10-Q 1 ohi-20180930x10q.htm 10-Q 20180930 10Q Q3





UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

______________



FORM 10-Q

(Mark One)

 X    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934



For the quarterly period ended September 30, 2018

or



___   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934



For the transition period from _______________ to _______________



OMEGA HEALTHCARE INVESTORS, INC.

OHI HEALTHCARE PROPERTIES LIMITED PARTNERSHIP



 

 

(Exact name of Registrant as specified in its charter)



 

 

Maryland

1-11316

38-3041398

(Omega Healthcare Investors, Inc.)

(Omega Healthcare Investors, Inc.)

(Omega Healthcare Investors, Inc.)

Delaware

333-203447-11

36-4796206

(OHI Healthcare Properties Limited Partnership)

(OHI Healthcare Properties Limited Partnership)

(OHI Healthcare Properties Limited Partnership)

(State of incorporation or organization)

(Commission file number)

(IRS Employer Identification No.)

303 International Circle, Suite 200, Hunt Valley, MD 21030

(Address of principal executive offices)



(410) 427-1700

(Telephone number, including area code)



Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.



Omega Healthcare Investors, Inc. Yes   No   OHI Healthcare Properties Limited Partnership Yes   No  



Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).   



Omega Healthcare Investors, Inc. Yes   No   OHI Healthcare Properties Limited Partnership Yes   No  



Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one:)



Omega Healthcare Investors, Inc.



 

 

 

 

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company



OHI Healthcare Properties Limited Partnership



 

 

 

 

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company



 

 


 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.   





 

 

 

Omega Healthcare Investors, Inc.     

 

OHI Healthcare Properties Limited Partnership  

 



Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).





 

 

 

Omega Healthcare Investors, Inc. Yes 

No 

OHI Healthcare Properties Limited Partnership Yes  

No  

Indicate the number of shares outstanding of each of the issuers’ classes of common stock as of October 31, 2018





 

 

Omega Healthcare Investors, Inc.

Common Stock, $.10 par value 

 

200,696,539



 

 

OHI Healthcare Properties Limited Partnership

N/A

 

No common stock outstanding 

(Class)

 

(Number of shares)







 

 


 





EXPLANATORY NOTE



This report combines the quarterly reports on Form 10-Q for the period ended September 30, 2018 of Omega Healthcare Investors, Inc. and OHI Healthcare Properties Limited Partnership (“Omega OP”).  Unless stated otherwise or the context otherwise requires, (i) references to “Omega” or the “Company” means Omega Healthcare Investors, Inc. and its consolidated subsidiaries, (ii) references to “Parent” refer to Omega Healthcare Investors, Inc. without regard to its consolidated subsidiaries, and (iii) references to “Omega OP” means OHI Healthcare Properties Limited Partnership and its consolidated subsidiaries. 



Omega is a self-administered real estate investment trust (“REIT”) under the Internal Revenue Code of 1986.  Omega is structured as an umbrella partnership REIT (“UPREIT”) under which all of Omega's assets are owned directly or indirectly by, and all of Omega's operations are conducted directly or indirectly through, its operating partnership subsidiary, Omega OP. 



Parent directly owned approximately 96% of the issued and outstanding partnership units in Omega OP (the “Omega OP Units”) at September 30, 2018.    Each Omega OP Unit (other than those owned by Parent) is redeemable at the election of the holder for cash equal to the then-fair market value of one share of common stock of Parent, subject to Parent’s election to exchange the Omega OP Units tendered for redemption for common stock of the Parent on a one-for-one basis in an unregistered transaction, subject to adjustment as set forth in the partnership agreement.  The management of Parent consists of the same members as the management of Omega OP. 



The financial results of Omega OP are consolidated into the financial statements of Omega.  Omega has no significant assets other than its investments in Omega OP.  Omega and Omega OP are managed and operated as one entity.  Omega OP has no significant assets other than its interests in non-guarantor subsidiaries.



