What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2020-08-07 compared with 2020-05-08 · 329 added, 146 removed, 979 unchanged (33% of the section changed)

11 unchanged sentences

Mortgage notes receivable – net

Other investments

Other investments – net

Investments in unconsolidated joint ventures

13 unchanged sentences

Total liabilities

Common stock $ .10 par value authorized – 350,000 shares, issued and outstanding – 226,866 shares as of March 31, 2020 and 226,631 as of December 31, 2019

Common stock $ .10 par value authorized – 350,000 shares, issued and outstanding – 226,943 shares as of June 30, 2020 and 226,631 as of December 31, 2019

Common stock – additional paid-in capital

12 unchanged sentences

Three Months Ended

Six Months Ended

Rental income

9 unchanged sentences

Impairment on real estate properties

Impairment on direct financing leases

(Recovery) impairment on direct financing leases

Provision for credit losses

1 unchanged sentence

Other operating income

Gain on assets sold – net

Gain (loss) on assets sold – net

Operating income

3 unchanged sentences

Interest – amortization of deferred financing costs

Realized (loss) gain on foreign exchange

Realized gain (loss) on foreign exchange

Total other expense

13 unchanged sentences

Three Months Ended

Six Months Ended

Other comprehensive (loss) income:

8 unchanged sentences

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

Three Months Ended March 31, 2020 and 2019

Three Months Ended June 30, 2020 and 2019

(in thousands, except per share amounts)

3 unchanged sentences

Dividends Paid

Balance at December 31, 2019

Balance at March 31, 2020

( 4,458,207 )

Cumulative effect of accounting change (see Note 1)

Grant of restricted stock to company directors

Stock-based compensation expense

Vesting/exercising of equity compensation plan, net of tax withholdings

Deferred compensation directors

Equity Program

Vesting/exercising of Omega OP Units

Common dividends declared ($ 0.67 per share)

Conversion and redemption of Omega OP Units to common stock

Omega OP Units distributions

Comprehensive income:

Foreign currency translation

Cash flow hedges

Total comprehensive income

Balance at June 30, 2020

( 4,610,828 )

Balance at March 31, 2019

( 3,875,884 )

Cumulative effect of accounting change

Balance at April 1, 2019

( 3,875,884 )

Grant of restricted stock to company directors

Stock-based compensation expense

3 unchanged sentences

Equity Shelf Program

Issuance of common stock - merger related

Vesting/exercising of Omega OP Units

6 unchanged sentences

Total comprehensive income

Balance at March 31, 2020

Balance at June 30, 2019

( 4,013,116 )

See notes to consolidated financial statements.

OMEGA HEALTHCARE INVESTORS, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

Six Months Ended June 30, 2020 and 2019

(in thousands, except per share amounts)

Comprehensive

Stockholders’

Noncontrolling

Dividends Paid

Balance at December 31, 2019

( 4,303,546 )

Cumulative effect of accounting change (see Note 1)

( 4,303,546 )

Grant of restricted stock to company directors

Stock-based compensation expense

2 unchanged sentences

Deferred compensation directors

Equity Shelf Program

Equity Program

Common dividends declared ($ 1.34 per share)

Vesting/exercising of Omega OP units

Conversion and redemption of Omega OP Units to common stock

Omega OP Units distributions

Comprehensive income:

Foreign currency translation

Cash flow hedges

Total comprehensive income

Balance at June 30, 2020

( 4,610,828 )

Balance at December 31, 2018

( 3,739,197 )

Cumulative effect of accounting change

Balance at April 1, 2019

( 3,739,197 )

Grant of restricted stock to company directors

Stock-based compensation expense

Vesting/exercising of equity compensation plan, net of tax withholdings

Dividend reinvestment and stock purchase plan

Deferred compensation directors

Equity Shelf Program

Issuance of common stock - merger related

Common dividends declared ($ 1.32 per share)

Vesting/exercising of Omega OP units

Conversion and redemption of Omega OP Units to common stock

5 unchanged sentences

Total comprehensive income

Balance at March 31, 2019

Balance at June 30, 2019

( 4,013,116 )

7 unchanged sentences

Impairment on real estate properties

Impairment on direct financing leases

(Recovery) impairment on direct financing leases

Provision for rental income

Provision for credit losses

2 unchanged sentences

Stock-based compensation expense

Gain on assets sold – net

(Gain) loss on assets sold – net

Amortization of acquired in-place leases – net

9 unchanged sentences

Cash flows from investing activities

Acquisition of a business, net of cash acquired

Acquisition of real estate

Acquisition deposit

Net proceeds from sale of real estate investments

9 unchanged sentences

Proceeds from other investments

Net cash (used in) provided by investing activities

Net cash used in investing activities

Cash flows from financing activities

9 unchanged sentences

Distributions to Omega OP Unit Holders

Net cash provided by (used in) financing activities

Net cash used in financing activities

Effect of foreign currency translation on cash, cash equivalents and restricted cash

14 unchanged sentences

Mortgage notes receivable – net

Other investments

Other investments – net

Investments in unconsolidated joint ventures

23 unchanged sentences

Three Months Ended

Six Months Ended

Rental income

9 unchanged sentences

Impairment on real estate properties

Impairment on direct financing leases

(Recovery) impairment on direct financing leases

Provision for credit losses

1 unchanged sentence

Other operating income

Gain on assets sold – net

Gain (loss) on assets sold – net

Operating income

3 unchanged sentences

Interest – amortization of deferred financing costs

Realized (loss) gain on foreign exchange

Realized gain (loss) on foreign exchange

Total other expense

13 unchanged sentences

Three Months Ended

Six Months Ended

Other comprehensive (loss) income:

