UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM 10-K

(Mark One)



| |  |                                                 
| |  | ------------------------------------------------
| |  | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]


For the fiscal year ended September 30, 2000.



| |  |                                                     
| |  | ----------------------------------------------------
| |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]


For the transition period from
                    to

Commission file number 000-23953

OMEGA WORLDWIDE, INC.

(Exact name of Registrant as specified in its
charter)


|                                                                                          |  |                                                 
|----------------------------------------------------------------------------------------- |  | ------------------------------------------------
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|Maryland
	(State or other jurisdiction
	of incorporation or organization)                 |  | 38-3382537
	(I.R.S. Employer Identification No.)
|                                                                                         
|900 Victors Way, Suite 345
	Ann Arbor, Michigan
	(Address of Principal Executive Offices) |  | 48108
	(Zip Code)                               

Registrants telephone number, including area code:
734-887-0300

Securities Registered Pursuant to Section 12(b) of the
Act:

Common Stock, $.10 Par Value

Indicate by check mark whether the registrant (1) has
filed all reports required to be filed by Section 13 or
15(d) of the Securities and Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has
been subject to such filing requirements for the past
90 days. Yes  No

Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not
contained herein, and will not be contained, to the best of
registrants knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K.

The aggregate market value of the voting stock of the
registrant held by non-affiliates was $23,655,915 based on the
$2.25 closing price per share for such stock on the NASDAQ
National Market on December 15, 2000.

As of December 15, 2000, there were 12,340,553 shares
outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Registrants Proxy Statement for its
Annual Meeting of Shareholders which is expected to be filed
with the Commission on or about January 25, 2001, are
incorporated herein by reference as indicated herein.









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PART I


Item 1  Business of the Company

The business of the Company is to provide asset management
services and management advisory services, as well as equity and
debt capital, to the healthcare industry, particularly
residential healthcare services to the elderly. The Company has
established financing activities in the United Kingdom and the
Commonwealth of Australia. In the current fiscal year the
Company acquired leasehold rights and other assets incidental to
119 nursing homes in the United Kingdom, and has operated
these homes since October 31, 1999.

The Company often provides seed equity and debt capital to
enable the establishment of operating or financing firms,
identifying high quality management personnel and providing
financial support to such companies. The intent of the Company
is to invest in less than majority equity positions in such
firms, to provide continuing support while such firms are not
public, and to secure local capital as the major source of the
growth capital for expansion and development of such firms. The
result is to enable such firms to access capital markets in the
locales in which services are provided.

The Company was established in November 1997 by Omega
Healthcare Investors, Inc. (Omega Healthcare), a
publicly traded REIT, which owns and finances healthcare
operating facilities in the United States. The Company began
initial operation as a separate entity on April 2, 1998,
when Omega Healthcare distributed shares of the Companys
common stock to Omega Healthcares existing shareholders.
At the same time, the Company undertook a primary offering and
Omega Healthcare undertook a secondary offering of shares of the
Companys common stock. Omega Healthcare distributed
5.2 million shares, sold 2.8 million shares (of which
500,000 shares were sold for the account of the Company) and
retained approximately 9.9% of the common shares then
outstanding, together with 260,000 preferred shares, in exchange
for the contribution to the Company of the following assets:



| |                                                                                                                                                                                                        
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (a)  33.375% of the ordinary shares in Principal Healthcare
	Finance Limited (Principal-UK), a Jersey corporation
	which is engaged in investing in long-term care facilities in
	the United Kingdom;
|
| | (b)  Warrants to purchase 10,556,361 shares of Principal-UK;                                                                                                                                           
|
| | (c)  A subordinated debt note of Principal-UK in the amount
	of £15 million; and                                                                                                                       
|
| | (d)  Miscellaneous other net assets stated at a net
	carrying amount of $150,000.                                                                                                                      

Principal-UK is, as of the date of this report, the owner of 241
long-term care facilities, primarily nursing homes, subject to
long-term, triple-net leases to 13 operating companies in the
UK. Principal-UKs revenues for the year ending
August 31, 2000 totaled $67.1 million, assets totaled
$539 million and net earnings totaled $4.6 million.
Principal-UK has employed fixed-rate financing in which it
attempts to match the term of assets and liabilities. Its rental
agreements provide annual increases in rentals in 30-year terms,
generally in accordance with the British consumer price index.
Principal has financed its activities through the issuance of
long-term, fixed-rate securitized debt. Its initial
securitization was issued in December 1997 in the amount of
£150 million, repayable in the years 2025 and 2027. In
March 1999 a second securitization was issued in the amount
of £122 million, repayable in the years 2027 and 2029.
Pursuant to a contract expiring on December 31, 2002, the
Company provides management services to Principal-UK for a fee
equal to 0.9% of assets managed. Both securitizations have
maturities that are consistent with the term of the leases with
respect to the facilities financed.

In June 1998, the Company acquired 100% of the units of
Assisted Living Unit Trust from FAI Insurances Limited, a life
and health insurer in Australia, and its subsidiary, Premier
Care Australia (Holdings) Pty Limited, and changed the name
of the trust to Principal Healthcare Finance Trust
(Principal-Australia). Principal-Australia is an
Australian Unit Trust which owned, as of the date of acquisition
by the Company, long-term nursing homes and assisted living
units in New South Wales. Initial long-term financing of
A$127.9 million was completed in October 1999. The
amount is repayable in quarterly installments through 2027.

1



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Principal-Australia net leased its nursing homes and assisted
living units to an affiliate of Moran Health Care Group
Pty Limited (Moran), the largest operator of
long-term care and assisted living facilities in Australia, for
an initial term of 30 years. On November 12, 1998,
Principal-Australia completed the first phase of a purchase and
leaseback transaction, also with Moran, which encompassed 30
long-term care facilities in Victoria, New South Wales and
Western Australia. In phase one of the transaction, an affiliate
of Moran sold 25 homes to Principal-Australia for
A$80 million and immediately leased them back for an
initial 30-year term. Simultaneously, phase two of the agreement
called for Principal-Australia to acquire, upon completion and
rent-up to stabilized occupancy, five additional Victoria
facilities from an affiliate of Moran for an aggregate purchase
price of A$10.5 million. Phase two was completed in
March 1999. As of September 30, 2000,
Principal-Australia owns and leases 43 nursing facilities and
483 assisted living facilities in Australia and New Zealand. The
Company provides management services to Principal-Australia for
a fee equal to 0.9% of assets managed. The agreement extends
through December 31, 2007.

On October 31, 1999 the Company, through its wholly-owned
subsidiary, Idun Health Care Limited (Idun),
acquired the operating subsidiaries of Tamaris, plc, a nursing
home operating company in the United Kingdom. The 48
subsidiaries acquired operate 119 nursing homes located
throughout England, Scotland and Northern Ireland. The
acquisition was accounted for under the purchase method of
accounting. The fair market value of the net assets at the date
of acquisition, in the opinion of management, was
$7.2 million. Fixed assets included in the
$7.2 million amount have been written down by
$3.5 million as prescribed by accounting principals
generally accepted in the United States, to report net assets
equal to the purchase price.

The Company acquired, in connection with its initial
establishment, an interest in Essex Healthcare Corporation
(Essex) and an affiliate, Atrium Living Centers,
Inc. In August 1998, the Company invested an additional
$500,000, increasing its equity interest in Essex to 47%. Essex
is an operator primarily in Ohio of 68 long-term care facilities
containing 4,200 beds in Ohio, which are leased from independent
third parties, and manages 55 facilities (approximately 2,800
beds) primarily in Indiana. As of November 30, 2000, the
Companys investment in Essex, was sold to Essex for
$325,000 in cash, which approximates its book value.

In August 1998, the Company acquired from a subsidiary of
Principal-UK for £640,000 a 19.9% interest in Moran
Healthcare (UK) Limited (Moran UK), the sole
shareholder of Baneberry Healthcare (Baneberry), a
UK operating company engaged in the business of providing
healthcare services in Northern Ireland and England. Baneberry
was previously financed by Principal-UK. Moran UK is an
affiliate of Moran, the operator of most of the long-term care
facilities in Australia that are owned by Principal-Australia.

Employees

At November 15, 2000, the Company employed ten persons in
its operating office in London, England, three persons in its
operating office in Sydney, Australia, and three persons at the
Companys executive offices in Ann Arbor, Michigan. The
Companys wholly-owned subsidiary Idun Healthcare Ltd.,
employs approximately 7,800 employees in the nursing home
operations throughout the United Kingdom.

Services Agreement

Omega Healthcare and the Company had entered into a Services
Agreement pursuant to which Omega Healthcare provides shared
management and other employees, office space and administrative
services to the Company. The Company reimbursed Omega Healthcare
quarterly for a portion of Omega Healthcares overhead
expenses, such as rent, compensation and utilities, based on a
formula determined by dividing the value of the assets managed
by the Company at the end of each fiscal quarter by the sum of
the value of the assets of Omega Healthcare and assets managed
by the Company at the end of each fiscal quarter. Upon
expiration of this on June 30, 2000, the Company entered
into a new agreement requiring quarterly payments to Omega
Healthcare of $37,500 for the use of offices and certain
administrative and financial services provided by staff of Omega
Healthcare.

2



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Investment Objectives

The investment objectives of the Company continue to be:



| |                                                                                                                                                                                                                                                           
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 1.  To extend its franchise value by providing and
	financing long-term care services to the elderly.                                                                                                                                                     
|
| | 2.  To expand its asset management business by establishing
	new financing entities and establishing relationships with
	strong operating companies to extend and expand assets under
	management.                                                        
|
| | 3.  To expand the Companys ability to provide
	financial capital to develop, expand and consolidate nursing
	home operating companies, primarily outside the United States.                                                                              
|
| | 4.  To grow the capital value of the Company through
	prudent use of leverage, extension of its franchise value and
	the application of the intellectual capital of the Company to
	investment opportunities in Europe, Australia, and the
	United States.

There is no expectation or intent in the near-term to pay a
dividend on common stock.

As announced earlier this year, the Company has undertaken a
process of exploring strategic alternatives. The Company is
continuing to explore alternatives to maximize shareholder
value, including the realization of the Companys
underlying investments. The Company has had and is continuing to
have discussions with third parties who have expressed an
interest in acquiring some or all of the Companys
underlying investments. There can be no assurance any such
transaction will be arranged.

Financial information about foreign and domestic
operations.

The information required by this item is incorporated herein by
reference to Note 14 the Business Segment
Information on page F-18 of the Companys
consolidated financial statements.

Regulation of the Healthcare Industry

The Company will invest in entities which own healthcare
facilities principally outside of the United States.
Accordingly, the Company does not intend to diversify its
investments to reduce the risks associated with investment in
the healthcare industry. Future investments by the Company may
be on terms or conditions less favorable than the terms
applicable to the Companys current investments. The
operation of healthcare facilities is subject to substantial
regulation. In addition to other laws and regulations with which
the Company will be required to comply, the Company will be
subject to laws that govern financial arrangements between
healthcare providers. Any failure to comply with these laws or
regulations could have an adverse effect on the operations of
the Company.

Healthcare is an area of extensive governmental regulation and
frequent regulatory change. Operating companies in which the
Company invests, as well as the lessees and mortgagors of
Principal-UK, Principal-Australia and similar companies are and
will continue to be subject to extensive regulation. Changes in
laws or regulations or new interpretations of existing laws or
regulations can have a dramatic effect on the healthcare
industry with respect to methods of doing business, costs of
doing business and revenues. Principal-UK and
Principal-Australia are attempting to develop and market a
method of financing for healthcare properties which is not, at
present, widely accepted in the United Kingdom, Australia or
elsewhere, and the business of the Company may not develop and
grow as the Company anticipates.

The operating results of the healthcare facilities underlying
the investments of Principal-UK, Principal-Australia and
operating companies in which the Company invests will depend on
various factors over which the Company will have no control and
which may affect the present or future cash flows of the
Company. Those factors include, without limitation, general
economic conditions, changes in supply of, or demand for,
competing long-term healthcare facilities, changes in occupancy
levels, the ability of the lessees and mortgagors of
Principal-UK, Principal-Australia and similar companies in which
the Company invests through rate increases or otherwise to
absorb increases in operating expenses, changes in governmental
regulations and changes in planning (zoning) regulations.

3



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A significant portion of the revenues of operating companies,
including the lessees of Principal-UK, Principal-Australia and
similar companies in which the Company invests, will be
dependent upon payments from third party payors, including
private insurers and local and national governments. The levels
of revenues and profitability of such lessees, mortgagors and
operating companies may be affected by the continuing efforts of
third party payors to contain or reduce the cost of healthcare.
Medical advances and changes in the method of providing
long-term healthcare services may significantly change the
healthcare needs of the elderly and thereby reduce the demand
for long-term healthcare facilities. Likewise, such advances and
changes may make obsolete the healthcare properties owned or
financed by Principal-UK, Principal-Australia and similar
companies in which the Company invests.

Although Principal-UK plans to increase the number of healthcare
operators it finances, currently over 50% of Principal-UKs
rents are derived from rent payments received from three
operators. Principal-Australia also plans to increase the number
of healthcare operators it finances, but presently most of its
assets are operated by and leased to affiliates of Moran. Thus,
the results of operations and financial condition of
Principal-UK and Principal-Australia will be dependent upon the
ability of these tenants to meet their obligations under their
agreements with Principal-UK and Principal-Australia.

Healthcare services, particularly those for the elderly outside
the United States, often have been provided by government or by
not-for-profit organizations, and the ability of the Company to
extend its financing and investment activities is premised upon
additional changes in the way in which healthcare services for
the elderly will be provided in such countries as the Company
may invest. While the United Kingdom and the Commonwealth of
Australia have been advanced in permitting and encouraging the
private for-profit sector to develop healthcare services, there
is no assurance that such encouragement and permission will be
available in other countries in which the Company may desire to
invest.

No assurance can be given that a lessee will exercise any option
to renew its lease upon the expiration of its term. In such an
instance, the Company may not be able to locate a qualified
purchaser or qualified replacement tenant for the healthcare
properties in question, and as a result it would lose a source
of revenue while remaining responsible for payment of its
obligations incurred in financing such properties.

Directors and Executive Officers of Omega Worldwide

Set forth below is information regarding (i) current
Directors of the Company, who will serve until the term expires
at the indicated annual meeting of shareholders or until their
successors are elected, and (ii) the current executive
officers of the Company, who are elected to serve at the
discretion of the Board of Directors.

|                      |  |         |      |     |  |           |    |  |  |                                           
|--------------------- |  | ------- | ---- | --- |  | --------- | -- |  |  | ------------------------------------------
|                      |  | Term    |      |     |  |          
|Name                  |  | Expires |      | Age |  | Positions
|                      |  |         |      |     |  |          
|Essel W. Bailey, Jr   |  |         | 2002 |     |  |           | 56 |  |  | Director                                  
|                     
|                     
|                     
|                     
|James E. Eden         |  |         | 2003 |     |  |           | 63 |  |  | Chairman of the Board of Directors        
|                     
|                     
|                     
|                     
|James P. Flaherty     |  |         | 2001 |     |  |           | 53 |  |  | Director and President                    
|                     
|                     
|                     
|                     
|Thomas F. Franke      |  |         | 2001 |     |  |           | 71 |  |  | Director                                  
|                     
|                     
|                     
|                     
|Anil Gupta            |  |         | 2003 |     |  |           | 51 |  |  | Director                                  
|                     
|                     
|                     
|                     
|Harold J. Kloosterman |  |         | 2002 |     |  |           | 58 |  |  | Director                                  
|                     
|                     
|                     
|                     
|Bernard J. Korman     |  |         | 2003 |     |  |           | 69 |  |  | Director                                  
|                     
|                     
|                     
|                     
|Edward C. Noble       |  |         |      |     |  |           | 46 |  |  | Vice President and Chief Financial Officer
|                     
|                     
|                     
|                     
|Robert L. Parker      |  |         | 2002 |     |  |           | 66 |  |  | Director                                  

Mr. Bailey was the Chief Executive Officer and President of
the Company from April 1998 to July 2000.
Mr. Bailey has been a Director of the Company since its
formation in November 1997. Mr. Bailey served as
President and Chief Executive Officer of Omega Healthcare until
June 2000, as well as a Director of Omega Healthcare since
its formation in 1992, until June 2000, and he served as
Chairman of the Board of Directors of Omega Healthcare from 1995
to June 2000. Prior to forming Omega Healthcare, he was a
Managing Director of Omega Healthcare Capital, a healthcare
investment partnership, from 1986 to 1992. Mr. Bailey was
formerly a Director of Evergreen Healthcare, Inc., which was a
NYSE listed company engaged in the

4



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Mr. Eden has been a Director of the Company since
April 1998. He was elected Chairman of the Board of the
Company in July 2000. He is President and principal owner
of Eden & Associates, Inc., which provides consulting
services to the senior living and long-term care industries. He
is also President and principal owner of Senior Living
Properties, LLC, and serves as Chairman and Chief Executive
Officer of Oakwood Living Centers, Inc., which owns and operates
7 nursing homes in Massachusetts and Virginia. From 1976 to
1992, he held various positions in healthcare at Marriott
Corporation ultimately, as Executive Vice President and General
Manager of its Senior Living Services Division. Mr. Eden is
also a Director of the Alliance for Aging Research and United
Vanguard Homes. Mr. Eden was a Director of Omega Healthcare
until July 2000.

