Omega Reports Fourth Quarter 2020 Results and Recent Developments
Omega Healthcare Investors reported strong financial results for Q4 2020, with net income of $63.1 million, up from $61.1 million YoY, and revenues of $263.8 million compared to $246.7 million in the prior year. The company also achieved NAREIT FFO of $173.3 million, a slight decrease from $175.5 million in Q4 2019. Notable developments include a $510 million acquisition of 24 senior living facilities and over 99% rent collection in January 2021, despite challenges from COVID-19. The company reinstated its dividend reinvestment plan and declared a dividend of $0.67 per share.
- Net income increased to $63.1 million in Q4 2020, up from $61.1 million YoY.
- Revenue rose to $263.8 million for Q4 2020 compared to $246.7 million in Q4 2019.
- Achieved NAREIT FFO of $173.3 million, with AFFO at $192.5 million in Q4 2020, despite slight reductions from prior year.
- Acquired 24 senior living facilities for $510 million, enhancing the portfolio.
- Collected over 99% of contractual rent in January 2021.
- Reinstated its dividend reinvestment and stock purchase plan.
- Total revenues decreased to $892.4 million for 2020, down from $928.8 million in 2019.
- Net income for the year fell significantly from $351.9 million in 2019 to $163.5 million in 2020.
- A $135.5 million non-cash revenue write-off impacted overall financial results.
- Increased provision for credit losses by $38.0 million significantly affected net income.
Omega Healthcare Investors, Inc. (NYSE: OHI) (the “Company” or “Omega”) today announced its results for the quarter and the year ended December 31, 2020. The Company reported net income for the quarter of
NAREIT FFO, AFFO and FAD are supplemental non-GAAP financial measures that the Company believes are useful in evaluating the performance of real estate investment trusts. For more information regarding these non-GAAP measures, see the “Funds From Operations” on the Company’s website at www.omegahealthcare.com.
CEO COMMENTS
Taylor Pickett, Omega’s Chief Executive Officer, stated, “We are pleased to finish an unprecedented year with strong quarterly AFFO and FAD, as well as continued excellent rent collections. Furthermore, we are excited to announce a new relationship with Brookdale, a leading operator of senior living communities, through our acquisition of 24 facilities for
Mr. Pickett continued, “Our operators continue to perform admirably in protecting residents. Despite a meaningful spike in COVID cases within communities nationwide during the holidays, through their enhanced infection control protocols and the continued diligence of their staff, many of our operators were able to significantly limit the increase in cases within our facilities. The efforts of both federal and state governments, including to grant priority access to vaccines for residents and staff, have highlighted their understanding of the vital role skilled nursing and assisted living facilities play within the healthcare continuum. With both occupancy and facility costs meaningfully impacted by the pandemic, we are hopeful that this support will remain forthcoming as the industry continues to focus on protecting their frail and vulnerable residents.”
Mr. Pickett concluded, “We would once again like to highlight the remarkable efforts of our operators and their heroic employees, who risk their own health and that of their families to bravely protect and care for their residents, and we thank them wholeheartedly for their endeavors.”
2021 RECENT DEVELOPMENTS AND 2020 FOURTH QUARTER HIGHLIGHTS
In Q1 2021, the Company…
-
declared a
$0.67 per share quarterly common stock dividend. -
sold 5 held for sale assets for
$76 million in cash proceeds, generating a$71 million gain. -
completed a
$510 million acquisition. -
collected over
99% of contractual rent and mortgage payments for the month of January (when excluding Daybreak, which is transitioning its portfolio pursuant to a forbearance agreement). - was included in the 2021 Bloomberg Gender-Equality Index.
In Q4 2020, the Company…
-
collected over
99% of fourth quarter contractual rent and mortgage payments (when excluding Daybreak). -
issued
$700 million aggregate principal amount of3.375% Senior Notes due 2031. -
issued
$153 million in equity through its equity shelf program. -
sold 16 facilities for
$64 million in cash proceeds, generating$5 million in gains. -
completed
$78 million of new investments. -
invested
$19 million in capital renovation and construction-in-progress projects. - announced the reinstatement of its dividend reinvestment and stock purchase plan.
-
paid a
$0.67 per share quarterly common stock dividend.
In Q3 2020, the Company…
-
collected over
99% of third quarter contractual rent and mortgage payments (when excluding Daybreak). -
sold 6 facilities and a land parcel for
$61 million in cash, recognizing a loss of$0.7 million . -
invested
$22 million in capital renovation and construction-in-progress projects. - revised its revenue recognition accounting treatment related to operators with going concern disclosures.
-
paid a
$0.67 per share quarterly common stock dividend.
In Q2 2020, the Company…
-
collected over
99% of second quarter contractual rent and mortgage payments (when excluding Daybreak). -
sold 7 facilities for
$38 million in cash, generating$13 million in gains. -
completed
$50 million of new investments. -
invested
$31 million in capital renovation and construction-in-progress projects. -
repaid
$300 million in credit facility borrowings. -
paid a
$0.67 per share quarterly common stock dividend.
In Q1 2020, the Company…
- suspended its dividend reinvestment and stock purchase plan.
-
sold six facilities for
$18 million in cash proceeds generating$2 million in gains. -
completed
$19 million of new investments. -
invested
$39 million in capital renovation and construction-in-progress projects. -
borrowed
$300 million on credit facility for potential liquidity needs. -
paid a
$0.67 per share quarterly common stock dividend.
