Investor Presentation June 2016
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Forward-looking Statements and Non-GAAP Information This presentation may include projections and other “forward -looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements relate to future events and expectations and involve unknown risks and uncertainties. Omega’s actual results or actions may differ materially from those projected in the forward-looking statements. For a summary of the specific risk factors that could cause results to differ materially from those expressed in the forward-looking statements, see Omega’s most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission. This presentation may contain certain non-GAAP financial information including EBITDA, Adjusted EBITDA, Total Adjusted Debt (aka, Funded Debt), Adjusted FFO, Total Cash Fixed Charges and certain related ratios. A reconciliation of these non-GAAP disclosures is available in the Exhibit to this presentation or on our website under “Non -GAAP Financial Measures” at www.omegahealthcare.com. Other financial information is also available on our website. Information is provided as of March 31, 2016, unless specifically stated otherwise. We assume no duty to update or supplement the information provided. Investor Presentation, June, 2016 3
Omega Overview
Omega Overview: Key Credit Highlights Conservative leverage level with Debt / Adj. EBITDA of 4.86x (Q1 2016), in-line with our leverage target Consistent and stable free cash flow with strong fixed charge coverage of 5.0x (Q1 2016) Low Secured debt / Adj. EBITDA of 0.3x and strong commitment to unsecured borrowing structure with ~$9.3B of unencumbered assets Financial Strength Minimal short-term debt maturities Positive ratings trajectory with history of upgrades and commitment to investment grade profile Significant liquidity with $750 million of cash and credit facility availability at 5/5/2016 Strong portfolio TTM rent coverage of 1.8x (EBITDARM) and 1.4x (EBITDAR) at 12/31/2015 Geographic and operator diversification with 83 operators across 42 states and the United Kingdom Portfolio Strength No upcoming material lease expirations and no material lease renewal risk Stable reimbursement outlook Senior management team with average tenure of 15+ years Experienced Proven ability to execute on strategies Management Team Proven ability to handle troubled assets Investor Presentation, June, 2016 5
Omega Overview: Facility and Investment Overview at December 31, 2015 Omega is the largest SNF-focused REIT As of March 31, 2016, Omega portfolio consisted of 969 (1) operating facilities Completed AVIV acquisition on April 1, 2015 Combination created operating, growth and cost of capital efficiencies High quality and complementary portfolio Significantly increased state and operator diversification Accretive to adjusted FFO and FAD Completed over $1.1 billion of investments since the Aviv acquisition Facility Statistics Revenue Statistics Other Mortgages Direct 2% Senior 8% Financing Housing, Leases 11% 7% Skilled Rental Property Nursing/Transitional 83% Care, 89% 1) Excludes non-operating facilities either held-for-sale, closed and/or not currently providing patient services Investor Presentation, June, 2016 6
Financial Overview: Shareholder Returns Compounded Annual Growth Rates Total Growth Percentages 1/1/2004 to 12/31/2015 1/1/2004 to 12/31/2015 OHI Share Price: 274.4% Real Estate Investments: 19.6% Operating Revenue: 19.9% RMZ Index: 88.1% Adjusted FFO per Share: 11.8% Quarterly Dividends as of 2/15/2016 OHI Share Price: 11.1% 1 Year Total Growth: 7.8% 3 Year Total Growth: 28.3% Dividend Yield at $0.57/Share Per Quarter 7.5% 5 Year Total Growth: 56.3% (based on closing price on 2/18/2016 of $30.32) Omega Share Price Growth, 2002-2015 $46.00 $44.00 $42.00 $40.00 $38.00 $36.00 $34.00 $32.00 $30.00 $28.00 $26.00 $24.00 $22.00 $20.00 $18.00 $16.00 $14.00 $12.00 $10.00 $8.00 $6.00 $4.00 $2.00 $0.00 Investor Presentation, June, 2016 7