We believe it is important for investors to understand the few differences between Omega and Omega OP in the context of how we operate as a consolidated company.  Omega acts as the general partner of Omega OP.  Net proceeds from equity issuances by Parent are contributed to Omega OP in exchange for additional partnership units. Parent and Omega OP incur indebtedness.  The net proceeds of the Parent’s borrowings are loaned to Omega OP.  The outstanding senior notes and certain other debt of Parent is guaranteed by Omega OP. 



The presentation of debt and related interest, including amounts accrued, stockholders’ equity, owners’ equity and noncontrolling interests are the main areas of difference between the consolidated financial statements of Omega and Omega OP.  The differences between debt, stockholders’ equity and owners’ equity result from differences in the debt or equity issued at the Omega and Omega OP levels. With respect to owners’ equity, the units held by the partners in Omega OP other than the Parent are accounted for as owners’ equity in Omega OP’s financial statements and as noncontrolling interests in Omega’s financial statements.  Although classified differently, total debt and equity of Omega and Omega OP are the same.



We believe combining the quarterly reports on Form 10-Q of Omega and Omega OP into this single report results in the following benefits:



·

combined reports better reflect how management and the analyst community view the business as a single operating unit;

·

combined reports enhance investors’ understanding of Omega and Omega OP by enabling them to view the business as a whole and in the same manner as management;

·

combined reports are more efficient for Omega and Omega OP and result in savings in time, effort and expense; and

·

combined reports are more efficient for investors by reducing duplicative disclosure and providing a single document for their review.



In order to highlight the differences between Omega and Omega OP, the separate sections in this report for Omega and Omega OP specifically refer to Omega and Omega OP.  In the sections that combine disclosure of Omega and Omega OP, this report refers to “we” and “us” actions or holdings as being “our” actions or holdings. Although Omega OP and its subsidiaries hold all of our assets, we believe that reference to “we,” “us” or “our” in this context is appropriate because the business is one enterprise and we operate substantially all of our business through Omega OP.







 

 

 


 

OMEGA HEALTHCARE INVESTORS, INC.

OHI HEALTHCARE PROPERTIES LIMITED PARTNERSHIP

FORM 10-Q

September 30, 2018





 

 

TABLE OF CONTENTS



 

Page No.

PART I

Financial Information

 



 

 

Item 1.

Financial Statements of Omega Healthcare Investors, Inc.:

 



Consolidated Balance Sheets

 



September 30, 2018 (unaudited) and December 31, 2017

2



Consolidated Statements of Operations (unaudited)

 



Three and Nine months ended September 30, 2018 and 2017

3



Consolidated Statements of Comprehensive Income (Loss) (unaudited)

 



Three and Nine months ended September 30, 2018 and 2017

4



Consolidated Statement of Changes in Equity (unaudited) 

 



Nine months ended September 30, 2018

5



Consolidated Statements of Cash Flows (unaudited)

 



Nine months ended September 30, 2018 and 2017

6



 

 



Financial Statements of OHI Healthcare Properties Limited Partnership:

 



Consolidated Balance Sheets

 



September 30, 2018 (unaudited) and December 31, 2017

7



Consolidated Statements of Operations (unaudited)

 



Three and Nine months ended September 30, 2018 and 2017

8



Consolidated Statements of Comprehensive Income (Loss) (unaudited)

 



Three and Nine months ended September 30, 2018 and 2017

9



Consolidated Statement of Changes in Owners’ Equity (unaudited) 

 



Nine months ended September 30, 2018

10



Consolidated Statements of Cash Flows (unaudited)

 



Nine months ended September 30, 2018 and 2017

11



 

 



Notes to Consolidated Financial Statements

 



September 30, 2018 (unaudited)

12



 

 

Item 2.

Management’s Discussion and Analysis of Financial Condition

 



and Results of Operations

41



 

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

59



 

 

Item 4.

Controls and Procedures

59



 

 

PART II

Other Information

 



 

 

Item 1.

Legal Proceedings

60



 

 

Item 1A.