NET INCOME
The Company reported net income of
The Company reported net income of
The year-over-year decrease in net income was primarily due to (i) a
FOURTH QUARTER 2020 RESULTS
Revenues – Revenues for the quarter ended December 31, 2020 totaled
Expenses – Expenses for the quarter ended December 31, 2020 totaled
Other Income and Expense – Other income and expense for the quarter ended December 31, 2020 was a net expense of
Funds From Operations – NAREIT FFO for the quarter ended December 31, 2020 was
The
The
Adjusted FFO was
2020 ANNUAL RESULTS
Revenues and Expenses – Revenues for the year ended December 31, 2020 totaled
Expenses for the year ended December 31, 2020 totaled
Other Income and Expense – Other income and expense for the year ended December 31, 2020 was net income of
Funds From Operations – NAREIT FFO for the year ended December 31, 2020 was
The
The
Adjusted FFO was
FINANCING ACTIVITIES
Equity Shelf Program and Dividend Reinvestment and Common Stock Purchase Plan – The Company reinstated its Dividend Reinvestment and Common Stock Purchase Plan on December 17, 2020 after temporarily suspending it on March 23, 2020. During the quarter ended December 31, 2020, the Company sold 4.2 million shares of its common stock, generating
|
|
Equity Shelf (At-the-Market) Program for 2020 |
|||||||||||||
|
|
(in thousands, except price per share) |
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q1 |
|
Q2 |
|
Q3 |
|
Q4 |
|
Total |
|||||
Number of shares |
|
|
49 |
|
|
- |
|
|
- |
|
|
4,172 |
|
|
4,221 |
Average price per share |
|
$ |
41.05 |
|
$ |
- |
|
$ |
- |
|
$ |
36.69 |
|
$ |
36.74 |
Gross proceeds |
|
$ |
2,000 |
|
$ |
- |
|
$ |
- |
|
$ |
153,069 |
|
$ |
155,069 |
|
|
Dividend Reinvestment and Common Stock Purchase Plan for 2020 |
|||||||||||||
|
|
(in thousands, except price per share) |
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q1 |
|
Q2 |
|
Q3 |
|
Q4 |
|
Total |
|||||
Number of shares |
|
|
90 |
|
|
- |
|
|
- |
|
|
- |
|
|
90 |
Average price per share |
|
$ |
41.80 |
|
$ |
- |
|
$ |
- |
|
$ |
- |
|
$ |
41.80 |
Gross proceeds |
|
$ |
3,747 |
|
$ |
- |
|
$ |
- |
|
$ |
- |
|
$ |
3,747 |
In conjunction with the repayments on the term loans, the Company settled several interest-rate swaps with an aggregate notional value of
2021 RECENT AND 2020 FOURTH QUARTER PORTFOLIO
Q1 2021 Portfolio Activity:
Q4 2020 Portfolio Activity:
Asset Sales and Impairments:
Impairments and Assets Held for Sale – During the fourth quarter of 2020, the Company recorded a net impairment charge of
As of December 31, 2020, the Company had 22 properties classified as assets held for sale, totaling approximately
BALANCE SHEET AND LIQUIDITY
As of December 31, 2020, the Company had
CFO COMMENTS
Bob Stephenson, Omega’s Chief Financial Officer, commented, “In October, we continued to improve our balance sheet with a
Mr. Stephenson continued, “Our bond deal was leverage-neutral and allowed us to repay all of our US dollar LIBOR-based revolving credit facility debt. In addition, we continued to lower our leverage in the fourth quarter with ATM share issuances and increased our balance sheet cash to help finance the Brookdale portfolio acquisition from Healthpeak in January 2021.”
DIVIDENDS
On January 28, 2021, the Board of Directors declared a common stock dividend of
TAX TREATMENT FOR 2020 DIVIDENDS
On February 14, 2020, May 15, 2020, August 14, 2020 and November 16, 2020, the Company paid dividends to its common stockholders in the per share amounts of
|
|
|
|
|
|
|
Dividend Payment Date |
|
% Taxable as Ordinary Income |
|
% Taxable as Return of Capital |
|
% Taxable as Capital Gain |
February 14, 2020 |
|
|
|
|
|
|
May 15, 2020 |
|
|
|
|
|
|
August 14, 2020 |
|
|
|
|
|
|
November 16, 2020 |
|
|
|
|
|
|
ESG
As previously reported, on January 27, 2021, Omega was named one of 380 companies across 11 sectors included in the 2021 Bloomberg Gender-Equality Index (“GEI”). The GEI brings transparency to gender-related practices and policies at publicly listed companies, increasing the breadth of environmental, social, and governance (“ESG”) data available to investors. The GEI scoring methodology allows investors to assess company performance and compare across industry peer groups. The reference index measures gender equality across five pillars: female leadership and talent pipeline, equal pay and gender pay parity, inclusive culture, sexual harassment policies, and pro-women brand.
2021 GUIDANCE
Given the continued uncertainty related to the COVID-19 pandemic, its impact on the financial performance of the Company’s operators and the extent of future necessary government support to the operators, the Company will not be providing 2021 earnings guidance.
