Omega Healthcare Investors, Inc. · NYSE:OHI
Omega Healthcare Investors — Q4 2024 Earnings Presentation
64 slides from Omega Healthcare Investors's earnings presentation, Feb 6, 2025
Slide 1: Omega Healthcare Investors Investor Presentation
OMEGA HEALTHCARE INVESTORS INVESTOR PRESENTATION March 2025
Slide 2: Disclaimers; Forward-looking Statements and Non-GAAP Information
Disclaimers; Forward-looking Statements and Non-GAAP Information • This presentation may include projections and other “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements relate to future events and expectations and involve unknown
Slide 3: Table of Contents
Table of Contents Page 4 Company Profile & Strategy 9 Why Invest? 13 Skilled Nursing Facilities: What Makes it an Attractive Asset Class? 22 Strong Portfolio of Skilled Operators 32 Benefits of Investing in Long-term Care 37 Excellent Financials and Execution Track Record 44 Proven Investment Strate
Slide 4: Company Profile & Strategy
1 Company Profile & Strategy INVESTOR PRESENTATION 4
Slide 5: Omega Snapshot
OMEGA SNAPSHOT (NYSE:OHI) 1992 $10.9B $15.7B Year Listed Total RE Investments Enterprise Value 86 1,000 92,284 Operators Properties (US & UK) Number of Beds BBB- 36% 7.1% Investment Grade 5-Year TSR Dividend Yield INVESTOR PRESENTATION 5 For source information see page 58 onwards
Slide 6: Differentiators that Support Today's Strength and Tomorrow's Opportunity
Differentiators that Support Today’s Strength and Tomorrow’s Opportunity Largest Skilled Long-term triple net 1 Nursing Facilities (SNF) focused REIT master leases provide lower risk, steady income 5 2 Consistent dividend growth Positioned to benefit from macro tailwinds 6 3 Diversified geographic e
Slide 7: Experienced and Proven Management Team
Experienced and Proven Management Team Taylor Pickett Bob Stephenson Matthew Gourmand Chief Executive Officer Chief Operating Officer President 40 years in industry 39 years in industry 27 years in industry 23 years at OHI 23 years at OHI 7 years at OHI Vikas Gupta Gail Makode Neal Ballew Chief Inve
Slide 8: Strategy that Supports Long-Term Shareholder Value Creation
Strategy that Supports Long-Term Shareholder Value Creation Growth Through Accretive Investments Maintain Shareholder Continued Financial Solid Dividend Value Creation Strength Growth Leverage Sound Corporate Stewardship Practices INVESTOR PRESENTATION 8
Slide 9: Why Invest?
2 Why Invest? INVESTOR PRESENTATION 9
Slide 10: Investment Thesis
Investment Thesis 1 2 3 4 5 Established, Strong Well Positioned to Consistent Anchored Experienced and Balance Sheet Capitalize on Growth, High-Yield Operating Model Diversified Management Future Growth INVESTOR PRESENTATION 10
Slide 11: Investment Thesis and Supporting Elements
Investment Thesis and Supporting Elements 1 2 3 4 5 Established, Consistent Growth, Anchored Operating Strong Well Positioned to Experienced and High-Yield Model Balance Sheet Capitalize on Future Diversified Management Growth • Experienced and proven • Prudent fixed rent • A low cost, needs-base •
Slide 12: Attractive Investment Opportunity
Attractive Investment Opportunity INCOME STOCK Dividend Yield of 7.1% VALUE STOCK Trades at GROWTH 12.7x AFFO STOCK Annualized AFFO Growth of 6.5% since 2004 SOURCE INDEX Information provided as of December 31, 2024 Books INVESTOR PRESENTATION 12
Slide 13: Skilled Nursing Facilities: What Makes it an Attractive Asset Class?
