Omega Healthcare Investors Inc. (NYSE:OHI) Q4 2015 Earnings Conference Call - Final Transcript

Feb 11, 2016 • 10:00 am ET


Omega Healthcare Investors Inc. (NYSE:OHI) Q4 2015 Earnings Conference Call - Final Transcript


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Good day, and welcome to the Omega Healthcare Fourth Quarter Earnings Conference Call and Webcast for 2015. [Operator Instructions]

I would now like to turn the conference call over to Ms. Michelle Reiber. Ms. Reiber, the floor is yours ma'am.8

Michelle Reiber

Thank you and good morning. With me today are Omega's CEO, Taylor Pickett; CFO, Bob Stephenson; COO, Dan Booth; and our Chief Corporate Development Officer, Steven Insoft.

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 restructuring, rent payments, financial condition or prospects of our operators, contemplated acquisitions 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 limitations 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 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, and in the case of FFO and adjusted FFO, in our press release issued today.

I will now turn the call over to Taylor.

Taylor Pickett

Thanks, Michelle. Good morning and thank you for joining Omega's fourth quarter 2015 earnings conference call. Adjusted FFO for the quarter is $0.81 per share; adjusted funds available for distribution FAD for the quarter is $0.72 per share. We increased our quarterly common dividend rate to $0.57 per share. This is a 2% increase from last quarter and an 8% increase from the fourth quarter 2014. We have now increased the dividend 14 consecutive quarters. The dividend payout ratio remains very conservative at 70% of adjusted FFO and 79% of FAD. Our full year 2015 FAD was $2.79 per share. Our full year 2015 adjusted FFO was $3.08 per share ahead of our original guidance range of $2.98 to $3.04 per share, and an 8% increase over 2014 adjusted FFO of $2.85 per share. We have announced our 2016 adjusted FFO guidance range of $3.25 to $3.30 per share and 2016 FAD guidance range of $2.95 to $3 per share. Our guidance includes $650 million in new investments, including the $186 million closed to-date in 2016.

As a result of the recent Genesis and ManorCare earnings announcements, we have been asked about a number of specific items. First, as it relates to our modest impairments and write-downs, we have normal asset redistribution from one operator to another resulting in accounting write-downs of a previously recorded straight-line rent, and very modest write-downs related to a couple of Aviv legacy assets.

Second, we evaluate our capital costs and our related