Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2024 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to OMEGA HEALTHCARE INVESTORS, INC. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation or ...

($ in thousands) As of March 31, 2024 No. of Michigan New York Core Portfolio: Operator EBITDARM and EBITDAR Coverage 1) Cash yield for Washington D.C. is 6.0% in year 1, 7.0% in year 2, 8.0% in year 3, and 2.5% escalators for the remainder of the lease 2) Includes land and finance costs 3) Inception to Date Funding multiplied by Initial Cash Yield 4) Current quarter revenue already reflects fundings to date SELECTED CREDIT FACILITY AND UNSECURED NOTE COVENANTS (1) | --- | --- | --- | --- | --- | --- | --- ...

[First Quarter 2024 Results and Recent Developments](index=1&type=section&id=First%20Quarter%202024%20Results%20and%20Recent%20Developments) [First Quarter 2024 Financial and Operational Highlights](index=1&type=section&id=First%20Quarter%202024%20Financial%20and%20Operational%20Highlights) Omega reported strong Q1 2024 financial results with significant year-over-year growth in net income and Adjusted FFO, alongside substantial new investments and strategic debt repayment Q1 2024 Key Financial Metrics vs. Q1 2023 | Metric | Q1 2024 ($) | Q1 2023 ($) | | :--- | :--- | :--- | | Net Income | $69 million | $37 million | | Net Income per Share | $0.27 | $0.15 | | Nareit FFO | $153 million | $146 million | | Nareit FFO per Share | $0.60 | $0.60 | | Adjusted FFO (AFFO) | $176 million | $160 million | | AFFO per Share | $0.68 | $0.66 | | FAD | $168 million | $147 million | | FAD per Share | $0.65 | $0.60 | - Completed **$75 million** in new investments in Q1 2024 and an additional **$165 million** in Q2 2024 to date[5](index=5&type=chunk) - Repaid **$400 million** of senior unsecured notes on April 1, 2024[5](index=5&type=chunk) - Issued **1 million** common shares for gross proceeds of **$33 million**[5](index=5&type=chunk) [CEO Commentary](index=1&type=section&id=CEO%20Commentary) CEO Taylor Pickett highlighted Q1 financial performance exceeding expectations due to strong interest income and improving operating fundamentals, while expressing concerns about new staffing regulations - Q1 financial performance exceeded expectations due to higher interest income and earlier-than-anticipated cash payments from a turnaround asset[4](index=4&type=chunk) - Operating fundamentals are improving, with occupancy and agency labor usage trending favorably, resulting in a Q1 standalone **EBITDAR coverage of 1.42x**, excluding stimulus[4](index=4&type=chunk) - Restructuring of the Guardian portfolio is complete, while efforts for LaVie and Maplewood are ongoing with expectations for incremental cash payments as the year progresses[4](index=4&type=chunk) - The company expressed disappointment with the recently announced final ruling on minimum staffing, believing it will place an unnecessary burden on the industry[6](index=6&type=chunk) [Financial Performance](index=3&type=section&id=Financial%20Performance) [First Quarter 2024 Results (P&L Analysis)](index=3&type=section&id=First%20Quarter%202024%20Results) Q1 2024 saw total revenues increase to $243.3 million and expenses decrease, leading to a substantial rise in net income to $69.3 million Q1 2024 vs Q1 2023 Income Statement Summary | Item | Q1 2024 ($M) | Q1 2023 ($M) | Change ($M) | | :--- | :--- | :--- | :--- | | Total Revenues | 243.3 | 218.2 | +25.1 | | Total Expenses | 174.1 | 199.8 | -25.7 | | Other Income | 2.6 | 16.4 | -13.8 | | Net Income | 69.3 | 36.8 | +32.5 | - The increase in revenue was primarily driven by the timing and impact of operator restructurings and transitions, as well as revenue from new investments[6](index=6&type=chunk) - The decrease in expenses was mainly due to a lower impairment on real estate properties (**$5.3 million** in Q1 2024 vs **$39.0 million** in Q1 2023) and reduced depreciation and interest expenses[7](index=7&type=chunk)[42](index=42&type=chunk) [Balance Sheet and Liquidity](index=6&type=section&id=Balance%20Sheet%20and%20Liquidity) Omega maintained strong liquidity as of March 31, 2024, with $361.8 million in cash and $1.4 billion in undrawn credit, while managing $5.1 billion in total debt Debt Profile as of March 