Omega Announces Third Quarter 2010 Financial Results; Adjusted FFO of $0.45 Per Share for the Third Quarter

HUNT VALLEY, Md.--(BUSINESS WIRE)-- Omega Healthcare Investors, Inc. (NYSE:OHI) (the "Company" or "Omega") today announced its results of operations for the quarter ended September 30, 2010. The Company also reported Funds From Operations ("FFO") available to common stockholders for the three months ended September 30, 2010 of $42.5 million or $0.44 per common share. The $42.5 million of FFO available to common stockholders for the third quarter of 2010 includes $0.5 million of non-cash restricted stock expense, a $0.5 million net loss associated with owned and operated assets and $78 thousand of costs associated with 2010 acquisitions. 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 $0.45 per common share for the three months ended September 30, 2010. FFO and Adjusted FFO are non-GAAP financial measures. Adjusted FFO is calculated as FFO available to common stockholders less certain non-cash items and certain items of revenue or expense, including, but not limited to: results of operations of owned and operated facilities during the period, expenses associated with acquisitions and restricted stock expense. For more information regarding FFO and Adjusted FFO, see the "Funds From Operations" section below.

GAAP NET INCOME

For the three-month period ended September 30, 2010, the Company reported net income of $17.0 million and net income available to common stockholders of $14.7 million, or $0.15 per diluted common share on operating revenues of $69.7 million. This compares to net income of $21.1 million and net income available to common stockholders of $18.9 million, or $0.22 per diluted common share on operating revenues of $49.8 million, for the same period in 2009.

For the nine-month period ended September 30, 2010, the Company reported net income of $53.5 million, net income available to common stockholders of $46.7 million, or $0.50 per diluted common share on operating revenues of $187.2 million. This compares to net income of $65.9 million, net income available to common stockholders of $59.1 million, or $0.71 per diluted common share on operating revenues of $148.1 million, for the same period in 2009.

The year-to-date decreases in both net income and net income available to common stockholders were primarily due to: (i) increased depreciation expense associated with approximately $900 million of new investments (including capital improvements) made throughout 2009 and 2010; (ii) increased interest expense associated with debt issued and assumed in connection with the CapitalSource Inc. ("CapitalSource") asset acquisitions; (iii) acquisition deal related expenses; (iv) the incremental impact of proceeds received from a 2009 legal settlement versus a second quarter 2010 legal settlement; (v) increase in general and administrative expenses resulting from the new investments; and (vi) a charge relating to the write-off of deferred financing credit facility costs associated with the termination of the Company's 2009 credit facility in the second quarter of 2010. This impact was partially offset by: (i) revenue associated with the new investments completed since September 2009; (ii) a $1.7 million reduction in the net loss associated with owned and operated assets; and (iii) $0.8 million of gain from two mortgage backed securities that were sold in the second quarter of 2010.

RECENT DEVELOPMENTS

    --  In October 2010, the Company announced an exchange offer for its $200
        million, 71/2% Senior Notes due 2020 issued in February 2010.
    --  In October 2010,the Company increased its quarterly common dividend per
        share from $0.36 to $0.37.
    --  In October 2010, the Company terminated and repaid its $100 million
        Credit Agreement with General Electric Capital Corporation.
    --  In October 2010, the Company issued $225 million aggregate principal
        amount of its 63/4% senior unsecured notes due 2022.

THIRD QUARTER 2010 RESULTS

Operating Revenues and Expenses - Operating revenues for the three months ended September 30, 2010, excluding nursing home revenues of owned and operated assets and therefore on a non-GAAP basis, were $69.7 million. Operating expenses for the three months ended September 30, 2010, excluding nursing home expenses for owned and operated assets, totaled $32.2 million, comprised of $27.7 million of depreciation and amortization expense, $3.9 million of general and administrative expenses, $0.5 million of restricted stock expense and $78 thousand of expense associated with the CapitalSource asset acquisitions. A reconciliation of these amounts to revenues and expenses reported in accordance with GAAP is provided at the end of this release.