3 Skilled Nursing Facilities: What Makes it an Attractive Asset Class? INVESTOR PRESENTATION 13
Slide 14: Skilled Nursing Facilities Meet an Essential Need
Skilled Nursing Facilities Meet an Essential Need LOWER AVG. HIGHER AVG. COST COST INVESTOR PRESENTATION 14
Slide 15: More Patients Are Discharged to Skilled Nursing Facilities Than Any Other Facility
More Patients Are Discharged to Skilled Nursing Facilities Than to Any Other Type of Facility MEDICARE FFS HOSPITAL DISCHARGE DESTINATIONS SNFs 19.3% Home Health Care 18.8% IRFs 4.6% Other 3.3% Over the last decade, SNFs have consistently been the highest discharge destination LTACH 0.8% SOURCE INDE
Slide 16: Lowest Cost Provider of Post-Acute 24-Hour Nursing Care
Lowest Cost Provider of Post-Acute 24-Hour Nursing Care SNFs provide care for much higher acuity patients that can be handled in Senior Housing or Home Health settings – so hospital discharges to SNFs have held steady AVG. COST PER DAY PER CARE SETTING $3,025 $1,795 $1,559 $507 Hospital IRF LTACH SN
Slide 17: Skilled Nursing Facilities are Primarily Funded Through Medicare and Medicaid
Skilled Nursing Facilities are Primarily Funded Through Medicare and Medicaid MEDICARE MEDICAID $700 Patient Per Day (PPD) $325 Patient Per Day (PPD) $650 $300 $600 $275 $550 $250 $500 $225 $450 $200 $400 $175 $350 $150 Early 80’s 20-25 Days $500-$650 Early 80’s 18 Months $275 Age of Resident Length
Slide 18: Omega's Average Facility Statistics
Omega’s Average Facility Statistics ~100 81.2% Avg. Beds in Facility Occupancy OPERATOR PAYOR MIX Medicare 28% 53% Medicaid 19% Private / Other SOURCE INDEX Books INVESTOR PRESENTATION 18
Slide 19: Limited Supply Growth Due to Regulatory Restrictions
Limited Supply Growth Due to Regulatory Restrictions 1.48M Certificate of Need Certified Beds Moratorium on New Beds 86% Both States have a moratorium on None new beds or CON restrictions • Supply of facilities and beds to meet increasing future demand is limited due to Certificate of Need (CON) and
Slide 20: "Stroke-of-the-Pen" Risk Overstated
“Stroke-of-the-Pen” Risk Overstated 1 • Most patients are too sick to 4 SNFs are a necessary care for at home, even with • SNFs are a low-margin business Efficient and lean part of the healthcare home health support • Reimbursement cuts could impact business model continuum • However, they do not re
Slide 21: Highest Investment Yields Compared to Other Healthcare Real Estate Assets
Highest Investment Yields Compared to Other Healthcare Real Estate Assets 11.0% Investment yields in SNFs have 10.0% 9.70% SNF 9.60% SH (NNN) consistently been 9.0% favorable to all 8.50% Hospital other sectors 8.0% 8.00% MOB 7.90% SH 7.0% 6.0% 5.70% LS 5.0% Average yield over the last five years: 4
Slide 22: Strong Portfolio of Skilled Operators
4 Strong Portfolio of Skilled Operators INVESTOR PRESENTATION 22
Slide 23: Portfolio Overview
Portfolio Overview GEOGRAPHIC & OPERATOR DIVERSIFICATION Long-term Triple Net Master Leases: Operators are responsible for all property expenses 1,000 86 42 Facilities Operators States + the UK FACILITY INVESTMENT TYPES STRONG OPERATOR COVERAGE 36% Skilled Nursing/Transitional 1.87x 1.50x EBITDARM E
Slide 24: Diversified Geographic Portfolio
Diversified Geographic Portfolio Omega’s geographic diversification helps 86 1,000 42 1 minimize impact of regulatory or Foreign Operators Facilities States Country reimbursement changes in any individual state Investment Concentration by Location United Kingdom 14.2% Texas 9.2% Indiana 6.2% Califor
Slide 25: United Kingdom: An Attractive and Profitable Market
United Kingdom: An Attractive and Profitable Market 1 Highly Compelling Supply/Demand Dynamic: Between 2012 and 2018, care home beds declined 1.5% while the population over 75 increased by 9.6% 2 Attractive Investment Yields: Initial cash yields standardly 9%+ with annual escalators of ~2.5% 3 Publi
