Omega Reports Fourth Quarter and Full Year 2023 Results
- Net income for Q4 2023 was $57 million, compared to $47 million for Q4 2022
- Nareit FFO for Q4 2023 was $129 million, compared to a loss of ($30) million for Q4 2022
- AFFO for Q4 2023 was $173 million, compared to $177 million for Q4 2022
- Completed $249 million in new investments in Q4 2023
- Sold 32 facilities for $324 million in cash proceeds and debt repayments in Q4 2023
- Repaid $227 million on 25 HUD mortgage loans in Q4 2023
- Full-year 2023 net income was $249 million, compared to $439 million in 2022
- FFO for 2023 was $591 million, compared to $461 million in 2022
- The company provided 2024 AFFO guidance of $2.70 to $2.80 per share
- Net income for 2023 decreased from 2022
- AFFO for Q4 2023 decreased from Q4 2022
- Full-year 2023 net income decreased from 2022
Insights
The financial results from Omega Healthcare Investors, Inc. highlight a mixed performance in Q4 and full-year 2023. The reported net income increase in Q4 suggests operational improvements, yet the year-over-year decrease in net income indicates challenges faced throughout the year. The completion of $249 million in new investments in Q4 aligns with the company's growth strategy, although the impact of these investments on future earnings will require ongoing evaluation.
Omega's Adjusted Funds From Operations (AFFO) guidance for 2024, between $2.70 and $2.80 per share, provides investors with a forecast to gauge potential performance. However, the decrease in AFFO and Funds Available for Distribution (FAD) from the previous year raises questions about the company's ability to sustain dividend payouts at current levels. The sale of 32 facilities and the repayment of HUD mortgage loans reflect a strategic shift in asset management, potentially improving the balance sheet but also possibly signaling a divestment from underperforming assets.
Omega Healthcare's report indicates a strategic focus on restructuring and optimizing its portfolio, as seen in the sale of facilities and repayment of debt. The real estate investment trust (REIT) sector has been sensitive to changes in interest rates and healthcare regulations and Omega's activities reflect an attempt to navigate these challenges. The company's emphasis on improving EBITDAR coverage and occupancy rates is positive, showing a commitment to enhancing operational efficiency.
Investors should monitor the potential impact of the CMS's pending final rule on minimum staffing, which could introduce new cost pressures for healthcare facilities. Furthermore, the company's acquisition pipeline and capital allocation efforts suggest confidence in the healthcare real estate market's resilience. The operator coverage data provided by Omega offers transparency but requires careful analysis as it is self-reported and not independently verified.
From a regulatory standpoint, the remarks on the CMS's pending final rule are of particular interest. Omega's proactive engagement with CMS regarding the proposed staffing rule reflects an awareness of the potential regulatory impact on its operators. The legal landscape for healthcare facilities is evolving and Omega's approach to regulatory challenges could affect its long-term sustainability and risk profile.
The company's restructuring efforts and the mention of restructured portfolios having meaningful long-term value suggest a strategic approach to legal and financial challenges. However, the success of these restructurings is contingent upon various factors, including the legal environment and the ability to negotiate favorable terms with operators and lenders.
Completed
Providing 2024 Adjusted FFO Guidance
FOURTH QUARTER 2023 AND RECENT HIGHLIGHTS
-
Net income for the quarter of
$57 million $0.22 $47 million $0.19 -
Nareit Funds From Operations (“Nareit FFO”) of
$129 million $0.50 ( , or ($30) million $0.13 -
Adjusted Funds From Operations (“Adjusted FFO” or “AFFO”) of
$173 million $0.68 $177 million $0.73 -
Funds Available for Distribution (“FAD”) of
$163 million $0.64 $171 million $0.70 -
$249 million $167 million $51 million $31 million -
Sold 32 facilities for
$324 million $10 million -
Repaid
$227 million -
Completed
$27 million
FULL YEAR 2023 HIGHLIGHTS
-
Net income for 2023 of
$249 million $1.00 $439 million $1.80 -
Nareit FFO of
$591 million $2.36 $461 million $1.89 -
AFFO of
$699 million $2.79 $730 million $2.99 -
FAD of
$657 million $2.62 $678 million $2.77 -
$667 million $322 million $261 million $84 million -
Sold 69 facilities for
$485 million $105 million $80 million -
Entered into a
$429 million -
Repaid
$350 million -
Repaid
$296 million -
Issued 11 million common shares for gross proceeds of
$339 million
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 (“REITs”). Reconciliations and further information regarding these non-GAAP measures are provided at the end of this press release.