CONFERENCE CALL
The Company will be conducting a conference call on Friday, February 5, 2021 at 10 a.m. Eastern time to review the Company’s 2020 fourth 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 may use the dial-in number (412) 902-4140. Ask the operator to be connected to the “Omega Healthcare’s Fourth Quarter 2020 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 that invests in the long-term healthcare industry, primarily in skilled nursing and assisted living facilities. Its portfolio of assets is operated by a diverse group of healthcare companies, predominantly in a triple-net lease structure. The assets span all regions within the US, as well as in the UK.
Forward-Looking Statements
This press release includes forward-looking statements within the meaning of the federal securities laws. 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, facility transitions, growth opportunities, expected lease income, continued qualification as a real estate investment trust (“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’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) the impact of novel coronavirus (“COVID-19”) on our business and the business of our operators, including without limitation, the extent and duration of the COVID-19 pandemic, increased costs experienced by operators of SNFs and “ALFs” in connection therewith, the ability of operators to comply with new infection control and vaccine protocols, and the extent to which continued government support may be available to operators to offset such costs and the conditions related thereto; (iii) 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 Omega to collect unpaid rent or interest during the pendency of a bankruptcy proceeding and retain security deposits for the debtor’s obligations, and other costs and uncertainties associated with operator bankruptcies; (iv) Omega’s ability to re-lease, otherwise transition or sell underperforming assets on a timely basis and on terms that allow Omega to realize the carrying value of these assets; (v) the availability and cost of capital to us; (vi) changes in Omega’s credit ratings and the ratings of its debt securities; (vii) competition in the financing of healthcare facilities; (viii) competition in the long-term healthcare industry and shifts in the perception of various types of long-term care facilities, including SNFs and ALFs; (ix) additional regulatory and other changes in the healthcare sector; (x) changes in the financial position of our operators; (xi) the effect of economic and market conditions generally, and particularly in the healthcare industry; (xii) changes in interest rates; (xiii) the timing, amount and yield of any additional investments; (xiv) changes in tax laws and regulations affecting REITs; (xv) 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; (xvi) Omega’s ability to maintain its status as a REIT; (xvii) the effect of other factors affecting our business or the businesses of our operators that are beyond our or their control, including natural disasters, other health crises or pandemics and governmental action, particularly in the healthcare industry, and (xviii) other factors identified in Omega’s filings with the SEC. 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.
We caution you that the foregoing list of important factors may not contain all the material factors that are important to you. Accordingly, readers should not place undue reliance on those statements. All forward-looking statements are based upon information available to us on the date of this release. We undertake no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law.
OMEGA HEALTHCARE INVESTORS, INC. CONSOLIDATED BALANCE SHEETS (in thousands, except per share amounts) |
||||||||
|
|
|
|
|
|
|
||
|
|
December 31, |
|
December 31, |
||||
|
|
2020 |
|
2019 |
||||
|
|
(Unaudited) |
|
|
|
|||
ASSETS |
|
|
|
|
|
|
||
Real estate properties |
|
|
|
|
|
|
||
Real estate investments |
|
$ |
8,702,154 |
|
|
$ |
8,985,994 |
|
Less accumulated depreciation |
|
|
(1,996,914 |
) |
|
|
(1,787,425 |
) |
Real estate investments – net |
|
|
6,705,240 |
|
|
|
7,198,569 |
|
Investments in direct financing leases – net |
|
|
10,764 |
|
|
|
11,488 |
|
Mortgage notes receivable – net |
|
|
885,313 |
|
|
|
773,563 |
|
|
|
|
7,601,317 |
|
|
|
7,983,620 |
|
