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I will now turn the call over to Taylor Pickett.Taylor Pickett Thanks Michelle. Good morning and thank you for joining Omega’s second quarter 2012 earnings conference call. Adjusted FFO for the second quarter is $0.53 per share, a 13% increase from the second quarter 2011 adjusted FFO of $0.47 per share. Our performance is consistent with the first quarter adjusted FFO of $0.55 per share when you take into account an additional $1 million in interest expense from our late first quarter bond offering and $2 million additional weighted average shares. In other words, the $0.02 decline in adjusted FFO is caused primarily by capital market transactions. We maintained our quarterly dividend of $0.42 per share. The dividend payout ratio is 80% of adjusted FFO. We've increased our 2012 adjusted FFO guidance to a revised range of $2.12 to $2.15 per share. This guidance continues to assume $150 million in new investments during 2012. Through June 30, we've made new investments of $46 million. The acquisition pipeline continues to be active. During the quarter, Fitch ratings initiated coverage of Omega with a BBB- investment grade rating our senior unsecured notes. We now have investment grade ratings from both Fitch and S&P. With two investment grade ratings, our pricing on our unsecured line of credit drops by 65 basis points. Bob will now review our second quarter financial results. Bob Stephenson Thank you, Taylor and good morning. Our reportable FFO on a dilutive basis was $55.8 million or $0.53 per share for the quarter as compared to $42.6 million or $0.42 per diluted share in the second quarter of 2011. Our adjusted FFO was $55.7 million or $0.53 per share for the quarter and excludes a favorable $1.7 million interest refinancing cost adjustment offset by $1.5 million of non-cash stock-based compensation expense and $98,000 of expenses related to the closing of new investments. Further information regarding the calculation of FFO is included in our earnings release and on our website.
Operating revenue for the quarter was $83.8 million versus $72.6 million for the second quarter of 2011. The increase was primarily a result of $7.4 million of incremental lease revenue from a combination of acquisitions completed in the second half of 2011, capital improvements made to our facilities throughout 2011 and 2012 and lease amendments made during that same time period, $4 million of mortgage interest from new mortgages originated throughout 2011 and a $0.5 million of other investment income related to a $28 million note originated in December.These three were partially offset by a $700,000 reduction in lease revenue related to one operator whose revenue is recorded on a cash basis and is anticipated to be current in the third quarter. The $83.8 million of revenue for the quarter includes approximately $8 million of non-cash revenue. Operating expense for the second quarter of 2012, when excluding nursing home expenses, provisions for uncollectible accounts receivable and stock-based compensation expense increased by $2.5 million as compared to the second quarter of 2011. The increase was primarily a result of $2.4 million in depreciation and amortization expense related to the closing of approximately $370 million of new investments since July 1, 2011. From a G&A standpoint, we project our 2012 annual G&A expense to be approximately $14.5 million assuming no extraordinary transactions or unusual events. Interest expense for the quarter when excluding refinancing cost and non-cash deferred financing cost was $24 million versus $20 million for the same period of 2011. The $4 million increase in interest expense resulted from higher debt balances associated with financings related to $370 million of new investments completed since July 1, 2011 and includes a full quarter of interest associated with the $400 million 5 7/8% bonds due 2024 that were issued in March 2012 offset by interest related to the March redemption of our then 175 million 7% bonds due 2016. Read the rest of this transcript for free on seekingalpha.com