Omega Announces First Quarter 2008 Financial Results; Adjusted FFO of $0.36 per Share; $123 Million of New Investments

Business Wire,  April 23, 2008  

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TIMONIUM, Md. -- Omega Healthcare Investors, Inc. (NYSE:OHI) today announced its results of operations for the quarter ended March 31, 2008. The Company also reported Funds From Operations ("FFO") available to common stockholders for the three months ended March 31, 2008 of $23.7 million or $0.34 per common share. The $23.7 million of FFO available to common stockholders for the first quarter includes a $1.5 million non-cash provision for impairment charge, collection of a claim associated with a prior operator's past due rental obligations of $0.7 million, $0.5 million of non-cash restricted stock expense and $45 thousand of non-cash consolidation adjustments due to Financial Accounting Standards Board Interpretation No. 46R, Consolidation of Variable Interest Entities ("FIN 46R"). 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"). Adjusted FFO was $0.36 per common share for the three months ended March 31, 2008. Adjusted FFO is a non-GAAP financial measure, which excludes the impact of certain non-cash items and certain items of revenue or expenses, including: a non-cash provision for impairment, settlement of prior operator's past due obligation, FIN 46R consolidation adjustments and restricted stock expense. For more information regarding FFO and adjusted FFO, see the "Funds From Operations" section below.

GAAP NET INCOME

For the three-month period ended March 31, 2008, the Company reported net income of $17.2 million, net income available to common stockholders of $14.8 million, or $0.21 per diluted common share and operating revenues of $40.9 million. This compares to net income of $20.7 million, net income available to common stockholders of $18.2 million, or $0.30 per diluted common share, and operating revenues of $42.6 million for the same period in 2007.

The decreases in net income, operating revenues and net income available to common stockholders were due primarily to the impact of an allowance adjustment of $5.0 million, or $0.08 per common share, with respect to straight-line rent recognition recorded in the first quarter of 2007 and a $1.5 million provision for impairment charge recorded in 2008; partially offset by revenue associated with $40 million of acquisitions completed in the third quarter of 2007 and $5 million of acquisitions completed in the first quarter of 2008.

FIRST QUARTER 2008 HIGHLIGHTS AND OTHER RECENT DEVELOPMENTS

* On April 18, 2008, the Company closed on $123 million of new investments yielding approximately 10.5%.

* In April, the Company increased the quarterly common dividend per share by $0.01 to $0.30 per share.

* On January 22, 2008, the Company purchased General Electric Capital Corporation's $39 million mortgage loan on seven skilled nursing facilities ("SNFs") operated by Haven Eldercare, LLC ("Haven").

* On January 17, 2008, the Company closed on a $5.2 million new investment yielding 10%.

FIRST QUARTER 2008 RESULTS

Operating Revenues and Expenses - Operating revenues for the three months ended March 31, 2008 were $40.9 million. The $40.9 million included collection of a claim associated with a prior operator's past due rental obligations of $0.7 million. Operating expenses for the three months ended March 31, 2008 totaled $14.0 million, comprised of $9.4 million of depreciation and amortization expense, $2.6 million of general and administrative expenses, a $1.5 million non-cash provision for impairment charge and $0.5 million of restricted stock expense.

Other Income and Expense - Other income and expense for the three months ended March 31, 2008 was a net expense of $10.1 million and was primarily comprised of $9.7 million of interest expense and $0.5 million of amortization of deferred financing costs.

Funds From Operations - For the three months ended March 31, 2008, reportable FFO available to common stockholders was $23.7 million, or $0.34 per common share, compared to $25.4 million, or $0.42 per common share, for the same period in 2007. The $23.7 million of FFO for the quarter includes the impact of: i) a $1.5 million non-cash provision for impairment; ii) $0.7 million collected from a claim associated with a prior operator's past due rental obligations; and iii) $0.5 million of non-cash restricted stock expense and $45,000 of non-cash FIN 46R consolidation adjustments.

The $25.4 million of FFO for the three months ended March 31, 2007, includes the impact of: i) a $5.0 million adjustment to the allowance for straight-line revenue (resulting in an increase in revenue for the first quarter of 2007); ii) $0.1 million of non-cash FIN 46R consolidation adjustments; and iii) $26,000 of non-cash restricted stock expense.

When excluding the above mentioned items in 2008 and 2007, adjusted FFO was $25.0 million, or $0.36 per common share, for the three months ended March 31, 2008, compared to $20.3 million, or $0.34 per common share, for the same period in 2007. For further information, see the attached "Funds From Operations" schedule and notes.