Investor Presentation June 2016 This page intentionally left blank - - PowerPoint PPT Presentation

Investor Presentation

June 2016

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Investor Presentation, June, 2016

Forward-looking Statements and Non-GAAP Information

3

• 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.

Omega Overview

Investor Presentation, June, 2016

Omega Overview: Key Credit Highlights

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Financial Strength Portfolio Strength

 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

 No upcoming material lease expirations and no material lease renewal risk  Stable reimbursement outlook  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

 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

Experienced Management Team

 Senior management team with average tenure of 15+ years  Proven ability to execute on strategies  Proven ability to handle troubled assets

Investor Presentation, June, 2016

Omega Overview: Facility and Investment Overview at December 31, 2015

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

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

Skilled Nursing/Transitional Care, 89% Senior Housing, 11% Rental Property 83% Direct Financing Leases 7% Mortgages 8% Other 2%

1) Excludes non-operating facilities either held-for-sale, closed and/or not currently providing patient services

Investor Presentation, June, 2016

Financial Overview: Shareholder Returns

7 1/1/2004 to 12/31/2015 OHI Share Price: 274.4% RMZ Index: 88.1% Quarterly Dividends as of 2/15/2016 1 Year Total Growth: 7.8% 3 Year Total Growth: 28.3% 5 Year Total Growth: 56.3% 1/1/2004 to 12/31/2015 Real Estate Investments: 19.6% Operating Revenue: 19.9% Adjusted FFO per Share: 11.8% OHI Share Price: 11.1% Dividend Yield at $0.57/Share Per Quarter 7.5%

(based on closing price on 2/18/2016 of $30.32)

$0.00 $2.00 $4.00 $6.00 $8.00 $10.00 $12.00 $14.00 $16.00 $18.00 $20.00 $22.00 $24.00 $26.00 $28.00 $30.00 $32.00 $34.00 $36.00 $38.00 $40.00 $42.00 $44.00 $46.00

Omega Share Price Growth, 2002-2015 Compounded Annual Growth Rates Total Growth Percentages

Investor Presentation, June, 2016

Financial Overview: Shareholder Returns (cont’d)

8 Total Return

• Ann. Equiv.

Ranking (2) 1 Year:

• 5.2%
• 5.2%

3rd 3 Year: 74.4% 20.4% 1st 5 Year: 115.3% 16.6% 1st 7 Year: 274.4% 20.8% 1st 10 Year: 446.2% 18.5% 1st (3)

1) Source: Bloomberg Comparative Analytics 2) Ranking among health care REITS: VTR, HCP, HCN, LTC, HR, NHI, SNH, SBRA 3) Ranked 3rd among all 181 publicly traded equity REITs. Source: KeyBanc Capital Markets “The Leaderboard”, December 31, 2015

Shareholder Returns Through 12/31/2015 (1)

Tax Treatment Total Dividends Ordinary Income Return of Capital % Ordinary Income % Return of Capital 2011 1.55 $ 0.99 $ 0.56 $ 63.8% 36.2% 2012 1.69 0.88 0.81 52.3% 47.7% 2013 1.86 1.54 0.32 82.6% 17.4% 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%

Dividends per Share and Return of Capital % Omega's Total Returns vs Healthcare REIT Average (2)

(Years ending 12/31/2015)

• 50.0%

0.0% 50.0% 100.0% 150.0% 200.0% 250.0% 300.0% 350.0% 400.0% 450.0% 500.0% 2016 YTD 1 Year 3 Year 5 Year 7 Year 10 Year Omega's Total Returns

• Avg. Total Returns of Healthcare REITs

SNF Industry and Reimbursement Overview

Investor Presentation, June, 2016

Medicare Payment System Continues to Evolve

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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

Medicare Payment System Continues to Evolve

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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

Attractive Fundamentals: Primary PAC Site

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SNFs – preferred post-acute care environment with growing demand and limited supply

Medicare Acute Hospital Discharges 43% Sent to Post-Acute SNFs 49% HHAs 39% IRFs 8% LTACHs 3%

