Omega Healthcare Investors, Inc.

Good morning and welcome to the Omega Health Investors Third 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 turn the conference over to Michelle River. 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 third quarter 2022 earnings conference call. Today I will discuss our third quarter financial results, operator restructurings, and our results over the course of the COVID pandemic. Our third quarter adjusted FFO is 76 cents per share, and funds available for distribution are 71 cents per share. We have maintained our quarterly dividend of 67 cents per share. The dividend payout ratio is 88 percent of adjusted FFO and 94 percent of funds available for distribution. The adjusted FFO per share FAD per share, and dividend payout ratios are all exactly the same as the second quarter. Year-to-date FAD is $2.07 per share, while our year-to-date dividend paid is $2.01 per share. We expect that our full-year FAD per share will exceed our full-year dividend per share payout. Turning to operator restructurings. We continue to successfully work through operator restructurings, generally resulting and little or no diminution in value of our assets and our long-term cash flows. The most recent example of our successful restructuring work is the sale of 21 AGMO assets, generating gross proceeds of $359 million. Early in 2023, we expect AGMO to begin paying rent and interest on the balance of the 29 facilities that they retained in the restructuring and anticipate the rent and interest on the AGMO retained portfolio will add nearly $0.03 per share to quarterly FAT. In addition, the redeployment of the Aegemo asset sale proceeds are expected to add another $0.03 per share to quarterly FAT. Unfortunately, we expect that we will continue to have ongoing restructuring discussions with certain operators due to inflationary costs, including dramatic increases in UK utility costs and Medicaid reimbursement and occupancy challenges. These ongoing restructurings will likely include asset sales, operator transitions, and rent deferrals. Turning to our COVID era results. This is our 11th COVID era earnings call. As a result of our active asset balance sheet and risk management, we currently have a pathway to potentially exit the pandemic with limited financial damage. Our current quarter fad per share of 71 cents compares favorably to our pre-COVID first quarter 2020 FAD per share of 74 cents, particularly when you consider the FAD per share upside from the nearly complete Pajima restructuring. Specific actions taken to protect long-term shareholder value over the last 32 months include, one, the sale of $1.6 billion in assets which generally strengthened our operator future credit metrics by exiting underperforming facilities within master leases, and in some cases, resulted in completely exiting the operator relationship. Two, while we harvested $1.6 billion in capital, we have deployed an equivalent amount, $1.6 billion, via asset purchases, construction, loans, and leverage-neutral stock buybacks. Three, in addition to acquiring and disposing assets, we have transitioned dozens of facilities to new or existing operators. The net result of our active asset management is a stronger operator platform as we narrowed our operator base from 70 operators in Q1 2020 to 63 operators today. Or, turning to the balance sheet, the issuance of $1.4 billion in long-dated sub-3.4 percent unsecured bonds. Five, the issuance of $400 million in common equity. Six, the extension of our $1.5 billion revolving credit agreement through 2025. And seven, turning to risk management, our hedges of interest rates and foreign currency combined with our debt maturity stack, which is virtually all fixed-rate debt, significantly minimizes the risk from increased short-term interest rates and near-term maturities. We believe that we will continue to grapple with ongoing COVID-related operator issues for the next 12 to 16 months. Fortunately, our rock-solid balance sheet and resilient operator franchise, along with our active day-to-day portfolio management, which includes supporting our operators with best practice communication and industry lobbying efforts, have put us in a relatively solid position to continue to return capital to our shareholders via our dividends. and to continue deploying growth capital to our operators. I will now turn the call over to Bob.