Omega Healthcare Investors(US:OHI)2021-02-05 22:12Financial Data and Key Metrics Changes - The adjusted FFO for Q4 2020 was $0.81 per share, while funds available for distribution were $0.77 per share, allowing the company to maintain a quarterly dividend of $0.67 per share, with a payout ratio of 83% of adjusted FFO and 87% of funds available for distribution [11][16] - NAREIT FFO on a diluted basis was $173 million or $0.73 per share for Q4 2020, compared to $176 million or $0.77 per diluted share for Q4 2019 [16] - Revenue for Q4 2020 was approximately $264 million, including about $12 million of non-cash revenue, with over 99% of contractual rents collected [17][18] Business Line Data and Key Metrics Changes - The operator EBITDARM and EBITDA coverage for the core portfolio increased to 1.87 times and 1.51 times respectively for the trailing 12 months ended September 30, 2020, compared to 1.84 times and 1.48 times for the previous quarter [27] - Cumulative occupancy percentage for the core portfolio dropped from 84% in January 2020 to 72.9% in December 2020, with a slight decline to approximately 72.1% in January 2021 [33] - New investments for the year ended December 31, 2020, totaled approximately $260 million, including $113 million in capital expenditures [36] Market Data and Key Metrics Changes - The vaccination rate for residents in facilities was approximately 69%, while the vaccination rate for staff was about 36% as of January 31, 2021 [12] - The company reported that the latest round of CARES Act funding targeted operators disproportionately impacted by the pandemic, with at least $23 billion remaining unallocated [10][41] Company Strategy and Development Direction - The company established a relationship with Brookdale through the acquisition of senior housing facilities, believing Brookdale is well-equipped to address the current COVID-19 environment and prosper post-pandemic [13][14] - The company aims to maintain leverage below 5 times, with a target range of approximately 4.75 times [24][97] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the vaccine rollout as a catalyst for improving occupancy statistics, despite ongoing challenges from COVID-19 [34] - The company refrained from providing 2021 earnings guidance due to uncertainties related to the pandemic and the financial performance of operators [25][79] Other Important Information - The company divested 16 facilities for total proceeds of $64 million in Q4 2020, and a total of 35 facilities for $181 million for the year [38] - The company has no bond maturities until August 2023, with a strong balance sheet and approximately $163 million in cash and cash equivalents as of December 31, 2020 [21] Q&A Session Summary Question: What is the current status of the Brookdale portfolio and expected occupancy rebound? - Management indicated that the coverage ratios for the Brookdale portfolio were around 1:1 with federal stimulus and about 0.9 without, expecting improvement in occupancy in the latter part of 2021 [63] Question: What are the expectations for CapEx related to the Brookdale acquisition? - There is a $30 million capital improvement line associated with the Brookdale transaction, expected to be utilized through 2025 [67] Question: Why is the company not providing guidance for 2021? - Management cited an abundance of caution due to potential volatility in the operating environment and reliance on government support for certain operators [80] Question: What is the state of distressed opportunities in the market? - Management noted that substantial government support has mitigated distress in the industry, with expectations for potential distress to arise later in the year [90] Question: How is the Maplewood portfolio performing during the pandemic? - The Maplewood portfolio has seen census creep upward, with occupancy over 85% as of January [101]