Company Website:
http://www.omegahealthcare.com
HUNT VALLEY, Md. -- (Business Wire)
Omega Healthcare Investors, Inc. (NYSE:OHI) (the “Company” or “Omega”)
today announced its results of operations for the three-month period
ended June 30, 2015. The Company also reported for the three-month
period ended June 30, 2015 Funds From Operations (“FFO”) available to
common stockholders of $100.7 million or $0.52 per common share and
Funds Available For Distribution (“FAD”) to common stockholders of
$136.1 million or $0.70 per common share.
The $100.7 million of FFO available to common stockholders for the
second quarter of 2015 includes $47.1 million of acquisition related
costs, $2.9 million of non-cash stock-based compensation expense and a
$1.0 million gain related to the early extinguishment of debt. FFO is
presented in accordance with the guidelines for the calculation and
reporting of FFO issued by the National Association of Real Estate
Investment Trusts (“NAREIT”). Adjusted FFO was $0.77 per common share
for the three-month period ended June 30, 2015. FFO and Adjusted FFO are
non-GAAP financial measures. Adjusted FFO is calculated as FFO available
to common stockholders excluding the impact of certain non-cash items
and certain items of revenue or expense, including, but not limited to:
acquisition related costs, interest refinancing costs and stock-based
compensation expense. For more information regarding FFO and Adjusted
FFO, see the “Second Quarter 2015 Results – Funds From Operations”
section below.
GAAP NET INCOME
For the three-month period ended June 30, 2015, the Company reported net
income of $43.5 million, or $0.22 per diluted common share, on operating
revenues of $197.7 million. This compares to net income of $46.8
million, or $0.37 per diluted common share, on operating revenues of
$121.8 million, for the same period in 2014.
For the six-month period ended June 30, 2015, the Company reported net
income of $86.5 million, or $0.53 per diluted common share, on operating
revenues of $331.1 million. This compares to net income of $102.6
million, or $0.81 per diluted common share, on operating revenues of
$242.8 million, for the same period in 2014.
The year-to-date decrease in net income compared to the prior year was
primarily due to: (i) $51.8 million in increased acquisition related
costs, (ii) $27.0 million in increased depreciation and amortization
expense, (iii) $14.1 million in increased interest expense and (iv)
$11.3 million in increased impairments on real estate assets. This
impact was partially offset by increased revenue associated with the new
investments completed in 2014 and the first six months of 2015.
2015 RECENT DEVELOPMENTS AND SECOND QUARTER
HIGHLIGHTS
In Q3 2015, the Company…
-
completed the purchase of $112 million of real estate in Manhattan for
the development of a senior housing community.
-
completed $72.3 million of other new investments.
-
increased its quarterly common stock dividend rate to $0.55 per share.
In Q2 2015, the Company…
-
completed the acquisition by merger of Aviv REIT, Inc. (“Aviv”).
-
completed $178 million of new United Kingdom investments.
-
invested $18 million in capital renovation projects.
-
paid off $9 million of secured long-term debt.
-
increased its quarterly common stock dividend rate to $0.54 per share.
SECOND QUARTER 2015 RESULTS
Operating Revenues and Expenses – Operating revenues for
the three-month period ended June 30, 2015 totaled $197.7 million.
Operating expenses for the three-month period ended June 30, 2015
totaled $123.5 million and were comprised of $59.2 million of
depreciation and amortization expense, $47.1 million of costs associated
with acquisitions, $7.4 million of general and administrative expense,
$6.9 million of provision for impairments on real estate assets and $2.9
million of stock-based compensation expense.
Other Income and Expense – Other income and expense for
the three-month period ended June 30, 2015 was a net expense of $39.1
million, which was primarily comprised of $38.2 million of interest
expense, $1.8 million of amortized deferred financing costs and a $1.0
million adjustment (gain) related to interest refinancing costs.
Funds From Operations – For the three-month period ended
June 30, 2015, reportable FFO available to common stockholders was
$100.7 million, or $0.52 per common share on 194 million
weighted-average common shares outstanding, compared to $79.7 million,
or $0.63 per common share on 127 million weighted-average common shares
outstanding, for the same period in 2014.
The $100.7 million of FFO for the three-month period ended June 30, 2015
includes the impact of $47.1 million of acquisition related costs, $2.9
million of non-cash stock-based compensation expense and a $1.0 million
adjustment (gain) related to interest refinancing activities.
The $79.7 million of FFO for the three-month period ended June 30, 2014
includes the impact of $2.8 million in provisions for uncollectible
straight-line receivables, $2.6 million of interest financing costs,
$2.3 million of non-cash stock-based compensation expense and $45
thousand of acquisition related costs.
Adjusted FFO was $149.7 million, or $0.77 per common share, for the
three months ended June 30, 2015, compared to $87.4 million, or $0.69
per common share, for the same period in 2014. The Company had 67
million additional weighted-average shares outstanding for the three
months ended June 30, 2015 compared to the same period in 2014. For
further information see the “Funds From Operations” section below.
ACQUISITION OF AVIV AND IMPLEMENTATION OF
UPREIT STRUCTURE
On April 1, 2015, the Company completed its acquisition by merger of
Aviv. In the Aviv transaction, the Company acquired 348 properties in 31
states, operated by 38 third-party operators. The Company issued
approximately 43.7 million shares of common stock in the transaction.
Prior to April 1, 2015, the Company restructured the manner in which it
holds its assets by converting to an umbrella partnership real estate
investment trust (“UPREIT”) structure. As a result of this
organizational restructuring and after giving effect to the Aviv merger,
substantially all of the Company’s assets are held by an operating
partnership (the “Operating Partnership”) that is a subsidiary of the
Company.
The Company’s results for the six-month period ended June 30, 2015 do
not reflect the operations of Aviv for the three-month period ended
March 31, 2015, and accordingly are not indicative of the Company’s
results for future periods.
FINANCING ACTIVITIES
Amendment to the 2014 Credit Facilities – On April 1,
2015, the Company amended its 2014 Credit Facilities (defined below).
Among other modifications to the 2014 Credit Facilities, the amendments
increased the amount of the 2014 Credit Facilities to a total of $1.65
billion, consisting of a $1.25 billion senior unsecured revolving credit
facility, a $200 million senior unsecured term loan facility, and a $200
million senior unsecured acquisition term loan facility (collectively,
the “2014 Credit Facilities”). The amended facility includes an
accordion feature permitting the Company to increase the amount of the
2014 Credit Facilities to $1.9 billion and to allocate the $250 million
increase to the existing revolver or term loan facilities or additional
tranches thereunder as it may elect, subject to various conditions set
forth in its existing credit facility.