CEO COMMENTS
Taylor Pickett, Omega’s Chief Executive Officer, stated, “The underlying operating performance of our portfolio has continued to improve, with occupancy now above
Mr. Pickett continued, “As a result, we anticipate our 2024 first and second quarter earnings to continue to be impacted by these restructuring efforts, although we expect earnings will improve as the year progresses and our operator issues are resolved. Additionally, the acquisition pipeline remains solid, and we expect further earnings growth from our accretive capital allocation efforts. As a result of this improving operating backdrop and the greater visibility into our financial performance, Omega is able to start providing annual AFFO guidance for the first time since the pandemic, and we expect our 2024 AFFO to be between
Mr. Pickett concluded, “With operating metrics improving, state and federal support remaining predominantly solid, and favorable demographics set to provide a tailwind to industry occupancy for the foreseeable future, we believe the most significant challenges of the post-pandemic period are behind us. The primary remaining concern is around CMS’s pending final rule on minimum staffing. We believe there are fundamental flaws in the proposed rule, especially at a time when labor capacity is the biggest issue facing most facilities. The industry has provided feedback to CMS on how they could achieve their clinical goals in a more efficient manner, and we are hopeful that the final rule will reflect these recommendations.”
FOURTH QUARTER 2023 RESULTS
Revenues – Revenues for the quarter ended December 31, 2023 totaled
Expenses – Expenses for the quarter ended December 31, 2023 totaled
Other Income and Expense – Other income for the quarter ended December 31, 2023 totaled
Net Income – Net income for the quarter ended December 31, 2023 totaled
2023 ANNUAL RESULTS
Revenues – Revenues for the year ended December 31, 2023 totaled
Expenses – Expenses for the year ended December 31, 2023 totaled
Other Income and Expense – Other income for the year ended December 31, 2023 totaled
Net Income – Net income for the year ended December 31, 2023 totaled
2023 FOURTH QUARTER PORTFOLIO AND RECENT ACTIVITY
Operator Updates:
LaVie – During the fourth quarter, the Company sold 30 facilities that were leased to LaVie Care Centers, LLC (“LaVie”) for
Maplewood – The Company recorded
Guardian – Guardian Healthcare (“Guardian”) failed to make its fourth quarter contractual rent payments. The Company recorded
New Investments:
The following table presents investment activity:
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Three Months Ended |
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Year Ended |
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Investment Activity ( |
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December 31, 2023 |
|
December 31, 2023 |
||||||||
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|
$ Amount |
|
% |
|
$ Amount |
|
% |
||||
Real property |
|
$ |
51,212 |
|
20.6 |
% |
|
$ |
261,276 |
|
39.2 |
% |
Construction-in-progress |
|
|
15,429 |
|
6.2 |
% |
|
|
46,905 |
|
7.0 |
% |
Capital expenditures |
|
|
14,893 |
|
6.0 |
% |
|
|
36,439 |
|
5.5 |
% |
Real estate loans receivable |
|
|
117,277 |
|
47.1 |
% |
|
|
230,749 |
|
34.6 |
% |
Other |
|
|
50,000 |
|
20.1 |
% |
|
|
91,746 |
|
13.7 |
% |
Total |
|
$ |
248,811 |
|
100.0 |
% |
|
$ |
667,115 |
|
100.0 |
% |
Asset Sales and Impairments:
Impairments and Assets Held for Sale – During the fourth quarter of 2023, the Company recorded a
As of December 31, 2023, the Company had 17 facilities classified as assets held for sale, totaling
OPERATOR COVERAGE DATA
The following tables present operator revenue mix, census and coverage data based on information provided by the Company’s operators for the indicated periods. The Company has not independently verified this information, and it is providing this data for informational purposes only.