8 unchanged sentences

CONSOLIDATED STATEMENTS OF CHANGES IN OWNERS’ EQUITY

Three Months Ended March 31, 2020 and 2019

Three Months Ended June 30, 2020 and 2019

(in thousands, except per unit amounts)

1 unchanged sentence

Noncontrolling

Balance at March 31, 2020

Contributions from partners

Distributions to partners

Vesting/exercising of Omega OP Units

Omega OP Unit conversions

Comprehensive income

Foreign currency translation

Cash flow hedges

Net income (loss)

Total comprehensive income

Balance at June 30, 2020

Balance at March 31, 2019

Cumulative effect of accounting change

Balance at April 1, 2019

Contributions from partners

Distributions to partners

Vesting/exercising of Omega OP Units

Omega OP Unit conversions

Comprehensive income

Foreign currency translation

Cash flow hedges

Total comprehensive income

Balance at June 30, 2019

See notes to consolidated financial statements.

OHI HEALTHCARE PROPERTIES LIMITED PARTNERSHIP

CONSOLIDATED STATEMENTS OF CHANGES IN OWNERS’ EQUITY

Six Months Ended June 30, 2020 and 2019

(in thousands, except per unit amounts)

Noncontrolling

Balance at December 31, 2019

Cumulative effect of accounting change

Balance at January 1, 2020

Contributions from partners

5 unchanged sentences

Cash flow hedges

Net income (loss)

Total comprehensive income

Balance at March 31, 2020

Balance at June 30, 2020

Balance at December 31, 2018

Cumulative effect of accounting change

Balance at April 1, 2019

Contributions from partners

7 unchanged sentences

Total comprehensive income

Balance at March 31, 2019

Balance at June 30, 2019

See notes to consolidated financial statements.

2 unchanged sentences

Unaudited (in thousands)

Three Months Ended

Six Months Ended

Cash flows from operating activities

2 unchanged sentences

Impairment on real estate properties

Impairment loss on direct financing leases

(Recovery) impairment loss on direct financing leases

Provision for rental income

Provision for credit losses

2 unchanged sentences

Stock-based compensation expense

Gain on assets sold – net

(Gain) loss on assets sold – net

Amortization of acquired in-place leases – net

9 unchanged sentences

Cash flows from investing activities

Acquisition of a business, net of cash acquired

Acquisition of real estate

Acquisition deposit

Net proceeds from sale of real estate investments

9 unchanged sentences

Proceeds from other investments

Net cash (used in) provided by investing activities

Net cash used in investing activities

Cash flows from financing activities

6 unchanged sentences

Distributions to limited partners

Net cash provided by (used in) financing activities

Net cash used in financing activities

Effect of foreign currency translation on cash, cash equivalents and restricted cash

6 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2020

June 30, 2020

NOTE 1 – BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

14 unchanged sentences

Omega has exclusive control over Omega OP’s day-to-day management pursuant to the Partnership Agreement.

As of March 31, 2020, Omega owned approximately 97 % of the issued and outstanding units of partnership interest in Omega OP (“Omega OP Units”), and investors owned approximately 3 % of the outstanding Omega OP Units.

As of June 30, 2020, Omega owned approximately 97 % of the issued and outstanding units of partnership interest in Omega OP (“Omega OP Units”), and investors owned approximately 3 % of the outstanding Omega OP Units.

Basis of Presentation

10 unchanged sentences

Risks and Uncertainties

The Company is subject to certain risks and uncertainties affecting the healthcare industry as a result of healthcare legislation and growing regulation by federal, state and local governments.

The Company is subject to certain risks and uncertainties affecting the healthcare industry, including those stemming from the 2019 novel coronavirus (“COVID-19”) global pandemic described below, which has disproportionately impacted the senior care sector, as well as, those stemming from healthcare legislation and changing regulation by federal, state and local governments, including those driven by the COVID-19 pandemic.

Additionally, we are subject to risks and uncertainties as a result of changes affecting operators of nursing home facilities due to the actions of governmental agencies and insurers to limit the rising cost of healthcare services.

1 unchanged sentence

The COVID-19 pandemic has led governments and other authorities in the U.S., U.K.

and around the world to impose measures intended to control its spread, including restrictions on freedom of movement and business operations such as travel bans, border closings, business closures, quarantines and shelter-in-place orders.

We believe many of our operators are incurring significant cost increases as a result of the pandemic, with dramatic increases for facilities with positive cases.

We believe these increases primarily stem from elevated labor costs, including increased use of overtime and bonus pay, as well as a significant increase in both the cost and usage of personal protective equipment and supplies.

In terms of occupancy levels, we believe many of our operators are experiencing declines, in part due to the elimination of elective hospital procedures.

To the extent these trends continue or accelerate and are not offset by sufficient or timely government relief, the operating results of our operators are likely to be adversely affected, some may be unwilling or unable to pay their contractual obligations to us in full or on a timely basis and we may be unable to restructure such obligations on terms as favorable to us as those currently in place.

and around the world to impose measures intended to control its spread, including but not limited to, the mandated use of personal protective equipment, restrictions on freedom of movement and business operations such as travel bans, border closings, business closures, quarantines and shelter-in-place orders, etc.

