Good day, and welcome to the Omega Healthcare Third Quarter 2015 Earnings Call and Webcast. All participants will be in listen-only mode. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Ms. Michelle Reiber. Please go ahead.

Thank you and good morning. With me today are Omega's CEO, Taylor Pickett; CFO, Bob Stephenson; COO, Dan Booth; and our Chief Corporate Development Officer, Steven Insoft. Comments made during this conference call that are not historical facts may be forward-looking statements, such as statements regarding our financial projections, dividend policy, portfolio restructuring, rent payments, financial condition or prospects of our operators, contemplated acquisitions and our business and portfolio outlook generally. These forward-looking statements involve risks and uncertainties, which may cause actual results to differ materially. Please see our press releases and our filings with the Securities and Exchange Commission, including without limitations our most recent report on Form 10-K, which identifies specific factors that may cause actual results or events to differ materially from those described in forward-looking statements. During the call today, we will refer to some non-GAAP financial measures such as FFO, adjusted FFO, FAD and EBITDA. Reconciliations of these non-GAAP measures to the most comparable measure under Generally Accepted Accounting Principles, as well as an explanation of the usefulness of the non-GAAP measures, are available under the Financial Information section of our website at www.omegahealthcare.com, and in the case of FFO and adjusted FFO, in our press release issued today. I will now turn the call over to Taylor.

Thanks, Michelle. Good morning and thank you for joining Omega’s third quarter 2015 earnings conference call. Adjusted FFO for the third quarter is $0.79 per share, adjusted funds available for distribution, FAD for the quarter is $0.72 per share. We increased our quarterly common dividend rate to $0.56 per share which is a 2% increase from the last quarter and an 8% increase from the third quarter 2014. We've now increased the dividend 13 consecutive quarters. Based on actual results through September, we’ve increased our 2015 adjusted FFO guidance upward to $3.06 to $3.07 per share. In addition, we’ve narrowed the 2015 FAD guidance range to $2.78 to $2.79 per share. Turning to the deal environment. We’ve seen a handful of large transactions priced in the 7% yield range. While we have a couple of mid-sized pipeline transactions that were priced in the mid 8% yield range, our deal pricing for new transactions is likely to be higher. Smaller skilled nursing facility transactions will likely price in the 9s with mid-sized deals in the high 8s. On the assisted living facility side, we will generally price transactions at 7.5% and higher. These pricing changes reflect our increased cost of both debt and equity capital. At this point it is unclear what if any impact this will have on our acquisition volumes in 2016. I will add that we continue to grow our capital expenditure in construction in progress commitments and we will continue to manage our balance sheet conservatively so that we are always in position to meet our tenant partners’ capital needs. Bob will now review our third quarter financial results.

Thank you, Taylor and good morning. Our reportable FFO on a diluted basis was $147.5 million or $0.76 per share for the quarter as compared to $93.9 million or $0.73 per share for the third quarter of 2014. Our adjusted FFO was $154.4 million or $0.79 per share for the quarter and excludes the impact of $3.6 million of expenses associated with acquisitions; $2.2 million of non-cash stock-based compensation expense, $863,000 of interest carry and a $301,000 provision for uncollectible accounts receivable. Operating revenue for the quarter was $202 million versus $130.7 million for the third quarter of 2014. The increase was primarily a result of incremental revenue from a combination of the Aviv acquisition and other new investments completed since the third quarter of 2014, capital improvements made to our facilities and lease amendments made during that same time period. The $202 million of revenue for the quarter includes approximately $14.9 million of non-cash revenue. Operating expense for the third quarter of 2015, when excluding acquisition and merger related costs, stock-based compensation expense, impairments and provisions for uncollectible accounts receivable was $34 million greater than our third quarter of 2014 due to the Aviv merger and other acquisitions. Our G&A was $8 million for the quarter and we project our quarterly G&A expense will be between $7.5 million to $8 million per quarter with the growth over 2014 related to the Aviv merger and the completion of other new investments. In addition, we expect our non-cash stock-based compensation expense to be between $3 million to $3.5 million per quarter. Interest expense for the quarter when excluding non-cash deferred financing costs and refinancing costs was $38.2 million versus $31.9 million for the same period in 2014. The $6.3 million increase in interest expense resulted from higher debt balances associated with…