Mr. Flaherty joined Omega Healthcare in 1996 and was
appointed Vice President-International of Omega Healthcare and
Chief Executive of Omega Healthcare (UK) Limited in
January 1997. Mr. Flaherty was appointed Chief
Operating Officer of the Company in April 1998 and
President in July 2000. He has been a Director of the
Company since July 2000. Before he joined Omega Healthcare,
Mr. Flaherty was Chairman of Black Rock Capital
Corporation, a leasing and merchant banking firm he founded in
1994. From April 1991 until December 1993,
Mr. Flaherty was Managing Partner of Pareto Partners, a
London based investment management firm. Prior to 1991, he was
employed by American Express Bank Ltd. in London and Geneva in a
number of senior management capacities and by State National
Bank of Connecticut and its successor, The Connecticut
Bank & Trust Co.

Mr. Franke has been a Director of the Company since
April 1998. He is Chairman and principal owner of Cambridge
Partners, Inc., an owner, developer and manager of multifamily
housing in Grand Rapids and Ann Arbor, Michigan. He is also the
principal owner of private healthcare firms operating in the
United States and the United Kingdom and a private hotel firm in
the United Kingdom. Mr. Franke has been a Director of Omega
Healthcare since its formation in 1992, and since
Principal-UKs formation in 1995, Mr. Franke has been
a Director of Principal-UK.

Dr. Anil K. Gupta has been a Director of the Company
since July 7, 1998. He is Professor of Strategy,
Organization and International Business at the Robert H.
Smith School of Business, The University of Maryland. He holds a
Doctor of Business Administration from Harvard Business School.
Dr. Gupta served as a director of Vitalink Pharmacy
Services, Inc. from 1992 to 1998. Recipient of numerous
scholarly awards, he also provides consulting and executive
training to a number of multinational companies.

Mr. Kloosterman has been a Director of the Company since
April 1998. He also has been a Director of Omega Healthcare
since its formation in 1992 and was a Managing Director of Omega
Healthcare Capital from 1986 to 1992. Mr. Kloosterman has
been involved in the acquisition, development and management of
commercial and multi-family properties since 1978. He has been a
senior officer of LaSalle Partners, Inc., and in 1985 he formed
Cambridge Partners, Inc., where he serves as President. At
Cambridge, he has been involved in the development and
management of commercial, apartment and condominium projects in
Grand Rapids and Ann Arbor, Michigan and in the Chicago area.

Mr. Korman has been a Director of the Company since
April 1998. He is Chairman of the Board of Trustees of
Philadelphia Health Care Trust, a private foundation, and of
NutraMax Products, Inc., a public consumer health care products
company. He formerly was President, Chief Executive Officer and
Director of MEDIQ Incorporated (health care services) from 1977
to 1995. Mr. Korman has been a Director of Omega Healthcare
since 1993 and also is a Director of the following public
companies: The New America High Income Fund (financial
services), The Pep Boys, Inc. (auto supplies), and Kranzco
Realty Trust (real estate investment trust).

Mr. Noble joined Worldwide in March 1999 as Vice
President and Chief Financial Officer. From 1995 to 1998,
Mr. Noble was Chief Financial Officer of the international
group of Culligan Water Technologies, Inc., a manufacturer of
water treatment products. From 1991 to 1995, he was Assistant
Treasurer for Astrum International, Inc., a holding company in
diverse industries.

5



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Mr. Parker served as Chairman of the Companys Board
of Directors from April 1998 to July 2000. He was a
consultant to and Director of Omega Healthcare from 1992 to July
2000. Mr. Parker was Chairman of Omega Healthcare from 1992
to 1995 and Managing Director of Omega Healthcare Capital from
1986 to 1992. From 1972 through 1983, Mr. Parker was a
senior officer of Beverly Enterprises, the largest operator of
long-term care facilities in the United States. At the time of
his retirement in 1983, Mr. Parker was Executive Vice President
of Beverly Enterprises. Mr. Parker is a registered
architect and is licensed in California and Oklahoma.
Mr. Parker also served as a Director of GranCare, Inc., a
public company engaged in the operation of long-term care
facilities, from 1995 to 1997, and of Vitalink Pharmacy Services
Inc., a publicly-traded institutional pharmacy, during 1997. He
has served as a director of Principal-UK since 1995, and of
First National Bank of Bethany, Oklahoma.

The Company believes that all filings required to be made
pursuant to Section 16(a) of the Securities Exchange Act of
1934 were timely made.

Item 2  Properties

At September 30, 2000, the Companys owned property
consists of two purchased nursing homes located in the United
Kingdom, operated by subsidiaries of Idun. Subsidiaries of Idun
are the tenants of 117 nursing homes located throughout the
United Kingdom.

Item 3  Legal Proceedings

There were no legal proceedings pending as of September 30,
2000, or as of the date of this report, to which the Company is
a party or to which the properties are subject, other than those
incurred in the normal course of operating the Idun nursing
homes. In the opinion of management, the resolution of these
cases will not result in a material adverse impact to the
Company.

Item 4  Submission of Matters to a Vote of
Security Holders

No matters were submitted to shareholders during the last
quarter of the year covered by this report.



PART II


Item 5  Market for Registrants Common Equity
and Related Shareholder Matters

The Companys shares of common stock are traded on the
NASDAQ National Market System under the symbol OWWI. The
following tables sets forth, for the periods shown, the high and
low closing prices reported on the NASDAQ National Market System:

|                                      |        |      |  |                                       |       |  |  |         |       |      |  |     |  |  |        |  |  |   |       |  |  |   |       | 
|------------------------------------- | ------ | ---- |  | ------------------------------------- | ----- |  |  | ------- | ----- | ---- |  | --- |  |  | ------ |  |  | - | ----- |  |  | - | ----- | 
|                                      |        |      |  |                                      
|Fiscal Year Ending September 30, 2000 |        |      |  | Fiscal Year Ending September 30, 1999
|                                      |        |      |  |                                      
|Quarter                               |        | High |  | Low                                   |       |  |  | Quarter |       | High |  | Low
|                                      |        |      |  |                                       |       |  |  |         |       |      |  |    
|                                      | First  |      |  | $                                     | 4.656 |  |  | $       | 3.625 |      |  |     |  |  | First  |  |  | $ | 4.750 |  |  | $ | 3.500 | 
|                                      | Second |      |  | $                                     | 5.063 |  |  | $       | 4.188 |      |  |     |  |  | Second |  |  | $ | 5.250 |  |  | $ | 3.438 | 
|                                      | Third  |      |  | $                                     | 4.688 |  |  | $       | 3.625 |      |  |     |  |  | Third  |  |  | $ | 6.000 |  |  | $ | 3.563 | 
|                                      | Fourth |      |  | $                                     | 3.875 |  |  | $       | 2.125 |      |  |     |  |  | Fourth |  |  | $ | 4.500 |  |  | $ | 4.000 | 

The closing price quoted on the NASDAQ National Market System on
December 15, 2000 was $2.25 per share. As of
December 15, 2000, there are 12,340,553 shares of common
stock outstanding with 2,000 registered holders and
approximately 12,000 beneficial owners.

6



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Item 6  Selected Financial Data

The following selected financial data should be used in
conjunction with the Companys consolidated financial
statements appearing elsewhere herein (In thousands, except per
share data):

|                                                                    |  |               |         |               |  |                  |        |   |  |   |        |  
|------------------------------------------------------------------- |  | ------------- | ------- | ------------- |  | ---------------- | ------ | - |  | - | ------ | -
|                                                                    |  |               |         |               |  | Period from     
|                                                                    |  | Year Ended    |         | Year Ended    |  | April 2, 1998 to
|                                                                    |  | September 30, |         | September 30, |  | September 30,   
|                                                                    |  | 2000          |         | 1999          |  | 1998            
|                                                                    |  |               |         |               |  |                 
|Revenues                                                            |  | $             | 145,609 |               |  | $                | 14,753 |   |  | $ | 5,095  |  
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|Operating income (loss)                                             |  |               | (535    | )             |  |                  | 6,414  |   |  |   | 2,429  |  
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|Equity in earnings of Principal Healthcare Finance Limited          |  |               | 1,468   |               |  |                  | 1,223  |   |  |   | 421    |  
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|Equity in earnings of Principal Healthcare Finance Trust            |  |               | 485     |               |  |                  | 484    |   |  |   |       |  
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|Equity in earnings (loss) of Essex Healthcare, Inc                  |  |               | 10      |               |  |                  | (282   | ) |  |   | 32     |  
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|Gain on dilution of interest in Principal Healthcare
	Finance Trust |  |               |        |               |  |                  | 951    |   |  |   |       |  
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|Recognized impairment of investment (Tamaris plc)                   |  |               |        |               |  |                  | (938   | ) |  |   |       |  
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|Income tax (provision) benefit                                      |  |               | 18      |               |  |                  | (2,389 | ) |  |   | (927   | )
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|Net earnings                                                        |  |               | 1,446   |               |  |                  | 5,463  |   |  |   | 1,955  |  
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|Net earnings available to common shareholders                       |  |               | 1,238   |               |  |                  | 5,255  |   |  |   | 1,851  |  
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|Earnings per common share, basic                                    |  |               | 0.10    |               |  |                  | 0.43   |   |  |   | 0.15   |  
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|Earnings per common share, diluted                                  |  |               | 0.10    |               |  |                  | 0.43   |   |  |   | 0.15   |  
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|Average shares outstanding, basic                                   |  |               | 12,297  |               |  |                  | 12,261 |   |  |   | 12,255 |  
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|Average shares outstanding, diluted                                 |  |               | 12,345  |               |  |                  | 12,262 |   |  |   | 12,255 |  

|                            |  |               |        |      |  |   |        | 
|--------------------------- |  | ------------- | ------ | ---- |  | - | ------ | 
|                            |  |              
|                            |  | September 30,
|                            |  |              
|                            |  | 2000          |        | 1999
|                            |  |               |        |     
|Balance Sheet Data          |  |               |        |      |  |   |        | 
|                           
|                           
|                           
|                           
|Current assets              |  | $             | 16,990 |      |  | $ | 7,042  | 
|                           
|                           
|                           
|                           
|Total assets                |  |               | 92,500 |      |  |   | 68,412 | 
|                           
|                           
|                           
|                           
|Total current liabilities   |  |               | 24,097 |      |  |   | 4,272  | 
|                           
|                           
|                           
|                           
|Long-term debt              |  |               | 2,323  |      |  |   |       | 
|                           
|                           
|                           
|                           
|Other long-term liabilities |  |               | 322    |      |  |   |       | 
|                           
|                           
|                           
|                           
|Total shareholders equity  |  |               | 65,758 |      |  |   | 64,140 | 

Item 7  Managements Discussion and
Analysis of Financial Condition and Results of Operations

Safe Harbor Statement Under the United States
Private Securities Litigation Reform Act of 1995. Statements
that are not historical facts contained in Managements
Discussion and Analysis are forward-looking statements that
involve risks and uncertainties that could cause actual results
to differ from projected results. Some of the factors that could
cause actual results to differ materially include: The financial
strength of the operators of the facilities owned by the
Companys investees as it affects their continuing ability
to meet their obligations under the terms of the lease
agreements; changes in the operators or ownership of operators;
government policy relating to the healthcare industry, including
changes in the reimbursement levels; Iduns and other
operators continued eligibility to participate in the
government-sponsored payment programs; changes in reimbursement
by other third-party payors; occupancy levels at the facilities;
the availability and cost of capital of the Company and its
investees; the strength and financial resources of competitors
of the Company and investees; the ability of investees to make
additional real estate investments at attractive yields; and the
ability of investees to obtain debt and equity capital at
reasonable costs.

Following is a discussion and analysis of the Companys
consolidated results of operations, financial condition and
liquidity and capital resources. The discussion should be read
in conjunction with the audited consolidated financial
statements and notes thereto. The Company began operations on
April 2, 1998.

7



---





Results of Operations

In prior years the Company generated income from three primary
sources: (1) fee income from providing investment advisory
and management services; (2) interest income from providing
financing to companies in the healthcare and healthcare
financing industries; and (3) equity in earnings of
companies in the healthcare and healthcare financing industries.
In the first quarter of the current fiscal year, the Company
added a fourth income source when it acquired, through its
wholly-owned subsidiary, Idun Health Care Ltd.
(Idun), 119 nursing homes in the United
Kingdom. Company results for the year ended September 30,
2000 include eleven months of Iduns operations since the
date of acquisition.

Prior to April 1, 1999, Principal-Australia was reported on
a consolidated basis; currently, Principal-Australia, now 47%
owned, is reported under the equity method.

Revenues

Patient services revenue from Iduns operations was
$134,656,000 for the eleven months ending September 30,
2000. Occupancy grew from 88.2% at the date of acquisition to
90.7% at year-end. The improvement is the result of an increased
focus on marketing throughout Idun, but specifically in the
England homes, which have lower occupancy than those in Scotland
and Northern Ireland. The Company acquired Idun with the
intention of bringing occupancy up to levels required for
profitability and is directing significant resources to this end.

Fee income from Principal Healthcare Finance Limited
(Principal-UK) for the fiscal year of $5,040,000 is essentially
equal to the $4,918,000 reported last year. The terms of the
Companys agreement with Principal-UK call for a fee equal
to 90 basis points times value of Principal-UK gross assets
under management by the Company as computed using UK GAAP.
Average assets under management at Principal-UK increased 7.8%,
from £283 million to £305 million during the
current year. The increase in fees was offset by the reduced
value of the British pound sterling versus the US dollar. At
year-end, assets under management stood at
£311 million. For fiscal year 1999, assets under
management increased 24.0%, resulting in the reported increase
over annualized results for fiscal year 1998. The fee agreement
is scheduled to expire on December 31, 2002.

Fee income from Principal Healthcare Finance Trust
(Principal-Australia) is an amount equal to
90 basis points times the value of
Principal-Australias assets under management by the
Company, as computed under Australian GAAP. Prior to
April 1, 1999, Principal-Australia fees were eliminated as
a result of consolidation. Average assets under management in
Australia increased 51.3% for the year, from A$119 million
to A$180 million. Principal-Australias assets under
management at year-end were A$182 million.

Interest income from Principal-UK was $4,628,000 for fiscal year
2000, compared to $4,761,000 and $1,784,000, respectively, for
the two prior fiscal periods. Interest income is earned on
£15 million of subdebt and temporary cash advances as
required by Principal-UK. The impact of the annual interest rate
increase for subordinated debt was $101,000 in fiscal year 2000
and $88,000 for fiscal year 1999. The interest rate on temporary
advances remains fixed at 9.25% and average balances outstanding
were £10.2 million, £11.0 million and
£5.9 million for the fiscal years 2000, 1999 and 1998,
respectively.

Rent income in prior years relates to the period when
Principal-Australia was a consolidated entity. The increase from
fiscal 1998 to 1999 was the result of the consolidation of two
months of Principal-Australia activity in fiscal year 1998 and
six months activity in fiscal year 1999.

Expenses

Cost of patient services is incurred in running the Idun nursing
homes in the United Kingdom. Minimum wage increases and
increased costs of temporary services and overtime have pushed
costs up faster than

8



---





Despite the increase in levels of assets managed, the total
direct cost of asset management, allocated expenses and general
and administrative costs declined by $91,000 from the comparable
period last year. The allocation from Omega Healthcare
Investors, Inc. (Omega Healthcare) declined as a
result of a reduction in overall cost and negotiated adjustments
to previously billed amounts. Beginning July 1, 2000,
allocations were further reduced, as Omega Healthcare is no
longer providing the services of shared executives for the
Company. The increase in fiscal 1999 from annualized 1998
results was caused by the opening of the Australian offices and
was reflective of increased assets under management.
Principal-Australia incurred most of the interest and
depreciation expense in the prior year and is no longer
consolidated. Interest expense in the current year arose from
financing required to fund the operations of the Idun nursing
home businesses.

Non-recurring expenses in the current year were incurred for
advice in pursuing strategic alternatives, including a possible
merger or sale transaction. As previously announced, the Company
continues to pursue strategic alternatives to maximize
shareholder value and is exploring the sale of certain or all of
its underlying assets.

Other

Equity earnings of Principal-UK increased from $1,223,000 in the
prior year to $1,468,000 in the current year. The Companys
ownership percentage in Principal-UK has remained constant at
33.375%. The increased income is due to improved performance of
Principal-UK as its leased assets and their rents have
increased, and Principal-UK achieved more favorable long-term
finance rates with the securitization of certain of its rental
properties in March 1999. Equity in earnings of
Principal-Australia decreased on an annualized basis in 2000
(only six months in 1999) due to the A$182 million
financing completed in September 1999. Not all of the
proceeds have yet been reinvested in rental properties. Although
we are pursuing numerous prospects, the return on temporary
investment is not adequate to cover the interest expense.

The change in the Medicare payment structure enacted last year
in the United States resulted in the prior year loss of $282,000
for Essex Healthcare Corporation (Essex). Essex
management made progress in structuring operations to be
profitable under this payment structure and in improving
performance at the several skilled nursing facilities that were
acquired when they were unprofitable. In addition, it has
doubled its beds in fiscal year 2000 to take advantage of the
benefits of economies of scale. Subsequent to year-end, the
Company sold its shares in Essex to Essex for $325,000 in cash,
which approximates book value.

On April 1, 1999 Principal-Australia sold 6,625,000
newly-issued shares to Omega Healthcare and AMP, and sold
875,000 additional shares to the Company, diluting the
Companys ownership to 47%. The transaction created a
one-time gain on dilution of interest in Principal-Australia of
$951,000, resulting in after-tax earnings of $628,000, or
$0.05 per share. Also in fiscal 1999, the Company recorded
a loss of $938,000 on its investment in Tamaris plc, created by
a decline in Tamaris stock price on the London Exchange.
The affected shares were tendered in fiscal year 2000 as part of
the consideration in Iduns purchase of Tamaris
nursing home assets.