While certain regions have entered various phases of reopening, there continues to be a wide range of government restrictions in place and uncertainty around the potential duration of the pandemic.

As of July 16, 2020, less than half of our facilities have reported a positive case of COVID-19 among the residents and/or operator employee populations.

Many of our operators have reported incurring significant cost increases as a result of the COVID-19 pandemic, with dramatic increases for facilities with positive cases.

In terms of occupancy levels, many of our operators have reported experiencing declines, in part due to the elimination or suspension of elective hospital procedures, fewer discharges from hospitals to SNFs and higher hospital readmittances from SNFs.

To the extent government support is not sufficient or timely to offset these impacts, or to the extent these trends continue or accelerate and are not offset by additional government relief that is sufficient or timely, the operating results of our operators are likely to be adversely affected, some may be unwilling or unable to pay their contractual obligations to us in full or on a timely basis and we may be unable to restructure such obligations on terms as favorable to us as those currently in place.

Even if operators are able to avail themselves of government relief to offset some of these costs, they may face challenges in complying with the terms and conditions of government support and may face longer-term adverse impacts to their personnel and business operations from the pandemic, including potential patient litigation and decreased demand for their services.

The extent of the COVID-19 pandemic’s effect on our and our operators’ operational and financial performance will depend on future developments, including the duration, spread and intensity of the outbreak, all of which are uncertain and difficult to predict.

Due to the speed with which the situation is developing, we are not able at this time to estimate the effect of these factors on our business, but the adverse impact on our business, results of operations, financial condition and cash flows could be material.

The extent of the COVID-19 pandemic’s effect on our and our operators’ operational and financial performance will depend on future developments, including the ultimate duration, spread and intensity of the outbreak, which may depend on factors such as the development and implementation of an effective vaccine and treatments for COVID-19 and the efficacy of other policies and measures that may mitigate the impact of the pandemic, all of which are uncertain and difficult to predict.

Due to the speed with which the situation is changing, we are not able at this time to estimate the effect of these factors on our business, but the adverse impact on our business, results of operations, financial condition and cash flows could be material.

Variable Interest Entities

17 unchanged sentences

We perform this analysis on an ongoing basis.

As of March 31, 2020, we have not consolidated any VIEs, as we do not have the power to direct the activities of any VIEs that most significantly impact their economic performance and we do not have the obligation to absorb losses or receive benefits of the VIEs that could be significant to the entity.

As of June 30, 2020, we have not consolidated any VIEs, as we do not have the power to direct the activities of any VIEs that most significantly impact their economic performance and we do not have the obligation to absorb losses or receive benefits of the VIEs that could be significant to the entity.

Real Estate Investments and Depreciation

2 unchanged sentences

Expenditures for maintenance and repairs are charged to operations as they are incurred.

Depreciation is computed on a straight-line basis over the estimated useful lives ranging from 20 to 40 years for buildings, eight to 15 years for site improvements, and three to ten years for furniture and equipment.

Depreciation is computed on a straight-line basis over the estimated useful lives ranging from 20 to 40 years for buildings, eight to 15 years for site improvements, and three to 10 years for furniture and equipment.

Leasehold interests are amortized over the shorter of the estimated useful life or term of the lease.

22 unchanged sentences

Changes in the facts and circumstances that drive management’s assumptions may result in an impairment to our assets in a future period that could be material to Omega’s results of operations.

For the three months ended March 31, 2020, we recognized impairment on real estate properties of approximately $ 3.6 million.

For the three months ended June 30, 2020 and 2019, we recognized impairment on real estate properties of approximately $ 12.0 million and $ 5.7 million, respectively.

For the six months ended June 30, 2020 and 2019, we recognized impairment on real estate properties of approximately $ 15.6 million and $ 5.7 million, respectively.

In July of 2020, we executed a Forbearance and Transition Agreement with Daybreak which, among other things, sets forth the parties’ plan to sell or re-lease the Daybreak portfolio, which plan contemplates the potential sale of 28 facilities currently leased to Daybreak to a non-Omega party for $ 100 million, and the Company’s agreement to forbear from exercising certain default remedies during the transition period.

As of June 30, 2020, the 28 facilities have a net book value of approximately $ 147 million.

As of August 7, 2020, we have not entered into a definitive agreement for the sale of these facilities.

We evaluated the facilities for impairment as of June 30, 2020 and concluded that the facilities were not currently impaired, as we believe our projected probability-weighted cash flows exceeded the current net book value of the 28 facilities.

In projecting the probability-weighted cash flows, we considered the potential sale of the facilities for $ 100 million and the potential transition of the facilities to other operators to the extent that the sale to the third party does not ultimately close.

As of June 30, 2020, we estimated a lower probability of the contemplated sale due to lack of a definitive sale agreement and evidence of buyer financing.

To the extent that our assessment of the probability of a potential sale increases in the future, we may be required to record an impairment of approximately $ 47 million on the 28 facilities to reduce the net book value of the 28 facilities to their estimated fair value or fair value less cost to sell and/or record a loss on the sale.

On May 26, 2020, we executed an Agreement of Purchase and Sale to sell an acute care hospital located in Nevada to an unrelated third-party for $ 56.5 million.

Pursuant to the Agreement of Purchase and Sale, the sale remains subject to a 60-day due diligence period which expired in July 2020.

During the second quarter of 2020, we recorded an impairment of approximately $ 2.2 million related to this facility to reduce its net book value to its fair value less costs to sell of approximately $ 55.3 million and reclassified the facility to assets held for sale.

