will add in -- we will move in an assisted living resident in her place. And then, in the 200 for 2016, those will add about $0.05 per share of CFFO, and again, they are more incremental in variety. As far as the timing of that, the 400 units -- we are kind of an annualized basis right now at $0.08 per share in the first quarter of 2016. That will grow through the year. I think probably for the year, we expect somewhere between $0.08 and $0.10 of contribution from those conversions for the full year in 2016. Product, which would be about $0.06 to $0.08 incremental from 2015. And then, the 100 probably will not impact until the very end of 2016, more in 2017, and then the 200 will be certainly more in 2017 and into the first part of 2018. So hopefully that helps. Brian, did that clear that up?

Yes, thank you. And then one final question and I will jump back in the queue. It seems, same occupancy at 88.5% at the end of the quarter, where do you see occupancy at the end of 2016?

Well, we expect 100 basis points for the year. The ending occupancy at the end of last year was 88.9. So we should be right close to 90% mark, is when our goal will be to end the year in 2016, Brian.

Okay, great. Thank you.

Thank you very much.

Our next question will come from Ryan Halsted with Wells Fargo

Thanks. Good evening.

Hey Ryan.

So I wanted to go back to the occupancy trends across the quarter. Obviously, the flu or the lack thereof was a big focus. I was hoping you could maybe breakout how the flu impacted you guys, I guess, over each month. Did you see it pick back up later in the quarter?

Actually, I [indiscernible] any flu impacting our occupancy at all during the quarter. In fact I asked today the regionals, and they were not worried any. So I mean, there may have been some flu, but it was not anything that we saw, that affected occupancy at all during the quarter. I mean, we have -- we serve the chronic senior, there is always attrition that's part of our business. The first quarter was fairly typical of what we would see. The comparison that we show improving, is where we had a very active flu the prior year, where we had the loss. So as I said, same period, we are up 115 same store units in occupancy, and that's a gain of 75 this year, versus a loss of 40 last year, was this flu related.

Great. And then, you mentioned that obviously set you up well for the rest of the year, and I guess, where I was going with my question is, can you talk about your average monthly rent growth for the in-place residents? I guess, with the lower attrition, how should we think about your average monthly rent growing over the course of the year, without having to consider some of those incentives or using less of those moving incentives on that higher occupied community?

Well first of all, in September of 2015, we increased market rents by 3% on all communities with occupancies with 93% or greater. That's about 60% of our portfolio. We also increased market level care fees for assisted living residents by 10% on September 1 and in-house 10% October 1. Then on January 1 of 2016, upon the renewal of leases for our in-house residents, you will see a 3% increase in their rents, and market rents or street rents increased by 3% effective January 1. So we are seeing that. Whether we have another price increase later this year, will be determined about by the occupancies. There is probably a dozen properties out of our 126 that we feel that we would look to create some stimulus in occupancy by some short term discounting or specials. That's about 10% of the portfolio. But the other 90% of the portfolio should receive a 3% rate increase, both on level care fees and market rents and renewal rates this year. To the extent that we might be able to do a little better in more highly occupied buildings, that's a possibility, but it's not budgeted.

That's helpful. On your CapEx, even adjusting for the amount hat you expect to receive from your REIT partners, it still seemed to trend a little bit higher in the quarter. Just curious how you feel about your CapEx targets for the rest of the year?

Yeah. So yes, it was higher in the first quarter. We have got a lot of the projects that are really in process right now in the first; and the second quarter and the third quarter will probably be somewhat similar depending on the timing of projects and kind of when they are completed. But then, it will begin to moderate in the fourth quarter, and certainly into 2017, that CapEx will moderate. So the $13.8 million in the first quarter, include the things we are doing on our lease properties as well, that we expect the reimbursement for. So that includes all communities, not just our own communities. So it's, maybe somewhere around $40 million to $45 million in 2016 all told. Then we will get some reimbursements as well, which will also show up in a separate line on our cash flow statements. You may notice, there is a new line in there called lease incentives, and that's where the reimbursements come through.

And this is a focused strategy that has a limited duration, Ryan. What's interesting, we are already talking about in 2017, second half of the year, what we can do with that excess cash, that we won't be investing in CapEx. So we think it's really helpful. Obviously, our trends are really positive. The results are demonstrating improvements in rate and occupancy, because of newly renovated and repositioned properties. But it was a strategy that we undertook over the last year, because we had the cash to do so, and we think its timely to do so for our residents. But again, that will probably burn off next year and get ratably lower throughout the first half of 2017, and that will go back to a much more standardized CapEx and hopefully even our lower CapEx needs, because some of these buildings have been renovated. They really won't need much CapEx for a number of years. The other point I will make about our CapEx on acquisitions, because we are buying properties in very good condition and new, their CapEx needs are lower. So again, this is a focused strategy of looking at ways we drive shareholder value, in addition to our acquisitions. But the repositions, conversions or renovations and they are -- there is a fixed term of when those will occur, and then we will have the benefit of the excess cash for other corporate uses or shareholder uses.