The $1.25 billion revolving credit facility matures on June 27, 2018,
subject to a one-time option for the Company to extend such maturity
date for one year. The $200 million senior unsecured term loan facility
matures on June 27, 2019 and the $200 million senior unsecured
acquisition term loan facility matures on June 27, 2017. The Company has
the option to extend the acquisition term loan facility maturity date
twice, the first extension until June 27, 2018 and the second extension
until June 27, 2019.
As of June 30, 2015, the Company had $351 million of outstanding
borrowings under its $1.25 billion revolver and $500 million of
outstanding term loan borrowings under its various term loan facilities
on a consolidated basis, including the Operating Partnership Term Loan
Facility described below.
$100 Million Operating Partnership Term Loan Facility – On
April 1, 2015, the Operating Partnership entered into a $100 million
senior unsecured term loan facility (the “Operating Partnership Term
Loan Facility”), with the entire amount advanced on April 1, 2015. The
Operating Partnership Term Loan Facility matures on June 27, 2017,
subject to the right of the Operating Partnership to extend such
maturity date twice, the first extension until June 27, 2018 and the
second extension until June 27, 2019.
$9 Million HUD Mortgage Payoffs – On April 30, 2015, the
Company paid approximately $9.1 million to retire one mortgage loan
guaranteed by the Department of Housing and Urban Development (“HUD”).
The loan had an interest rate of 4.35% per annum with a March 1, 2041
maturity. The payoff resulted in a $1.0 million gain on the
extinguishment of the debt due to the write-off of the $1.5 million fair
market value adjustment recorded at the time the loan was assumed offset
by a prepayment fee of approximately $0.5 million.
Equity Shelf Program and Dividend Reinvestment and Common Stock
Purchase Plan – During the first two quarters of 2015, the
Company sold the following shares of its common stock under its Equity
Shelf Program and its Dividend Reinvestment and Common Stock Purchase
Plan:
Equity Shelf (At-The-Market) Program for 2015 |
(in thousands, except price per share)
|
|
| |
| |
| |
| |
Q1
|
|
Q2
|
|
Year To
Date
|
| | | | | |
|
Number of shares
| | |
-
| | |
-
| | |
-
|
Average price per share
| |
$
|
-
| |
$
|
-
| |
$
|
-
|
Gross proceeds
| |
$
|
-
| |
$
|
-
| |
$
|
-
|
| | | | | |
|
Dividend Reinvestment and Common Stock Purchase Program for 2015 |
(in thousands, except price per share)
|
|
| |
| |
| |
| |
Q1
|
|
Q2
|
|
Year To Date
|
| | | | | |
|
Number of shares
| | |
135
| | |
678
| | |
813
|
Average price per share
| |
$
|
40.13
| |
$
|
36.46
| |
$
|
37.07
|
Gross proceeds
| |
$
|
5,423
| |
$
|
24,703
| |
$
|
30,126
|
| | | | | | | | |
|
2015 RECENT DEVELOPMENTS AND PORTFOLIO ACTIVITY
$184 Million in New Investments in July 2015 – In July
2015, the Company completed five separate transactions totaling
approximately $184 million of new investments. The new investments
consisted of the following:
$28.5 Million Acquisition – On July
30, 2015, the Company completed a purchase/leaseback of one skilled
nursing facility (“SNF”) for approximately $28.5 million. The 300 bed
SNF, located in Virginia, was leased to the new operator with an initial
annual yield of 9.25%.
$111.7 Million Real Estate Acquisitions
– On July 24, 2015, the Company purchased five buildings on the Upper
East Side of Manhattan for approximately $111.7 million and leased them
to an existing operator of the Company. The Company and its operator
plan to co-develop the sites into a 201,000 square-foot senior living
facility. The properties were added to the operator’s existing master
lease. During the construction phase, the Company will earn a 5% annual
cash yield on the land. Upon certification of occupancy, the Company’s
annual yield will be 7% in year one and 8% in year two with annual 2.5%
escalators thereafter.
$18.0 Million Acquisition – On July
1, 2015, the Company purchased a three facility campus from an unrelated
third party for approximately $18.0 million and leased them to an
existing operator of the Company. The 161 bed campus (consisting of a
skilled nursing, memory care and assisted living facility) located in
the state of Washington, was added to the operator’s existing master
lease with a blended initial annual yield of 8.3%.
$15.0 Million Acquisition – On July
1, 2015, the Company purchased six SNFs from an unrelated third party
for approximately $15.0 million and leased them to an existing operator
of the Company. The SNFs, all located in Nebraska, totaling 530 beds,
were added to the operator’s existing master lease with an initial
annual yield of 9.0%.
$10.8 Million Acquisition – On July
1, 2015, the Company purchased one assisted living facility (“ALF”) and
one memory care facility for approximately $10.8 million and leased them
to a new operator of the Company. The facilities, located in Georgia,
totaling 125 beds, were leased to the operator via a master lease with
an initial annual yield of 8.0%.
Aviv Acquisition/Merger – On April 1, 2015, the Company
acquired Aviv by merger, acquiring 348 properties in 31 states, operated
by 38 third-party operators, in addition to the assumption of several
mortgages and other notes. The transaction was structured as stock for
stock swap with each share of Aviv being exchanged for 0.9 shares of
Omega. In connection with the Aviv merger, Omega exchanged approximately
48.6 million Aviv shares for approximately 43.7 million shares of Omega
and exchanged approximately 9.2 million partnership units of Omega
Healthcare Property Limited Partnership (“Omega OP Units”) for 10.2
million Aviv Healthcare Property Limited Partnership units. In addition
to the shares and units exchanged, Omega assumed the legacy Aviv stock
compensation plans as well as debt and other liabilities. Based on the
closing price of Omega’s common stock on April, 1, 2015, the estimated
fair value of the consideration exchanged or assumed was approximately
$3.8 billion.
$196 Million of New Investments in Q2 2015 – During the
three months ended June 30, 2015, the Company completed $196 million of
combined new investments and capital renovations.