Slide 26: Triple-Net Leases Provide a Secure, Steady Source of Revenue
Triple-Net Leases Provide a Secure, Steady Source of Revenue Long-term triple-net master leases with cross collateralization provisions • • Seek strong credit profiles Security deposits of generally 3 to 6 93% • months Monthly reporting requirements 96% Rent & Interest tied to Fixed-Rate Rent & Inte
Slide 27: Favorable Portfolio Composition to Peers
Favorable Portfolio Composition to Peers EBITDA / Total Revenue Compared to other Healthcare REITS 7th 88.7% Highest Concentration of ALL REITs Top 5 relationships: 36%; Peer Avg: 52% 62.6% Favorable 56.8% portfolio diversification & exposure Reduced state- State diversification: specific risks rela
Slide 28: Long-Term Leases with Minimal Near-Term Expirations
Long-Term Leases with Minimal Near-Term Expirations % OF PORTFOLIO LEASE AND MORTGAGE EXPIRATIONS BY YEAR 51.6% 9.4 97% of portfolio years expirations after Avg. lease term 2026 12.5% 8.6% 8.8% 5.3% 5.7% 2.4% 1.5% 1.4% 1.7% 0.5% 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 Thereafter SOURCE IND
Slide 29: Strong Returns Start with Strong Operators
Strong Returns Start with Strong Operators Diversified Group of Operators OPERATOR CONCENTRATION 70% of all investments in the past five years have been with current operators Communicare Ciena 10% 10% Genesis Brookdale 5% 5% Saber 6% Maplewood LaVie 5% 4% Remaining operators PACS HHC Nexion 43% 5%
Slide 30: Skilled Operators with Extensive Patient Expertise
Skilled Operators with Extensive Patient Expertise Highly Reputable Highly Engaged Typically repeat business with Over 80% of our operator strong relationships to local businesses are privately doctors and hospitals. owned and operated. Highly Experienced Geographic Experts Our average operator has
Slide 31: Operators Continue to be Profitable
Operators Continue to be Profitable RECENT HEADWINDS Since 2007, despite declining operator EBITDAR coverage across The Baby Bust healthcare REITs, our operators continue to be profitable. Average birth rate between 1928 and 1940 was 15% lower than prior decade. This smaller cohort drove lower occup
Slide 32: Benefits of Investing in Long-term Care
5 Benefits of Investing in Long-term Care INVESTOR PRESENTATION 32
Slide 33: A Growing Aging Population Provides Opportunity
A Growing Aging Population Provides Opportunity 65+ Age Population 80.8 78.0 73.1 65.2 56.1 22% 21% 21% 19% 17% Aging Baby Boomers expected to drive a 1 multi-decade increase in demand for SNFs 44% projected increase in Adults 65+ 2020 2025 2030 2035 2040 2 in the next 20 years Census Estimates % of
Slide 34: Demographic Tailwinds Expected to Drive Occupancy Growth For the Next 20 Years
Demographic Tailwinds Expected to Drive Occupancy Growth For the Next 20 Years 1 Medicare utilization of SNFs materially increases from 75 years old The SNF industry has been Based on birth rates beginning in the 1940s and current SNF 2 This utilization increases through their late 80s battling with
Slide 35: Significant Increase in SNF Utilization by Those Aged 75+
Significant Increase in SNF Utilization by Those Aged 75+ SNF UTILIZATION BY AGE AVERAGE SNF DAYS PER 6,500 1,000 BENEFICIARIES BY AGE RANGE 6,000 SNF Days per 1,000 Beneficiaries 5,500 5,000 4,500 75-84 65-74 2,461 849 4,000 3,500 3,000 85+ 2,500 2,000 1,500 5,331 1,000 500 0 65 66 67 68 69 70 71 7
Slide 36: SNF Demand Estimated to Outstrip Supply by 2030
SNF Demand Estimated to Outstrip Supply by 2030 1 116% Aging demographics 113% should drive SNF 102% 84% occupancy beyond 79% capacity in the next 100% decade. 2 Prudent incremental supply will create 2023 2025 2030 2035 2040 additional Residents Capacity Occupancy development growth opportunities.