31, 2024 | Debt Component | Amount ($M) | | :--- | :--- | | Senior Unsecured Notes | 4,600.0 | | Unsecured Term Loans | 478.5 | | Secured Debt | 19.8 | | Revolving Credit Facility | 20.2 | | **Total Indebtedness** | **~5,100.0** | - As of March 31, 2024, the company had **$361.8 million** in cash and cash equivalents and **$1.4 billion** of undrawn capacity under its unsecured revolving credit facility[25](index=25&type=chunk) - On April 1, 2024, the company repaid its **$400.0 million** 4.950% senior notes that matured, using invested cash and borrowings from its credit facility[26](index=26&type=chunk) [Portfolio Activity and Operations](index=3&type=section&id=Portfolio%20Activity%20and%20Operations) [Portfolio Updates](index=3&type=section&id=2024%20First%20Quarter%20Portfolio%20and%20Recent%20Activity) Omega actively managed its portfolio in Q1 2024 through operator restructurings, new investments totaling $75 million, and asset sales, with accelerated investment activity into Q2 [Operator Updates](index=3&type=section&id=Operator%20Updates) Omega completed the Guardian portfolio restructuring in April, while LaVie and Maplewood made partial rent payments as their restructurings continue - **Guardian:** The restructuring was completed in April 2024 with the transition of the remaining six facilities to a new operator for an initial annual rent of **$5.5 million**[12](index=12&type=chunk) - **LaVie:** Paid **$4.4 million** in rent in Q1 2024 and **$1.5 million** in April 2024[10](index=10&type=chunk) - **Maplewood:** Paid **$11.3 million** in rent in Q1 2024 and **$3.8 million** in April 2024[11](index=11&type=chunk) [Investment Activities](index=4&type=section&id=New%20Investments) Omega invested $75.0 million in Q1 2024, primarily in real estate loans, and accelerated investments in Q2 with an additional $165.4 million deployed Q1 2024 New Investments ($75.0M Total) | Investment Type | Amount ($M) | % of Total | | :--- | :--- | :--- | | Real estate loans receivable | 41.2 | 55.0% | | Construction-in-progress | 14.8 | 19.7% | | Real property | 13.3 | 17.7% | | Capital expenditures | 5.7 | 7.6% | - In Q2 2024 to date, the company closed on **$165.4 million** in new investments, including **$71.7 million** in loans and **$93.7 million** in real estate acquisitions[14](index=14&type=chunk)[15](index=15&type=chunk)[16](index=16&type=chunk) [Asset Dispositions](index=4&type=section&id=Asset%20Sales%20and%20Impairments) Omega sold four facilities for $10.1 million, recorded a $5.3 million impairment, and classified 16 facilities with an $81.5 million book value as held for sale - Sold four facilities for **$10.1 million** in cash, resulting in a loss of **$1.4 million**[17](index=17&type=chunk) - Recorded a **$5.3 million** net impairment charge to reduce the book value of three facilities to their estimated fair value[17](index=17&type=chunk) - As of quarter-end, **16 facilities** were classified as assets held for sale, with a total net book value of **$81.5 million**[18](index=18&type=chunk) [Operator Coverage Data](index=5&type=section&id=OPERATOR%20COVERAGE%20DATA) Operator portfolio fundamentals improved, with occupancy rising to 79.6% and EBITDAR coverage increasing to 1.33x, while Medicaid remained the primary payor source Operator Occupancy and Coverage Trends (Trailing 12-Months) | Period Ended | Occupancy | EBITDARM Coverage (Before Mgmt Fee) | EBITDAR Coverage (After Mgmt Fee) | | :--- | :--- | :--- | :--- | | Dec 31, 2023 | 79.6% | 1.69x | 1.33x | | Sep 30, 2023 | 79.1% | 1.63x | 1.28x | | Jun 30, 2023 | 78.6% | 1.50x | 1.15x | | Mar 31, 2023 | 78.0% | 1.44x | 1.10x | | Dec 31, 2022 | 77.0% | 1.38x | 1.04x | - For the three months ended December 31, 2023, the operator revenue mix was **55.3% Medicaid**, **28.0% Medicare/Insurance**, and **16.7% Private/Other**[20](index=20&type=chunk) [Outlook and Shareholder Information](index=6&type=section&id=Outlook%20and%20Shareholder%20Information) [2024 Guidance](index=6&type=section&id=2024%20GUIDANCE%20AFFIRMED) Omega affirmed its 2024 Adjusted FFO guidance of $2.70 to $2.80 per diluted share, noting it is subject to various operational and transactional factors - The company affirmed its 2024 Adjusted FFO guidance to be between **$2.70** and **$2.80 