$178 Million Acquisition in the United Kingdom– On May 1, 2015, the Company completed a $178 million
purchase/leaseback transaction for 23 Care Homes located in the United
Kingdom and operated by Healthcare Homes Holding Limited (“Healthcare
Homes”). As part of the transaction, the Company acquired title to the
23 Care Homes with 1,018 registered beds and leased them back to
Healthcare Homes pursuant to a 12-year master lease agreement with an
initial annual cash yield of 7%, and annual escalators of 2.5%. The Care
Homes, comparable to U.S. ALFs, are located throughout the East Anglia
region (north of London) of the United Kingdom. Healthcare Homes is
headquartered in Colchester (Essex County), England.
$18 Million Q2 Capital Renovations –
The Company also invested $18 million under its capital renovation
program in the second quarter of 2015.
Facility Sales, Closures and Impairments – For the
three-month period ended June 30, 2015, the Company sold four facilities
(two classified as held-for-sale) for total cash proceeds of $26.6
million, generating an $8.8 million gain. Two of the facilities sold
resulted from purchase options exercised by the tenant.
DIVIDENDS
On July 15, 2015, the Board of Directors declared a common stock
dividend of $0.55 per share, increasing the quarter common dividend by
$0.01 per share over the prior quarter to be paid August 17, 2015 to
common stockholders of record as of the close of business on July 31,
2015.
2015 FAD AND ADJUSTED FFO GUIDANCE REVISED
The Company revised its previously announced 2015 annual FAD available
to common stockholders to be between $2.77 and $2.81 per diluted share
and its 2015 annual Adjusted FFO available to common stockholders to be
between $3.04 and $3.06 per diluted share. The table below outlines
Omega’s 2015 quarterly guidance for both FAD and Adjusted FFO available
to common stockholders:
|
|
2015 Adjusted FFO and FAD Guidance Range per diluted common share (1) |
| |
Q1(2) |
|
Q2
|
|
Q3
|
|
Q4(3) |
|
Full Year
|
Adjusted
FFO
| |
$
|
0.71
| |
$
|
0.77
| |
$
|
0.77 - $0.78
| |
$
|
0.79 - $0.80
| |
$
|
3.04 - $3.06
|
FAD
| |
$
|
0.65
| |
$
|
0.70
| |
$
|
0.70 - $0.72
| |
$
|
0.72 - $0.74
| |
$
|
2.77 - $2.81
|
| |
|
| |
2014 Actual Adjusted FFO and FAD per diluted common share
|
| |
Q1
| |
Q2
| |
Q3
| |
Q4
| |
Full Year
|
Adjusted
FFO
| |
$
|
0.71
| |
$
|
0.69
| |
$
|
0.73
| |
$
|
0.72
| |
$
|
2.85
|
FAD
| |
$
|
0.65
| |
$
|
0.63
| |
$
|
0.67
| |
$
|
0.66
| |
$
|
2.61
|
| | | | | | | | | | | | | | |
|
(1) Assumes $650 million of new investments and planned capital
renovation projects for 2015, including $65 million of new investments
and capital renovations closed and/or completed in the first quarter of
2015 by Aviv. At April 1, 2015, after reflecting operating partnership
units and other dilutive securities, there were approximately 194
million fully diluted common shares outstanding. Omega's guidance is
based on a number of assumptions, which are subject to change and many
of which are outside Omega’s control. If actual results vary from these
assumptions, Omega's expectations may change. Without limiting the
generality of the foregoing, the timing and completion of acquisitions,
divestitures and capital and financing transactions may cause actual
results to vary materially from our current expectations. There can be
no assurance that Omega will achieve its projected results.
(2) Based on approximately 135 million fully diluted weighted average
common shares outstanding.
(3) Assumes refinancing $575 million 6.75% notes due 2022.
CONFERENCE CALL
The Company will be conducting a conference call on Tuesday, August 4,
2015, at 10 a.m. Eastern to review the Company’s 2015 second quarter
results and current developments. Analysts and investors within the
United States interested in participating are invited to call (877)
511-2891. The Canadian toll-free dial-in number is (855) 669-9657. All
other international participants can use the dial-in number (412)
902-4140. Ask the operator to be connected to the “Omega Healthcare’s
Second Quarter 2015 Earnings Call.”
To listen to the conference call via webcast, log on to www.omegahealthcare.com
and click the “earnings call” icon on the Company’s home page. Webcast
replays of the call will be available on the Company’s website for two
weeks following the call.
* * * * * *
Omega is a real estate investment trust investing in and providing
financing to the long-term care industry. As of June 30, 2015, Omega has
a portfolio of investments that includes over 900 properties located in
41 states and the United Kingdom and operated by 84 different operators.
________________________
This press release includes forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. All
statements regarding Omega’s or its tenants’, operators’, borrowers’ or
managers’ expected future financial condition, results of operations,
cash flows, funds from operations, dividends and dividend plans,
financing opportunities and plans, capital markets transactions,
business strategy, budgets, projected costs, operating metrics, capital
expenditures, competitive positions, acquisitions, investment
opportunities, dispositions, merger integration, growth opportunities,
expected lease income, continued qualification as a REIT, plans and
objectives of management for future operations and statements that
include words such as “anticipate,” “if,” “believe,” “plan,” “estimate,”
“expect,” “intend,” “may,” “could,” “should,” “will” and other similar
expressions are forward-looking statements. These forward-looking
statements are inherently uncertain, and actual results may differ from
Omega’s expectations. Omega does not undertake a duty to update these
forward-looking statements, which speak only as of the date on which
they are made.
Omega’s actual results may differ materially from those reflected in
such forward-looking statements as a result of a variety of factors,
including, among other things: (i) uncertainties relating to the
business operations of the operators of Omega’s properties, including
those relating to reimbursement by third-party payors, regulatory
matters and occupancy levels; (ii) regulatory and other changes in the
healthcare sector; (iii) changes in the financial position of Omega’s
operators; (iv) the ability of any of Omega’s operators in bankruptcy to
reject unexpired lease obligations, modify the terms of Omega’s
mortgages and impede the ability of to collect unpaid rent or interest
during the pendency of a bankruptcy proceeding and retain security
deposits for the debtor's obligations; (v) the availability and cost of
capital; (vi) changes in Omega’s credit ratings and the ratings of its
debt securities; (vii) competition in the financing of healthcare
facilities; (viii) Omega’s ability to maintain its status as a REIT;
(ix) Omega’s ability to manage, re-lease or sell any owned and operated
facilities; (x) Omega’s ability to sell closed or foreclosed assets on a
timely basis and on terms that allow Omega to realize the carrying value
of these assets; (xi) the effect of economic and market conditions
generally, and particularly in the healthcare industry; (xii) risks
relating to the integration of Aviv’s operations and employees into
Omega and the possibility that the anticipated synergies and other
benefits of the combination with Aviv will not be realized or will not
be realized within the expected timeframe; and (xiii) other factors
identified in Omega’s filings with the Securities and Exchange
Commission. Statements regarding future events and developments and
Omega’s future performance, as well as management's expectations,
beliefs, plans, estimates or projections relating to the future, are
forward looking statements. Omega undertakes no obligation to update any
forward-looking statements contained in this announcement.