Risk Factors

60



 

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

60



 

 

Item 6.

Exhibits 

61



 

 





 

 


 

 



PART I – FINANCIAL INFORMATION



Item 1 - Financial Statements



OMEGA HEALTHCARE INVESTORS, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except per share amounts)







 

 

 

 

 

 



 

September 30,

 

December 31,



 

2018

 

2017



 

(Unaudited)

 

 

 

ASSETS

 

 

 

 

 

 

Real estate properties

 

 

 

 

 

 

Real estate investments

 

$

7,700,636 

 

$

7,655,960 

Less accumulated depreciation

 

 

(1,515,846)

 

 

(1,376,828)

Real estate investments – net

 

 

6,184,790 

 

 

6,279,132 

Investments in direct financing leases – net

 

 

163,467 

 

 

364,965 

Mortgage notes receivable – net

 

 

708,178 

 

 

671,232 



 

 

7,056,435 

 

 

7,315,329 

Other investments – net

 

 

511,668 

 

 

276,342 

Investment in unconsolidated joint venture

 

 

32,159 

 

 

36,516 

Assets held for sale – net

 

 

17,826 

 

 

86,699 

Total investments

 

 

7,618,088 

 

 

7,714,886 



 

 

 

 

 

 

Cash and cash equivalents

 

 

9,768 

 

 

85,937 

Restricted cash 

 

 

1,371 

 

 

10,871 

Accounts receivable – net

 

 

336,825 

 

 

279,334 

Goodwill

 

 

644,201 

 

 

644,690 

Other assets

 

 

31,711 

 

 

37,587 

Total assets

 

$

8,641,964 

 

$

8,773,305 



 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

Revolving line of credit

 

$

360,000 

 

$

290,000 

Term loans – net

 

 

900,847 

 

 

904,670 

Secured borrowings – net

 

 

 -

 

 

53,098 

Senior notes and other unsecured borrowings – net

 

 

3,327,393 

 

 

3,324,390 

Accrued expenses and other liabilities

 

 

253,560 

 

 

295,142 

Deferred income taxes

 

 

14,198 

 

 

17,747 

Total liabilities

 

 

4,855,998 

 

 

4,885,047 



 

 

 

 

 

 

Equity:

 

 

 

 

 

 

Common stock $.10 par value authorized – 350,000 shares,

 

 

 

 

 

 

 issued and outstanding200,693 shares as of

 

 

 

 

 

 

September 30, 2018 and 198,309 as of December 31, 2017

 

 

20,069 

 

 

19,831 

Common stock – additional paid-in capital

 

 

5,012,544 

 

 

4,936,302 

Cumulative net earnings

 

 

2,068,295 

 

 

1,839,356 

Cumulative dividends paid

 

 

(3,606,181)

 

 

(3,210,248)

Accumulated other comprehensive loss

 

 

(32,382)

 

 

(30,150)

Total stockholders’ equity 

 

 

3,462,345 

 

 

3,555,091 

Noncontrolling interest

 

 

323,621 

 

 

333,167 

Total equity

 

 

3,785,966 

 

 

3,888,258 

Total liabilities and equity

 

$

8,641,964 

 

$

8,773,305 



See notes to consolidated financial statements.

2


 

 

OMEGA HEALTHCARE INVESTORS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

Unaudited

(in thousands, except per share amounts)







 

 

 

 

 

 

 

 

 

 

 



Three Months Ended

 

Nine Months Ended



September 30,

 

September 30,



2018

 

2017

 

2018

 

2017

Revenue

 

 

 

 

 

 

 

 

 

 

 

Rental income

$

192,276 

 

$

194,063 

 

$

579,075 

 

$

580,597 

Income from direct financing leases

 

264 

 

 

614 

 

 

1,374 

 

 

31,722 

Mortgage interest income

 

18,396 

 

 

16,920 

 

 

51,809 

 

 

49,173 

Other investment income

 

10,259 

 

 

7,245 

 

 

27,883 

 

 

21,437 

Miscellaneous income

 

