OHI - Earnings call transcript Q2 2019 | Omega Healthcare Investors, Inc.

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Operator

Good morning, and welcome to the Omega Healthcare Investors Q2 2019 Earnings Conference Call. [Operator Instructions]. Please note, this event is being recorded.

I would now like to turn the conference over to Michele Reber. Please go ahead.

Michele Reber

morning. good and you, Thank With me Stephenson; Steven Pickett; Bob CEO, and are Dan Booth; Omega's COO, Marshall. Officer, Operations, Taylor Chief SVP, CFO, Jeff today Corporate Insoft; Development are transitions made of contemplated not generally. statements Comments portfolio our as our restructurings, operators, policy, regarding and acquisitions, and projections, statements conference outlook condition rent this call, payments, such historical may financial our be during business facts, forward-looking dividend portfolio or financial dispositions but or prospects

and which filings most press Commission, in differ to may actual risks Securities results involve which differ materially. those our limitation, from actual recent materially Exchange statements see to Form cause XX-K, results releases identifies forward-looking These or our statements. uncertainties, on including forward-looking described without and with specific events cause report may Please factors our and the that

an will most today, FFO, of some During the to adjusted we under well principles adjusted issued of the measures of FAD the as financial and as available these and FFO, under and the our refer in of EBITDA. the Information Reconciliations generally at accepted comparable measures case usefulness explanation section of are Financial measures such in our accounting to call FFO non-GAAP press website as measure release. non-GAAP non-GAAP recently FFO the www.omegahealthcare.com

I will now turn to over the call Taylor.

Taylor Pickett

quarter discuss earnings second for Medicaid second XXXX XXXX quarter Texas our call. our activity, our I thank joining Michele. reimbursement. Good morning, will you and and Thanks, earnings conference recent guidance Today, our results, acquisition

FFO the acquisition. share is we per per distribution. quarter funds we adjusted a and XX% and dividend. MedEquities $X.XX closed available of payout second May, is for The $X.XX ratio In XX% share, Our FFO of adjusted declared

deployment the provide Dan functions have capital All of in additional to We've about in later recently the Hunt purchase signed relationships fully been Valley. agreement. also will call. MedEquities million $XXX operational potential our tenant and new excited forward opportunities. announced We're and look new integrated the details accounting

Turning guidance. earnings to

a We XXXX the $X.XX and have the our to $X.XX. facilities. operated tightened Kentucky full Diversicare closing cash to the of tightened opportunistic Daybreak MedEquities pending reflects rents anticipated sale adjusted The of from currently the by facilities deal, FFO range of guidance million $XX XX our year guidance

we per range quarter our share. addition, $X.XX In have fourth FFO adjusted to adjusted to share guidance $X.XX a per of

The the our adjusted improvement redeployment our sale Daybreak proceeds and cash going XXXX. Diversicare rate will positively run of any in into impact rents FFO

with Lastly, Texas challenging Medicaid a remains state rates. very low

skilled difficult is facilities. this Dan nursing Texas rural detail, As will for particularly

Bob. will the now over turn call to I

Robert Stephenson

Thanks, Taylor, and good morning.

Our reportable $XXX FFO the second on million to basis the was as quarter quarter $X.XX $XXX a share for per diluted or share $X.XX compared XXXX. diluted or for of million per

and for quarter excludes our release, adjusted per Our items million FFO our $X.XX net outlined our or was share on the in and $XXX several supplemental. found adjusted in earnings our website to as reconciliation FFO income

of real combination as capital Operating quarter primarily a of revenue million $XXX to as for of increase approximately investments versus was quarter our million well of of renovations was completed lease XXXX the second second revenue of million new the the result incremental over revenue $XXX the XXXX. amendments made estate lease related Orianna in the facilities $XXX and XXXX; a and for standard since and adopted quarter The from same we of new and, tenant were Omega income revenue. in to lease that during XXXX, transitioned resulted X, quarters in operators that existing a period; effective made taxes ground accounting January time to third the recording finally, which facilities fourth

and accounting to the related transitions operators throughout XXXX; finally, operators cash $XX approximately occurred to basis; by The $X.X the cash the of we partially based was of a and related The $XXX loan the on on increase includes related of reduced the cash million revenue recorded requiring the timing revenue in collectibility for of guidance that the offset revenue repayments operators receipts sales, basis, asset for on quarter interpretation a million new receivables standard to of million noncash for approximately straight-line quarter. two revenue. write-off during lease noncollectible revenue in