The Companys effective tax rate on a year-to-date basis
varies from the federal statutory rate of 34% due to the benefit
available from foreign tax credits on equity in earnings of
Principal-UK which is reported after UK tax expense.

Liquidity and Capital Resources

The Company has outstanding at year-end $4,850,000 of debt under
its line of credit agreement with Fleet Bank, NA, and Harris
Trust and Savings Bank. Repayment is due in full by
June 30, 2001. The Company anticipates the need to invest
approximately $4 million of additional capital in Idun for
unpaid

9



---





Year 2000

The Company is not aware of any significant adverse effects of
year 2000 on its systems and operations.

Impact of Recently Issued Accounting Standards

In December 1999, the Securities and Exchange Commission (the
Commission) issued Staff Accounting Bulletin
No. 101 (SAB 101), Revenue
Recognition in Financial Statements. SAB 101
summarizes certain of the Commissions views in applying
generally accepted accounting principles to revenue recognition
in financial statements. In June 2000, the Commission issued
SAB 101B to defer the effective date of implementation of
SAB 101 to the calendar fourth quarter 2000. The Company
will adopt SAB 101 as of October 1, 2000 and does not
expect the adoption to have material impact on the
Companys operations.

In June 2000, the Financial Accounting Standards Board
(FASB) issued Statement of Financial Accounting
Standards (SFAS) 138, Accounting for Certain
Derivative Instruments and Certain Hedging Activities,
which amends SFAS 133, Accounting for Derivative
Instruments and Hedging Activities. SFAS 133 was
previously amended by SFAS 137 Accounting for
Derivative Instruments and Hedging Activities 
Deferral of the Effective Date of FASB Statement 133,
which deferred the effective date of SFAS 133 to fiscal
years beginning after June 15, 2000. The Company will adopt
SFAS 133 and SFAS 138 effective October 1, 2000.
SFAS 133 and SFAS 138 will require the Company to
recognize all derivatives on the balance sheet at fair value.
Derivatives that are not hedges must be adjusted to fair value
through income. If the derivative is a hedge, depending on the
nature of the hedge, changes in the fair value of derivatives
will either be offset against the change in fair value of the
hedged assets, liabilities, or firm commitments, through
earnings or recognized in other comprehensive income until the
hedged item is recognized in earnings. The ineffective portion
of the derivatives change in fair value will be recognized
immediately in earnings. Based on the Companys derivative
positions and their related fair values of approximately
$38.5 million recorded at September 30, 2000, the
Company estimates that there will not be a material impact on
the consolidated financial statements.

Item 7a.  Quantitative and Qualitative Disclosure
about Market Risk

The Company is exposed to various market risks. Market risk is
the potential loss arising from adverse changes in market
interest rates and prices, such as short-term borrowing and
foreign currency exchange rates. The Company does not enter into
derivatives or other financial instruments for trading or
speculative purposes. The Company enters into forward foreign
currency contracts, principally to hedge currency fluctuations
in its investments denominated in foreign currencies, thereby
limiting the Companys risk that would otherwise result
from changes in exchange rates. At September 30, 2000, the
Company had outstanding a British pound sterling forward
currency swap to exchange £20 million for $31,750,000
to mature on October 15, 2007, and an Australian dollar
forward currency swap to exchange $11.0 million Australia
dollars for $6,749,000 to mature on July 3, 2003. From time
to time, the Company also may obtain hedges for its foreign
currency exposure relative to temporary loans to Principal-UK
and Idun. Because of the Companys foreign exchange
contracts, its sensitivity to foreign exchange currency exposure
is considered partially mitigated. Most components of the
Companys income are earned in currencies other than the
dollar and are subject to fluctuation.

The Company has approximately $10 million of debt
outstanding at September 30, 2000. All of the debt incurs
interest expense based on rates that fluctuate with Libor or an
equivalent benchmark. Iduns lease

10



---





Item 8  Financial Statements and
Supplementary Data

The consolidated financial statements and report of independent
auditors are filed as part of this report on pages F-1
through F-19.

Item 9  Changes in and Disagreements
with Accountants on Accounting and Financial Disclosure

None.



PART III


Item 10  Directors and Executive Officers of
the Registrant

Located in Part I as permitted by Instruction 3 to
Item 401(b) of Regulation S-K.

Item 11  Executive Compensation

The information required by this item is incorporated by
reference to the Companys definitive proxy statement for
the 2001 Annual Meeting of Shareholders, which is expected to be
filed on or about January 25, 2001 with the Securities and
Exchange Commission pursuant to Regulation 14A.

Item 12  Security Ownership of Certain
Beneficial Owners and Management

The information required by this item is incorporated by
reference to the Companys definitive proxy statement for
the 2001 Annual Meeting of Shareholders, which is expected to be
filed on or about January 25, 2001 with the Securities and
Exchange Commission pursuant to Regulation 14A.

Item 13  Certain Relationships and Related
Transactions

The information required by this item is incorporated by
reference to the Companys definitive proxy statement for
the 2001 Annual Meeting of Shareholders which is expected to be
filed on or about January 25, 2001 with the Securities and
Exchange Commission pursuant to Regulation 14A.



PART IV


Item 14  Exhibits, Financial Statements,
Financial Statement Schedules and Reports on Form 8-K.

(a)(1)  Listing of Consolidated Financial Statements

|                                                                                                                                                              |  |        |     |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------ | --- | -
|                                                                                                                                                              |  | Page  
|Title of Document                                                                                                                                             |  | Number
|                                                                                                                                                              |  |       
|Report of Independent Auditors                                                                                                                                |  |        | F-1 |  
|                                                                                                                                                             
|                                                                                                                                                             
|                                                                                                                                                             
|                                                                                                                                                             
|Consolidated Balance Sheets as of September 30, 2000 and
	September 30, 1999                                                                                  |  |        | F-2 |  
|                                                                                                                                                             
|                                                                                                                                                             
|                                                                                                                                                             
|                                                                                                                                                             
|Consolidated Statements of Operations for the years ended
	September 30, 2000, and 1999 and for the period from
	April  2, 1998 to September 30, 1998         |  |        | F-3 |  
|                                                                                                                                                             
|                                                                                                                                                             
|                                                                                                                                                             
|                                                                                                                                                             
|Consolidated Statements of Shareholders Equity for the
	years ended September 30, 2000 and 1999 and for the period
	from April 2, 1998 to September 30, 1998 |  |        | F-4 |  
|                                                                                                                                                             
|                                                                                                                                                             
|                                                                                                                                                             
|                                                                                                                                                             
|Consolidated Statements of Cash Flows the year ended
	September 30, 2000, and 1999 and for the period from
	April  2, 1998 to September 30, 1998              |  |        | F-5 | a
|                                                                                                                                                             
|                                                                                                                                                             
|                                                                                                                                                             
|                                                                                                                                                             
|Notes to Consolidated Financial Statements                                                                                                                    |  |        | F-6 |  

11



---



(a)(2)  Listing of Financial Statement Schedules. All
schedules for which provision is made in the applicable
accounting regulation of the Securities and Exchange Commission
are not required under the related instructions or are
inapplicable and, therefore, have been omitted.

(a)(3)  Listing of Exhibits  See Index to
Exhibits beginning on Page 17 of this report.

(b)  Reports on Form 8-K  none filed in the
quarter ended September 30, 2000.

(c)  Exhibits  See Index to Exhibits beginning
on Page 17 of this report.

(d)  Financial Statement Schedules  The
following consolidated financial statement schedule is included
herein: None

12



---





SIGNATURES


Pursuant to the requirements of Sections 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused
this report to be signed on its behalf by the undersigned
hereunto duly authorized.



| |                      
| | ---------------------
| | OMEGA WORLDWIDE, INC.



| |     |                      
| | --- | ---------------------
| | By: | /s/ JAMES P. FLAHERTY

| |                       
| | ----------------------
| |                       
| | James P. Flaherty     
| | President and Director



Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed by the following persons on
behalf of the Registrant and in the capacities on the date
indicated.

|                                                              |  |                                                                                   |  |      |                   | 
|------------------------------------------------------------- |  | --------------------------------------------------------------------------------- |  | ---- | ----------------- | 
|Signatures                                                    |  | Title                                                                             |  | Date
|                                                              |  |                                                                                   |  |     
|PRINCIPAL EXECUTIVE OFFICER                                   |  |                                                                                   |  |      |                   | 
|/s/ JAMES P. FLAHERTY James P. Flaherty                       |  | President and Director                                                            |  |      | December 28, 2000 | 
|PRINCIPAL FINANCIAL OFFICER and
	PRINCIPAL ACCOUNTING OFFICER
|/s/ EDWARD C. NOBLE Edward C. Noble                           |  | Vice President, Secretary,
	Chief Financial Officer and
	Chief Accounting Officer |  |      | December 28, 2000 | 
|                                                             
|DIRECTORS                                                     |  |                                                                                   |  |      |                   | 
|/s/ JAMES A. EDEN James A. Eden                               |  | Chairman of the Board                                                             |  |      | December 28, 2000 | 
|/s/ THOMAS F. FRANKE Thomas F. Franke                         |  | Director                                                                          |  |      | December 28, 2000 | 
|/s/ ANIL K. GUPTA Anil K. Gupta                               |  | Director                                                                          |  |      | December 28, 2000 | 
|/s/ HAROLD J. KLOOSTERMAN Harold J. Kloosterman               |  | Director                                                                          |  |      | December 28, 2000 | 
|/s/ BERNARD J. KORMAN Bernard J. Korman                       |  | Director                                                                          |  |      | December 28, 2000 | 
|/s/ ROBERT L. PARKERRobert L. Parker                          |  | Director                                                                          |  |      | December 28, 2000 | 

13



---



Report of Independent Auditors

Board of Directors



We have audited the accompanying consolidated balance sheets of
Omega Worldwide, Inc. as of September 30, 2000 and 1999,
and the related consolidated statements of operations,
shareholders equity and cash flows for the years ended
September 30, 2000 and 1999 and the period from
April 2, 1998 (commencement of operations) through
September 30, 1998. These financial statements are the
responsibility of the Companys management. Our
responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with auditing standards
generally accepted in the United States. Those standards require
that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred
to above present fairly, in all material respects, the
consolidated financial position of Omega Worldwide, Inc. at
September 30, 2000 and 1999, and the consolidated results
of their operations and their cash flows for years ended
September 30, 2000 and 1999 and the period from
April 2, 1998 (commencement of operations) through
September 30, 1998, in conformity with accounting
principles generally accepted in the United States.



| |                      
| | ---------------------
| | /s/ Ernst & Young LLP

Chicago, Illinois



F-1



---





OMEGA WORLDWIDE, INC.


CONSOLIDATED BALANCE SHEETS

(In thousands, except par values)


|                                                                          |                                               |                                                        |                                            |        |       |        |        |        |       |        | 
|------------------------------------------------------------------------- | --------------------------------------------- | ------------------------------------------------------ | ------------------------------------------ | ------ | ----- | ------ | ------ | ------ | ----- | ------ | 
|                                                                          |                                               |                                                       
|                                                                          |                                               | September 30,                                         
|                                                                          |                                               |                                                       
|                                                                          |                                               | 2000                                                   |                                            | 1999  
|                                                                          |                                               |                                                        |                                            |       
|ASSETS                                                                    |                                               |                                                        |                                            |        |       |        |        |       
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|Current assets:                                                           |                                               |                                                        |                                            |        |       |        |        |       
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|                                                                          | Cash and short-term investments               |                                                        | $                                          | 3,415  |       |        | $      | 5,738  |      
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|                                                                          | Restricted cash                               |                                                        |                                            | 2,786  |       |        |        | 389    |      
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|                                                                          | Patient receivables                           |                                                        |                                            | 7,763  |       |        |        |       |      
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|                                                                          | Other current assets                          |                                                        |                                            | 3,026  |       |        |        | 915    |      
|                                                                          |                                               |                                                        |                                            |        |       |        |        |       
|                                                                          |                                               |                                                        | Total current assets                       |        |       | 16,990 |        |        |       | 7,042  | 
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|Plant, property and equipment, net of accumulated
	depreciation of $1,604 |                                               |                                                        | 14,560                                     |        |       |        |       |       
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|Investments in and advances to Principal Healthcare Finance
	Limited      |                                               |                                                        | 42,735                                     |        |       |        | 48,842 |       
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|Investments in Principal Healthcare Finance Trust                         |                                               |                                                        | 6,930                                      |        |       |        | 6,619  |       
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|Prepaid rent                                                              |                                               |                                                        | 4,031                                      |        |       |        |       |       
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|Rent deposits                                                             |                                               |                                                        | 3,657                                      |        |       |        |       |       
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|Other assets                                                              |                                               |                                                        | 3,597                                      |        |       |        | 5,909  |       
|                                                                          |                                               |                                                        |                                            |        |       |        |        |       
|                                                                          |                                               |                                                        | 75,510                                     |        |       |        | 61,370 |       
|                                                                          |                                               |                                                        |                                            |        |       |        |        |       
|                                                                          |                                               |                                                        | Total assets                               |        | $     | 92,500 |        |        | $     | 68,412 | 
|                                                                          |                                               |                                                        |                                            |        |       |        |        |       
|                                                                         
|LIABILITIES AND SHAREHOLDERS EQUITY                                      |                                               |                                                        |                                            |        |       |        |        |       
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|Current liabilities:                                                      |                                               |                                                        |                                            |        |       |        |        |       
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|                                                                          | Short-term debt                               |                                                        | $                                          | 7,755  |       |        | $      |       |      
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|                                                                          | Accounts payable and accrued expenses         |                                                        |                                            | 15,190 |       |        |        | 1,177  |      
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|                                                                          | Accrued income taxes                          |                                                        |                                            | 80     |       |        |        | 1,880  |      
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|                                                                          | Deferred income                               |                                                        |                                            | 1,072  |       |        |        | 1,215  |      
|                                                                          |                                               |                                                        |                                            |        |       |        |        |       
|                                                                          |                                               |                                                        | Total current liabilities                  |        |       | 24,097 |        |        |       | 4,272  | 
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|Long-term debt                                                            |                                               |                                                        | 2,323                                      |        |       |        |       |       
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|Other long-term liabilities                                               |                                               |                                                        | 322                                        |        |       |        |       |       
|                                                                          |                                               |                                                        |                                            |        |       |        |        |       
|                                                                          |                                               |                                                        | Total liabilities                          |        |       | 26,742 |        |        |       | 4,272  | 
|                                                                          |                                               |                                                        |                                            |        |       |        |        |       
|Shareholders equity:                                                     |                                               |                                                        |                                            |        |       |        |        |       
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|                                                                          | Preferred stock $1.00 par value:              |                                                        |                                            |        |       |        |        |        |      
|                                                                          |                                               | Authorized  10,000 shares                             |                                            |        |       |        |        |        |       |       
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|                                                                          |                                               | Outstanding 260 Class B shares at liquidation value    |                                            |        | 2,600 |        |        |        | 2,600 |       
|                                                                          | Common stock $.10 par value                   |                                                        |                                            |        |       |        |        |        |      
|                                                                          |                                               | Authorized  50,000 shares                             |                                            |        |       |        |        |        |       |       
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|                                                                          |                                               | Outstanding  12,341 shares in 2000 and 12,266 in 1999 |                                            |        | 1,234 |        |        |        | 1,227 |       
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|                                                                          | Additional paid-in capital                    |                                                        |                                            | 53,157 |       |        |        | 52,893 |      
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|                                                                          | Retained earnings                             |                                                        |                                            | 8,864  |       |        |        | 7,418  |      
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|                                                                          | Accumulated other comprehensive income (loss) |                                                        |                                            | (97    | )     |        |        | 2      |      
|                                                                          |                                               |                                                        |                                            |        |       |        |        |       
|                                                                          |                                               |                                                        | Total shareholders equity                 |        |       | 65,758 |        |        |       | 64,140 | 
|                                                                          |                                               |                                                        |                                            |        |       |        |        |       
|                                                                          |                                               |                                                        | Total liabilities and shareholders equity |        | $     | 92,500 |        |        | $     | 68,412 | 
|                                                                          |                                               |                                                        |                                            |        |       |        |        |       

See notes to consolidated financial statements.

F-2



---



OMEGA WORLDWIDE, INC.