Other investments – net |
|
|
467,442 |
|
|
|
419,228 |
|
Investments in unconsolidated joint ventures |
|
|
200,638 |
|
|
|
199,884 |
|
Assets held for sale – net |
|
|
81,452 |
|
|
|
4,922 |
|
Total investments |
|
|
8,350,849 |
|
|
|
8,607,654 |
|
|
|
|
|
|
|
|
||
Cash and cash equivalents |
|
|
163,535 |
|
|
|
24,117 |
|
Restricted cash |
|
|
4,023 |
|
|
|
9,263 |
|
Contractual receivables – net |
|
|
10,408 |
|
|
|
27,122 |
|
Other receivables and lease inducements |
|
|
234,666 |
|
|
|
381,091 |
|
Goodwill |
|
|
651,737 |
|
|
|
644,415 |
|
Other assets |
|
|
82,231 |
|
|
|
102,462 |
|
Total assets |
|
$ |
9,497,449 |
|
|
$ |
9,796,124 |
|
|
|
|
|
|
|
|
||
LIABILITIES AND EQUITY |
|
|
|
|
|
|
||
Revolving line of credit |
|
$ |
101,158 |
|
|
$ |
125,000 |
|
Term loans – net |
|
|
186,349 |
|
|
|
804,738 |
|
Secured borrowings |
|
|
369,524 |
|
|
|
389,680 |
|
Senior notes and other unsecured borrowings – net |
|
|
4,512,221 |
|
|
|
3,816,722 |
|
Accrued expenses and other liabilities |
|
|
280,824 |
|
|
|
312,040 |
|
Deferred income taxes |
|
|
10,766 |
|
|
|
11,350 |
|
Total liabilities |
|
|
5,460,842 |
|
|
|
5,459,530 |
|
|
|
|
|
|
|
|
||
Equity: |
|
|
|
|
|
|
||
Preferred stock |
|
|
— |
|
|
|
— |
|
Common stock $.10 par value authorized – 350,000 shares, issued and outstanding – 231,199 shares as of December 31, 2020 and 226,631 as of December 31, 2019 |
|
|
23,119 |
|
|
|
22,663 |
|
Common stock – additional paid-in capital |
|
|
6,152,887 |
|
|
|
5,992,733 |
|
Cumulative net earnings |
|
|
2,594,735 |
|
|
|
2,463,436 |
|
Cumulative dividends paid |
|
|
(4,916,097 |
) |
|
|
(4,303,546 |
) |
Accumulated other comprehensive loss |
|
|
(12,768 |
) |
|
|
(39,858 |
) |
Total stockholders’ equity |
|
|
3,841,876 |
|
|
|
4,135,428 |
|
Noncontrolling interest |
|
|
194,731 |
|
|
|
201,166 |
|
Total equity |
|
|
4,036,607 |
|
|
|
4,336,594 |
|
Total liabilities and equity |
|
$ |
9,497,449 |
|
|
$ |
9,796,124 |
|
OMEGA HEALTHCARE INVESTORS, INC. CONSOLIDATED STATEMENTS OF OPERATIONS Unaudited (in thousands, except per share amounts) |
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Three Months Ended |
|
|
Year Ended |
||||||||||||
|
|
December 31, |
|
|
December 31, |
||||||||||||
|
|
2020 |
|
2019 |
|
|
2020 |
|
2019 |
||||||||
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Rental income |
|
$ |
224,080 |
|
|
$ |
212,175 |
|
|
|
$ |
740,815 |
|
|
$ |
791,168 |
|
Real estate tax and ground lease income |
|
|
3,089 |
|
|
|
2,437 |
|
|
|
|
12,612 |
|
|
|
12,908 |
|
Income from direct financing leases |
|
|
258 |
|
|
|
259 |
|
|
|
|
1,033 |
|
|
|
1,036 |
|
Mortgage interest income |
|
|
24,044 |
|
|
|
19,780 |
|
|
|
|
89,422 |
|
|
|
76,542 |
|
Other investment income |
|
|
11,994 |
|
|
|
10,364 |
|
|
|
|
44,864 |
|
|
|
43,400 |
|
Miscellaneous income |
|
|
320 |
|
|
|
1,653 |
|
|
|
|
3,635 |
|
|
|
3,776 |
|
Total revenues |
|
|
263,785 |
|
|
|
246,668 |
|
|
|
|
892,381 |
|
|
|
928,830 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Depreciation and amortization |
|
|
82,623 |
|
|
|
80,498 |
|
|
|
|
329,924 |
|
|
|
301,683 |
|
General and administrative |
|
|
10,381 |
|
|
|
9,917 |
|
|
|
|
39,619 |
|
|
|
41,790 |
|
Real estate tax and ground lease expense |
|
|
3,230 |
|
|
|
3,442 |
|
|
|
|
13,764 |
|
|
|
16,141 |
|
Stock-based compensation expense |
|
|
4,442 |
|
|
|
3,840 |
|
|
|
|
18,822 |
|
|
|
14,871 |
|
Acquisition, merger and transition related costs |
|
|
1,956 |
|
|
|
43 |
|
|
|
|
2,018 |
|
|
|
5,115 |
|
Impairment on real estate properties |
|
|
28,762 |
|
|
|
35,719 |
|
|
|
|
72,494 |
|
|
|
45,264 |
|
(Recovery) impairment on direct financing leases |
|
|
(2,003 |
) |
|
|
217 |
|
|
|
|
(3,079 |
) |
|
|
7,917 |
|
Provision for credit losses |
|
|
4,420 |
|
|
|
— |
|
|
|
|
37,997 |
|
|
|
— |
|
Interest expense |
|
|
55,981 |
|
|
|
52,793 |
|
|
|
|
213,313 |
|
|
|
199,151 |
|
Interest – amortization of deferred financing costs |
|
|
2,692 |
|
|
|
2,811 |
|
|
|
|
10,076 |
|
|
|
9,564 |
|
Total expenses |
|
|
192,484 |
|
|
|
189,280 |
|
|
|
|
734,948 |
|
|
|
641,496 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other (expense) income |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest and investment (expense) income |
|
|
(282 |
) |
|
|
735 |
|
|
|
|
(957 |
) |
|
|
856 |
|
Loss on debt extinguishment |
|
|
(12,444 |
) |
|
|
— |
|
|
|
|
(13,340 |
