Investor Presentation February 2019
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 (a/k/a, Funded Debt), Adjusted FFO, FAD, 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 December 31, 2018, unless specifically stated otherwise. We assume no duty to update or supplement the information provided. Investor Presentation, February 2019 2
Omega Overview
Omega Overview: Key Credit Highlights ◼ Conservative leverage level with Funded Debt / Adj. Pro Forma EBITDA of 5.37x (4Q 2018) (1) ◼ Consistent and stable free cash flow with strong fixed charge coverage of 3.83x (4Q 2018) (1) ◼ No secured borrowing, all $10 billion+ of assets are unencumbered Financial Strength ◼ Minimal short-term debt maturities ◼ Positive ratings trajectory with history of upgrades and commitment to investment grade profile ◼ Significant liquidity with $961 million of cash and credit facility availability at 1/31/2019 ◼ Strong core portfolio TTM rent coverage of 1.67x (EBITDARM) and 1.32x (EBITDAR) at 9/30/2018 ◼ Geographic and operator diversification with 68 operators across 41 states and the United Portfolio Strength Kingdom ◼ No upcoming material lease expirations and no material lease renewal risk ◼ Favorable near term supply and demand outlook ◼ Senior management team with average tenure over 17+ years Experienced Management ◼ Proven ability to execute on strategies Team ◼ Proven ability to handle troubled assets 1) See 4Q 2018 Supplemental for detailed calculation Investor Presentation, February 2019 4
Omega Overview: Facility and Investment Overview at December 31, 2018 ◼ Omega is the largest SNF-focused REIT As of December 31, 2018, Omega’s portfolio consisted of 909 (1) operating facilities ◼ Completed approximately $471 million of new investments (including CAPEX) in 2018 ◼ In 2018, completed 83 asset dispositions totaling over $412 million of net proceeds ◼ Rent/Interest Statistics (2) Facility Investment Statistics Other Mortgage Notes 5.8% Senior 8.4% Housing, Direct 17.6% Financing Leases 0.1% Skilled Rental Property Nursing/Transitional 85.7% Care, 82.4% 1) Excludes facilities which are non-operating, closed and/or not currently providing patient services 2) 3 Months ended December 31, 2018 Investor Presentation, February 2019 5
Financial Overview: Annual Shareholder Returns Compounded Annual Growth Rates Total Growth Percentages 1/1/2004 to 12/31/2018 1/1/2004 to 12/31/2018 OHI Share Price: 276.7% Real Estate Investments: 17.5% Operating Revenue: 17.1% RMZ Index: 80.7% Adjusted FFO per Share: 9.0% Annual Dividends as of 2/15/2019 OHI Share Price: 9.3% 3 Year Total Growth: 18.9% Dividend Yield at $0.66/Share Per Quarter 7.2 % 5 Year Total Growth: 39.0% (based on closing price on 2/15/2019 of $36.46) 10 Year Total Growth: 120.0 % Omega Share Price Growth, 12/31/2002-2/15/2019 $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 $0.00 Investor Presentation, February 2019 6
Financial Overview: Annual Shareholder Returns (cont’d) Shareholder Returns Through 12/31/2018 Dividends per Share and Return of Capital % Tax Treatment ($) Tax Treatment (%) Total Return (1) Ann. Equiv. Ranking (1) Ordinary (1) Return of (1) Capital Gain (1) Total % Ordinary % Return of % Capital Gain 6 th 3 Year: 27.9% 8.5% Dividends Income Capital Distribution Income Capital Distribution 5 Year: 66.6% 10.7% 5 th 2014 2.02 1.83 0.19 - 90.8% 9.2% 0.0% 2015 2.18 1.13 1.05 - 52.0% 48.0% 0.0% 10 Year: (2) 2 nd 393.3% 17.3% 2016 2.36 1.97 0.32 0.07 83.4% 13.6% 3.0% 2017 2.54 1.57 0.93 0.04 61.8% 36.6% 1.6% 2018 2.64 1.69 0.93 0.02 64.0% 35.3% 0.7% $ 11.74 $ 8.20 $ 3.41 $ 0.13 70.4% 28.6% 1.0% Avg. 1) Rounded to two decimals Omega's Total Returns vs Healthcare REIT Averages (3) (Years