Omega Announces Second Quarter 2013 Financial Results; Adjusted FFO of $0.62 Per Share for the Second Quarter

  Omega Announces Second Quarter 2013 Financial Results; Adjusted FFO of $0.62
  Per Share for the Second Quarter

Business Wire

HUNT VALLEY, Md. -- July 31, 2013

Omega Healthcare Investors, Inc. (NYSE:OHI) (the “Company” or “Omega”) today
announced its results of operations for the three- and six-month period ended
June 30, 2013. The Company also reported Funds From Operations (“FFO”)
available to common stockholders for the three-month period ended June 30,
2013 of $82.4 million or $0.70 per common share. The $82.4 million of FFO
available to common stockholders for the second quarter of 2013 includes an
$11.1 million gain related to the early extinguishment of debt, $1.5 million
of non-cash stock-based compensation expense and a $65 thousand provision for
uncollectible straight-line accounts receivable. The $11.1 million interest
refinancing adjustment (gain) is related to the write-off of the remaining
fair market value debt adjustment on 11 mortgage loans the Company paid off in
May 2013. FFO is presented in accordance with the guidelines for the
calculation and reporting of FFO issued by the National Association of Real
Estate Investment Trusts (“NAREIT”). Normalized or Adjusted FFO was $0.62 per
common share for the three-month period ended June 30, 2013. FFO and Adjusted
FFO are non-GAAP financial measures. Normalized or Adjusted FFO is calculated
as FFO available to common stockholders excluding the impact of certain
non-cash items and certain items of revenue or expense, including, but not
limited to: acquisitions, refinancing interest expenses, provisions for
uncollectible accounts receivable and stock-based compensation expense. For
more information regarding FFO and Adjusted FFO, see the “Second Quarter 2013
Results – Funds From Operations” section below.

GAAP NET INCOME

For the three-month period ended June 30, 2013, the Company reported net
income available to common stockholders of $49.1 million, or $0.42 per diluted
common share, on operating revenues of $102.5 million. This compares to net
income available to common stockholders of $30.6 million, or $0.29 per diluted
common share, on operating revenues of $83.8 million, for the same period in
2012.

For the six-month period ended June 30, 2013, the Company reported net income
available to common stockholders of $87.2 million, or $0.76 per diluted common
share, on operating revenues of $204.3 million. This compares to net income
available to common stockholders of $56.7 million, or $0.54 per diluted common
share, on operating revenues of $168.3 million, for the same period in 2012.

The year-to-date increase in net income was primarily due to: (i) additional
rental income and mortgage interest income associated with approximately $510
million of new investments made since the second quarter of 2012 and (ii) an
$11.1 million interest refinancing adjustment (gain) recorded in the second
quarter of 2013. These increases to net income were partially offset by (i)
increased expenses associated with new investments made throughout 2012 and
2013, including: (a) $9.8 million in increased depreciation expense and (b)
$3.6 million in increased interest expense and (ii) $5.4 million in interest
refinancing costs relating to 2012 refinancing activities.

SECOND QUARTER 2013 HIGHLIGHTS AND OTHER RECENT DEVELOPMENTS

  *In July 2013, the Company increased its quarterly common stock dividend to
    $0.47 per share.
  *In Q2 2013, the Company paid off $51 million of long-term debt.
  *In Q2 2013, the Company completed $25 million of new investments.
  *In Q2 2013, the Company completed $10 million of capital renovation
    projects.
  *In April 2013, the Company increased its quarterly common stock dividend
    to $0.46 per share.

SECOND QUARTER 2013 RESULTS

Operating Revenues and Expenses – Operating revenues for the three-month
period ended June 30, 2013 were $102.5 million. Operating expenses for the
three-month period ended June 30, 2013 totaled $37.8 million and were
comprised of $32.2 million of depreciation and amortization expense, $4.0
million of general and administrative expense, $1.5 million of stock-based
compensation expense and a $65 thousand provision for uncollectible
straight-line accounts receivable.

Other Income and Expense – Other income and expense for the three-month period
ended June 30, 2013 was a net expense of $14.5 million, which was comprised of
$25.0 million of interest expense and $0.7 million of amortized deferred
financing costs. The Company also recorded an $11.1 million interest
refinancing adjustment (gain) related to the write-off of the remaining fair
market value debt adjustment on 11 mortgage loans that the Company paid off in
May 2013.

