Omega Healthcare Investors(OHI) - 2025 Q1 - Quarterly Report

Financial Performance - For the three months ended March 31, 2025, total revenues increased to $276,785 thousand, up from$243,299 thousand in the same period of 2024, representing a 13.8% increase[172]. - Rental income rose by $25,257 thousand, primarily due to facility acquisitions and increased cash rent payments, with a total of$232,178 thousand recognized in Q1 2025[172][174]. - Interest income increased by $7,280 thousand to$43,116 thousand, driven by new loans and additional fundings, despite a $3.7 million decrease from principal repayments[172][174]. - Nareit Funds from Operations (FFO) for Q1 2025 was$183,778 thousand, compared to $153,122 thousand in Q1 2024, reflecting a 19.9$5,092 thousand in Q1 2025 compared to $8,470 thousand in Q1 2024[172][174]. - The increase in income tax expense was attributed to higher taxable income in the U.K. following acquisitions made in 2024 and 2025[176]. Investments and Acquisitions - In the first quarter of 2025, the company acquired six facilities for a total consideration of$58.3 million, with an initial cash yield between 9.9% and 10.0%[163]. - The company invested $35.3 million in construction and capital improvement programs during the first quarter of 2025[163]. - The company sold 27 facilities for$120.9 million in net cash proceeds, recognizing a net gain of $10.1 million in the first quarter of 2025[168]. - A significant gain of$11.5 million was recorded from the sale of 27 facilities in Q1 2025, compared to only four facilities sold in the same period of 2024[175]. - The company has commitments totaling $227.8 million for the construction of new facilities and capital improvements, with additional commitments of$40.0 million and $56.3 million under existing loans[192]. Financial Position - Total assets as of March 31, 2025, were$9.7 billion, with total equity of $4.9 billion and total debt of$4.5 billion, indicating a debt-to-capitalization ratio of 47.5%[181]. - The company had $368.0 million in cash and cash equivalents and$1.45 billion available under its Revolving Credit Facility as of March 31, 2025, providing sufficient liquidity for upcoming obligations[183]. - Cash, cash equivalents, and restricted cash totaled $404.1 million as of March 31, 2025, a decrease of$144.7 million from December 31, 2024[194]. Operational Challenges - The long-term care industry continues to recover from COVID-19 impacts, but labor shortages and lower occupancy rates persist, affecting operators' financial conditions[145]. - A significant portion of operators' revenue is derived from government-funded reimbursement programs, primarily Medicare and Medicaid, which are subject to potential reforms and budgetary adjustments[146]. - The Centers for Medicare and Medicaid Services (CMS) has implemented a final rule requiring SNFs to maintain a total nurse staffing standard of 3.48 hours per resident day, which may adversely impact operators' financial conditions if not accompanied by increased reimbursement[150]. - Inflation-related cost increases and global tariffs are expected to further exacerbate labor shortages and increase operational costs for operators[141]. - The company remains cautious about long-term demand for skilled nursing care due to ongoing challenges faced by certain operators[142]. - Regulatory changes, including potential Medicaid and Medicare reforms, may significantly impact operators' results and financial conditions[146]. - The company has experienced several operators failing to make contractual payments, leading to short-term payment deferrals and lease restructurings[142]. Shareholder Returns - The company declared a cash dividend of $0.67 per share on April 23, 2025, to be paid on May 15, 2025[171]. - For the three months ended March 31, 2025, the company paid dividends totaling$189.2 million, with a dividend of $0.67 per share paid on February 18, 2025[189]. - The company issued 4.4 million shares under the ATM Program, generating gross proceeds of$164.4 million, and has $656.5 million of potential issuances remaining[190]. Cash Flow Activities - Net cash provided by operating activities increased by$30.5 million year-over-year, driven by a $39.7 million increase in net income[195]. - Cash provided by investing activities increased primarily due to a$110.8 million rise in proceeds from real estate sales and a $55.4 million increase in loan repayments[195]. - Cash used in financing activities increased by$161.7 million, primarily due to a $358.7 million rise in repayments on long-term borrowings[196]. - There were no significant changes to the company's material cash requirements compared to the previous year[191]. - The company reported no material changes in its primary market risk exposures during the quarter[198].