Great. And how about the flipside of that strategy? I guess, do you have any initiatives underway of rationalizing your portfolio or reevaluating kind of the cash generation of some aspects of your portfolio and maybe considering divesting some or other ways to maximize cash flow?

Ryan, we do that every month as a management team. We do an analysis every quarter. We sold five buildings last year. We talked about it, we got $26 million of cash. I am pleased to say, there is nothing in the portfolio that we are looking to sell, because we think that they are in good markets, good performers; or will be improved with the CapEx that we are spending or repositionings that will generate sustainable strong cash flow to our company. But we analyze that every year. You know it's funny, every dollar we invest in CapEx, we ask the question, what other uses can we make of this cash, and what are the returns? And we have models for every property. And we look at the returns on those investments compared to acquisitions or other uses, and if we can't generate a return. In fact, some projects, we skinny down, because we didn't feel the returns were attractive compared to alternative uses of capital. So we are very careful in how we allocate the capital. We are very thoughtful and we are very thoughtful and we are very mathematical. And I am very pleased to say, that we have a really good portfolio, and there is no pruning necessary at this time.

Okay, great. Maybe one last one for me; just a question on your leased portfolio, can you just remind me -- is there a portion of your leases that there may be an opportunity to buy out or to exit in the near future?

Nothing contractual. But that's not to say that the REITs aren't looking for ways to get cash and they are very vocal about disposing off assets. So there maybe opportunities, but there is nothing contractual.

Okay. Thank you.

We will now take our next question from Marc Cohen from MTC Advisers.

Yeah, good afternoon. It's actually Todd.

Hey Todd.

So anyway, I am a little bit confused on a couple of comments that have already been made, so I just like to try and get some clarity on that. So Carey, the bridge that you walked us through on the fourth quarter call, I thought that kind of got us to about the number that you actually did generate here in the first quarter. Is that correct, or what actually was that number that you guided us to?

Yeah, I guided you to being about $0.38 to $0.39 is where we would have been, but we ended up at $0.41, so we ended up a little bit better than that.

Okay good. And then Larry, I thought I heard you say that, you expect to increase occupancy by about 100 basis points. Last year, you indicated it was 88.9, and this year, 89. So did I --

89, well I said, about 90%. 89.9 or about 90% Todd.

Okay, great. Got it. And then, when I look at resident capacity and unit capacity, can you -- what is the difference there? Is it just the number of units that are out of the loop right now, from conversions and buildings that are shut down, are you --

The definition is different for units than resident capacity. Unit capacity is doorknobs. It’s the number of doors in a building. Some of those doors have units that actually are suites. So there we have two beds in a suite for example. Or we may have a husband and a wife, about 10% of our residents are couples. So the resident capacity will take into account those units that have more than one occupants. So the resident capacity is the number of residents that can live in the community, where as the number of units is the actual physical number of doors that we have in the community.

Okay. And then, so what would you say, how much in resident capacity are we -- do not have an inventory right now?

We have about 120 units out right now. We have 70 units at Amberleigh, which is a property up in Buffalo, that's going through a major repositioning renovation, having assisted living. We have 30 units out at Georgetown, Indiana, again going through in IL to AL memory care conversion. Trouble [ph] has 10 units for memory care under construction right now. Foronda has 45 units that are out, coming back in, very well occupied. Those again, open in July, and are leasing up. So those are 120 units, in addition to that Todd, we have the full buildings of Canton regency and town center. Those collectively have about 500 units. Those are where the CCRCs will be closed with skilled nursing. Canton has opened its memory care. It looks great. Its leasing up right now, and those will come back in over the next year or so. So looking at units in total, we are talking about somewhere around 770 units out of service. Two of which are complete buildings, and the other are wings or units within about three or four buildings.

So then, I am assuming there are some units here that have more than one occupant? So is the number of residents that we are kind of locked out of right now, like between 750 and 1000 or 750 and 900?

I am going to guess, it's probably over -- probably another 8.25 to 10% -- about 10%.

Okay, great. And then on the -- so you are saying CapEx will be running about $13 million per quarter?

In the first three quarters, and then it will probably moderate a little bit in the fourth quarter. What we currently project, it's going to have the timing to project.