Funds From Operations – For the three-month period ended June 30, 2013,
reportable FFO available to common stockholders was $82.4 million, or $0.70
per common share on 117 million weighted-average common shares outstanding,
compared to $55.8 million, or $0.53 per common share on 106 million
weighted-average common shares outstanding, for the same period in 2012.

The $82.4 million of FFO for the three-month period ended June 30, 2013
includes the impact of the $11.1 million interest refinancing adjustment
(gain), $1.5 million of stock-based compensation expense and the $65 thousand
provision for uncollectible straight-line accounts receivable.

The $55.8 million of FFO for the three-month period ended June 30, 2012
includes the impact of the $1.7 million interest refinancing adjustment
(gain), $1.5 million of stock-based compensation expense and $0.1 million of
expense associated with recently completed acquisitions.

Adjusted FFO was $72.9 million, or $0.62 per common share, for the three
months ended June 30, 2013, compared to $55.7 million, or $0.53 per common
share, for the same period in 2012. The Company had 11.0 million additional
weighted-average shares outstanding for the three months ended June 30, 2013
compared to the same period in 2012. For further information see “Funds From
Operations” below.

FINANCING ACTIVITIES

$51 Million HUD Mortgage Payoffs – On May 31, 2013, the Company paid
approximately $51 million to retire 11 mortgage loans guaranteed by the
Department of Housing and Urban Development (“HUD”). The loans were assumed as
part of the June 2010 purchase of 40 skilled nursing facilities (“SNFs”) from
affiliates of CapitalSource, Inc. and had a blended interest rate of 6.61% per
annum with maturities between January 2036 and May 2040. The payoff resulted
in an $11.1 million gain on the extinguishment of the debt due to the
write-off of the remaining fair market value adjustment offset by a prepayment
fee of $0.2 million.

Equity Shelf Program and Dividend Reinvestment and Common Stock Purchase Plan
– During the six-month period ended June 30, 2013, the Company sold the
following shares of its common stock under its Equity Shelf Programs and its
Dividend Reinvestment and Common Stock Purchase Plan:


Equity Shelf (At-The-Market) Program for 2013
(in thousands, except price per share)
                                            
                          Q1         Q2         Year
                          Total      Total      To Date
                                                
Number of shares            2,440      839        3,279
Average price per share   $ 28.95    $ 35.74    $ 30.69
Gross proceeds            $ 70,643   $ 29,999   $ 100,642
                                                  


Dividend Reinvestment and Common Stock Purchase Program for 2013
(in thousands, except price per share)
                                                  
                            Q1            Q2           Year
                            Total         Total        To Date
                                                       
Number of shares               1,315         147          1,462
Average price per share     $  27.63      $  35.89     $  28.46
Gross proceeds              $  36,343     $  5,280     $  41,623
                                                          

2013 PORTFOLIO AND RECENT DEVELOPMENTS

$25 Million Mezzanine Loan – On May 2, 2013, the Company invested $24.9
million in a mezzanine loan with a third party. The loan bears interest at 12%
per annum and matures in December 2017.

$10 Million of Capital Renovation Projects in Q2 2013 – For the three-month
period ending June 30, 2013, the Company invested approximately $10 million
under its capital renovation programs.

Facility Sales – For the three-month period ended June 30, 2013, the Company
sold one facility in Texas for total cash proceeds of $2.2 million, resulting
in a loss on sale of $1.2 million.

DIVIDENDS

On July 17, 2013,  the Company’s Board of Directors announced a common stock
dividend of $0.47 per share, increasing the quarterly common dividend by $0.01
per share over the prior quarter, to be paid August 15, 2013 to common
stockholders of record on July 31, 2013.

2013 ADJUSTED FFO AND ADJUSTED FAD GUIDANCE

The Company revised its 2013 Adjusted FFO available to common stockholders to
be between $2.48 and $2.51 per diluted share and its 2013 Adjusted Funds
Available For Distribution (“FAD”) available to common stockholders to be
between $2.23 and $2.26 per diluted share.

