Omega Healthcare Investors, Inc.

Greetings and welcome to the Omega Healthcare Investors' fourth quarter 2023 earnings conference call. At this time, all participants are in 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 from your telephone keypad. As a reminder, this conference is being recorded. I will now turn the conference over to Michelle Rebar. You may begin.

Thank you and good morning. With me today is 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, potential transactions, operator prospects, and outlook generally. Factors that could cause actual results to differ materially from those in the forward-looking statements are detailed in the company's filings with the SEC. During the call today, we will refer to some non-GAAP financial measures, such as NAVREAD FFO, Adjusted FFO, FAD, and EBITDA. Reconciliations of these non-GAAP measures to the most comparable measure under generally accepted accounting principles are available in the quarterly supplements. 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 fourth quarter 2023 earnings conference call. Today I will discuss our fourth quarter financial results and certain key operating trends. Fourth quarter FAD, funds available for distribution, of 64 cents per share was as expected, reflecting several portfolios that are in the process of being transitioned, which will result in meaningful FAD upside over the next few quarters. Full year FAD was $2.62 per share, slightly below our full year dividend of $2.68 per share, resulting in a payout ratio of 102%. We continue to have a handful of cash basis operators, including Maplewood, that will impact our go-forward AFFO and FAD, making first quarter 2024 FAD difficult to predict. However, longer term, we believe all of these assets, but in particular Maplewood, are well positioned to generate reliable and growing cash flows and related rent. We believe that we have enough visibility into the timing and ultimate resolution of the portfolios that are being transitioned or sold to provide guidance for the first time since the pandemic started. Our 2024 AFFO guidance is between $2.70 and $2.80 per share. As Dan will discuss, key tenant occupancy and rent coverage metrics continue to improve including the under one times EBITDA coverage operator metric, which dropped from 27.5% of total rent to 13.2% of total rent. We can break the 13.2% into a handful of buckets. Operators representing 7.5% of the 13.2% are strong credits and therefore payment of rent should not be an issue. Operators representing 1.2% have third quarter and October EBITDA coverage above 1.0 times, benefiting from state rate increases and operational improvements. that we expect to continue on a go-forward basis. 0.9% represents facilities that have already transitioned to performing credit. That leaves operators representing 3.6%, of which an operator representing 0.5% was recently transitioned, which leaves a balance of 3.1%, representing 11 small operating relationships. I will now turn the call over to Bob.