ending 12/31/2018) 450% 393.3% 400% 350% 300% 220.3% 250% 200% 150% 100% 66.6% 44.3% 27.9% 50% 16.1% 0% 3 Yr. Returns 5 Yr. Returns 10 Yr. Returns Omega Peers 1) Ranking among healthcare REITs. Source of Total Returns and Ranking: KeyBanc Capital Markets The Leaderboard , December 28, 2018 Ranked 20 th among all 98 publicly traded equity REITs with at least 10 years of return history. Source: KeyBanc Capital Markets The Leaderboard , December 28, 2018 2) 3) Source: KeyBanc Capital Markets The Leaderboard , December 28, 2018. Peer returns are simple average of returns of NHI, HR, LTC, SABRA, VTR, WELL, and HCP Investor Presentation, February 2019 7
Omega Overview: Quarterly Highlights 1Q 2019 ➢ Paid a $0.66 per quarterly common stock dividend ➢ Entered into a definitive merger agreement to acquire MedEquities Realty Trust, Inc. ➢ Finalized the Orianna restructuring 4Q 2018 ➢ Paid a quarterly common stock dividend rate of $0.66 per share ➢ Completed $53 million in new investments ➢ Invested $45 million in capital renovation and construction-in-progress projects ➢ Sold 15 assets for cash consideration of $67 million, recognizing a gain of $15.5 million 3Q 2018 ➢ Paid a quarterly common stock dividend rate of $0.66 per share ➢ Transitioned 22 Orianna facilities to existing operators for annual contractual rent of $17 million ➢ Sold 7 assets for consideration of $26 million in cash and a $5 million seller note ➢ Completed $131 million in new investments ➢ Invested $44 million in capital renovation and construction-in-progress projects 2Q 2018 ➢ Paid a quarterly common stock dividend rate of $0.66 per share ➢ Completed $77 million in new investments ➢ Invested $54 million in capital renovation and construction-in-progress projects ➢ Sold 47 assets for consideration of $137.6 million, a $25 million seller note, and $53.1 million in buyer assumed debt 1Q 2018 ➢ Increased its quarterly common stock dividend rate to $0.66 per share ➢ Completed $30 million in new investments ➢ Invested $38 million in capital renovation and construction-in-progress projects ➢ Sold 14 facilities and had 3 mortgage loans paid off totaling $98.4 million in net cash proceeds Investor Presentation, February 2019 8
Omega Overview Proven Track Record of Growth and New Investments Omega’s Growth Strategy Continue to pursue selective investments ◼ ➢ 2004 - 2007 Investments: $686 million ➢ 2008 New Investments: $197 million ➢ 2009 New Investments: $292 million ➢ 2010 New Investments: $638 million ➢ 2011 New Investments: $365 million ➢ 2012 New Investments: $510 million $6.7 billion (2) ➢ 2013 New Investments: $621 million ➢ 2014 New Investments: $566 million ➢ $507 million (1) 2015 New Investments: ➢ 2016 New Investments: $1,328 million ➢ 2017 New Investments: $530 million ➢ 2018 New Investments: $471 million ➢ Additionally, the Company has approximately $213 million committed to its operators for capital improvement and new construction projects to be completed over the next 24-36 months (as of 12/31/2018) Continue to pursue accretive transactions ◼ ◼ Leverage existing 68 operator relationships Invest primarily in current core markets ◼ ◼ Maintain focus on senior care facilities ◼ Use credit facility to make acquisitions and replenish availability with long-term debt and equity issuances Approximately $961 million of combined cash and credit facility availability as of January 31, 2019 ◼ Investments exclude the approximate $3.9 billion acquisition via merger of Aviv REIT on April 1, 2015 1) Excludes investments made by Aviv prior to acquisition via merger by Omega 2) Investor Presentation, February 2019 9
Demographics to Drive Growth
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