Our from XXXX of reduction G&A million quarter reduced for related second the of workout the $XX.X the quarter expense and was resulting with second $X.X million XXXX versus restructuring for expenses.

$XX deferred of noncash excluding quarter or the when quarter, same the for was the approximately million financing expense second Interest cost, XXXX. as

major XXXX For assumptions. following guidance assuming the we're and purposes, modeling

second XX on construction and of issued new a additional related May For a from with into portion per be supplemental and their our We continue quarter. to our on acquisition, the have MedEquities, quarter. approximately half cash of the put cash $X X of will or credit was price website. the with acquisition their million recorded Daybreak accordance revenue incurred in posted of projects and shareholders. common $X.X payoff $X X.X shares Page of revenue to our be from of we revenue service credit assume result Omega as $XXX information We results million schedule debt our will basis MedEquities assume on a million purchase as to quarter the part the completed million of million facility facility We to on

June expense per should the with or $X consistent $X revenue or $XX and debt. stock-based $XX credit We second driven our variability and in of quarterly compensation of quarter. Noncash quarter. million is expense interest LIBOR on to facility rate rates. be G&A quarters approximately between remaining noncash debt million our be to $X XX, at was billion million to estimated $XX our quarter. quarter our At million project XX% continue XXXX per assume for primarily floating by borrowings per million is The our We

opportunities potential guidance. not additional in occur. disposition of assets of is in XX disposition may the And the $XXX occur included will the XXXX asset end million quarter. the assume Diversicare not included by We the third The although guidance, acquisition

in be million $XX Omega issuances, through X.X and with the million to second of dividend assume for plan, $XX issued stock addition million MedEquities approximately quarter share the to in consistent recent issuing our our common shares equity we common quarterly reinvestment per quarter, we issuances. Regarding purchase will

subject equity continue Lastly, price our decide we and under market conditions, to fund on to stock delever to and to ATM may based issue potential equity acquisitions. our

gross plans. of months of a common million During of dividend six the our through million Omega combination purchase common first ATM proceeds X.X reinvestment and we sold generating approximately or XXXX, issued stock in stock $XXX our shares and

and MedEquities revenue no full related June annualized for and EBITDA builds, revenue pro of funded It's and is six new these to operational important charge known quarter with process our builds ratio our our XX to debt-to-adjusted construction was our net strong. leverage XX% was the become and a note scheduled Our At in of our roughly the fixed in debt remains to on calculations X.XXx, balance XX, approximately sheet on $X.X associated When fixed, adjusting months. forma X.XXx. EBITDA has next new Xx. be would billion

will over I to Dan. the call now turn

Daniel Booth

everyone. Bob, good Thanks, and morning,

operators These and Kingdom. XXXX with portfolio XX-month had the an period quarter spread XX, approximately respectively XX, XX and XX of our and United slightly versus third-party to were located and XX-month operating Trailing the of X.XX facilities respectively XXX coverages XXXX. EBITDAR ended asset in facilities Omega within states trailing XXXX, X.XXx June XX,XXX X.XXx across for beds. operating operator core dipped X.XX portfolio during EBITDARM for of December the first As

issues. a of on top cash basis Turning placed recognition Omega XX operators, revenue matters. On Daybreak, and to one portfolio liquidity to its September purposes due X, challenges XXXX, for operational