In July of 2020, we agreed with the third-party buyer to lower the purchase price to approximately $ 49.0 million.

The reduction in the purchase price will result in an additional impairment and/or loss on sale of approximately $ 7.4 million during the third quarter of 2020.

Allowance for Losses on Mortgages, Other Investments and Direct Financing Leases

14 unchanged sentences

Under the cash basis method, we apply cash received to principal or interest income based on the terms of the agreement.

As of March 31, 2020 and December 31, 2019, we had $ 35.3 million and $ 5.1 million, respectively, of reserves on our loans.

As of June 30, 2020 and December 31, 2019, we had $ 35.1 million and $ 5.1 million, respectively, of reserves on our loans.

For additional information see “Accounting Pronouncements Adopted in 2020,” Note 3 – Direct Financing Leases, Note 4 – Mortgage Notes Receivable, and Note 5 – Other Investments.

39 unchanged sentences

As a matter of policy, we do not use derivatives for trading or speculative purposes.

At March 31, 2020 and December 31, 2019, the fair value of certain qualifying cash flow hedges was $ 13.5 million and $ 3.7 million, respectively, and are included in accrued expenses and other liabilities on our Consolidated Balance Sheets.

At March 31, 2020, the fair value of certain qualifying cash flow hedges was $ 1.9 million and is included in other assets on our Consolidated Balance Sheets.

At June 30, 2020 and December 31, 2019, the fair value of certain qualifying cash flow hedges was $ 13.5 million and $ 3.7 million, respectively, and are included in accrued expenses and other liabilities on our Consolidated Balance Sheets.

At June 30, 2020, the fair value of certain qualifying cash flow hedges was $ 2.4 million and is included in other assets on our Consolidated Balance Sheets.

Net investment hedge

21 unchanged sentences

Other receivables and lease inducements

During the first quarter of 2020, we provided approximately $ 16.0 million of funding to four operators, which were accounted for as lease inducements.

During the first quarter of 2020, we provided approximately $ 16.0 million of funding to four operators, which was accounted for as lease inducements.

Of the $ 16.0 million, $ 12.9 million was funded to an operator for development and start-up related costs.

During the second quarter of 2020, we provided approximately $ 12.9 million of funding to three operators, which was accounted for as lease inducements.

Of the $ 12.9 million, $ 11.0 million was funded to an operator for development and start-up related costs.

Reclassification

The six months ended June 30, 2019 Consolidated Statements of Changes in Equity and the six months ended June 30, 2019 Consolidated Statements of Changes in Owners’ Equity have been reclassified to conform to current period presentation.

Accounting Pronouncements Adopted in 2020

3 unchanged sentences

ASU 2016-13 specifically excludes from its scope receivables arising from operating leases accounted for under Topic 842.

We adopted ASU 2016-13 on January 1, 2020 using the modified retrospective approach.

Upon adoption, we recorded an initial $ 28.8 million allowance for expected credit losses with a corresponding adjustment to equity .

We adopted ASU 2016-13 on January 1, 2020 using the modified retrospective approach and we recorded an initial $ 28.8 million allowance for expected credit losses with a corresponding adjustment to equity .

Transition Impact of Adopting Topic 326

19 unchanged sentences

Revolving Loans

Balance as of March 31, 2020

Balance as of June 30, 2020

(in thousands)

4 unchanged sentences

Mortgage Notes Receivable

Investment in Direct Financing Leases

Mortgage Notes Receivable

Investment in Direct Financing Leases

3 unchanged sentences

Other Investments

We have a limited history of incurred losses and consequently have elected to employ external data to perform our expected credit loss calculation.

9 unchanged sentences

Allowance for Credit Loss on January 1, 2020

Provision for Credit Loss for the period ended March 31, 2020

Allowance for Credit Loss as of March 31, 2020

Provision for Credit Loss for the three months ended June 30, 2020

Provision for Credit Loss for the six months ended June 30, 2020

Allowance for Credit Loss as of June 30, 2020

(in thousands)

3 unchanged sentences

Mortgage Notes Receivable

Investment in Direct Financing Leases

4 unchanged sentences

Off-Balance Sheet Commitments

As of March 31, 2020, $ 12.7 million of contractual interest receivable is recorded in contractual receivables – net on our Consolidated Balance Sheets.

No interest receivable has been reserved for during the period ended March 31, 2020.

As of June 30, 2020, $ 13.6 million of contractual interest receivable is recorded in contractual receivables – net on our Consolidated Balance Sheets.

No interest receivable has been reserved for during the six month period ended June 30, 2020.

We have elected the practical expedient to exclude interest receivable from our allowance for credit losses.

18 unchanged sentences

Real estate investments – net

At March 31, 2020, our leased real estate properties included 776 SNFs, 115 ALFs, 29 specialty facilities and two MOBs.

Three Months Ended March 31, 2020

Three Months Ended March 31, 2019

At June 30, 2020, our leased real estate properties included 766 SNFs, 114 ALFs, 28 specialty facilities and two MOBs.

Three Months Ended June 30,

Six Months Ended June 30,

(in thousands)

2 unchanged sentences

Total lease income

The following tables summarize the significant asset acquisitions that occurred during the first three months of 2020:

The following tables summarize the significant asset acquisitions that occurred during the first six months of 2020:

Building & Site

12 unchanged sentences

Based on the closing price of our common stock on May 16, 2019, the fair value of the consideration exchanged approximated $ 346 million.