Thanks, Bob and good morning everyone. As of the end of the third quarter of 2015, Omega had a core asset portfolio of 932 facilities with approximately 93,000 operating beds distributed among 83 third-party operators located within 41 states and the United Kingdom. Trailing 12-month operator EBITDARM for our portfolio remained stable during the second quarter at 1.8 times as of June 30 versus 1.8 times as of March 31, 2015. Correspondingly, trailing 12-month operator EBITDAR coverage also remained stable at 1.4 times as of June 30 versus 1.4 times as of March 31. Turning to new investments. During the third quarter ended September 30, Omega successfully consummated $216 million of new investments, including capital expenditures. As previously reported in our June 10-Q and our second quarter earnings discussion, we completed five separate transactions of $184 million. Subsequently in September of in 2015, Omega closed from a $32 million sale-leaseback on two skilled facilities in Florida with 260 operating beds. The facilities were added to an existing master lease with the current operator and bearing an initial yield of 9%. Not including the Aviv merger, Omega has closed on $468 million of new investments in capital expenditure projects for the nine months ended September 30. As previously stated, we have a strong pipeline and are still on track to meet our previous acquisition target of $650 million for the year. That being said, timing is not always predictable and certain transactions in our pipeline that we have a high level of confidence in closing could slip to the first quarter of 2016 as we await certain regulatory approvals. In addition to an active pipeline, we continue to invest capital in both major renovation projects and new development projects with our existing operators. As of today, Omega currently has approximately $550 million for the development of new SNFs and ALFs and reinvest in our existing portfolio. These projects taken as a whole have approximately $230 million remaining under these various commitments. As of today Omega currently has approximately $830 million of cash in availability to fund new investments. I will now turn the call over to Steven to discuss our assisted living memory care strategy.

Thanks, Dan. Thanks everyone for joining today. Consistent with our call last quarter, senior housing remains the targeted portion of our investment focus. We are focusing on regionally based operators who have a track record of successful execution in value add ALF and dedicated Alzheimer's acquisitions and targeted new construction. This limited focus approach allows us to achieve stronger yields and higher end private pay ALF and dementia related assets. In that vein, in the third quarter we closed our first investment with Atlanta-based Phoenix Senior Living. The Phoenix acquisition had a starting yield of 7%, rising to 8% in the second lease year with 2.5% annual escalators thereafter. Our two Atlanta area acquisitions with Phoenix were purchased below replacement costs and meaningfully through fill-up at the time of investment. We’re also investing in a 48-unit dedicated Alzheimer's facility in Baton Rouge, Louisiana with Phoenix. The investment is being funded as a construction loan with an 8.75% yield. The agreement provides us the purchase option as we intend to add it to our master lease upon stabilization. While we pursue these opportunities and work with other senior housing operators that fit our target profile, we remain mindful of the development cycle and are limiting our new construction focus to supply-constrained markets. Furthermore, our senior housing investments remain roughly 10% of our asset base and are all subjective to triple-net master leases. We have no ideal [ph] structures in our portfolio at this time. Our ability to fund these talented regionally focused operators leverages our broader market coverage approach that we’ve employed over the years in attracting high quality SNF operators into our portfolio. While we remain very much a SNF focused REIT, Phoenix is an example of how our emerging senior housing strategy allows us to leverage our SNF marketing approach.

Thank you, Steven. That concludes our prepared comments. We’ll now take questions.

[Operator Instructions] The first question comes from Juan Sanabria of Bank of America.

Taylor, I was just going back to your initial comments about cap rates. Those new numbers you gave, are those the new market numbers you’re seeing out there for current transactions or what your cost of capital will allow you to pay? And are you seeing increased competition from other sources?

We are not seeing increased competition to the extent that they were sourcing through our large network. In terms of cap rates, I think you will still see deals at least for a some period of time, get done at lower cap rates. We’ve seen non-trader REITs dip down into the 7s and low 8s and that goes away. But from our perspective in order for the transactions to make sense given our capital costs, that’s where it will be priced going forward.

And then just on the sort of regulatory reimbursement front, there is a lot of talk about on delaying and how CMS could push patients to home health and away from skilled nursing, do you have any way to help us quantify the percentage of your tenant volume that could be at risk for the single joint replacement type work, that is being looked at by CMS?