) |
|
|
— |
|
Realized gain (loss) on foreign exchange |
|
|
128 |
|
|
|
104 |
|
|
|
|
78 |
|
|
|
(42 |
) |
Gain on assets sold - net |
|
|
5,181 |
|
|
|
2,893 |
|
|
|
|
19,113 |
|
|
|
55,696 |
|
Total other (expense) income |
|
|
(7,417 |
) |
|
|
3,732 |
|
|
|
|
4,894 |
|
|
|
56,510 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Income before income tax expense & income from unconsolidated joint ventures |
|
|
63,884 |
|
|
|
61,120 |
|
|
|
|
162,327 |
|
|
|
343,844 |
|
Income tax expense |
|
|
(2,299 |
) |
|
|
(893 |
) |
|
|
|
(4,925 |
) |
|
|
(2,844 |
) |
Income from unconsolidated joint ventures |
|
|
1,489 |
|
|
|
919 |
|
|
|
|
6,143 |
|
|
|
10,947 |
|
Net income |
|
|
63,074 |
|
|
|
61,146 |
|
|
|
|
163,545 |
|
|
|
351,947 |
|
Net income attributable to noncontrolling interest |
|
|
(1,678 |
) |
|
|
(1,606 |
) |
|
|
|
(4,218 |
) |
|
|
(10,824 |
) |
Net income available to common stockholders |
|
$ |
61,396 |
|
|
$ |
59,540 |
|
|
|
$ |
159,327 |
|
|
$ |
341,123 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Earnings per common share available to common stockholders: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income available to common stockholders |
|
$ |
0.27 |
|
|
$ |
0.27 |
|
|
|
$ |
0.70 |
|
|
$ |
1.60 |
|
Diluted: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income |
|
$ |
0.27 |
|
|
$ |
0.27 |
|
|
|
$ |
0.70 |
|
|
$ |
1.58 |
|
Dividends declared per common share |
|
$ |
0.67 |
|
|
$ |
0.67 |
|
|
|
$ |
2.68 |
|
|
$ |
2.65 |
|
OMEGA HEALTHCARE INVESTORS, INC. FUNDS FROM OPERATIONS Unaudited (in thousands, except per share amounts) |
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Three Months Ended |
|
Year Ended |
||||||||||||
|
|
December 31, |
|
December 31, |
||||||||||||
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income |
|
$ |
63,074 |
|
|
$ |
61,146 |
|
|
$ |
163,545 |
|
|
$ |
351,947 |
|
Deduct gain from real estate dispositions |
|
|
(5,181 |
) |
|
|
(2,893 |
) |
|
|
(19,113 |
) |
|
|
(55,696 |
) |
Add back loss (deduct gain) from real estate dispositions of unconsolidated joint ventures |
|
|
544 |
|
|
|
— |
|
|
|
(5,894 |
) |
|
|
(9,345 |
) |
Sub-total |
|
|
58,437 |
|
|
|
58,253 |
|
|
|
138,538 |
|
|
|
286,906 |
|
Elimination of non-cash items included in net income: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Depreciation and amortization |
|
|
82,623 |
|
|
|
80,498 |
|
|
|
329,924 |
|
|
|
301,683 |
|
Depreciation - unconsolidated joint ventures |
|
|
3,439 |
|
|
|
1,625 |
|
|
|
14,000 |
|
|
|
6,513 |
|
Add back non-cash provision for impairments on real estate properties |
|
|
28,762 |
|
|
|
35,719 |
|
|
|
72,494 |
|
|
|
45,264 |
|
Add back unrealized loss (gain) on warrants |
|
|
61 |
|
|
|
(580 |
) |
|
|
988 |
|
|
|
(410 |
) |
NAREIT funds from operations (“NAREIT FFO”) |
|
$ |
173,322 |
|
|
$ |
175,515 |
|
|
$ |
555,944 |
|
|
$ |
639,956 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted-average common shares outstanding, basic |
|
|
228,785 |
|
|
|
219,668 |
|
|
|
227,741 |
|
|
|
213,404 |
|
Restricted stock and PRSUs |
|
|
1,761 |
|
|
|
1,977 |
|
|
|
1,239 |
|
|
|
1,753 |
|
Net forward share contract |
|
|
— |
|
|
|
397 |
|
|
|
— |
|
|
|
179 |
|
Omega OP Units |
|
|
6,263 |
|
|
|
5,938 |
|
|
|
6,124 |
|
|
|
6,789 |
|
Weighted-average common shares outstanding, diluted |
|
|
236,809 |
|
|
|
227,980 |
|
|
|
235,104 |
|
|
|
222,125 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
NAREIT funds from operations available per share |
|
$ |
0.73 |
|
|
$ |
0.77 |
|
|
$ |
2.36 |
|
|
$ |
2.88 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Adjustments to calculate adjusted funds from operations: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
NAREIT FFO |
|
$ |
173,322 |
|
|
$ |
175,515 |
|
|
$ |
555,944 |
|
|
$ |
639,956 |
|
Add back |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Uncollectible accounts receivable (1) |
|
|
2,107 |
|
|
|
150 |
|
|
|
146,608 |
|
|
|
11,120 |
|
Provision for credit losses |
|
|
4,420 |
|
|
|
— |
|
|
|
37,997 |
|
|
|
— |
|
Stock-based compensation expense |
|
|
4,442 |
|
|
|
3,840 |
|
|
|
18,822 |
|
|
|
14,871 |
|
Loss on debt extinguishment |
|
|
12,444 |
|
|
|
— |
|
|
|
13,340 |
|
|
|
— |
|
Severance |
|
|
— |
|
|
|
— |
|
|
|
853 |
|
|
|
— |
|
Acquisition, merger and transition related costs |
|
|
1,956 |
|
|
|
43 |
|
|
|
2,018 |
|
|
|
5,115 |
|