Other Income and Expense - Other income and expense for the three months ended September 30, 2010 was a net expense of $20.0 million and was primarily comprised of $19.1 million of interest expense and $1.0 million of amortized deferred financing costs.

Funds From Operations - For the three months ended September 30, 2010, reportable FFO available to common stockholders was $42.5 million, or $0.44 per common share on 96 million weighted-average common shares outstanding, compared to $30.0 million, or $0.36 per common share on 84 million weighted-average common shares outstanding, for the same period in 2009.

The $42.5 million of FFO for the third quarter of 2010 includes the impact of $78 thousand of costs associated with the CapitalSource asset acquisitions, $0.5 million of non-cash restricted stock expense, and a $0.5 million net loss associated with owned and operated assets.

The $30.0 million of FFO for the three months ended September 30, 2009 includes the impact of $0.5 million of non-cash restricted stock expense, a $0.1 million net loss associated with owned and operated assets, and a real estate impairment of $0.1 million.

Adjusted FFO was $43.5 million, or $0.45 per common share, for the three months ended September 30, 2010, compared to $30.7 million, or $0.37 per common share, for the same period in 2009. The Company had 12.1 million additional weighted-average shares for the three months ended September 30, 2010 compared to the same period in 2009. The increase in weighted-average common shares was primarily a result of: (i) approximately 8.2 million common shares issued under the Company's 2009 and 2010 Equity Shelf Programs; (ii) approximately 3.7 million shares of common stock issued to CapitalSource as part of the December 2009 and June 29, 2010 asset acquisitions; and (iii) approximately 2.8 million common shares issued under the Company's Dividend Reinvestment and Common Stock Purchase Plan. For further information, see "Funds From Operations" below.

FINANCING ACTIVITIES

$200 Million Senior Notes - On October 20, 2010, the Company announced that it commenced an offer to exchange $200 million of its 71/2% Senior Notes due 2020 which have been registered under the Securities Act of 1933 in exchange for $200 million of its outstanding 71/2% Senior Notes due 2020, which were issued in February of 2010 in a private placement. The exchange offer is being conducted upon the terms and subject to the conditions set forth in the Company's prospectus dated October 20, 2010, and the related letter of transmittal.

$100 Million Term Loan - On October 6, 2010, the Company terminated its Credit Agreement with General Electric Capital Corporation. The Credit Agreement previously provided the Company with a five year $100 million term loan. In connection with the termination, the Company repaid the outstanding principal amount of the loan plus a prepayment premium of $3 million. As a result, for the three month period ending December 31, 2010, the Company will record a non-cash charge of approximately $2.2 million relating to the write-off of deferred financing costs associated with the termination of the Credit Agreement.

$225 Million Senior Notes - On October 4, 2010, the Company sold $225 million aggregate principal amount of its 63/4% Senior Notes due 2022. These notes were sold at an issue price of 98.984% of the principal amount of the notes resulting in gross proceeds to the Company of approximately $223 million.

Sale of 3.0 Million Shares of Common Stock under the $140 Million 2010 Equity Shelf Program - During the three months ended September 30, 2010, the Company sold 3.0 million shares of its common stock available under its $140 million 2010 Equity Shelf Program resulting in net proceeds of approximately $64 million.

Sale of 0.7 Million Shares of Common Stock under the Dividend Reinvestment and Common Stock Purchase Plan - During the three months ended September 30, 2010, the Company sold 0.7 million shares of its common stock available under its Dividend Reinvestment and Common Stock Purchase Plan resulting in net proceeds of approximately $16 million.

PORTFOLIO DEVELOPMENTS

Construction-to-Permanent Mortgage Loans - In August 2010, the Company agreed to extend four construction-to-permanent mortgage loans to affiliates of Ciena Health Care Management Inc. for the purpose of constructing four new skilled nursing facilities in Michigan. Each of the loans will have a ten year maturity from the completion of construction of the applicable facility and will bear interest at an annual rate of 12.5%. As of September 30, 2010, the Company disbursed approximately $2.4 million for the construction of one 120 bed facility in Michigan.