CONSOLIDATED STATEMENTS OF OPERATIONS


|                                                                    |                                                          |                                          |         |                   |       |                    |        |       |       |   |        |       |       | 
|------------------------------------------------------------------- | -------------------------------------------------------- | ---------------------------------------- | ------- | ----------------- | ----- | ------------------ | ------ | ----- | ----- | - | ------ | ----- | ----- | 
|                                                                    |                                                          |                                          |         | Period from      
|                                                                    |                                                          | Year Ended                               |         | April 2, 1998    
|                                                                    |                                                          | September 30,                            |         | (Commencement    
|                                                                    |                                                          |                                          |         | of Operations) to
|                                                                    |                                                          | 2000                                     |         | 1999              |       | September 30, 1998
|                                                                    |                                                          |                                          |         |                   |       |                   
|                                                                    |                                                          |                                         
|                                                                    |                                                          | (In thousands, except per share amounts)
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|Revenue:                                                            |                                                          |                                          |         |                   |       |                    |        |       |       |   |        |      
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    | Patient services revenue                                 |                                          | $       | 134,656           |       |                    | $      |      |       |   | $      |      |      
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    | Fee income  Principal Healthcare Finance Limited        |                                          |         | 5,040             |       |                    |        | 4,918 |       |   |        | 1,920 |      
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    | Fee income  Principal Healthcare Finance Trust          |                                          |         | 1,013             |       |                    |        | 405   |       |   |        |      |      
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    | Interest Income:                                         |                                          |         |                   |       |                    |        |       |       |   |        |       |      
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    |                                                          | Principal Healthcare Finance Limited     |         |                   | 4,628 |                    |        |       | 4,761 |   |        |       | 1,784 | 
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    |                                                          | Short-term investments                   |         |                   | 250   |                    |        |       | 663   |   |        |       | 347   | 
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    | Rent income                                              |                                          |         |                  |       |                    |        | 3,908 |       |   |        | 1,014 |      
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    | Other income                                             |                                          |         | 22                |       |                    |        | 98    |       |   |        | 30    |      
|                                                                    |                                                          |                                          |         |                   |       |                    |        |       |       |   |        |      
|                                                                    |                                                          |                                          | 145,609 |                   |       |                    | 14,753 |       |       |   | 5,095  |      
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|Expenses:                                                           |                                                          |                                          |         |                   |       |                    |        |       |       |   |        |      
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    | Direct cost of patient services                          |                                          |         | 139,704           |       |                    |        |      |       |   |        |      |      
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    | Direct costs of asset management                         |                                          |         | 2,797             |       |                    |        | 2,494 |       |   |        | 1,113 |      
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    | General and administrative                               |                                          |         | 1,548             |       |                    |        | 1,718 |       |   |        | 485   |      
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    | Allocated expenses from Omega Healthcare Investors, Inc. |                                          |         | 544               |       |                    |        | 768   |       |   |        | 303   |      
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    | Imputed and other interest                               |                                          |         | 963               |       |                    |        | 2,685 |       |   |        | 573   |      
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    | Provision for depreciation                               |                                          |         | 91                |       |                    |        | 674   |       |   |        | 192   |      
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    | Non-recurring expenses                                   |                                          |         | 497               |       |                    |        |      |       |   |        |      |      
|                                                                    |                                                          |                                          |         |                   |       |                    |        |       |       |   |        |      
|                                                                    |                                                          |                                          | 146,144 |                   |       |                    | 8,339  |       |       |   | 2,666  |      
|                                                                    |                                                          |                                          |         |                   |       |                    |        |       |       |   |        |      
|Earnings (loss) before equity earnings and income taxes             |                                                          |                                          | (535    | )                 |       |                    | 6,414  |       |       |   | 2,429  |      
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|Equity in earnings of Principal Healthcare Finance Limited          |                                                          |                                          | 1,468   |                   |       |                    | 1,223  |       |       |   | 421    |      
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|Equity in earnings of Principal Healthcare Finance Trust            |                                                          |                                          | 485     |                   |       |                    | 484    |       |       |   |       |      
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|Equity in earnings (loss) of Essex Healthcare Corporation           |                                                          |                                          | 10      |                   |       |                    | (282   | )     |       |   | 32     |      
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|Gain on dilution of interest in Principal Healthcare
	Finance Trust |                                                          |                                          |        |                   |       |                    | 951    |       |       |   |       |      
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|Recognized impairment of investment (Tamaris plc)                   |                                                          |                                          |        |                   |       |                    | (938   | )     |       |   |       |      
|                                                                    |                                                          |                                          |         |                   |       |                    |        |       |       |   |        |      
|Earnings before income taxes                                        |                                                          |                                          | 1,428   |                   |       |                    | 7,852  |       |       |   | 2,882  |      
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|Income tax (provision) benefit                                      |                                                          |                                          | 18      |                   |       |                    | (2,389 | )     |       |   | (927   | )    
|                                                                    |                                                          |                                          |         |                   |       |                    |        |       |       |   |        |      
|Net earnings                                                        |                                                          |                                          | 1,446   |                   |       |                    | 5,463  |       |       |   | 1,955  |      
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|Net earnings allocated to preferred stock dividends                 |                                                          |                                          | (208    | )                 |       |                    | (208   | )     |       |   | (104   | )    
|                                                                    |                                                          |                                          |         |                   |       |                    |        |       |       |   |        |      
|Net earnings available to common shareholders                       |                                                          | $                                        | 1,238   |                   |       | $                  | 5,255  |       |       | $ | 1,851  |      
|                                                                    |                                                          |                                          |         |                   |       |                    |        |       |       |   |        |      
|Earnings per common share, basic                                    |                                                          | $                                        | 0.10    |                   |       | $                  | 0.43   |       |       | $ | 0.15   |      
|                                                                    |                                                          |                                          |         |                   |       |                    |        |       |       |   |        |      
|Earnings per common share, diluted                                  |                                                          | $                                        | 0.10    |                   |       | $                  | 0.43   |       |       | $ | 0.15   |      
|                                                                    |                                                          |                                          |         |                   |       |                    |        |       |       |   |        |      
|Average shares outstanding, basic                                   |                                                          |                                          | 12,297  |                   |       |                    | 12,261 |       |       |   | 12,255 |      
|                                                                    |                                                          |                                          |         |                   |       |                    |        |       |       |   |        |      
|Average shares outstanding, diluted                                 |                                                          |                                          | 12,345  |                   |       |                    | 12,262 |       |       |   | 12,255 |      
|                                                                    |                                                          |                                          |         |                   |       |                    |        |       |       |   |        |      
|Total comprehensive income, net of income taxes                     |                                                          | $                                        | 1,347   |                   |       | $                  | 5,456  |       |       | $ | 1,964  |      
|                                                                    |                                                          |                                          |         |                   |       |                    |        |       |       |   |        |      

See notes to consolidated financial statements.

F-3



---



OMEGA WORLDWIDE, INC.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY

(In thousands, except per share amount)


|                                         |                                                                                                                |                                                                          |       |            |     |           |        |          |        |               |       |   |       |   |       |   |   |   |     |   |   | 
|---------------------------------------- | -------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------ | ----- | ---------- | --- | --------- | ------ | -------- | ------ | ------------- | ----- | - | ----- | - | ----- | - | - | - | --- | - | - | 
|                                         |                                                                                                                |                                                                          |       |            |     |           |        |          |        | Accumulated  
|                                         |                                                                                                                |                                                                          |       |            |     |           |        |          |        | Other        
|                                         |                                                                                                                |                                                                          |       | Additional |     |           |        |          |        | Comprehensive
|                                         |                                                                                                                | Common Stock                                                             |       | Paid-In    |     | Preferred |        | Retained |        | Income       
|                                         |                                                                                                                | Par Value                                                                |       | Capital    |     | Stock     |        | Earnings |        | (Loss)       
|                                         |                                                                                                                |                                                                          |       |            |     |           |        |          |        |              
|Issuance of stock:                       |                                                                                                                |                                                                          |       |            |     |           |        |          |        |               |       |   |       |   |       |   |   |   |     |  
|                                         | Issuance of 8,500 common shares and 260 preferred shares to
	Omega Healthcare                                  |                                                                          |       |            |     |           |        |          |        |               |       |   |       |   |       |   |   |   |     |   |  
|                                        
|                                        
|                                        
|                                        
|                                         |                                                                                                                | Investors, Inc.                                                          |       | $          | 850 |           |        | $        | 25,802 |               |       | $ | 2,600 |   |       | $ |  |   |     | $ |  | 
|                                        
|                                        
|                                        
|                                        
|                                         | Proceeds from April 2, 1998 equity offering of 3,750 shares
	at $7.50 per share, net of issuance costs of $750 |                                                                          |       | 375        |     |           |        | 27,000   |        |               |       |  |       |   |       |  |   |   |     |  |  
|                                        
|                                        
|                                        
|                                        
|                                         | Grants of restricted stock (8 shares at $7.50 per share)                                                       |                                                                          |       | 1          |     |           |        | 59       |        |               |       |  |       |   |       |  |   |   |     |  |  
|                                        
|                                        
|                                        
|                                        
|Net earnings for 1998                    |                                                                                                                |                                                                          |      |            |     |           |       |          |        |               |      |   |       |   | 1,955 |   |   |   |    |  
|                                        
|                                        
|                                        
|                                        
|Foreign currency translation adjustments |                                                                                                                |                                                                          |      |            |     |           |       |          |        |               |      |   |       |   |      |   |   |   | 9   |  
|                                         |                                                                                                                |                                                                          |       |            |     |           |        |          |        |               |       |   |       |   |       |   |   |   |     |  
|Balance at September 30, 1998            |                                                                                                                |                                                                          | 1,226 |            |     |           | 52,861 |          |        |               | 2,600 |   |       |   | 1,955 |   |   |   | 9   |  
|                                        
|                                        
|                                        
|                                        
|Issuance of stock:                       |                                                                                                                |                                                                          |       |            |     |           |        |          |        |               |       |   |       |   |       |   |   |   |     |  
|                                        
|                                        
|                                        
|                                        
|                                         |                                                                                                                | Grants of restricted stock (8 shares at an average of $4.09 per
	share)  |       |            | 1   |           |        |          | 32     |               |       |   |      |   |       |   |  |   |     |   |  | 
|                                        
|                                        
|                                        
|                                        
|Net earnings for 1999                    |                                                                                                                |                                                                          |      |            |     |           |       |          |        |               |      |   |       |   | 5,463 |   |   |   |    |  
|                                        
|                                        
|                                        
|                                        
|                                         | Foreign currency translation adjustments                                                                       |                                                                          |       |           |     |           |        |         |        |               |       |  |       |   |       |  |   |   |     |  |  
|                                         |                                                                                                                |                                                                          |       |            |     |           |        |          |        |               |       |   |       |   |       |   |   |   |     |  
|Balance at September 30, 1999            |                                                                                                                |                                                                          | 1,227 |            |     |           | 52,893 |          |        |               | 2,600 |   |       |   | 7,418 |   |   |   | 9   |  
|                                        
|                                        
|                                        
|                                        
|Issuance of stock:                       |                                                                                                                |                                                                          |       |            |     |           |        |          |        |               |       |   |       |   |       |   |   |   |     |  
|                                        
|                                        
|                                        
|                                        
|                                         |                                                                                                                | Grants of restricted stock (75 shares at an average of $3.64 per
	share) |       |            | 7   |           |        |          | 264    |               |       |   |      |   |       |   |  |   |     |   |  | 
|                                        
|                                        
|                                        
|                                        
|Net earnings for 2000                    |                                                                                                                |                                                                          |      |            |     |           |       |          |        |               |      |   |       |   | 1,446 |   |   |   |    |  
|                                        
|                                        
|                                        
|                                        
|Foreign currency translation adjustments |                                                                                                                |                                                                          |      |            |     |           |       |          |        |               |      |   |       |   |      |   |   |   | (99 | )
|                                         |                                                                                                                |                                                                          |       |            |     |           |        |          |        |               |       |   |       |   |       |   |   |   |     |  
|Balance at September 30, 2000            |                                                                                                                | $                                                                        | 1,234 |            |     | $         | 53,157 |          |        | $             | 2,600 |   |       | $ | 8,864 |   |   | $ | (90 | )
|                                         |                                                                                                                |                                                                          |       |            |     |           |        |          |        |               |       |   |       |   |       |   |   |   |     |  

See notes to consolidated financial statements.

F-4



---



OMEGA WORLDWIDE, INC.



CONSOLIDATED STATEMENTS OF CASH FLOWS


|                                                                                                                |                                                                                            |                |        |                   |   |                    |         |        |   |   |         |      |  
|--------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------ | -------------- | ------ | ----------------- | - | ------------------ | ------- | ------ | - | - | ------- | ---- | -
|                                                                                                                |                                                                                            |                |        | Period from      
|                                                                                                                |                                                                                            | Year Ended     |        | April 2, 1998    
|                                                                                                                |                                                                                            | September 30,  |        | (Commencement    
|                                                                                                                |                                                                                            |                |        | of Operations) to
|                                                                                                                |                                                                                            | 2000           |        | 1999              |   | September 30, 1998
|                                                                                                                |                                                                                            |                |        |                   |   |                   
|                                                                                                                |                                                                                            |               
|                                                                                                                |                                                                                            | (In thousands)
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|Operating activities:                                                                                           |                                                                                            |                |        |                   |   |                    |         |        |   |   |         |     
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|Net earnings                                                                                                    |                                                                                            | $              | 1,446  |                   |   | $                  | 5,463   |        |   | $ | 1,955   |     
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                                | Adjustments to reconcile net earnings to cash (used in) provided
	by operating activities: |                |        |                   |   |                    |         |        |   |   |         |      |  
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                                | Equity in earnings of Principal Healthcare Finance Limited                                 |                |        | (1,468            | ) |                    |         | (1,223 | ) |   |         | (421 | )
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                                | Equity in earnings of Principal Healthcare Finance Trust                                   |                |        | (485              | ) |                    |         | (484   | ) |   |         |     |  
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                                | Equity in (earnings) loss of Essex Healthcare Corporation                                  |                |        | (10               | ) |                    |         | 282    |   |   |         | (32  | )
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                                | Straight-line rent adjustment                                                              |                |        | 3,622             |   |                    |         |       |   |   |         |     |  
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                                | Depreciation and amortization                                                              |                |        | 1,553             |   |                    |         | 903    |   |   |         | 192  |  
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                                | Other non-cash charges                                                                     |                |        | 392               |   |                    |         | 402    |   |   |         | 92   |  
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                                | Gain on dilution of interest in Principal Healthcare Finance
	Trust                        |                |        |                  |   |                    |         | (951   | ) |   |         |     |  
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                                | Recognized impairment of investment in Tamaris, plc                                        |                |        |                  |   |                    |         | 938    |   |   |         |     |  
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                                | Imputed interest                                                                           |                |        |                  |   |                    |         | 1,146  |   |   |         | 573  |  
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                                | Write-off of investment in AVC Holdings                                                    |                |        |                  |   |                    |         | 281    |   |   |         |     |  
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                                | Net change in operating assets and liabilities                                             |                |        | (12,268           | ) |                    |         | 73     |   |   |         | (106 | )
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                                | Foreign currency translation                                                               |                |        | (99               | ) |                    |         | 7      |   |   |         | (22  | )
|                                                                                                                |                                                                                            |                |        |                   |   |                    |         |        |   |   |         |     
|Net cash (used in) provided by operating activities                                                             |                                                                                            |                | (7,317 | )                 |   |                    | 6,837   |        |   |   | 2,231   |     
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|Cash flows from financing activities:                                                                           |                                                                                            |                |        |                   |   |                    |         |        |   |   |         |     
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|Proceeds from revolving credit facility with bank                                                               |                                                                                            |                | 4,850  |                   |   |                    |        |        |   |   |        |     
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|Proceeds from (repayment of) revolving warehouse facility drawn
	by subsidiary                                  |                                                                                            |                | (2,564 | )                 |   |                    | 34,502  |        |   |   |        |     
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|Repayment of long-term borrowings by subsidiary                                                                 |                                                                                            |                | (1,227 | )                 |   |                    |        |        |   |   |        |     
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|Proceeds from issuance of common stock                                                                          |                                                                                            |                |       |                   |   |                    |        |        |   |   | 27,375  |     
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|Cash contributed by Omega Healthcare in exchange for liabilities
	assumed                                       |                                                                                            |                |       |                   |   |                    |        |        |   |   | 837     |     
|                                                                                                                |                                                                                            |                |        |                   |   |                    |         |        |   |   |         |     
|Net cash provided by financing activities                                                                       |                                                                                            |                | 1,059  |                   |   |                    | 34,502  |        |   |   | 28,212  |     
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|Cash flows from investing activities:                                                                           |                                                                                            |                |        |                   |   |                    |         |        |   |   |         |     
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|Acquisition of plant, property and equipment by subsidiaries                                                    |                                                                                            |                | (2,302 | )                 |   |                    | (49,288 | )      |   |   |        |     
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|Decrease (increase) in restricted cash                                                                          |                                                                                            |                | (2,397 | )                 |   |                    | 5,831   |        |   |   | (9,330  | )   
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|Repayments from (temporary advances to) Principal Healthcare
	Finance Limited                                   |                                                                                            |                | 7,575  |                   |   |                    | (9,989  | )      |   |   | (8,379  | )   
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|Cash received in acquisition of operating companies by Idun
	Health Care Limited net of cash consideration paid |                                                                                            |                | 727    |                   |   |                    |        |        |   |   |        |     
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|Proceeds from repayment of secured loan                                                                         |                                                                                            |                | 263    |                   |   |                    | 102     |        |   |   |         |     
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|Dividends from affiliates                                                                                       |                                                                                            |                | 174    |                   |   |                    | 272     |        |   |   |        |     
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|Repayment of temporary advances from Principal Healthcare
	Finance Trust                                        |                                                                                            |                |       |                   |   |                    | 13,631  |        |   |   |        |     
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|Investment in Tamaris, plc stock                                                                                |                                                                                            |                |       |                   |   |                    | (2,842  | )      |   |   |        |     
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|Investment in Principal Healthcare Finance Trust                                                                |                                                                                            |                |       |                   |   |                    | (1,108  | )      |   |   |        |     
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|Investment in Baneberry Healthcare Ltd.                                                                         |                                                                                            |                |       |                   |   |                    | (1,622  | )      |   |   |        |     
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|Loan to Baneberry Healthcare Ltd.                                                                               |                                                                                            |                |       |                   |   |                    | (228    | )      |   |   |        |     
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|Loan to an enterprise                                                                                           |                                                                                            |                |       |                   |   |                    | (465    | )      |   |   |        |     
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|Secured loan to individual                                                                                      |                                                                                            |                |       |                   |   |                    |        |        |   |   | (818    | )   
|                                                                                                               
|                                                                                                               
|                                                                                                               
|                                                                                                               
|Other                                                                                                           |                                                                                            |                | (105   | )                 |   |                    | (176    | )      |   |   | (1,635  | )   
|                                                                                                                |                                                                                            |                |        |                   |   |                    |         |        |   |   |         |     
|Net cash provided by (used in) investing activities                                                             |                                                                                            |                | 3,935  |                   |   |                    | (45,882 | )      |   |   | (20,162 | )   
|                                                                                                                |                                                                                            |                |        |                   |   |                    |         |        |   |   |         |     
|Increase (decrease) in cash and short-term investments                                                          |                                                                                            | $              | (2,323 | )                 |   | $                  | (4,543  | )      |   | $ | 10,281  |     
|                                                                                                                |                                                                                            |                |        |                   |   |                    |         |        |   |   |         |     

See notes to consolidated financial statements.