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Operator Revenue Mix (1) |
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Medicare / |
Private / |
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Medicaid |
Insurance |
Other |
|||
Three-months ended September 30, 2023 |
|
55.5 |
% |
28.0 |
% |
16.5 |
% |
Three-months ended June 30, 2023 |
|
54.0 |
% |
30.0 |
% |
16.0 |
% |
Three-months ended March 31, 2023 |
|
53.0 |
% |
31.8 |
% |
15.2 |
% |
Three-months ended December 31, 2022 |
|
54.3 |
% |
31.4 |
% |
14.3 |
% |
Three-months ended September 30, 2022 |
|
53.4 |
% |
31.5 |
% |
15.1 |
% |
(1) |
Excludes all facilities considered non-core and does not include federal stimulus revenue. For non-core definition, see Fourth Quarter 2023 Financial Supplemental posted in the “Quarterly Supplements” section of Omega’s website.. |
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Coverage Data |
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Before |
After |
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Occupancy (2) |
Management |
Management |
|
Operator Census and Coverage (1) |
|
|
Fees (3) |
Fees (4) |
|
Twelve-months ended September 30, 2023 |
|
79.1 |
% |
1.63x |
1.28x |
Twelve-months ended June 30, 2023 |
|
78.6 |
% |
1.50x |
1.15x |
Twelve-months ended March 31, 2023 |
|
78.0 |
% |
1.44x |
1.10x |
Twelve-months ended December 31, 2022 |
|
77.0 |
% |
1.38x |
1.04x |
Twelve-months ended September 30, 2022 |
|
76.2 |
% |
1.37x |
1.04x |
(1) |
Excludes facilities considered non-core. |
|
(2) |
Based on available (operating) beds. |
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(3) |
Represents EBITDARM of our operators, defined as earnings before interest, taxes, depreciation, amortization, Rent costs 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 contractual rent and mortgage interest due under the Company’s lease and mortgage agreements over the applicable period. |
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(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 |
FINANCING ACTIVITIES
Dividend Reinvestment and Common Stock Purchase Plan and ATM Program – The following is a summary of the 2023 quarterly common shares issued under the Dividend Reinvestment and Common Stock Purchase Plan and ATM Program through December 31:
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Dividend Reinvestment and Common Stock Purchase Plan for 2023 |
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(in thousands, except price per share) |
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Q1 |
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Q2 |
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Q3 |
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Q4 |
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Total |
|||||
Number of shares |
|
82 |
|
|
77 |
|
|
3,529 |
|
|
27 |
|
|
3,715 |
Average price per share |
$ |
27.88 |
|
$ |
29.30 |
|
$ |
31.70 |
|
$ |
31.39 |
|
$ |
31.57 |
Gross proceeds |
$ |
2,278 |
|
$ |
2,252 |
|
$ |
111,895 |
|
$ |
834 |
|
$ |
117,259 |
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ATM Program for 2023 |
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(in thousands, except price per share) |
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Q1 |
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Q2 |
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Q3 |
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Q4 |
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Total |
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Number of shares |
|
— |
|
|
6,529 |
|
|
466 |
|
|
248 |
|
|
7,243 |
Average price per share |
$ |
— |
|
$ |
30.54 |
|
$ |
30.95 |
|
$ |
31.93 |
|
$ |
30.61 |
Gross proceeds |
$ |
— |
|
$ |
199,397 |
|
$ |
14,400 |
|
$ |
7,935 |
|
$ |
221,732 |
BALANCE SHEET AND LIQUIDITY
As of December 31, 2023, the Company had
DIVIDENDS
On January 26, 2024, the Board of Directors declared a quarterly cash dividend of
2024 GUIDANCE
The Company expects its 2024 Adjusted FFO to be between
The Company’s Adjusted FFO guidance for 2024 includes the annual impact of acquisitions completed in 2023 and year-to-date 2024, assumes quarterly G&A expense of approximately
The Company's guidance is based on several assumptions including those noted above, which are subject to change and many of which are outside the Company’s control. If actual results vary from these assumptions, the Company's expectations may change. Without limiting the generality of the foregoing, the timing of collection of rental obligations from operators on a cash basis, the timing and completion of acquisitions, divestitures, and capital and financing transactions may cause actual results to vary materially from our current expectations. There can be no assurance that the Company will achieve its projected results. The Company may, from time to time, update its publicly announced Adjusted FFO guidance, but it is not obligated to do so.
