Completed $611 Million in New Investments in
Q1 Issued $700 Million 3.250% Notes due 2033 in Q1 Repurchased $350
Million of 4.375% Notes due 2023 in Q1 Closed New $1.45 Billion
Unsecured Credit Facility in Q2
Omega Healthcare Investors, Inc. (NYSE: OHI) (the “Company” or
“Omega”) announced today its results for the quarter ended March
31, 2021. The Company reported net income for the quarter of $164.4
million or $0.69 per common share. The Company also reported Nareit
Funds From Operations (“Nareit FFO”) for the quarter of $170.2
million or $0.71 per common share, Adjusted Funds From Operations
(“AFFO” or “Adjusted FFO”) of $203.8 million or $0.85 per common
share, and Funds Available for Distribution (“FAD”) of $193.2
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. 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 with our start to 2021, closing on nearly $600 million of
acquisitions and reporting strong quarterly AFFO and FAD, as well
as continued excellent rent collections. Furthermore, we were able
to take advantage of robust capital markets to issue both debt and
equity, enabling us to extend our debt maturities, fund
acquisitions, and enhance our balance sheet. In addition, we are
excited to announce that Maplewood’s flagship property, Inspīr
Carnegie Hill in Manhattan, opened its doors to its first residents
in March.”
Mr. Pickett continued, “The ongoing diligence of our operators,
augmented by the continued roll-out of the vaccine, has led to a
decline in COVID cases reported at our facilities of over 90% from
the height of the pandemic. As a result, we started to see a modest
improvement in occupancy in February and March. Nevertheless, with
occupancy still well below pre-COVID levels and with Medicare mix
moderating, many operators continue to be reliant on government
financial support. Throughout this crisis, the efforts of both
federal and state governments have highlighted their understanding
of the vital role skilled nursing and assisted living facilities
play within the healthcare continuum. We are hopeful that this
support will continue to be provided as the industry remains
focused on protecting its 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 FIRST
QUARTER HIGHLIGHTS
In Q2 2021, the Company…
- collected over 99% of contractual rent and mortgage payments
for the month of April.
- closed a new $1.45 billion unsecured credit facility.
- closed a new $50 million term loan to an Omega operating
partnership subsidiary.
- declared a $0.67 per share quarterly cash dividend on common
stock.
In Q1 2021, the Company…
- collected over 99% of contractual rent and mortgage
payments.
- issued $700 million aggregate principal amount of 3.250% Senior
Notes due 2033.
- repurchased $350 million aggregate principal amount of 4.375%
Senior Notes due 2023.
- completed $595 million of new acquisitions.
- sold 24 facilities for $188 million in cash proceeds,
generating a $100 million gain.
- invested $17 million in capital renovation and
construction-in-progress projects.
- paid a $0.67 per share quarterly cash dividend on common
stock.
- was included in the 2021 Bloomberg Gender-Equality Index.
NET INCOME
The Company reported net income of $164.4 million, or $0.69 per
common share, on revenues of $273.8 million for the quarter ended
March 31, 2021. This compares to net income of $92.3 million, or
$0.39 per common share, on revenues of $253.0 million, for the same
period in 2020. The year-over-year increase in net income was
primarily due to (i) a $98.5 million increase in gain on the sale
of assets, (ii) $20.7 million in revenue from incremental new
investments completed and (iii) a $10.3 million increase in income
from unconsolidated joint ventures. The increase in net income was
partially offset by (i) a $29.7 million increase in loss on early
extinguishment of debt, (ii) $24.5 million of incremental
impairments on real estate properties and direct financing leases,
and (iii) a $3.0 million increase in interest expense.
FIRST QUARTER 2021
RESULTS
Revenues – Revenues for the quarter ended March 31, 2021
totaled $273.8 million, which included $12.1 million of non-cash
revenue, $5.0 million of non-recurring revenue, $2.9 million of
real estate tax and ground rents, and a $2.7 million write-off of
non-cash straight-line revenue.
