Omega Healthcare Investors Inc Q4 2020 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 : Just to start, curious about Brookdale as it was the subject of some lease revisions with some of your peers this year. So anecdotally, I'm just wondering how do those conversations progress with the operator as you near closing? Second to that, what does rent coverage look like currently? And then what kind of occupancy rebound might you be expecting for this portfolio as we look forward the next couple of years?

Question: Connor Serge Siversky - Joh. Berenberg, Gossler & Co. KG, Research Division - Analyst : Okay. That's helpful -- go ahead.

Question: Connor Serge Siversky - Joh. Berenberg, Gossler & Co. KG, Research Division - Analyst : Okay. That's helpful color. And then just double-checking on pricing. So $43 million in rents over $510 million acquisition cost is about 8.5%. Are there any sort of CapEx expectations that you're aware of for this portfolio? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 05, 2021 / 3:00PM, OHI.N - Q4 2020 Omega Healthcare Investors Inc Earnings Call

Question: Connor Serge Siversky - Joh. Berenberg, Gossler & Co. KG, Research Division - Analyst : Okay. And then one more for me. Just anecdotally, I'm thinking about a read across from one of the hospital operators that reported earlier last week, seeing that admissions have picked up meaningfully for inpatient procedures. I'm just wondering if there's any commentary from your operators in regard to referrals to SNFs if that kind of dynamic is improving somewhat as we approach the end of the year.

Question: Nicholas Philip Yulico - Scotiabank Global Banking and Markets, Research Division - Analyst : I guess going back to the cash basis tenants, can you just remind us at this point what percentage of revenue is on a cash basis? And I guess, if we relate that back to Page 6 in the supplement where you guys give the breakdown in coverage. Is that also -- are those tenants also then reflected in this page? Or are they not reflected in this page? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 05, 2021 / 3:00PM, OHI.N - Q4 2020 Omega Healthcare Investors Inc Earnings Call

Question: Nicholas Philip Yulico - Scotiabank Global Banking and Markets, Research Division - Analyst : I apologize. Did you say 14%?

Question: Nicholas Philip Yulico - Scotiabank Global Banking and Markets, Research Division - Analyst : Okay. And then as we relate this back to Page 6, right, and we see the buckets of coverage where certain operators have lower coverage. Are those -- is that 14% of the company reflected on this page or any of those get removed?

Question: Nicholas Philip Yulico - Scotiabank Global Banking and Markets, Research Division - Analyst : Okay. Got it. All right. Got it. So I guess -- I mean, can you -- maybe you can just kind of square that away with us because I know you did talk about, in relation to the guidance, some worries about -- the reason why you didn't give guidance is because there could be maybe some operators having some problems if they don't get additional government stimulus. But if you're already -- I guess, if we look at this page, right, Page 6 in the supplemental, where you have the 2 buckets that have lower coverage, adds up to about 10% of the company. If you're saying 14% of that -- of tenants are already on a cash basis, that would be more than these 2 buckets. So I'm just trying to understand if you face incremental pressure from tenants, have you already -- are you already accounting for that by virtue of the fact that those tenants are on a cash basis? Or is there some additional impact that we should think about that could happen?

Question: Nicholas Philip Yulico - Scotiabank Global Banking and Markets, Research Division - Analyst : Got it. Okay. And so maybe the other way to ask this is, right. So obviously, moving the tenants to a cash basis, there's a straight-line rent impact. But can you just remind us where -- for the tenants that are on a cash basis right now, where they are on payment on a cash basis versus their contractual rents on just sort of a rough feel for that? Because that would, obviously, be the other incremental pressure, I guess, you could face is that you just have lower cash collections on those tenants.

Question: Nicholas Philip Yulico - Scotiabank Global Banking and Markets, Research Division - Analyst : Okay. Got it. That's helpful. Just one other clarification question. When you were talking about the Brookdale coverage earlier, was that EBITDAR or EBITDARM coverage?