of a we concerns, which granted XXXX, consensually for these deferral and forbearance first rent Daybreak into settlement October agreement a effective amended January extended quarters entered of a XXXX, $X.X whereby on two XXXX. the and As result of and Daybreak Omega of XX million was

escrows, $X.X second through With real in quarter the of of tax exception met contractual Daybreak record obligations million the their XXXX. estate

continued would pressures operators income as overall Compounding even not of any liquidity. pass Taylor Medicaid accordingly, However, failed we labor these relief. recently nursing have home the which have Medicare provided a mentioned, third occupancy, ongoing have in State recognized in XXXX. bill, much-needed Texas And to-date and Texas census pressures, tighter resulted to the costs and rate on Legislature quarter

Omega engaged review a recommendations a of third-party for forecast long-range overall cash consultant and to these and provide a comprehensive provide operations, recently future challenges, expectations. commentary Daybreak's with flow for provide Confronted improvement opportunities

consultants million the and quarter of point receipts $X results It our not $X to rent adjusting to and per final, reflects that cash range our a portfolio Daybreak's is and our Daybreak's While future are cash we this forecast. future management ultimate work to consultant's yet third-party million for our foreseeable and tune findings however, between important out, no expectations of for progress our as a in thus future this way future. team the for to fine continue in are work rent expectations with remains we flow maximize rent

many footprint and in geographical localities other exposure While Medicare its Q-mix of continued low across entire are Texas to and better is woefully widespread pressures, states reimbursement Texas' our the the challenged rural its Medicaid its occupancy. labor of rate low challenged state, by limited further lack mostly resulting given operators and Daybreak any

Daybreak of QIPP October Omega and the of While facilities benefits challenging discussions the future benefit as in particularly with the and results PDPM will quarter, we take The and program, the on factors greatly in X.X% X, Medicare Texas rate our of PDPM from rate begins confident the the assist X. our ultimate as one, plans. third several increase. restructure benefit Daybreak that consultant's well increases The effect September recommendations a addition known will be implementation to quarter fourth QIPP Omega is these expected are ongoing our and into Medicare including while our forecast XX

to Turning investments. new

May to will are by XX of mentioned Omega for well provide portfolio $XXX believe of as Omega. classes. MedEquities on acquisition new asset portfolio states our The on of new MedEquities facilities Taylor, with XX into different in as eight total consisted of potential new We opportunities with million. located XXXX, XX, closed this the to which we expand operators, consideration As XX

capital the invested XXXX. MRT $XX.X million in In quarter during expenditures the to of acquisition, addition second Omega

cash XX, facilities for approximately Turning yield mentioned cash of earlier, agreement Carolina for million of an XXXX, $XXX master and of Virginia. assumption three $XXX skilled The were initial the In of to Omega the of entered operator's six new July an of $XX XXXX, sale to $XXX million and for a into million events. subsequent acquisition Omega in lease completed and July X.X%. leaseback as debt. on purchase Also of purchase consisting nursing North a million facilities approximately added existing facilities for

Completion is to limits are of conditions. transaction of $XX customary as facilities satisfaction assisted three at to closing comprised XX as generating two leases this additional share of of million living transaction by skilled An leased revenue. approximately HUD the operators annual facilities subject the in XXXX The to and via nursing two nondisclosure cash consent executed facilities well time. this details ability agreement our triple-net

I will to turn call over now the Jeff.