Restructuring costs |
|
|
— |
|
|
|
21 |
|
|
|
— |
|
|
|
1,683 |
|
Non-recurring lease termination payment |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,118 |
|
Deduct |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Non-recurring revenue |
|
|
(4,260 |
) |
|
|
(1,437 |
) |
|
|
(16,201 |
) |
|
|
(2,409 |
) |
(Recovery) impairment for direct financing leases |
|
|
(2,003 |
) |
|
|
217 |
|
|
|
(3,079 |
) |
|
|
7,917 |
|
Add back unconsolidated JV related |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Uncollectible accounts receivable |
|
|
— |
|
|
|
— |
|
|
|
1,584 |
|
|
|
— |
|
Loss on debt extinguishment |
|
|
68 |
|
|
|
— |
|
|
|
2,493 |
|
|
|
2,014 |
|
Adjusted funds from operations (“AFFO”) |
|
$ |
192,496 |
|
|
$ |
178,349 |
|
|
$ |
760,379 |
|
|
$ |
681,385 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Adjustments to calculate funds available for distribution: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Non-cash interest expense |
|
$ |
2,670 |
|
|
$ |
2,788 |
|
|
$ |
9,986 |
|
|
$ |
9,467 |
|
Capitalized interest |
|
|
(321 |
) |
|
|
(3,341 |
) |
|
|
(10,029 |
) |
|
|
(13,876 |
) |
Non-cash revenues |
|
|
(11,923 |
) |
|
|
(14,096 |
) |
|
|
(40,709 |
) |
|
|
(60,861 |
) |
Funds available for distribution (“FAD”) |
|
$ |
182,922 |
|
|
$ |
163,700 |
|
|
$ |
719,627 |
|
|
$ |
616,115 |
|
________________________ |
||
(1) |
|
Straight-line accounts receivable write-off recorded as a reduction to Rental income. |
NAREIT Funds From Operations (“NAREIT FFO”), Adjusted FFO and Funds Available for Distribution (“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 income statement, 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 NAREIT FFO in accordance with the definition and interpretive guidelines issued by the National Association of Real Estate Investment Trusts (“NAREIT”), and consequently, NAREIT 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 and changes in the fair value of warrants. Adjustments for unconsolidated partnerships and joint ventures will be calculated to reflect funds from operations on the same basis. The Company believes that NAREIT 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 funds from operations was designed by the real estate industry to address this issue. Funds from operations described herein is not necessarily comparable to funds from operations 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 NAREIT FFO excluding the impact of non-cash stock-based compensation and certain revenue and expense items (e.g., acquisition, merger and transition related costs, provisions for uncollectible accounts, provisions for current expected credit losses, severance, etc.). 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 may not be comparable to the NAREIT definition of funds from operations 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 FAD 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, funds from operations 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 lease and loan maturities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31, 2020 |
||||||||||
|
|
|
|
Total |
|
|
|
# of |
|
# of |
||
Balance Sheet Data |
|
Total # of |
|
Investment |
|
% of |
|
Operating |
|
Operating |
||
|
|
Properties |
|
( |
|
Investment |
|
Properties (2) |
|
Beds (2) |
||
Real estate investments (1) |
|
883 |
|
$ |
8,712,918 |
|
91 |
% |
|
892 |
|
89,609 |
Mortgage notes receivable |
|
62 |
|
|
885,313 |
|
9 |
% |
|
57 |
|
6,173 |
|
|
945 |
|
$ |
9,598,231 |
|
100 |
% |
|
949 |
|
95,782 |
Assets held for sale |
|
22 |
|
|
81,452 |
|
|
|
|
|
|
|
Total investments |
|
967 |
|
$ |
9,679,683 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31, 2020 |
|||||||||||||
|
|
|
|
Total |
|
|
|
# of |
|
# of |
|
|
Investment |
||
Investment Data |
|
Total # of |
Investment |
% of |
|
Operating |
Operating |
per Bed |
|||||||
|
|
Properties |
( |
Investment |
|
Properties (2) |
Beds (2) |
( |
|||||||
SNFs/Transitional care |
|
813 |
|
$ |
7,975,076 |
|
83 |
% |
|
820 |
|
87,694 |
|
$ |
91 |
Senior housing (3) |
|
132 |
|
|
1,623,155 |
|
17 |
% |
|
129 |
|
8,088 |
|
$ |
201 |
|
|
945 |
|
$ |
9,598,231 |
|
100 |
% |
|
949 |
|
95,782 |
|
$ |
100 |
Assets held for sale |
|
22 |
|
|
81,452 |
|
|
|
|
|
|
|
|
|
|
Total investments |
|
967 |
|
$ |
9,679,683 |
|
|
|
|
|
|
|
|
|
|
________________________ |
||