The following table highlights the fair value of the assets acquired and liabilities assumed on May 17, 2019:

Our purchase price allocation was finalized during the second quarter of 2020, with no material adjustments recorded.

The following table highlights the final fair value of the assets acquired and liabilities assumed on May 17, 2019:

(in thousands)

9 unchanged sentences

Fair value of net assets acquired

(1) With the exception for real estate investments, above market lease assets and below market lease liabilities, the fair value estimates above are final.

(1) Includes approximately $ 2.5 million in above market lease assets.

1 unchanged sentence

The MedEquities facilities acquired in 2019 are included in our results of operations from the date of acquisition.

For the three months ended March 31, 2020, we recognized approximately $ 13 million of total revenue from the assets acquired in connection with the MedEquities Merger.

Our purchase price allocation will be finalized during the second quarter of 2020.

For the three and six months ended June 30, 2020, we recognized approximately $ 13 million and $ 26 million, respectively of total revenue from the assets acquired in connection with the MedEquities Merger.

Pro Forma Acquisition Results

3 unchanged sentences

Three Months Ended

Six Months Ended

(in thousands, except per share amounts, unaudited)

7 unchanged sentences

In addition, we recorded impairments on three facilities of approximately $ 3.6 million ( one was subsequently reclassified to assets held for sale).

During the second quarter of 2020, we sold 15 facilities subject to operating leases and one facility subject to a direct financing lease for approximately $ 38.0 million in net cash proceeds recognizing a net gain of approximately $ 12.8 million.

In addition, we recorded impairments on 10 facilities of approximately $ 12.0 million ( two were subsequently reclassified to assets held for sale).

Our recorded impairments were primarily the result of decisions to exit certain non-strategic facilities and/or operators.

11 unchanged sentences

Number of direct financing leases

In June 2020, we received approximately $ 14.9 million from the Orianna Health Systems Distribution Trust (the “Trust”) as part of its final liquidation.

As of December 31, 2019, our remaining receivable was approximately $ 14.1 million which was recorded in other assets on our Consolidated Balance Sheets.

Approximately $ 0.8 million of the overall proceeds were recorded in recovery (impairment) of direct financing leases on our Consolidated Statements of Operations for the three and six months ended June 30, 2020.

In March 2019, we received updated information from the Trust indicating diminished collectability of the accounts receivable owed to us.

As a result, we recorded an additional $ 7.7 million allowance during the three months ended March 31, 2019.

NOTE 4 – MORTGAGE NOTES RECEIVABLE

As of March 31, 2020, mortgage notes receivable relate to nine fixed rate mortgage notes on 53 facilities.

As of June 30, 2020, mortgage notes receivable relate to ten fixed rate mortgage notes on 64 facilities.

The mortgage notes are secured by first mortgage liens on the borrowers’ underlying real estate and personal property.

The mortgage notes receivable relate to facilities located in eight states that are operated by seven independent healthcare operating companies.

We monitor compliance with mortgages and when necessary have initiated collection, foreclosure and other proceedings with respect to certain outstanding mortgage notes.

We monitor compliance with the terms of our mortgages and when necessary have initiated collection, foreclosure and other proceedings with respect to certain outstanding mortgage notes.

The principal amounts outstanding of mortgage notes receivable, net of allowances, were as follows:

8 unchanged sentences

Total mortgages — net

(1) Approximates the weighted average interest rate on 36 facilities as of March 31, 2020.

Three notes totaling approximately $ 38.9 million are construction mortgages with maturities through 2021.

The remaining loan balance matures in 2029 .

(2) Other mortgages outstanding have a weighted average interest rate of 9.46 % per annum as of March 31, 2020 and maturity dates through 2028 .

(1) Approximates the weighted average interest rate on 47 facilities as of June 30, 2020.

Two notes totaling approximately $ 23.6 million are construction mortgages with maturities in 2021.

Two mortgages notes totaling $ 43.1 million mature in 2021 and the remaining loan balance matures in 2029 .

(2) Other mortgages outstanding have a weighted average interest rate of 9.47 % per annum as of June 30, 2020 and maturity dates through 2028 .

$ 665 Million Mortgage Notes due 2029

On May 1, 2020, we amended our initial $ 415 million amortizing master mortgage (the “Master Mortgage”) with Ciena Healthcare (“Ciena”) to (i) increase the interest rate on the Master Mortgage to 10.67 % per annum and (ii) add an additional $ 83.5 million mortgage note related to eight SNFs and one ALF located in Michigan.

These nine facilities were formerly leased to Ciena and were sold to Ciena in a noncash transaction that closed on May 1, 2020 and we retained the first mortgage.

In connection with this sale, we recorded a loss of $ 3.6 million related to the write-off of the nine facilities’ straight-line rent receivable.

The mortgage note matures on June 30, 2029 and bears an initial annual interest rate of 10.31 % which increases each year by 2 %.

As of June 30, 2020, the outstanding principal balance of this mortgage note is approximately $ 83.4 million.

In June 2020, we entered into a loan agreement with subsidiaries of Ciena to provide $ 43.2 million of mortgage notes related to two SNFs located in Ohio.

The mortgage notes mature on June 30, 2021 and bear an initial annual interest rate of 9.5 %.

As of June 30, 2020, the outstanding principal balance of these mortgage notes is approximately $ 43.2 million.

As of June 30, 2020, our total outstanding mortgages notes receivable with Ciena total $ 665.4 million.

