Omega Announces First Quarter 2017 Financial Results; Increased Dividend Rate for 19th Consecutive Quarter

Company Release - May 03, 2017 18:35

Omega Announces First Quarter 2017 Financial Results; Increased Dividend Rate for 19th Consecutive Quarter

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 March 31, 2017. The Company reported for the three-month period ended March 31, 2017 net income of $109.1 million, or $0.53 per common share, Funds From Operations (“FFO”) of $181.0 million or $0.88 per common share, and Funds Available For Distribution (“FAD”) of $159.4 million.

FFO for the first quarter of 2017 includes $3.7 million of non-cash stock-based compensation expense and $2.4 million in provisions for uncollectible accounts. These costs were partially offset by a $10.4 million one-time contractual settlement. Adjusted FFO is $0.86 per common share for the three-month period ended March 31, 2017. FFO, Adjusted FFO and FAD are non-GAAP financial measures. For more information regarding FFO and Adjusted FFO, see the “Funds From Operations” schedule.

GAAP NET INCOME

For the three-month period ended March 31, 2017, the Company reported net income of $109.1 million, or $0.53 per common share, on operating revenues of $231.7 million. This compares to net income of $58.2 million, or $0.29 per common share, on operating revenues of $212.9 million, for the same period in 2016.

The increase in net income for the three-month period ended March 31, 2017 compared to the prior year was primarily due to revenue associated with new investments completed in 2016, a one-time contractual settlement in 2017 and the reduction in impairments on real estate assets and acquisition costs. This increase in net income was partially offset by $7.6 million in increased depreciation and amortization expense, $1.1 million in incremental general and administrative expenses and $1.0 million in increased stock-based compensation expense.

2017 RECENT DEVELOPMENTS AND FIRST QUARTER HIGHLIGHTS

In Q2 2017, the Company

  • redeemed $400 million of its 5.875% senior notes due 2024.
  • prepaid its $200 million senior unsecured term loan.
  • issued $550 million aggregate principal amount of its 4.750% Senior Notes due 2028.
  • issued $150 million aggregate principal amount of its 4.500% Senior Notes due 2025.
  • increased its quarterly common stock dividend rate to $0.63 per share.

In Q1 2017, the Company

  • completed $7.6 million in new investments.
  • invested $30 million in capital renovation and construction-in-progress projects.
  • increased its quarterly common stock dividend rate to $0.62 per share.

FIRST QUARTER 2017 RESULTS

Operating Revenues and Expenses – Operating revenues for the three-month period ended March 31, 2017 totaled $231.7 million which included $18.1 million of non-cash revenue.

Operating expenses for the three-month period ended March 31, 2017 totaled $92.5 million and were comprised of $70.0 million of depreciation and amortization expense, $8.8 million of general and administrative expense, $7.6 million of impairment on real estate properties, $3.7 million of stock-based compensation expense and $2.4 million in provision for uncollectible accounts. The $7.6 million and $2.4 million charges were primarily the result of the Company’s continued effort to exit certain non-strategic facilities.

Other Income and Expense – Other income and expense for the three-month period ended March 31, 2017 was a net expense of $37.1 million, which was primarily comprised of $45.0 million of interest expense and $2.5 million of amortized deferred financing costs. The expense was offset by a one-time $10.4 million contractual settlement with an unrelated third party related to a 2012 contingent liability obligation that was resolved in the first quarter of 2017.

Funds From Operations – For the three-month period ended March 31, 2017, FFO was $181.0 million, or $0.88 per common share on 206 million weighted-average common shares outstanding, compared to $153.6 million, or $0.77 per common share on 198 million weighted-average common shares outstanding, for the same period in 2016.

The $181.0 million of FFO for the three-month period ended March 31, 2017 includes the impact of $3.7 million of non-cash stock-based compensation expense and $2.4 million in provision for uncollectible accounts, offset by a $10.4 million non-cash contractual settlement.

The $153.6 million of FFO for the three-month period ended March 31, 2016 includes the impact of $5.1 million in provision for uncollectible accounts, $3.8 million of acquisition costs, $2.8 million of non-cash stock-based compensation expense and $0.3 million of interest refinancing costs.

