Omega Healthcare Investors, Inc.

Greetings and welcome to the Omega Healthcare Investors First Quarter 2023 Earnings Conference Call. At this time, all participants are on a listen-only mode. After today's presentation, there will be a brief question and answer session. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to Michelle Reber. You may begin.

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 NAREIT 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 2023 earnings conference call. Today, I will discuss our first quarter financial results, operator restructurings, and certain key operating trends. As expected, our first quarter per share FAD, funds available for distribution, of $0.60 per share was less than our quarterly dividend of $0.67 per share, resulting in a dividend payout ratio of 112%. We expect that the dividend payout ratio will rapidly improve as Agemo resumed paying quarterly rent and interest of $6.5 million on April 1st. In addition, after a four-month rent deferral, Healthcare homes began paying full contractual rent on May 1st, and all of the assets related to the previously disclosed 2.4% and 2.2% operators have been fully transitioned to new operators. These completed restructurings, along with progress related to the LeVie restructuring, provide us with strong FAD momentum in the next few quarters. Turning to positive operating trends. Fourth quarter operator EBITDA coverage, excluding CARES Act support, was strong at 1.09 times. This level of coverage reflects continued occupancy improvement, strong state reimbursement rates, and some moderation in the still difficult labor market. The under 1.0 times EBITDA operators declined accordingly to 29.1%. we can break the 29.1% into a handful of buckets. Operators representing 6% of the 29.1% are sitting on extremely strong balance sheets and therefore payment of rent should not be an issue. Operators representing 6.1% have fourth quarter EBITDA coverage above 1.0 times. 9.6% of the 29.1% represents LaVie. LaVie's fourth quarter EBITDA coverage, when excluding the anticipated sale or transition of 23 facilities, is also above 1.0 times. That leaves operators representing 7.4%, of which operators representing 4.9% are in active restructurings. which leaves a balance of only 2.5%, representing eight modestly-sized operating relationships. Lastly, we acknowledge and mourn the loss of two important leaders in the senior housing industry. The first, George Chapman, was the former CEO of Welltower REIT, and until his passing, the CEO of Renew REIT. George was an important and influential leader within the healthcare and real estate industries. The second, Greg Smith, was the CEO of Maplewood. We had a great professional and personal relationship with Greg. He was a forward-thinking entrepreneur who envisioned and then created Maplewood's unparalleled clinical excellence combined with five-star hotel-like hospitality. Our condolences to the family, friends, and associates of these two important leaders. I will now turn the call over to Bob.