657 

 

 

796 

 

 

1,791 

 

 

4,250 

Total operating revenues

 

221,852 

 

 

219,638 

 

 

661,932 

 

 

687,179 



 

 

 

 

 

 

 

 

 

 

 

Expenses

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

70,711 

 

 

71,925 

 

 

210,681 

 

 

212,268 

General and administrative

 

14,240 

 

 

11,560 

 

 

45,952 

 

 

35,625 

Acquisition costs

 

 -

 

 

 -

 

 

 -

 

 

(22)

Impairment on real estate properties

 

22,868 

 

 

17,837 

 

 

26,685 

 

 

35,610 

Impairment on direct financing leases

 

 -

 

 

194,659 

 

 

15 

 

 

197,968 

(Recovery) provision for uncollectible accounts

 

(2,000)

 

 

11,899 

 

 

6,363 

 

 

13,667 

Total operating expenses

 

105,819 

 

 

307,880 

 

 

289,696 

 

 

495,116 



 

 

 

 

 

 

 

 

 

 

 

Income (loss) before other income and expense

 

116,033 

 

 

(88,242)

 

 

372,236 

 

 

192,063 

Other income (expense)

 

 

 

 

 

 

 

 

 

 

 

Interest income and other - net

 

(1,214)

 

 

 

 

496 

 

 

262 

Interest expense

 

(47,764)

 

 

(47,383)

 

 

(143,857)

 

 

(140,509)

Interest – amortization of deferred financing costs

 

(2,238)

 

 

(2,228)

 

 

(6,723)

 

 

(7,273)

Interest – refinancing costs

 

 -

 

 

 -

 

 

 -

 

 

(21,965)

Contractual settlement

 

 -

 

 

 -

 

 

 -

 

 

10,412 

Realized gain on foreign exchange

 

27 

 

 

95 

 

 

20 

 

 

235 

Total other expense

 

(51,189)

 

 

(49,512)

 

 

(150,064)

 

 

(158,838)



 

 

 

 

 

 

 

 

 

 

 

Income (loss) before (loss) gain on assets sold

 

64,844 

 

 

(137,754)

 

 

222,172 

 

 

33,225 

(Loss) gain on assets sold – net

 

(5,361)

 

 

693 

 

 

9,248 

 

 

7,491 

Income (loss) from continuing operations

 

59,483 

 

 

(137,061)

 

 

231,420 

 

 

40,716 

Income tax expense

 

(804)

 

 

(999)

 

 

(2,185)

 

 

(2,690)

Income (loss) from unconsolidated joint venture

 

383 

 

 

545 

 

 

(254)

 

 

1,728 

Net income (loss)

 

59,062 

 

 

(137,515)

 

 

228,981 

 

 

39,754 

Net (income) loss attributable to noncontrolling interest

 

(2,456)

 

 

5,837 

 

 

(9,619)

 

 

(1,735)

Net income (loss) available to common stockholders

$

56,606 

 

$

(131,678)

 

$

219,362 

 

$

38,019 



 

 

 

 

 

 

 

 

 

 

 

Earnings per common share available to common stockholders:

 

 

 

 

 

 

 

 

 

 

 

Basic:

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) available to common stockholders

$

0.28 

 

$

(0.67)

 

$

1.10 

 

$

0.19 

Diluted:

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

$

0.28 

 

$

(0.67)

 

$

1.10 

 

$

0.19 



 

 

 

 

 

 

 

 

 

 

 

Weighted-average shares outstanding, basic

 

200,910 

 

 

197,890 

 

 

199,773 

 

 

197,445 

Weighted-average shares outstanding, diluted

 

210,437 

 

 

206,662 

 

 

208,905 

 

 

206,502 



See notes to consolidated financial statements. 