F-5



---



OMEGA WORLDWIDE, INC.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


September 30, 2000 and 1999

NOTE 1  ORGANIZATION AND SIGNIFICANT
ACCOUNTING POLICIES

Organization

Omega Worldwide, Inc. (the Company) was formed to
provide investment advisory and management services as well as
equity and debt capital to the healthcare industry, primarily in
Europe and the Pacific Rim. On April 2, 1998, the
Companys registration statement became effective, and it
offered 3,750,000 shares of common stock to the public at $7.50
per share. The Company received $27,375,000, net of issuance
costs of $750,000. Shares offered included 500,000 shares in a
primary offering and 3,250,000 shares in a rights offering.
Operations commenced upon the effectiveness of the initial
public offering. Except for $1,000 invested by Omega Healthcare
Investors, Inc. (Omega Healthcare) at the date of
formation (November 1997), there were no cash flow
activities of the Company from the date of formation to the date
operations commenced.

Immediately prior to the offering of shares by the Company,
Omega Healthcare contributed substantially all of its investment
in Principal Healthcare Finance Limited
(Principal-UK) to the Company. Assets contributed by
Omega Healthcare, which were recorded by the Company at Omega
Healthcares accounting basis, included a $23,805,000
subordinated loan to Principal-UK, 33.375% of the common stock
of Principal-UK with a carrying value of $5,297,000, 10,556,361
warrants and other net assets totaling $150,000. Omega
Healthcare also assigned its interest in a management agreement
with Principal-UK in which the Company receives an annual fee of
0.9% of Principal-UKs assets (as defined) for providing
certain advisory services. In exchange, Omega Healthcare
received 8,500,000 shares of common stock and 260,000 shares of
Class B preferred stock. Of the common stock received by
Omega Healthcare, approximately 5,200,000 shares were
distributed pro rata to Omega Healthcares shareholders,
and approximately 2,300,000 were sold pursuant to the
Companys registration statement. As of the date of the
stock distribution, Omega Healthcare retained approximately 9.9%
of the Companys common stock then outstanding.

Consolidation

The consolidated financial statements include the accounts of
the Company and its wholly-owned subsidiaries after elimination
of all material inter-company accounts and transactions. As
described in Note 4, the Companys wholly-owned
subsidiary, Idun Health Care Limited (Idun) began
its operations on October 31, 1999. Information for Idun as
of September 30, 2000 and its results for the eleven-month
period ended September 30, 2000 are included in the
consolidated statements of the Company.

Prior to April 1, 1999, the Company owned 100% of Principal
Healthcare Finance Trust (Principal-Australia). As
more fully explained in Note 3, newly issued shares of
Principal-Australia were issued to independent investors in 1999
resulting in the dilution of the Companys ownership to
47%. Principal-Australias financial results prior to
April 1, 1999 are included in the Companys results on
a consolidated basis, while Principal-Australias results
after April 1, 1999 are included in the Companys
results using the equity method of accounting.

The Company reports the results of its equity investments
for which it has over 20% ownership, but in which it does not
hold a majority interest, using the equity method of accounting,
using a one-month lag. Investments in companies over which the
Company does not exercise control are recorded at fair market
value. Temporary changes in fair market value are charged to
accumulated other comprehensive income, while permanent
reductions in fair market value are charged to operations.

Certain prior year amounts have been reclassified to correspond
with the current years presentation.

F-6



---



OMEGA WORLDWIDE, INC.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)

Cash and Short-Term Investments

Short-term investments consist of highly liquid investments with
a maturity date of three months or less when purchased. These
investments are stated at cost, which approximates fair value.

Restricted Cash

The Company has pledged $500,000 of cash with a bank as
collateral guaranteeing the Companys performance under
short-term purchase and sale of foreign currency hedge
positions. The cash is restricted for periods no greater than
30 days and is classified as restricted on the balance
sheet. The Company is also required to provide restricted cash
accounts supporting Idun debt of approximately $1.9 million
and $389,000 for other obligations.

Plant, Property and Equipment

Plant, property and equipment owned by Idun is stated at cost.
Depreciation expense is calculated using the straight-line
method for financial reporting purposes over the estimated
useful lives of the depreciable asset. Estimated useful lives of
depreciable assets range from 3 to 7 years for furniture,
fixtures and equipment, and 40 years for buildings.
Depreciation expense related to Idun amounted to approximately
$1,476,000 and is included in fiscal year 2000 direct cost of
patient services in the consolidated statements of operations.

Revenue Recognition

Patient services revenue of Idun is recorded as the services are
provided. Fee income is recognized as earned and is based on
assets under management. Rental income is recognized on a
straight-line basis over the initial terms of the related master
lease. Such income includes periodic increases based upon
predetermined formulas as defined in the master lease.

Direct Cost of Patient Services

Direct cost of patient services directly supports patient
service revenue and includes all operating expenses, including
depreciation, of Idun.

Straight-Line Rent Expense

Certain of the Companys subsidiaries are the lessees of
several long-term leases. Rent expense differs from cash rental
payments and is recognized as the total rent payable over the
initial term of the related lease amortized on a straight-line
basis. Such expense includes the adjustment in the rental
payments based upon predetermined minimum formulas as defined in
the master lease and is reported as a component of direct cost
of patient services.

Non-Recurring Expense

The Company on February 23, 2000 announced that it had
engaged Warburg, Dillon Reed LLC to assist in exploring ways to
boost shareholder value. The cost of services from Warburg
Dillon Reed LLC, legal advice related to the process and costs
of investor banker services specific to the Companys
United Kingdom investment totaled $497,000.

Translation

Translation of currencies for foreign subsidiary financial
information is computed pursuant to the provisions of Financial
Accounting Standards Board Statement No. 52, which provides
that balance sheet amounts are translated at the year end
exchange rate and income statement amounts are translated at the

F-7



---



OMEGA WORLDWIDE, INC.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)

average annual rate. There are no material amounts of exchange
gains or losses included in the results of operations for 2000,
1999 or 1998.

Financial Instruments

The Company has foreign exchange rate hedge contracts, which
mitigate the risk of currency movements. Any gain or loss on the
contracts offset losses or gains, respectively, on certain
investments denominated in British pound sterling and Australian
dollars.

Stock Based Compensation

The Company grants stock options to employees and directors with
an exercise price equal to the value of the shares at the date
of the grant. In accordance with the provisions of APB Opinion
No. 25, Accounting for Stock Issued to Employees,
compensation expense is not recognized for these stock option
grants.

Accounting Estimates

The preparation of financial statements in conformity with
accounting principles generally accepted in the United States
(GAAP) requires management to make estimates and
assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts
of the revenues and expenses during the period. Actual results
could differ from those estimates.

Impact of Recently Issued Accounting Standards

In December 1999, the Securities and Exchange Commission
(the Commission) issued Staff Accounting Bulletin
No. 101 (SAB 101), Revenue
Recognition in Financial Statements. SAB 101 summarizes
certain of the Commissions views in applying generally
accepted accounting principles to revenue recognition in
financial statements. In June 2000, the Commission issued
SAB 101B to defer the effective date of implementation of
SAB 101 to the calendar fourth quarter 2000. The Company
will adopt SAB 101 as of October 1, 2000 and does not
expect the adoption to have material impact on the
Companys operations.

In June 2000, the Financial Accounting Standards Board
(FASB) issued Statement of Financial Accounting
Standards (SFAS) 138, Accounting for Certain
Derivative Instruments and Certain Hedging Activities,
which amends SFAS 133, Accounting for Derivative
Instruments and Hedging Activities. SFAS 133 was
previously amended by SFAS 137 Accounting for Derivative
Instruments and Hedging Activities  Deferral of the
Effective Date of FASB Statement 133, which deferred the
effective date of SFAS 133 to fiscal years beginning after
June 15, 2000. The Company will adopt SFAS 133 and
SFAS 138 effective October 1, 2000. SFAS 133 and SFAS
138 will require the Company to recognize all derivatives on the
balance sheet at fair value. Derivatives that are not hedges
must be adjusted to fair value through income. If the derivative
is a hedge, depending on the nature of the hedge, changes in the
fair value of derivatives will either be offset against the
change in fair value of the hedged assets, liabilities, or firm
commitments, through earnings or recognized in other
comprehensive income until the hedged item is recognized in
earnings. The ineffective portion of the derivatives
change in fair value will be recognized immediately in earnings.
Based on the Companys derivative positions and their
related fair values of approximately $38.5 million recorded
at September 30, 2000, the Company estimates that there
will not be a material impact on the consolidated financial
statements.

Comprehensive Income

Comprehensive income consists of the Companys earnings
before preferred stock dividends adjusted for the unrealized
gains or losses on investments, net of tax and foreign currency
translation adjustments.

F-8



---



OMEGA WORLDWIDE, INC.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)

NOTE 2  INVESTMENT IN PRINCIPAL HEALTHCARE FINANCE
LIMITED (PRINCIPAL-UK)

As described in Note 1, the Company acquired 33.375% of
Principal-UKs voting ordinary shares in connection with
the Omega Healthcare distribution/exchange. The Company accounts
for its interest in Principal-UK using the equity method.
Principal-UK has a fiscal year end of August 31; therefore,
the equity in earnings of Principal-UK is recognized on a
one-month lag. Principal-UK has $407 (£279) million and
$414 (£260) million of real estate investments in long-term
care facilities as of August 31, 2000 and 1999,
respectively. These facilities are operated by independent
operators and Idun (see note 4) and are located in the
United Kingdom. Substantially all of Principal-UKs real
estate is pledged as collateral for Principal-UKs debt
agreements.

The following summarizes selected financial information of
Principal-UK in accordance with accounting principles generally
accepted in the United States (In thousands):

|                                                    |                                 |                       |        |         |         |      |        |         |         |   |        |         |         |  
|--------------------------------------------------- | ------------------------------- | --------------------- | ------ | ------- | ------- | ---- | ------ | ------- | ------- | - | ------ | ------- | ------- | -
|                                                    |                                 |                      
|                                                    |                                 | Year Ended August 31,
|                                                    |                                 |                      
|                                                    |                                 | 2000                  |        | 1999    |         | 1998
|                                                    |                                 |                       |        |         |         |     
|Selected Operating Results:                         |                                 |                       |        |         |         |      |        |         |         |   |        |        
|                                                   
|                                                   
|                                                   
|                                                   
|Revenues:                                           |                                 |                       |        |         |         |      |        |         |         |   |        |        
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Rent income                     |                       | $      | 59,309  |         |      | $      | 55,693  |         |   | $      | 47,542  |        
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Patient service revenue         |                       |        | 9,833   |         |      |        |        |         |   |        |        |        
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Interest income                 |                       |        | 6,445   |         |      |        | 6,107   |         |   |        | 2,991   |        
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Other income                    |                       |        |        |         |      |        |        |         |   |        | 509     |        
|                                                    |                                 |                       |        |         |         |      |        |         |         |   |        |        
|                                                    |                                 | Total revenues        |        |         | 75,587  |      |        |         | 61,800  |   |        |         | 51,042  |  
|                                                   
|                                                   
|                                                   
|                                                   
|Expenses:                                           |                                 |                       |        |         |         |      |        |         |         |   |        |        
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Interest expense                |                       |        | (40,338 | )       |      |        | (39,149 | )       |   |        | (34,572 | )      
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Depreciation and amortization   |                       |        | (11,078 | )       |      |        | (9,839  | )       |   |        | (7,202  | )      
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Direct cost of patient services |                       |        | (10,218 | )       |      |        |        |         |   |        |        |        
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | General and administrative      |                       |        | (6,607  | )       |      |        | (5,880  | )       |   |        | (4,284  | )      
|                                                    |                                 |                       |        |         |         |      |        |         |         |   |        |        
|                                                    |                                 | Total expenses        |        |         | (68,241 | )    |        |         | (54,868 | ) |        |         | (46,058 | )
|                                                    |                                 |                       |        |         |         |      |        |         |         |   |        |        
|Income from operations                              |                                 |                       | 7,346  |         |         |      | 6,932  |         |         |   | 4,984  |        
|                                                   
|                                                   
|                                                   
|                                                   
|Non-operating income                                |                                 |                       |       |         |         |      |       |         |         |   | 1,406  |        
|                                                    |                                 |                       |        |         |         |      |        |         |         |   |        |        
|Income before income taxes and extraordinary charge |                                 |                       | 7,346  |         |         |      | 6,932  |         |         |   | 6,390  |        
|                                                   
|                                                   
|                                                   
|                                                   
|Provision for income taxes                          |                                 |                       | (2,706 | )       |         |      | (3,053 | )       |         |   | (2,283 | )      
|                                                   
|                                                   
|                                                   
|                                                   
|Extraordinary charge for prepayment of debt         |                                 |                       |       |         |         |      |       |         |         |   | (1,985 | )      
|                                                    |                                 |                       |        |         |         |      |        |         |         |   |        |        
|Net Income                                          |                                 | $                     | 4,640  |         |         | $    | 3,879  |         |         | $ | 2,122  |        
|                                                    |                                 |                       |        |         |         |      |        |         |         |   |        |        

|                                                                              |  |            |         |      |  |   |         |  |  |  |  | 
|----------------------------------------------------------------------------- |  | ---------- | ------- | ---- |  | - | ------- |  |  |  |  | 
|                                                                              |  |            |         |     
|                                                                              |  | August 31, |         |     
|                                                                              |  |            |         |     
|                                                                              |  | 2000       |         | 1999 |  |  
|                                                                              |  |            |         |      |  |  
|Selected Balance Sheet Information as of:                                     |  |            |         |      |  |   |         |  |  |  |  | 
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|Investments in real estate subject to triple-net leases, net of
	depreciation |  | $          | 382,270 |      |  | $ | 395,533 |  |  |  |  | 
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|Total assets                                                                  |  |            | 539,339 |      |  |   | 569,666 |  |  |  |  | 
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|Non-recourse debt borrowings                                                  |  |            | 445,887 |      |  |   | 478,233 |  |  |  |  | 
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|Total liabilities                                                             |  |            | 519,292 |      |  |   | 552,544 |  |  |  |  | 
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|Total stockholders equity                                                    |  |            | 20,047  |      |  |   | 17,122  |  |  |  |  | 

The effective tax rates are 37%, 44% and 36% for the years ended
August 31, 2000, 1999 and 1998, respectively. These rates
differ from the UK tax rate primarily because the provisions for
depreciation and amortization are not deductible for tax
purposes in the United Kingdom. The Companys proportionate
share

F-9



---



OMEGA WORLDWIDE, INC.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)

of Principal-UKs earnings for the years ended
August 31, 2000 and 1999 and the six-month period ended
August 31, 1998 are approximately $1,549,000, $1,296,000
and $474,000, respectively. Included in the Companys share
of Principal-UK earnings during the six-month period ended
August 31, 1998, is $172,000 ($0.01 per share) related to
the non-recurring operating items realized by Principal-UK. The
Company has recorded a charge against earnings of approximately
$81,000 and $73,000 for the years ended August 31, 2000 and
1999 and approximately $53,000 for the six month period ended
August 31, 1998, representing amortization over a ten-year
period of the excess of the Companys investment in
Principal-UK of approximately $771,000 over its proportionate
share of Principal-UKs underlying equity at the date of
acquisition. In January 1999, the Company received $272,000,
representing a 5-pence annual dividend declared by
Principal-UKs Board of Directors.

The Company has a British pound sterling denominated
subordinated loan receivable from Principal-UK originally due
December 31, 2000, which has since been extended to
June 30, 2001. The carrying amount of the loan is
$23.8 million and it bears interest at a rate of 12.93%
during the remaining term.

The Company has warrants to purchase 10,000,000 ordinary shares
of Principal-UK expiring June 30, 2001 at an exercise price
of £1.50 (approximately $2.19 at September 30, 2000)
per share and 556,361 ordinary shares of Principal expiring
June 30, 2001 at an exercise price of £1.00
(approximately $1.46 at September 30, 2000) per share. As
to the 556,361 warrants, no value was assigned at the date of
issuance because the underlying securities were issued at their
fair value at that date. As to the 10,000,000 warrants, the
coupon rate for the subordinated debt was the prevailing market
rate on the date of the loan, and, therefore, the face amount of
the subordinated loans approximated its fair value on the date
of issuance. In addition, at the grant date the exercise price
on these warrants significantly exceeded the fair value of the
stock on the date of issuance since the warrants enabled the
purchase of shares at £1.50, while the current value of the
shares at that time was approximately £1.00. Based on these
factors at the date of the loan, no value was ascribed to the
warrants. However, the estimated fair value of these warrants at
September 30, 2000 approximates $161,300. In determining
the estimated fair value, the Company used a Black-Scholes
pricing model with the following assumptions: risk free interest
rate of 6%; a volatility factor of 10%; and an average life of
six years from the date of grant.