Adjusted FFO was $176.7 million, or $0.86 per common share, for the three months ended March 31, 2017, compared to $165.4 million, or $0.83 per common share, for the same period in 2016. For further information see the “Funds From Operations” schedule.

FINANCING ACTIVITIES

$550 Million Senior Notes and $150 Million Senior Notes – On April 4, 2017, Omega issued (i) $550 million aggregate principal amount of its 4.750% Senior Notes due 2028 (the “2028 Notes”) and (ii) an additional $150 million aggregate principal amount of its existing 4.500% Senior Notes due 2025 (the “2025 Notes,” and together with the 2028 Notes collectively, the “Notes”). The 2028 Notes mature on January 15, 2028 and the 2025 Notes mature on January 15, 2025.

The 2028 Notes were sold at an issue price of 98.978% of their face value before the underwriters’ discount and the 2025 Notes were sold at an issue price of 99.540% of their face value before the underwriters’ discount. The net proceeds from the offering, after deducting underwriting discounts and expenses, were approximately $690.7 million. The net proceeds from the Notes offering were used to (i) redeem all of the Company’s outstanding $400 million aggregate principal amount of 5.875% Senior Notes due 2024 (the “2024 Notes”) on April 28, 2017, (ii) prepay a $200 million senior unsecured incremental term loan facility (the “Tranche A-2 Term Loan Facility”) on April 5, 2017 that otherwise would have become due on June 27, 2017, and (iii) repay outstanding borrowings under its revolving credit facility.

$400 Million Senior Notes Redemption – On April 28, 2017, the Company redeemed all of its outstanding 2024 Notes. As a result of the redemption, during the second quarter of 2017, the Company will record approximately $16.5 million in redemption related costs and write-offs, including $11.8 million for the call premium and $4.7 million in net write-offs associated with unamortized deferred financing costs.

Equity Shelf Program and Dividend Reinvestment and Common Stock Purchase Plan – During the three-month period ended March 31, 2017, the Company sold 0.5 million shares of its common stock generating $14.4 million of gross proceeds. The following table outlines shares of the Company’s common stock issued under its Equity Shelf program and its Dividend Reinvestment and Common Stock Purchase Plan in 2017:

           
(in thousands, except price per share)

Equity Shelf

(At-the-Market)

Program

Dividend

Reinvestment and

Common Stock

Purchase Program

Q1 2017
 
Number of shares 228 239
Average price per share $ 31.12 $ 30.67
Gross proceeds $ 7,079 $ 7,335
 

2017 FIRST QUARTER PORTFOLIO ACTIVITY

$38 Million of New Investments in Q1 2017 – In Q1 2017, the Company completed a new $8 million investment and $30 million in capital renovations and new construction consisting of the following:

$8 Million AcquisitionOn January 31, 2017, the Company completed a purchase/leaseback of one assisted living facility (“ALF”) for $7.6 million. The 60 bed ALF, located in Virginia, was added to the existing operator’s master lease with an initial annual cash yield of 7.5% with 2.5% annual escalators.

$30 Million Capital Renovation Projects – In addition to the new investment outlined above, in Q1 2017, the Company invested approximately $30 million under its capital renovation and construction-in-progress programs.

ASSET DISPOSITIONS AND IMPAIRMENTS

During the first quarter of 2017, the Company sold 15 facilities for approximately $45.8 million in net cash proceeds recognizing a gain of approximately $7.4 million. Eleven of the sold facilities were previously classified as assets held for sale. In addition, the Company recorded approximately $7.6 million of impairments on three facilities, one of which was reclassified to assets held for sale on March 31, 2017.

As of March 31, 2017, the Company had nine facilities, totaling $23.2 million, classified as assets held for sale. The Company expects to sell these facilities over the next few quarters.

DIVIDENDS

On April 13, 2017, the Board of Directors declared a common stock dividend of $0.63 per share, increasing the quarterly common dividend by $0.01 per share over the prior quarter, to be paid May 15, 2017 to common stockholders of record on May 1, 2017.