DIVIDENDS

Common Dividends - On October 14, 2010, the Company's Board of Directors announced a common stock dividend of $0.37 per share, increasing the quarterly common dividend by $0.01 per share over the prior quarter. The common dividends are to be paid November 15, 2010 to common stockholders of record on October 29, 2010. At the date of this release, the Company has approximately 98 million common shares outstanding.

Series D Preferred Dividends - On October 14, 2010, the Company's Board of Directors also declared the regular quarterly dividends for Series D preferred stock, payable November 15, 2010 to preferred stockholders of record on October 29, 2010. Series D preferred stockholders of record will be paid dividends in the amount of $0.52344 per preferred share. The liquidation preference for the Company's Series D preferred stock is $25.00 per share. Regular quarterly preferred dividends represent dividends for the period August 1, 2010 through October 31, 2010.

2010 ADJUSTED FFO GUIDANCE

The Company modified its quarterly 2010 Adjusted FFO available to common stockholders guidance to be between $0.43 and $0.44 per diluted share.

The Company's Adjusted FFO guidance for 2010 excludes the impact of all other future acquisitions, gains and losses from the sale of assets, additional divestitures, certain revenue and expense items, capital transactions and restricted stock amortization expense. A reconciliation of the Adjusted FFO guidance to the Company's projected GAAP earnings is provided on a schedule attached to this press release. 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 Adjusted FFO guidance is based on a number of assumptions, which are subject to change and many of which are outside the control of the Company. If actual results vary from these assumptions, the Company's expectations may change. Without limiting the generality of the foregoing, the completion of acquisitions, divestitures, capital and financing transactions, variations in restricted stock amortization expense, and the factors identified below 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, November 4, 2010, at 10 a.m. Eastern to review the Company's 2010 third quarter results and current developments. Analysts and investors interested in participating are invited to call (877) 303-7604 from within the United States or (760) 666-3606 from outside the United States, using pass code 21980777.

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.

The Company is a real estate investment trust investing in and providing financing to the long-term care industry. At September 30, 2010, the Company owned or held mortgages on 395 skilled nursing facilities, assisted living facilities and other specialty hospitals with approximately 45,914 licensed beds (44,179 available beds) located in 35 states and operated by 49 third-party healthcare operating companies. In addition, the Company has one closed facility currently held for sale.

This announcement includes forward-looking statements, including without limitation the information under the heading "2010 Adjusted FFO Guidance." 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 the Company'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, including without limitation, changes in Medicare reimbursement; (iii) changes in the financial position of the Company's operators; (iv) the ability of operators in bankruptcy to reject unexpired lease obligations, modify the terms of the Company's mortgages, and impede the ability of the Company 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) the Company's ability to maintain its credit ratings; (vii) competition in the financing of healthcare facilities; (viii) the Company's ability to maintain its status as a real estate investment trust; (ix) the Company's ability to manage, re-lease or sell any owned and operated facilities; (x) the Company's ability to sell closed or foreclosed assets on a timely basis and on terms that allow the Company to realize the carrying value of these assets; (xi) the effect of economic and market conditions generally, and particularly in the healthcare finance industry; (xii) the potential impact of a general economic slowdown on governmental budgets and healthcare reimbursement expenditures; and (xiii) other factors identified in the Company's filings with the Securities and Exchange Commission. Statements regarding future events and developments and the Company's future performance, as well as management's expectations, beliefs, plans, estimates or projections relating to the future, are forward-looking statements. The Company undertakes no obligation to update any forward-looking statements contained in this announcement.