3

 


 

 

OMEGA HEALTHCARE INVESTORS, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

Unaudited

(in thousands)







 

 

 

 

 

 

 

 

 

 

 



Three Months Ended

 

Nine Months Ended



September 30,

 

September 30,



2018

 

2017

 

2018

 

2017



 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

$

59,062 

 

$

(137,515)

 

$

228,981 

 

$

39,754 

Other comprehensive (loss) income:

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation

 

(3,518)

 

 

5,022 

 

 

(9,802)

 

 

19,630 

Cash flow hedges

 

1,196 

 

 

2,351 

 

 

7,472 

 

 

198 

Total other comprehensive (loss) income

 

(2,322)

 

 

7,373 

 

 

(2,330)

 

 

19,828 

Comprehensive income (loss)

 

56,740 

 

 

(130,142)

 

 

226,651 

 

 

59,582 

Comprehensive (income) loss attributable to noncontrolling interest

 

(2,359)

 

 

5,524 

 

 

(9,521)

 

 

(2,579)

Comprehensive income (loss) attributable to common stockholders

$

54,381 

 

$

(124,618)

 

$

217,130 

 

$

57,003 



See notes to consolidated financial statements.









 

4

 


 

 



OMEGA HEALTHCARE INVESTORS, INC.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Unaudited

(in thousands, except per share amounts)







 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 



Common

 

Additional

 

Cumulative

 

 

 

Other

 

Total

 

 

 

 



Stock

 

Paid-in

 

Net

 

Cumulative

 

Comprehensive

 

Stockholders’

 

Noncontrolling

 

Total



Par Value

 

Capital

 

Earnings

 

Dividends

 

Loss

 

Equity

 

Interest

 

Equity

Balance at December 31, 2017 (198,309 common shares & 8,772 Omega OP Units) 

$

19,831 

 

$

4,936,302 

 

$

1,839,356 

 

$

(3,210,248)

 

$

(30,150)

 

$

3,555,091 

 

$

333,167 

 

$

3,888,258 

 Cumulative effect of accounting change (see Note 1)

 

 -

 

 

 -

 

 

9,577 

 

 

 -

 

 

 -

 

 

9,577 

 

 

423 

 

 

10,000 

Balance at January 1, 2018 (198,309 common shares & 8,772 Omega OP Units)

 

19,831 

 

 

4,936,302 

 

 

1,848,933 

 

 

(3,210,248)

 

 

(30,150)

 

 

3,564,668 

 

 

333,590 

 

 

3,898,258 

Grant of restricted stock to company directors (38 shares at $30.36 per share)

 

 

 

(4)

 

 

 -

 

 

 -

 

 

 -

 

 

 -

 

 

 -

 

 

 -

Stock-based compensation expense

 

 -

 

 

12,107 

 

 

 -

 

 

 -

 

 

 -

 

 

12,107 

 

 

 -

 

 

12,107 

Vesting/exercising of equity compensation plan, net of tax withholdings (89 shares)

 

 

 

(1,663)

 

 

 -

 

 

 -

 

 

 -

 

 

(1,654)

 

 

 -

 

 

(1,654)

Dividend reinvestment and stock purchase plan (1,257 shares at an average of $29.36 per share)

 

126 

 

 

36,778 

 

 

 -

 

 

 -

 

 

 -

 

 

36,904 

 

 

 -

 

 

36,904 

Deferred compensation directors (35 shares at $30.42 per share)

 

 

 

191 

 

 

 -

 

 

 -

 

 

 -

 

 

194 

 

 

 -

 

 

194 

Equity Shelf Program (912 shares at $29.82 per share, net of issuance costs)

 

91 

 

 

27,111 

 

 

 -

 

 

 -

 

 

 -

 

 

27,202 

 

 

 -

 

 

27,202 

Common dividends declared ($1.98 per share)

 

 -

 

 

 -

 

 

 -

 

 

(395,933)

 

 

 -

 

 

(395,933)

 

 

 -

 

 

(395,933)

Conversion of Omega OP Units to common stock (53 share at $32.98 per share)

 

 

 

1,722 

 

 

 -

 

 

 -

 

 

 -

 

 

1,727 

 

 

 -

 

 