2017 ADJUSTED FFO GUIDANCE AFFIRMED

The Company affirmed its 2017 annual Adjusted FFO available to common stockholders to be between $3.40 and $3.44 per diluted share. The Company's 2017 FAD guidance and reconciliation to projected net income can be found in the Company's First Quarter 2017 Financial Supplement located on the Company's website. The following table presents a reconciliation of Omega’s guidance regarding Adjusted FFO to projected GAAP earnings.

     
2017 Annual Adjusted FFO
Guidance Range
(per diluted common share)
Full Year
Net Income $1.86 - $1.90
Depreciation 1.40
Gain on assets sold (0.04)
Real estate impairment 0.04
FFO $3.26 - $3.30
Adjustments:
Contractual settlement (0.05)
Provision for uncollectible accounts 0.01
Transaction costs 0.00
Interest – refinancing costs 0.11
Stock-based compensation expense 0.07
Adjusted FFO $3.40 - $3.44
 

Note: All per share numbers rounded to 2 decimals.

 

The Company's Adjusted FFO guidance for 2017 includes approximately $100 million of planned capital renovation projects; however, it excludes the impact of additional new investments. It also excludes the impact of gains and losses from the sale of assets, revenue from divestitures, certain revenue and expense items, interest refinancing expense, capital transactions, acquisition costs, provision for uncollectible accounts, and stock-based compensation expense. The Company may, from time to time, update its publicly announced Adjusted FFO guidance, but it is not obligated to do so.

The Company's guidance is based on a number of assumptions, which are subject to change and many of which are outside the Company’s control. If actual results vary from these assumptions, the Company's expectations may change. Without limiting the generality of the foregoing, the timing and completion of acquisitions, divestitures, capital and financing transactions, and variations in stock-based compensation expense may cause actual results to vary materially from our current expectations. There can be no assurance that the Company will achieve its projected results.

CONFERENCE CALL

The Company will be conducting a conference call on Thursday, May 4, 2017 at 10 a.m. Eastern to review the Company’s 2017 first 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 First Quarter 2017 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 March 31, 2017, Omega has a portfolio of investments that includes approximately 1,000 properties located in 42 states and the United Kingdom and operated by 77 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, if any; (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) the potential impact of changes in the SNF and ALF market or local real estate conditions on the Company’s ability to dispose of assets held for sale for the anticipated proceeds or on a timely basis, or to redeploy the proceeds therefrom on favorable terms 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)

 
 
    March 31,     December 31,
2017     2016
(Unaudited)
ASSETS
Real estate properties
Real estate investments $ 7,581,665 $ 7,566,358
Less accumulated depreciation   (1,306,084 )       (1,240,336 )
Real estate investments – net 6,275,581 6,326,022
Investments in direct financing leases – net 604,777 601,938
Mortgage notes receivable – net   644,696         639,343  
7,525,054 7,567,303
Other investments – net 255,899 256,846
Investment in unconsolidated joint venture 40,152 48,776
Assets held for sale – net   23,245         52,868  
Total investments 7,844,350 7,925,793
 
Cash and cash equivalents 40,349 93,687
Restricted cash 12,198 13,589
Accounts receivable – net 272,506 240,035
Goodwill 643,692 643,474
Other assets   29,023         32,682  
Total assets $ 8,842,118       $ 8,949,260  
 
LIABILITIES AND EQUITY
Revolving line of credit $ 123,000 $ 190,000
Term loans – net 1,094,875 1,094,343
Secured borrowings – net 54,052 54,365
Unsecured borrowings – net 3,028,938 3,028,146
Accrued expenses and other liabilities 316,985 360,514
Deferred income taxes   9,746         9,906  
Total liabilities   4,627,596         4,737,274  
 
Equity:

Common stock $.10 par value authorized – 350,000 shares, issued and outstanding – 196,761 shares as of March 31, 2017 and 196,142 as of December 31, 2016

19,676

19,614

Common stock – additional paid-in capital 4,878,637 4,861,408
Cumulative net earnings 1,843,377 1,738,937
Cumulative dividends paid (2,829,718 ) (2,707,387 )
Accumulated other comprehensive loss   (48,478 )       (53,827 )
Total stockholders’ equity 3,863,494 3,858,745
Noncontrolling interest   351,028         353,241  
Total equity   4,214,522         4,211,986  
Total liabilities and equity $ 8,842,118       $ 8,949,260  
 