Jeff Marshall

Medicaid X, PPS XXXX, payment July price budget Thanks, harmless was changed applied at average to cost or hold system X, Dan, Florida's dropped neutral. resulting from to discretionary from PPS based impact October provisions of based basically morning, new and time. rate nursing be prospective to onetime that to effective the the The in rate the methodology funding new and designed good cover everyone. XXXX, loss X.X% rates of home the enacted

PPS This September PPS, a additional implementation higher SNFs or of to XX, the actual more after benefits pursuant with of to September cap. have expected Medicaid new However, allow which subject upon based of through funding hold decreases harmless as calculated cost-efficient of extends was their be quality to discretionary XX% allocated on paid good outcomes. to the the rate Florida because PPS, the be immediately would the SNF to rate providers provision rates XXXX, new XXXX, suffered exclusively SNFs XX, are which the rate

in for discretionary XXXX-XX relief of spending above those average year X%. was hold rates fiscal rate allocated of about for of The directly XX% attributable whose to the funding resulting state PPS decreases levels increases hurricane harmless loss facilities to unanticipated facilities were

coverage decreases of rates be change maintain However, essentially to these was could levels such levels the operational just nine to effectively. months impact back their to made prior pre-PPS that adjustments

rates smaller by effective A up increase facilities will X, discretionary those bump X.X%. XXXX, October back

projects reserve of based rest high nation, Association and economic rainy to a of for XXXX-XX, Budget spending. Officers, equal nursing on average the balance overall June home states Medicaid a general general for fund increase fiscal report the fund year rate None National of Medicaid X.X% reported a with budgeted the the day average outlook for record with decreases. states in general State of comparable the state of rate median growth of spending XXXX funds all X.X% the of As to healthy the X.X% portion increase X.X%

rate aside beneficiaries. As rates with nursing from expect for Medicaid growth result, the a to the generally Medicaid home keep cut, expenses unique in Florida pace we operating

now turn will the I to call over Steven.

Steven Insoft

to work care million, Second and Senior thanks to memory Street on is for the conjunction expected and today. is open project cost scheduled to with Jeff, XXXX. everyone The Thanks, XXrd In at approximately early line Maplewood Manhattan. continue high-rise in Living, rent, Avenue we ALF in joining and our $XXX on including accrued to

health with balance Anchored relationship New Senior at senior CIP our quarter, housing project, Living York City housing comprises assets Maplewood and of investment totaled on the sheet. independent end our overall billion our Care Including Omega's and Gold memory portfolio homes living, $X.X in our U.K. as care the as XXX by their and land second U.S. now of living care in growing the in well senior the best-in-class U.K., the and assisted of investment properties

On its obligations care covers also lease publicly only the housing portfolios core amongst the represents larger portfolio senior the but of not X.XXx, health one a stand-alone listed REITs. basis, at

in-house operating commitment Our our facilities, is as XX is our construction XX portfolio including and this ability by having to Maplewood our to with highlighted component well Southport, coupling opened unit Connecticut related our on continue expertise. important design in newly as to the ALF the successfully pipeline predicated tenant's of capabilities grow

reinvestment was Through ongoing this a of of our invested million $XXX with million construction approximately in and The in of the to million inclusive strategic related quarter million, new reinvestment. total predominantly capability, same $XX.X second investment our to is remaining portfolio we program. $XX.X $XX.X budget of construction this the CapEx investment projects Manhattan. related active

I to the for turn will over now call some final Taylor comments.

Taylor Pickett

intention accretive are XXXX. Thanks, we executing Steven. back to announced in our that move deal the and We've closed traditional recently to our acquisition, And our been clearing between model on growth today plan. MedEquities'

We also further will acquisitions, while continue value development with through our portfolio augment pipeline. to our generating accretive robust look to additional

for now the will open questions. up We call

Operator

Instructions]. [Operator

comes question Ford first Our from Karin Securities. with MUFG

Karin Ford

around question and Diversicare some ask to wanted the resolution Daybreak I sales. the

to around Following is how headline operator you in operators is the be coming issues? into ebbing these, visibility negative your future the risk Are comfortable quarters? going that

Daniel Booth

has now probably to looking out two the been issue close for of Diversicare the listen, The going Daybreak be mean, I Yes. is they on where issue quite where situation years. frankly in. an one shouldn't them we're to state, get

that's So companies. I think win-win for both a

As far of see point, horizon, materiality. any as this other nothing issues we on at the

So standpoint. all clear this from

Karin Ford

for funding of How with are Okay, you're you can quality the to it detail will but do And acquisition, cash When you great. on what pending just additional close? compare share plans know it a sourced? think existing us your was portfolio? lot I unable does how wise credit it tell the and generally your portion?