NOTE 5 – OTHER INVESTMENTS

13 unchanged sentences

Total other investments - net

(1) Approximate weighted average interest rate as of March 31, 2020.

(2) Other investment notes have a weighted average interest rate of 8.54 % as of March 31, 2020 and maturity dates through 2029 .

(1) Approximate weighted average interest rate as of June 30, 2020.

(2) Other investment notes have a weighted average interest rate of 7.96 % as of June 30, 2020 and maturity dates through 2028 .

Other Investment Notes due 2021-2025

On September 30, 2016, we acquired and amended a term loan with a fair value of approximately $ 37.0 million with Agemo Holdings LLC (“Agemo,” an entity formed in May 2018 to silo our leases and loans formerly held by Signature Healthcare).

A $ 5.0 million tranche of the term loan that bore interest at 13 % per annum was repaid in August 2017.

The remaining $ 32.0 million tranche of the term loan bears interest at 9 % per annum and currently matures on December 31, 2024 .

The $ 32.0 million term loan (and the $ 25.0 million working capital loan discussed below) is secured by a security interest in the collateral of Agemo.

On May 7, 2018, we provided Agemo a $ 25.0 million secured working capital loan bearing interest at 7 % per annum that matures on April 30, 2025 .

The proceeds of the working capital loan were used to pay operating expenses, settlement payments, fees, taxes and other costs approved by Omega.

As of March 31, 2020, approximately $ 25.0 million is outstanding on this working capital loan.

On November 5, 2019, we provided Agemo a $ 1.7 million term loan bearing interest at a fixed rate of 9 % per annum and was initially scheduled to mature on March 31, 2020 .

On February 10, 2020, we extended the maturity of this loan to January 1, 2021 .

As of March 31, 2020, $ 1.7 million is outstanding on this term loan.

On February 28, 2020, we provided an affiliate of Agemo a $ 3.5 million term loan bearing interest at a fixed rate of 10 % per annum and matures on February 28, 2021 .

As of March 31, 2020, $ 3.5 million is outstanding on this term loan.

Our total loans outstanding with Agemo and their affiliates at March 31, 2020 approximate $ 62.2 million.

On February 28, 2020, we provided an affiliate of Agemo Holdings LLC (“Agemo”) a $ 3.5 million term loan bearing interest at a fixed rate of 10 % per annum and maturing on February 28, 2021 .

As of June 30, 2020, $ 3.5 million is outstanding on this term loan.

Our total loans outstanding with Agemo and its affiliates at June 30, 2020 approximate $ 62.2 million.

Other Investment Notes Outstanding

On April 17, 2020, we provided a $ 17.6 million unsecured loan to a subsidiary of Second Spring Healthcare Investments (an entity in which we have an approximate 15 % ownership interest, see Note 7 – Investment in Joint Ventures).

The loan bears interest at the greater of the prime interest rate or 3-month LIBOR plus 2.75 % per annum and is due on demand.

As of June 30, 2020, the loan bears interest at 3.25 % per annum and has a total outstanding balance of $ 17.6 million.

NOTE 6 – VARIABLE INTEREST ENTITIES

As of March 31, 2020 and December 31, 2019, Agemo is a VIE.

Below is a summary of our assets and collateral associated with this operator as of March 31, 2020 and December 31, 2019:

As of June 30, 2020 and December 31, 2019, Agemo is a VIE.

Below is a summary of our assets and collateral associated with this operator as of June 30, 2020 and December 31, 2019:

(in thousands)

Real estate investments – net

Assets held for sale

Other investments

9 unchanged sentences

In May 2018, we reached an out-of-court restructuring agreement with Agemo that provided for the deferral of rent, the extension of the maturity of our lease and loans, and a working capital loan.

If Agemo’s operations deteriorate and they are unable to meet their contractual obligations to us, we may be required to account for rental income from them on a cash basis and reserve approximately $ 75.9 million of contractual receivables, straight-line rent receivables and lease inducements.

The table below reflects our total revenues from Agemo for the three months ended March 31, 2020 and 2019:

Three Months Ended

March 31, 2020

March 31, 2019

If Agemo is unable to meet their contractual obligations to us, we may be required to account for rental income from them on a cash basis and reserve approximately $ 78.2 million of contractual receivables, straight-line rent receivables and lease inducements.

The table below reflects our total revenues from Agemo for the three and six months ended June 30, 2020 and 2019:

Three Months Ended June 30

Six Months Ended June 30,

(in thousands)

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Other investment income

(1) For the three months ended March 31, 2020 and 2019, we received cash rental income and other investment income from Agemo of approximately $ 13.7 million and $ 13.1 million, respectively.

(1) For the three months ended June 30, 2020 and 2019, we received cash from Agemo of approximately $ 13.1 million and $ 13.2 million, respectively, pursuant to our lease and other investment agreements.

For the six months ended June 30, 2020 and 2019, we received cash from Agemo of approximately $ 26.8 million and $ 26.2 million, respectively, pursuant to our lease and other investment agreements.

NOTE 7 – INVESTMENTS IN JOINT VENTURES

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(2) Our initial investment includes our transaction costs, if any.

The following table reflects our income (loss) from unconsolidated joint ventures for the three months ended March 31, 2020 and 2019:

Three Months Ended March 31,

(3) The Company made a loan of $ 17.6 million to the venture which is included in other investments.

See Note 5 – Other Investments.