NOTE 3  PRINCIPAL HEALTHCARE FINANCE TRUST
(PRINCIPAL-AUSTRALIA)

In June 1998 the Company acquired Assisted Living Unit
Trust, an Australian property trust that owns nursing homes, for
a cash investment of $3 million plus a loan of
$6.2 million and a guarantee of the entitys deferred
purchase obligation of $30 million. Concurrent with the
acquisition, the Assisted Living Unit Trusts name was
changed to Principal Healthcare Finance Trust
(Principal-Australia). The investment in facilities approximated
$30 million, which was paid in June 1999.

In April 1999, Principal-Australia sold 6,625,000 newly
issued shares to Omega Healthcare and AMP Life Limited, as well
as 875,000 additional shares to the Company. Prior to the
issuance of these shares, the Company owned 100% of
Principal-Australia. Issuance of the new shares reduced the
Companys ownership to 47% of shares outstanding. The
transaction created a one-time gain on dilution of interest in
Principal-Australia of $951,000, resulting in after tax earnings
available to common shareholders of $628,000 or $0.05 per share.

As described in Note 1, the financial results of
Principal-Australia prior to April 1, 1999 are included in
the Companys results on a consolidated basis, while
Principal-Australias results after April 1, 1999 are
included in the Companys results using the equity method
of accounting. Principal-Australia has a fiscal year end of
August 31; accordingly, the equity in earnings of
Principal-Australia is recognized on a one-month lag.

F-10



---



OMEGA WORLDWIDE, INC.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)

The following summarizes selected financial information of
Principal-Australia in accordance with generally accepted
accounting principles in the United States (In thousands):

|                            |                               |                       |       |        |         |   |       |        |        |  
|--------------------------- | ----------------------------- | --------------------- | ----- | ------ | ------- | - | ----- | ------ | ------ | -
|                            |                               |                      
|                            |                               | Year Ended August 31,
|                            |                               |                      
|                            |                               | 2000                  |       | 1999  
|                            |                               |                       |       |       
|Selected Operating Results: |                               |                       |       |        |         |   |       |       
|                           
|                           
|                           
|                           
|Revenues:                   |                               |                       |       |        |         |   |       |       
|                           
|                           
|                           
|                           
|                            | Rent income                   |                       | $     | 11,967 |         |   | $     | 9,592  |       
|                           
|                           
|                           
|                           
|                            | Interest and other income     |                       |       | 982    |         |   |       | 322    |       
|                            |                               |                       |       |        |         |   |       |       
|                            |                               | Total Revenues        |       |        | 12,949  |   |       |        | 9,914  |  
|                           
|                           
|                           
|                           
|Expenses:                   |                               |                       |       |        |         |   |       |       
|                           
|                           
|                           
|                           
|                            | Interest expense              |                       |       | (8,742 | )       |   |       | (5,203 | )     
|                           
|                           
|                           
|                           
|                            | Depreciation and amortization |                       |       | (1,974 | )       |   |       | (1,856 | )     
|                           
|                           
|                           
|                           
|                            | General and administrative    |                       |       | (1,201 | )       |   |       | (932   | )     
|                            |                               |                       |       |        |         |   |       |       
|                            |                               | Total expenses        |       |        | (11,917 | ) |       |        | (7,991 | )
|                            |                               |                       |       |        |         |   |       |       
|Income from operations      |                               | $                     | 1,032 |        |         | $ | 1,923 |       
|                            |                               |                       |       |        |         |   |       |       

|                                                                |  |            |         |      |  |   |        | 
|--------------------------------------------------------------- |  | ---------- | ------- | ---- |  | - | ------ | 
|                                                                |  |           
|                                                                |  | August 31,
|                                                                |  |           
|                                                                |  | 2000       |         | 1999
|                                                                |  |            |         |     
|Selected Balance Sheet Information as of:                       |  |            |         |      |  |   |        | 
|                                                               
|                                                               
|                                                               
|                                                               
|Investments in real estate subject to triple-net leases, net of |  | $          | 88,298  |      |  | $ | 85,652 | 
|                                                               
|                                                               
|                                                               
|                                                               
|Total assets                                                    |  |            | 116,255 |      |  |   | 96,986 | 
|                                                               
|                                                               
|                                                               
|                                                               
|Non-recourse debt borrowings                                    |  |            | 94,546  |      |  |   | 75,815 | 
|                                                               
|                                                               
|                                                               
|                                                               
|Total liabilities                                               |  |            | 102,261 |      |  |   | 82,215 | 
|                                                               
|                                                               
|                                                               
|                                                               
|Total unit holders equity                                      |  |            | 13,994  |      |  |   | 14,771 | 

NOTE 4  ACQUISITION OF IDUN HEALTH CARE LIMITED

On October 31, 1999 the Company, through its wholly-owned
subsidiary, Idun, acquired the operating subsidiaries of
Tamaris, plc. The 48 subsidiaries acquired operate 119 nursing
homes located throughout England, Scotland and Northern Ireland.
The acquisition was accounted for under the purchase method of
accounting. Purchase consideration was approximately $1,933,000
(£1,075,000) in cash and Tamaris, plc. shares valued at
$1,903,000. The fair market value of the net assets at the date
of acquisition, in the opinion of management, was
$7.2 million (gross assets of $45.1 million net of
liabilities assumed of $37.9 million). Fixed assets
included in the $7.2 million amount have been written down
by $3.5 million as prescribed by GAAP to report net assets equal
to the purchase price.

Public trading of the Tamaris stock was suspended on
September 25, 1999, and trading did not resume prior to
October 31, 1999 when shares were surrendered. Based on an
interpretation of FASB Statement No. 115, management
determined that the recording of the value of the Tamaris stock
relinquished in the acquisition should be based on the last
quoted price of the security rather than the fair value of the
assets acquired. To meet this technical interpretation, a charge
of $938,000 ($657,000, net of tax) was included in the
Companys income statement for the year ended
September 30, 1999.

F-11



---



OMEGA WORLDWIDE, INC.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)

Pro forma information for the Company, as if the Idun purchase
had been made as of October 1, 1998, is as follows:

Pro forma operating results for the period ended:

|                                              |  |                       |         |      |  |   |         | 
|--------------------------------------------- |  | --------------------- | ------- | ---- |  | - | ------- | 
|                                              |  |                      
|                                              |  | Year Ended           
|                                              |  | September 30,        
|                                              |  |                      
|                                              |  | 2000                  |         | 1999
|                                              |  |                       |         |     
|                                              |  |                      
|                                              |  | (In thousands, except
|                                              |  | per share data)      
|                                             
|                                             
|                                             
|                                             
|Revenues                                      |  | $                     | 157,846 |      |  | $ | 147,499 | 
|                                             
|                                             
|                                             
|                                             
|Net earnings available to common shareholders |  |                       | 1,000   |      |  |   | 4,131   | 
|                                             
|                                             
|                                             
|                                             
|Earnings per common share, basic              |  |                       | 0.08    |      |  |   | 0.34    | 
|                                             
|                                             
|                                             
|                                             
|Earnings per common share, diluted            |  |                       | 0.08    |      |  |   | 0.34    | 
|                                             
|                                             
|                                             
|                                             
|Average exchange rate ($ per £)               |  |                       | 1.5658  |      |  |   | 1.6300  | 

The functional currency of Idun is British pound sterling. In
accordance with FASB 52, the balance sheet amounts, are
translated at the period end exchange rate and the income
statement amounts are translated at the average exchange rate
for the period. The cash component of the Companys equity
investment in Idun was the subject of a foreign currency hedge
using forward purchase agreements from the date of acquisition
until June 2000. The cash benefit of the transaction
totaling $447,000 is reflected as a component of accumulated
other comprehensive income (loss) as required by
FASB 52.

NOTE 5  ESSEX HEALTHCARE CORPORATION

On April 2, 1998, Omega Healthcare contributed to the
Company its holdings in the preferred stock of Essex Healthcare
Corporation (Essex), an Atlanta-based private
operator of skilled nursing facilities. The preferred stock was
valued at approximately $39,000. Essexs primary activities
are in Ohio, where it operates 68 long-term care and
assisted living facilities (approximately 4,200 beds). It also
manages 55 facilities (approximately 2,800 beds) primarily in
Indiana. On July 30, 1998, the Company acquired 55,000
shares of Essexs common stock for $500,000 and converted
its preferred stock into additional 1,940 shares of common stock
of Essex. The Company holds approximately 47% of the outstanding
common shares of Essex. The Company accounts for this investment
using the equity method.

The Companys proportionate share of Essexs earnings
for the year ended August 31, 2000 is $10,000, loss for the
year ended August 31, 1999 of $282,000, and earnings of
$32,000 for the six-month period ended August 31, 1998.

NOTE 6  SECURED LOANS

On May 28, 1998, the Company loaned $818,000 to an
individual. The loan was secured by the individuals
interest in Tamaris plc., an aged care operating company in
the United Kingdom. The loan bears interest at 10.5% and
principal payments were due on demand. The carrying value of the
loan September 30, 1999 was $716,000 and has no remaining
balance outstanding at September 30, 2000.

On August 18, 1999, the Company loaned $465,000 to an
enterprise. The loan was secured by the enterprises
interest in Tamaris plc. The loan bears interest at 7.15% and
principal and interest were due on demand. Due to the
uncertainty regarding the ultimate recovery of the loan, the
Company recorded a $202,000 write down in fiscal year 2000. The
carrying value of the loan at September 30, 1999 was
$465,000 and has no remaining balance outstanding at
September 30, 2000.

F-12



---



OMEGA WORLDWIDE, INC.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)

NOTE 7  FINANCIAL INSTRUMENTS

The carrying amounts and fair values of the Companys
financial instruments are as follows:

|             |                                             |                                    |        |         |       |          |        |         |       |   |        |        |        |   |        |        |        |  
|------------ | ------------------------------------------- | ---------------------------------- | ------ | ------- | ----- | -------- | ------ | ------- | ----- | - | ------ | ------ | ------ | - | ------ | ------ | ------ | -
|             |                                             |                                   
|             |                                             | September 30,                     
|             |                                             |                                   
|             |                                             |                                    |        |        
|             |                                             | 2000                               |        | 1999   
|             |                                             |                                    |        |        
|             |                                             | Carrying                           |        | Fair    |       | Carrying |        | Fair   
|             |                                             | Amount                             |        | Value   |       | Amount   |        | Value  
|             |                                             |                                    |        |         |       |          |        |        
|             |                                             |                                   
|             |                                             | (In thousands)                    
|            
|            
|            
|            
|Assets:      |                                             |                                    |        |         |       |          |        |         |       |   |        |        |        |   |        |       
|            
|            
|            
|            
|             | Cash and short-term investments             |                                    | $      | 3,415   |       |          | $      | 3,415   |       |   | $      | 5,738  |        |   | $      | 5,738  |       
|            
|            
|            
|            
|             | Restricted cash                             |                                    |        | 2,786   |       |          |        | 2,786   |       |   |        | 389    |        |   |        | 389    |       
|            
|            
|            
|            
|             | Subordinated loan to Principal-UK           |                                    |        | 23,805  |       |          |        | 21,959  |       |   |        | 23,805 |        |   |        | 24,699 |       
|            
|            
|            
|            
|             | Temporary advances to Principal-UK          |                                    |        | 10,793  |       |          |        | 10,793  |       |   |        | 18,368 |        |   |        | 18,368 |       
|            
|            
|            
|            
|             | Warrants for 10,556,361 Principal-UK shares |                                    |        |        |       |          |        | 161     |       |   |        |       |        |   |        | 8,758  |       
|            
|            
|            
|            
|             | Secured loans                               |                                    |        |        |       |          |        |        |       |   |        | 1,181  |        |   |        | 1,181  |       
|            
|            
|            
|            
|Liabilities: |                                             |                                    |        |         |       |          |        |         |       |   |        |        |        |   |        |       
|            
|            
|            
|            
|             | Debt (short and long term)                  |                                    |        | (10,078 | )     |          |        | (10,078 | )     |   |        |       |        |   |        |       |       
|             |                                             |                                    |        |         |       |          |        |         |       |   |        |        |        |   |        |       
|             |                                             | $                                  | 30,721 |         |       | $        | 29,036 |         |       | $ | 49,481 |        |        | $ | 59,133 |       
|             |                                             |                                    |        |         |       |          |        |         |       |   |        |        |        |   |        |       
|             |                                             | Foreign currency forward contracts |        | $       | 3,210 |          |        | $       | 3,210 |   |        | $      | (1,629 | ) |        | $      | (1,629 | )

Fair value estimates are subjective in nature and are dependent
on a number of important assumptions, including estimates of
future cash flows, risks, discount rates and relevant comparable
market information associated with each financial instrument.
The use of different market assumptions and estimation
methodologies may have a material effect on the reported
estimated fair value amounts. Accordingly, the estimates
presented above are not necessarily indicative of the amounts
the Company would realize in a current market exchange.

The Company has forward contracts to hedge currency risks
associated with investments in Principal-UK and
Principal-Australia. Pursuant to a ten-year British pound
sterling currency swap agreement, the Company is obligated to
exchange (pound)20,000,000 for $31,740,000 on October 15,
2007. At September 30, 2000 the Company is obligated to
exchange A$11,000,000 at an average rate of US$ 0.6135. The
carrying amount of the investment in Principal-UK, the
subordinated loans/advances to Principal-UK, and the investment
in Principal-Australia, are based on the rates established in
the forward exchange contracts. In addition the Company
routinely enters into 30 day British pound sterling currency
swap agreements to hedge currency risks associated with the
temporary advances to Principal-UK.

F-13



---



OMEGA WORLDWIDE, INC.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)

NOTE 8  INCOME TAXES

The components of Pre-tax income and income tax provision
(benefit) were as follows (In thousands):

|                                     |                                         |      |   |         |  |       |   |        |   |  |   |        |  
|------------------------------------ | --------------------------------------- | ---- | - | ------- |  | ----- | - | ------ | - |  | - | ------ | -
|                                     |                                         | U.S. |   | Foreign |  | Total
|                                     |                                         |      |   |         |  |      
|Fiscal year ended September 30, 2000 |                                         |      |   |         |  |       |   |        |   |  |   |       
|                                    
|                                    
|                                    
|                                    
|                                     | Pre tax income (loss)                   |      | $ | 7,123   |  |       | $ | (5,696 | ) |  | $ | 1,427  |  
|                                     |                                         |      |   |         |  |       |   |        |   |  |   |       
|                                     | Current Income tax provision            |      | $ | 993     |  |       | $ | 139    |   |  | $ | 1,132  |  
|                                    
|                                    
|                                    
|                                    
|                                     | Deferred income tax provision (benefit) |      |   | 925     |  |       |   | (2,075 | ) |  |   | (1,150 | )
|                                     |                                         |      |   |         |  |       |   |        |   |  |   |       
|                                     | Total Provision (benefit)               |      | $ | 1,918   |  |       | $ | (1,936 | ) |  | $ | (18    | )
|                                     |                                         |      |   |         |  |       |   |        |   |  |   |       
|Fiscal year ended September 30, 1999 |                                         |      |   |         |  |       |   |        |   |  |   |       
|                                    
|                                    
|                                    
|                                    
|                                     | Pre tax income (loss)                   |      | $ | 7,540   |  |       | $ | 312    |   |  | $ | 7,852  |  
|                                     |                                         |      |   |         |  |       |   |        |   |  |   |       
|                                     | Current Income tax provision            |      | $ | 1,614   |  |       | $ | 101    |   |  | $ | 1,715  |  
|                                    
|                                    
|                                    
|                                    
|                                     | Deferred income tax provision           |      |   | 674     |  |       |   |       |   |  |   | 674    |  
|                                     |                                         |      |   |         |  |       |   |        |   |  |   |       
|                                     | Total Provision                         |      | $ | 2,288   |  |       | $ | 101    |   |  | $ | 2,389  |  
|                                     |                                         |      |   |         |  |       |   |        |   |  |   |       
|Fiscal year ended September 30, 1998 |                                         |      |   |         |  |       |   |        |   |  |   |       
|                                    
|                                    
|                                    
|                                    
|                                     | Pre tax income (loss)                   |      | $ | 2,901   |  |       | $ | (19    | ) |  | $ | 2,882  |  
|                                     |                                         |      |   |         |  |       |   |        |   |  |   |       
|                                     | Current Income tax provision            |      | $ | 619     |  |       | $ |       |   |  | $ | 619    |  
|                                    
|                                    
|                                    
|                                    
|                                     | Deferred income tax provision           |      |   | 308     |  |       |   |       |   |  |   | 308    |  
|                                     |                                         |      |   |         |  |       |   |        |   |  |   |       
|                                     | Total Provision                         |      | $ | 927     |  |       | $ |       |   |  | $ | 927    |  
|                                     |                                         |      |   |         |  |       |   |        |   |  |   |       

Income tax expense (benefit) differs from the amounts
computed by applying the U.S. Federal income tax rate of 34% to
earnings before taxes as follows for the years ended
September 30, 2000, and 1999 and the six-month period ended
September 30, 1998 (In thousands):

|                                                |       |      |      |      |   |      |       |       |  |   |      |     | 
|----------------------------------------------- | ----- | ---- | ---- | ---- | - | ---- | ----- | ----- |  | - | ---- | --- | 
|                                                |       | 2000 |      | 1999 |   | 1998
|                                                |       |      |      |      |   |     
|Computed expected tax expense                   |       | $    | 484  |      |   | $    | 2,669 |       |  | $ | 979  |    
|                                               
|                                               
|                                               
|                                               
|Tax effect of equity in earnings of investments |       |      | (503 | )    |   |      | (281  | )     |  |   | (143 | )  
|                                               
|                                               
|                                               
|                                               
|Other                                           |       |      | 1    |      |   |      | 1     |       |  |   | 91   |    
|                                                |       |      |      |      |   |      |       |       |  |   |      |    
|                                                | Total |      | $    | (18  | ) |      | $     | 2,389 |  |   | $    | 927 | 
|                                                |       |      |      |      |   |      |       |       |  |   |      |    

The tax basis of assets transferred from Omega Healthcare to the
Company exceeded the book basis by approximately
$36 million, resulting in a deferred tax asset of
approximately $12 million. Due to the uncertainties in
realizing this benefit, management has provided a valuation
reserve against the full amount. As of September 30, 2000
net operating losses of $2,335,000 are available to offset
future taxable income of Idun subject to UK taxes. The Company
believes that it is more likely than not, that the benefits of
this loss carry over will be realized in future years and the
Company has not reserved against the resulting deferred tax
asset.