Daniel Booth

source, our we'll again expectations contingent mean its closing above and is predict, current tell you we'll not them of assumption really how because deck, describe the hard which and coverage is a to is agency can't that slightly upon timing. to down able pin their it's on I of government HUD once but

to far take So pretty closing a of the of we nine think place. between wide three as months for have outside maybe and as I range

Karin Ford

considering million are financing to Great. Should on rates? that on any term later be given your And now a have refinancing loans line. of we you year about the debt this then of out? term just, out side, $XXX low lastly, you Or deal modeling XXXX your

Daniel Booth

then to is and do facility once up $XXX-plus use point, gets certain practice to it out. always lever a it we our Our we million, And term to look credit acquisitions. historical

we market you tell the piece on rate can't how I finance back plan is of HUD. a how your doing up be opportunistic to the So given going looking but whether not, follow it other the will we -- to do we're them environment. assuming the current potential or But deal, at question,

sale. credit The the second also facility, the use piece coming from Diversicare is we'll proceeds our have in we but

Karin Ford

your Is included guidance deal a bond range? in

Daniel Booth

is It not.

Operator

next comes Hughes from Our James. with Raymond question Jonathan

Jonathan Hughes

What's X.X% portfolio did of you contract? the acquisitions of July. under I outside yield at that pipeline look million start at know $X,XXX of another

many Just double use more and single are acquisitions, of the analogy, a those in how pipeline? to curious type baseball

Daniel Booth

consistent We're close But I at upon we with seen rows it's wasn't our months are say the constantly looking when just radar that and obviously it that will. those we six terms we if shall just The will even what if choppy, I may we've it ago. singles, big there more be pipeline, you past. even them screen in in announced, The The in when say. deal our deals receive on them. of bigger

So they predict. very are to hard very,

Jonathan Hughes

exposure there Texas Okay. reimbursement state dispositions legislation you Maybe there? year. few you your to in over people address potential? to and Obviously, exposure in can headwinds happen You I do half then. didn't I'll rates do struggle potential and of the those mean, Or you pair create plans Medicaid value expected did see be turn shareholders? years creating growth that How opportunities the investment there. current terms any the mention as for next to view more could some of back some

Daniel Booth

we're I comes operators hit existing to of can to the think aggressive do not we But with and going it we'll meet everything in latter Texas. us, acquiring a our to up those one I if in listen, sources be point. mean, deal needs. facilities

Texas, there opportunistic do I some think going to in So because we will opportunities. be are be

Jonathan Hughes

policies? two for years Is are would stuck with before legislature the readdress any that chance that Or rate here current there we Okay. XXXX?

Daniel Booth

don't this cap funds are recent So trying I to want unique. trying do legislation. you federal -- that something with to they I we're mean, know to

increases, It occur trying could bit a bill. granting years. specific next the a unique. two from out doesn't So preclude just That little within -- it they was rate to was flat Texas were Medicaid pass which

Jonathan Hughes

So understand One talked my go the Florida the All maybe more but expand And a I Medicaid company. to chance months-or-so? for X% of Florida do want right. Florida basically? legislation upon you can the you that Maybe it's size. about in coverage portfolio expect your where backyard, within from me small next since XX earlier to risk what's over the your just that's to maybe overall you segment?

Daniel Booth

The coverage switch helped above base from PPS. the and the by in is cost probably to Florida mean, was up it slightly

So up. them going to we new think it actually in now line of again. some down But the of got a I for this of most corporate have with dealt bring back of the rates. with pick cuts back in this, most and to is terms slip And had operators accounted there cost sort making

Operator

Our from question Street next Lukas Hartwich comes Green with Advisors.