The following table reflects our income (loss) from unconsolidated joint ventures for the three and six months ended June 30, 2020 and 2019:

Three Months Ended June 30,

Six Months Ended June 30,

(in thousands)

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We receive asset management fees from certain joint ventures for services provided.

For the three months ended March 31, 2020 and 2019, we recognized approximately $ 0.2 million of asset management fees.

For the three months ended June 30, 2020 and 2019, we recognized approximately $ 0.5 million and $ 0.3 million, respectively of asset management fees.

For the six months ended June 30, 2020 and 2019, we recognized approximately $ 0.7 million and $ 0.5 million, respectively of asset management fees.

These fees are included in miscellaneous income in the accompanying Consolidated Statements of Operations.

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March 31, 2020

Properties sold (1)

Properties added (2)

June 30, 2020 (3)

(1) In the first quarter of 2020, we sold four facilities for approximately $ 4.2 million in net cash proceeds recognizing a net loss on sale of approximately $ 0.5 million.

In the second quarter of 2020, we sold five facilities for approximately $ 38.4 million in net cash proceeds recognizing a net gain on sale of approximately $ 16.7 million.

(2) In the first quarter of 2020, we recorded approximately $ 1.9 million of impairment expense to reduce one facility’s book value to its estimated fair value less costs to sell before it was reclassified to assets held for sale.

(3) We plan to sell the facilities classified as assets held for sale at March 31, 2020 within the next twelve months.

In the second quarter of 2020, we recorded approximately $ 2.6 million of impairment expense to reduce two facilities’ book value to their estimated fair value less costs to sell before they were reclassified to assets held for sale.

(3) We plan to sell the facilities classified as assets held for sale at June 30, 2020 within the next twelve months.

NOTE 9 – INTANGIBLES

The following is a summary of our intangibles as of March 31, 2020 and December 31, 2019:

The following is a summary of our intangibles as of June 30, 2020 and December 31, 2019:

(in thousands)

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The net amortization related to the above and below market leases is included in our Consolidated Statements of Operations as an adjustment to rental income.

As disclosed in Note 2 – Properties and Investments, certain above market lease assets and below market lease liabilities acquired in the MedEquities Merger are subject to further adjustment pending completion of the purchase accounting.

For the three months ended March 31, 2020 and 2019, our net amortization related to intangibles was $ 1.3 million and $ 1.8 million, respectively.

For the three months ended June 30, 2020 and 2019, our net amortization related to intangibles was $ 3.5 million and $ 1.6 million, respectively.

For the six months ended June 30, 2020 and 2019, our net amortization related to intangibles was $ 4.8 million and $ 3.4 million, respectively.

The estimated net amortization related to these intangibles for the remainder of 2020 and the subsequent four years is as follows:

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2023 – $ 5.7 million and 2024 – $ 5.6 million.

As of March 31, 2020, the weighted average remaining amortization period of above market lease assets is eleven years and below market lease liabilities is approximately nine years .

The following is a summary of our goodwill as of March 31, 2020:

As of June 30, 2020, the weighted average remaining amortization period of above market lease assets is eight years and below market lease liabilities is approximately eight years .

The following is a summary of our goodwill as of June 30, 2020:

(in thousands)

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foreign currency translation

Balance as of March 31, 2020

Balance as of June 30, 2020

NOTE 10 – CONCENTRATION OF RISK

As of March 31, 2020, our portfolio of real estate investments consisted of 985 healthcare facilities, located in 40 states and the U.K.

As of June 30, 2020, our portfolio of real estate investments consisted of 981 healthcare facilities, located in 40 states and the U.K.

and operated by 69 third-party operators.

Our investment in these facilities, net of impairments and allowances, totaled approximately $ 9.7 billion at March 31, 2020, with approximately 97 % of our real estate investments related to long-term care facilities.

Our portfolio is made up of 778 SNFs, 115 ALFs, 29 specialty facilities, two medical office buildings, fixed rate mortgages on 47 SNFs, two ALFs and four specialty facilities and eight facilities that are held for sale.

At March 31, 2020, we also held other investments of approximately $ 424.7 million, consisting primarily of secured loans to third-party operators of our facilities and $ 194.4 million of investments in five unconsolidated joint ventures.

At March 31, 2020 we had investments with one operator/or manager that exceeded 10% of our total investments:

Our investment in these facilities, net of impairments and allowances, totaled approximately $ 9.8 billion at June 30, 2020, with approximately 97 % of our real estate investments related to healthcare facilities.

Our portfolio is made up of 767 SNFs, 114 ALFs, 28 specialty facilities, two medical office buildings, fixed rate mortgages on 57 SNFs, three ALFs and four specialty facilities and six facilities that are held for sale.

At June 30, 2020, we also held other investments of approximately $ 434.7 million, consisting primarily of secured loans to third-party operators of our facilities and $ 195.5 million of investments in five unconsolidated joint ventures.

At June 30, 2020 we had investments with one operator/or manager that exceeded 10% of our total investments:

Ciena Healthcare (“Ciena”).

Ciena also generated approximately 10 % of our total revenues for the three months ended March 31, 2020 and 2019.

At March 31, 2020, the three states in which we had our highest concentration of investments were Florida ( 14 %), Texas ( 10 %) and Michigan ( 7 %).

Ciena also generated approximately 10 % of our total revenues for the three and six months ended June 30, 2020.

Ciena generated approximately 11 % of our total revenues for the three and six months ended June 30, 2019.

