Omega Healthcare Investors, Inc.

Good morning and welcome to the Omega Healthcare Investors first quarter 2022 earnings conference call. All participants will be in listen only mode. Should you need assistance, 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 telephone keypad. To withdraw your question, Please press star, then two. Please note, this event is being recorded. I would now like to send 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, 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 NAERI 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 first quarter 2022 earnings conference call. Today I will discuss our first quarter financial results, skilled nursing facility industry trends, operator restructurings, and our share repurchasing activity. Our first quarter adjusted FFO is 74 cents per share and funds available for distribution are 65 cents per share. We have maintained our quarterly dividend of 67 cents per share. Dividend payout ratio is 91% of adjusted FFO and 103% of funds available for distribution. We believe that the elevated FAD payout ratio is temporary based on the fact that 14.5% of our contractual rents and interest are involved in restructuring discussions and 12.3% of contractual rents were not paid in the first quarter and therefore are excluded from FAD. The successful sale of the Gulf Coast portfolio and imminent completion of the Guardian restructure provide us with strong momentum to eventually return to comfortable FAB payout ratios. Turning to skilled nursing facility industry trends. Fortunately, the December and January pause in facility occupancy improvement reversed in February and March, with preliminary mid-April omega core occupancy levels at 77.9%, up 300 basis points since January 2022. Unfortunately, staffing shortages and elevated costs continue to pressure operating cash flows and the ability to admit new residents. At this point, it is impossible to predict how quickly industry occupancy will fully recover or how rapidly the current labor force pressures will subside. Turning to operator restructurings. Dan will provide detail regarding specific operator restructurings. 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. As we have discussed in the past, The strength of our portfolio assets generally allows us to work through operator restructurings with limited long-term cash flow downside. The Gulf Coast portfolio net proceeds of over $300 million offset the lost Gulf Coast contractual revenue, while Guardian, which is still in process, will result in a very modest diminution in value from the pre-restructuring contractual rents and no diminution in value from our origination yields. turning to share repurchasing activity. We've repurchased $133 million of our stock, utilizing a portion of our asset sale proceeds. The share repurchase program is an efficient tool that has allowed us to harvest capital non-dilutively. 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.