F-14



---



OMEGA WORLDWIDE, INC.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)

NOTE 9  CREDIT FACILITIES

The Company had no outstanding indebtedness at
September 30, 1999. At September 30, 2000, the
Companys outstanding indebtedness consists of the
following (In thousands):

|                                                                        |  |   |        |  
|----------------------------------------------------------------------- |  | - | ------ | -
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|(1) Credit agreement (9.91% interest at September 30,
	2000)            |  | $ | 4,850  |  
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|(2) Loan due on demand (8.50% interest at
	September 30, 2000)          |  |   | 1,879  |  
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|(3) Loan due February 2003 (8.34% interest at
	September  30, 2000)     |  |   | 1,358  |  
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|(4) Loan due February 2017 (8.34% interest at
	September  30, 2000)     |  |   | 1,555  |  
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|(5) Loan due September 30, 2001 (5.50% interest at
	September 30, 2000) |  |   | 436    |  
|                                                                        |  |   |        |  
|                                                                        |  |   | 10,078 |  
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|Less current maturities                                                 |  |   | (7,755 | )
|                                                                        |  |   |        |  
|Long-term debt                                                          |  | $ | 2,323  |  
|                                                                        |  |   |        |  



| |     |                                                                                                                                                                                                                                                                                                                                                                                                                        
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (1) | The Companys bank credit agreement as amended calls for
	quarterly repayments of $2 million each quarter until the
	full amount is repaid in June  2001. Borrowings under the
	agreement bear interest at LIBOR plus 3.25%. Omega Healthcare
	provided a guarantee to the banks in consideration of a fee of
	1%, plus an annual 25 basis point facility fee. No further
	borrowings may be made under this agreement.
|
| | (2) | Idun has a loan with a bank that is secured by the business and
	assets of a nursing home subsidiary and bears an interest rate
	of 2.5% above the banks base lending rate.                                                                                                                                                                                                                                           
|
| | (3) | Idun has a loan with a bank that is secured by the business and
	assets of a nursing home company and bears a floating interest
	rate of LIBOR plus 2%. The loan requires quarterly principal
	payments of approximately $165,000 through maturity.                                                                                                                                                                    
|
| | (4) | Idun has a loan with a bank that is secured by the business and
	assets of a nursing home company and carries floating interest
	rate of LIBOR plus 2%. The loan requires quarterly principal
	payments of approximately $25,000 through maturity.                                                                                                                                                                     
|
| | (5) | Idun has an unsecured bank loan of approximately $436,000. The
	interest rate on this loan is at the banks base rate less
	.5%.                                                                                                                                                                                                                                                                                       

None of the loans of Idun are guaranteed by the Company. Cash of
$1,879,000 included in Restricted Cash will be used for partial
payment of an as yet undetermined combination of loans 2, 3 and
4 above. In addition to the Restricted Cash, assets with a
carrying value of approximately $3.5 million at
September 30, 2000 are pledged as collateral on loans 2, 3
and 4 above.

NOTE 10  STOCK OPTIONS

Under the terms of the 1998 Stock Option and Restricted Plan
(the Plan), the Company reserved 750,000 shares of
common stock for grants to be issued during a period of up to
10 years. Directors, officers and key employees are
eligible in the Plan. Options for 339,500, 107,000 and 648,000
shares have been granted to eligible participants during the
years ended September 30, 2000 and 1999, and the six-month
period ended September 30, 1998, respectively.
Additionally, during the years ended September 30, 2000 and
1999 and the six-month period ending September 30, 1998,
restricted shares of 67,553, 8,000, and 8,000 respectively, have
been granted under the provisions of the Plan. The vesting
period on restricted stock varies from six months to eighteen
months. Expense related to the restricted stock grants are
$271,000, $33,000 and $60,000 for the years ended
September 30, 2000 and 1999 and the six-month period ended
September 30, 1998, respectively.

F-15



---



OMEGA WORLDWIDE, INC.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)

The following is a summary of activity under the Plan.

|                                  |                        |           |         |          |   |          |             |             |  |   |       |       | 
|--------------------------------- | ---------------------- | --------- | ------- | -------- | - | -------- | ----------- | ----------- |  | - | ----- | ----- | 
|                                  |                        |           |         |          |   | Weighted
|                                  |                        | Number of |         | Exercise |   | Average 
|                                  |                        | Shares    |         | Price    |   | Price   
|                                  |                        |           |         |          |   |         
|Outstanding at April 2, 1998      |                        |           |        |          |   | $        |            |             |  | $ |      |      
|                                 
|                                 
|                                 
|                                 
|                                  | Granted during 1998    |           |         | 648,000  |   |          |             | 5.6887.500 |  |   |       | 7.479 | 
|                                 
|                                 
|                                 
|                                 
|                                  | Forfeited              |           |         | (42,000  | ) |          |             | 7.500       |  |   |       | 7.500 | 
|                                  |                        |           |         |          |   |          |             |             |  |   |       |      
|Outstanding at September 30, 1998 |                        |           | 606,000 |          |   |          | 5.6887.500 |             |  |   | 7.477 |      
|                                 
|                                 
|                                 
|                                 
|                                  | Granted during 1999    |           |         | 107,000  |   |          |             | 4.0004.688 |  |   |       | 4.458 | 
|                                 
|                                 
|                                 
|                                 
|                                  | Forfeited              |           |         | (31,000  | ) |          |             | 4.6887.500 |  |   |       | 7.100 | 
|                                  |                        |           |         |          |   |          |             |             |  |   |       |      
|Outstanding at September 30, 1999 |                        |           | 682,000 |          |   |          | 4.0007.500 |             |  |   | 7.116 |      
|                                 
|                                 
|                                 
|                                 
|                                  | Granted during 2000    |           |         | 339,500  |   |          |             | 2.3754.875 |  |   |       | 3.951 | 
|                                 
|                                 
|                                 
|                                 
|                                  | Forfeited and canceled |           |         | (383,500 | ) |          |             | 4.0007.500 |  |   |       | 7.484 | 
|                                  |                        |           |         |          |   |          |             |             |  |   |       |      
|Outstanding at September 30, 2000 |                        |           | 638,000 |          |   | $        | 2.3757.500 |             |  | $ | 5.116 |      
|                                  |                        |           |         |          |   |          |             |             |  |   |       |      

In October 1995, the Financial Accounting Standards Board
issued Statement of Financial Accounting Standard
(SFAS) No. 123, Accounting for Stock-Based
Compensations. This standard prescribes a fair value based
method of accounting for employee stock options or similar
equity instruments and requires certain pro forma disclosures.
For purpose of the pro forma disclosures required under
Statement 123, the estimated fair value of the options is
amortized to expense over the options vesting period. The
estimated weighted average fair value of options granted
approximates $609,000, $204,000, and $2,000,000, during the
years ended September 30, 2000, 1999 and the six-month
period ended September 30, 1998, respectively. In
determining the estimated fair value of the Companys stock
options as of the date of grant, a Black-Scholes option pricing
model was used with the following weighted-average assumptions:
risk-free interest rates of 6.0%; volatility factors of the
expected market price of the Companys common stock at 30%;
and a weighted-average expected life of the options of
7 years.

The Black-Scholes option valuation model was developed for use
in estimating the fair value of traded options, which have no
vesting restrictions and are fully transferable. In addition,
option valuation models require the input of highly subjective
assumptions, including the expected stock price volatility.
Because the Companys employee stock options have
characteristics significantly different from those of traded
options, and because changes in the subjective input assumptions
can materially affect the fair value estimate, in
managements opinion, the existing models do not
necessarily provide a reliable single measure of the fair value
of its employee stock options.

Pro forma information regarding net income and earnings per
share is required by Statement 123, and has been determined as
if the Company had accounted for its employee stock options
under the fair value method of that Statement. For purposes of
pro forma disclosures, the estimated fair value of the options
is amortized to expense over the options vesting period.
The Companys pro forma net earnings would be $1,531,000
$5,084,000 and $1,784,000, and pro forma earnings per common
share, basic and diluted, would be $0.11, $0.47 and $0.14, for
the years ended September 30, 2000, 1999 and the six-month
period ending September 30, 1998, respectively.

NOTE 11  PREFERRED STOCK

Effective April 2, 1998, the Company issued 260,000 shares
of 8% Series B Cumulative Preferred Stock (Preferred
Stock) at $1 par value per share to Omega Healthcare. Each
share of Series B Preferred converts to one share of the
Companys Common Stock immediately after Omega Healthcare
makes a distribution of the Series B Preferred to its
shareholders or otherwise transfers the shares to any
unaffiliated

F-16



---



OMEGA WORLDWIDE, INC.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)

third party. Dividends on the Preferred Stock are payable
annually based on liquidation value of $10 per share. Cumulative
undeclared dividends at September 30, 2000 are $520,000.

NOTE 12  NET EARNINGS PER SHARE

Net earnings per share are computed based on the weighted
average number of common shares outstanding during the period.
Average common shares outstanding for the basic earnings per
share were 12,297,000, 12,261,000, and 12,255,000 and for
diluted earnings per share were 12,345,000, 12,262,000 and
12,255,000 for the periods ended September 30, 2000, 1999
and 1998, respectively. The difference between average basic and
diluted common shares is due to the effect of dilutive employee
stock options. The assumed conversion of shares of preferred
stock is currently antidilutive.

NOTE 13  LEASES

The Company, through its subsidiary Idun, leases nursing
homes throughout the United Kingdom under operating leases which
expire at various dates through the year 2035. Rent expense on
these leases was approximately $34.1 million for the
eleven-month period that Idun is included in the year ended
September 30, 2000 results. No lease expense for the
consolidated company was incurred during the year ended
September 30, 1999 and the six-month period ending
September 30, 1998.

Future minimum lease payments required under operating leases as
of September 30, 2000 are as follows (In thousands):

|           |  |   |         | 
|---------- |  | - | ------- | 
|          
|          
|          
|          
|2001       |  | $ | 31,570  | 
|          
|          
|          
|          
|2002       |  |   | 31,881  | 
|          
|          
|          
|          
|2003       |  |   | 32,197  | 
|          
|          
|          
|          
|2004       |  |   | 32,520  | 
|          
|          
|          
|          
|2005       |  |   | 32,849  | 
|          
|          
|          
|          
|Thereafter |  | $ | 636,702 | 

NOTE 14  RELATED PARTY TRANSACTIONS

Pursuant to the provision of a Services Agreement between Omega
Healthcare and the Company that expired June 30, 2000,
indirect costs incurred by Omega Healthcare, including
compensation of shared executive officers and relations support
personnel, and costs incurred by Omega Healthcare for rent,
insurance, telephone, utilities, supplies, maintenance and
travel, were allocated to the Company based upon the
relationship of assets under the Companys management to
the combined total of those assets and Omega Healthcares
assets. Allocated expenses for the years ended
September 30, 2000 and 1999 and for the six-month period
ended September 30, 1998 were approximately $544,000
$768,000 and $303,000, respectively. Such allocations are based
on estimates and formulas that management believes to be
reasonable. The service agreement has expired. As of
July 1, 2000, the Company and Omega Healthcare have
negotiated a new arrangement for a quarterly fee of $37,500
which excludes certain previously provided services, most
significantly, those of shared executives.

Temporary unsecured advances to Principal-UK in the amount of
$10,793,000, and $18,368,000 are outstanding at
September 30, 2000 and 1999, respectively. Interest at
9.25% is paid on a monthly basis. Included in interest income
for the years ended September 30, 2000, and 1999 and the
six-month period ended September 30, 1998 is $1,484,000,
$1,719,000 and $292,000, respectively, related to advances to
Principal-UK.

Interest on the subordinated loan to Principal-UK for the years
ended September 30, 2000 and 1999, and the six-month period
ended September 30, 1998 is $3,144,000, $3,042,000 and
$1,492,000, respectively. The loan was originally scheduled to
mature on December 31, 2000, but has been extended to
June 30, 2001. Fees

F-17



---



OMEGA WORLDWIDE, INC.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)

from services provided to Principal-UK for the years ended
September 30, 2000 and 1999, and the six-month period ended
September 30, 1998 are $5,040,000, $4,918,000, and
$1,920,000, respectively.

Fees from services provided to Principal-Australia for the year
ended September 30, 2000 and the period April 1, 1999
through September 30, 1999 are $1,013,000 and $405,000,
respectively.

Rent expense, included in direct cost of patient services,
related to Iduns leases with Principal-UK, is
approximately $1,315,000 for the year ended September 30,
2000.

Interest expense relating to a bridge loan from Omega Healthcare
totaled $226,000 for the year ended September 30, 1999.
This loan was repaid in December 1998.

NOTE 15  BUSINESS SEGMENT INFORMATION

The Company provides investment advisory and management
services, as well as equity and debt capital to the healthcare
industry, primarily in Europe and the Pacific Rim. The Company
emphasizes investments in firms, which provide residential
services to the elderly. The Company has established subsidiary
businesses, Omega Healthcare (UK) Ltd. in London and Omega
Healthcare (Australia) Pty Ltd., in Sydney, to manage, finance,
and monitor investments in Europe and Australia/ New Zealand,
respectively. Accordingly, the Company presently operates in
three geographic regions, the United States, United Kingdom and
Australia.

The following is a summary of operations by geographic region
for the years ended September 30, 2000 and 1999, and the
six-months ended September 30, 1998. (In thousands):

|                            |                    |       |   |         |         |      |   |        |        |  |   |       |       | 
|--------------------------- | ------------------ | ----- | - | ------- | ------- | ---- | - | ------ | ------ |  | - | ----- | ----- | 
|                            |                    | 2000  |   | 1999    |         | 1998
|                            |                    |       |   |         |         |     
|Revenue:                    |                    |       |   |         |         |      |   |        |        |  |   |      
|                           
|                           
|                           
|                           
|                            | United States      |       | $ | 4,897   |         |      | $ | 5,369  |        |  | $ | 2,065 |      
|                           
|                           
|                           
|                           
|                            | United Kingdom     |       |   | 139,696 |         |      |   | 4,918  |        |  |   | 1,920 |      
|                           
|                           
|                           
|                           
|                            | Australia          |       |   | 1,016   |         |      |   | 4,466  |        |  |   | 1,110 |      
|                            |                    |       |   |         |         |      |   |        |        |  |   |      
|                            |                    | Total |   | $       | 145,609 |      |   | $      | 14,753 |  |   | $     | 5,095 | 
|                            |                    |       |   |         |         |      |   |        |        |  |   |      
|Operating income (expense): |                    |       |   |         |         |      |   |        |        |  |   |      
|                           
|                           
|                           
|                           
|                            | United States      |       | $ | 5,915   |         |      | $ | 5,357  |        |  | $ | 2,643 |      
|                           
|                           
|                           
|                           
|                            | United Kingdom     |       |   | (3,348  | )       |      |   | 2,828  |        |  |   | 477   |      
|                           
|                           
|                           
|                           
|                            | Australia          |       |   | 409     |         |      |   | 1,385  |        |  |   | 247   |      
|                           
|                           
|                           
|                           
|                            | Corporate expenses |       |   | (1,548  | )       |      |   | (1,718 | )      |  |   | (485  | )    
|                            |                    |       |   |         |         |      |   |        |        |  |   |      
|                            |                    | Total |   | $       | 1,428   |      |   | $      | 7,852  |  |   | $     | 2,882 | 
|                            |                    |       |   |         |         |      |   |        |        |  |   |      

The following is a summary of assets of geographic region at
September 30, 2000 and 1999. (In thousands):

|                     |                |               |   |        |        |  |   |        |        | 
|-------------------- | -------------- | ------------- | - | ------ | ------ |  | - | ------ | ------ | 
|                     |                |              
|                     |                | September 30,
|                     |                |              
|                     |                | 2000          |   | 1999  
|                     |                |               |   |       
|Identifiable assets: |                |               |   |        |        |  |   |       
|                    
|                    
|                    
|                    
|                     | United States  |               | $ | 56,708 |        |  | $ | 67,921 |       
|                    
|                    
|                    
|                    
|                     | United Kingdom |               |   | 35,046 |        |  |   | 113    |       
|                    
|                    
|                    
|                    
|                     | Australia      |               |   | 746    |        |  |   | 378    |       
|                     |                |               |   |        |        |  |   |       
|                     |                | Total         |   | $      | 92,500 |  |   | $      | 68,412 | 
|                     |                |               |   |        |        |  |   |       

Identifiable assets attributable to the United States include
approximately $53 million represented by cash, loans and
investments denominated in currencies other than the U.S. dollar.

