$175 Million 7% Senior Notes Tender and Redemption - On March 5, 2012, the Company commenced a tender offer to purchase for cash any and all of its outstanding 2016 Notes. Pursuant to the terms of the tender offer, on March 19, 2012, the Company purchased $168.9 million aggregate principal amount of the 2016 Notes. The Company paid holders of the tendered 2016 Notes consent payments aggregating approximately $4.5 million over the face amount of the 2016 Notes.
On March 27, 2012, the Company redeemed the remaining $6.1 million aggregate principal amount of the 2016 Notes at a redemption price of 102.333% of the principal amount thereof, plus accrued and unpaid interest on the 2016 Notes up to the redemption date.
In connection with the tender offer and redemption, the Company wrote-off approximately $2.6 million of deferred financing costs and other related expenses in connection with the repurchase. The consideration for the tender and redemption of the 2016 Notes was paid from the proceeds from the sale of the 2024 Notes.
Equity Shelf Program and Dividend Reinvestment and Common Stock Purchase Plan - During the twelve-month period ended December 31, 2012, the Company sold the following shares of its common stock under its Equity Shelf Program and its Dividend Reinvestment and Common Stock Purchase Plan:
2012 PORTFOLIO AND RECENT DEVELOPMENTS
$237 Million New Investments in Q4 2012 - For the three-month period ended December 31, 2012, the Company completed five separate acquisitions with three different operators totaling $237 million of new investments. The new investments were comprised of 17 SNFs and two assisted living facilities ("ALFs") totaling 2,050 operating beds and 268 units, respectively. The 19 facilities are located in California (10), Arizona (4), Michigan (2), Indiana (2) and Texas (1).
The new investments were financed with a combination of credit facility borrowings and the assumption of $72 million of HUD indebtedness. The $72 million of assumed HUD debt is comprised of 8 HUD mortgage loans with a blended interest rate of 5.50% and maturities between April 2031 and February 2045.
In addition to the $237 million of new investments, the Company also invested $13 million under its capital renovation program.
$203 Million of New Investments in Q3 2012 - For the three-month period ended September 30, 2012, the Company purchased 27 facilities (17 SNFs, 4 ALFs and 6 independent living facilities) from an unrelated third party for $203 million. Simultaneous with the transaction, the Company also purchased one parcel of land for $2.8 million. The 27 facilities and land parcel were added to an existing master lease with a current operator. The 27 facilities located in Indiana total 2,892 beds (2,340 skilled nursing, 293 assisted living and 259 independent living).
$25 Million of New Investments in Q2 2012 - For the three-month period ending June 30, 2012, the Company completed two separate acquisitions with two existing operators totaling $25 million. The acquisitions consisted of five SNFs located in Indiana totaling 463 beds. These facilities were added to existing master leases.
$45 Million of Capital Renovation Projects in 2012 - For the twelve-month period ending December 31, 2012, the Company invested $45 million under its capital renovation program.
Other Portfolio Transactions
Genesis Healthcare - On December 1, 2012, Genesis Healthcare ("Genesis"), an existing operator of the Company, completed the purchase of Sun Healthcare Group ("Sun"), also an existing operator of the Company. At September 30, 2012, Sun was the Company's second largest tenant with $235 million in leased assets (40 facilities in 10 states). The Company leased the 40 facilities to Sun under a master lease with expiration dates in 2013 and 2018. At September 30, 2012, the Company had a master lease with Genesis covering $122 million in leased assets (13 facilities) located in 5 states.
In connection with the acquisition, on December 1, 2012, the Company entered into a new 53 facility master lease with Genesis expiring on December 31, 2025. At December 31, 2012, Genesis was the Company's largest tenant with $357 million in leased assets (approximately 11% of the Company's total investments) located in 13 states.
Mortgage Payoff - On October 31, 2012, the Company received $12.2 million for the payoff of a first mortgage loan on two Florida SNFs. As a result of the payoff, in the fourth quarter, the Company recorded one-time deferred mortgage interest income.
Facility Sales - For the three-month period ended December 31, 2012, the Company sold two facilities (one of which was closed) for total cash proceeds of $4.8 million, generating approximately a $2.8 million accounting gain. For the year ended December 31, 2012, the Company sold nine facilities for total cash proceeds of $29.0 million, generating approximately an $11.8 million accounting gain.
On January 16, 2013, the Company's Board of Directors announced a common stock dividend of $0.45 per share, increasing the quarterly common dividend by $0.01 per share over the prior quarter, to be paid February 15, 2013 to common stockholders of record on January 31, 2013.
2013 ADJUSTED FFO AND ADJUSTED FAD GUIDANCE
The Company currently expects its 2013 Adjusted FFO available to common stockholders to be between $2.45 and $2.50 per diluted share. In addition, it expects its 2013 Adjusted Funds Available For Distribution ("FAD") available to common stockholders to be between $2.20 and $2.25 per diluted share.
The Company's Adjusted FFO and Adjusted FAD guidance for 2013 includes approximately $200 million of new investments; however, it excludes the impact of gains and losses from the sale of assets, additional divestitures, certain revenue and expense items, interest refinancing expense, capital transactions and restricted stock amortization expense. A reconciliation of the Adjusted FFO and FAD guidance to the Company's projected GAAP earnings is provided on schedules attached to this press release. The Company may, from time to time, update its publicly announced Adjusted FFO and FAD guidance, but it is not obligated to do so.
The Company's Adjusted FFO and FAD guidance is based on a number of assumptions, which are subject to change and many of which are outside the Company's control. If actual results vary from these assumptions, the Company's expectations may change. Without limiting the generality of the foregoing, the timing and completion of acquisitions, divestitures, capital and financing transactions, and variations in restricted stock amortization expense may cause actual results to vary materially from our current expectations. There can be no assurance that the Company will achieve its projected results.
TAX TREATMENT FOR 2012 DIVIDENDS
On February 15, 2012, May 15, 2012, August 15, 2012 and November 15, 2012, the Company paid dividends to its common stockholders in the per share amounts of $0.41, $0.42, $0.42 and $0.44, for stockholders of record on January 31, 2012, April 30, 2012, July 31, 2012 and October 31, 2012, respectively. The Company has determined that 47.70% of the common dividends paid in 2012 should be treated for tax purposes as a return of capital, with the balance of 52.30% treated as an ordinary dividend.
Source: Omega Healthcare Investors, Inc.