Well, you have 75 MSAs that are going to start that, funnily called the hip and knee project in July, and we are in – we cover a number of those MSAs. 30% of Medical admissions are those qualified patients, so you have 30% potentially at risk but likely it’s just a way too soon and we’ve had lots of discussions with our operators about how to attack the marketplace. We know the hospitals are going to control the payments. We know they’re going to look at sources to deal with rehab but I think it’s just premature to start thinking about the impact on our operators other than to say the high end, most qualified post-acute providers are going to get the hospitals’ attention.

Are they going to start with –

They’re going to get the hospitals’ attention. They are going to be the go to players.

And then just if you could comment on how you guys view sort of any potential bad debt you have 11% of your total rents sub 1 times EBITDAR coverage, and I think about a 0.5% that are current with rents, if you could just kind of give us an update about how you look at those – that particular subset of your exposure?

Yes, so that -- haven’t seen quarter over quarter but it’s larger than it historically has been. There are a number of operators in that grouping that have either strong credits or strong credits work behind it, that we feel have absolutely no risk of a non-payment situation. But to that end, we are still working with those folks to call out perhaps one bad building that drives the coverage down or one bad market, so we are pro-active about trying to clean up those operators despite an otherwise strong credit background. And then we also have a couple of three – half a dozen facilities are just with 1Zs [ph] that we are looking to quite frankly call one way shape or form or another, whether it be to move that facility to another operator, or sell it or whatever and we’ve been very pro-active about that, we’re in the process of doing that as we speak. So we do expect that percentage to ultimately go down. As far as those that are not current, that is a very very small, less than $0.5 of our current operators and as I said those are the operators that – and we are looking to very likely to move that asset.

The next question comes from Kevin Tyler of Green Street Advisors.

The skilled nursing acquisitions that you’ve reported at this point in the year, not really as high I guess as what I would have thought we’d see, rewinding to the beginning of the year timeframe, I guess is this because you’re being more selective on price given the cap rate color you laid out earlier, is it the dearth of opportunity or can you talk a little bit more about either of those things?

Well, for starters we are not done with the year as we’ve indicated, right? So – but we have been – we have looked at this year – particularly at the beginning of the year we did a number of assisted living facility deals, which sort of moved the dial a little bit more in favor of that product type. But once again our niche is still skilled nursing facility deals. There was a little bit of a dearth in the second quarter although we still have some time left in the year and there was also some increased competition we’ve seen with the deals. As Taylor indicated, we’ve got done, quite frankly we just weren’t running for.

And then let me shift in a bit to your commentary on the assisted living side, hearing you guys talked about it in the opening remarks and it certainly seems like that’s going to be a continued part of the strategy moving forward, as you alluded to but how should I think about that business in terms of overall size, it’s 10% of the portfolio, now does it become 20 and ultimately 30% over the next call it 12 to 24 months, or is it something that it’d just be more of a bite sized opportunity at this point.

I think it’s a lot of sort of just what comes out, we are opportunistic, not acquirers, right? So if we happen to see a good deal in the assisted living market with one of our existing operators, we will pursue that and that might skew the overall percentage breakdown skilled and assisted living. But I don’t see the Dow moving tremendously from 910 to –

To meaningfully move, when you talk about come from 10% to 20%, I don’t think there is any part of our strategy that gets us that kind of meaningful movement.

And then last one, just on the bigger providers, the larger national operators, we continue to hear about the merits of being aligned with the largest operators and it surfaced this morning the amount of care has struggled again with its operations in part due to Medicare advantage. I guess we’ve talked about this in the past, but can you give us an update on where you’re seeing Medicare Advantage in our portfolio, has it been headwind for your operators, are they seeing shortened length of stay and some pressure on reimbursement, and just general how are they performing at this point in time?

Sure. Their lengths of stay are declining and the reimbursement rates in management of care are a little bit lower, although they tend to just work up of exiting Medicare rates as a percentage. And our operators have handled it less and I can tell you when you think about our portfolio, one of our largest tenants is Genesis, so we understanding what’s happening in the Genesis portfolio and we look at our regional operators and how they have handled Medicare advantage, and they have handled it less. We are really – you are otherwise seeing a coverage.

The next question comes from Chad Vanacore of Stifel.

So you were just – the challenges and your willingness to pay for acquisitions and you outlined that pretty well? Have you seen changes from the other side, are there more or less willing sellers at the new cap rates.