Lukas Hartwich

portfolio? Can EBITDARM on and the mix you million the provide skilled $XXX margin

Robert Stephenson

of the Off no. my top head,

XX%. it's think second I did north the And what -- one, of you the was have then cover... EBITDAR

Lukas Hartwich

margin? EBITDARM

Robert Stephenson

be would slightly above mean portfolio. EBITDARM for entire the our

Lukas Hartwich

are portfolio? that retenanting plans then And there of any Okay.

Taylor Pickett

No.

Lukas Hartwich

Okay. lastly, And bumps? the you rent provide then can

Taylor Pickett

There is one believe, to X.X%. is X.XX% I one and are portfolio. more than one

Operator

next with Our question comes from Trent Trujillo Scotiabank.

Trent Trujillo

topic some or and have to remove about thoughts where the documented Ohio on just in optimally states your that like following and the exposure. market Texas, been exposure? up Kentucky on us news market and diversification you'd So other operators bit exiting Diversicare give issues a leaving little you a in earlier can add from With like

Taylor Pickett

good focus operators lightened a a dangerous Southeast liability the continue particularly but state, In and Far of somewhat Kentucky professional we've West. to it's it because the makes I exposure unique, the for say country, the already. is pretty Diversicare. that state, we reimbursement public there like would on The up Trent, middle general,

pretty situation. state. bit unique is Kentucky, little a a in that's of a So good general,

The has next So the that's will not two. it broad year a brush. of or a kind been nor be Northeast in focus

Trent Trujillo

Okay.

in So Southeast? $XXX markets I as triangulating focused the that, guess is on the that say is fair it such acquisition like to million

Taylor Pickett

Trent, That yes. to is say. fair

Trent Trujillo

Kentucky inspiring Diversicare, theirs XX still you less of sticking assets Okay. have that than to, this your other assets in with guess, earlier they results I guess XX after even And of reported believe, I exposure they I some, week. somewhat operate. sale

relationship? how you that So viewing are

Taylor Pickett

We ultimately, a with had sit but And the a have credit, continue long we perform. always tightened their portfolio will their to that with relatively to we and to of had flows relationship tough they've bit, be level balance to specifically strong. speak overall think of look Diversicare, the we cash sheet we will can't situation. sheet I the balance facility a which but balance continue think issues,

Trent Trujillo

looking either can on to looks million little and X.Xx Okay. X into much at range. EBITDAR one shifting how bucket the $XX down shift talk stratification, or change Shifting I your the Can about down rent of drop you coverage like operator cusp quarter-to-quarter? a about bit is know that because that maybe up

Robert Stephenson

don't Yes. past At I And fell some that it's associated somebody below. above on of dollar the million but cusp between and that's amount million any fringe, the We was exactly $XX this was the $XX right probably whatever the and the rent the that of quarter. got running with immaterial somewhere had number. folks It's X.X rent. what have define on we an would happened But line not those. fringe. is time, we've

Trent Trujillo

that is the fringe, on That shift? could

Robert Stephenson

fringe, on but you depends yes. It Yes. how define

Trent Trujillo

inclusive the your stratification portfolio of did -- much? absorbing Well, that sure, numbers those okay. properties? Did MedEquities portfolio Are affect okay, that

Daniel Booth

We because in It affect mid-May. didn't not in closed on all that it's at corporate.

the So it out we that reporting be were coverages even would there on.

higher than the in Omega, So is slightly no, not it general, fit. move the needle. slightly wouldn't coverages but to although portfolio, enough It's has -- the legacy MedEquities'

Trent Trujillo

Okay. more don't if last one for one mind. And me, -- one you

how the a all announced you are your acquisitions, So dividend basis? completed and thinking about go-forward on given