OMEGA HEALTHCARE INVESTORS, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands)

                                                   September 30,   December 31,

                                                   2010            2009

                                                   (Unaudited)

ASSETS

Real estate properties

Land and buildings                                 $ 2,352,372     $ 1,669,843

Less accumulated depreciation                        (355,274   )    (296,441  )

Real estate properties - net                         1,997,098       1,373,402

Mortgage notes receivable - net                      90,252          100,223

                                                     2,087,350       1,473,625

Other investments - net                              31,340          32,800

                                                     2,118,690       1,506,425

Assets held for sale - net                           670             877

Total investments                                    2,119,360       1,507,302

Cash and cash equivalents                            1,192           2,170

Restricted cash                                      21,151          9,486

Accounts receivable - net                            90,780          81,558

Other assets                                         60,440          50,778

Operating assets for owned and operated              635             3,739
properties

Total assets                                       $ 2,293,558     $ 1,655,033

LIABILITIES AND STOCKHOLDERS' EQUITY

Revolving line of credit                           $ 143,000       $ 94,100

Secured borrowings                                   302,210         159,354

Unsecured borrowings - net                           702,947         484,695

Accrued expenses and other liabilities               122,739         49,895

Operating liabilities for owned and operated         1,579           1,762
properties

Total liabilities                                    1,272,475       789,806

Stockholders' equity:

Preferred stock issued and outstanding - 4,340
shares Series D with an aggregate liquidation        108,488         108,488
preference of $108,488

Common stock $.10 par value authorized - 200,000
shares: issued and outstanding - 98,236 shares as    9,824           8,827
of September 30, 2010 and 88,266 as of December
31, 2009

Common stock - additional paid-in-capital            1,358,564       1,157,931

Cumulative net earnings                              575,855         522,388

Cumulative dividends paid                            (1,031,648 )    (932,407  )

Total stockholders' equity                           1,021,083       865,227

Total liabilities and stockholders' equity         $ 2,293,558     $ 1,655,033




OMEGA HEALTHCARE INVESTORS, INC.

CONSOLIDATED STATEMENTS OF INCOME

Unaudited

(in thousands, except per share amounts)

                               Three Months Ended       Nine Months Ended

                               September 30,            September 30,

                               2010         2009        2010         2009

Revenues

Rental income                  $ 66,299     $ 41,226    $ 165,028    $ 123,626

Mortgage interest income         2,576        2,915       7,709        8,686

Other investment income - net    746          694         3,282        1,844

Miscellaneous                    103          160         3,852        364

Nursing home revenues of         -            4,758       7,336        13,545
owned and operated assets

Total operating revenues         69,724       49,753      187,207      148,065

Expenses

Depreciation and amortization    27,742       11,093      58,880       33,014

General and administrative       3,926        2,195       10,002       7,481

Restricted stock expense         450          480         1,756        1,439

Acquisition costs                78           -           1,490        -

Impairment loss on real          -            89          155          159
estate properties

Nursing home expenses of         480          4,899       7,849        15,750
owned and operated assets

Total operating expenses         32,676       18,756      80,132       57,843

Income before other income       37,048       30,997      107,075      90,222
and expense

Other income (expense):

Interest and other investment    11           2           88           19
income

Interest                         (19,070 )    (9,171 )    (47,350 )    (26,656 )

Interest - amortization of
deferred financing costs and     (978    )    (690   )    (6,342  )    (2,216  )
refinancing costs

Litigation settlements           -            -           -            4,527

Total other expense              (20,037 )    (9,859 )    (53,604 )    (24,326 )

Income before loss on assets     17,011       21,138      53,471       65,896
sold

Loss on assets sold - net        (4      )    -           (4      )    (24     )

Net income                       17,007       21,138      53,467       65,872

Preferred stock dividends        (2,271  )    (2,271 )    (6,814  )    (6,814  )

Net income available to        $ 14,736     $ 18,867    $ 46,653     $ 59,058
common stockholders

Income per common share
available to common
stockholders:

Basic:

Net income                     $ 0.15       $ 0.23      $ 0.50       $ 0.71

Diluted:

Net income                     $ 0.15       $ 0.22      $ 0.50       $ 0.71

Dividends declared and paid    $ 0.36       $ 0.30      $ 1.00       $ 0.90
per common share

Weighted-average shares          95,698       83,740      92,523       82,903
outstanding, basic

Weighted-average shares          95,987       83,858      92,700       83,004
outstanding, diluted

Components of other
comprehensive income:

Net income                     $ 17,007     $ 21,138    $ 53,467     $ 65,872

Total comprehensive income     $ 17,007     $ 21,138    $ 53,467     $ 65,872




OMEGA HEALTHCARE INVESTORS, INC.