I am not sure that the capital rates have just where our mentality has changed a little but because of our cost of capital has increased a little bit. So as far as more sellers out there, I think there’s still – it’s a lot of cyclical, I mean this time of the year, not a lot of they can coming to market because there’s no – it’s a lot of cyclical, I mean this time of year there’s not a lot of deals coming there, we have just no deals the natural slowdown here whether that picks back up which would assisted the normal sort of trend in the squarer because there’s away we can considerate they close by end. It’s just the natural slowdown, whether that peaks up, which you will be normal sort of the trend in the first quarter and into the second quarter, that remains to be seen, but there is a seasonal trend here and we’re sort of in a slow period of new deals coming to the market.

And so what can you tell you what about the supply situation here, you say you’re limiting new construction thesis of bi-accident years. If you do that, any color there, there will be great.

We’re being very careful and selected five of those markets. Baton Rogue is a great example of the unit that is very much under – supply vacant, because of the piece population shift, after Katrina, there are markets that we are looking is we can’t comfortable with. By virtue of what we are discussing we’re always talking about the projects we do. We don’t intend to talk about the projects we passed on but those are increasing in volume and the larger MSAs, it’s getting sometimes tougher to rationalize out of the ground in the part of the cycle.

So you just renewed an upsized available ATM programs, Bob, how should we think about the equity issuance here and how you got Taylor issue and how you use that ATM program?

Well, we’re going to use it like we have had just based on the deal pipeline, long term we look to fund our acquisition 15/56 debt and equity. So at a certain price we will be issuing and to help fund the pipelines?

We have a question from Tayo Okusanya from Jefferies.

Just a couple of quick ones to me. I just didn’t join a little late, I apologize for that. Did you did walk why increased in guidance with some of your underlying assumptions and seem to do, what was driving that?

The big thing is the initial guidance that we did last quarter, was the timing of the bond deal, so that adds plenty of acquisitions, two, the big things, drives the tighten the ride, so we’re going to so close to the year.

And then just a couple other of the comments about the in-acquisition environment is seasonally things are slowing down as you mentioned, but you still have to deliver the biggest quarter of all those ruling flight quarter over your fourth quarter this compared to deal flow, I know it’s kind of mid-615 mix attached are you looking to get there and the given we are where IND inhuman –

Based on the pipeline we have today, we will get there. But that being said deals have their own vagaries whether it’s approval from state authorities or just general timing of getting documents time but as we did here today we are highly confident.

And then just lastly again a lot of noise, when we met at NIC, when I think we were discussing Genesis prop dropping 10% in one day because of all this noise around the inspector general and all this kind of stuff going on, I mean as you just kind of take a look at the landscape for skilled nursing, what are you kind of hearing from some of your tenants in regards to what the outlook looks like and if there are any real regulatory or reimbursement risks as we head into 2016?

I don’t think there is anything specific on the regulatory side. I mean the hits from the OIG come with some regulatory slight lightening, the strikes you never weren’t aware, the reimbursement front, we have touched upon that a little bit on this call. There is obviously some movement of cliff in terms of bundling and other things but I mean I don’t think that’s – while people are dealing with it and getting prepared for it, I don’t think there is anything that we can specifically quantify in time in terms of how it’s going to affect our operators and reimbursement.

And specifically in terms of our whole very large operator pool, we really haven’t heard anything coming out of our operators as it relates to the specific issue of high utilization of rehab. Other than it’s something that OIGs focus on, but none of our operators have come to us and said we have a real concern about X, Y and Z.

The next question comes from John Roberts of Hilliard Lyons.

On that front, you have been covering here with the cost of capital being considerably higher. Do you expect maybe to go a little bit higher on the debt side versus equity in this environment maybe leverage up a bit more than you might have historically been comfortable with given the drop in stock price?

Well, we are still well inside our stated leverage target of 5 times debt to EBITDA. So we have a room there. And to our point, when we start thinking about allocating capital, it’s likely given our stock price, we will use that room, we have not made any decisions to go beyond that and if we do, it’s something we got to talk about. End of Q&A

This concludes our question and answer session. I would like to turn the conference back over to Taylor Pickett, chief executive officer for any closing remarks.

Thank you for joining our call this morning. Bob and me will be available for any follow-up questions.