Source: MedPAC Data Book, June 2015

Investor Presentation, June, 2016

Attractive Fundamentals: Demographic Trends Will Drive Volume

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Source: US Census Bureau, December 2014 Release

Source: CMS Nursing Home Data Compendium, 2015 Edition

Percentage of U.S. SNF Residents by Age

6,304 6,727 7,482 9,132

• 1,000

2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000 2015 2020 2025 2030 Population

Projected Population Growth: Aged 85+ 2015 to 2030

5,792 6,470 8,061 10,513

• 2,000

4,000 6,000 8,000 10,000 12,000 2015 2020 2025 2030 Population

Projected Population Growth: Aged 80-84 2015 to 2030

AHCA “DC Updated”, Presented by Mark Parkinson, Pres. & CEO, April 18, 2016

Investor Presentation, June, 2016

Industry Overview: Attractive Fundamentals

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Supply of facilities and beds to meet increasing future demand is limited due to CON restrictions, increasing occupancy prospects for existing facilities

(figures in 000s, unless

• therwise indicated)

Source: Compiled by American Health Care Association (AHCA) Research Department from CMS OSCAR/CASPER survey data (2001-2015)

Dec '01 Dec '02 Dec '03 Dec '04 Dec '05 Dec '06 Dec '07 Dec '08 Dec '09 Dec '10 Dec '11 Dec '12 Dec '13 Dec '14 Dec '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 14.0k 14.4k 14.8k 15.2k 15.6k 16.0k 16.4k 16.8k 17.2k 17.6k 18.0k 18.4k 18.8k 1,300k 1,350k 1,400k 1,450k 1,500k 1,550k 1,600k 1,650k 1,700k 1,750k Certified Facilities Beds & Patients

Trend in Certified Nursing Facilities, Beds and Residents

Investor Presentation, June, 2016

Industry Overview: Attractive Fundamentals

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Source: SNF Volume from November 2015 Avalere Health projection model (“Assessment of SNF Reimbursement and Utilization Landscape” Report); Medicare enrollment from 2015 Medicare Trustees’ Report

SNF Medicare patient days projected to grow due to increasing enrollment, even while lengths

• f stay decline under alternative payment models (bundling, managed care, ACOs, VBP)

Note: Conservative, Moderate, and Aggressive refer to model assumptions about rate of growth in alternative payment models (not traditional fee-for-service)

47.72 55.83 64.47 81.97 92.40 105.79 81.97 91.22 101.53 81.97 91.22 96.59 40 50 60 70 80 90 100 110 2010 2015 2020 (Millions of Days or Beneficiaries)

Yearly Medicare SNF Volume (Days)

Total Medicare Enrollment (Beneficiaries) Conservative Moderate Aggressive

Portfolio Overview

Investor Presentation, June, 2016

Portfolio Overview: Summary

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• As of March 31, 2016
• 969 operating healthcare facilities, located in 42 states and the UK, operated by 83 third-

party operators

• Gross real estate investments of approximately $8.6B
• Focused on leasing long-term care facilities (primarily skilled nursing facilities) to strong

regional and local operators

• Long term triple-net master leases with cross collateralization provisions
• Strong credit profiles
• Security deposits of three to six months
• Monthly reporting requirements
• Property level expenses are operator’s responsibility (labor, insurance, property taxes, capital

expenditures)

• Omega receives fixed rent payments from tenants, with annual escalators
• Operators receive revenues through reimbursement of Medicare, Medicaid and private pay for

services

Investor Presentation, June, 2016

Ohio 11.2% Florida 10.0% Texas 8.3% Michigan 7.1% California 5.6% Pennsylvania 5.5% Indiana 5.4% South Carolina 2.9% Arkansas 2.9% North Carolina 2.9% Mississippi 2.9% Virginia 2.6% Tennessee 2.4% Kentucky 2.3% Maryland 2.2% Washington 2.1% Other States & UK 23.9%

