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What were the key takeaways from Omega Healthcare's earnings call?

- **Record Q4 Growth**: Adjusted FFO $0.80/share, FAD $0.76/share, with 8%+ YoY AFFO/FAD growth.
- **Strategic Investments**: $1.1B in 2025, including first U.S. senior housing RIDEA and Canada development loan with 34.9% equity conversion.
- **Balance Sheet Strength**: Reduced debt by $700M, entering $2B ATM program, and 5.8x fixed charge coverage.
- **2026 Outlook**: $3.15-$3.25/share FFO guidance, Sabra to become largest revenue source, and Canada expansion with high-single-digit growth potential.

**【CEO Opening Remarks】**
- **Q4 2025 Financial Highlights**: Adjusted FFO of $0.80 per share and FAD of $0.76 per share, driven by $1.1 billion in capital deployment and improved operator credit quality.
- **Full Year Growth**: AFFO and FAD grew over 8% YoY, with a dividend payout ratio of 84% for AFFO and 88% for FAD.
- **2026 Outlook**: Momentum to continue with active portfolio management, RIDEA platform expansion, and Sabra becoming the largest revenue source.

**【CIO Portfolio Update】**
- **Portfolio Performance**: 1,111 facilities (62% skilled nursing, 38% senior housing/U.K. care homes) with trailing 12-month EBITDAR coverage of 1.57x.
- **Genesis Bankruptcy**: $52 million annual rent from 31 facilities, with $129 million term loan secured by first lien on assets. Second auction won by 101 West Street, expected resolution in Q3/Q4 2026.
- **New Investments**: $1.1 billion in 2025, including $37 million in U.S. senior housing RIDEA, $43 million in NC CCRC, and $109 million in Georgia SNFs (10.6% yield). Canada development loan of $64 million for 5 LTACs with 34.9% equity conversion option.
- **Sabra JV**: $222 million real estate investment and $93 million equity stake in Sabra's operating company, targeting aligned growth opportunities.

**【CFO Financial Commentary】**
- **Q4 2025 Results**: Revenue $319 million (14% YoY), net income $172 million ($0.55/share), adjusted FFO $250 million ($0.80/share), FAD $238 million ($0.76/share).
- **Balance Sheet Strength**: Reduced debt by $700 million, entering $2 billion ATM program, and ending with $1.7 billion revolver capacity. Fixed charge coverage 5.8x, leverage 3.51x.
- **2026 Guidance**: Adjusted FFO $3.15-$3.25/share, assuming $157 million in loan repayments, $15-$25 million/Q4 asset sales, and no additional investments beyond pipeline.

**【Q&A Highlights】**
- **SHOP Strategy**: Focus on smaller, turnaround deals with low- to mid-teens IRRs, aligning with operators' expertise. Georgia SNFs leased to existing operator at 10.6% yield.
- **Genesis Proceeds**: $137 million expected mid-2026, to be reinvested at 3.5% overnight rates.
- **Canada Expansion**: Low-single to high-single-digit growth potential in Ontario LTAC market, with 21-facility collateral for $64 million loan.
- **Regulatory Update**: No impact from Medicare Advantage rate freeze, as <26% of operator revenue tied to Medicare.
- **Dividend Policy**: Target dividend payout ratio below 85% for AFFO, with potential increase when FAD coverage >90%.


Omega Healthcare Investors, Inc. (OHI) Q4 2025 Earnings Call Transcript

- **AFFO Growth**: 15% year-over-year growth in AFFO midpoint to $3.08-$3.10 per share, driven by new investments and improved coverage.
- **Sabre JV Success**: 9.9% equity stake in Sabre Healthcare with 9.3% yield and potential high-teens IRR through operating company growth.
- **Balance Sheet Strength**: 5.1x fixed charge coverage, 3.59x leverage, and $737 million cash to support $1 billion+ annual investment pace.
- **Strategic Expansion**: Transitioning from pure triple net to RIDEA and joint ventures, with first U.S. RIDEA deal in pipeline.
- **Dividend Flexibility**: Payout ratio at 85% for AFFO, with Board open to increases as payout approaches 80%.

**【CEO Summary Section】**
- Third-quarter adjusted funds from operations (AFFO) was $0.79 per share, with FAD (funds available for distribution) of $0.75 per share, reflecting 15% year-over-year growth in AFFO midpoint guidance.
- Dividend payout ratio improved to 85% for AFFO and 89% for FAD, down from prior quarters, signaling stronger balance sheet flexibility.
- Portfolio metrics showed EBITDAR coverage at 1.55x, the highest in 12 years, with below 1x rent coverage dropping to 4.3% of total rent.
- Strategic expansion into joint ventures and minority interests, exemplified by the 9.9% equity stake in Sabre Healthcare, targeting low to mid-teens IRRs.

**【CFO Financial Commentary】**
- Revenue grew 13% year-over-year to $312 million, driven by new investments and improved operator performance.
- Balance sheet strength with $737 million in cash, a 5.1x fixed charge coverage ratio, and 3.59x leverage.
- Raised 2025 AFFO guidance to $3.08-$3.10 per share, up $0.035 from prior midpoint, reflecting $374 million in new investments.
- New $2.3 billion credit facility and $2 billion ATM program to support future growth.

**【Q&A Highlights】**
- **Sabre JV Details**: 64-facility portfolio with 1.46x coverage, 9.3% initial yield, and potential for high-teens IRR through operating company growth.
- **Labor Market Trends**: U.S. wage increases aligning with inflation, no significant temp labor usage; U.K. market less strained but facing demographic growth.
- **RIDEA Outlook**: Pipeline includes U.S. and U.K. RIDEA deals, with focus on risk-adjusted returns above traditional triple net leases.
- **Dividend Growth**: Board open to dividend increases as payout ratio approaches 80%, with historical precedent of quarterly hikes.
- **Genesis Bankruptcy**: Lease assumed by Genesis, with full rent payments continuing; process expected to conclude in Q1/Q2 2026.

Omega Healthcare Investors, Inc. (OHI) Q3 2025 Earnings Call Transcript

- **Record Growth**: Q2 FAD up 3% QoQ, 2025 AFFO guidance raised to $3.04-$3.07 per share.
- **Strong Balance Sheet**: 3.67x net debt/EBITDA (lowest in over a decade), $734M cash.
- **Investment Pipeline**: $605M in new investments at 10%+ yields, 65% U.K.-focused.
- **Operational Resilience**: 1.51x EBITDAR coverage, 80% operators on straight-line accounting.
- **Dividend Potential**: 90% payout ratio, targeting 85%+ for future increases.

**【CEO Summary Section】**
- Q2 2025 adjusted FFO of $0.77 per share and FAD of $0.74 per share, driven by $605M in new investments and strong portfolio management.
- Raised 2025 AFFO guidance to $3.04-$3.07 per share (from $2.95-$3.01), reflecting $183M post-Q1 investments and debt refinancing.
- Genesis filed Chapter 11 bankruptcy, with Omega providing $8M DIP financing and expecting full rent payments.
- Senior housing portfolio expanded to 396 facilities (38% of total), with $2B+ liquidity for future growth.

**【CFO Financial Commentary】**
- Q2 revenue: $283M (12% YoY growth), net income: $140M ($0.46 per share), Nareit FFO: $213M ($0.70 per share).
- FAD increased $0.021 QoQ to $0.74, driven by new investments and $1.9M U.K. currency gains.
- Balance sheet: $734M cash, 95% fixed-rate debt, 3.67x net debt/EBITDA (lowest in over a decade).
- Issued $600M 5.2% bonds to refinance 2026 debt, maintaining leverage neutrality.

**【Portfolio & Investment Update】**
- Senior housing/SNF EBITDAR coverage: 1.51x (flat QoQ), with 80% operators on straight-line accounting.
- Q2 investments: $605M (93% real estate), including:
  - $344M U.K. care home portfolio (45 facilities)
  - $158M U.S. SNF/ALF portfolio (12 facilities)
  - $25M real estate loans (10% yield)
- New investments yield 10%+ with 1.7-2.5% annual escalators.

**【Legislative Update】**
- OBBBA removes SNF from Medicaid provider tax cuts, but may cause 4% Medicare rate cut in 2026 (offset by 3.2% rate increase).
- Staffing mandate moratorium extended for 10 years.
- SNF reliance on Medicaid (60%) vs. senior housing (private pay 80%), reducing regulatory risk.

**【Q&A Highlights】**
- **Investment Strategy**: 10%+ yields on new investments, focusing on U.S. senior housing and U.K. care homes.
- **Balance Sheet**: Target leverage 4.5-4.75x, using equity for accretive investments.
- **Maplewood**: Q2 rent $17.6M, expects full contractual rent ($69M annualized) as occupancy grows.
- **Dividend**: Current payout ratio ~90%, aiming for 85%+ to enable future increases.
- **Labor Costs**: Wage inflation stabilizing, no material differences between SNF and ALF.


Omega Healthcare Investors, Inc. (OHI) Q2 2025 Earnings Call Transcript

- **AFFO Guidance Raised**: $2.95-$3.01 per share, up from $2.90-$2.98, driven by Q1 strength.
- **Genesis Liquidity Issue**: One-time ABL lender tightening, no impact on $118M secured loan coverage.
- **U.K. Growth Acceleration**: $344M portfolio acquisition at 10% yield, 93% of 2025 investments.
- **Private Pay Expansion**: 39% revenue mix vs 8% in 2015, reducing regulatory risk exposure.
- **Financial Strength**: 3.72x leverage (lowest in 10 years), $368M cash, no near-term refinancing risk.

**【CEO Summary Section】**
- Q1 2025 adjusted FFO of $0.75 per share and FAD of $0.71 per share, driven by revenue and EBITDA growth.
- AFFO guidance raised to $2.95-$3.01 per share, reflecting strong Q1 results and equity dilution.
- Genesis paid $4.2M rent in April after missing March payment; term loan collateralized by ancillary assets with 1.6x cash flow coverage.
- Private pay revenue mix increased to 39% (from 8% in 2015), reducing reliance on government reimbursement.

**【CFO Financial Commentary】**
- Q1 2025 revenue $277M (+13% YoY), net income $112M, NAREIT FFO $0.62, adjusted FFO $0.75.
- FAD increased $0.013Q/Q due to $340M 2024 investments and Maplewood's $15.5M rent payment.
- Repaid $400M senior notes, ending with $368M cash and 3.72x leverage (target 4.5-4.75x).
- Issued 7M shares (diluting FAD ~$0.01), projecting G&A $12-14M/2025.
- 2025 guidance assumes Genesis/Maplewood rent stability, $84M loans converting to fee simple, and $600M 2026 bond repayment.

**【CIO & Operations Update】**
- Portfolio EBITDAR coverage 1.51x, LaVie exiting bankruptcy, Maplewood occupancy 94% (DC facility 20% leased).
- Q1 2025 investments $457M (U.K. 93%), including $344M U.K. portfolio at 10% yield.
- Pipeline favors accretive U.S. deals, with cautious underwriting amid Medicaid uncertainty.

**【Q&A Highlights】**
- **Genesis Risk**: Strong collateralization (1.6x coverage), no material impact if default occurs.
- **U.K. Expansion**: 45-care home acquisition reflects scale advantage, 10% yields vs U.S. 7%.
- **Medicaid Policy**: Focus on Medicaid expansion cuts, potential 1-2% provider tax reduction.
- **FX Hedging**: Natural hedge via pound-denominated investments, no material currency risk.
- **Acquisition Strategy**: Prioritize U.S. fee-simple deals with 10%+ yields, U.K. pipeline remains robust.

Omega Healthcare Investors (OHI)-2 May 25-2025 Q1 Earnings call transcript

- **Q4 2024 Financial Strength**: FAD of $0.70 per share, 3.96x leverage, $1.1B capital deployment.
- **2025 Guidance**: FFO $2.90-$2.98 per share, reflecting equity dilution and operator stability.
- **Investment Momentum**: $782M U.K. investments, 31% in loans with 1/3 fee simple conversion.
- **Operational Recovery**: Maplewood occupancy 91%, EBITDAR coverage 1.5x.
- **Strategic Leverage**: Prefund acquisitions to maintain 4.0x+ target, flexible debt/equity mix.

**【CEO Opening Remarks】**
- Q4 2024 FAD of $0.70 per share reflects revenue and EBITDA growth, with leverage reduced to 3.96x debt-to-EBITDA.
- 2025 FFO guidance of $2.90-$2.98 per share includes dilutive impact of Q4 2024 share issuances.
- Management changes: Matthew Gourmand as President, Vikas Gupta as CIO. 2024 capital deployment of $1.1B, with active 2025 pipeline.

**【CFO Financial Highlights】**
- Q4 2024 revenue: $279M (16% YoY growth), NAREIT FFO: $196M ($0.68 per share), Adjusted FFO: $214M ($0.74 per share).
- Q4 FAD of $0.70 per share stable vs. Q3, despite 14M shares issued in Q3.
- Balance sheet: $500M+ cash at year-end, $400M bond repaid in January 2025, 4.7x fixed charge coverage.
- 2025 guidance assumes no operator revenue changes, $56M in asset sales, and $12M-$14M quarterly G&A.

**【Investment Activity Update】**
- 2024 new investments: $1.1B ($782M in U.K.), with 31% in real estate loans (1/3 convertible to fee simple).
- Q4 2024 new investments: $179M in real estate (9.9% yield), $162M in loans (10.9% interest rate).
- 2025 pipeline: Strong in U.S. and U.K., focusing on accretive owned real estate deals.

**【Policy & Industry Insights】**
- Operator EBITDAR coverage: 1.5x (up from 1.49x), driven by operational improvements.
- Regulatory risks: Staffing mandate legal challenges, potential immigration policy impacts on labor.
- U.K. investment rationale: Established operator relationships, accretive deal flow.

**【Q&A Key Takeaways】**
- Equity issuance strategy: Prefund acquisitions to maintain leverage below 4.0x, dilutive impact of ~$0.01 per 4M shares.
- Maplewood recovery: Occupancy at 91%, Q4 2024 rent up $1M YoY, expects further improvement.
- U.K. currency hedging: Under evaluation due to pound/dollar volatility.
- 2025 debt management: Prepare for $600M bond maturity with cash and equity issuance flexibility.

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