 

OMEGA HEALTHCARE INVESTORS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

Unaudited

(in thousands, except per share amounts)

 
 
    Three Months Ended
March 31,
2017     2016
Revenue    
Rental income $ 192,537 $ 176,703
Income from direct financing leases 15,646 15,442
Mortgage interest income 15,956 16,606
Other investment income – net 6,914 3,431
Miscellaneous income   691     697  
Total operating revenues 231,744 212,879
 
Expenses
Depreciation and amortization 69,993 62,433
General and administrative 8,780 7,677
Stock-based compensation 3,744 2,778
Acquisition costs (41 ) 3,771
Impairment loss on real estate properties 7,638 34,558
Provision for uncollectible accounts   2,404     5,124  
Total operating expenses 92,518 116,341
 
Income before other income and expense139,22696,538
Other income (expense)
Interest income 4 8
Interest expense (45,041 ) (37,222 )
Interest – amortization of deferred financing costs (2,502 ) (2,132 )
Interest – refinancing costs - (298 )
Contractual settlement 10,412 -
Realized gain (loss) on foreign exchange   61     (22 )
Total other expense (37,066 ) (39,666 )
 
Income before gain on assets sold102,16056,872
Gain on assets sold – net   7,420     1,571  
Income from continuing operations109,58058,443
Income tax expense (1,100 ) (247 )
Income from unconsolidated joint venture   632     -  
Net income109,11258,196
Net income attributable to noncontrolling interest   (4,672)   (2,641)
Net income available to common stockholders$104,440   $55,555  
 
Income per common share available to common stockholders:
Basic:
Net income available to common stockholders $ 0.53   $ 0.30  
Diluted:
Net income $ 0.53   $ 0.29  
 
Dividends declared per common share $ 0.62   $ 0.57  
 
Weighted-average shares outstanding, basic   197,013     188,228  
Weighted-average shares outstanding, diluted   206,174     198,350  
 
 

OMEGA HEALTHCARE INVESTORS, INC.

FUNDS FROM OPERATIONS

Unaudited

(in thousands, except per share amounts)

 
 
    Three Months Ended
March 31,
2017     2016
   
Net income $ 109,112 $ 58,196
Deduct gain from real estate dispositions   (7,420 )   (1,571 )
Sub – total 101,692 56,625
Elimination of non-cash items included in net income:
Depreciation and amortization 69,993 62,433
Depreciation - unconsolidated joint venture 1,658
Add back non-cash provision for impairments on real estate properties   7,638     34,558  
Funds from operations $ 180,981   $ 153,616  
 
Weighted-average common shares outstanding, basic 197,013 188,228
Restricted stock and PRSUs 347 1,175
Omega OP Units   8,814     8,947  
Weighted-average common shares outstanding, diluted   206,174     198,350  
 
Funds from operations available per share $ 0.88   $ 0.77  
 
Adjustments to calculate adjusted funds from operations:
Funds from operations available to common stockholders $ 180,981 $ 153,616
Deduct one-time revenue (235 )
Deduct contractual settlement (10,412 )
(Deduct) add back acquisition costs (41 ) 3,771
Add back provision for uncollectible accounts 2,404 5,124
Add back interest refinancing expense 298
Add back non-cash stock-based compensation expense   3,744     2,778  
Adjusted funds from operations $ 176,676   $ 165,352  
 
Adjustments to calculate funds available for distribution:
Non-cash interest expense 2,810 2,100
Capitalized interest (1,989 ) (1,720 )
Non-cash revenues   (18,129 )   (17,209 )
Funds available for distribution $ 159,368   $ 148,523  
 

Funds From Operations (“FFO”), Adjusted FFO and 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 exclude 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 include 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 (computed in accordance with GAAP), adjusted for the effects of asset dispositions and certain non-cash items, primarily depreciation and amortization and impairments on real estate assets, and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures will be calculated to reflect funds from operations on the same basis. 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.

Adjusted FFO is calculated as FFO 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. 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.