per diluted share**[28](index=28&type=chunk) - Guidance is subject to change based on factors like the timing of rent collection, acquisitions, divestitures, and restructurings[29](index=29&type=chunk) [Dividends](index=6&type=section&id=DIVIDENDS) The Board of Directors declared a quarterly cash dividend of $0.67 per common share on April 18, 2024, payable on May 15, 2024 - A quarterly cash dividend of **$0.67 per share** was declared on April 18, 2024[27](index=27&type=chunk) [Financial Statements](index=9&type=section&id=Financial%20Statements) [Consolidated Balance Sheets](index=9&type=section&id=OMEGA%20HEALTHCARE%20INVESTORS%2C%20INC.%20CONSOLIDATED%20BALANCE%20SHEETS) As of March 31, 2024, Omega reported total assets of **$9.01 billion**, total liabilities of **$5.31 billion**, and total equity of **$3.70 billion**, showing slight changes from year-end 2023 Consolidated Balance Sheet Summary (in thousands) | | March 31, 2024 (in thousands) | December 31, 2023 (in thousands) | | :--- | :--- | :--- | | **Total real estate investments** | **$7,357,181** | **$7,378,929** | | Cash and cash equivalents | $361,773 | $442,810 | | **Total assets** | **$9,011,848** | **$9,117,402** | | **Total liabilities** | **$5,311,255** | **$5,355,111** | | **Total equity** | **$3,700,593** | **$3,762,291** | | **Total liabilities and equity** | **$9,011,848** | **$9,117,402** | [Consolidated Statements of Operations](index=10&type=section&id=OMEGA%20HEALTHCARE%20INVESTORS%2C%20INC.%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) For Q1 2024, Omega's total revenues increased to **$243.3 million**, resulting in net income available to common stockholders of **$67.4 million**, or **$0.27 per diluted share** Consolidated Statements of Operations Summary (in thousands) | | Three Months Ended March 31, 2024 (in thousands) | Three Months Ended March 31, 2023 (in thousands) | | :--- | :--- | :--- | | Total revenues | $243,299 | $218,202 | | Total expenses | $174,072 | $199,831 | | Net income | $69,346 | $36,845 | | **Net income available to common stockholders** | **$67,361** | **$35,942** | | **Diluted EPS** | **$0.27** | **$0.15** | [Reconciliation of Non-GAAP Measures](index=11&type=section&id=OMEGA%20HEALTHCARE%20INVESTORS%2C%20INC.%20Nareit%20FFO%2C%20Adjusted%20FFO%20and%20FAD%20Reconciliation) For Q1 2024, Net Income of **$69.3 million** was reconciled to **Nareit FFO of $153.1 million**, **Adjusted FFO (AFFO) of $176.1 million**, and **Funds Available for Distribution (FAD) of $167.9 million** Q1 2024 Reconciliation from Net Income to FAD (in thousands) | Metric | Amount (in thousands) | | :--- | :--- | | Net income | $69,346 | | Adjustments (Depreciation, Impairment, etc.) | +$83,776 | | **Nareit FFO** | **$153,122** | | Adjustments (Credit losses, stock comp, etc.) | +$22,996 | | **Adjusted FFO (AFFO)** | **$176,118** | | Adjustments (Non-cash revenue/expense) | -$8,201 | | **Funds Available for Distribution (FAD)** | **$167,917** |

Khosrork/iStock via Getty Images OHI stock downgraded to SELL Readers following my writings know that I have been a bull for Omega Healthcare Investors (NYSE:OHI) since 2021 after the COVID-19 interruption. Besides the rebound potential I expect after the pandemic, its dividend was another draw. At the time of my earlier bullish writings, the stock has been yielding around 9% (see the chart below). More recently, in Oct 2023, I wrote an update to downgrade the stock from BUY to HOLD (see the second char ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2023 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to OMEGA HEALTHCARE INVESTORS, INC. (Exact Name of Registrant as Specified in its Charter) (Omega Healthcare Investors, Inc.) (Omega Healthcare Investors, Inc. ...

| --- | --- | --- | --- | |------------------------------------|---------------------------|----------------------------------------|-----------------------------------| | U NSECURED N OTES Quarter Ending | Debt / Adj. Total Assets | Unencumbered Assets / Unsecured Debt | Secured Debt / Adj. Total Assets | | Requirement | <= 60% | >= 150% | <= 40% | | March 31, 2023 | 50% | 197% | 0% | | June 30, 2023 | 48% | 202% | 0% | | September 30, 2023 | 48% | 202% | 0% | | December 31, 2023 | 48% | 203% | 0% | | Stat ...