The Company does not provide a reconciliation for its Adjusted FFO guidance to GAAP net income because it is unable to determine meaningful or accurate estimates of reconciling items without unreasonable effort. This is due to the inherent difficulty of forecasting the timing and/or amounts of various items that would impact future net income. This includes, but is not limited to, changes in the provision for credit losses, real estate impairments, acquisition, merger and transition related costs, straight-line write-offs, gain/loss on assets sold, etc. In particular, the Company is unable to predict with reasonable certainty the amount of the change in the provision for credit losses in future periods, which is often a significant reconciling adjustment.
ADDITIONAL INFORMATION
Additional information regarding the Company can be found in its Fourth Quarter 2023 Financial Supplemental posted under “Financial Info” in the Investors section of Omega’s website. The information contained on, or that may be accessed through, Omega’s website, including the information contained in the aforementioned supplemental, is not incorporated by any reference into, and is not part of, this document.
CONFERENCE CALL
The Company will be conducting a conference call on Thursday, February 8, 2024, at 10 a.m. Eastern time to review the Company’s 2023 fourth quarter results and current developments. Analysts and investors within the
To listen to the conference call via webcast, log on to www.omegahealthcare.com and click the “Omega Healthcare Investors, Inc. 4Q Earnings Call” hyper-link on the “Investors” page of Omega’s website. Webcast replays of the call will be available on Omega’s website for a minimum of two weeks following the call. Additionally, a copy of the earnings release will be available in the “Financial Info” section and “SEC Filings” section on the “Investors” page of Omega’s website.
Omega is a REIT 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
Forward-Looking Statements and Cautionary Language
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 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 long-term impacts of the Novel coronavirus (“COVID-19”) pandemic on our business and the business of our operators, including without limitation, the levels of staffing shortages, increased costs and decreased occupancy experienced by operators of skilled nursing facilities (“SNFs”) and assisted living facilities (“ALFs”) arising from the pandemic, the ability of our operators to comply with infection control and vaccine protocols and to manage facility infection rates or future infectious diseases, and the sufficiency of government support and reimbursement rates to offset such costs and the conditions related thereto; (iii) additional regulatory and other changes in the healthcare sector, including federal minimum staffing requirements for SNFs that may further exacerbate labor and occupancy challenges for Omega’s operators; (iv) 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; (v) Omega’s ability to re-lease, otherwise transition or sell underperforming assets or assets held for sale on a timely basis and on terms that allow Omega to realize the carrying value of these assets; (vi) the availability and cost of capital to Omega; (vii) changes in Omega’s credit ratings and the ratings of its debt securities; (viii) competition in the financing of healthcare facilities; (ix) competition in the long-term healthcare industry and shifts in the perception of various types of long-term care facilities, including SNFs and ALFs; (x) changes in the financial position of Omega’s operators; (xi) the effect of economic and market conditions generally, and particularly in the healthcare industry; (xii) changes in interest rates or the impact of inflation; (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 Omega’s operators that are beyond Omega’s or operators’ 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 Securities and Exchange Commission. 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. |
