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This statistic highlights Omega Healthcare’s Revenue by segment split across Rental income, Income from direct financing leases, Mortgage interest income, other investment income, and miscellaneous income, reported on a quarterly basis from Q1 2016 onwards.
|Revenue by Segment||Q3 2020||Q2 2021||Q3 2021||Revenue contribution in Q3 2021|
|Income from direct financing leases||$0.26||$0.26||$0.26||0.09%|
|Mortgage interest income||$24.01||$24.02||$23.05||8.18%|
|Other investment income||$11.29||$11.81||$10.78||3.83%|
(All figures are in millions except percentages)
Omega’s total revenue increased from $119.18 million in Q3 2020 to $281.67 in Q3 2021 on a YOY basis. It also grew by $24.25 million as compared to $257.42 million earned in Q2 2021, on a QoQ basis.
The majority of Omega healthcare revenue is generated through the Rental income accounting for 87.75% of the company revenue in Q3 2021, amounting to $247.16 million. It also grew by 12% as compared to Q2 2021.
Rents they received from real property generally do not operate or use for managing the property or furnish or render services to the tenants of such property, other than through an independent contractor from which they derive no revenue.
Lesser Accounting for Direct Financing Lease Income
Income from direct financial lease has a contribution of 0.09% in their total revenue. Income is constant on a YOY basis. They record financial lease income on a constant interest rate basis over the term of the lease. Costs related to direct financing leases are deferred and amortized on a straight-line basis as a reduction to income from direct financing leases over the term.
The determination of the allowances is based on a quarterly evaluation of these loans, including estimated collectability of loan payments and general economic conditions. They evaluate the collectability of their loans based on a combination of factors, including, but not limited to, the financial strength of the borrower and guarantors, if applicable, and the value of the underlying collateral
Mortgage Interest Income
Omega mortgages typically have a fixed interest rate for the mortgage term and are secured by first mortgage liens on the underlying real estate and personal property of the mortgagor. Total Revenue of omega healthcare includes 8.18% of mortgage income having a decline of 4% on a YOY basis.
Mortgage interest income is recognized as income earned over the terms of the related mortgage notes, using the effective yield method. Allowances are provided against earned revenues from mortgage interest when the collection of amounts due becomes questionable or when negotiations for restructurings of troubled operators lead to lower expectations regarding ultimate collection.
Income from other investments is recognized as earned over the terms of the related other investments. Interest income is recorded on an accrual basis to the extent that amounts are expected to be collected using the effective interest method. In applying the effective interest method, the effective yield on a loan is determined based on its contractual payment terms, after adjusting for prepayment terms.
Revenue from this segment has fallen by 4% on a YOY basis and has a contribution of 3.83% in the total revenue of the company. The proceeds of their investment are used in updating the technology of their facilities or other facilities of their operators.
Miscellaneous Income of the company is derived from the gain on disposal of assets, gain on revaluation of assets, interest incomes from sales on credit, interest from the savings account, and interest from the fixed deposit of the company. Revenue from Miscellaneous income is 0.15% of the total revenue with an increase of $0.03 million on a YOY basis.
Omega healthcare investors are a triple-net, equity REIT (NYSE: OHI) supporting the goals of skilled Nursing Faculty (SNF) and Assisted Living Facility (ALF) operators with financing and capital to meet the required needs. They are a self-administered real estate investment trust (“REIT”), providing financing and capital to the long-term healthcare industry with a particular focus on real-estate properties related to healthcare located in the United States and the United Kingdom.
It is involved in the sale, leaseback, construction, and renovation of skilled nursing facilities. The company invests in long-term facilities located in the US and operates both in the UK and the US.
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