Expenses – Expenses for the quarter ended March 31, 2021
totaled $191.2 million, consisting of $84.8 million of depreciation
and amortization expense, $55.8 million of interest expense, $28.7
million of impairment on real estate properties, $10.4 million of
general and administrative (“G&A”) expense, $5.4 million of
stock-based compensation expense, $3.1 million of real estate tax
and ground lease expense, $2.8 million of amortized deferred
financing costs, $1.8 million of acquisition, merger and transition
related costs offset by a $1.0 million recovery for estimated
current expected credit losses (“CECL”) and a $0.6 million recovery
on direct financing leases.
Other Income and Expense – Other income and expense for
the quarter ended March 31, 2021 totaled $70.9 million, which
included $100.3 million of gain on assets sold offset by $29.7
million in charges related to the early extinguishment of debt
obligations.
Funds From Operations – Nareit FFO for the quarter ended
March 31, 2021 was $170.2 million, or $0.71 per common share, on
240 million weighted-average common shares outstanding, compared to
$181.0 million, or $0.77 per common share, on 235 million
weighted-average common shares outstanding, for the same period in
2020.
The $170.2 million of Nareit FFO includes $29.7 million in loss
on early extinguishment of debt, $5.4 million of non-cash
stock-based compensation expense, a $2.7 million write-off of
non-cash straight-line revenue, and $1.8 million of acquisition,
merger and transition related costs offset by $5.0 million of
non-recurring revenue, a $1.0 million recovery for credit losses
and a $0.6 million recovery on direct financing leases.
The $181.0 million of Nareit FFO for the quarter ended March 31,
2020 includes $4.6 million of non-cash stock-based compensation
expense and a $1.5 million provision for CECL offset by $0.7
million of one-time revenue and a $0.2 million adjustment for
merger related costs.
Adjusted FFO was $203.8 million, or $0.85 per common share, for
the quarter ended March 31, 2021, compared to $186.2 million, or
$0.79 per common share, for the same quarter in 2020. For further
information, see the “Funds From Operations” schedule below and on
the Company’s website.
FINANCING ACTIVITIES
Equity Shelf Program and Dividend Reinvestment and Common
Stock Purchase Plan – During the quarter ended March 31, 2021,
the Company sold 2.0 million shares of its common stock, generating
$76.8 million of gross proceeds, under its Equity Shelf Program and
its Dividend Reinvestment and Common Stock Purchase Plan:
Equity Shelf
Dividend
(At-the-
Reinvestment and
Market)
Common Stock
(in thousands, except price per share)
Program
Purchase Plan
Q1 2021
Number of shares
1,617
416
Average price per share
$
37.95
$
37.23
Gross proceeds
$
61,355
$
15,491
$700 Million Senior Notes – On March 10, 2021, the
Company issued $700 million aggregate principal amount of its
3.250% Senior Notes due 2033. The notes were sold at a public
offering price of 99.304% of their face value before the
underwriters’ discount. The Company’s net proceeds from the
offering were used to repay $350 million 4.375% Senior Notes due
2023 and partially repay borrowings under the Company’s then
outstanding revolving credit facility and term loans.
Repurchase of $350 Million Senior Notes due 2023 – On
March 18, 2021, the Company repurchased and retired $350 million
aggregate principal amount of its 4.375% Senior Notes due 2023
pursuant to a cash tender offer. As a result of the notes
retirement, the Company recorded approximately $30 million in early
extinguishment of debt charges.
$1.45 Billion Credit Facility – On April 30, 2021, the
Company closed a new four-year $1.45 billion senior unsecured
credit facility (“Credit Facility”). The Credit Facility replaced a
$1.25 billion senior unsecured credit facility that was scheduled
to mature on May 25, 2021.
$50 Million OP Term Loan Facility – On April 30, 2021,
the Company closed a new four-year $50 million senior unsecured
term loan facility (“OP Term Loan Facility”) to its operating
partnership subsidiary. The OP Term Loan Facility replaced a $50
million senior unsecured term loan facility that was scheduled to
mature on May 25, 2022.
