OMEGA HEALTHCARE INVESTORS INC [OHI] Filings

10-Q 1 ohi-20220630x10q.htm 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2022


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

OMEGA HEALTHCARE INVESTORS, INC.

(Exact name of registrant as specified in its charter)


Maryland	1-11316	38-3041398
(State or other jurisdiction of incorporation or organization)	(Commission file number)	(IRS Employer Identification No.)

303 International Circle, Suite 200, Hunt Valley, MD 21030

(Address of principal executive offices)

(410) 427-1700

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $.10 par value	OHI	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.


Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).


Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer ⌧	Accelerated filer ◻	Non-accelerated filer ◻	Smaller reporting company ☐	Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐

No ☒

As of July 28, 2022, there were 234,110,584 shares of common stock outstanding.

Table of Contents

OMEGA HEALTHCARE INVESTORS, INC.

FORM 10-Q

June 30, 2022


TABLE OF CONTENTS
		Page No.
PART I	Financial Information

Item 1.	Financial Statements of Omega Healthcare Investors, Inc.:
	Consolidated Balance Sheets	2
	June 30, 2022 (unaudited) and December 31, 2021
	Consolidated Statements of Operations (unaudited)
	Three and six months ended June 30, 2022 and 2021	3
	Consolidated Statements of Comprehensive Income (unaudited)
	Three and six months ended June 30, 2022 and 2021	4
	Consolidated Statements of Changes in Equity (unaudited)
	Three and six months ended June 30, 2022 and 2021	5
	Consolidated Statements of Cash Flows (unaudited)
	Three and six months ended June 30, 2022 and 2021	7
	Notes to Consolidated Financial Statements
	June 30, 2022 (unaudited)	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	33

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	51

Item 4.	Controls and Procedures	51

PART II	Other Information

Item 1.	Legal Proceedings	51

Item 1A.	Risk Factors	51

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	52

Item 6.	Exhibits	53

Table of Contents

PART I – FINANCIAL INFORMATION

Item 1 - Financial Statements

OMEGA HEALTHCARE INVESTORS, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except per share amounts)


	June 30,		December 31,
	2022		2021
	(Unaudited)
ASSETS
Real estate assets
Buildings and improvements	$	7,447,278	$	7,448,126
Land		928,174		916,328
Furniture and equipment		515,629		511,271
Construction in progress		80,273		74,062
Total real estate assets		8,971,354		8,949,787
Less accumulated depreciation		(2,286,945)		(2,160,696)
Real estate assets – net		6,684,409		6,789,091
Investments in direct financing leases – net		10,881		10,873
Mortgage notes receivable – net		711,589		835,086
		7,406,879		7,635,050
Other investments – net		560,914		469,884
Investments in unconsolidated joint ventures		183,661		194,687
Assets held for sale		61,624		261,151
Total investments		8,213,078		8,560,772

Cash and cash equivalents		164,949		20,534
Restricted cash		3,515		3,877
Contractual receivables – net		10,357		11,259
Other receivables and lease inducements		270,013		251,815
Goodwill		649,966		651,417
Other assets		209,267		138,804
Total assets	$	9,521,145	$	9,638,478

LIABILITIES AND EQUITY
Revolving credit facility	$	38,000	$	—
Secured borrowings		377,823		362,081
Senior notes and other unsecured borrowings – net		4,896,223		4,891,455
Accrued expenses and other liabilities		268,387		276,716
Total liabilities		5,580,433		5,530,252

Equity:
Preferred stock $1.00 par value authorized – 20,000 shares, issued and outstanding – none		—		—
Common stock $0.10 par value authorized – 350,000 shares, issued and outstanding – 234,102 shares as of June 30, 2022 and 239,061 shares as of December 31, 2021		23,410		23,906
Additional paid-in capital		6,295,907		6,427,566
Cumulative net earnings		3,290,548		3,011,474
Cumulative dividends paid		(5,872,269)		(5,553,908)
Accumulated other comprehensive income (loss)		3,501		(2,200)
Total stockholders’ equity		3,741,097		3,906,838
Noncontrolling interest		199,615		201,388
Total equity		3,940,712		4,108,226
Total liabilities and equity	$	9,521,145	$	9,638,478

See notes to consolidated financial statements.

Table of Contents

OMEGA HEALTHCARE INVESTORS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

Unaudited

(in thousands, except per share amounts)


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
Revenues
Rental income	$	211,428	$	220,955	$	428,311	$	458,716
Income from direct financing leases		256		257		512		515
Mortgage interest income		19,597		24,021		40,146		47,646
Other investment income		11,777		11,813		22,371		23,465
Miscellaneous income		1,591		374		2,624		846
Total revenues		244,649		257,420		493,964		531,188

Expenses
Depreciation and amortization		83,207		85,799		165,959		170,648
General and administrative		18,775		15,200		35,160		31,352
Real estate taxes		3,717		3,001		7,320		5,730
Acquisition, merger and transition related costs		3,960		—		5,473		1,814
Impairment on real estate properties		7,695		8,822		11,206		37,511
Recovery on direct financing leases		—		(164)		—		(717)
(Recovery) provision for credit losses		(1,563)		3,536		261		2,512
Interest expense		58,372		58,879		116,517		117,400
Total expenses		174,163		175,073		341,896		366,250