Portfolio Overview: Omega State Diversification as of March 31, 2016

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Rent/Interest by State 1

1) Rent excludes all GAAP required non-cash straight-line or lease inducement revenue 2) Excludes seventeen facilities closed and/or not currently providing patient services; includes two facilities held-for-sale 3) Many operators have facilities in multiple states State 1Q16 Annualized Contractual Rent/Interest % of Total Rent/Interest Facilities (2) Operators (3)

• 1. Ohio

89,121,209 $ 11.2% 91 12

• 2. Florida

79,061,886 10.0% 97 12

• 3. Texas

65,446,721 8.3% 107 12

• 4. Michigan

56,160,428 7.1% 48 4

• 5. California

44,339,799 5.6% 60 11

• 6. Pennsylvania

43,399,177 5.5% 44 8

• 7. Indiana

43,103,672 5.4% 59 7

• 8. South Carolina

22,904,652 2.9% 20 2

• 9. Arkansas

22,864,449 2.9% 32 4

• 10. North Carolina

22,780,663 2.9% 31 5

• 11. Mississippi

22,733,956 2.9% 19 3

• 12. Virginia

20,284,777 2.6% 16 5

• 13. Tennessee

18,630,223 2.4% 20 8

• 14. Kentucky

17,922,599 2.3% 26 3

• 15. Maryland

17,752,214 2.2% 16 2

• 16. Washington

16,829,022 2.1% 21 6

Other States & UK 189,215,072

23.9%

262 72 TOTAL 792,550,521 $ 100.0% 969 83

Investor Presentation, June, 2016

Ciena, 10.0% Communicare, 6.7% Genesis, 6.7% Ark, 6.7% Saber, 4.8% HHC, 4.3% Signature, 3.9% Maplewood, 3.8% Guardian, 3.7% Diversicare, 3.6% 73 Remaining Operators, 45.9%

Portfolio Overview: Omega Operator Diversification as of March 31, 2016

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Rent/Interest by Operator 1

1) Rent excludes all GAAP required non-cash straight-line or lease inducement revenue

Operator 1Q2016 Annualized Contractual Rent/Interest % of Total 1 Ciena 79,611,739 $ 10.0% 2 Communicare 52,820,747 6.7% 3 Genesis 52,802,938 6.7% 4 Ark 52,727,047 6.7% 5 Saber 38,411,190 4.8% 6 HHC 34,092,055 4.3% 7 Signature 30,571,174 3.9% 8 Maplewood 30,336,535 3.8% 9 Guardian 29,129,509 3.7% 10 Diversicare 28,468,905 3.6% 73 Remaining Operators 363,578,683 45.9% 792,550,521 $ 100.0%

Investor Presentation, June, 2016

Portfolio Overview: Omega’s Strong Portfolio Rent Coverage

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Period Trailing Twelve Months (TTM) Period Trailing Twelve Months (TTM) Ending EBITDARM EBITDAR Ending EBITDARM EBITDAR 03/31/02 1.5 1.1 03/31/09 2.0 1.6 06/30/02 1.6 1.1 06/30/09 2.0 1.6 09/30/02 1.6 1.1 09/30/09 2.0 1.6 12/31/02 1.5 1.1 12/31/09 2.0 1.6 03/31/03 1.5 1.1 03/31/10 2.0 1.6 06/30/03 1.5 1.1 06/30/10 2.0 1.6 09/30/03 1.5 1.1 09/30/10 2.1 1.6 12/31/03 1.5 1.1 12/31/10 2.2 1.7 3/31/04 1.6 1.1 3/31/11 2.2 1.8 6/30/04 1.7 1.2 6/30/11 2.3 1.8 9/30/04 1.8 1.3 9/30/11 2.3 1.9 12/31/04 1.9 1.4 12/31/11 2.2 1.8 3/31/05 1.8 1.4 3/31/12 2.1 1.7 6/30/05 1.9 1.4 6/30/12 2.0 1.6 9/30/05 1.9 1.5 9/30/12 2.0 1.5 12/31/05 2.0 1.5 12/31/12 2.0 1.5 3/31/06 2.0 1.6 3/31/13 2.0 1.5 6/30/06 2.1 1.6 6/30/13 1.9 1.5 9/30/06 2.1 1.6 9/30/13 1.9 1.5 12/31/06 2.1 1.7 12/31/13 1.9 1.4 3/31/07 2.1 1.7 3/31/14 1.8 1.4 6/30/07 2.2 1.7 6/30/14 1.8 1.4 9/30/07 2.2 1.8 9/30/14 1.8 1.4 12/31/07 2.2 1.8 12/31/14 1.8 1.4 3/31/08 2.2 1.8 3/31/15 1.8 1.4 6/30/08 2.1 1.7 6/30/15 1.8 1.4 9/30/08 2.1 1.7 9/30/15 1.8 1.4 12/31/08 2.0 1.6 12/31/15 1.8 1.4 1.0 1.3 1.5 1.8 2.0 2.3 2.5