Financial Overview: Shareholder Returns (cont’d) Shareholder Returns Through 12/31/2015 (1) Dividends per Share and Return of Capital % Tax Treatment Ranking (2) Total Return Ann. Equiv. Total Ordinary Return of % Ordinary % Return of 3 rd 1 Year: -5.2% -5.2% Dividends Income Capital Income Capital 3 Year: 74.4% 20.4% 1 st 2011 $ 1.55 $ 0.99 $ 0.56 63.8% 36.2% 1 st 5 Year: 115.3% 16.6% 2012 1.69 0.88 0.81 52.3% 47.7% 7 Year: 274.4% 20.8% 1 st 2013 1.86 1.54 0.32 82.6% 17.4% 1 st (3) 10 Year: 446.2% 18.5% 2014 2.02 1.83 0.19 90.8% 9.2% 2015 2.18 1.13 1.05 52.0% 48.0% $ 9.30 $ 6.38 $ 2.92 68.6% 31.4% Omega's Total Returns vs Healthcare REIT Average (2) (Years ending 12/31/2015) 500.0% 450.0% 400.0% 350.0% 300.0% 250.0% 200.0% 150.0% 100.0% 50.0% 0.0% 2016 YTD 1 Year 3 Year 5 Year 7 Year 10 Year -50.0% Omega's Total Returns Avg. Total Returns of Healthcare REITs Source: Bloomberg Comparative Analytics 1) 2) Ranking among health care REITS: VTR, HCP, HCN, LTC, HR, NHI, SNH, SBRA Ranked 3rd among all 181 publicly traded equity REITs. Source: KeyBanc Capital Markets “The Leaderboard”, December 31, 2015 3) Investor Presentation, June, 2016 8
SNF Industry and Reimbursement Overview
Medicare Payment System Continues to Evolve Shift Away from Traditional Fee-for-Service (FFS) from 2010 to 2015, Continued but Slower Growth in Alternative Payment Going Forward 2010 2015E 2020E Sources: CMS Office of the Actuary for Spending and Enrollment. Avalere analysis for alternative payment model projections. Investor Presentation, June, 2016 10
Medicare Payment System Continues to Evolve Increasingly FFS Payments will be Bundled or Subject to Value-Based Adjustments Sources: CMS Office of the Actuary for Spending and Enrollment. Avalere analysis for alternative payment model projections. Investor Presentation, June, 2016 11
Attractive Fundamentals: Primary PAC Site SNFs – preferred post-acute care environment with growing demand and limited supply SNFs 49% HHAs Medicare 39% Acute 43% Sent to Post-Acute Hospital IRFs Discharges 8% LTACHs 3% Source: MedPAC Data Book, June 2015 Investor Presentation, June, 2016 12
Attractive Fundamentals: Demographic Trends Will Drive Volume Projected Population Growth: Aged 85+ 2015 to 2030 Percentage of U.S. SNF Residents by Age 10,000 9,132 9,000 8,000 7,482 6,727 7,000 6,304 6,000 Population 5,000 4,000 3,000 2,000 1,000 - 2015 2020 2025 2030 Source: US Census Bureau, December 2014 Release Projected Population Growth: Aged 80-84 2015 to 2030 12,000 10,513 10,000 8,061 8,000 Population 6,470 5,792 6,000 4,000 2,000 - 2015 2020 2025 2030 AHCA “DC Updated”, Presented by Mark Parkinson, Pres. & CEO, April 18, 2016 Source: CMS Nursing Home Data Compendium, 2015 Edition Investor Presentation, June, 2016 13
Industry Overview: Attractive Fundamentals Supply of facilities and beds to meet increasing future demand is limited due to CON restrictions, increasing occupancy prospects for existing facilities Trend in Certified Nursing Facilities, Beds and Residents (figures in 000s, unless otherwise indicated) 1,750k 18.8k 18.4k 1,700k 18.0k 1,650k 17.6k 1,600k 17.2k Certified Facilities Beds & Patients 16.8k 1,550k 16.4k 1,500k 16.0k 1,450k 15.6k 15.2k 1,400k 14.8k 1,350k 14.4k 1,300k 14.0k Dec Dec Dec Dec Dec Dec Dec Dec Dec Dec Dec Dec Dec Dec Dec '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 Certified Beds 1,695k 1,700k 1,690k 1,682k 1,676k 1,673k 1,671k 1,669k 1,667k 1,670k 1,665k 1,667k 1,666k 1,663k 1,662k Patients in Certified Beds 1,457k 1,457k 1,447k 1,439k 1,433k 1,430k 1,420k 1,411k 1,400k 1,394k 1,384k 1,383k 1,372k 1,368k 1,357k Certified Facilities 16.6k 16.4k 16.3k 16.1k 16.0k 15.9k 15.8k 15.7k 15.7k 15.7k 15.6k 15.7k 15.7k 15.6k 15.7k Source: Compiled by American Health Care Association (AHCA) Research Department from CMS OSCAR/CASPER survey data (2001-2015) Investor Presentation, June, 2016 14
Industry Overview: Attractive Fundamentals SNF Medicare patient days projected to grow due to increasing enrollment, even while lengths of stay decline under alternative payment models (bundling, managed care, ACOs, VBP) Yearly Medicare SNF Volume (Days) 110 105.79 101.53 100 92.40 96.59 91.22 (Millions of Days or Beneficiaries) 90 91.22 81.97 81.97 Total Medicare Enrollment (Beneficiaries) 80 81.97 Conservative Moderate 70 Aggressive 64.47 Source: SNF Volume from November 2015 Avalere Health 60 projection model (“Assessment of SNF Reimbursement and Utilization Landscape” Report); Medicare enrollment from 2015 Medicare Trustees’ Report 55.83 50 47.72 40 2010 2015 2020 Note: Conservative, Moderate, and Aggressive refer to model assumptions about rate of growth in alternative payment models (not traditional fee-for-service) Investor Presentation, June, 2016 15
Portfolio Overview
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