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CONSOLIDATED BALANCE SHEETS |
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(in thousands, except per share amounts) |
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December 31, |
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December 31, |
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2023 |
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2022 |
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(Unaudited) |
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ASSETS |
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Real estate assets |
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Buildings and improvements |
|
$ |
6,863,177 |
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$ |
7,347,853 |
|
Land |
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|
866,866 |
|
|
|
923,605 |
|
Furniture and equipment |
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|
466,291 |
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|
499,902 |
|
Construction in progress |
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|
138,410 |
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|
88,904 |
|
Total real estate assets |
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|
8,334,744 |
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|
8,860,264 |
|
Less accumulated depreciation |
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|
(2,458,809 |
) |
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|
(2,322,773 |
) |
Real estate assets – net |
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|
5,875,935 |
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|
6,537,491 |
|
Investments in direct financing leases – net |
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|
8,716 |
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|
8,503 |
|
Real estate loans receivable – net |
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|
1,212,162 |
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|
1,042,731 |
|
Investments in unconsolidated joint ventures |
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|
188,409 |
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|
178,920 |
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Assets held for sale |
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|
93,707 |
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|
9,456 |
|
Total real estate investments |
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|
7,378,929 |
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|
7,777,101 |
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Non-real estate loans receivable – net |
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|
275,615 |
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|
225,281 |
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Total investments |
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|
7,654,544 |
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|
8,002,382 |
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Cash and cash equivalents |
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|
442,810 |
|
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|
297,103 |
|
Restricted cash |
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|
1,920 |
|
|
|
3,541 |
|
Contractual receivables – net |
|
|
11,888 |
|
|
|
8,228 |
|
Other receivables and lease inducements |
|
|
214,657 |
|
|
|
177,798 |
|
Goodwill |
|
|
643,897 |
|
|
|
643,151 |
|
Other assets |
|
|
147,686 |
|
|
|
272,960 |
|
Total assets |
|
$ |
9,117,402 |
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|
$ |
9,405,163 |
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LIABILITIES AND EQUITY |