(1) |
|
Includes one asset under a direct financing lease totaling |
(2) |
|
Excludes facilities which are non-operating, closed and/or not currently providing patient services. |
(3) |
|
Includes ALFs, memory care and independent living facilities. |
Revenue Composition (
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue by Investment Type |
|
Three Months Ended |
|
Year Ended |
||||||||
|
|
December 31, 2020 |
|
December 31, 2020 |
||||||||
Rental property (1) |
|
$ |
224,338 |
|
85 |
% |
|
$ |
741,848 |
|
84 |
% |
Real estate tax and ground lease income |
|
|
3,089 |
|
1 |
% |
|
|
12,612 |
|
1 |
% |
Mortgage notes |
|
|
24,044 |
|
9 |
% |
|
|
89,422 |
|
10 |
% |
Other investment income and miscellaneous income - net |
|
|
12,314 |
|
5 |
% |
|
|
48,499 |
|
5 |
% |
|
|
$ |
263,785 |
|
100 |
% |
|
$ |
892,381 |
|
100 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue by Facility Type |
|
Three Months Ended |
|
Year Ended |
||||||||
|
|
December 31, 2020 |
|
December 31, 2020 |
||||||||
SNFs/Transitional care |
|
$ |
211,197 |
|
80 |
% |
|
$ |
710,255 |
|
80 |
% |
Senior housing |
|
|
37,185 |
|
14 |
% |
|
|
121,015 |
|
14 |
% |
Real estate tax and ground lease income |
|
|
3,089 |
|
1 |
% |
|
|
12,612 |
|
1 |
% |
Other |
|
|
12,314 |
|
5 |
% |
|
|
48,499 |
|
5 |
% |
|
|
$ |
263,785 |
|
100 |
% |
|
$ |
892,381 |
|
100 |
% |
________________________ |
||
(1) |
|
Includes one asset under a direct financing lease totaling |
|
|
|
|
|
|
|
|
|
|
|
As of |
2020 Q4 |
% of Total |
||||
|
|
December 31, 2020 |
Annualized |
Annualized |
||||
Rent/Interest Concentration by Operator ( |
|
# of |
Contractual |
Contractual |
||||
|
|
Properties (1) |
Rent/Interest (1)(2) |
Rent/Interest |
||||
Ciena |
|
65 |
|
$ |
96,732 |
|
10.1 |
% |
Consulate |
|
80 |
|
|
86,253 |
|
9.0 |
% |
CommuniCare |
|
45 |
|
|
62,786 |
|
6.5 |
% |
Genesis |
|
51 |
|
|
61,904 |
|
6.4 |
% |
Maplewood |
|
15 |
|
|
59,011 |
|
6.1 |
% |
Saber |
|
54 |
|
|
55,382 |
|
5.8 |
% |
Agemo |
|
54 |
|
|
51,611 |
|
5.4 |
% |
HHC |
|
44 |
|
|
37,391 |
|
3.9 |
% |
Guardian |
|
35 |
|
|
36,326 |
|
3.8 |
% |
Nexion |
|
45 |
|
|
32,630 |
|
3.4 |
% |
Remaining Operators (3) |
|
460 |
|
|
381,268 |
|
39.6 |
% |
|
|
948 |
|
$ |
961,294 |
|
100.0 |
% |
________________________ |
||
(1) |
|
Excludes properties which are non-operating, closed and/or not currently providing patient services. |
(2) |
|
Includes mezzanine and term loan interest. |
(3) |
|
Excludes one multi-tenant medical office building. |
|
|
|
|
|
|
|
|
|
|
|
As of December 31, 2020 |
||||||
Geographic Concentration by Investment ( |
|
Total # of |
Total |
% of Total |
||||
|
|
Properties (1) |
Investment (1)(2) |
Investment |
||||
Florida |
|
128 |
|
$ |
1,400,648 |
|
14.6 |
% |
Texas |
|
116 |
|
|
858,936 |
|
8.9 |
% |
Michigan |
|
49 |
|
|
663,640 |
|
6.9 |
% |
Indiana |
|
70 |
|
|
639,590 |
|
6.6 |
% |
Pennsylvania |
|
53 |
|
|
567,530 |
|
5.9 |
% |
California |
|
52 |
|
|
562,581 |
|
5.8 |
% |
Ohio |
|
42 |
|
|
532,815 |
|
5.5 |
% |
Virginia |
|
27 |
|
|
397,574 |
|
4.1 |
% |
North Carolina |
|
40 |
|
|
345,991 |
|
3.6 |
% |
New York |
|
1 |
|
|
332,721 |
|
3.5 |
% |
Remaining 30 states |
|
310 |
|
|
2,882,991 |
|
30.0 |
% |
|
|
888 |
|
|
9,185,017 |
|
95.4 |
% |
United Kingdom |
|
57 |
|
|
442,248 |
|
4.6 |
% |
|
|
945 |
|
$ |
9,627,265 |
|
100.0 |
% |
________________________ |
||
(1) |
|
Excludes 22 properties with total investment of |
(2) |
|
Excludes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31, 2020 |
||||||||||
Operating Lease Expirations & Loan Maturities ( |
|
Lease (Rent) |
Interest Income |
Lease (Rent) and Interest Income |
% of Total Annualized Contractual Rent/Interest |
|||||||
2021 |
|
$ |
3,543 |
|
$ |
2,944 |
|
$ |
6,487 |
|
0.7 |
% |
2022 |
|
|
37,641 |
|
|
4,198 |
|
|
41,839 |
|
4.4 |
% |
2023 |
|
|
5,295 |
|
|
780 |
|
|
6,075 |
|
0.6 |
% |
2024 |
|
|
9,854 |
|
|
2,911 |
|
|
12,765 |
|
1.3 |
% |
2025 |
|
|
12,764 |
|
|
5,387 |
|
|
18,151 |
|
1.9 |
% |
________________________ |
||
(1) |
|
Based on annualized 4th quarter 2020 contractual rent and interest. |
The following tables present operator revenue mix, census and coverage data based on information provided by our operators for the indicated periods ended. We have not independently verified this information, and we are providing this data for informational purposes only.