OMEGA HEALTHCARE INVESTORS, INC. CONSOLIDATED BALANCE SHEETS
(in thousands, except per share amounts)
|
|
| |
| |
| | June 30, | | December 31, |
| |
| 2015 |
|
|
| 2014 |
|
| |
(Unaudited)
| | |
ASSETS | | | | |
Real estate properties
| | | | |
Land and buildings
| |
$
|
6,513,674
| | |
$
|
3,223,785
| |
Less accumulated depreciation
| |
|
(898,734
|
)
|
|
|
(821,712
|
)
|
Real estate properties – net
| | |
5,614,940
| | | |
2,402,073
| |
Investments in direct financing leases
| | |
571,377
| | | |
539,232
| |
Mortgage notes receivable
| |
|
682,255
|
|
|
|
648,079
|
|
| | |
6,868,572
| | | |
3,589,384
| |
Other investments
| |
|
82,955
|
|
|
|
48,952
|
|
| | |
6,951,527
| | | |
3,638,336
| |
Assets held for sale – net
| |
|
15,903
|
|
|
|
12,792
|
|
Total investments
| | |
6,967,430
| | | |
3,651,128
| |
| | | |
|
Cash and cash equivalents
| | |
25,154
| | | |
4,489
| |
Restricted cash
| | |
21,545
| | | |
29,076
| |
Accounts receivable – net
| | |
189,037
| | | |
168,176
| |
Goodwill
| | |
543,093
| | | |
—
| |
Other assets
| |
|
67,417
|
|
|
|
68,776
|
|
Total assets
| |
$
|
7,813,676
|
|
|
$
|
3,921,645
|
|
| | | |
|
LIABILITIES AND EQUITY | | | | |
Revolving line of credit
| |
$
|
351,000
| | |
$
|
85,000
| |
Term loans
| | |
500,000
| | | |
200,000
| |
Secured borrowings
| | |
263,068
| | | |
251,454
| |
Unsecured borrowings – net
| | |
2,333,856
| | | |
1,842,049
| |
Accrued expenses and other liabilities
| | |
271,584
| | | |
141,815
| |
Deferred income taxes
| |
|
16,852
|
|
|
|
—
|
|
Total liabilities
| |
|
3,736,360
|
|
|
|
2,520,318
|
|
| | | |
|
Equity:
| | | | |
Common stock $.10 par value authorized – 350,000 shares, issued
and outstanding – 183,321 shares as of June 30, 2015 and 127,606
as of December 31, 2014
| | |
18,332
| | | |
12,761
| |
Common stock – additional paid-in capital
| | |
4,503,180
| | | |
2,136,234
| |
Cumulative net earnings
| | |
1,232,478
| | | |
1,147,998
| |
Cumulative dividends paid
| | |
(2,047,257
|
)
| | |
(1,895,666
|
)
|
Accumulated other comprehensive income
| |
|
2,839
|
|
|
|
—
|
|
Total stockholders’ equity
| | |
3,709,572
| | | |
1,401,327
| |
Noncontrolling interest
| |
|
367,744
|
|
|
|
—
|
|
Total equity
| |
|
4,077,316
|
|
|
|
1,401,327
|
|
Total liabilities and equity
| |
$
|
7,813,676
|
|
|
$
|
3,921,645
|
|
| | | | | | | |
|
OMEGA HEALTHCARE INVESTORS, INC. CONSOLIDATED STATEMENTS OF OPERATIONS Unaudited
(in thousands, except per share amounts)
|
|
| |
| |
| | Three Months Ended | | Six Months Ended |
| | June 30, | | June 30, |
| |
| 2015 |
|
|
| 2014 |
|
|
| 2015 |
|
|
| 2014 |
|
Revenue | | |
| | | |
| |
Rental income
| |
$
|
163,112
| | |
$
|
96,242
| | |
$
|
264,076
| | |
$
|
192,160
| |
Income from direct financing leases
| | |
15,020
| | | |
14,146
| | | |
29,366
| | | |
28,230
| |
Mortgage interest income
| | |
17,562
| | | |
9,923
| | | |
34,141
| | | |
19,249
| |
Other investment income – net
| |
|
2,017
|
| |
|
1,489
|
| |
|
3,548
|
| |
|
3,162
|
|
Total operating revenues
| | |
197,711
| | | |
121,800
| | | |
331,131
| | | |
242,801
| |
| | | | | | | |
|
Expenses | | | | | | | | |
Depreciation and amortization
| | |
59,156
| | | |
31,301
| | | |
89,766
| | | |
62,745
| |
General and administrative
| | |
7,435
| | | |
4,012
| | | |
11,839
| | | |
8,246
| |
Stock-based compensation
| | |
2,873
| | | |
2,285
| | | |
4,483
| | | |
4,548
| |
Acquisition costs
| | |
47,084
| | | |
45
| | | |
51,952
| | | |
140
| |
Impairment loss on real estate properties
| | |
6,916
| | | |
1,558
| | | |
12,898
| | | |
1,558
| |
Provisions for uncollectible mortgages, notes and accounts receivable
| |
|
(7
|
)
| |
|
2,761
|
| |
|
(9
|
)
| |
|
2,745
|
|
Total operating expenses
| | |
123,457
| | | |
41,962
| | | |
170,929
| | | |
79,982
| |
| | | | | | | |
|
Income before other income and expense | | | 74,254 | | | | 79,838 | | | | 160,202 | | | | 162,819 | |
Other income (expense) | | | | | | | | |
Interest income
| | |
7
| | | |
17
| | | |
200
| | | |
25
| |
Interest expense
| | |
(38,248
|
)
| | |
(29,447
|
)
| | |
(70,607
|
)
| | |
(56,528
|
)
|
Interest – amortization of deferred financing costs
| | |
(1,826
|
)
| | |
(946
|
)
| | |
(3,179
|
)
| | |
(1,868
|
)
|
Interest – refinancing gain (costs)
| |
|
1,016
|
| |
|
(2,645
|
)
| |
|
(8,361
|
)
| |
|
(4,685
|
)
|
Total other expense
| | |
(39,051
|
)
| | |
(33,021
|
)
| | |
(81,947
|
)
| | |
(63,056
|
)
|
| | | | | | | |
|
Income before gain on assets sold | | | 35,203 | | | | 46,817 | | | | 78,255 | | | | 99,763 | |
Gain on assets sold – net
| |
|
8,802
|
| |
|
-
|
| |
|
8,802
|
| |
|
2,883
|
|
Income from continuing operations before income taxes | | | 44,005 | | | | 46,817 | | | | 87,057 | | | | 102,646 | |
Income taxes
| |
|
(539
|
)
|
|
|
-
|
| |
|
(539
|
)
| |
|
-
|
|
Net income | | | 43,466 | | | | 46,817 | | | | 86,518 | | | | 102,646 | |