Table of Contents FORM 10-Q (Mark One) UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (Registrant's telephone number, including area code) Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 303 International Circle, Suite 200, Hunt Valley, MD 21030 (Address of principal executive offices) (410) 427-1700 (Exact name of registrant as specified in its charter) ...

PART I - Financial Information [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents Omega Healthcare Investors, Inc.'s unaudited consolidated financial statements as of June 30, 2023, and for the three and six months then ended, covering Balance Sheets, Statements of Operations, Comprehensive Income, Equity, and Cash Flows, alongside detailed accounting policy notes [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) As of June 30, 2023, Omega's total assets were approximately $9.404 billion, nearly unchanged from $9.405 billion at December 31, 2022, with total liabilities decreasing slightly to $5.591 billion and total equity increasing to $3.813 billion over the same period Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | **Total Assets** | **$9,404,033** | **$9,405,163** | | Real estate assets – net | $6,489,376 | $6,537,491 | | Real estate loans receivable – net | $1,096,806 | $1,042,731 | | Cash and cash equivalents | $350,691 | $297,103 | | **Total Liabilities** | **$5,591,441** | **$5,601,881** | | Senior notes and other unsecured borrowings – net | $4,905,761 | $4,900,992 | | **Total Equity** | **$3,812,592** | **$3,803,282** | [Consolidated Statements of Operations](index=4&type=section&id=Consolidated%20Statements%20of%20Operations) For Q2 2023, total revenues were $250.2 million and net income was $61.5 million, while for the six months ended June 30, 2023, revenues reached $468.4 million and net income was $98.4 million, a significant decrease from the prior year primarily due to lower gain on assets sold Key Operating Results (in thousands, except per share data) | Metric | Q2 2023 | Q2 2022 | Six Months 2023 | Six Months 2022 | | :--- | :--- | :--- | :--- | :--- | | **Total Revenues** | **$250,187** | **$244,649** | **$468,389** | **$493,964** | | Rental income | $219,101 | $211,428 | $408,178 | $428,311 | | Impairment on real estate properties | $21,114 | $7,695 | $60,102 | $11,206 | | Gain on assets sold – net | $12,243 | $25,180 | $25,880 | $138,817 | | **Net Income** | **$61,521** | **$91,915** | **$98,366** | **$287,071** | | **Diluted EPS** | **$0.25** | **$0.38** | **$0.40** | **$1.17** | [Consolidated Statements of Cash Flows](index=9&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2023, net cash provided by operating activities decreased to $281.7 million, while investing activities shifted to a net use of $184.7 million due to lower asset sale proceeds, and financing activities saw a reduced net use of $41.7 million primarily from increased stock issuance and fewer repurchases Cash Flow Summary (in thousands) | Activity | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :--- | :--- | :--- | | Net cash provided by operating activities | $281,736 | $305,196 | | Net cash (used in) provided by investing activities | $(184,669) | $277,166 | | Net cash used in financing activities | $(41,685) | $(436,756) | | **Increase in cash, cash equivalents and restricted cash** | **$55,867** | **$144,053** | [Notes to Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) These notes provide detailed information on the company's accounting policies and financial activities, covering operator collectibility issues, rent deferrals, restructurings, real estate transactions, loan portfolio, debt structure, hedging, and legal proceedings - The company's core business is providing financing and capital to the long-term healthcare industry, focusing on skilled nursing facilities (SNFs) and assisted living facilities (ALFs) in the U.S. and U.K. through triple-net leases and real estate loans[23](index=23&type=chunk) - As of June 30, 2023, **18 operators were on a cash basis** for revenue recognition, representing **25.8% of total revenues** for the first six months of 2023[49](index=49&type=chunk) - During the first six months of 2023, the company allowed nine operators to defer **$33.6 million** of contractual rent and interest, primarily related to LaVie (**$19.0M**), Healthcare Homes (**$8.2M**), and Agemo (**$1.9M**)[50](index=50&type=chunk) - On August 1, 2023, the company repaid its **$350 million** of 4.375% senior notes that matured on that date using available cash[154](index=154&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=52&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial condition and operating results, emphasizing ongoing operator challenges such as labor shortages, occupancy recovery, and the phase-out of government pandemic support, alongside collectibility issues, portfolio restructurings, investment activities, liquidity, and quarterly performance analysis [Outlook, Trends and Other