TTM EBITDARM & EBITDAR Coverage 12/31/2001 to 12/31/2015, Quarterly

Series1 Series2

Investor Presentation, June, 2016

Portfolio Overview: Operator Cash Flow Coverages – Peer Group Comparison

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1.8x 1.9x 1.8x 1.7x 1.7x 1.1x 0.0x 0.5x 1.0x 1.5x 2.0x 2.5x OHI VTR SBRA HCN CCP HCP 1.4x 1.5x 1.4x 1.4x 1.2x 0.9x 0.0x 0.5x 1.0x 1.5x 2.0x 2.5x OHI VTR SBRA HCN CCP HCP

(1)

SNF EBITDARM Coverage (TTM) SNF EBITDAR Coverage (TTM)

Source: Q1 2016 Supplemental Information presentations. HCP coverages only include the HCR Manor Care portfolio, as it represents 77% ($3.94Bn) of their SNF

• investments. An additional 9.4% of their SNF investments covers at 1.8x and 1.4x, but coverages for the remaining 13% SNF portfolio are not reported.

1) Estimated based on the spread of EBITDARM to EBITDAR Coverage (~0.4x) for OHI, SBRA, HCN and CCP

Financial Overview

Investor Presentation, June, 2016

Financial Overview: Consistent Financial Policy

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Q1 2016 (unless otherwise noted)

• Conservative capitalization
• Debt to adjusted EBITDA ratio of 4.0x – 5.0x:

4.86x (see website)

• Significant liquidity
• $1.25B revolving credit facility:

$750 million of availability (as of May 5, 2016)

• Well-laddered debt maturities

No maturities until June 2019 (assuming allowable credit facility extensions)

• Financial flexibility
• Capital markets access
• Minimize encumbered assets
• Funded Debt to Total Asset Value:

46.0%

• Adjusted Fixed Charge Ratio >3.5x:

5.0x (see website)

• Stable dividend payout ratio
• Less than 85% of AFFO:

Payout of 70%

• Less than 90% of AFAD:

Payout of 78%

• Fifteen consecutive quarters of dividend increases

Investor Presentation, June, 2016

3.8x 3.1x 3.3x 3.5x 4.0x 4.1x 4.7x 0.0x 0.5x 1.0x 1.5x 2.0x 2.5x 3.0x 3.5x 4.0x 4.5x 5.0x 2009 2010 2011 2012 2013 2014 2015 3.7x 4.3x 4.8x 4.7x 4.4x 4.7x 4.6x 1.3x 0.7x 0.9x 0.9x 0.6x 0.5x 0.3x 0.0x 1.0x 2.0x 3.0x 4.0x 5.0x 6.0x 2009 2010 2011 2012 2013 2014 2015 Total Debt / Adj. EBITDA Secured Debt / Adj. EBITDA

Financial Overview: Conservative Capitalization

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(1) Adjusted annualized EBITDA includes revenue for all new investments as if they occurred January 1 of their respective year. Debt amounts exclude the fair value adjustments on HUD debt and the net premium or discount on the unsecured notes. (2) Reflects adjusted annualized EBITDA divided by the sum of cash interest and preferred dividends, if any.