Net income attributable to noncontrolling interest | |
| (2,038 | ) | |
| - |
| |
| (2,038 | ) | |
| - |
|
Net income available to common stockholders | | $ | 41,428 |
| | $ | 46,817 |
| | $ | 84,480 |
| | $ | 102,646 |
|
| | | | | | | |
|
Income per common share available to common stockholders: | | | | | | | | |
Basic: | | | | | | | | |
Net income available to common stockholders
| |
$
|
0.23
|
| |
$
|
0.37
|
| |
$
|
0.53
|
| |
$
|
0.82
|
|
Diluted: | | | | | | | | |
Net income
| |
$
|
0.22
|
| |
$
|
0.37
|
| |
$
|
0.53
|
| |
$
|
0.81
|
|
| | | | | | | |
|
Dividends declared and paid per common share
| |
$
|
0.18
|
| |
$
|
0.50
|
| |
$
|
1.07
|
| |
$
|
0.99
|
|
| | | | | | | |
|
Weighted-average shares outstanding, basic
| |
|
182,697
|
| |
|
126,474
|
| |
|
158,521
|
| |
|
125,467
|
|
Weighted-average shares outstanding, diluted
| |
|
194,482
|
| |
|
127,436
|
| |
|
164,644
|
| |
|
126,130
|
|
| | | | | | | | | | | | | | | |
|
OMEGA HEALTHCARE INVESTORS, INC. FUNDS FROM OPERATIONS Unaudited
(in thousands, except per share amounts)
|
|
| |
| |
| | Three Months Ended | | Six Months Ended |
| | June 30, | | June 30, |
| |
| 2015 |
|
|
| 2014 |
| |
| 2015 |
|
|
| 2014 |
|
| | |
| | | |
| |
Net income | |
$
|
43,466
| | |
$
|
46,817
| | |
$
|
86,518
| | |
$
|
102,646
| |
Deduct gain from real estate dispositions
| |
|
(8,802
|
)
| |
|
—
|
| |
|
(8,802
|
)
| |
|
(2,883
|
)
|
Sub – total
| | |
34,664
| | | |
46,817
| | | |
77,716
| | | |
99,763
| |
Elimination of non-cash items included in net income:
| | | | | | | | |
Depreciation and amortization
| | |
59,156
| | | |
31,301
| | | |
89,766
| | | |
62,745
| |
Add back non-cash provision for impairments on real estate properties
| |
|
6,916
|
| |
|
1,558
|
| |
|
12,898
|
| |
|
1,558
|
|
Funds from operations available to common stockholders | |
$
|
100,736
|
| |
$
|
79,676
|
| |
$
|
180,380
|
| |
$
|
164,066
|
|
| | | | | | | |
|
Weighted-average common shares outstanding, basic
| | |
182,697
| | | |
126,474
| | | |
158,521
| | | |
125,467
| |
Restricted stock and PRSUs
| | |
2,796
| | | |
962
| | | |
1,628
| | | |
663
| |
Omega OP Units
| |
|
8,989
|
| |
|
—
|
| |
|
4,495
|
| |
|
—
|
|
Weighted-average common shares outstanding, diluted
| |
|
194,482
|
| |
|
127,436
|
| |
|
164,644
|
| |
|
126,130
|
|
| | | | | | | |
|
Funds from operations per share available to common stockholders | |
$
|
0.52
|
| |
$
|
0.63
|
| |
$
|
1.10
|
| |
$
|
1.30
|
|
| | | | | | | |
|
Adjustments to calculate adjusted funds from operations: | | | | | | | | |
Funds from operations available to common stockholders
| |
$
|
100,736
| | |
$
|
79,676
| | |
$
|
180,380
| | |
$
|
164,066
| |
Deduct non-cash provision for uncollectible accounts receivable,
mortgages and notes
| | |
(7
|
)
| | |
2,761
| | | |
(9
|
)
| | |
2,745
| |
(Deduct)/add back interest refinancing expense
| | |
(1,016
|
)
| | |
2,645
| | | |
8,361
| | | |
4,685
| |
Add back acquisition costs
| | |
47,084
| | | |
45
| | | |
51,952
| | | |
140
| |
Add back non-cash stock-based compensation expense
| |
|
2,873
|
| |
|
2,285
|
| |
|
4,483
|
| |
|
4,548
|
|
Adjusted funds from operations available to common stockholders | |
$
|
149,670
|
| |
$
|
87,412
|
| |
$
|
245,167
|
| |
$
|
176,184
|
|
| | | | | | | |
|
Adjustments to calculate funds available for distribution: | | | | | | | | |
Non-cash interest expense
| | |
1,857
| | | |
994
| | | |
3,277
| | | |
1,972
| |
Capitalized interest
| | |
(403
|
)
|
| |
—
| | | |
(423
|
)
| | |
—
| |
Non-cash revenues
| |
|
(14,990
|
)
|
|
|
(8,663
|
)
| |
|
(24,377
|
)
| |
|
(17,207
|
)
|
Funds available for distribution | |
$
|
136,134
|
| |
$
|
79,743
|
| |
$
|
223,644
|
| |
$
|
160,949
|
|
| | | | | | | | | | | | | | | |
|
Funds From Operations (“FFO”), Adjusted FFO and Adjusted Funds Available
for Distribution (“FAD”) are non-GAAP financial measures. For purposes
of the Securities and Exchange Commission’s Regulation G, a non-GAAP
financial measure is a numerical measure of a company’s historical or
future financial performance, financial position or cash flows that
excludes amounts, or is subject to adjustments that have the effect of
excluding amounts, that are included in the most directly comparable
financial measure calculated and presented in accordance with GAAP in
the statement of operations, balance sheet or statement of cash flows
(or equivalent statements) of the company, or includes amounts, or is
subject to adjustments that have the effect of including amounts, that
are excluded from the most directly comparable financial measure so
calculated and presented. As used in this press release, GAAP refers to
generally accepted accounting principles in the United States of
America. Pursuant to the requirements of Regulation G, the Company has
provided reconciliations of the non-GAAP financial measures to the most
directly comparable GAAP financial measures.