Conditions](index=54&type=section&id=Outlook%2C%20Trends%20and%20Other%20Conditions) The company remains cautious due to significant post-pandemic challenges impacting operators, including persistent labor shortages, elevated costs, slow occupancy recovery, and uncertainty regarding Medicare and Medicaid reimbursement rates, further pressured by the May 11, 2023, expiration of the public health emergency and associated financial support - Operators continue to be significantly impacted by post-pandemic effects, including occupancy declines, labor shortages, and cost increases, leading to several operators failing to make contractual payments[162](index=162&type=chunk) - The federally declared public health emergency expired on May 11, 2023, discontinuing waivers like 'skilling in place' and phasing out the additional **6.2% FMAP reimbursement**, which may adversely affect operators' finances[163](index=163&type=chunk)[166](index=166&type=chunk) - Average occupancy in facilities has improved since early 2021 but has not returned to pre-pandemic levels, partly due to staffing shortages limiting admissions[165](index=165&type=chunk) [Government Regulation and Reimbursement](index=57&type=section&id=Government%20Regulation%20and%20Reimbursement) This section details the complex regulatory landscape for healthcare operators, highlighting the end of the COVID-19 public health emergency, phase-out of enhanced FMAP, a projected **4.0% net increase** in Medicare payments for FY 2024, and potential new burdens from minimum staffing requirements and proposed REIT ownership disclosure rules - The expiration of the public health emergency on May 11, 2023, ended temporary regulatory waivers, including the suspension of the three-day prior hospital stay requirement for Medicare coverage[174](index=174&type=chunk) - CMS issued a final rule for FY 2024 projecting a net **4.0% ($1.4 billion)** increase in Medicare Part A payments to SNFs, which includes a **6.4% market basket update** offset by a **2.3% PDPM parity adjustment recalibration**[190](index=190&type=chunk) - The Biden Administration is considering implementing federal minimum staffing requirements for nursing homes, which, if unfunded, could have a material adverse impact on operators' financial condition[183](index=183&type=chunk) - CMS proposed a rule in February 2023 that would require SNFs to disclose information about entities like REITs that lease real estate to them, citing concerns about quality of care at facilities owned by investment firms[185](index=185&type=chunk) [Second Quarter of 2023 and Recent Highlights](index=65&type=section&id=Second%20Quarter%20of%202023%20and%20Recent%20Highlights) In Q2 2023, Omega acquired five facilities for **$128.6 million** and sold ten for **$44.7 million**, recording **$21.1 million** in impairments, while financially issuing **6.6 million shares** for **$201.6 million** and receiving a **$92.6 million** cash settlement from swap terminations, amidst ongoing operator issues with LaVie and Maplewood - Acquired **5 facilities for $128.6M** and sold **10 facilities for $44.7M** in net proceeds during Q2 2023[197](index=197&type=chunk) - Issued **6.6 million shares** of common stock under its ATM and DRSPP programs, generating **$201.6 million** in gross proceeds[199](index=199&type=chunk) - Terminated five forward starting swaps, receiving a **$92.6 million** net cash settlement[199](index=199&type=chunk) - Operator Maplewood short-paid rent by **$1.0 million** in both June and July 2023, and operator LaVie short-paid July 2023 rent by **$4.7 million**[203](index=203&type=chunk) [Results of Operations](index=70&type=section&id=Results%20of%20Operations) For Q2 2023, rental income increased by **$7.7 million** and impairments rose to **$21.1 million**, while for the six-month period, rental income decreased by **$20.1 million**, primarily due to lower revenue from cash-basis operators and a **$12.5 million** option termination payment Comparison of Operating Results (in thousands) | Account | Q2 2023 | Q2 2022 | Change | | :--- | :--- | :--- | :--- | | Rental income | $219,101 | $211,428 | $7,673 | | Interest income | $29,232 | $31,374 | $(2,142) | | Impairment on real estate properties | $21,114 | $7,695 | $13,419 | | Gain on assets sold – net | $12,243 | $25,180 | $(12,937) | - The Q2 2023 increase in rental income was driven by a **$9.5M** decrease in straight-line rent write-offs and **$7.1M** from acquisitions, partially offset by a **$12.0M** decrease from cash basis operators[206](index=206&type=chunk) - The six-month decrease in rental income was primarily due to a **$46.3M** net decrease from cash basis operators (including a **$12.5M** termination payment to Maplewood), partially offset by fewer write-offs and acquisition-related income[210](index=210&type=chunk) [Funds from Operations](index=75&type=section&id=Funds%20from%20Operations) Nareit FFO, a key performance measure, was **$155.2 million** for Q2 2023 and **$301.2 million** for the six months ended June 30, 