Omega Healthcare Investors, Inc. Q2 FY2025 earnings call

• Financial results: Second quarter adjusted funds from operations of $0.77 per share and FAD of $0.74 per share. Raised and narrowed 2025 AFFO guidance to $3.04 to $3.07 per share. Balance sheet metrics strong with adjusted annualized EBITDA near $1.2 billion and net funded debt $4.3 billion. • Portfolio mix: Senior housing portfolio has 396 facilities (38% of total). • Operator performance: Genesis filed Chapter 11 bankruptcy, Omega committed to debtor-in-possession financing. LaVie exited bankruptcy, master lease assigned to Avardis. Maplewood portfolio occupancy strong, with Inspir Embassy Row leasing up. • New investments: Over $605 million in total new investments YTD through June 30, with over $560 million in real estate investments. Completed $527 million in new investments in Q2, including $502 million in real estate acquisitions. • Balance sheet: Strong liquidity with $734 million in cash, 95% debt at fixed rates, fixed charge coverage ratio 5.4x, net funded debt to annualized adjusted normalized EBITDA 3.67x.

Omega Healthcare Investors' second quarter 2025 financials show: Revenue was $283 million, up from $253 million in Q2 2024. Net income was $140 million or $0.46 per share. Nareit FFO was $213 million or $0.70 per share. Adjusted FFO was $232 million or $0.77 per share. FAD was $223 million or $0.74 per share. The senior housing portfolio is 38% of the total operating facility portfolio.

• Raised and narrowed full-year adjusted FFO guidance to $3.04 to $3.07 per share. • Key assumptions include $3.6 million monthly revenue from Avardis, no other revenue changes from operators, project quarterly G&A expense $13.5 million to $14.5 million, $65 million in mortgages converting to fee simple, $88 million repaid, $50 million asset sales, $252 million secured debt repaid in November 2025.

• Genesis Chapter 11 bankruptcy, though Omega expects to receive full monthly contractual rent. • Potential Medicaid reductions and Medicare rate cuts as per OBBBA, though industry lobbying and demographic tailwinds may mitigate impact. • Lease coverage risks with some operators having low EBITDAR coverage.

Q: Share details of investment pipeline yields, U.S. seniors housing opportunities, and sales yields.

A: Vikas Gupta said pipeline is strong with 10% yield across asset classes, no sales on horizon.

Q: On Maplewood's rent trajectory.

A: Robert O. Stephenson and Vikas Gupta said Maplewood paid $17.6 million in Q2 rent, expected to increase as they push occupancy and rates.

Q: Change in balance sheet strategy.

A: Robert O. Stephenson said will use equity to fund acquisitions, may redo credit facility affecting guidance.

Q: Confidence in tenants with low EBITDAR coverage.

A: Taylor Pickett said tenants are improving, one tenant expected to graduate out of low coverage bucket next quarter.

Q: Lease structure and upside for Maplewood.

A: Vikas Gupta and Taylor Pickett said lease is structured for cash flow, trending to full contractual rent.

Q: Competition and underwriting in investment opportunities.

A: Vikas Gupta said compete with REIT peers, private equity, family offices, underwriting standards unchanged.

Q: Holistic portfolio metrics and EBITDAR coverage.

A: Taylor Pickett said trailing 12 coverage flat but trajectory up based on preliminary results.

Q: Labor and wage increases.

A: Megan Krull said normal inflationary wage increases, CNAs sometimes difficult to hire.

Q: Guidance raise and shareholder value.

A: Matthew Gourmand said active portfolio management, sourcing better operators.

Q: PACS and operator coverage.

A: Vikas Gupta said PACS are clinically strong with strong coverages.

Q: Dividend and payout ratio.

A: Taylor Pickett said Board considers 80s payout ratio for dividend increase.

Q: Genesis confidence and lease risk.

A: Taylor Pickett said master lease makes rejection unlikely, portfolio has strong coverages.

Q: Marketplace split and new operators.

A: Vikas Gupta said corporate development team works on incomings and new operators.

Q: Senior housing transactions and structures.

A: Matthew Gourmand said considers various structures for accretive growth.

Q: U.K. opportunities.

A: Vikas Gupta said U.K. has 17,000 care homes, ongoing pipeline with current operators.