The Company's Adjusted FFO and Adjusted FAD guidance for 2013 includes
approximately $200 million of new investments (including capital renovation
projects); however, it excludes the impact of gains and losses from the sale
of assets, additional divestitures, certain revenue and expense items,
interest refinancing expense, capital transactions and stock-based
compensation expense. A reconciliation of the Adjusted FFO and FAD guidance to
the Company's projected GAAP earnings is provided on schedules attached to
this press release. The Company may, from time to time, update its publicly
announced Adjusted FFO and FAD guidance, but it is not obligated to do so.

The Company's Adjusted FFO and FAD guidance is based on a number of
assumptions, which are subject to change and many of which are outside the
Company’s control. If actual results vary from these assumptions, the
Company's expectations may change. Without limiting the generality of the
foregoing, the timing and completion of acquisitions, divestitures, capital
and financing transactions, and variations in restricted stock amortization
expense may cause actual results to vary materially from our current
expectations. There can be no assurance that the Company will achieve its
projected results.

CONFERENCE CALL

The Company will be conducting a conference call on Thursday, August 1, 2013,
at 10 a.m. Eastern to review the Company’s 2013 second quarter results and
current developments. Analysts and investors within the United States
interested in participating are invited to call (888) 317-6016. The Canadian
toll-free dial-in number is (855) 669-9657. All other international
participants can use the dial-in number (412) 317-6016. Ask the operator to be
connected to the “Omega Healthcare’s Second Quarter 2013 Earnings Call.”

To listen to the conference call via webcast, log on to
www.omegahealthcare.com and click the “earnings call” icon on the Company’s
home page. Webcast replays of the call will be available on the Company’s
website for two weeks following the call.

The Company is a real estate investment trust investing in and providing
financing to the long-term care industry. At June 30, 2013, the Company owned
or held mortgages on 477 skilled nursing facilities, assisted living
facilities and other specialty hospitals with approximately 55,075 licensed
beds (52,890 available beds) located in 33 states and operated by 47
third-party healthcare operating companies.

This announcement includes forward-looking statements, including without
limitation the information under the heading “2013 Adjusted FFO and Adjusted
FAD Guidance Confirmed.” Actual results may differ materially from those
reflected in such forward-looking statements as a result of a variety of
factors, including, among other things: (i) uncertainties relating to the
business operations of the operators of the Company’s properties, including
those relating to reimbursement by third-party payors, regulatory matters and
occupancy levels; (ii) regulatory and other changes in the healthcare sector;
(iii) changes in the financial position of the Company’s operators; (iv) the
ability of any of the Company’s operators in bankruptcy to reject unexpired
lease obligations, modify the terms of the Company’s mortgages and impede the
ability of the Company to collect unpaid rent or interest during the pendency
of a bankruptcy proceeding and retain security deposits for the debtor's
obligations; (v) the availability and cost of capital; (vi) changes in the
Company’s credit ratings and the ratings of its debt securities; (vii)
competition in the financing of healthcare facilities; (viii) the Company’s
ability to maintain its status as a real estate investment trust; (ix) the
Company’s ability to manage, re-lease or sell any owned and operated
facilities; (x) the Company’s ability to sell closed or foreclosed assets on a
timely basis and on terms that allow the Company to realize the carrying value
of these assets; (xi) the effect of economic and market conditions generally,
and particularly in the healthcare industry; and (xii) other factors
identified in the Company’s filings with the Securities and Exchange
Commission. Statements regarding future events and developments and the
Company’s future performance, as well as management's expectations, beliefs,
plans, estimates or projections relating to the future, are forward-looking
statements. The Company undertakes no obligation to update any forward-looking
statements contained in this announcement.


OMEGA HEALTHCARE INVESTORS, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands)
                                                             
                                               June 30,         December 31,
                                               2013            2012
                                               (Unaudited)
ASSETS
Real estate properties
Land and buildings                             $ 3,051,363      $ 3,038,553
Less accumulated depreciation                   (643,514   )   (580,373   )
Real estate properties – net                     2,407,849        2,458,180
Mortgage notes receivable – net                 241,254       238,621    
                                                 2,649,103        2,696,801
Other investments – net                         74,646        47,339     
                                                 2,723,749        2,744,140
Assets held for sale – net                      1,020         1,020      
Total investments                                2,724,769        2,745,160
                                                                
Cash and cash equivalents                        7,039            1,711
Restricted cash                                  40,127           36,660
Accounts receivable – net                        138,059          125,180
Other assets                                    69,802        73,294     
Total assets                                   $ 2,979,796    $ 2,982,005  
                                                                