FUNDS FROM OPERATIONS

Unaudited

(in thousands, except per share amounts)

                                  Three Months Ended    Nine Months Ended

                                  September 30,         September 30,

                                  2010      2009        2010         2009

Net income available to common    $ 14,736  $ 18,867    $ 46,653     $ 59,058
stockholders

Add back loss from real estate      4         --          4            24
dispositions

Sub-total                           14,740    18,867      46,657       59,082

Elimination of non-cash items
included in net income:

Depreciation and amortization       27,742    11,093      58,880       33,014

Funds from operations available   $ 42,482  $ 29,960    $ 105,537    $ 92,096
to common stockholders

Weighted-average common shares      95,698    83,740      92,523       82,903
outstanding, basic

Effect of restricted stock          281       107         168          89
awards

Assumed exercise of stock           --        11          3            11
options

Deferred stock                      8         --          6            1

Weighted-average common shares      95,987    83,858      92,700       83,004
outstanding, diluted

Fund from operations per share    $ 0.44    $ 0.36      $ 1.14       $ 1.11
available to common stockholders

Adjusted funds from operations:

Funds from operations available   $ 42,482  $ 29,960    $ 105,537    $ 92,096
to common stockholders

Deduct litigation settlements -     --        --          (1,111  )    (4,527  )
net

Deduct gain from sale of            --        --          (789    )    --
securities

Deduct nursing home revenues        --        (4,758 )    (7,336  )    (13,545 )

Add back non-cash provision for
impairments on real estate          --        89          155          159
properties

Add back nursing home expenses      480       4,899       7,849        15,750

Add back interest refinancing       --        --          3,461        526
expense

Add back acquisition related        78        --          1,490        --
costs

Add back non-cash restricted        450       480         1,756        1,439
stock expense

Adjusted funds from operations    $ 43,490  $ 30,670    $ 111,012    $ 91,898
available to common stockholders



This press release includes Funds From Operations, or FFO, which is a non-GAAP financial measure. 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. The Company believes that FFO is an important supplemental measure 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 as one of several criteria to measure the operating performance of its business. The Company further believes that by excluding the effect of depreciation, amortization 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 this measure to assist the users of its financial statements in analyzing its performance; however, this is not a measure of financial performance under GAAP and should not be considered a measure of liquidity, an alternative to net income or an indicator 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 less non-cash stock-based compensation and one-time revenue and expense items. The Company believes that Adjusted FFO provides an enhanced measure of the operating performance of the Company's core portfolio as a REIT. The Company's computation of Adjusted FFO is not comparable to the NAREIT definition of FFO or to similar measures reported by other REITs, but the Company believes it is an appropriate measure for this Company.

The Company currently expects its quarterly 2010 Adjusted FFO available to common stockholders to be between $0.43 and $0.44 per diluted share after giving effect to the CapitalSource second and third closings, the $225 million bond offering, the repayment of the $100 million term loan and the full weighted average dilutive impact of the equity shelf shares issued during the third quarter of 2010. The following table presents a reconciliation of our guidance regarding quarterly 2010 FFO and Adjusted FFO to net income available to common stockholders:


                                                                 2010 Projected

                                                                 Quarterly AFFO

Per diluted share:

Net income available to common stockholders                      $ 0.09   $ 0.10

Adjustments:

Depreciation and amortization                                      0.28     0.28

Funds from operations available to common stockholders           $ 0.37   $ 0.38

Adjustments:

Acquisition deal costs                                             0.00     0.00

Nursing home revenue and expense - net                             0.00     0.00

Refinancing interest expense                                       0.06     0.06

Restricted stock expense                                           0.00     0.00

Adjusted funds from operations available to common stockholders  $ 0.43   $ 0.44



The table below reconciles reported revenues and expenses to revenues and expenses excluding nursing home revenues and expenses of owned and operated assets:


                                       Three Months Ended  Nine Months Ended

                                       September 30,       September 30,

                                       2010      2009      2010       2009

                                       (in thousands)

Total operating revenues               $ 69,724  $ 49,753  $ 187,207  $ 148,065

Nursing home revenues of owned and       --        4,758     7,336      13,545
operated assets

Revenues excluding nursing home        $ 69,724  $ 44,995  $ 179,871  $ 134,520
revenues of owned and operated assets

Total operating expenses               $ 32,676  $ 18,756  $ 80,132   $ 57,843

Nursing home expenses of owned and       480       4,899     7,849      15,750
operated assets

Expenses excluding nursing home        $ 32,196  $ 13,857  $ 72,283   $ 42,093
expenses of owned and operated assets



This press release includes references to revenues and expenses excluding nursing home owned and operated assets, which are non-GAAP financial measures. The Company believes that the presentation of the Company's revenues and expenses, excluding nursing home owned and operated assets, provides a useful measure of the operating performance of the Company's core portfolio as a real estate investment trust in view of the disposition of all but two of the Company's owned and operated assets and short term holding of owned and operated assets. Effective June 1, 2010, the Company no longer operates any facilities; therefore the revenues and expenses of these two entities are not included in our consolidated statements of income after June 1, 2010.

The following tables present selected portfolio information, including operator and geographic concentrations, and revenue maturities for the period ending September 30, 2010:


Portfolio
Composition
($000's)

Balance Sheet  # of        # of Operating
Data           Properties                  Investment   % Investment
                           Beds

Real Property  385         42,864          $ 2,371,572  96  %
(1)

Loans          10          1,315             90,252     4   %
Receivable(2)

Total          395         44,179          $ 2,461,824  100 %
Investments

Investment     # of        # of Operating                             Investment
Data           Properties                  Investment   % Investment
                           Beds                                       per Bed

Skilled
Nursing        380         43,376          $ 2,396,395  97  %         $ 55
Facilities
(1) (2)

Assisted
Living         10          510               32,031     1   %           63
Facilities

Specialty
Hospitals and  5           293               33,398     2   %           114
Other

               395         44,179          $ 2,461,824  100 %         $ 56

Note: table above excludes one closed facility classified as held-for-sale.

(1) Includes $19.2 million for lease inducement.

(2) Includes $0.9 million of unamortized principal.




Revenue Composition ($000's)

Revenue by Investment Type(1)  Three Months Ended  Nine Months Ended

                               September 30, 2010  September 30, 2010

Rental Property                $ 66,299  95  %     $ 165,028  94  %

Mortgage Notes                   2,576   4   %       7,709    4   %

Other Investment Income          746     1   %       3,282    2   %

                               $ 69,621  100 %     $ 176,019  100 %

Revenue by Facility Type(1)    Three Months Ended  Nine Months Ended

                               September 30, 2010  September 30, 2010

Skilled Nursing Facilities     $ 67,186  97  %     $ 167,649  95  %

Assisted Living Facilities       653     1   %       1,882    1   %

Specialty Hospitals              1,036   1   %       3,206    2   %

Other                            746     1   %       3,282    2   %

                               $ 69,621  100 %     $ 176,019  100 %

(1) Excludes revenue from owned and operated assets.




Operator Concentration ($000's)

Concentration by Investment      # of Properties  Investment   % Investment

CommuniCare Health Services      36               $ 319,827    13  %

Airamid                          38                 262,467    11  %

Signature Holdings, LLC          32                 224,991    9   %

Sun Healthcare Group, Inc.       40                 224,991    9   %

Gulf Coast.                      17                 146,560    6   %

Guardian LTC Management (1)      23                 145,171    6   %

Formation Capital                16                 145,030    6   %

Advocat Inc.                     36                 144,470    6   %

LaVie                            17                 120,881    5   %

Nexion                           19                 84,494     3   %

Remaining Operators (2)          121                642,942    26  %

                                 395              $ 2,461,824  100 %

Note: table above excludes one closed facility classified as held-for-sale.