Leverage (1) Cash Fixed Charge Coverage (2) Target Debt to Adjusted EBITDA Ratio of 4.0x – 5.0x

• Typically have used drawings under the revolver to make acquisitions and

replenished revolver availability with long term debt and equity issuances

4.86x for Q1:16 Annualized 5.3x for Q1:16 Annualized

Investor Presentation, June, 2016

$530M $500M Term Loans $350M Term Loan $250M Term Loan $400M 5.875% Notes $250M 4.50% Notes $600M 5.25% Notes $700M 4.50% Notes $720M Available $180M $20.0 M sub- Notes $400M 4.95% Notes $50M $0 $50 $100 $150 $200 $250 $300 $350 $400 $450 $500 $550 $600 $650 $700 $750 $800 $850 $900 $950 $1,000 $1,050 $1,100 $1,150 $1,200 $1,250 $1,300 $1,350 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028-45 $ Millions

Financial Overview: Conservative Capitalization

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Debt Maturity Schedule at 3/31/2016

• $2.35B unsecured revolving credit

and term loan facilities

• $1.25B revolver with a June 2018

maturity, with an additional year

• ption
• $1.1B term loans
• $750MM available as of May 5,

2016

• No near bond term maturities
• 2024 $400MM 5.875% Notes are

callable in March 2017

$1.25B Revolving Credit Facility: $530M drawn at 3/31/2016 Approximate balance of amortizing HUD Loans at 12/31/28 with final maturities to 2044

5.875% Notes Callable Mar 2017

$180M Secured loans at 4.00%

Investor Presentation, June, 2016

Debt / Adj. Total Assets Unencumbered Assets / Unsecured Debt Secured Debt /

• Adj. Total Assets

Req. <= 60% >= 150% <= 40% 6/30/15 Actual 44% 241% 2% Status Pass Pass Pass Req. <= 60% >= 150% <= 40% 9/30/15 Actual 45% 204% 2% Status Pass Pass Pass Req. <= 60% >= 150% <= 40% 12/31/15 Actual 45% 204% 2% Status Pass Pass Pass Req. <= 60% >= 150% <= 40% 3/31/16 Actual 48% 204% 2% Status Pass Pass Pass

Financial Overview: Conservative Capitalization

26

Financial Covenant Review

• Strong balance sheet with significant cushion
• n all covenants
• Leverage ratio is key covenant
• Defined as “Funded Debt to Total

Asset Value” not to exceed 60%

• Approximately 46% at Q1 2016
• Debt to Adjusted EBITDA is 4.86x for Q1 2016
• Currently have ability to suspend high yield

related covenants on 2024 bonds (have not elected to do so) leaving only standard REIT covenants Key Bond Covenants Key Credit Facility Covenants

Consolidated

Leverage Ratio Secured Leverage Ratio Unsecured Leverage Ratio Fixed Charge Cov. Ratio Unsecured Interest Cov. Ratio

Req. <= 60% <=30% <= 60% >=1.50 to 1 >=2.00 to 1 6/30/15 Actual 42% 3% 39% 4.2 4.7 Status Pass Pass Pass Pass Pass Req. <= 60% <=30% <= 60% >=1.50 to 1 >=2.00 to 1 9/30/15 Actual 50% 3% 50% 4.5 4.6 Status Pass Pass Pass Pass Pass Req. <= 60% <=30% <= 60% >=1.50 to 1 >=2.00 to 1 12/31/15 Actual 41% 3% 41% 4.8 4.6 Status Pass Pass Pass Pass Pass Req. <= 60% <=30% <= 60% >=1.50 to 1 >=2.00 to 1 3/31/16 Actual 46% 3% 46% 5.2 4.9 Status Pass Pass Pass Pass Pass

Investor Recap

Investor Presentation, June, 2016

Investor Recap

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• Attractive industry fundamentals
• Consistent and stable free cash flow and conservative capitalization
• Strong portfolio rent coverage
• Geographic and operator diversification
• No upcoming material lease expirations
• Proven track record of acquisitions and growth
• Seasoned capital markets issuer
• No long-term debt maturities until 2024
• Experienced senior management team with average tenure of 15+ Years