The Company uses these non-GAAP measures among the criteria to measure the operating performance of its business. The Company also uses Adjusted FFO among the performance metrics for performance-based compensation of officers. 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. These non-GAAP measures 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 these non-GAAP measures as substitutes for any GAAP measure, including net income.

 

The following tables present selected portfolio information, including operator and geographic concentrations, and revenue maturities for the period ended March 31, 2017:

       
As of March 31, 2017 As of March 31, 2017
Balance Sheet Data

Total # of
Properties (2)

 

Total
Investment
($000’s)

 

% of
Investment

# of Operating
Properties(4)

 

# of Operating
Beds

Real Estate Investments (1) 869   $ 7,600,865   86 % 867   87,718
Direct Financing Leases 58 604,777 7 % 57 5,695

Mortgage Notes Receivable

49     641,501   7 % 48   5,115
Total Investments 976 $ 8,847,143 100 % 972 98,528
 
                       
Investment Data

Total # of
Properties
(2)

 

Total
Investment
($000’s)

 

% of
Investment

# of
Operating
Properties
(4)

 

# of
Operating
Beds

 

Investment
per Bed
($000’s)

Skilled Nursing Facilities / Transitional Care (1) 861  

$

7,558,759

  85 % 860   91,369   $ 83
Senior Housing (3) 115     1,288,384   15 % 112   7,159 $ 180
976 $ 8,847,143 100 % 972 98,528 $ 90
 
(1)   Total Investment includes a $19.2 million lease inducement and excludes $23.2 million of assets (nine properties) classified as assets held for sale.
(2) Total # of Properties excludes properties classified as assets held for sale.
(3) Includes ALFs, memory care and independent living facilities.
(4) Total # of Operating Properties excludes facilities which are non-operating, closed and/or not currently providing patient services.
 
     
Revenue Composition ($000's)
     
Revenue by Investment Type Three Months Ended
March 31, 2017
Rental Property $ 192,537 83 %
Direct Financing Leases 15,646 7 %
Mortgage Notes 15,956 7 %
Other Investment Income and Miscellaneous Income - net   7,605   3 %
$ 231,744 100 %
 
 
Revenue by Facility Type Three Months Ended
March 31, 2017
Skilled Nursing Facilities/Transitional Care $ 199,464 86 %
Senior Housing 24,675 11 %
Other   7,605   3 %
$ 231,744 100 %
 
     

Operator Concentration by Investment
($000’s)

As of March 31, 2017

Total # of
Properties (1)

 

Total Investment
(2)

 

% of
Investment

Ciena Healthcare 68   $ 914,187   10.3%
New Ark Investment, Inc. 59 622,137 7.0%
Signature Holdings II, LLC 62 549,928 6.2%
Maplewood Real Estate Holdings, LLC 13 535,561 6.1%
Saber Health Group 45 486,043 5.5%
CommuniCare Health Services, Inc. 35 392,210 4.4%
Genesis Healthcare 50 337,545 3.8%
Daybreak Venture, LLC 48 336,843 3.8%
Health & Hospital Corporation 44 304,711 3.5%
Diversicare Healthcare Services 35 277,980 3.2%
Remaining 67 Operators 517     4,089,998   46.2%
976 $ 8,847,143 100.0%
 
(1)   Total # of Properties excludes nine properties classified as assets held for sale.
(2) Total Investment includes a $19.2 million lease inducement and excludes $23.2 million (nine properties) classified as assets held for sale.
 
             

Geographic Concentration by
Investment ($000’s)

Total # of
Properties (1)

 

Total Investment (2)

 

% of
Investment

Ohio 87   $ 843,813   9.5%
Texas 109 786,418 8.9%
Florida 95 783,921 8.9%
Michigan 46 604,294 6.8%
California 55 511,722 5.8%
Pennsylvania 43 468,529 5.3%
Indiana 59 406,490 4.6%
Tennessee 41 345,290 3.9%
Virginia 17 303,034 3.4%
South Carolina 23 268,947 3.1%
Remaining 32 states (3) 366     3,267,239   36.9%
941 8,589,697 97.1%
United Kingdom 35     257,446   2.9%
976 $ 8,847,143 100.0%
 
(1)   Total # of Properties excludes nine properties classified as assets held for sale.
(2) Total Investment includes a $19.2 million lease inducement and excludes $23.2 million (nine properties) classified as assets held for sale.
(3) # of states and Total Investment includes New York City 2nd Avenue development project.
 