The Company calculates and reports FFO in accordance with the definition
and interpretive guidelines issued by the National Association of Real
Estate Investment Trusts ("NAREIT"), and consequently, FFO is defined as
net income available to common stockholders, adjusted for the effects of
asset dispositions and certain non-cash items, primarily depreciation
and amortization and impairments on real estate assets. The Company
believes that FFO, Adjusted FFO and FAD are important supplemental
measures of its operating performance. Because the historical cost
accounting convention used for real estate assets requires depreciation
(except on land), such accounting presentation implies that the value of
real estate assets diminishes predictably over time, while real estate
values instead have historically risen or fallen with market conditions.
The term FFO was designed by the real estate industry to address this
issue. FFO described herein is not necessarily comparable to FFO of
other real estate investment trusts, or REITs, that do not use the same
definition or implementation guidelines or interpret the standards
differently from the Company.
The Company uses FFO, Adjusted FFO and FAD among the criteria to measure
the operating performance of its business. The Company further believes
that by excluding the effect of depreciation, amortization, impairments
on real estate assets and gains or losses from sales of real estate, all
of which are based on historical costs and which may be of limited
relevance in evaluating current performance, FFO can facilitate
comparisons of operating performance between periods and between other
REITs. The Company offers these measures to assist the users of its
financial statements in analyzing its operating performance and not as
measures of liquidity or cash flow. FFO, Adjusted FFO and FAD are not
measures of financial performance under GAAP and should not be
considered as measures of liquidity, alternatives to net income or
indicators of any other performance measure determined in accordance
with GAAP. Investors and potential investors in the Company’s securities
should not rely on this measure as a substitute for any GAAP measure,
including net income.
Adjusted FFO is calculated as FFO available to common stockholders
excluding the impact of non-cash stock-based compensation and certain
revenue and expense items identified above. FAD is calculated as
Adjusted FFO less non-cash interest expense and non-cash revenue, such
as straight-line rent. The Company believes these measures provide an
enhanced measure of the operating performance of the Company’s core
portfolio as a REIT. FAD is calculated as Adjusted FFO less non-cash
interest expense and non-cash revenue, such as straight-line rent. The
Company’s computation of adjusted FFO and FAD are not comparable to the
NAREIT definition of FFO or to similar measures reported by other REITs,
but the Company believes that they are appropriate measures for this
Company.
2015 FAD AND ADJUSTED FFO GUIDANCE
RECONCILIATION
The following table presents a reconciliation of Omega’s guidance
regarding Adjusted FFO and FAD to projected GAAP earnings. Omega may,
from time to time, update its publicly announced FAD and Adjusted FFO
guidance, but it is not obligated to do so.
|
|
2015 Quarterly Adjusted FFO and FAD Guidance Range per diluted
common share
|
| |
Q1
|
|
Q2
|
|
Q3
|
|
Q4
|
|
Full Year
|
Net Income
| |
$
|
0.32
| | |
$
|
0.22
| | |
$
|
0.39 - $0.41
| | |
$
|
0.35 - $0.36
| | |
$
|
1.28 - $1.31
| |
Depreciation
| | |
0.23
| | | |
0.30
| | | |
0.31
| | | |
0.32
| | | |
1.16
| |
Gain on assets sold
| | |
-
| | | |
(0.05
|
)
| | |
-
| | | |
-
| | | |
(0.05
|
)
|
Real estate impairment
| |
|
0.04
|
| |
|
0.04
|
| |
|
-
|
| |
|
-
|
| |
|
0.08
|
|
FFO
| |
$
|
0.59
| | |
$
|
0.52
| | |
$
|
0.70 - $0.72
| | |
$
|
0.67 - $0.68
| | |
$
|
2.48 - $2.51
| |
Adjustments:
| | | | | | | | | | |
Transaction costs
| | |
0.04
| | | |
0.24
| | | |
0.06
| | | |
-
| | | |
0.35
| |
Interest – refinancing costs
| | |
0.07
| | | |
(0.01
|
)
| | |
-
| | | |
0.11
| | | |
0.16
| |
Stock-based compensation expense
| |
|
0.01
|
| |
|
0.01
|
| |
|
0.01
|
| |
|
0.01
|
| |
|
0.05
|
|
Adjusted FFO
| |
$
|
0.71
| | |
$
|
0.77
| | |
$
|
0.77 - $0.78
| | |
$
|
0.79 - $0.80
| | |
$
|
3.04 - $3.06
| |
Non-cash interest expense
| | |
0.01
| | | |
0.01
| | | |
0.01
| | | |
0.01
| | | |
0.04
| |
Non-cash revenue
| |
|
(0.07
|
)
| |
|
(0.08
|
)
| |
|
(0.08
|
)
| |
|
(0.08
|
)
| |
|
(0.29
|
)
|
FAD
| |
$
|
0.65
| | |
$
|
0.70
| | |
$
|
0.70 - $0.72
| | |
$
|
0.72 - $0.74
| | |
$
|
2.77 - $2.81
| |
| | | | | | | | | |
|
Note: All per share numbers rounded to 2 decimals. This table should
be read in conjunction with the notes to the preceding table under “2015
FAD and Adjusted FFO Guidance” section above.