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Revolving credit facility |
|
$ |
20,397 |
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|
$ |
19,246 |
|
Secured borrowings |
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|
61,963 |
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|
366,596 |
|
Senior notes and other unsecured borrowings – net |
|
|
4,984,956 |
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|
4,900,992 |
|
Accrued expenses and other liabilities |
|
|
287,795 |
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|
315,047 |
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Total liabilities |
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|
5,355,111 |
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|
|
5,601,881 |
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Preferred stock |
|
|
— |
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|
|
— |
|
Common stock |
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|
24,528 |
|
|
|
23,425 |
|
Additional paid-in capital |
|
|
6,671,198 |
|
|
|
6,314,203 |
|
Cumulative net earnings |
|
|
3,680,581 |
|
|
|
3,438,401 |
|
Cumulative dividends paid |
|
|
(6,831,061 |
) |
|
|
(6,186,986 |
) |
Accumulated other comprehensive income |
|
|
29,338 |
|
|
|
20,325 |
|
Total stockholders’ equity |
|
|
3,574,584 |
|
|
|
3,609,368 |
|
Noncontrolling interest |
|
|
187,707 |
|
|
|
193,914 |
|
Total equity |
|
|
3,762,291 |
|
|
|
3,803,282 |
|
Total liabilities and equity |
|
$ |
9,117,402 |
|
|
$ |
9,405,163 |
|
OMEGA HEALTHCARE INVESTORS, INC. |
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CONSOLIDATED STATEMENTS OF OPERATIONS |
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Unaudited |
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(in thousands, except per share amounts) |
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Three Months Ended |
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Year Ended |
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December 31, |
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|
December 31, |
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|
2023 |
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2022 |
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2023 |
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2022 |
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Revenues |
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Rental income |
|
$ |
203,998 |
|
|
$ |
110,149 |
|
|
|
$ |
810,017 |
|
|
$ |
734,236 |
|
Real estate tax and ground lease income |
|
|
3,256 |
|
|
|
4,159 |
|
|
|
|
15,363 |
|
|
|
15,972 |
|
Income from direct financing leases |
|
|
252 |
|
|
|
255 |
|
|
|
|
1,014 |
|
|
|
1,023 |
|
Real estate loans interest income |
|
|
25,492 |
|
|
|
24,955 |
|
|
|
|
97,766 |
|
|
|
110,322 |
|
Non-real estate loans interest income |
|
|
6,121 |
|
|
|
5,103 |
|
|
|
|
22,122 |
|
|
|
13,597 |
|
Miscellaneous income |
|
|
200 |
|
|
|
228 |
|
|
|
|
3,458 |
|
|
|
3,094 |
|
Total revenues |
|
|
239,319 |
|
|
|
144,849 |
|
|
|
|
949,740 |
|
|
|
878,244 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Depreciation and amortization |
|
|
75,674 |
|
|
|
83,739 |
|
|
|
|
319,682 |
|
|
|
332,407 |
|
General and administrative |
|
|
9,273 |
|
|
|
8,840 |
|
|
|
|
44,572 |
|
|
|
40,626 |
|
Real estate tax and ground lease expense |
|
|
3,709 |
|
|
|
4,373 |
|
|
|
|
16,889 |
|
|
|
16,969 |
|
Stock-based compensation expense |
|
|
8,762 |
|
|
|
6,787 |
|
|
|
|
35,068 |
|
|
|
27,302 |
|
Acquisition, merger and transition related costs |
|
|
4,158 |
|
|
|
36,348 |
|
|
|
|
5,341 |
|
|
|
42,006 |
|
Impairment on real estate properties |
|
|
3,951 |
|
|
|
17,230 |
|
|
|
|
91,943 |
|
|
|
38,451 |
|
Provision for credit losses |
|
|
32,913 |
|
|
|
64,296 |
|
|
|
|
44,556 |
|
|
|
68,663 |
|
Interest expense |
|
|
55,724 |
|
|
|
55,238 |
|
|
|
|
221,832 |
