Omega Healthcare Investors, Inc.

Good morning and welcome to the Omega Healthcare Investors third quarter of 2021 earnings conference call. All participants will be in a listen-only mode. Should you need assistance today, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touch-tone phone. To withdraw your question, please press star then two. Please note this event is being recorded. I'd now like to turn the conference over to Michelle Reber. Please go ahead. Thank you, and good morning.

With me today are Omega's CEO, Taylor Pickett, COO, Dan Booth, CFO, Bob Stevenson, Chief Corporate Development Officer, Stephen Insoff, and Megan Krull, Senior Vice President of Operations. Comments made during this conference call that are not historical facts may be forward-looking statements, such as statements regarding our financial projections, dividend policy, portfolio restructurings, rent payments, financial condition or prospects of our operators, contemplated acquisitions, dispositions or transitions, and our business and portfolio outlook generally. These forward-looking statements involve risks and uncertainties which may cause actual results to differ materially. Please see our press releases and our filings with the Securities and Exchange Commission, including, without limitation, our most recent report on Form 10-K. which identifies specific factors that may cause actual results or events to differ materially from those described in forward-looking statements. During the call today, we will refer to some non-GAAP financial measures such as NAREIT FFO, adjusted FFO, FAD, and EBITDA. Reconciliations of these non-GAAP measures to the most comparable measure under generally accepted accounting principles, as well as an explanation of the usefulness of the non-GAAP measures, are available under the financial information section of our website. at www.omegahealthcare.com, and in the case of NAIRI FFO and adjusted FFO, in our recently issued press release. In addition, certain operator coverage and financial information that we discuss is based on data provided by our operators that has not been independently verified by Omega. I will now turn the call over to Taylor.

Thanks, Michelle. Good morning, and thank you for joining our third quarter 2021 earnings conference call. Today I will discuss our third quarter financial results, skilled nursing facility industry trends, and operator liquidity issues. We posted strong quarterly results with third quarter adjusted FFO of 85 cents per share and funds available for distribution of 81 cents per share. We have maintained our quarterly dividend of 67 cents per share. Dividend payout ratio remains conservative at 79% of adjusted FFO and 83% of funds available for distribution. However, approximately $0.07 per share of our funds available for distribution is the result of applying letters of credit and other collateral to fund third quarter rent and interest obligations. Fortunately, our liquidity and our balance sheet have never been stronger as we work with our operators to navigate through what is hopefully the tail end of the pandemic. Turning to skilled nursing facility industry trends. Positive trends include, one, occupancy continues to improve. It's now 76% for the Omega portfolio. Two, approximately 20% of our facilities are at or above pre-COVID occupancy levels. Three, the federal government has released $25 billion in provider relief funding with distribution anticipated over the next several months. And four, most states continue to support the industry through supplemental Medicaid reimbursement. Negative trends include, one, labor and the continuing labor shortage and related increasing wages combined with the dramatically increased usage of staffing agency labor at increased hourly costs. Two, we're several months into the recoupment cycle for those operators that took Medicare advance payments when the pandemic started. Repayment of these advances has significantly impacted operator liquidity, including the liquidity of a GMO and Gulf Coast. Three, the pace of occupancy recovery remains a big question mark, and we could see additional operators face liquidity issues in the coming months. And four, uncertainty regarding the amount and timing of ongoing federal and state support. Turning to operator liquidity issues and restructuring, Dan will provide detail regarding specific operator current liquidity and restructuring issues. In general, these efforts include one or more of the following actions. One, rent deferrals. Two, asset sales or transitions to a new operator. And three, in certain cases, rent resets with other amended lease provisions. Examples include elimination of purchase options, future upward potential rent resets, lease extensions or revisions of renewal rights, and collateral enhancements, adjustments, or usage. Historically, in many of our restructurings, One or more of the actions that I've outlined are sufficient to protect the value of our assets and most, if not all, of the long-term cash flow generation from the restructured assets. We continue to remain hopeful that the outcome of our COVID restructurings will yield a similar result. Finally, I again thank our operating partners and, in particular, the frontline caregivers and staff who have cared for the tens of thousands of residents within our facilities. I will now turn the call over to Bob.