The following tables present selected portfolio information,
including operator and geographic concentrations, and revenue maturities
for the period ended June 30, 2015, and do not give effect to the
acquisition of Aviv by merger:
|
|
As of June 30, 2015
|
|
As of June 30, 2015
|
Balance Sheet Data | |
Total # of Properties (2) |
|
Total Investment
($000’s)
|
|
% of Investment
| |
# of Operating Properties
|
|
# of Operating Beds
|
Real Property(1)(2) | |
820
|
|
$
|
6,532,874
|
|
84
|
%
| |
809
|
|
80,451
|
Direct Financing Leases
| |
58
| | |
571,377
| |
7
|
%
| |
56
| |
5,643
|
Loans Receivable
| |
58
|
|
|
682,255
|
|
9
|
%
| |
58
|
|
6,097
|
Total Investments
| |
936
| |
$
|
7,786,506
| |
100
|
%
| |
923
| |
92,191
|
| | | | | | | | | |
|
Investment Data |
|
Total # of Properties (2) |
|
Total Investment
($000’s)
|
|
% of Investment
|
|
# of Operating Properties
|
|
# of Operating Beds
|
|
Investment per Bed ($000’s)
|
Skilled Nursing Facilities/Transitional Care (1)(2) | |
843
|
|
$
|
6,866,966
|
|
88
|
%
| |
831
|
|
86,715
|
|
$
|
79
|
Senior Housing
| |
93
|
|
|
919,540
|
|
12
|
%
| |
92
|
|
5,476
|
|
|
168
|
| |
936
| |
$
|
7,786,506
| |
100
|
%
| |
923
| |
92,191
| |
$
|
84
|
(1) Total investment includes a $19.2 million lease inducement and
excludes $15.9 million of properties classified as held-for-sale.
(2)
Total # of properties includes properties classified as held-for-sale,
closed and/or are being used for activities other than patient services.
Revenue Composition ($000's) |
| |
| |
| |
| |
| |
|
|
|
|
|
|
|
Revenue by Investment Type | |
Three Months Ended
| |
Six Months Ended
|
| |
June 30, 2015
| |
June 30, 2015
|
Rental Property (1) | |
$
|
163,112
| |
82
|
%
| |
$
|
264,076
| |
80
|
%
|
Capital Lease
| | |
15,020
| |
8
|
%
| | |
29,366
| |
9
|
%
|
Mortgage Notes
| | |
17,562
| |
9
|
%
| | |
34,141
| |
10
|
%
|
Other Investment Income- net
| |
|
2,017
|
|
1
|
%
|
|
|
3,548
|
|
1
|
%
|
| |
$
|
197,711
| |
100
|
%
| |
$
|
331,131
| |
100
|
%
|
| |
|
|
|
|
|
|
|
Revenue by Facility Type | |
Three Months Ended
| |
Six Months Ended
|
| |
June 30, 2015
|
|
June 30, 2015
|
Skilled Nursing Facilities/Transitional Care (1) | |
$
|
179,249
| |
91
|
%
| |
$
|
304,945
| |
92
|
%
|
Senior Housing
| | |
16,445
| |
8
|
%
| | |
22,638
| |
7
|
%
|
Other
| |
|
2,017
|
|
1
|
%
|
|
|
3,548
|
|
1
|
%
|
| |
$
|
197,711
| |
100
|
%
| |
$
|
331,131
| |
100
|
%
|
(1) 2nd quarter revenue includes $0.8 million reduction for
lease inducement and $1.6 million year-to-date.
Note: the Company’s results for the six-month period ended June 30, 2015
do not reflect the operations of Aviv for the three-month period ended
March 31, 2015, and accordingly are not indicative of the Company’s
results for future periods.
Operator Concentration by Investment ($000's) |
|
As of June 30, 2015
|
| |
Total # of Properties (1) |
|
Total Investment (2) |
|
% of Investment
|
New Ark Investment, Inc.
| |
59
| |
$
|
579,130
| |
7
|
%
|
Ciena Healthcare
| |
31
| | |
418,689
| |
5
|
%
|
Maplewood Real Estate Holdings, LLC
| |
10
| | |
365,220
| |
5
|
%
|
Genesis Healthcare
| |
59
| | |
358,027
| |
5
|
%
|
CommuniCare Health Services, Inc.
| |
36
| | |
357,349
| |
5
|
%
|
Daybreak Venture, LLC
| |
54
| | |
348,952
| |
4
|
%
|
Laurel
| |
27
| | |
308,047
| |
4
|
%
|
Health & Hospital Corporation
| |
44
| | |
304,719
| |
4
|
%
|
Saber Health Group
| |
30
| | |
281,782
| |
4
|
%
|
Diversicare Healthcare Services
| |
36
| | |
272,069
| |
3
|
%
|
Remaining 74 Operators
| |
550
| |
|
4,192,522
| |
54
|
%
|
| |
936
| |
$
|
7,786,506
| |
100
|
%
|
|
(1) Total # of properties includes properties classified as
held-for-sale, closed and/or are being used for activities other
than patient services.
(2) Total investment includes a $19.2 million lease inducement and
excludes $15.9 million of properties classified as held-for-sale.
|
|
Concentration by State |
|
Total # of Properties (1) |
|
Total Investment (2) |
|
% of Investment
|
Ohio
| |
86
| |
$
|
800,404
| |
10
|
%
|
Texas
| |
109
| | |
687,968
| |
9
|
%
|
Florida
| |
96
| | |
660,037
| |
9
|
%
|
Michigan
| |
47
| | |
588,073
| |
8
|
%
|
California
| |
60
| | |
514,455
| |
7
|
%
|
Pennsylvania
| |
44
| | |
461,525
| |
6
|
%
|
Indiana
| |
60
| | |
386,522
| |
5
|
%
|
Arkansas
| |
33
| | |
251,415
| |
3
|
%
|
Connecticut
| |
6
| | |
239,025
| |
3
|
%
|
South Carolina
| |
22
| | |
231,084
| |
3
|
%
|
Mississippi
| |
19
| | |
224,096
| |
3
|
%
|
Kentucky
| |
26
| | |
189,226
| |
2
|
%
|
Massachusetts
| |
16
| | |
176,791
| |
2
|
%
|
Maryland
| |
16
| | |
174,077
| |
2
|
%
|
Missouri
| |
23
| | |
159,992
| |
2
|
%
|
Tennessee
| |
20
| | |
155,427
| |
2
|
%
|
Remaining 25 States and United Kingdom
| |
253
| |
|
1,886,389
| |
24
|
%
|
| |
936
| |
$
|
7,786,506
| |
100
|
%
|
|
(1) Total # of properties includes properties classified as
held-for-sale, closed and/or are being used for activities other
than patient services.