F-18



---



OMEGA WORLDWIDE, INC.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)

NOTE 16  SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION

Following are details of changes in operating assets,
liabilities and other non-cash transactions for the years ended
September 30, 2000 and 1999 and the six-month period ended
September 30, 1998 (In thousands):

Increase (decrease) in cash from changes in operating
assets and liabilities:

|                                                             |                                                                   |             |         |      |   |      |        |   |   |   |      |         |         |  
|------------------------------------------------------------ | ----------------------------------------------------------------- | ----------- | ------- | ---- | - | ---- | ------ | - | - | - | ---- | ------- | ------- | -
|                                                             |                                                                   | 2000        |         | 1999 |   | 1998
|                                                             |                                                                   |             |         |      |   |     
|Operating assets                                             |                                                                   | $           | 2,281   |      |   | $    | (3,310 | ) |   | $ | (880 | )      
|                                                            
|                                                            
|                                                            
|                                                            
|Other liabilities                                            |                                                                   |             | (11,611 | )    |   |      | 1,936  |   |   |   | 341  |        
|                                                            
|                                                            
|                                                            
|                                                            
|Accrued taxes                                                |                                                                   |             | (2,938  | )    |   |      | 1,447  |   |   |   | 433  |        
|                                                             |                                                                   |             |         |      |   |      |        |   |   |   |      |        
|                                                             |                                                                   | $           | (12,268 | )    |   | $    | 73     |   |   |   | (106 | )      
|                                                             |                                                                   |             |         |      |   |      |        |   |   |   |      |        
|Noncash investing and financing transactions:                |                                                                   |             |         |      |   |      |        |   |   |   |      |        
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Contribution by Omega Healthcare Investors, Inc., excluding cash: |             |         |      |   |      |        |   |   |   |      |         |        
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             |                                                                   | Investments |         | $    |  |      |        |   |  |   |      | $       | 5,297   |  
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             |                                                                   | Loans       |         |      |  |      |        |   |  |   |      |         | 23,805  |  
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             |                                                                   | Other       |         |      |  |      |        |   |  |   |      |         | 150     |  
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             |                                                                   | Equity      |         |      |  |      |        |   |  |   |      |         | (29,252 | )
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Acquisition of land and buildings subject to triple-net lease     |             |         |     |   |      |        |  |   |   |      | (27,457 | )      
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Non-interest bearing deferred obligation                          |             |         |     |   |      |        |  |   |   |      | 27,457  |        
|                                                            
|                                                            
|                                                            
|                                                            
|Income taxes paid during the period, net of refunds received |                                                                   |             | 2,925   |      |   |      | 923    |   |   |   | 600  |        
|                                                            
|                                                            
|                                                            
|                                                            
|Interest expense paid during the period                      |                                                                   |             | 959     |      |   |      | 1,627  |   |   |   |     |        
|                                                            
|                                                            
|                                                            
|                                                            
|Principal-Australia cash balance at April 1, 1999            |                                                                   |             |        |      |   |      | 151    |   |   |   |     |        

In addition, a portion of the purchase consideration for
Iduns purchase of the operating subsidiaries of Tamaris,
plc was noncash (see Note 4).

F-19



---



OMEGA WORLDWIDE, INC.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)

NOTE 17  QUARTERLY DATA (UNAUDITED)

The following is an unaudited summary of quarterly results of
operations for the years ended September 30, 2000 and 1999
and the six-month period ended September 30, 1998.

|                                 |                                           |                                  |        |          |  |         |        |              |   |   |        |      |  |   |        |      | 
|-------------------------------- | ----------------------------------------- | -------------------------------- | ------ | -------- |  | ------- | ------ | ------------ | - | - | ------ | ---- |  | - | ------ | ---- | 
|                                 |                                           | December 31                      |        | March 31 |  | June 30 |        | September 30
|                                 |                                           |                                  |        |          |  |         |        |             
|                                 |                                           |                                 
|                                 |                                           | (In thousands, except per share)
|2000                             |                                           |                                  |        |          |  |         |        |              |   |   |        |      |  |   |        |     
|                                
|                                
|                                
|                                
|Revenues                         |                                           | $                                | 27,424 |          |  | $       | 40,053 |              |   | $ | 39,615 |      |  | $ | 38,517 |     
|                                
|                                
|                                
|                                
|Net earnings                     |                                           |                                  | 897    |          |  |         | (315   | )            |   |   | 60     |      |  |   | 804    |     
|                                
|                                
|                                
|                                
|Net earnings available to common |                                           |                                  | 845    |          |  |         | (367   | )            |   |   | 8      |      |  |   | 752    |     
|                                
|                                
|                                
|                                
|Per Share Amounts:               |                                           |                                  |        |          |  |         |        |              |   |   |        |      |  |   |        |     
|                                
|                                
|                                
|                                
|                                 | Net earnings available to common, basic   |                                  |        | 0.07     |  |         |        | (0.03        | ) |   |        |     |  |   |        | 0.06 | 
|                                
|                                
|                                
|                                
|                                 | Net earnings available to common, diluted |                                  |        | 0.07     |  |         |        | (0.03        | ) |   |        |     |  |   |        | 0.06 | 
|1999                             |                                           |                                  |        |          |  |         |        |              |   |   |        |      |  |   |        |     
|                                
|                                
|                                
|                                
|Revenues                         |                                           | $                                | 3,858  |          |  | $       | 5,269  |              |   | $ | 2,740  |      |  | $ | 2,886  |     
|                                
|                                
|                                
|                                
|Net earnings                     |                                           |                                  | 1,291  |          |  |         | 1,214  |              |   |   | 2,112  |      |  |   | 1,503  |     
|                                
|                                
|                                
|                                
|Net earnings available to common |                                           |                                  | 1,239  |          |  |         | 1,162  |              |   |   | 2,060  |      |  |   | 1,451  |     
|                                
|                                
|                                
|                                
|Per Share Amounts:               |                                           |                                  |        |          |  |         |        |              |   |   |        |      |  |   |        |     
|                                
|                                
|                                
|                                
|                                 | Net earnings available to common, basic   |                                  |        | 0.10     |  |         |        | 0.10         |   |   |        | 0.16 |  |   |        | 0.12 | 
|                                
|                                
|                                
|                                
|                                 | Net earnings available to common, diluted |                                  |        | 0.10     |  |         |        | 0.10         |   |   |        | 0.16 |  |   |        | 0.12 | 
|1998                             |                                           |                                  |        |          |  |         |        |              |   |   |        |      |  |   |        |     
|                                
|                                
|                                
|                                
|Revenues                         |                                           | $                                |       |          |  | $       |       |              |   | $ | 1,778  |      |  |   | 3,317  |     
|                                
|                                
|                                
|                                
|Net earnings                     |                                           |                                  |       |          |  |         |       |              |   |   | 744    |      |  |   | 1,211  |     
|                                
|                                
|                                
|                                
|Net earnings available to common |                                           |                                  |       |          |  |         |       |              |   |   | 692    |      |  |   | 1,159  |     
|                                
|                                
|                                
|                                
|Per Share Amounts:               |                                           |                                  |        |          |  |         |        |              |   |   |        |      |  |   |        |     
|                                
|                                
|                                
|                                
|                                 | Net earnings available to common, basic   |                                  |        |         |  |         |        |             |   |   |        | 0.06 |  |   |        | 0.09 | 
|                                
|                                
|                                
|                                
|                                 | Net earnings available to common, diluted |                                  |        |         |  |         |        |             |   |   |        | 0.06 |  |   |        | 0.09 | 

NOTE 18  SUBSEQUENT EVENT

As of November 30, 2000 the Company sold to Essex its
entire investment in Essex. Proceeds from the sale were $325,000
in cash, which approximates the book value of Essex. Accordingly
no gain or loss was recognized on the transaction. In connection
with the sale all outstanding balances between the
Companys were settled in cash as well.

F-20



---





INDEX TO EXHIBITS


|        |       |             |  |                                                                                                                                                                                                                                                             
|------- | ----- | ----------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |       |            
|Number  |       | Description
|        |       |            
|        | 3.1   |             |  | Articles of Amendment and Restatement Incorporated by reference
	to Exhibit 3.1 to Form S-1 Registration Statement                                                                                                                                          
|        | 3.2   |             |  | Amended and Restated Bylaws Incorporated by reference to
	Exhibit 3.2 to Form S-1 Registration Statement                                                                                                                                                    
|        | 3.3   |             |  | Articles Supplementary for Series B Preferred Stock
	Incorporated by reference to Exhibit 3.3 to Form S-1
	Registration Statement                                                                                                                           
|        | 3.4   |             |  | Articles Supplementary for Series A Preferred Stock
	Incorporated by reference to Exhibit 3.4 to Form S-1
	Registration Statement                                                                                                                           
|        | 3.5   |             |  | Amendment No. 1 to Amended and Restated bylaws dated as of
	March 25, 2000 Incorporated by reference to
	Exhibit 3.2 to the Companys report on Form 10-Q
	for the quarterly period dated March 31, 2000.                                                   
|        | 10.1  |             |  | Omega Worldwide, Inc. 1997 Stock Option and Restricted
	Stock Plan Incorporated by reference to Exhibit 10.1 to
	Form S-1 Registration Statement                                                                                                            
|        | 10.2  |             |  | Form of Rights Agreement, dated as of April 1, 1998,
	between the Company and First Chicago Trust Company of New York
	Incorporated by reference to Exhibit 10.6 to Form S-1
	Registration Statement.                                                       
|        | 10.3  |             |  | Amended and Restated Advisory Agreement dated as of July 
	21, 1995 between the Company (as successor by assignment from
	Omega Healthcare) and Principal Incorporated by reference to
	Exhibit 10.5 to Form S-1 Registration Statement                     
|        | 10.4  |             |  | Indemnification Agreements between the Company and its Directors
	and Executive Officers Incorporated by reference to
	Exhibit 10.7 to Form S-1 Registration Statement                                                                                      
|        | 10.5  |             |  | Advisory Agreement between Omega Healthcare (Australia) Pty
	Limited and Principal Healthcare Finance Trust incorporated by
	reference to Exhibit 10.6 to Form 10-K for the fiscal year
	ended September 30, 1998.                                          
|        | 10.6  |             |  | Form of Loan Agreement dated as of November 20, 1998 among
	the Company, Fleet Bank, N.A., as Agent, and other financial
	institutions named therein. Incorporated by reference to
	Exhibit 10.7 to Form 10-K for the fiscal year ended
	September 30, 1998.
|        | 10.7  |             |  | Amendment to Loan agreement dated as of November 20, 1998
	among the Company, Fleet Bank, N.A. as agent 
	Incorporated by reference to Exhibit 10.12 to
	Form 10-K for the fiscal year ended September 30, 1999.                                           
|        | 10.8  |             |  | Amendment #2 to Loan Agreement dated as of January 10,
	2000, among the Company, Fleet Bank, N.A. as agent and a bank
	and Harris Trust and Savings Bank  Incorporated by
	reference to Exhibit 10.5 to Form 10-Q for the quarter
	ended March 31, 2000.   
|        | 10.9  |             |  | Amendment #3 to Loan Agreement dated as of March 17, 2000,
	among the Company, Fleet Bank, N.A. as agent and a bank and
	Harris Trust and Savings Bank  Incorporated by
	reference to Exhibit 10.6 to Form 10-Q for the quarter
	ended March  31, 2000.    
|        | 10.10 |             |  | Amendment #4 to Loan Agreement dated June 29, 2000, among
	the Company, Fleet Bank, N.A. as agent and a bank and Harris
	Trust and Savings Bank  Incorporated by reference to
	Exhibit 10.7 to Form 10-Q for the quarter ended
	June 30, 2000.             
|        | 10.11 |             |  | Transaction documents dated June 19, 1998 
	Incorporated by reference to Exhibit 10.1 to the
	Companys report on Form  8-K filed on July 2,
	1998:                                                                                                        
|        |       |             |  | (a)   Mortgage of Deposit between the Company and ABN
	AMRO Facilities Australia Limited (ABN Facilities)                                                                                                                                                 



---



|        |       |             |  |                                                                                                                                                                                                                                                                                                                                         
|------- | ----- | ----------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |       |            
|Number  |       | Description
|        |       |            
|        |       |             |  | (b)   Bill Facility Agreement between Principal Pty
	and ABN AMRO Australia Limited (ABN Australia)                                                                                                                                                                                                                                   
|        |       |             |  | (c)   Deed of Guarantee and Indemnity between the
	Company and ABN Facilities                                                                                                                                                                                                                                                           
|        |       |             |  | (d)   Redemption and Subscription Agreement among
	Premier Care Australia (Holdings) Pty Limited, FAI Insurances
	Limited (FAI), PHF No. 1 Pty Limited (PHF
	No. 1), Tanoa Pty Limited (Tanoa), and
	Premier Care Australia Pty Limited (now known as Principal
	Healthcare Finance Pty Limited (Principal Pty)                 
|        |       |             |  | (e)   Relationship Agreement among the Company, PHF
	No.  1 Pty Limited, PHF No. 2 Pty Limited, Tanoa, Mindra
	Pty Limited, Beheer-en Beleggingsmaatschappij Dilava BV,
	Beheer-en Beleggingsmaatschappij Rocla BV, Moran Health Care
	(Australia) Pty Limited (Moran
	Australia) and Moran Health Care Group Pty Limited
	(Moran)
|        |       |             |  | (f)   Deed of Mortgage and Annexure B to Mortgage
	between Principal Pty and ABN Facilities                                                                                                                                                                                                                                             
|        |       |             |  | (g)   Capital Contribution Agreement among Moran
	Australia, Moran and Principal Pty                                                                                                                                                                                                                                                    
|        |       |             |  | (h)   NSW Lease between Principal Pty, as lessor, and
	Moran Australia, as lessee                                                                                                                                                                                                                                                       
|        |       |             |  | (i)   Lease Guarantee between Moran and Principal Pty                                                                                                                                                                                                                                                                                   
|        |       |             |  | (j)   Indemnity Deed                                                                                                                                                                                                                                                                                                                    
|        |       |             |  | (k)   Procurement Agreement among Moran Australia,
	FAI, Moran, Douglas John Moran, Greta Richmond Moran, Peter
	Godfrey Moran and Shane Moran                                                                                                                                                                                          
|        |       |             |  | (l)   Mortgage of Shares between Moran and Principal
	Pty                                                                                                                                                                                                                                                                               
|        | 10.12 |             |  | Transaction documents dated April 16, 1999 with the
	following exhibits. Incorporated by reference to Exhibit 10.10
	to the Companys report on Form 8-K filed on
	April  16, 1999.                                                                                                                                                     
|        |       |             |  | (a)   Form of Transaction Documents                                                                                                                                                                                                                                                                                                     
|        |       |             |  | (b)   Subscription Deed, Principal Healthcare Finance
	Unit Trust No. 1                                                                                                                                                                                                                                                                 
|        |       |             |  | (c)   Subscription Deed, Principal Healthcare Finance
	Unit Trust No. 2                                                                                                                                                                                                                                                                 
|        |       |             |  | (d)   Deed of Loan, PHF No. 1 Pty Limited, AMP
	Life Limited, Omega Healthcare Worldwide, Inc.                                                                                                                                                                                                                                          
|        |       |             |  | (e)   Principal Healthcare Finance Unit Trust
	No. 1, Term of 2004 Options                                                                                                                                                                                                                                                              
|        |       |             |  | (f)   Principal Healthcare Finance Unit Trust
	No. 2, Term of 2004 Options                                                                                                                                                                                                                                                              
|        |       |             |  | (g)   Advisory Agreement                                                                                                                                                                                                                                                                                                                
|        | 10.13 |             |  | Share Acquisition Agreement between Tamaris plc and the
	Company  Incorporated by reference to
	Exhibit 10.1 to the Companys report on Form 8-K
	filed on November 1, 1999                                                                                                                                                            
|        | 10.14 |             |  | Asset Administration deed between Principal Healthcare Finance
	Pty Limited and Omega (Australia) Pty Limited dated as of
	November 1, 1999  Incorporated by reference to
	Exhibit 10.13 to Form 10-K for the fiscal year ended
	September 30, 1999                                                                                    
|        | 10.15 |             |  | Service agreement between the Company and Omega Healthcare dated
	as of July 1, 2000  Filed herewith                                                                                                                                                                                                                                   



---



|        |       |             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|------- | ----- | ----------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |       |            
|Number  |       | Description
|        |       |            
|        | 10.16 |             |  | Employment and change in control agreement by and between
	James P. Flaherty and Omega Worldwide, Inc. dated
	March  24, 2000  Filed herewith                                                                                                                                                                                                                                                                                                                                                                              
|        | 10.17 |             |  | Change in control agreement, dated March 24, 2000, by and
	between Edward C. Noble and Omega Worldwide, Inc.
	Incorporated by reference to Exhibit 10.4 to the
	Companys report on Form 10-Q for the quarterly period
	ended March  31, 2000.                                                                                                                                                                                                                                                                              
|        | 12    |             |  | Statement re Computation of Ratio of Earnings to Combined Fixed
	Charges and Preferred Stock Dividends  Filed herewith                                                                                                                                                                                                                                                                                                                                                                                                     
|        | 21    |             |  | Subsidiaries of Registrant  Filed herewith                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|        | 27    |             |  | Financial Data Schedule  Filed herewith                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|        | 99(a) |             |  | Financial Statements of Principal Healthcare Finance
	Limited (filed herewith):
	    Report of Auditors
	 Consolidated Statement of operations for the years
	ended August 31, 2000, 1999, and 1998
	 Consolidated Balance Sheets as of August 31,
	2000 and 1999
	 Consolidated Statements of Shareholders Equity
	for the years ended August 31, 2000, 1999, and 1998
	    Consolidated Statements of Cash Flows
	for the years ended August 31, 2000, 1999, and 1998
	 Notes to Consolidated Financial Statements