2021 FIRST QUARTER PORTFOLIO AND RECENT
ACTIVITY
Q1 2021 Portfolio
Activity:
$611 Million of New Investments – In the first quarter of
2021, the Company completed approximately $594.5 million of
acquisitions and $16.8 million in capital renovations and new
construction projects consisting of the following:
$511 Million Acquisition – On January
20, 2021, the Company acquired 24 senior living facilities from
Healthpeak Properties, Inc. (NYSE: PEAK) for $511.3 million
including closing costs. The acquisition included the assumption of
an in-place master lease with Brookdale Senior Living (NYSE: BKD).
The master lease provides for 2021 contractual rent of $43.5
million with a 2.4% annual escalator and includes 24 facilities
representing 2,552 operating units located in Arizona (1),
California (1), Florida (1), Illinois (1), New Jersey (1), Oregon
(6), Pennsylvania (1), Tennessee (1), Texas (6), Virginia (1), and
Washington (4).
$83 Million Acquisition – On February
25, 2021, the Company acquired six skilled nursing facilities
(“SNFs”) located in Florida from an unrelated third party for
approximately $83.1 million. The six facilities with 716 beds were
added to an existing operator’s master lease with an initial annual
cash yield of 9.25% with 2.25% annual escalators.
$17 Million of Capital Investments –
In the first quarter of 2021, the Company invested $16.8 million
under its capital renovation and construction-in-progress
programs.
Asset Sales and Impairments:
$188 Million in Asset Sales – In the first quarter of
2021, the Company sold 24 facilities for $188.3 million in cash,
recognizing a gain of approximately $100.3 million. Twenty-one of
these assets were previously classified as held for sale.
Impairments and Assets Held for Sale – During the first
quarter of 2021, the Company recorded a net impairment charge of
$28.7 million to reduce the net book value of four properties to
their estimated fair values or expected selling prices.
As of March 31, 2021, the Company had six properties classified
as assets held for sale, totaling approximately $7.9 million.
BALANCE SHEET AND
LIQUIDITY
As of March 31, 2021, the Company had $5.5 billion of
outstanding indebtedness with a weighted-average annual interest
rate of 4.26%. The Company’s indebtedness consisted of an aggregate
principal amount of $4.9 billion of senior unsecured notes, a $50.0
million unsecured term loan, $367.7 million of secured debt and
$135.0 million of borrowings outstanding under its unsecured
revolving credit facility. As of March 31, 2021, total cash and
cash equivalents were $51.4 million and the Company had $1.1
billion of undrawn capacity on its unsecured credit facility
revolver.
CFO COMMENTS
Bob Stephenson, Omega’s Chief Financial Officer, commented, “In
2021, we continued to improve our balance sheet with a $700 million
senior unsecured notes offering in March and a new $1.45 billion
unsecured credit facility in April. With the proceeds from our
notes offering, we were able to repay approximately $661 million of
combined fixed and variable rate debt maturing in the next two
years with 12-year fixed-rate paper. The 3.25% coupon was the
lowest coupon ever issued by Omega.”
Mr. Stephenson continued, “We are extremely pleased to have no
senior unsecured notes maturing until 2023 and a new unsecured
credit facility maturing in 2025. Our new credit facility is
substantially undrawn, providing Omega with nearly $1.3 billion of
available borrowing capacity. Our weighted-average debt maturity
improved to 8.4 years and our weighted-average cost of debt
improved to 4.12%.”
DIVIDENDS
On April 22, 2021, the Board of Directors declared a quarterly
cash dividend of $0.67 per share, to be paid May 17, 2021 to common
stockholders of record as of the close of business on May 3,
2021.
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.
CONFERENCE CALL
The Company will be conducting a conference call on Tuesday, May
4, 2021 at 10 a.m. Eastern time to review the Company’s 2021 first
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 First Quarter 2021 Earnings Call.”
To listen to the conference call via webcast, log on to
www.omegahealthcare.com and click the “Omega Healthcare
Investors, Inc. 1Q Earnings Call” hyper link under “Upcoming
Events” in the Investor Relations section on Omega’s website
homepage. Webcast replays of the call will be available on Omega’s
website for approximately two weeks following the call.
Additionally, a copy of the earnings release will be available in
the “Featured Documents” and “Press Releases” sections of Omega’s
website.