|
|
|
|
|
|
|
|
Operator Revenue Mix (1) |
|
|
|
Medicare / |
|
||
|
|
Medicaid |
Insurance |
Private / Other |
|||
Three-months ended September 30, 2020 |
|
51.6 |
% |
37.2 |
% |
11.2 |
% |
Three-months ended June 30, 2020 |
|
52.4 |
% |
36.4 |
% |
11.2 |
% |
Three-months ended March 31, 2020 |
|
52.6 |
% |
35.7 |
% |
11.7 |
% |
Three-months ended December 31, 2019 |
|
52.7 |
% |
34.6 |
% |
12.7 |
% |
Three-months ended September 30, 2019 |
|
53.4 |
% |
33.4 |
% |
13.2 |
% |
| ________________________ | ||
(1) |
|
Excludes all facilities considered non-core. |
|
|
|
|
|
|
|
|
|
|
Coverage Data |
|
|
|
|
Before |
After |
|
|
|
Occupancy (2) |
Management |
Management |
|
Operator Census and Coverage (1) |
|
|
Fees (3) |
Fees (4) |
|
|
|
|
|
|
|
Twelve-months ended September 30, 2020 |
|
80.1 |
% |
1.87x |
1.51x |
Twelve-months ended June 30, 2020 |
|
82.2 |
% |
1.84x |
1.48x |
Twelve-months ended March 31, 2020 |
|
83.6 |
% |
1.68x |
1.32x |
Twelve-months ended December 31, 2019 |
|
83.6 |
% |
1.64x |
1.29x |
Twelve-months ended September 30, 2019 |
|
83.4 |
% |
1.66x |
1.30x |
________________________ |
||
(1) |
|
Excludes all properties considered non-core. |
(2) |
|
Based on available (operating) beds. |
(3) |
|
Represents EBITDARM of our operators, defined as earnings before interest, taxes, depreciation, amortization, Rent expense and management fees for the applicable period, divided by the total Rent payable to the Company by its operators during such period. “Rent” refers to the total monthly rent and mortgage interest due under the Company’s lease and mortgage agreements over the applicable period. |
(4) |
Represents EBITDAR of our operators, defined as earnings before interest, taxes, depreciation, amortization, and Rent (as defined in footnote 3) expense for the applicable period, divided by the total Rent payable to the Company by its operators during such period. Assumes a management fee of |
|
The following table presents a debt maturity schedule as of December 31, 2020:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unsecured Debt |
|
|
|
|
|
|
|||||||
Debt Maturities ( |
|
Line of Credit and Term Loans (1) |
Senior Notes/Other (2) |
Subordinated
|
|
Secured Debt |
Total Debt Maturities |
||||||||
2021 |
|
$ |
101,158 |
|
$ |
— |
|
$ |
20,000 |
|
$ |
2,275 |
|
$ |
123,433 |
2022 |
|
|
186,700 |
|
|
— |
|
|
— |
|
|
— |
|
|
186,700 |
2023 |
|
|
— |
|
|
700,000 |
|
|
— |
|
|
— |
|
|
700,000 |
2024 |
|
|
— |
|
|
400,000 |
|
|
— |
|
|
— |
|
|
400,000 |
2025 |
|
|
— |
|
|
400,000 |
|
|
— |
|
|
— |
|
|
400,000 |
2026 |
|
|
— |
|
|
600,000 |
|
|
— |
|
|
— |
|
|
600,000 |
Thereafter |
|
|
— |
|
|
2,450,000 |
|
|
— |
|
|
367,249 |
|
|
2,817,249 |
|
|
$ |
287,858 |
|
$ |
4,550,000 |
|
$ |
20,000 |
|
$ |
369,524 |
|
$ |
5,227,382 |
________________________ |
||
(1) |
|
The Line of Credit and Term Loans borrowings can be extended into 2022. The |
(2) |
|
Excludes net discounts and deferred financing costs. |
(3) |
|
Excludes |
The following table presents investment activity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Year Ended |
||||||||
Investment Activity ( |
|
December 31, 2020 |
|
December 31, 2020 |
||||||||
|
|
$ Amount |
|
% |
|
$ Amount |
|
% |
||||
Real property |
|
$ |
78,434 |
|
80.2 |
% |
|
$ |
104,340 |
|
40.1 |
% |
Construction-in-progress |
|
|
12,800 |
|
13.1 |
% |
|
|
65,031 |
|
25.0 |
% |
Capital expenditures |
|
|
6,564 |
|
6.7 |
% |
|
|
47,576 |
|
18.3 |
% |
Mortgages |
|
|
— |
|
— |
% |
|
|
43,150 |
|
16.6 |
% |
Other |
|
|
— |
|
— |
% |
|
|
— |
|
— |
% |
Total |
|
$ |
97,798 |
|
100.0 |
% |
|
$ |
260,097 |
|
100.0 |
% |
View source version on businesswire.com: https://www.businesswire.com/news/home/20210204006028/en/
FAQ
What are Omega Healthcare Investors' Q4 2020 financial results?
How did Omega Healthcare's NAREIT FFO perform in Q4 2020?
What acquisition did Omega Healthcare complete in early 2021?
What was Omega Healthcare's common stock dividend in early 2021?
What challenges did Omega Healthcare face in 2020?