(2) Total investment includes a $19.2 million lease inducement and
excludes $15.9 million of properties classified as held-for-sale.
|
|
Revenue Maturities ($000's) |
|
|
As of June 30, 2015
|
Operating Lease Expirations
& Loan Maturities
| | |
Year
|
|
2015 Current
Lease
Revenue
|
|
2015 Current
Interest
Revenue
|
|
2015 Lease and
Interest
Revenue
|
|
%
|
|
| | |
2015
|
|
$
|
2,394
|
|
$
|
-
|
|
$
|
2,394
|
|
0.3
|
%
|
| | |
2016
| | |
3,139
| | |
-
| | |
3,139
| |
0.4
|
%
|
| | |
2017
| | |
13,829
| | |
109
| | |
13,938
| |
1.9
|
%
|
| | |
2018
| | |
54,828
| | |
1,473
| | |
56,301
| |
7.8
|
%
|
| | |
2019
| | |
3,040
| | |
-
| | |
3,040
| |
0.4
|
%
|
| | |
2020
| | |
7,971
| | |
-
| | |
7,971
| |
1.1
|
%
|
|
Note: Based on 2015 contractual revenues.
|
|
The following tables present operator revenue mix, census and
coverage data based on information provided by our operators:
Operator Revenue Mix |
|
As of March 31, 2015
|
| |
Medicaid
|
|
Medicare /
Insurance
|
|
Private / Other
|
| | |
| |
| |
Three-months ended March 31, 2015 (1) | |
51.0
|
%
| |
39.7
|
%
| |
9.3
|
%
|
Three-months ended December 31, 2014 (1) | |
53.2
|
%
| |
37.3
|
%
| |
9.5
|
%
|
Three-months ended September 30, 2014 (2) | |
53.9
|
%
| |
38.4
|
%
| |
7.7
|
%
|
Three-months ended June 30, 2014 (2) | |
53.0
|
%
| |
39.2
|
%
| |
7.8
|
%
|
Three-months ended March 31, 2014 (2) | |
53.1
|
%
| |
39.3
|
%
| |
7.6
|
%
|
| | | | | |
|
(1) Includes results for Aviv legacy properties.
(2) Excludes results for Aviv legacy properties.
|
|
Operator Census and Coverage |
|
|
|
Coverage Data
|
| |
Occupancy(3) |
|
Before
Management Fees
|
|
After
Management Fees
|
| | | | |
| |
Twelve-months ended March 31, 2015 (1) | |
82.3
|
%
| |
1.8x
| |
1.4x
|
Twelve-months ended December 31, 2014 (2) | |
84.5
|
%
| |
1.8x
| |
1.4x
|
Twelve-months ended September 30, 2014 (2) | |
84.3
|
%
| |
1.8x
| |
1.4x
|
Twelve-months ended June 30, 2014 (2) | |
84.2
|
%
| |
1.8x
| |
1.4x
|
Twelve-months ended March 31, 2014 (2) | |
83.7
|
%
| |
1.8x
| |
1.4x
|
(1) Includes results for Aviv legacy properties.
(2) Excludes results for Aviv legacy properties.
(3) Based on available (operating) beds.
|
|
The following table presents a debt maturity schedule as of June 30,
2015:
Debt Maturities ($000’s) |
|
|
Secured Debt
|
|
Unsecured Debt
|
| |
Year
| | |
HUD Mortgages (1) |
|
GE Term Loan
|
|
Line of Credit (2)(3) |
|
Senior Notes
(4) |
|
Sub Notes
(5) |
|
Total Debt
|
2015
| | | |
-
|
|
-
|
| |
-
|
| |
-
|
| |
-
| | |
-
|
2016
| | | |
-
| |
-
| | |
-
| | |
-
| | |
-
| | |
-
|
2017
| | | |
-
| |
-
| | |
300,000
| | |
-
| | |
-
| | |
300,000
|
2018
| | | |
-
| |
-
| | |
1,250,000
| | |
-
| | |
-
| | |
1,250,000
|
2019
| | | |
-
| |
180,000
| | |
200,000
| | |
-
| | |
-
| | |
380,000
|
2020
| | | |
-
| |
-
| | |
-
| | |
-
| | |
-
| | |
-
|
Thereafter
| | |
|
80,927
|
|
-
|
|
|
-
|
|
|
2,325,000
|
|
|
20,000
|
|
|
2,425,927
|
| | |
$
|
80,927
|
|
180,000
|
|
$
|
1,750,000
|
|
$
|
2,325,000
|
|
$
|
20,000
|
|
$
|
4,355,927
|
| | | | | | | | | | | | |
|
(1) Excludes $2.1 million of fair market valuation (adjustments).
(2) Reflected at 100% borrowing capacity.
(3) Comprised of a $200 million acquisition term loan and $100
million Omega OP term loan due 2017, $1.25 billion revolver
(excluding $250 million accordion) due 2018 and a $200 million
term loan due 2019.
(4) Excludes net discount of $11.8 million.
(5) Excludes $0.7 million of fair market valuation (adjustments).
|
|
The following table presents investment activity for the three-and
six-month period ended June 30, 2015:
Investment Activity ($000's) |
|
Three Months Ended
|
|
Six Months Ended
|
| |
June 30, 2015
|
|
June 30, 2015
|
Funding by Investment Type:
| |
$ Amount
|
|
%
|
|
|
$ Amount
|
|
%
|
|
| | |
| | | |
| |
Real Property
| |
$
|
177,484
| |
90
|
%
| |
$
|
183,784
| |
85
|
%
|
Construction-in-Progress
| | |
9,639
| |
5
|
%
| | |
15,490
| |
7
|
%
|
Capital Expenditures
| |
|
8,857
|
|
5
|
%
|
|
|
17,931
|
|
8
|
%
|
Total
| |
$
|
195,980
| |
100
|
%
| |
$
|
217,205
| |
100
|
%
|
| | | | | | | | | | | |
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20150803006339/en/
Contacts:
Omega Healthcare Investors, Inc.
Bob Stephenson, 410-427-1700
CFO
Source: Omega Healthcare Investors, Inc.
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