* * * * * *
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 and Cautionary Language
Novel coronavirus (“COVID-19”) data has been provided by our
operators. We caution that we have not independently validated
facility virus incidence information, it may be reported on an
inconsistent basis by our operators, and we can provide no
assurance regarding its accuracy or that there have not been any
changes since the time the information was obtained from our
operators; we also undertake no duty to update this
information.
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 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 assisted living facilities (“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 or
assets held for sale 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)
March 31,
December 31,
2021
2020
(Unaudited)
ASSETS
Real estate properties
Real estate investments
$
9,261,190
$
8,702,154
Less accumulated depreciation
(2,069,822
)
(1,996,914
)
Real estate investments – net
7,191,368
6,705,240
Investments in direct financing leases –
net
10,757
10,764
Mortgage notes receivable – net
890,068
885,313
8,092,193
7,601,317
Other investments – net
444,719
467,442
Investments in unconsolidated joint
ventures
204,646
200,638
Assets held for sale – net
7,922
81,452
Total investments
8,749,480
8,350,849
Cash and cash equivalents
51,376
163,535
Restricted cash
4,522
4,023
Contractual receivables – net
11,428
10,408
Other receivables and lease
inducements
236,669
234,666
Goodwill
651,679
651,737
Other assets
117,648
82,231
Total assets
$
9,822,802
$
9,497,449
LIABILITIES AND EQUITY
Revolving line of credit
$
135,000
$
101,158
Term loans – net
49,914
186,349
Secured borrowings
367,685
369,524
Senior notes and other unsecured
borrowings – net
4,855,286
4,512,221
Accrued expenses and other liabilities
256,338
280,824
Deferred income taxes
10,249
10,766
Total liabilities
5,674,472
5,460,842
Equity:
Preferred stock $1.00 par value authorized
– 20,000 shares, issued and outstanding - none
—
—
Common stock $.10 par value authorized –
350,000 shares, issued and outstanding – 233,386 shares as of March
31, 2021 and 231,199 as of December 31, 2020
23,338
23,119
Common stock – additional paid-in
capital
6,226,543
6,152,887
Cumulative net earnings
2,754,713
2,594,735
Cumulative dividends paid
(5,074,432
)
(4,916,097
)
Accumulated other comprehensive income
(loss)
23,230
(12,768
)
Total stockholders’ equity
3,953,392
3,841,876
Noncontrolling interest
194,938
194,731
Total equity
4,148,330
4,036,607
Total liabilities and equity
$
9,822,802
$
9,497,449
OMEGA HEALTHCARE INVESTORS,
INC.
CONSOLIDATED STATEMENTS OF
OPERATIONS
Unaudited
(in thousands, except per share
amounts)
Three Months Ended
March 31,
2021
2020
Revenues
Rental income
$
234,825
$
218,125
Real estate tax and ground lease
income
2,936
3,375
Income from direct financing leases
258
258
Mortgage interest income
23,625
19,685
Other investment income
11,652
10,652
Miscellaneous income
472
929
Total revenues
273,768
253,024
Expenses
Depreciation and amortization
84,849
82,643
General and administrative
10,399
10,927
Real estate tax and ground lease
expense
3,086
4,027
Stock-based compensation expense
5,396
4,635
Acquisition, merger and transition related
costs
1,814
(225
)
Impairment on real estate properties
28,689
3,639
Recovery on direct financing leases
(553
)
—
(Recovery) provision for credit losses
(1,024
)
1,486
Interest expense
55,768
52,741
Interest – amortization of deferred
financing costs
2,753
2,461
Total expenses
191,177
162,334
Other (expense) income
Interest and investment expense
(435
)
(734
)
Loss on debt extinguishment
(29,670
)
—
Realized gain (loss) on foreign
exchange
666
(70
)
Gain on assets sold – net
100,342
1,838
Total other income
70,903
1,034
Income before income tax expense and
income from unconsolidated joint ventures
153,494
91,724
Income tax expense
(958
)
(1,005
)
Income from unconsolidated joint
ventures
11,830
1,560
Net income
164,366
92,279
Net income attributable to
noncontrolling interest
(4,388
)
(2,364
)
Net income available to common
stockholders
$
159,978
$
89,915
Earnings per common share available to
common stockholders:
Basic:
Net income available to common
stockholders
$
0.69
$
0.40
Diluted:
Net income
$
0.69
$
0.39
Dividends declared per common share
$
0.67
$
0.67
OMEGA HEALTHCARE INVESTORS,
INC.