LIABILITIES AND STOCKHOLDERS’ EQUITY
Revolving line of credit                       $ 5,000          $ 158,000
Term loan                                        200,000          100,000
Secured borrowings                               301,526          366,538
Unsecured borrowings – net                       1,200,139        1,200,394
Accrued expenses and other liabilities          135,835       145,744    
Total liabilities                               1,842,500     1,970,676  
                                                                
Stockholders’ equity:
Common stock $.10 par value authorized –                         
200,000 shares issued and outstanding
117,152 shares as of June 30, 2013 and           11,715           11,239
112,393 as of December 31, 2012
Common stock – additional paid-in capital        1,807,201        1,664,855
Cumulative net earnings                          841,306          754,128
Cumulative dividends paid                       (1,522,926 )   (1,418,893 )
Total stockholders’ equity                      1,137,296     1,011,329  
Total liabilities and stockholders’ equity     $ 2,979,796    $ 2,982,005  


OMEGA HEALTHCARE INVESTORS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
Unaudited
(in thousands, except per share amounts)
                                                  
                         Three Months Ended          Six Months Ended
                         June 30,                    June 30,
                         2013         2012         2013         2012
Revenue                                                         
Rental income            $ 93,069      $ 75,228      $ 186,178     $ 151,203
Mortgage interest          7,435         7,404         14,781        14,740
income
Other investment           1,860         1,165         3,166         2,295
income – net
Miscellaneous             151         28          151         102     
Total operating            102,515       83,825        204,276       168,340
revenues
                                                                   
Expenses
Depreciation and           32,225        27,199        64,184        54,346
amortization
General and                4,011         3,468         7,756         7,509
administrative
Stock-based                1,472         1,486         2,924         2,971
compensation expense
Acquisition costs          9             98            143           203
Impairment loss on         -             -             -             272
real estate properties
Provisions for
uncollectible             65          -           65          -       
mortgages, notes and
accounts receivable
Total operating            37,782        32,251        75,072        65,301
expenses
                                                                   
Income before other        64,733        51,574        129,204       103,039
income and expense
Other income (expense)
Interest income            14            9             17            16
Interest expense           (24,952 )     (24,009 )     (50,624 )     (46,976 )
Interest –
amortization of            (698    )     (668    )     (1,380  )     (1,297  )
deferred financing
costs
Interest – refinancing    11,112      1,698       11,112      (5,410  )
gain (costs)
Total other expense        (14,524 )     (22,970 )     (40,875 )     (53,667 )
                                                                   
Income before (loss)       50,209        28,604        88,329        49,372
gain on assets sold
(Loss) gain on assets     (1,151  )    1,968       (1,151  )    7,284   
sold – net
Net income available     $ 49,058     $ 30,572     $ 87,178     $ 56,656  
to common stockholders
                                                                   
Income per common
share available to
common shareholders:
Basic:
Net income               $ 0.42       $ 0.29       $ 0.76       $ 0.54    
Diluted:
Net income               $ 0.42       $ 0.29       $ 0.76       $ 0.54    
                                                                   
Dividends declared and   $ 0.46       $ 0.42       $ 0.91       $ 0.83    
paid per common share
                                                                   
Weighted-average
shares outstanding,       116,199     105,717     114,491     104,736 
basic
Weighted-average
shares outstanding,       117,022     106,033     115,273     105,023 
diluted


OMEGA HEALTHCARE INVESTORS, INC.
FUNDS FROM OPERATIONS
Unaudited
(in thousands, except per share amounts)
                                                  
                         Three Months Ended          Six Months Ended
                         June 30,                    June 30,
                         2013         2012          2013         2012
                                                                
Net income available     $ 49,058      $ 30,572      $ 87,178      $ 56,656
to common stockholders
Add back loss (deduct
gain) from real estate    1,151       (1,968  )    1,151       (7,284  )
dispositions
Sub – total                50,209        28,604        88,329        49,372
Elimination of
non-cash items
included in net
income:
Depreciation and           32,225        27,199        64,184        54,346
amortization
Add back non-cash
provision for             —           —           —           272     
impairments on real
estate properties
Funds from operations
available to common      $ 82,434     $ 55,803     $ 152,513    $ 103,990 
stockholders
                                                                   