(1) Investment amount includes a $19.2 million lease inducement.

(2) Includes $0.9 million of unamortized principal.




Concentration by State  # of Properties  Investment   % Investment

Florida (1)             83               $ 582,278    24  %

Ohio                    50                 351,783    15  %

Pennsylvania            25                 173,472    7   %

Texas                   30                 156,681    6   %

Tennessee               16                 118,797    5   %

Maryland                10                 102,130    4   %

West Virginia (2)       10                 78,927     3   %

Colorado                11                 69,277     3   %

Indiana                 18                 67,350     3   %

North Carolina          11                 61,806     3   %

Alabama                 11                 57,403     2   %

Kentucky                15                 57,090     2   %

Louisiana               14                 55,343     2   %

Massachusetts           8                  54,077     2   %

Mississippi             6                  52,714     2   %

Arkansas                12                 47,669     2   %

Remaining 19 States     65                 375,027    15  %

                        395              $ 2,461,824  100 %

Note: table above excludes one closed facility classified as
held-for-sale.

(1) Includes $0.9 million of unamortized principal.

(2) Investment amount includes a $19.2 million lease inducement.




Revenue
Maturities
($000's)

                                            Current      Lease and
Operating Lease              Current Lease
Expirations &    Year                       Interest     Interest    %
Loan Maturities              Revenue (1)
                                            Revenue (1)  Revenue

                 2010          516            -            516       0   %

                 2011          9,698          -            9,698     4   %

                 2012          5,288          -            5,288     2   %

                 2013          33,180         -            33,180    13  %

                 2014          1,985          694          2,679     1   %

                 Thereafter    201,924        9,267        211,191   80  %

                             $ 252,591      $ 9,961      $ 262,552   100 %

(1) Based on 2010 contractual rents and interest (assumes no annual
escalators).

Selected
Facility Data

TTM ending                                               Coverage Data
6/30/2010

                             % Revenue Mix               Before      After

                 Census (1)  Private        Medicare     Mgmt. Fees  Mgmt. Fees

Total Portfolio  83.8%       7.8%           25.4%        2.0 x       1.6 x

(1) Based on available
beds.



The following table presents a debt maturity schedule for the period ending September 30, 2010:


Debt

Maturities              Secured Debt (3)

($000's)

                        Lines of   HUD         Senior     Sub Notes
            Year        Credit     Mortgages   Notes (4)  (2)        Total
                        (1)        (2)

            2010        $ -        $ -         $ -        $ -        $ -

            2011          -          -           -        -            -

            2012          -          -           -        -            -

            2013          -          -           -        -            -

            2014          320,000    -           310,000  -            630,000

            Thereafter    -          181,487     600,000  20,000       801,487

                        $ 320,000  $ 181,487   $ 910,000  $ 20,000   $ 1,431,487




(1)  Reflected at 100% borrowing capacity. Due 12/31/2013 if 2014 Notes are not
     refinanced beforehand.

(2)  Excludes fair market valuations.

(3)  Excludes $100 million term loan outstanding at 9/30, subsequently prepaid
     in October 2010.

(4)  Includes $225 million of 6.75% senior notes issued October 2010.



The following table presents investment activity for the three- and nine - month periods ending September 30, 2010:


Investment Activity ($000's)

                              Three Months Ended  Nine Months Ended

                              September 30, 2010  September 30, 2010

                              $ Amount  %         $ Amount   %

Funding by Investment Type:

Real Property                 $ -       0   %     $ 588,718  97  %

Mortgages                       2,372   25  %       2,372    0   %

Other                           7,294   75  %       19,034   3   %

Total                         $ 9,666   100 %     $ 610,124  100 %




    Source: Omega Healthcare Investors, Inc.