Slide 37: Excellent Financials and Execution Track Record
6 Excellent Financials and Execution Track Record INVESTOR PRESENTATION 37
Slide 38: Consistently Performing and Growing
Consistently Performing and Growing Omega Gross Investments Omega Core Operations Revenue ($ in billions) ($ in millions) $10.3 $10.9 $10.4 $10.1 $1,063 $1,051 $10.1 $9.9 $929 $950 $9.2 $9.1 $9.1 $901 $908 $882 $892 $878 $8.1 $744 12.7% 12.5% CAGR CAGR $505 $4.5 $419 $3.9 $3.3 $350 $2.8 $292 $2.5 $2
Slide 39: Strong Growth in Profitability
Strong Growth in Profitability Adjusted EBITDA Adjusted Funds from Operations ($ in millions) ($ in millions) $1,047 $1,001 $810 $988 $967 $778 $760 $924 $730 $870 $882 $893 $689 $683 $699 $843 $681 $638 $716 $564 12.5% 13.1% CAGR CAGR $487 $363 $402 $299 $334 $279 $236 $236 $193 $156 $170 $123 SOUR
Slide 40: Outstanding Financial Performance Among ALL REITs
Outstanding Financial Performance Among ALL REITs EBITDA / TOTAL REVENUES Exceptional EBITDA margins are driven by: 94% 93% 91% 93% 92% 88% 90% 86% 89% 80% Consistency Genuine Triple- Conservative of Revenue Net Nature of G&A Load Streams Leases #2 #2 #2 #2 #2 #6 #3 #9 #13 #7 Resulting in: 1 2 3 Sur
Slide 41: High-Yield and Historically Consistent Dividend
High-Yield and Historically Consistent Dividend $3.00 $2.68 $2.68 $2.68 $2.68 2.68 $2.68 $2.64 $2.66 $2.58 $2.50 $2.41 $2.22 $2.06 $2.00 $1.90 $1.73 $1.59 $1.50 $1.42 $1.20 $1.22 $1.11 $0.98 $1.00 $0.88 $0.75 $0.64 $0.50 $0.00 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 201
Slide 42: Top-Tier Total Shareholder Returns
Top-Tier Total Shareholder Returns Shareholder Returns Through 12/31/24 OHI Total Returns vs. Healthcare REIT Averages (Years ending 12/31/2024) 112.9% 3 5 TOTAL RETURN TOTAL RETURN 65.8% 35.9% ANN. EQUIV. ANN. EQUIV. YEAR 18.4% YEAR 19.9% 65.8% 57.8% 35.9% 31.3% 19.9% 10 TOTAL RETURN 112.9% YEAR AN
Slide 43: Top-Tier Returns on Investments
Top-Tier Returns on Investments Higher than 2024 Healthcare Rank Industry Average ROAA 3.82% +387bps 4 ROIC 8.44% +249bps 1 ROAE 9.24% +997bps 4 SOURCE INDEX Books INVESTOR PRESENTATION 43
Slide 44: Proven Investment Strategy for Future Growth
7 Proven Investment Strategy for Future Growth INVESTOR PRESENTATION 44
Slide 45: A Long History of Prudent Capital Allocation
A Long History of Prudent Capital Allocation INVESTMENTS In billions Acquisitions Mortgages $4.4 $15.3 Capex billion CIP (2) New investments since January 2010 (1) $1.7 Other (3) $1.3 $1.2 $0.8 $0.7 $0.6 $0.6 $0.6 $0.5 $0.5 $0.5 $0.4 $0.4 $0.3 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2
Slide 46: External Growth Augmented by Development
External Growth Augmented by Development New Builds by In-Service Year 2025E 2025E 2026E $225M 174 1 $15.5M 120 1 $15.2M 90 1 Investment Beds Projects Investment Beds Projects Investment Beds Projects INVESTOR PRESENTATION 46
Slide 47: Proven Investment Strategy for Future Growth
Proven Investment Strategy for Future Growth Partner with quality operators 1 Continue to pursue accretive transactions with ambition to grow 2 Leverage existing 86 operator relationships Justify the cost of capital advantage through strong growth 3 Invest primarily in current core markets 4 Maintai
Slide 48: Ample Opportunity to Expand Portfolio
Ample Opportunity to Expand Portfolio SNF OWNERSHIP Omega Publicly Traded REITs Other Even as the largest owner of SNFs, we still only own 5% of the market. Given the accretion created from acquisitions, the fragmented ownership of SNFs provides a significant opportunity for further growth. EXPECTAT
Slide 49: Liquidity Structure & Credit Profile
8 Liquidity Structure & Credit Profile INVESTOR PRESENTATION 49
Slide 50: Effective Balance Sheet Management Provides Financial Flexibility
Effective Balance Sheet Management Provides Financial Flexibility CONSERVATIVE SIGNIFICANT FINANCIAL DIVIDEND PAYOUT CAPITALIZATION LIQUIDITY FLEXIBILITY RATIOS Debt to adjusted Availability under Minimal encumbered assets: AFFO Payout Ratio: 3.6% $1.45B revolving credit 90.0% Normalized EBITDA rati
Slide 51: Conservative Capitalization Policy