Weighted-average
common shares              116,199       105,717       114,491       104,736
outstanding, basic
Restricted stock and       786           299           750           270
PRSUs
Deferred stock            37          17          32          17      
Weighted-average
common shares             117,022     106,033     115,273     105,023 
outstanding, diluted
                                                                   
Funds from operations
per share available to   $ 0.70       $ 0.53       $ 1.32       $ 0.99    
common stockholders
                                                                   
Adjusted funds from
operations:
Funds from operations
available to common      $ 82,434      $ 55,803      $ 152,513     $ 103,990
stockholders
Add back non-cash
provision for              65            —             65            —
uncollectible accounts
receivable
(Deduct)/add back
interest refinancing       (11,112 )     (1,698  )     (11,112 )     5,410
expense
Add back acquisition       9             98            143           203
costs
Add back non-cash
stock-based               1,472       1,486       2,924       2,971   
compensation expense
Adjusted funds from
operations available     $ 72,868     $ 55,689     $ 144,533    $ 112,574 
to common stockholders

This press release includes Funds From Operations, or FFO, which is a non-GAAP
financial measure. For purposes of the Securities and Exchange Commission’s
Regulation G, a non-GAAP financial measure is a numerical measure of a
company’s historical or future financial performance, financial position or
cash flows that excludes amounts, or is subject to adjustments that have the
effect of excluding amounts, that are included in the most directly comparable
financial measure calculated and presented in accordance with GAAP in the
statement of operations, balance sheet or statement of cash flows (or
equivalent statements) of the company, or includes amounts, or is subject to
adjustments that have the effect of including amounts, that are excluded from
the most directly comparable financial measure so calculated and presented. As
used in this press release, GAAP refers to generally accepted accounting
principles in the United States of America. Pursuant to the requirements of
Regulation G, the Company has provided reconciliations of the non-GAAP
financial measures to the most directly comparable GAAP financial measures.

The Company calculates and reports FFO in accordance with the definition and
interpretive guidelines issued by the National Association of Real Estate
Investment Trusts ("NAREIT"), and consequently, FFO is defined as net income
available to common stockholders, adjusted for the effects of asset
dispositions and certain non-cash items, primarily depreciation and
amortization and impairments on real estate assets. The Company believes that
FFO is an important supplemental measure of its operating performance. Because
the historical cost accounting convention used for real estate assets requires
depreciation (except on land), such accounting presentation implies that the
value of real estate assets diminishes predictably over time, while real
estate values instead have historically risen or fallen with market
conditions. The term FFO was designed by the real estate industry to address
this issue. FFO described herein is not necessarily comparable to FFO of other
real estate investment trusts, or REITs, that do not use the same definition
or implementation guidelines or interpret the standards differently from the
Company.

The Company uses FFO as one of several criteria to measure the operating
performance of its business. The Company further believes that by excluding
the effect of depreciation, amortization, impairments on real estate assets
and gains or losses from sales of real estate, all of which are based on
historical costs and which may be of limited relevance in evaluating current
performance, FFO can facilitate comparisons of operating performance between
periods and between other REITs. The Company offers this measure to assist the
users of its financial statements in analyzing its performance; however, this
is not a measure of financial performance under GAAP and should not be
considered a measure of liquidity, an alternative to net income or an
indicator of any other performance measure determined in accordance with GAAP.
Investors and potential investors in the Company’s securities should not rely
on this measure as a substitute for any GAAP measure, including net income.

Adjusted FFO is calculated as FFO available to common stockholders excluding
the impact of non-cash stock-based compensation and certain revenue and
expense items identified above. The Company believes that Adjusted FFO
provides an enhanced measure of the operating performance of the Company’s
core portfolio as a REIT. The Company’s computation of Adjusted FFO is not
comparable to the NAREIT definition of FFO or to similar measures reported by
other REITs, but the Company believes it is an appropriate measure for this
Company.

The Company currently expects its 2013 Adjusted FFO available to common
stockholders to be between $2.48 and $2.51 per diluted share. The Company also
expects its 2013 Adjusted FAD available to common stockholders to be between
$2.23 and $2.26 per diluted share. The following table presents a
reconciliation of our guidance regarding 2013 FFO and Adjusted FFO and FAD and
Adjusted FAD to net income available to common stockholders:

                                                       2013 Projected Adjusted
                                                     
                                                       FFO and FAD
Per diluted share:
Net income available to common stockholders            $  1.42     − $ 1.44
Add back loss from real estate dispositions              0.01    −  0.01  
Sub total                                                 1.43         1.45
Elimination of non-cash items included in net
income:
Depreciation and amortization                             1.10     −   1.11
Provision for impairment on real estate assets           0.00    −  0.00  
Funds from operations available to common              $  2.53     − $ 2.56
stockholders
                                                                     
Adjustments:
Acquisition costs                                         0.00     −   0.00
Provision for uncollectible accounts receivable           0.00     −   0.00
Interest expense – refinancing costs                      (0.10  ) −   (0.10 )
Stock-based compensation expense                         0.05    −  0.05  
Adjusted funds from operations available to common     $  2.48     − $ 2.51
stockholders
                                                                     
Adjustments:
Non-cash interest expense                                 0.01     −   0.01
Non-cash revenue                                         (0.26  ) −  (0.26 )
Funds available for distributions                      $  2.23    − $ 2.26  

The following tables present selected portfolio information, including
operator and geographic concentrations, and revenue maturities for the period
ended June 30, 2013:

                                                                
                As of June 30, 2013
Balance Sheet   # of          # of        Investment   %
Data            Properties   Operating  ($000’s)    Investment
                              Beds
Real            444          49,194     $           93%
Property^(1)                              3,069,177
Loans           33           3,696      241,254     7%
Receivable
Total           477           52,890      $            100%
Investments                               3,310,431
                
Investment      # of          # of        Investment   %            Investment
Data            Properties   Operating  ($000’s)    Investment  per Bed
                              Beds
Skilled
Nursing         450           51,273      $            95%          $ 62
Facilities                                3,155,891
^(1)
Assisted
Living          16            1,074       91,504       3%           85
Facilities
Specialty
Hospitals and   11           543        63,036      2%          116
Other
                477           52,890      $            100%         $ 63
                                          3,310,431
                                                                    
Note: table above excludes two facilities classified as held-for-sale and one
closed facility.
(1) Includes a $19.2 million lease inducement.


                                                                
Revenue
Composition
($000's)
                                                                 
Revenue by             Three Months Ended              Six Months Ended
Investment Type
                       June 30, 2013                  June 30, 2013
Rental Property        $   93,069        91    %       $   186,178     91   %
^(1)
Mortgage Notes             7,435         7     %           14,781      7    %
Other Investment          1,860        2     %         3,166      2    %
Income
                       $   102,364       100   %       $   204,125     100  %
                                                                 
Revenue by             Three Months Ended              Six Months Ended
Facility Type
                       June 30, 2013                  June 30, 2013
Skilled Nursing        $   96,073        94    %       $   192,103     94   %
Facilities ^(1)
Assisted Living            2,418         2     %           4,835       2    %
Facilities
Specialty                  2,013         2     %           4,021       2    %
Hospitals
Other                     1,860        2     %         3,166      2    %
                       $   102,364       100   %       $   204,125     100  %
                                                                       
(1) 2^nd quarter revenue includes $0.9 million reduction for lease inducement
and $1.9 million year-to-date.


                                
Operator Concentration by         As of June 30, 2013
Investment ($000's)
                                  # of Properties  Investment   % Investment
Genesis Healthcare                52               $ 350,489    11      %
CommuniCare Health Services,      36                  340,964     10      %
Inc.
Health & Hospital Corporation     40                  279,475     9       %
Airamid Health Management         37                  255,125     8       %
Signature Holdings II, LLC        32                  236,101     7       %
S&F Management Company, LLC       14                  212,373     6       %
Advocat Inc.                      36                  150,582     5       %
Gulf Coast Master Tenant I,       17                  146,636     4       %
LLC
Guardian LTC Management Inc.      23                  145,171     4       %
^(1)
Affiliates of Capital Funding     17                  129,697     4       %
Group, Inc.
Remaining 37 Operators            173               1,063,818  32      %
                                  477               $ 3,310,431   100     %
                                                                  
Note: table above excludes two facilities classified as held-for-sale and one
closed facility.
(1) Investment amount includes a $19.2 million lease inducement.

                                                         
Concentration by          # of            Investment         % Investment
State                     Properties
Florida                   85              $   606,219        18       %
Ohio                      50                   370,800         11       %
Indiana                   50                   318,570         10       %
California                22                   187,032         6        %
Pennsylvania              25                   178,817         5        %
Maryland                  16                   174,077         5        %
Texas                     31                   170,225         5        %
Michigan                  21                   154,666         5        %
Arkansas                  23                   125,912         4        %
Tennessee                 16                   118,922         4        %
Arizona                   10                   98,014          3        %
West Virginia ^(1)        11                   94,996          3        %
Colorado                  12                   79,659          2        %
Kentucky                  15                   67,500          2        %
North Carolina            10                   59,296          2        %
Massachusetts             8                    57,347          2        %
Remaining 17 States       72                 448,379        13       %
                          477              $   3,310,431       100      %
Note: table above excludes two facilities classified as held-for-sale and one
closed facility.
(1) Investment amount includes a $19.2 million lease inducement.

                       
Revenue Maturities       As of June 30, 2013
($000's)
Operating Lease                 Current        Current        Lease and
Expirations & Loan       Year  Lease         Interest      Interest   %
Maturities                      Revenue ^(1)   Revenue ^(1)   Revenue
                         2013  268           550           818        0.2%
                         2014   1,054          -              1,054       0.3%
                         2015   3,237          -              3,237       0.9%
                         2016   29,446         -              29,446      7.9%
                         2017   7,527          -              7,527       2.0%
                                                                          
(1) Based on 2013 contractual rents and interest (without giving effect to
annual escalators).

The following tables present operator revenue mix, census and coverage data
based on information provided by our operators:

                                     
Operator Revenue Mix                   % Revenue Mix
                                       Medicaid  Medicare /  Private / Other
                                                  Insurance
                                                            
Three-months ended March 31, 2013      51.9  %    40.2   %     7.9      %
Three-months ended December 31, 2012   53.2  %    38.0   %     8.8      %
Three-months ended September 30,       53.3  %    38.3   %     8.4      %
2012
Three-months ended June 30, 2012       52.6  %    39.1   %     8.3      %
Three-months ended March 31, 2012      52.2  %    39.6   %     8.2      %

                                         
Operator Census and Coverage               Coverage Data
                               Census ^(1)  Before           After
                                             Management Fees   Management Fees
                                                            
Twelve-months ended March      83.9%         2.0x              1.5x
31, 2013
Twelve-months ended December   83.4%         2.0x              1.5x
31, 2012
Twelve-months ended            83.6%         2.0x              1.5x
September 30, 2012
Twelve-months ended June 30,   83.7%         2.0x              1.6x
2012
Twelve-months ended March      83.7%         2.1x              1.7x
31, 2012

(1) Based on available beds.

The following table presents a debt maturity schedule as of June 30, 2013:

                                                             
Debt          Secured
Maturities    Debt         Unsecured Debt                       
($000’s)
              HUD           Line of       Senior        Sub
Year          Mortgages    Credit       Notes ^(4)   Notes     Total Debt
              ^(1)          ^(2)(3)                     ^(5)
2013          $  -         $  -         $ -          $ -        $ -
2014             -             -            -             -          -
2015             -             -            -             -          -
2016             -             500,000      -             -          500,000
2017             -             200,000      -             -          200,000
Thereafter      282,858     -          1,175,000   20,000   1,477,858
              $  282,858   $  700,000   $ 1,175,000  $ 20,000  $ 2,177,858
                                                                   
(1) Excludes $18.7 million of fair market valuation (adjustments).
(2) Reflected at 100% borrowing capacity.
(3) Comprised of a $500 million revolver due 2016 and a $200 million term loan
due 2017.
(4) Excludes net premium of $4.2 million
(5) Excludes $1.0 million of fair market valuation (adjustments).

The following table presents investment activity for the three- and six -
month period ended June 30, 2013:

                                                
Investment Activity ($000's)   Three Months Ended  Six Months Ended
                               June 30, 2013       June 30, 2013
Funding by Investment Type:    $ Amount    %     $ Amount  %   
                                                            
Real Property                  $  -         0   %   $ -        0   %
Mortgages                         821       2   %     2,870    6   %
Other                            33,921   98  %   42,249  94  %
Total                          $  34,742    100 %   $ 45,119   100 %

Contact:

Omega Healthcare Investors, Inc.
Bob Stephenson, CFO, 410-427-1700
 
Press spacebar to pause and continue. Press esc to stop.