Okay. So I guess my question is, cash less restricted, it is about $31 million. We have got to come up with $18 million in the quarter for the $74 million acquisition. So that leaves us with about $13 million at the end of the quarter, without cash flow. So it looks like we are going to end the second quarter with cash, significantly below where we are now.

Except that we own the real estate and we are scheduled to have supplemental financings on appreciated assets come through in the second quarter, third quarter --

Okay, you didn't discuss that. So how much --

Well I did mention in my commentary.

You did? Okay. So how much do you think you'd be able to pull out in the second quarter?

We have not disclosed that, but we are confident that we will have more than enough cash to spend on all the projects. I don't feel comfortable giving the numbers, because we don't have the exact numbers right now. We have term fees with our lenders, but they are being underwritten. But we are confident that we have sufficient cash. In fact, one of the analysis we do every month, is a day-by-day cash projection for the next six months. That takes into account everything we are speaking about. So we do have the ability, with the supplemental financings. I think our cash flow statements, when we follow the 10-Q, we generated $15.7 million of cash flow from operations this quarter. So that's annualized over $60 million, and that we have again, financings from supplementals that will -- should more than be sufficient cash, to take care of these needs, as well as the reimbursements from the rates on the CapEx that's being done on the buildings that they own.

Right. Well it's tough to get a number when it's difficult for you to actually give us those numbers. And don't get me wrong, I mean, almost $140 million of acquisitions in the first two quarters is awesome. Just was a little bit concerned about the firepower you will have in the third quarter to do a significant number, maybe in the fourth quarter, I don't know. Anyway, that's cut it for me. Thank you.

Thanks Scott.

[Operator Instructions]. And our next question will come from Dana Hambly with Stephens Incorporated.

Hey guys, this is Jacob on for Dana. Really quickly --

Hey Jacob.

Hey. On the pickup in M&A, are there any common themes for these properties to come into the market on the seller side? Or do you think this is more just a function of greater appetite on your part?

We have always had a very robust pipeline. I am not sure there is anything unique about the market. The difference is, we are looking at larger properties, larger transactions. So I think that's just -- maybe our appetite has changed a little bit on our focus. When we started doing acquisitions, we bought some $5 million, $10 million properties. We no longer even look at those. So we really have sharpened our focus on higher quality, larger units, and so the gross dollar volume goes up, but the number of -- I mentioned for example, the number of properties we sign CAs for. Those CAs only totaled I think 18 in the quarter. They represented, I think 70 properties. So [indiscernible]. So it’s a function of just looking at larger opportunities, because we feel we have the ability to do so, and they are proving to really generate stronger sustainable cash flow, as well as the ability to have future supplement to financings, as those cash flows grow.

Great. And then one last one; Larry, you mentioned usage of cash when the CapEx normalizes. I am assuming, M&A is the first priority, but just checking, did you guys repurchase any shares during the quarter?

We did in the first quarter, yes; but those are ones we had already announced in our fourth quarter call. But we did have 144,215 shares that we did purchase at a weighted average price of $17.29 in the first quarter.

Great. That's it for me. Thanks guys.

Thanks. Have a great night.

And at this time, we do have a follow-up from Todd from MTC Advisers.

Yeah guys, just one last question; so generally speaking, is the third quarter -- how does the third quarter compare to the second quarter, and how does the fourth quarter compare generally?

Generally, the business gets better throughout the year. So the trajectory usually is up from here. The difference is, we didn't have the harsh first quarter weather or flu, so we are starting at a better pace for the second quarter. But I would say, that in this industry, as the weather improves, there is more shoppers out there, there is more traffic out there. So I would expect that, and Carey gave some indications and Joana mentioned about the percentage increase in cash flow that we are guiding to for the second quarter, and we expect to see sustainable growth over that in the third and fourth quarter.

Todd, you always have to consider what's happening with expenses, because utilities are a major cost for us when the third quarter always -- second quarter is the mildest quarter, so the third quarter will be higher, and the fourth quarter will be a little bit higher than that, from a utilities standpoint. And then you have got, and they were down a number of days; for instance, the third quarter will have 92 days versus 91, and that always makes a little bit of a difference for us. So kind of factor some of those things in, as well as you are looking to the third and fourth quarters.

Great. Thanks.

You're welcome.

And at this time, I show no further questions in the queue. And I'd like to turn the conference back over to our presenters for any additional or closing remarks.

Well, again, I want to thank everybody for today's participation. As always, we look forward to seeing you at various conferences over the next number of weeks, and feel free, if you have any further questions to call Carey or myself. We are always open for conversations. Have a great evening, and again, thank you very much for your interest in capital senior living. Good night.

That does conclude our conference for today. Thank you for your participation.