Conservative Capitalization Policy Targeted Funded Debt to Adjusted EBITDA Ratio Typically have used borrowings under the revolver to make acquisitions and replenished revolver 4.0x – 5.0x availability with long-term debt and equity issuances Leverage Fixed Charge Coverage 5.3x 5.3x 5.1x 5.2x 5.1x 4
Slide 52: Well-Laddered Debt Provides Stability
Well-Laddered Debt Provides Stability Debt Maturity Schedule as of 12/31/24 $1.45B unsecured revolving credit facility • ~8% of debt maturing in 2025 $1.45B Revolving • 95.2% of debt is fixed rate Credit Facility $1,450M Credit Facility & $429M $50M Term Loan Cindat JV $231.1 M $700M $700M $700M $60
Slide 53: Strong Balance Sheet and Secure Credit Ratings
Strong Balance Sheet and Secure Credit Ratings Funded Debt/Adj. Ann. EBITDA 4.05X Adj. EBITDA/Total Interest Expense Ratio 4.8X BBB- Adj. Total Debt/Adj. Book Capitalization 50.7% Baa3 Adj. EBITDA/Fixed Coverage Ratio 4.7X Adj. Total Debt/Total Market Capitalization 30.9% 4Q24 Funds Available for Di
Slide 54: Readily Accessible Capital Markets as a Seasoned Issuer
Readily Accessible Capital Markets as a Seasoned Issuer Capital Markets Accessibility Common Equity $1,910 Preferred Equity Senior Unsecured Notes $1,246 1,300 $996 $1,030 $960 $982 $859 $785 $760 500 $592 700 775 700 $453 700 650 400 $339 700 $339 $293 260 $231 610 530 225 $138 $102 $125 $91 339 28
Slide 55: Commitment to ESG Principles
9 Commitment to ESG Principles INVESTOR PRESENTATION 55
Slide 56: Prudent and Responsible ESG Program
Prudent and Responsible ESG Program E S G STEWARDS OF THE ENVIRONMENT SOCIAL RESPONSIBILITY STRONG CORPORATE GOVERNANCE Independence 57%+ Of Omega’s development in the since 2015 has been built to LEED One of 15 US REITs to be included in the 88% of directors are independent, certification standards
Slide 57: Sources & Appendix
Sources & Appendix INVESTOR PRESENTATION 57
Slide 58: Source Index
SOURCE INDEX Page 5 - Current supplemental information report located in the Investor Relations tab at www.omegahealthcare.com. 5-Year TSR as of 12/31/2024. Page 12 - Historical AFFO and dividend information can be found in the Investor Relations tab at www.omegahealthcare.com. AFFO per share based
Slide 59: Source Index
SOURCE INDEX Page 43 - Source for ranking is “2024 KeyBanc Capital Markets: The Leaderboard” as of 12/31/2024 Page 44 - Current and historic supplemental information report located in the Investor Relations tab at www.omegahealthcare.com. 1) Includes the $3.9 billion 2015 Aviv acquisition; and the $
Slide 60: 2024 Quarterly Highlights
2024 Quarterly Highlights 1Q 2024 2Q 2024 3Q 2024 4Q 2024 • Paid a $0.67 per share • Paid a $0.67 per share • Paid a $0.67 per share • Paid a $0.67 per share quarterly cash dividend on quarterly cash dividend on quarterly cash dividend on quarterly cash dividend on common stock common stock common s
Slide 61: 2025 Quarterly Highlights
2025 Quarterly Highlights 1Q 2025 2Q 2025 3Q 2025 4Q 2025 • Declared a $0.67 per share quarterly cash dividend on common stock to be paid in February • Completed $26 million in new investments in Q1 2025 to date. • Repaid $400 million of senior unsecured notes due January 15, 2025. SOURCE INDEX Book
Slide 62: Industry Overview: Baby Boomers Started Turning 75 in 2016
Industry Overview: Baby Boomers Started Turning 75 in 2016 U.S. Birthrates, 1909 to 1980 5,000 4,500 4,000 Births (000’s) 3,500 3,000 2,500 2,000 1928 to 1940 1941 to 1964 Avg. 2,476 Avg. 3,767 1,500 SOURCE INDEX Books INVESTOR PRESENTATION 62
Slide 63: Industry Overview: Percentage of Historical Hospital Discharges to SNFs
Industry Overview: Percentage of Historical Hospital Discharges to SNFs has Remained Steady in Recent Years Discharge Disposition by Year 21.8% 21.4% 21.0% 21.3% 21.3% 20.9% 20.5% 19.3% Skilled Nursing Facilities 18.6% 19.6% 19.7% 17.9% 19.4% 19.5% 19.4% 18.8% Home Health Care 4.5% 4.6% IRF 4.2% 3.5
Slide 64: Industry Overview: Limited Supply Availability
Industry Overview: Limited Supply Availability Trend in Certified Nursing Facilities, Beds and Residents 1,800k 16.0k 15.9k 1,700k 15.8k 1,600k 15.7k Certified Facilities 1,500k 15.6k Beds & Patients 1,400k 15.5k 15.4k 1,300k 15.3k 1,200k 15.2k 1,100k 15.1k 1,000k 15.0k Dec-10 Dec-11 Dec-12 Dec-13 D
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