|
|
|
220,296 |
|
Interest – amortization of deferred financing costs |
|
|
3,705 |
|
|
|
3,251 |
|
|
|
|
13,697 |
|
|
|
12,948 |
|
Total expenses |
|
|
197,869 |
|
|
|
280,102 |
|
|
|
|
793,580 |
|
|
|
799,668 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other income (expense) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other income (expense) – net |
|
|
11,146 |
|
|
|
3,041 |
|
|
|
|
20,297 |
|
|
|
(1,997 |
) |
Loss on debt extinguishment |
|
|
(486 |
) |
|
|
— |
|
|
|
|
(492 |
) |
|
|
(389 |
) |
Gain on assets sold – net |
|
|
9,712 |
|
|
|
180,205 |
|
|
|
|
79,668 |
|
|
|
359,951 |
|
Total other income |
|
|
20,372 |
|
|
|
183,246 |
|
|
|
|
99,473 |
|
|
|
357,565 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Income before income tax expense and (loss) income from unconsolidated joint ventures |
|
|
61,822 |
|
|
|
47,993 |
|
|
|
|
255,633 |
|
|
|
436,141 |
|
Income tax expense |
|
|
(4,163 |
) |
|
|
(1,026 |
) |
|
|
|
(6,255 |
) |
|
|
(4,561 |
) |
(Loss) income from unconsolidated joint ventures |
|
|
(1,137 |
) |
|
|
(261 |
) |
|
|
|
(582 |
) |
|
|
7,261 |
|
Net income |
|
|
56,522 |
|
|
|
46,706 |
|
|
|
|
248,796 |
|
|
|
438,841 |
|
Net income attributable to noncontrolling interest |
|
|
(1,521 |
) |
|
|
(1,127 |
) |
|
|
|
(6,616 |
) |
|
|
(11,914 |
) |
Net income available to common stockholders |
|
$ |
55,001 |
|
|
$ |
45,579 |
|
|
|
$ |
242,180 |
|
|
$ |
426,927 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Earnings per common share available to common stockholders: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income available to common stockholders |
|
$ |
0.22 |
|
|
$ |
0.19 |
|
|
|
$ |
1.01 |
|
|
$ |
1.81 |
|
Diluted: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income available to common stockholders |
|
$ |
0.22 |
|
|
$ |
0.19 |
|
|
|
$ |
1.00 |
|
|
$ |
1.80 |
|
Dividends declared per common share |
|
$ |
0.67 |
|
|
$ |
0.67 |
|
|
|
$ |
2.68 |
|
|
$ |
2.68 |
|
OMEGA HEALTHCARE INVESTORS, INC. |
||||||||||||||||
Nareit FFO, Adjusted FFO and FAD Reconciliation |
||||||||||||||||
Unaudited |
||||||||||||||||
(in thousands, except per share amounts) |
||||||||||||||||
|
||||||||||||||||
|
|
Three Months Ended |
|
Year Ended |
||||||||||||
|
|
December 31, |
|
December 31, |
||||||||||||
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income (1) |
|
$ |
56,522 |
|
|
$ |
46,706 |
|
|
$ |
248,796 |
|
|
$ |
438,841 |
|
Deduct gain from real estate dispositions |
|
|
(9,712 |
) |
|
|
(180,205 |
) |
|
|
(79,668 |
) |
|
|
(359,951 |
) |
Deduct gain from real estate dispositions of unconsolidated joint ventures |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(93 |
) |
Sub-total |
|
|
46,810 |
|
|
|
(133,499 |
) |
|
|
169,128 |
|
|
|
78,797 |
|
Elimination of non-cash items included in net income: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Depreciation and amortization |
|
|
75,674 |
|
|
|
83,739 |
|
|
|
319,682 |
|
|
|
332,407 |
|
Depreciation - unconsolidated joint ventures |
|
|
2,482 |
|
|
|
2,623 |
|
|
|
10,423 |
|
|
|
10,881 |
|
Add back provision for impairments on real estate properties |
|
|
3,951 |
|
|
|
17,230 |
|
|
|
91,943 |
|
|
|
38,451 |
|
Nareit funds from operations (“Nareit FFO”) |
|
$ |
128,917 |
|
|
$ |
(29,907 |
) |
|
$ |
591,176 |
|
|
$ |
460,536 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted-average common shares outstanding, basic |
|
|
245,751 |
|
|
|
234,863 |
|
|
|
240,493 |
|
|
|
236,256 |
|
Restricted stock and PRSUs |
|
|
3,589 |
|
|
|
1,378 |
|
|
|
2,923 |
|
|
|
1,198 |
|
Omega OP Units |
|
|
7,219 |
|
|
|
6,752 |
|
|
|
7,035 |
|
|
|
6,836 |
|
Weighted-average common shares outstanding, diluted |
|
|
256,559 |
|
|
|
242,993 |
|
|
|
250,451 |
|
|
|
244,290 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Nareit funds from operations available per share |
|
$ |
0.50 |
|
|
$ |
(0.13 |
) |
|
$ |
2.36 |
|
|
$ |