2023, representing decreases from the prior-year periods Nareit FFO Reconciliation (in thousands) | Metric | Q2 2023 | Q2 2022 | Six Months 2023 | Six Months 2022 | | :--- | :--- | :--- | :--- | :--- | | Net income | $61,521 | $91,915 | $98,366 | $287,071 | | Adjustments (Gains, Depreciation, Impairments) | $93,632 | $68,710 | $202,859 | $44,232 | | **Nareit FFO** | **$155,153** | **$160,625** | **$301,225** | **$331,303** | [Liquidity and Capital Resources](index=76&type=section&id=Liquidity%20and%20Capital%20Resources) As of June 30, 2023, Omega had **$5.3 billion** in total debt (**58.3%** of capitalization, **99%** fixed-rate), **$356.5 million** in cash, and **$1.43 billion** available under its revolving credit facility, having raised **$203.9 million** through equity programs and subsequently repaid **$350 million** in senior notes - As of June 30, 2023, total debt was **$5.3 billion**, with a weighted average annual interest rate of **4.2%**, and **99%** of this debt has fixed interest payments[219](index=219&type=chunk)[220](index=220&type=chunk) - The company had **$1.43 billion** of availability under its revolving credit facility and **$730.5 million** remaining under its ATM Program as of June 30, 2023[221](index=221&type=chunk)[222](index=222&type=chunk)[227](index=227&type=chunk) - On August 1, 2023, the company repaid **$350 million** of 4.375% senior notes using available cash[221](index=221&type=chunk) Cash Flow Summary Comparison (in thousands) | Activity | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :--- | :--- | :--- | | Operating activities | $281,736 | $305,196 | | Investing activities | $(184,669) | $277,166 | | Financing activities | $(41,685) | $(436,756) | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=81&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company states that there were no material changes in its primary market risk exposures or the management of those exposures during the quarter ended June 30, 2023, compared to what was disclosed in its 2022 Annual Report on Form 10-K - There were no material changes in the company's primary market risk exposures or how those exposures are managed during the quarter[240](index=240&type=chunk) [Item 4. Controls and Procedures](index=81&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of June 30, 2023, with no material changes to internal control over financial reporting identified during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of June 30, 2023[243](index=243&type=chunk) - No material changes to the company's internal control over financial reporting were identified during the quarter[244](index=244&type=chunk) PART II - Other Information [Item 1. Legal Proceedings](index=83&type=section&id=Item%201.%20Legal%20Proceedings) This section incorporates by reference legal proceedings detailed in Note 18 of the Consolidated Financial Statements, including the settlement of a shareholder class action lawsuit and related ongoing derivative actions - The company refers to Note 18 for details on legal proceedings, which discusses the settlement of a securities class action lawsuit in Q2 2023 and other ongoing litigation[140](index=140&type=chunk)[245](index=245&type=chunk) [Item 1A. Risk Factors](index=83&type=section&id=Item%201A.%20Risk%20Factors) The company reports that there have been no material changes to the risk factors previously disclosed in its Annual Report on Form 10-K for the year ended December 31, 2022 - No material changes to risk factors were reported since the company's 2022 Annual Report on Form 10-K[246](index=246&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=83&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q2 2023, Omega issued **17,839 common shares** in exchange for Omega OP Units via private placements, while no shares were repurchased under its authorized **$500 million** program - In Q2 2023, the company issued **17,839 shares** of common stock in exchange for an equal number of Omega OP Units[247](index=247&type=chunk) - No shares were repurchased during the second quarter of 2023 under the company's stock repurchase program[249](index=249&type=chunk) [Item 6. Exhibits](index=84&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including amendments to credit agreements, CEO and CFO certifications, and the Inline XBRL data files - Exhibits filed include amendments to credit agreements to conform to reference rate reform (SOFR), CEO/CFO certifications, and XBRL data[250](index=250&type=chunk)

Omega Healthcare Investors, Inc. (NYSE:OHI) Q1 2023 Earnings Conference Call May 3, 2023 10:00 AM ET Company Participants Michele Reber - Senior Director, Asset Management Taylor Pickett - Chief Executive Officer Bob Stephenson - Chief Financial Officer Dan Booth - Chief Operating Officer Megan Krull - Senior Vice President, Operations Conference Call Participants Jonathan Hughes - Raymond James Connor Siversky - Wells Fargo Securities Michael Griffin - Citi Steven Valiquette - Barclays Joshua Dennerlein - ...

PART I [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) The unaudited consolidated financial statements for Q1 2023 show total assets decreased to $9.29 billion, net income significantly fell to $35.9 million, and operating cash flow decreased to $111.4 million [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) Total assets decreased to $9.29 billion as of March 31, 2023, primarily due to reduced real estate assets, while total equity also declined Consolidated Balance Sheet Summary (in thousands) | Account | March 31, 2023 | December 31, 2022 | | :--- | :--- | :--- | | **Total Assets** | **$9,290,206** | **$9,405,163** | | Real estate assets – net | $6,438,035 | $6,537,491 | | Cash and cash equivalents | $245,182 | $297,103 | | **Total Liabilities** | **$5,604,595** | **$5,601,881** | | Senior notes and other unsecured borrowings – net | $4,903,377 | $4,900,992 | | **Total Equity** | **$3,685,611** | **$3,803,282** | [Consolidated Statements of Operations](index=4&type=section&id=Consolidated%20Statements%20of%20Operations) Total revenues decreased to $218.2 million in Q1 2023, leading to a sharp decline in net income to $35.9 million, primarily due to lower rental income and higher impairment charges Consolidated Statements of Operations Summary (in thousands) | Account | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :--- | :--- | :--- | | Total revenues | $218,202 | $249,315 | | Rental income | $189,077 | $216,883 | | Total expenses | $199,831 | $167,733 | | Impairment on real estate properties | $38,988 | $3,511 | | Gain on assets sold – net | $13,637 | $113,637 | | **Net income available to common stockholders** | **$35,942** | **$189,607** | | **Diluted EPS** | **$0.15** | **$0.79** | [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operating activities decreased to $111.4 million in Q1 2023, while investing activities significantly declined and financing activities used $166.4 million Consolidated Statements of Cash Flows Summary (in thousands) | Activity | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :--- | :--- | :--- | | Net cash provided by operating activities | $111,360 | $132,202 | | Net cash provided by investing activities | $2,657 | $177,338 | | Net cash (used in) provided by financing activities | ($166,422) | $161,237 | | **(Decrease) increase in cash** | **($52,126)** | **$470,370** | [Notes to Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes detail significant events including asset acquisitions, sales, impairments, and ongoing collectibility issues with operators leading to rent deferrals and restructurings - In Q1 2023, the company acquired **6 ALF facilities** in the U.K. for **$26.4 million** with an initial annual cash yield of **8.0%**[27](index=27&type=chunk) - During Q1 2023, the company sold **two facilities** for **$17.6 million** in net cash proceeds, recognizing a net gain of **$13.6 million**, and recorded impairments of approximately **$39.0 million** on four facilities[32](index=32&type=chunk)[35](index=35&type=chunk) - As of March 31, 2023, **17 operators** were on a cash basis for revenue recognition, representing **25.1%** of total revenues for the quarter[42](index=42&type=chunk) - In Q1 2023, the company allowed **eight operators** to defer **$24.4 million** of contractual rent and interest, primarily related to LaVie (**$14.3M**), Healthcare Homes (**$6.1M**), and Agemo (**$1.9M**)[44](index=44&type=chunk) - Subsequent to quarter end, the company committed to a **$222.6 million** investment with an existing operator, including the acquisition of **4 SNFs** and providing **five loans**[141](index=141&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=45&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the adverse impact of COVID-19 on operators, leading to collectibility issues and restructurings, with total revenues and Nareit FFO decreasing, while maintaining strong liquidity [Outlook, Trends and Other Conditions](index=47&type=section&id=Outlook%2C%20Trends%20and%20Other%20Conditions) Operators face ongoing challenges from COVID-19, including lower occupancy and labor shortages, with uncertainty regarding future government support post-public health emergency - Operators are significantly impacted by reduced revenue from lower occupancy, increased expenses, and uncertainty around reimbursement levels, especially with the public health emergency ending on **May 11, 2023**[150](index=150&type=chunk) - Staffing shortages continue to impact operators' occupancy levels and profitability, requiring them to limit admissions in some cases[151](index=151&type=chunk)[152](index=152&type=chunk) - The phase-out of the additional **6.2% FMAP** reimbursement in 2023 may adversely affect operators if state rate-setting does not adjust to cover increased costs[153](index=153&type=chunk) [First Quarter of 2023 and Recent Highlights](index=58&type=section&id=First%20Quarter%20of%202023%20and%20Recent%20Highlights) Q1 2023 highlights include facility acquisitions and sales, significant impairments, and ongoing operator distress management through restructurings and lease transitions - Acquired **six facilities** for **$26.4 million** and invested **$10.1 million** in capital improvements[183](index=183&type=chunk) - Sold **two facilities** for **$17.6 million** in net proceeds, resulting in a **$13.6 million** gain, and recorded **$39.0 million** in impairments on four other facilities[184](index=184&type=chunk)[186](index=186&type=chunk) - Managed significant operator collectibility issues, including deferring **$24.4 million** in rent and interest and executing major restructurings with operators Agemo, LaVie, and Maplewood[187](index=187&type=chunk)[188](index=188&type=chunk) [Results of Operations](index=61&type=section&id=Results%20of%20Operations) Q1 2023 saw rental income decrease by $27.8 million due to cash-basis operators, interest income fall, and a significant increase in real estate impairment charges Comparison of Results (in thousands) | Account | Q1 2023 | Q1 2022 | Change | | :--- | :--- | :--- | :--- | | Rental income | $189,077 | $216,883 | $(27,806) | | Interest income | $28,420 | $31,143 | $(2,723) | | Impairment on real estate properties | $38,988 | $3,511 | $35,477 | | (Recovery) provision for credit losses | $(4,057) | $1,824 | $(5,881) | | Gain on assets sold – net | $13,637 | $113,637 | $(100,000) | - The decrease in rental income was primarily driven by a **$45.5 million** net decrease from cash basis operators, including Maplewood and LaVie[190](index=190&type=chunk) [Funds From Operations](index=63&type=section&id=Funds%20From%20Operations) Nareit FFO, a key non-GAAP measure, decreased by **$24.6 million** to **$146.1 million** in Q1 2023, primarily due to lower total revenue from operators Nareit FFO Reconciliation (in thousands) | Account | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :--- | :--- | :--- | | Net income | $36,845 | $195,156 | | Deduct gain from real estate dispositions | (13,637) | (113,637) | | Depreciation and amortization | 81,192 | 82,752 | | Add back impairments on real estate properties | 38,988 | 3,511 | | **Nareit FFO** | **$146,072** | **$170,678** | - The **$24.6 million** decrease in Nareit FFO was primarily driven by the overall decrease in total revenue[198](index=198&type=chunk) [Liquidity and Capital Resources](index=65&type=section&id=Liquidity%20and%20Capital%20Resources) As of March 31, 2023, the company had **$5.3 billion** in total debt, mostly fixed-rate, and strong liquidity with **$245 million** cash and **$1.43 billion** credit facility availability - As of March 31, 2023, total debt was **$5.3 billion**, with **98%** being fixed-rate debt, and a weighted average annual interest rate of **4.1%**[200](index=200&type=chunk)[201](index=201&type=chunk) - The company has **$1.43 billion** of availability under its revolving credit facility and approximately **$245 million** of cash on its balance sheet[202](index=202&type=chunk) - The company anticipates repaying the **$350 million** of **4.375%** senior notes due in August 2023 using available cash and proceeds from its revolving credit facility[202](index=202&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=69&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) No material changes were reported in the company's primary market risk exposures or their management during Q1 2023 - There were no material changes in the company's primary market risk exposures or how those exposures are managed during the quarter[220](index=220&type=chunk) [Controls and Procedures](index=50&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were effective as of March 31, 2023, with no material changes to internal control over financial reporting - Based on an evaluation as of March 31, 2023, the Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective[222](index=222&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that materially affected or are likely to materially affect internal controls[223](index=223&type=chunk) PART II – OTHER INFORMATION [Legal Proceedings](index=50&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in a securities class action lawsuit with a **$30.75 million** settlement approved, and ongoing litigation with debt holders regarding offset rights - A settlement of **$30.75 million** for a securities class action lawsuit was approved on **April 25, 2023**, funded by the company's directors and officers insurers[126](index=126&type=chunk) - The company is involved in ongoing litigation with subordinated debt holders related to the former Gulf Coast master lease agreement regarding the exercise of offset rights for unpaid rent[132](index=132&type=chunk)[133](index=133&type=chunk) [Risk Factors](index=50&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the company's risk factors were reported from those disclosed in the 2022 Form 10-K - No material changes to risk factors were reported from those disclosed in the 2022 Form 10-K[225](index=225&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=50&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q1 2023, the company did not issue common stock for Omega OP Units nor repurchase shares under its authorized stock repurchase program - The company did not repurchase any shares of its outstanding common stock during the first quarter of 2023[228](index=228&type=chunk) [Exhibits](index=51&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with Form 10-Q, including CEO and CFO certifications and financial statements in Inline XBRL format - The report includes required CEO and CFO certifications (Exhibits **31.1**, **31.2**, **32.1**, **32.2**) and financial statements in Inline XBRL format (Exhibit **101**)[230](index=230&type=chunk)