1,727 

Redemption of Omega OP Units (57 units at $32.52 per share)

 

 -

 

 

 -

 

 

 -

 

 

 -

 

 

 -

 

 

 -

 

 

(1,845)

 

 

(1,845)

Omega OP Units distributions 

 

 -

 

 

 -

 

 

 -

 

 

 -

 

 

 -

 

 

 -

 

 

(17,645)

 

 

(17,645)

Comprehensive income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation

 

 -

 

 

 -

 

 

 -

 

 

 -

 

 

(9,390)

 

 

(9,390)

 

 

(412)

 

 

(9,802)

Cash flow hedges

 

 -

 

 

 -

 

 

 -

 

 

 -

 

 

7,158 

 

 

7,158 

 

 

314 

 

 

7,472 

Net income

 

 -

 

 

 -

 

 

219,362 

 

 

 -

 

 

 -

 

 

219,362 

 

 

9,619 

 

 

228,981 

Total comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

226,651 

Balance at September 30, 2018 (200,693 shares & 8,715 Omega OP Units) 

$

20,069 

 

$

5,012,544 

 

$

2,068,295 

 

$

(3,606,181)

 

$

(32,382)

 

$

3,462,345 

 

$

323,621 

 

$

3,785,966 



See notes to consolidated financial statements.







 

5


 

 



OMEGA HEALTHCARE INVESTORS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

Unaudited (in thousands)





 

 

 

 

 

 



 

Nine Months Ended



 

September 30,



 

2018

 

2017

Cash flows from operating activities

 

 

 

 

 

 

Net income 

 

$

228,981 

 

$

39,754 

Adjustment to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

Depreciation and amortization 

 

 

210,681 

 

 

212,268 

Impairment on real estate properties 

 

 

31,860 

 

 

35,610 

Impairment on direct financing leases

 

 

15 

 

 

197,968 

Provision for uncollectible accounts 

 

 

6,363 

 

 

13,667 

Interest - amortization of deferred financing costs

 

 

6,723 

 

 

17,468 

Accretion of direct financing leases

 

 

89 

 

 

(6,139)

Stock-based compensation expense

 

 

12,107 

 

 

11,350 

Gain on assets sold – net

 

 

(9,248)

 

 

(7,491)

Amortization of acquired in-place leases - net

 

 

(7,518)

 

 

(9,101)

Effective yield receivable on mortgage notes

 

 

(889)

 

 

(1,558)

Interest paid-in-kind

 

 

(4,944)

 

 

 -

Change in operating assets and liabilities – net:

 

 

 

 

 

 

Contractual receivables

 

 

2,265 

 

 

(35,418)

Straight-line rent receivables

 

 

(46,787)

 

 

(13,559)

Lease inducements

 

 

(32,315)

 

 

1,342 

Other operating assets and liabilities

 

 

(48,918)

 

 

(28,893)

Net cash provided by operating activities

 

 

348,465 

 

 

427,268 

Cash flows from investing activities

 

 

 

 

 

 

Acquisition of real estate

 

 

(52,744)

 

 

(345,268)

Net proceeds from sale of real estate investments

 

 

246,351 

 

 

69,788 

Investments in construction in progress

 

 

(98,760)

 

 

(69,409)

Investments in direct financing leases

 

 

 -

 

 

(6,951)

Proceeds from sale of direct financing lease

 

 

16,947 

 

 

33,074 

Placement of mortgage loans

 

 

(62,185)

 

 

(29,324)

Collection of mortgage principal

 

 

25,612 

 

 

1,058 

Distributions from unconsolidated joint venture

 

 

4,407 

 

 

10,966 

Capital improvements to real estate investments

 

 

(24,425)

 

 

(25,293)

Receipts from insurance proceeds

 

 

6,911 

 

 

 -

Investments in other investments 

 

 

(374,784)

 

 

(86,075)

Proceeds from other investments 

 

 

162,118 

 

 

45,045 

Cash acquired

 

 

 -

 

 