1.89 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Adjustments to calculate adjusted funds from operations |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Nareit FFO |
|
$ |
128,917 |
|
|
$ |
(29,907 |
) |
|
$ |
591,176 |
|
|
$ |
460,536 |
|
Add back: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Stock-based compensation expense |
|
|
8,762 |
|
|
|
6,787 |
|
|
|
35,068 |
|
|
|
27,302 |
|
Uncollectible accounts receivable (2) |
|
|
— |
|
|
|
96,133 |
|
|
|
20,633 |
|
|
|
124,758 |
|
Non-cash provision for credit losses |
|
|
34,082 |
|
|
|
67,027 |
|
|
|
51,966 |
|
|
|
77,109 |
|
Acquisition, merger and transition related costs |
|
|
4,158 |
|
|
|
36,348 |
|
|
|
5,341 |
|
|
|
42,006 |
|
Non-recurring expense |
|
|
384 |
|
|
|
722 |
|
|
|
2,277 |
|
|
|
3,722 |
|
Loss on debt extinguishment |
|
|
486 |
|
|
|
— |
|
|
|
492 |
|
|
|
389 |
|
Non-recognized cash interest |
|
|
207 |
|
|
|
— |
|
|
|
6,378 |
|
|
|
— |
|
Deduct: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Non-recurring revenue |
|
|
(4,587 |
) |
|
|
(2,372 |
) |
|
|
(17,368 |
) |
|
|
(4,934 |
) |
Add back (deduct) unconsolidated JV related non-recurring loss (revenue) |
|
|
1,054 |
|
|
|
1,940 |
|
|
|
2,710 |
|
|
|
(645 |
) |
Adjusted funds from operations (“AFFO”) (1)(3) |
|
$ |
173,463 |
|
|
$ |
176,678 |
|
|
$ |
698,673 |
|
|
$ |
730,243 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Adjustments to calculate funds available for distribution |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Non-cash interest expense |
|
$ |
2,676 |
|
|
$ |
2,222 |
|
|
$ |
9,581 |
|
|
$ |
8,832 |
|
Capitalized interest |
|
|
(1,324 |
) |
|
|
(859 |
) |
|
|
(4,340 |
) |
|
|
(3,158 |
) |
Non-cash revenue |
|
|
(11,403 |
) |
|
|
(6,979 |
) |
|
|
(47,011 |
) |
|
|
(58,269 |
) |
Funds available for distribution (“FAD”) (1)(3) |
|
$ |
163,412 |
|
|
$ |
171,062 |
|
|
$ |
656,903 |
|
|
$ |
677,648 |
|
(1) |
The three months and year ended December 31, 2023 includes the application of |
|
(2) |
The year ended December 31, 2023 includes a |
|
(3) |
Adjusted funds from operations per share and funds available for distribution per share can be calculated using weighted-average common shares outstanding, diluted, as shown above. |
Nareit Funds From Operations (“Nareit FFO”), Adjusted FFO and Funds Available for Distribution (“FAD”) are non-GAAP financial measures. As used in this press release, GAAP refers to generally accepted accounting principles in
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. Revenue recognized based on the application of security deposits and letters of credit or based on the ability to offset against other financial instruments is included within Nareit FFO. 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, write-off of straight-line accounts receivable, recoveries and provisions for credit losses (excluding certain cash recoveries on impaired loans), cash interest received but not included in revenue, non-recognized cash interest, severance, legal reserve expenses, 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. The Company offers these measures to assist the users of its financial statements in analyzing its operating performance. These non-GAAP measures are not measures of financial performance under GAAP and should not be considered as measures of liquidity or cash flow, 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.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240207384980/en/
Matthew Gourmand, SVP, Corporate Strategy & Investor Relations
or
Bob Stephenson, CFO at (410) 427-1700
Source: Omega Healthcare Investors, Inc.
FAQ
What was Omega Healthcare Investors, Inc.'s net income for Q4 2023?
What was the Nareit FFO for Q4 2023?
What is the 2024 AFFO guidance provided by Omega Healthcare Investors, Inc.?
How much did the company sell 32 facilities for in Q4 2023?
What was the full-year 2023 net income for Omega Healthcare Investors, Inc.?
