Omega Healthcare Investors Inc Q2 2022 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Connor Serge Siversky - Joh. Berenberg, Gossler & Co. KG, Research Division - Analyst : I'm going to lump a couple together here pertaining to Guardian. So as the restructuring effort effectively complete, are there any other moving pieces that you are taking into consideration here? And then for the master lease agreement revised to $24 million in annual rents to be paid to OHI, could you quantify at all what kind of haircut you would be taking on the remaining facilities as if -- compared to a more normalized or pre-pandemic environment?

Question: Connor Serge Siversky - Joh. Berenberg, Gossler & Co. KG, Research Division - Analyst : Okay. Understood. And then similarly, as it relates to Agemo, I mean, it sort of stands out that there's been less disclosure on paper compared to Guardian, and obviously, it's a limitation on how much you can speak on the subject. But would you be willing to take a similar -- or are you looking to take a similar strategy that you took with restructuring the Guardian portfolio? And understanding that Agemo operates in a number of different markets, is there any kind of rhyme or reason you're looking at as to which assets you would potentially be looking to keep versus what would be sold or repositioned?

Question: Nicholas Philip Yulico - Scotiabank Global Banking and Markets, Research Division - Analyst : First question was just going back to the 3.4% operator. I just want to make sure that I understand this correctly in terms of the operators paying rent again. I think you said it's also paid in July. But at the same time, you described in the release how they pretty much maxed out their line of credit facility. And so I just want to make sure that for that operator, that we should be fully confident that they're going to continue to pay rent. Or was there a chance that some of the drawing on the credit facility was actually being used to help pay rent?

Question: Nicholas Philip Yulico - Scotiabank Global Banking and Markets, Research Division - Analyst : Okay. But the way you described it in the release, I just want to make sure I'm clear on this. Was there -- from the beginning of the year since when they weren't paying rent to June 30 when they were fully paying rent, how much did they draw on the credit facility with your company?

Question: Nicholas Philip Yulico - Scotiabank Global Banking and Markets, Research Division - Analyst : Got it. Okay. That's helpful, Bob. So the other question I had was in terms of the new investments you made, the mezz loan and the preferred equity investment. Are those both fully cash paying loans?

Question: Nicholas Philip Yulico - Scotiabank Global Banking and Markets, Research Division - Analyst : Okay. And then just following up on the mezz loan, the working capital loan, I mean, what -- can you just describe sort of the health of the operator that you helped fund there? I mean is this a troubled operator that needed capital and we need to worry about -- it's an operator that maybe we don't -- that hasn't gone through any sort of nonpayment of rent yet?

Question: Nicholas Philip Yulico - Scotiabank Global Banking and Markets, Research Division - Analyst : Okay. Great. And just one last question, I guess, is on the dividend. How we should think about that. It's pretty much paying out most of AFFO right now. If you look at your cash flow statement, you're paying out more in your dividends than you're getting an operating cash flow. So I mean what's the Board thinking in terms of the ability to keep the dividend as it is?

Question: Omotayo Tejamude Okusanya - CrTdit Suisse AG, Research Division - Analyst : Yes. So I just wanted to get back to something a little bit different. In the quarter, you guys kind of disclosed a legal reserve. I'm just kind of curious what that may have been in regards to. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 02, 2022 / 2:00PM, OHI.N - Q2 2022 Omega Healthcare Investors Inc Earnings Call

Question: Omotayo Tejamude Okusanya - CrTdit Suisse AG, Research Division - Analyst : Okay. That's helpful. And then, Taylor, I mean, some of the comments you've made, I mean, I guess I'm kind of reading cause of optimism from you and the rest of the team in regards to there could still be some near-term challenges, but the worst is over. I mean is that what you really kind of want us to kind of take away from the call? Or should we still be concerned about potential for things to get worse before they get better?

Question: Omotayo Tejamude Okusanya - CrTdit Suisse AG, Research Division - Analyst : And Texas being the biggest wildcard for you guys?