Taylor Pickett

and up at see the a our a it dividend to a we of will going timing in takes lot in policy. every point, the At the between XXs, this with the making. quarter of quarter. online. coverage look shift Board. drive announced wouldn't And to assets we today. it I As closing significant transaction The again do a the But produce have Trent, that cash we They're decision Avenue every the in of pretty Second past, discussed we'll Board dividend as number expect coming of

Operator

Capital question Daniel One. Our with comes next Bernstein from

Daniel Bernstein

I go back -- following wanted your how Texas, in on overexposure role you're to up about versus earlier thinking your comments? to just the

Taylor Pickett

it will be you're on rural facilities sort have as relatively to to that analysis. Texas but think the opportunities I continue I just difficult, we'll Texas, of point. you risk-adjusted relates making to look at in based mean continue

So but of say distinction than making in rural we and capital, rural I wouldn't urban. that a allocating we're risk between adjust will urban way we terms in do a different

Daniel Bernstein

Okay.

So not, I take exposure can If talk don't actual can about you know versus your rural that if always we urban. offline.

Taylor Pickett

overall Yes. it's you you It goes will back to decide rural. rural. to we it, really to I define to but you how think XX% again, how our tell depends But about define XX% it about decide portfolio,

Daniel Bernstein

bit Okay. Kind to housing. seniors a of switch little gears

have guess You Maplewood. kind some you your that. them? point build development maybe beyond of actively I do with And that housing get other have to peers development of seeking pipelines Are a your just more to pipeline seniors at development looking operators expand this out to with and trying done or other Maplewood. proclivity

Taylor Pickett

for operators. that, can everything We you But across Maplewood the I incredibly from perspective, spectrum will. we the important, of turbocharge our continue to development to look the doing will we're is and if relationship you tell potential front on opportunities

Daniel Bernstein

maybe developments is still of you're still everything accretive? out? Does construction that and point? temper Whatever kind of any rise this what's kind out are you or board drawing of the hasn't penciling is turned want your on. enthusiasm -- on costs penciling go as in working those Are development with to forward Or out but yet, labor with at

Taylor Pickett

a are at to They want shot do but, you Steven, take generally, that.

Steven Insoft

Yes.

say particular around had we that exciting haven't way are in don't costs, not off And a were bit you the not factored, point now. putting to into excitement or a factoring got I I on the the of it's slightly new labor something less are they investments where level we're other. cost the They think fair about. desirability these mean, pencil particularly pressure But it's swaying builds. a but year but just, yet are careful out. one they little of the are to mentioned right also, those think They construction really of I than really ago. some

Operator

Vanacore Our with from next question Chad comes Stifel.

Chad Vanacore

how do PDPM Any is opportunities? deceleration the months? pipeline impacting upcoming So you think acceleration in of implementation noticeable six or of next

Daniel Booth

that we sure. not can that's well, point, this to directly PDPM, tie for At No.

So no. I'd say

Chad Vanacore

you what, can $XXX say sign after Dan, So deal? in, you that, million

Daniel Booth

I'm not sure was a that driving force.

Chad Vanacore

And just your Yes. are what All in right. across seeing operators, you of then trends? census terms looking

Daniel Booth

census because, think, slightly dropping Medicaid, back they're flat been been bit. up little up. still creeping and are off even picking down probably For slowly but still the certainly Medicare surely not has or coming just a I has of just length stay -- they

census by overall, and to flat So is up, slightly it's mostly driven Medicaid.

Chad Vanacore

with so opening update opening -- plant give right in Okay. second a And quarter. new then you leasing is far? us before first just Can on development Where one the more Maplewood? question Steven. half probably for the an You're

give So going? is an how can you lease-up us the idea

Steven Insoft

Sure, Chad.

