OHI - Earnings call transcript Q3 2019 | Omega Healthcare Investors, Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning, and welcome to the Omega Healthcare Investor's Third Quarter 2019 Earnings Conference Call. [Operator Instructions]. Please note that 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; Officer, Pickett; Bob CEO, Insoft. are Dan Booth; Omega's COO, Development Taylor and CFO, today Chief Steven Corporate Comments condition our or business financial not dividend policy, acquisitions, that forward-looking conference dispositions rent transitions such of projections, made and payments, our restructurings, generally. may contemplated financial statements regarding our facts prospects portfolio be are statements as portfolio during this or and historical outlook call operators,

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

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

will I Taylor. now turn the to call over

Taylor Pickett

results, our current quarter our XXXX the earnings quarter third for recent conference Daybreak, third Good I Michele. joining thank Today, will and environment. Thanks, discuss you morning, acquisition reimbursement call. and our activity,

available cash Manhattan facilities. namely from XX% both distribution. in and reflects the quarter. Encore closed opportunities, facility, or in of of the our new Maplewood's transaction rent and known is an the a $X.XX million The share. our declared for around improvement $X.XX optimism Daybreak per the adjusted rents growth for equivalents adjusted XXXX of opening $X.XX increase continued earnings $XXX share XX% is upsides, recently quarter dividend ratio FFO funds per third FFO and dividend Our Payout We

Directors October be Future earnings our XX, be potential will for On dividend acquisition million. dependent partially increases upsides portfolio of achieving known growth evaluated by on Encore and opportunities. $XXX additional we closed our and announced previously will Board periodically both

the recognized we $XXX related $XX.X for million. gain during XX addition, opportunistically sold third million In quarter, a facilities and of

We continue work to with Daybreak.

near-term issues. only time As rent quarter over $XXX,XXX of detail rent, Dan upside issues in expect liquidity near-term will work payment Daybreak's the future significant these which issues, anticipate of Daybreak restructuring through liquidity third as Daybreak the be we will resulted resolved and we

the on Model new too It Operator to related early still PDPM. front. positive. know the feedback of Lastly, financial reimbursement PDPM, Patient has the Payment to impact is Driven been

details will as provide investors We information unfold. with more

will to turn I Bob. now call the over

Robert Stephenson

and Thank you, good Taylor, morning.

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

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

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

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

XXXX buyout quarter of a restructuring $XXX,XXX $XX.X to was Chicago our primarily of expense million the G&A in office related for XXXX termination. charges, included Our lease, had and early third the which

we that first Chicago quarter recall of the in XXXX. our closed may You office

the expense $XX when XXXX financing the resulting deferred Interest for from increase with noncash $X quarter, higher costs excluding borrowings a was third million over of quarter the for quarter. million outstanding

Our and strong improve. to balance sheet remains continues

forward sale stock sell to X.X $XXX common equity million connection a an of shares into offering. with underwritten million public in entered we agreement September, In

We be expect of Encore repay to from of acquisition. equity of the portion finance a the used Net settlement borrowed the to by proceeds portfolio XXXX. sale to agreement forward debt end forward the settle the the sale agreement will

were senior our offering Also borrowings from of portion proceeds million XXXX. to due and in the under term a issued October facility notes September, X.XXX% credit we used $XXX loans. outstanding repay revolving our of Net

related September debt in become was within our XX coverage no X.Xx. newbuilds operational and charge At on construction of X EBITDA to associated approximately XX, X.XXx scheduled the fixed important in and annualized debt our It's with was was months. calculations to our EBITDA to adjusted ratio has our funded XX% revenue net process next to billion note fixed, these $X.X

of contractual on to be related during roughly forma revenue Xx. revenue pro full leverage builds new assets adjusting our quarter include eliminate quarter, When the a and our sold to would

we expect we million $XX.X of the rent. acquisition in to result, quarter following: a the was record On months the in Regarding fourth completed portfolio, approximately and modeling purposes, cash XX; X to October or are as Encore on assuming revenue the

per assumed assume investment new in U.K. put We of We of should estimated noncash We be expense of a compensation of HUD from $X per fourth with per to rate $XX the late to quarter. and also $XX $X cash million between per $XXX part Noncash We the debt projects $X should million assume in close in supplemental posted as the We quarter. We million portfolio quarter. continue blended G&A quarter. at be X.XX% from will stock-based X revenue is acquisition. late million million project $X our our schedule $XX accordance to million assume construction million recorded quarterly information revenue XXXX. service be website. Daybreak into Page approximately quarter on basis rent with to a on portfolio to will that the assume be million our generating in

rates. and variability revolving as LIBOR The our in floating expense assets XX% loan debt million well debt. $X.X September to revenue on We third borrowings was of interest as the sold related of recorded credit rate term primarily million or our our facilities XX, is driven At quarter. by $XXX during

included may in occur. guidance, Although additional disposition asset opportunities not

share issuances. Regarding

million our and issuances. $XX purchase recent quarter agreement, we assume reinvestment issuing to forward X.X end, by dividend the million will to approximately sale common through expect addition consistent quarterly we plan stock be we year which equity with In share of settle per our

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

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

will the I call over now to Dan. turn

Daniel Booth

everyone. Thanks, Bob, and good morning,

As across of XX, core XX-month Trailing EBITDAR of and within XX trailing respectively, for approximately XXXX X.XXx These our operating XX coverage third-party the EBITDARM during XX, of Omega was respectively, and spread versus in March United September asset and with X.XXx, the portfolio facilities XX,XXX were operators X.Xx, XX-month period XXXX. and an XXX had quarter X.XXx states XXXX, operator the ended beds. portfolio for Kingdom. operating facilities located second

matters. portfolio to Turning

pressures and deteriorated significant consume of operational as operating performance During rate. the of occupancy, a further Daybreak's labor Daybreak's result liquidity costs a in that XXXX, reduced of much ongoing and third run quarter current overall mix, fall-off quality legacy changes

As in the for rent quarter. less third recognized Omega million result, than $X a

a and these geographic to allowing has factors attention State on of Daybreak to more in benefit begin of consensually PDPM the implementation few Daybreak across resulted Daybreak's The program, addition markets. expected wide selectively benefits Medicare agreeing Daybreak of its and XX Texas, only of will Daybreak's from the of to While Omega Texas increase, a first the QIP is the not with X.X% liquidity rate of facilities downsize the into to Omega the these into select quarter challenges focus assist footprint narrowly majority XXXX. vast combination

number to quarter outside of Accordingly, discussions discussions facilities other operators have with re-leasing geographic process began the several during a core are downsizing that Texas-based and Daybreak's ongoing. of the desired footprint. Both third the fall Omega XXXX, about

While between with our feel to or Daybreak annum portfolio. we per confident end that process at eventually time, the this rent Omega ultimate $XX of outcome to is this equivalents million on of current ascertain difficult up will $XX rent million

annual cash July The master facilities an to escalators. transaction lease existing X.X% On X operators X, facilities completed North Virginia. with for added investments. new to of Carolina were yield Omega for nursing X% Turning purchase and $XX XXXX, million initial skilled in an a lease

subsequent events. to Turning

significant by escalators The operator, located of triple-net Southeast. million from consisted with nursing Taylor, are facilities. October will X operators, a in purchase approximately The on leased being the consists facilities the on facilities our annual million ranging one mortgage X.XX% announced X facilities $XXX The portfolio existing previously approximately to mentioned leases. of X generate across approximately at living acquisition $XXX million $XX As of cash X.X%. loans. and Omega closed and XX Omega initial of XXXX, skilled in rent of states with assumption XX, assisted facilities cash HUD XX X master in $XXX The via concentration million

$X.X entered interest new facility Cindat XX, to as development of across United Management the in and operators a acquire close to has Kingdom earlier, on agreement investment Capital The care billion with loan end. expected a third-party with mentioned an by consists venture investments existing leases joint million. is into homes borrower. master single owned share Omega a triple-net October expenditures. Properties' year approximately Omega made to leased Year-to-date, purchase The portfolio capital separate via a equity Also, XX% including Healthpeak totaling total X of XXXX, transaction XX approximately X $XX for

to dispositions. Turning

the XX transactions X facilities approximately for separate total third quarter via proceeds million. Omega of During $XXX XXXX, divested

and expenditures. of capital investments today, as revolver Omega and availability to has $XXX Lastly, of million combined approximately fund future cash

call the to turn Steven. now will I over

Steven Insoft

continue we and scheduled land on $X.X joining today. billion Second investment including open work Living, the thanks Senior sheet. rise Thanks, conjunction Dan, the accrued is XXXX. XXrd high Manhattan. to to memory early totaled Maplewood end for line our of Housing in CIP with million quarter, at at approximately and our $XXX project to City on in Avenue Street everyone expected our ALF in In Including The Senior third and portfolio project, cost the New is the balance York Omega of of on care rent

the relationship but comprises and their the also portfolio Senior publicly REITs. investment independent not well XXX health senior U.K. growing with its covers the On a health senior stand-alone living care now U.K., best-in-class Care properties represents our as basis, by Anchored the care X.Xx, Gold amongst in as of obligations living, our core U.S. lease care and Living only overall assets housing portfolios in one the listed assisted and at larger in homes memory Maplewood housing

of of Connecticut, our by Our tenants' same Through capabilities our having with is continue predicated portfolio, ability newly including to our the as facilities XX-unit as successfully coupling important well the the commitment XX highlighted our related to and in on predominantly Southport, opened million this in-house as approximately $XX.X $XX construction design component grow to expertise. ALF Maplewood construction of pipeline, operating this million $XX.X a our of capability, new of related with third the portfolio active investment investment our this program. reinvestment. strategic ongoing was $XXX and The remaining is CapEx million, total we to million Manhattan. inclusive reinvestment in projects to construction invested related budget quarter in

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

Taylor Pickett

prepared Thanks, concludes comments. our This Steven.

for open the call questions. We up will now

Operator

of our Bank [Operator come Lynch. Joshua question Merrill America first Instructions]. of And will Dennerlein from

Joshua Dennerlein

whole pursue to portfolio? to opportunity Just do U.K. eventually bought partnership the the the there consolidate on JV that decide cap why color you an any that you rates? then kind of into, curious And on you how you and acquisition, does for work? did have Is JV

Taylor Pickett

mean, listen, been U.K. still I Yes. very we've on opportunistic -- We We're bullish the in it.

for of always there. we're new kind opportunities So, looking

think more, operators will there good that X There add think are have The opportunity and we care thing. we've States. rates with. like we living business great. This assisted existing with homes them. and U.K. diversity in over the X operators, a are over up I do Cap here is -- we demographics look quality more United We the matched much are at

than rates your average are lower So, cap SNFs.

looking rights. JV. I and we're Xs, everybody basically we deal there in the You're a than XX:XX, your structure this future, then mean as and an mutual I Xs holds rather it's the all sort well. if -- opportunity to right but a potentially now have unwind Xs the the of has voting JV in And questions, captured that in is for where

still I can't presents itself, to buy piece. in out U.K. the probably other we the my we're And would I in if term. but the speak think our partner, the long is opportunity bullish U.K. strategy

Joshua Dennerlein

Okay, not from heard How just Daybreak. if great. Is much run XQ for And it. good Daybreak? one guidance question a then including sure on in XQ maybe are I'm rate? you I rent

Robert Stephenson

Yes.

of and know, and on said in range it's so a we'll and you guidance. -- Daybreak's we have we that -- basis, assume we as cash So, a

So, in guidance and in that is we the third had $XXX quarter range. million our

Operator

Jonathan question James. of Hughes come our from And will next Raymond

Jonathan Hughes

have Just a with million Daybreak, going $X I'm paid the back projecting? rent to confused you're in million there. line to little $X they October

Robert Stephenson

that away. we're after fourth in are is a -- of recognized. million to That's not the out number No. That That's things $X quarter. different million $X projecting

and costs about Some Medicare the PDPM Texas properties, are promissory all talked in, that legacy of in I which then things the rolling or the QIPP increases, we've got and months XXXX. that number roll notes, off the notes et rate coming a vendor cetera, throughout of

pretty $X-plus million then, $X all And alluded big you running work. transitions to, It's the in I as some a pickup. revenue legacy that costs of economic So, when swirl in together, that's million about and about enhancements got we've out. in

not their I focus quite really be as to attention east taken then well. on to really that's a Daybreak's markets, market that's across literally, southern the Texas, some northern west outlier geographic end these geographic think as spread bit So facilities. or more a and single on we'll focus of quantifiable, able both X of entire the and And more state they're narrowing to which from the tip little

or outliers So, other some parse to able we're operators to going that focus attention their more markets. be and then out in those of focused to these are concentrated other

$XX what So, to $X where is to And I there's we million between combination is or and think what the not quantifiable and million. to million time get of million here $X $XX this there. is quantifiable

Jonathan Hughes

$X XQ to rate, essentially for million $X that And run million Okay. 'XX right? is quarterly

Robert Stephenson

at That's a good look to way it, Jon.

Jonathan Hughes

Okay.

operators a me Looking a sequential that few that the in surprised impact by distribution, Was large or driven maybe the rolling portfolio coverage in of there? bit MedEquities occupancy. the in on the increase the at shift given fringe

Taylor Pickett

bucket. another. We pretty It two two scale, -- any just It bucket it's to into from didn't pickup, was operators bucket from MedEquities over our their was that down slipped but sort But impact. have it slight a exactly the think temporary, predict. operators yes, actually, went it's top to one of maybe from was that given really hard lower of No. higher right. but XX you're was flat,

Jonathan Hughes

it With rounding like X.XX operators, mean, a those turns talking error? I or the are we kind for move two was like of

Taylor Pickett

rounding, one more X.XX that. more a like significant, a little X.XX, bit One was a was of

Jonathan Hughes

there kind CMS hear reimbursement it but Meaning looks improve that is last in impacting? properties? XXXX has underwriting SNFs? how in SNFs and that's underwriting overall overly they your of significantly thoughts the did on to some for kind Would early out rate to future like maybe one, you further your some margins impact is costs? tell process to look too PDPM, are to assumptions you I using Okay. the recover look the altered of fully on case at love know on in as And then began horizon, How conservative if of you cut

Taylor Pickett

through that I ultimately that don't the -- that think quarters force And there's a turn while not full don't underwriting. really yes, if in not numbers going are will roll underwriting. until to PDPM expected the happy are results not be impact, where several CMS first flip quarter. that's or But to go. will us a consistent, will -- our we're I has reimbursements with think our sure suggest or I out after leveled of see built So that see have would But where I PDPM and then, it it's materially our changing an We're this and looks the the switch. a that the into operators head

Jonathan Hughes

have of you? to few mean as growth past a I you Right. trended how sellers just of curious the external pipeline, come your cadence the are the relationship seen any driven, deals that's I more know months? over lot

Taylor Pickett

As sort of part season bit where the that quarter. we're down slow always, and a the opportunities until of it's into first getting choppy, the little

Operator

next will our question Trujillo Trent of from Scotiabank. And come

Trent Trujillo

the one coverage on clarify Jonathan's up want I EBITDAR something. following questions just to distribution. So about of

a can because in think anyway, X.X summer, -- So also happening wouldn't in shown to was my XX. your as understanding reflected it the it transitioning like early perhaps supplemental be of but is stats PDPM, was so pretty the downtick. that the from to this, understanding signature to that X over that sizable June on large from of into light some what a bucket maybe or drop-down operator shed My part was you with I is

give such a in drop bit you to coverage was context little there can as more stratification? the maybe a So why

Taylor Pickett

had fell not to that that operators Yes, we've materially But the think the to material. drop. again, actually X Well, there into the from bucket. was were a once X bucket X.X I don't that drop-offs X.X X.X

sort the come was, systems prep and education October of PDPM place for in fact, X. Some of in for on to it that the getting and

when form X of not a results. I it see any So think, those back the those from one it, as October we of PDPM or we'll drop-off define describe X, But of we in would see some to operators. on material come start ticks

Trent Trujillo

Okay. little then. bit a Maybe rephrasing that

there the a really bucket if lower was from $XX you $XX coverage which So weighted or quarter, would dropped a that improve decline, there -- actually million prior from expect the went a move million even And the shift. no down, roughly coverage to bucket. average material that much it imply big average higher wouldn't was was but pretty actually weighted that would

to want you maybe operator before just So back. just be X.X color operator this in X thing ago don't on be is would from it because years would a any XX.X% if issues? sort again, with can to operators, a these color bucket having there are of helpful. reminiscent provide the onetime insinuate more of helpful now But there's you started and issues, I it bounce that, it's some perspective, couple of could

Taylor Pickett

already I that Yes. the with and I weighted I'd have could average of -- once at material, one at I look sort as of I weighted from dropped I'll look bucket before to I'll the with focus more X -- anymore well. but mean other. honest operators to the clarity look It than into it's to be have. that again, wasn't But the any as average, indicated, dig you, respond at sort

Trent Trujillo

are come your or being I about set evolved going a as And Okay. And majority like in X X topics in Maybe level your seeing they're portfolio. Encore prior relationship that's later. Can that to top them? the the operator, operator. How talk growth that. top switching opportunities follow-up with But to favoring Looks to comfort over them a Southeast time? with Appreciate top Consulate be we'll guess, given maybe about with growth you you further operator? comments region?

Taylor Pickett

them. actually. will Consulate will -- talk don't being I opportunities but with So, growth operator, end our up certainly today, ultimately see has become well, #X yes, it any we

relationship their team our think with excellent. management is I

are have I states markets in this being We over we particularly covet, in think, Southeast. the gone point. They've with frequent They that conversations them. to, X from down XX at

done and in their at Consulate. to to their narrowing that they've a the good that on to a And extent going think rein So opportunities in hard. done honed and lot in like footprint do costs. they're where operate future, with stuff operator. forward. They've do about geographic we really they quality the lot will There's a want we job We that to them look to long a have certainly

Trent Trujillo

for Okay. And one last me.

prepared growth time? the deal, it in one as operator in with portfolio, sounds in relatively a a are other relationship your your new newer like plans one, The put the you to definitely terms smaller it's What and that maybe of remarks. over

Taylor Pickett

X So a in represents operator, they are transaction. this new facilities

if have with to operator met previously, quality continue any think talk with to them like We will new And We they're there a are as we expand well. and them. with them. opportunities, we'd

Operator

Our next Stifel. come Vanacore from question Chad of will

Chad Vanacore

expected about the is U.K. a from bought how's Give So or don't ratio. allocation growth HCP? lease then you the over know you more year? coverage what is market? your of bit performance underlying ultimately past Could that some And in terms the trended target properties us little U.K. and investment what we talk that

Taylor Pickett

The flat. other up, has flat. stayed facilities one the coverage and Actually, been performance pretty of ticked portfolio has the those

opportunistic. be not got we're from improved. on mean side. assisted like coverage the operators it's can back have in line how what And today. time think, X get be, below first looked so will we slightly I big it's we I north We've think looking living is we They there. the will to because it at but in it's our that continue [indiscernible] So It's -- has -- portfolio then and just really the looks U.K.? we're it's that, going the acquisition -- assisted to aggressive with living, historically,

at haven't end we there. end I picked have, some opportunities of think, we to do more over -- want more the where day. a up we'll deals don't some We the to target So

Chad Vanacore

probably development or that the you stabilization to Steve, in is Okay. point? And one development this and point? then an Can Manhattan this then either expected should. or up at date which is surprises update a this Second leasing on least Any us in opens at for negative Avenue give positive first activity quarter

Steven Insoft

up years, deposits I are according what really have sort months. it's say Operator XX% level should product about to sort now in it's shown XX-plus on of over to date opening about lease think deposit sort the the full or and according of of way. swings going see plan. of the in So had XX% of plan. the the would on count, to extent well. suburban preopening would unit their to of like be accepting surprises, with they're to consistent that. sort wild Market either track do and going stabilization No I actually to is you And asked operations

Chad Vanacore

changes expectations this no rent point? on at So

Steven Insoft

No.

Chad Vanacore

of the things. then And on debt side you -- Okay.

more So Bob. probably this toward geared is

$XXX pretty XX-year at senior note September, about was did You in attractive. which million X.XXX%

average interest debt are, more this costs existing the that a higher where of Given long-term to point? to refinance rate at notes carry any chance

Robert Stephenson

time look sense all to we the the time. on the but us will that -- make-whole opportunistic we analyze and or do given Chad, spread and that at the XX year, we makes all the if be

Operator

come from will next the question Street Hartwich of Green Advisors. Lukas And

Lukas Hartwich

Can about skilled past mix trends over bit few you guys a talk the quarters?

Taylor Pickett

the come it up They're shorter. hasn't a I there a pressure. pressure. decline a mix We're the -- seeing quite downward if mean although past down quality but over stay the mean under look to come the slow it trend slowed trending I you still still of longer and has off has the on length still quarters. I be -- fallen trend much, mean I to hold of mean trend bit. hospitals has It under stay. Yes. length at is and steps mix patients has four

Robert Stephenson

available not Lukas, California. The it with we've seen taking I'd high parts And providers you're patients, around last except settings. operators tick situation, an occupancy environment in versus a the in where Medicaid I where no, are having is, It's a no situation our it's There's one about selection of add, really all Medicaid type the occupancy is movement up, our say, that. around for is country, of and I completely other not want years. maybe thing needs very where But of think talked other the X.X this have and patient length we've demographic done that driven. options beginning residents of stay the in that. analysis over That's issues don't the a terms upward of

still you're Medicare seeing it what that it's And it's is is not of think abating, as we're the on And the Dan Medicaid on that side I So demographics. beginning of pressure. because side, the length seeing just stay there. but the mentioned, out obvious pressure of

Lukas Hartwich

any projects nearing That's kind over helpful. if quarters. few And then could just similar on that is development the York this you have next thoughts of you curious touched updated on completion. I'm earlier, but start your you New

Taylor Pickett

the next Carnegie long. on -- looking be team find suburban or sort very finding X/X to Maplewood for opportunity. their The incredibly we still tend as of X/X lead opportunities the they continue Hill, opportunities, is and are those we're of of The size product, which for quite looking supportive these big to the we're meantime, well. we be for of additive, I In and say but Second to Avenue, that. they're continue times actively will active in things

Operator

question next from Bernstein One. Capital will of Our come Daniel

Daniel Bernstein

now I maybe pipeline. more my right question guess, about the is

operators. context, of in for What's that the new And about to and large one-off, $XXX portfolio butter kind two-off year? some you a bread with can talk did the just outlook You opportunities do relationships million expand assets where transactions. maybe or million $XXX

smaller on wanted the to your of side. kind Some opportunities largest you. there for started operators smaller the just understand are as operators And of off what

Taylor Pickett

plus and there $XXX to consistent. it's So into generate would that XXXX. bread expect to I continue And is just out million and tends forward which per your point, butter, year, roll the to to

year. you but or at of really the it's grow And relationships number all add over tended the actually side, we X they've if about down some of operator out relationships every we you years, Dan, know, we've added those But lot. this a X to few our On talked operators, look haven't and skinnied last us. we've as interesting, with new

that to So about other I want comment we opportunities. it think last When talked in provide that continues conditions same like and find operators are growth market anything of market found to of the have we'll are the still year transactions last next where those couple good The well. in pipeline but about have today. opportunistic bigger them, -- generation opportunities type the in only year. a market make for pipeline you you them. wouldn't I'd we continue to a it feels conditions exist might for still -- over deals we've see don't find hard to We the as look invest to be type is And a We I there. find. the today, the

Daniel Bernstein

is, surprises, about have bad, or $XXX on the other their to So the question were million think there of know to way million of $X PDPM? The operators to -- PDPM, billion is probably your that's to $XXX I one-off I talked whether but it? good about $XXX any one in deal had transition and preliminary million kind very

Taylor Pickett

is which now. anything haven't we by would heard bad, I and -- really have

all around been that. the positive. think that terms I and in I But of got feedback cycle, don't coding revenue know we've that's that, So coding, the on expectations

think the on a most has just it but the you of now, been on three of those it's month generally until and adjustment when think We tone process. process, didn't start start our operators expenses, efficiencies good. I really depends the rehab

Daniel Bernstein

if little I or on bucket. in go what in understand kind don't of know the maybe lease what slipped and the terms can just of -- structure I in is G&A maybe subordination And something bit? safeguards you over there coverage maybe the a of there Okay. that? to the like wanted it then operators, guarantees covenants or

Taylor Pickett

Yes, there's a for subordination fees. Yes. of we company either now management a listen, or There's from source everything secondary of lease a consistent always repayment put mean almost dozen-plus mean I parent a we've individuals. master -- leases. structures generally I company, management into had years.

other There pledges. financial there's AR. Sometimes There seconds interest. equity protect protect and are us a our are of that covenants. We on things number get

our many don't hasn't to it years. we change. consistent and over So underwriting think It I has expect been changed,

Daniel Bernstein

funding Okay. Michigan? your Any I in And there it's largest there standpoint potential that then third in impacts Michigan, question. be from in some one and state. your think changeover concerns last your Medicaid There's could operators on negative

Taylor Pickett

one, have for large analysis the caps, operator lowering and will early we this neutral is that doing obviously, and the them. what they're in Michigan be is So

Operator

of will come question next Todd Our Fargo. from Stender Wells

Todd Stender

guess, around I changes, acquired some tenant of the Just some in the the questions, portfolio quarter. assets quick

who X SNFs So million, were going leased those $XX for to be to?

Taylor Pickett

existing private An operator.

Todd Stender

into master Can you Or is it if lease, a I is? I it -- goes think it that disclose who caught right.

Taylor Pickett

we private disclose does. a rule, don't our operators. generally as It But

Todd Stender

on those? Okay. the Got it. And then in operators million, X assets $XX sales, the sold how for you about

Taylor Pickett

Yes.

You know sold who to? want we to

Todd Stender

Who were those facilities? the operators in

Taylor Pickett

bunch of X-facility It portfolios. deal. operators. There was were wasn't with sort a It smaller one-offs smaller transactions within one big of different

Todd Stender

it. Got

Okay.

kind just reconcile finally, want CapEx what million. about forecast to at to it's year-to-date, Just $XX looking CapEx, of

considering money mostly Just going is towards that's facilities? a what triple-net towards? retenanting Just is a mostly are you as that owner, reminder, that going

Robert Stephenson

is buildings, Todd, CapEx, to that typically incremental yield. has Our additions

that no almost as call CapEx type is there's office it kind zero -- retenanting very of Might CapEx. well your there. So

Todd Stender

a CapEx? what all about acquiring you're maintenance and yield comparable it? something is enhancing no at So This revenue

Robert Stephenson

right. Correct. That's exactly

Operator

come Our next Okusanya of question from Mizuho. will Tayo

Tayo Okusanya

a on I follow-up just wanted questions to that little two earlier. asked were

talking we -- is just of a early. may sounds PDPM I did down of guess, about is impact bracing be go those diligence, buckets today? ratios tenants is for them PDPM there be positively we Again, coverage kind be The again, implement given the just if one a again, bit. our two coverage there's to first all but really coverage should the very that we moved down short-term ultimately actually try thinking just agree do, negative due about that waiting first is, And going it shock like of about one, again, curious may type one start just the some where of Signature ones all the to with of I'm before -- like should comments to I I on, what which Trent's was earlier Signature? climbing? that to one was given not first everyone's tenants -- all little for

Robert Stephenson

that to XXX% we'll is I see question going think Tayo. shock. what answer I say Honestly, to the be, we will don't don't that know a

have folks -- will push a that prior is have we'll as it meaningfully that some little expenses in will because coverages a is XXXX. other, less rehab October may you won't have -- are who that front program particularly of I aggressive PDPM, and of minutes get move and good weighted. the interesting get one their think to that became see Dan will that they I bit, certain you or in really were QX much trying of sense My delivered. mentioned, way a terms big to that coverages will would incur view been in, and comment that Signature have

good so straight from decent both their cases rare see big one a pickup we And is and a of rehab revenue just reasonably because PDPM of piece a pickup. expense expenses, also the they're where the coding, overall still may from

affect unusual in in rehab the as they for really positive will, back the you they're dialed the prior know, them. with to issues had of circumstance delivery, government the the So revenue which of given and disclosed side equation terms that

reimbursement. year one particular, rolling Signature, of with spend is comfortable next feel in our tenant obviously, of So we we this into lot time relationships, of that a very

Tayo Okusanya

things. held other I'm or that -- some question that changes changes of Okay. wrong, the the around Correct specifically That's all regulatory but delayed somehow and Texas. kind that trying me how be profitability to really that indeed of -- were to with to comfortable some that regards hanging of items case, on start seems of in legislation? And to if in idea does the these often one kind meant voting if is recovering, like all we're reimbursement improve helpful. QIPP if Daybreak just I Then the the to up of these got on second is get stuff with and thought make more

Taylor Pickett

QIPP been yet because all. but then It of the at coming That number will took has So program QIPP well, just is -- not on the effect of quarter into now it it's for revenue X. in X in first a held come up XXXX. place was not years, September delayed in was a reimbursement, Texas it's what

certainly to as or what it was on. I referring but not planning of make of is think it's what wasn't attempted high our of so active. So come provider have did more through push did you're couple and years, now, called We out in might a not certainly in say back was it not a is voted hopes, tax, but it was And and it what underwriting. to committee, Texas I what not can our it now thought in it's right

Tayo Okusanya

to bottom to impact think then end -- or to helpful. Medicaid large Could changes just Michigan, impact that's you that more with them? line your And how being up somewhat expect to I they help being neutral how tenant line. one indulge neutral Okay, time. understand up it is me end just their payment market, that going negative exposed to bottom a again, to don't their me their understand I -- these how a to quite

Taylor Pickett

legislation, it's centers. not unless if being So I secondly, certain XX what proposed you reduction a It's the have in you think in then last what's one, happened And hours. the something's is will, presented, cost passed. is to number -- just caps

are will they'll pickup be to have on. the caps, it have the able a certain and some that there is operator our above get are going to which So that caps, which below facilities

we say, is So and they proposed neutral, and what's what Michigan took should proposing. legislature it the today all when the ultimately, impact, -- I was their actually been looked the facilities governor what's based in upon what know at or the

Operator

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

Taylor Pickett

Thanks, today. our call everyone, joining for

always, we'll available again. for follow-up be As you Thanks, may any have.

Operator

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

disconnect. may You now

Omega Healthcare Investors (OHI) 6 Nov 192019 Q3 Earnings call transcript