FUNDS FROM OPERATIONS
Unaudited
(in thousands, except per share
amounts)
Three Months Ended
March 31,
2021
2020
Net income
$
164,366
$
92,279
Deduct gain from real estate
dispositions
(100,342
)
(1,838
)
Deduct gain from real estate dispositions
of unconsolidated joint ventures
(14,924
)
(117
)
Sub-total
49,100
90,324
Elimination of non-cash items included in
net income:
Depreciation and amortization
84,849
82,643
Depreciation - unconsolidated joint
ventures
3,361
3,632
Add back non-cash provision for
impairments on real estate properties
28,689
3,639
Add back provision for impairments on real
estate properties of unconsolidated joint ventures
4,178
—
Add back unrealized loss on warrants
72
775
Nareit funds from operations (“Nareit
FFO”)
$
170,249
$
181,013
Weighted-average common shares
outstanding, basic
232,572
227,261
Restricted stock and PRSUs
944
1,261
Omega OP Units
6,391
5,984
Weighted-average common shares
outstanding, diluted
239,907
234,506
Nareit funds from operations available
per share
$
0.71
$
0.77
Adjustments to calculate adjusted funds
from operations:
Nareit FFO
$
170,249
$
181,013
Add back
Uncollectible accounts receivable (1)
2,750
—
(Recovery) provision for credit losses
(1,024
)
1,486
Stock-based compensation expense
5,396
4,635
Loss on debt extinguishment
29,670
—
Acquisition, merger and transition related
costs
1,814
(225
)
Deduct
Non-recurring revenue
(5,004
)
(666
)
Recovery on direct financing leases
(553
)
—
Add back unconsolidated joint venture
related
Loss on debt extinguishment
457
—
Adjusted funds from operations
(“AFFO”)
$
203,755
$
186,243
Adjustments to calculate funds
available for distribution:
Non-cash interest expense
$
1,880
$
2,438
Capitalized interest
(388
)
(3,646
)
Non-cash revenue
(12,070
)
(10,763
)
Funds available for distribution
(“FAD”)
$
193,177
$
174,272
_________________________________________________________________________________
(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,
write-off of straight-line accounts receivable, recoveries and
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 March 31, 2021
Total
# of
# of
Balance Sheet Data
Total # of
Investment
% of
Operating
Operating
Properties
($000’s)
Investment
Properties (2)
Beds (2)
Real estate investments (1)
905
$
9,271,947
91
%
896
90,383
Mortgage notes receivable
63
890,068
9
%
58
6,270
968
$
10,162,015
100
%
954
96,653
Assets held for sale
6
7,922
Total investments
974
$
10,169,937
As of March 31, 2021
Total
# of
# of
Investment
Investment Data
Total # of
Investment
% of
Operating
Operating
per Bed
Properties
($000’s)
Investment
Properties (2)
Beds (2)
($000’s)
SNFs/Transitional care
812
$
7,967,363
78
%
801
85,980
$
93
Senior housing (3)
156
2,194,652
22
%
153
10,673
$
206
968
$
10,162,015
100
%
954
96,653
$
105
Assets held for sale
6
7,922
Total investments
974
$
10,169,937
_________________________________________________________________________________
(1)
Includes one asset under a direct
financing lease totaling $10.8 million.
(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 ($000’s)
Revenue by Investment Type
Three Months Ended
March 31, 2021
Rental property (1)
$
235,083
86
%
Real estate tax and ground lease
income
2,936
1
%
Mortgage notes
23,625
9
%
Other investment income and miscellaneous
income - net
12,124
4
%
$
273,768
100
%
Revenue by Facility Type
Three Months Ended
March 31, 2021
SNFs/Transitional care
$
215,069
79
%
Senior housing
43,639
16
%
Real estate tax and ground lease
income
2,936
1
%
Other
12,124
4
%
$
273,768
100
%
_________________________________________________________________________________
(1)
Includes one asset under a direct
financing lease totaling $0.3 million for the three months ended
March 31, 2021.
As of
2021 Q1
% of Total
March 31, 2021
Annualized
Annualized
Rent/Interest Concentration by Operator
($000’s)
# of
Contractual
Contractual
Properties (1)
Rent/Interest (1)(2)
Rent/Interest
Ciena
65
$
96,438
9.7
%
Consulate
86
94,403
9.5
%
Maplewood
15
62,351
6.3
%
Genesis
45
57,290
5.8
%
Communicare
36
55,752
5.6
%
Agemo
54
53,646
5.4
%
Saber
49
51,993
5.2
%
Brookdale
24
43,101
4.4
%
HHC
44
37,391
3.8
%
Guardian
35
36,313
3.7
%
Remaining Operators (3)
500
401,911
40.6
%
953
$
990,589
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 March 31, 2021
Geographic Concentration by Investment
($000’s)
Total # of
Total
% of Total
Properties (1)
Investment (1)(2)
Investment
Florida
135
$
1,561,075
15.3
%
Texas
118
1,009,015
9.9
%
Michigan
49
651,885
6.4
%
Indiana
70
639,590
6.3
%
California
53
580,659
5.7
%
Pennsylvania
54
580,216
5.7
%
Ohio
42
530,988
5.2
%
Virginia
28
419,743
4.1
%
New York
1
333,780
3.3
%
North Carolina
39
327,531
3.2
%
Remaining 32 states
322
3,109,102
30.5
%
911
9,743,584
95.6
%
United Kingdom
57
446,356
4.4
%
968
$
10,189,940
100.0
%
_________________________________________________________________________________
(1)
Excludes six properties with
total investment of $7.9 million classified as assets held for
sale.
(2)
Excludes $28 million provision
for credit losses.
As of March 31, 2021
Operating Lease Expirations
& Loan Maturities ($000's) (1)
Lease (Rent)
Interest Income
Lease (Rent) and Interest
Income
% of Total Annualized Contractual
Rent/Interest
2021
$
3,547
$
3,163
$
6,710
0.7
%
2022
37,391
4,273
41,664
4.2
%
2023
3,732
712
4,444
0.4
%
2024
9,957
2,879
12,836
1.3
%
2025
12,777
5,241
18,018
1.8
%
_________________________________________________________________________________
(1)
Based on annualized 1st quarter
2021 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. 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 December 31, 2020
51.0
%
38.1
%
10.9
%
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
%
_________________________________________________________________________________
(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 December 31, 2020
78.1
%
1.86x
1.50x
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
(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 4%.
The following table presents a debt maturity schedule as of
March 31, 2021:
Unsecured Debt
Debt Maturities
($000’s)
Line of Credit and Term Loans
(1)
Senior Notes/Other (2)
Subordinated Notes (3)
Secured Debt
Total Debt Maturities
2021
$
135,000
$
—
$
20,000
$
—
$
155,000
2022
50,000
—
—
2,275
52,275
2023
—
350,000
—
—
350,000
2024
—
400,000
—
—
400,000
2025
—
400,000
—
—
400,000
2026
—
600,000
—
—
600,000
Thereafter
—
3,150,000
—
365,410
3,515,410
$
185,000
$
4,900,000
$
20,000
$
367,685
$
5,472,685
_________________________________________________________________________________
(1)
Does not reflect the replacement
of our prior credit facility and prior term loan facility on April
30, 2021, with the new Credit Facility and OP Term Loan facility
maturing April 30, 2025.
(2)
Excludes net discounts and
deferred financing costs.
(3)
Excludes $0.1 million of fair
market valuation adjustments.
The following table presents investment activity:
Three Months Ended
Investment Activity ($000's)
March 31, 2021
$ Amount
%
Real property
$
594,504
97.3
%
Construction-in-progress
9,417
1.5
%
Capital expenditures
7,402
1.2
%
Mortgages
—
—
%
Other
—
—
%
Total
$
611,323
100.0
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210503005702/en/
Matthew Gourmand, SVP, Corporate Strategy &
Investor Relations or Bob Stephenson, CFO at (410) 427-1700
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