behind of taken describe than months being is best really leases on would leases opened. would see Maplewood the of it from being away past. levels the to is still executed the the way is with momentum consistent momentum suburban think for I rather at building But we deposits a in number call well deposits locations it -- the in the the the that is point and I this because that

cautiously we're market accepting pricing. optimistic. the So The is

obviously more follow comes day opening as the to closer. So

Operator

with Stender from Our Wells Fargo. Todd comes next question

Todd Stender

new made. you do portfolio with the My to has announcement question

other the leases kind bottoming the the So you underwrite in-place and upside demographics that, is how do at then did so side how looking that? you potential contractual in of there Just are that, in subscribed if SNF are participate? fundamentals, rents if in? kind you to of locked of And guys fundamentals, if you've and acquiring right XXXX, already are now here

Daniel Booth

buying If effectively are so is the rents is here. revenues locked. there in-place we our the here. no rent improve, So leases, There's operations improve, no but coverages

Todd Stender

fundamentals? improving you maybe how rent look enter at Did coverage Or with that? at would lower you than Okay. of backdrop normally a did you the

Daniel Booth

No.

it think normal we underwrote I our standards. to

Todd Stender

XX Okay. drop your in pulled they so And Just to out quarter. speak dropped tenant the to rent Daybreak, maybe of? you was Daybreak. of top this back mathematically? proactively them cash Or out something contribution list their Did out

Taylor Pickett

run had cash year, $X is And based $X we've it's quarter. million Well, we've about at on a $X to this million which rent talked the million. rate

think to the push can an just XX. you we and towards be won't about basis, wait them have top the they annualized over top -- So XX. back when see. that they Hopefully, in just on We'll time

Todd Stender

Okay. Bob. Last question,

you program it I of $XX equity think was new you estimate? kind gave quarter million indicated, guess was I or DRIP a of a

Robert Stephenson

Correct.

Todd Stender

it to sorry, ahead. say... Is fair go

Robert Stephenson

That couple the quarters. based of off was leasing

Sorry about that.

Todd Stender

reason much The I should assume through as Diversicare, equity gotten chew is, we maybe asset ask you've through to sales not the is assume raised before DRIP include until which larger outside fair your equity new of Okay. raise? that the maybe it dispositions

Robert Stephenson

That's a assumption. fair

Operator

from Our Ford next with MUFG follow-up question question is Karin a Securities.

Karin Ford

Just quick of a couple ones.

you've you You to billion, above mentioned $X.X year. given for say average as to that be for the Or we thinking Should you the billion, growth is to $X.X more an two out turning normal XXXX been come. transactions this year done? about external guys, would year a has pivot this back this large an level be anomaly maybe new accretive volume OHI?

Taylor Pickett

out made a naturally have. deal-driven lot, see as to million incrementally, $XXX Dan it's of the be or in to allocation we So we million And and then, about normal of capital deal a And seems the portfolio. larger about $XXX talked we've typically these an coming we that minimum relationships think comment that that that flow earlier opportunities. something

we is, in you and way, that's I billion it out the do year, it time, a range. look $X about if over so averages over in think, Karin, good I pretty think year, a if And best that time

So similar about average more might I we've of believe would to That seen I billion XXXX. things think reasons as a $X.X see there said, than type of being activity the lot XXXX, in an are we year. think in

Karin Ford

coverage in estimate your rate missed if how did you lift guys might just then And -- and Great. the Medicare sorry think an guys Do portfolio? overall you give increase you I PDPM to this. much

Taylor Pickett

talked it's at X.X time being for coverage by two in the X.XX have the of operators, between of improvement each modeled of of We past, about the operator, that we but coverage positive those to And overall the least we it's about average numbers. it. improvement the last and with model specific

Operator

back [Operator question-and-answer Taylor I like our Instructions]. conference for the This session. turn Pickett to would concludes any closing over remarks. to

Taylor Pickett

today. Thanks, call Brandon. everyone, the Thanks, joining for

available As follow-ups. specific Matthew if I or you any we're again. Bob Thanks, either for you have to call would ask questions. always,

Operator

for presentation. conference Thank has today's The concluded. attending now you

now may You disconnect.

Omega Healthcare Investors (OHI) 7 Aug 192019 Q2 Earnings call transcript