2,341 

Net cash used in investing activities

 

 

(150,552)

 

 

(400,048)

Cash flows from financing activities

 

 

 

 

 

 

Proceeds from credit facility borrowings 

 

 

1,003,000 

 

 

1,487,000 

Payments on credit facility borrowings

 

 

(933,000)

 

 

(1,312,000)

Receipts of other long-term borrowings

 

 

 -

 

 

1,346,749 

Payments of other long-term borrowings

 

 

(2,049)

 

 

(1,252,463)

Payments of financing related costs

 

 

(8)

 

 

(29,198)

Receipts from dividend reinvestment plan 

 

 

36,904 

 

 

30,136 

Payments for exercised options and restricted stock

 

 

(1,654)

 

 

(2,120)

Net proceeds from issuance of common stock 

 

 

27,202 

 

 

22,196 

Dividends paid

 

 

(395,738)

 

 

(373,424)

Redemption of Omega OP Units

 

 

(118)

 

 

(48)

Distributions to Omega OP Unit Holders

 

 

(17,645)

 

 

(16,819)

Net cash used in financing activities

 

 

(283,106)

 

 

(99,991)

Effect of foreign currency translation on cash, cash equivalents and restricted cash

 

 

(476)

 

 

409 

Decrease in cash, cash equivalents and restricted cash

 

 

(85,669)

 

 

(72,362)

Cash, cash equivalents and restricted cash at beginning of period

 

 

96,808 

 

 

107,276 

Cash, cash equivalents and restricted cash at end of period

 

$

11,139 

 

$

34,914 

See notes to consolidated financial statements.





6

 


 

 

OHI HEALTHCARE PROPERTIES LIMITED PARTNERSHIP

CONSOLIDATED BALANCE SHEETS

(in thousands, except per share amounts)







 

 

 

 

 

 



 

 

 

 

 

 



 

September 30,

 

December 31,



 

2018

 

2017



 

(Unaudited)

 

 

 

ASSETS

 

 

 

 

 

 

Real estate properties

 

 

 

 

 

 

Real estate investments

 

$

7,700,636 

 

$

7,655,960 

Less accumulated depreciation

 

 

(1,515,846)

 

 

(1,376,828)

Real estate investments – net

 

 

6,184,790 

 

 

6,279,132 

Investments in direct financing leases – net

 

 

163,467 

 

 

364,965 

Mortgage notes receivable – net

 

 

708,178 

 

 

671,232 



 

 

7,056,435 

 

 

7,315,329 

Other investments – net

 

 

511,668 

 

 

276,342 

Investment in unconsolidated joint venture

 

 

32,159 

 

 

36,516 

Assets held for sale – net

 

 

17,826 

 

 

86,699 

Total investments

 

 

7,618,088 

 

 

7,714,886 



 

 

 

 

 

 

Cash and cash equivalents

 

 

9,768 

 

 

85,937 

Restricted cash 

 

 

1,371 

 

 

10,871 

Accounts receivable – net

 

 

336,825 

 

 

279,334 

Goodwill

 

 

644,201 

 

 

644,690 

Other assets

 

 

31,711 

 

 

37,587 

Total assets

 

$

8,641,964 

 

$

8,773,305 



 

 

 

 

 

 

LIABILITIES AND OWNERS’ EQUITY

 

 

 

 

 

 

Term loan – net

 

$

99,521 

 

$

99,423 

Secured borrowings – net

 

 

 -

 

 

53,098 

Accrued expenses and other liabilities

 

 

205,583 

 

 

226,028 

Deferred income taxes

 

 

14,198 

 

 

17,747 

Intercompany loans payable

 

 

4,536,696 

 

 

4,488,751 

Total liabilities

 

 

4,855,998 

 

 

4,885,047 



 

 

 

 

 

 

Owners’ Equity:

 

 

 

 

 

 

General partners’ equity

 

 

3,462,345 

 

 

3,555,091 

Limited partners’ equity

 

 

323,621 

 

 

333,167 

Total owners’ equity

 

 

3,785,966 

 

 

3,888,258 

Total liabilities and owners’ equity

 

$

8,641,964 

 

$

8,773,305 



See notes to consolidated financial statements.