Other income (expense)
Other (expense) income – net		(4,407)		540		(4,862)		771
Loss on debt extinguishment		(7)		(395)		(13)		(30,065)
Gain on assets sold – net		25,180		4,123		138,817		104,465
Total other income		20,766		4,268		133,942		75,171

Income before income tax expense and income from unconsolidated joint ventures		91,252		86,615		286,010		240,109
Income tax expense		(1,119)		(939)		(2,344)		(1,897)
Income from unconsolidated joint ventures		1,782		1,187		3,405		13,017
Net income		91,915		86,863		287,071		251,229
Net income attributable to noncontrolling interest		(2,448)		(2,340)		(7,997)		(6,728)
Net income available to common stockholders	$	89,467	$	84,523	$	279,074	$	244,501

Earnings per common share available to common stockholders:
Basic:
Net income available to common stockholders	$	0.38	$	0.36	$	1.17	$	1.04
Diluted:
Net income	$	0.38	$	0.36	$	1.17	$	1.04

See notes to consolidated financial statements.

Table of Contents

OMEGA HEALTHCARE INVESTORS, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Unaudited

(in thousands)


	Three Months Ended					Six Months Ended
		June 30,				June 30,
	2022		2021		2022		2021
Net income	$	91,915	$	86,863	$	287,071	$	251,229
Other comprehensive income (loss):
Foreign currency translation		(22,341)		940		(33,150)		2,126
Cash flow hedges		19,444		(20,167)		39,022		15,634
Total other comprehensive (loss) income		(2,897)		(19,227)		5,872		17,760
Comprehensive income		89,018		67,636		292,943		268,989
Comprehensive income attributable to noncontrolling interest		(2,368)		(1,820)		(8,168)		(7,197)
Comprehensive income attributable to common stockholders	$	86,650	$	65,816	$	284,775	$	261,792

See notes to consolidated financial statements.

Table of Contents

OMEGA HEALTHCARE INVESTORS, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

Three Months Ended June 30, 2022 and 2021

Unaudited

(in thousands, except per share amounts)


									Accumulated
	Common		Additional		Cumulative		Cumulative		Other		Total
	Stock		Paid-in		Net		Dividends		Comprehensive		Stockholders’		Noncontrolling		Total
	Par Value		Capital		Earnings		Paid		Income (Loss)		Equity		Interest		Equity
Balance at March 31, 2022	$	23,820	$	6,401,207	$	3,201,081	$	(5,714,595)	$	6,318	$	3,917,831	$	212,013	$	4,129,844
Stock related compensation		—		6,892		—		—		—		6,892		—		6,892
Issuance of common stock		13		2,331		—		—		—		2,344		—		2,344
Repurchase of common stock		(423)		(114,523)		—		—		—		(114,946)		—		(114,946)
Common dividends declared ($0.67 per share)		—		—		—		(157,674)		—		(157,674)		—		(157,674)
Conversion and redemption of Omega OP Units to common stock		—				—				—		—		(9,704)		(9,704)
Omega OP Units distributions		—		—		—		—		—		—		(5,062)		(5,062)
Other comprehensive loss		—		—		—		—		(2,817)		(2,817)		(80)		(2,897)
Net income		—		—		89,467		—		—		89,467		2,448		91,915
Balance at June 30, 2022	$	23,410	$	6,295,907	$	3,290,548	$	(5,872,269)	$	3,501	$	3,741,097	$	199,615	$	3,940,712


Balance at March 31, 2021	$	23,338	$	6,226,543	$	2,754,713	$	(5,074,432)	$	23,230	$

OMEGA HEALTHCARE INVESTORS INC [OHI] Filings
10-Q	[2022-08-02]
10-Q	[2022-05-03]
10-K	[2022-02-17]
10-Q	[2021-11-05]
10-Q	[2021-08-03]
10-Q	[2021-05-04]
10-K	[2021-02-22]
10-Q	[2020-11-03]
10-Q	[2020-08-07]
10-Q	[2020-05-08]
10-K	[2020-02-28]
10-Q	[2019-11-08]
10-Q	[2019-08-08]
10-Q	[2019-05-09]
10-K	[2019-02-26]
10-Q	[2018-11-07]
10-Q	[2018-08-08]
10-Q	[2018-05-10]
10-K	[2018-02-23]
10-Q	[2017-11-07]
10-Q	[2017-08-09]
10-Q	[2017-05-05]
10-K	[2017-02-24]
10-Q	[2016-11-08]
10-Q	[2016-08-05]
10-Q	[2016-05-06]
10-K	[2016-02-29]
10-Q	[2015-11-06]
10-Q	[2015-08-05]
10-Q	[2015-05-08]
10-K	[2015-02-27]
10-Q	[2014-11-07]
10-Q	[2014-08-06]
10-Q	[2014-05-07]
10-K	[2014-02-11]
10-Q	[2013-11-07]
10-Q	[2013-08-05]
10-Q	[2013-05-09]
10-K	[2013-02-28]
10-Q	[2012-11-07]
10-Q	[2012-08-07]
10-Q	[2012-05-08]
10-K	[2012-02-27]