     
Revenue Maturities ($000's) As of March 31, 2017

Operating Lease Expirations
& Loan Maturities

Year  

2017 Lease
Revenue

 

2017
Interest
Revenue

 

2017 Lease
and Interest
Revenue

  %
2017   $ 7,622   $ 342   $ 7,964   0.9%
2018 38,116 1,625 39,741 4.7%
2019 2,986 650 3,636 0.4%
2020 5,575 8,480 14,055 1.7%
2021 10,506 935 11,441 1.4%
2022 65,705 2,879 68,584 8.1%
 
Note: Based on annualized 1st quarter 2017 contractual revenues.
 
 

The following tables present operator revenue mix, census and coverage data based on information provided by our operators as of December 31, 2016:

 
       
Operator Revenue Mix As of December 31, 2016
Medicaid  

Medicare /
Insurance

 

Private / Other

   
Three-months ended December 31, 2016 52.6% 35.8% 11.6%
Three-months ended September 30, 2016 53.0% 35.8% 11.2%
Three-months ended June 30, 2016 51.8% 37.5% 10.7%
Three-months ended March 31, 2016 51.8% 38.6% 9.6%
Three-months ended December 31, 2015 53.1% 37.5% 9.4%
 
 
 
Operator Census and Coverage

 

  Coverage Data

Occupancy (1)

 

Before
Management
Fees

 

After
Management
Fees

 
Twelve-months ended December 31, 2016 82.2% 1.69x 1.33x
Twelve-months ended September 30, 2016 82.1% 1.68x 1.31x
Twelve-months ended June 30, 2016 82.1% 1.72x 1.34x
Twelve-months ended March 31, 2016 82.2% 1.75x 1.37x
Twelve-months ended December 31, 2015 82.5% 1.78x 1.40x
 
(1)   Based on available (operating) beds.
 

The following table presents a debt maturity schedule as of April 30, 2017:

                   

Debt
Maturities
($000’s)

Secured Debt

 

Unsecured Debt

 
Year

HUD
Mortgages (1)

 

Line of Credit
and Term Loans
(2)(3)

 

Senior
Notes/Other
(4)

 

Sub Notes
(5)

 

Total Debt
Maturities

2017

$

-

 

$

-

 

$

-

 

$

-

 

$

-

2018 - - - - -
2019 -

1,550,000

- - 1,550,000
2020 -

-

- - -
2021 -

350,000

- 20,000 370,000
2022 -

250,000

- - 250,000

Thereafter

  54,530    

-

   

3,350,000

    -     3,404,530

$

54,530

 

$

2,150,000

 

$

3,350,000

 

$

20,000

 

$

5,574,530

 
(1)   Mortgages guaranteed by HUD (excluding net deferred financing costs of $0.6 million).
(2) Reflected at 100% borrowing capacity.
(3) $1.55 billion is comprised of a: $100 million term loan to Omega’s operating partnership, $200 million Tranche A-1 term loan and $1.25 billion revolving credit facility (excluding a $250 million accordion feature and $5.1 million net deferred financing costs) assuming the exercise of existing extension rights.
(4) Excludes net discounts , deferred financing costs and a $1.5 million promissory note.
(5) Excludes $0.5 million of fair market valuation adjustments.
 
 

The following table presents investment activity for the three–month period ended March 31, 2017:

 
     
Investment Activity ($000's) Three Months Ended
March 31, 2017
Funding by Investment Type $ Amount   %
Real Property $ 7,574   20.3%
Construction-in-Progress 13,673 36.6%
Capital Expenditures 13,865 37.1%
Investment in Direct Financing Leases   2,229   6.0%
Total $ 37,341 100.0%
 

Omega Healthcare Investors, Inc.
Bob Stephenson, CFO, 410-427-1700

Source: Omega Healthcare Investors, Inc.