 

7

 


 

 



OHI HEALTHCARE PROPERTIES LIMITED PARTNERSHIP

CONSOLIDATED STATEMENTS OF OPERATIONS

Unaudited

(in thousands, except per share amounts)







 

 

 

 

 

 

 

 

 

 

 

 



 

Three Months Ended

 

Nine Months Ended



 

September 30,

 

September 30,



 

2018

 

2017

 

2018

 

2017

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

Rental income

 

$

192,276 

 

$

194,063 

 

$

579,075 

 

$

580,597 

Income from direct financing leases

 

 

264 

 

 

614 

 

 

1,374 

 

 

31,722 

Mortgage interest income

 

 

18,396 

 

 

16,920 

 

 

51,809 

 

 

49,173 

Other investment income

 

 

10,259 

 

 

7,245 

 

 

27,883 

 

 

21,437 

Miscellaneous income

 

 

657 

 

 

796 

 

 

1,791 

 

 

4,250 

Total operating revenues

 

 

221,852 

 

 

219,638 

 

 

661,932 

 

 

687,179 



 

 

 

 

 

 

 

 

 

 

 

 

Expenses

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

70,711 

 

 

71,925 

 

 

210,681 

 

 

212,268 

General and administrative

 

 

14,240 

 

 

11,560 

 

 

45,952 

 

 

35,625 

Acquisition costs

 

 

 -

 

 

 -

 

 

 -

 

 

(22)

Impairment on real estate properties

 

 

22,868 

 

 

17,837 

 

 

26,685 

 

 

35,610 

Impairment on direct financing leases

 

 

 -

 

 

194,659 

 

 

15 

 

 

197,968 

(Recovery) provision for uncollectible accounts

 

 

(2,000)

 

 

11,899 

 

 

6,363 

 

 

13,667 

Total operating expenses

 

 

105,819 

 

 

307,880 

 

 

289,696 

 

 

495,116 



 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) before other income and expense

 

 

116,033 

 

 

(88,242)

 

 

372,236 

 

 

192,063 

Other income (expense)

 

 

 

 

 

 

 

 

 

 

 

 

Interest income and other - net

 

 

(1,214)

 

 

 

 

496 

 

 

262 

Interest expense

 

 

(47,764)

 

 

(47,383)

 

 

(143,857)

 

 

(140,509)

Interest – amortization of deferred financing costs

 

 

(2,238)

 

 

(2,228)

 

 

(6,723)

 

 

(7,273)

Interest – refinancing costs

 

 

 -

 

 

 -

 

 

 -

 

 

(21,965)

Contractual settlement

 

 

 -

 

 

 -

 

 

 -

 

 

10,412 

Realized gain on foreign exchange

 

 

27 

 

 

95 

 

 

20 

 

 

235 

Total other expense

 

 

(51,189)

 

 

(49,512)

 

 

(150,064)

 

 

(158,838)



 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) before (loss) gain on assets sold

 

 

64,844 

 

 

(137,754)

 

 

222,172 

 

 

33,225 

(Loss) gain on assets sold – net

 

 

(5,361)

 

 

693 

 

 

9,248 

 

 

7,491 

Income (loss) from continuing operations

 

 

59,483 

 

 

(137,061)

 

 

231,420 

 

 

40,716 

Income tax expense

 

 

(804)

 

 

(999)

 

 

(2,185)

 

 

(2,690)

Income (loss) from unconsolidated joint venture

 

 

383 

 

 

545 

 

 

(254)

 

 

1,728 

Net income (loss)

 

$

59,062 

 

$

(137,515)

 

$

228,981 

 

$

39,754 



 

 

 

 

 

 

 

 

 

 

 

 

Earnings per unit:

 

 

 

 

 

 

 

 

 

 

 

 

Basic: