OMEGA HEALTHCARE INVESTORS INC [OHI] Filings

10-Q 1 ohi-20220930x10q.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 September 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 October 31, 2022, there were 234,182,805 shares of common stock outstanding.

Table of Contents

OMEGA HEALTHCARE INVESTORS, INC.

FORM 10-Q

September 30, 2022


TABLE OF CONTENTS
		Page No.
PART I	Financial Information

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

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	35

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	53

Item 4.	Controls and Procedures	53

PART II	Other Information

Item 1.	Legal Proceedings	53

Item 1A.	Risk Factors	53

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	54

Item 6.	Exhibits	55

Table of Contents

PART I – FINANCIAL INFORMATION

Item 1 - Financial Statements

OMEGA HEALTHCARE INVESTORS, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except per share amounts)


	September 30,		December 31,
	2022		2021
	(Unaudited)
ASSETS
Real estate assets
Buildings and improvements	$	7,217,231	$	7,448,126
Land		908,424		916,328
Furniture and equipment		498,473		511,271
Construction in progress		84,884		74,062
Total real estate assets		8,709,012		8,949,787
Less accumulated depreciation		(2,246,659)		(2,160,696)
Real estate assets – net		6,462,353		6,789,091
Investments in direct financing leases – net		10,560		10,873
Mortgage notes receivable – net		669,533		835,086
		7,142,446		7,635,050
Other investments – net		608,190		469,884
Investments in unconsolidated joint ventures		176,556		194,687
Assets held for sale		190,723		261,151
Total investments		8,117,915		8,560,772

Cash and cash equivalents		134,855		20,534
Restricted cash		3,323		3,877
Contractual receivables – net		9,945		11,259
Other receivables and lease inducements		266,890		251,815
Goodwill		648,948		651,417
Other assets		293,829		138,804
Total assets	$	9,475,705	$	9,638,478

LIABILITIES AND EQUITY
Revolving credit facility	$	17,861	$	—
Secured borrowings		368,405		362,081
Senior notes and other unsecured borrowings – net		4,898,609		4,891,455
Accrued expenses and other liabilities		295,454		276,716
Total liabilities		5,580,329		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 – 234,176 shares as of September 30, 2022 and 239,061 shares as of December 31, 2021		23,417		23,906
Additional paid-in capital		6,305,089		6,427,566
Cumulative net earnings		3,392,822		3,011,474
Cumulative dividends paid		(6,029,603)		(5,553,908)
Accumulated other comprehensive income (loss)		6,243		(2,200)
Total stockholders’ equity		3,697,968		3,906,838
Noncontrolling interest		197,408		201,388
Total equity		3,895,376		4,108,226
Total liabilities and equity	$	9,475,705	$	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				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
Revenues
Rental income	$	207,588	$	247,164	$	635,899	$	705,880
Income from direct financing leases		256		257		768		772
Mortgage interest income		17,234		23,047		57,380		70,693
Other investment income		14,110		10,780		36,481		34,245
Miscellaneous income		242		424		2,866		1,270
Total revenues		239,430		281,672		733,394		812,860

Expenses
Depreciation and amortization		82,709		86,097		248,668		256,745
General and administrative		18,242		15,372		53,402		46,724
Real estate taxes		4,175		3,272		11,495		9,002
Acquisition, merger and transition related costs		185		—		5,658		1,814
Impairment on real estate properties		10,015		4,942		21,221		42,453
Recovery on direct financing leases		—		—		—		(717)
Provision for credit losses		4,106		25,511		4,367		28,023
Interest expense		58,238		58,979		174,755		176,379
Total expenses		177,670		194,173		519,566		560,423

Other income (expense)
Other (expense) income – net		(176)		(767)		(5,038)		4
Loss on debt extinguishment		(376)		(642)		(389)		(30,707)
Gain on assets sold – net		40,930		56,169		179,747		160,634
Total other income		40,378		54,760		174,320		129,931

Income before income tax expense and income from unconsolidated joint ventures		102,138		142,259		388,148		382,368
Income tax expense		(1,191)		(976)		(3,535)		(2,873)
Income from unconsolidated joint ventures		4,117		1,552		7,522		14,569
Net income		105,064		142,835		392,135		394,064
Net income attributable to noncontrolling interest		(2,790)		(3,888)		(10,787)		(10,616)
Net income available to common stockholders	$	102,274	$	138,947	$	381,348	$	383,448

Earnings per common share available to common stockholders:
Basic:
Net income available to common stockholders	$	0.44	$	0.58	$	1.61	$	1.62
Diluted:
Net income	$	0.43	$	0.58	$	1.60	$	1.62

See notes to consolidated financial statements.

Table of Contents

OMEGA HEALTHCARE INVESTORS, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Unaudited

(in thousands)


	Three Months Ended					Nine Months Ended
		September 30,				September 30,
	2022		2021		2022		2021
Net income	$	105,064	$	142,835	$	392,135	$	394,064
Other comprehensive income (loss):
Foreign currency translation		(14,753)		(5,027)		(47,903)		(2,901)
Cash flow hedges		17,573		1,895		56,595		17,529
Total other comprehensive income (loss)		2,820		(3,132)		8,692		14,628
Comprehensive income		107,884		139,703		400,827		408,692
Comprehensive income attributable to noncontrolling interest		(2,868)		(3,803)		(11,036)		(11,000)
Comprehensive income attributable to common stockholders	$	105,016	$	135,900	$	389,791	$	397,692

See notes to consolidated financial statements.

Table of Contents

OMEGA HEALTHCARE INVESTORS, INC.

CONSOLIDATED STATEMENTS OF EQUITY

Three Months Ended September 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 June 30, 2022	$	23,410	$	6,295,907	$	3,290,548	$	(5,872,269)	$	3,501	$	3,741,097	$	199,615	$	3,940,712
Stock related compensation		—		6,855		—		—		—		6,855		—		6,855
Issuance of common stock		7		2,327		—		—		—		2,334		—		2,334
Common dividends declared ($0.67 per share)		—		—		—		(157,334)		—		(157,334)		—		(157,334)
Omega OP Units distributions		—		—		—		—		—		—		(5,080)		(5,080)
Capital contribution from noncontrolling interest holder in consolidated JV		—		—		—		—		—		—		5		5
Other comprehensive income		—		—		—		—		2,742		2,742		78		2,820
Net income		—		—		102,274		—		—		102,274		2,790		105,064
Balance at September 30, 2022	$	23,417	$	6,305,089	$	3,392,822	$	(6,029,603)	$	6,243	$	3,697,968	$	197,408	$	3,895,376


Balance at June 30, 2021	$	23,756	$	6,377,238	$	2,839,236	$	(5,232,692)	$	4,523	$	4,012,061	$	197,965	$	4,210,026
Stock related compensation		—		5,750		—		—		—		5,750		—		5,750
Issuance of common stock		134		47,572		—		—		—

OMEGA HEALTHCARE INVESTORS INC [OHI] Filings
10-Q	[2022-11-03]
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]