At June 30, 2020, the three states in which we had our highest concentration of investments were Florida ( 14 %), Texas ( 9 %) and Michigan ( 7 %).

NOTE 11 – STOCKHOLDERS’/OWNERS’ EQUITY

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Omega has no obligation to repurchase any amount of its common stock, and such repurchases, if any, may be discontinued at any time.

Omega did no t repurchase any of its outstanding common stock through March 31, 2020.

Omega did no t repurchase any of its outstanding common stock during the six months ended June 30, 2020.

The Board of Directors has declared common stock dividends as set forth below:

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April 30, 2020

July 31, 2020

August 14, 2020

On the same dates listed above, Omega OP Unit holders received the same distributions per unit as those paid to the common stockholders of Omega.

$ 500 Million Equity Shelf Program

For the three months ended March 31, 2020 and 2019, we issued approximately 49 thousand and 2.2 million, respectively, shares of our common stock at an average price of $ 37.58 per share and $ 34.46 per share, respectively, net of issuance costs, generating net proceeds of $ 1.8 million and $ 76.5 million, respectively, under our $ 500 million Equity Shelf Program.

For the three months ended June 30, 2020, no shares were issued under our $ 500 Million Equity Shelf Program.

For the three months ended June 30, 2019, we issued approximately 0.7 million shares of our common stock at an average price of $ 35.90 per share, net of issuance costs, generating net proceeds of $ 26.3 million under our $ 500 Million Equity Shelf Program.

For the six months ended June 30, 2020 and 2019, we issued approximately 49 thousand and 3.0 million, respectively, shares of our common stock at an average price of $ 36.18 per share and $ 34.82 per share, respectively, net of issuance costs, generating net proceeds of $ 1.8 million and $ 102.9 million, respectively, under our $ 500 Million Equity Shelf Program.

Dividend Reinvestment and Common Stock Purchase Plan

On March 23, 2020, we announced that we suspended our Dividend Reinvestment and Common Stock Purchase Plan.

For the three months ended March 31, 2020 and 2019, we issued approximately 90 thousand and 0.9 million, respectively, shares of our common stock at an average price of $ 41.80 per share and $ 36.19 per share, respectively, through our Dividend Reinvestment and Common Stock Purchase Plan for gross proceeds of approximately $ 3.7 million and $ 32.3 million, respectively.

For the three months ended June 30, 2020, no shares were issued under our Dividend Reinvestment and Common Stock Purchase Plan.

For the three months ended June 30, 2019, we issued approximately 0.6 million shares of our common stock at an average price of $ 37.02 per share through our Dividend Reinvestment and Common Stock Purchase Plan for gross proceeds of approximately $ 21.8 million.

For the six months ended June 30, 2020 and 2019, we issued approximately 90 thousand and 1.5 million, respectively, shares of our common stock at an average price of $ 41.80 per share and $ 36.52 per share, respectively, through our Dividend Reinvestment and Common Stock Purchase Plan for gross proceeds of approximately $ 3.7 million and $ 54.1 million, respectively.

Accumulated Other Comprehensive Loss

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As of and for the

Three Months Ended

Six Months Ended

(in thousands)

Foreign Currency Translation:

Beginning balance

Translation (loss) gain

Realized (loss) gain

Translation loss

Realized gain (loss)

Ending balance

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Beginning balance

Unrealized loss

Unrealized gain (loss)

Realized (loss) gain (1)

2 unchanged sentences

Beginning balance

Unrealized gain (loss)

Unrealized gain

Ending balance

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Subject to the limitation under the REIT asset test rules, we are permitted to own up to 100 % of the stock of one or more taxable REIT subsidiaries (“TRSs”).

We have elected for five of our active subsidiaries to be treated as TRSs.

Three of our TRSs are domestic and are subject to federal, state and local income taxes at the applicable corporate rates and the other two are subject to foreign income taxes.

As of March 31, 2020, one of our TRSs that is subject to federal, state and local income taxes at the applicable corporate rates had a net operating loss carry-forward of approximately $ 5.7 million.

We have elected for certain of our active subsidiaries to be treated as TRSs.

Our domestic TRSs are subject to federal, state and local income taxes at the applicable corporate rates.

Our foreign TSRs are subject to foreign income taxes.

As of June 30, 2020, one of our TRSs that is subject to federal, state and local income taxes at the applicable corporate rates had a net operating loss carry-forward of approximately $ 5.7 million.

Up to 100 % of the net operating loss carry-forwards arising in taxable years ending prior to January 1, 2018, may be used to reduce taxable income for any taxable year during the eligible carry-forward period.

Changes made by the Tax Cuts and Jobs Act of 2017 (the “2017 Act”) limited the amount of net operating loss (“NOL”) carry-forward arising in tax years ending subsequent to December 31, 2018, to reduce 80 % of taxable income for any taxable year during the eligible carry-forward period.

Our NOL carry-forward was fully reserved as of March 31, 2020, with a valuation allowance due to uncertainties regarding realization.

Our NOL carry-forward was fully reserved as of June 30, 2020, with a valuation allowance due to uncertainties regarding realization.

Under current law, our NOL carryforwards generated up through December 31, 2017 may be carried forward for no more than 20 years, and our net operating loss carryforward generated in our taxable years ended December 31, 2019 and December 31, 2018 may be carried forward indefinitely.

The Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) signed into law on March 27, 2020 modified the NOL carryforward rules applicable to certain of the NOL carryforwards possessed by our TRSs.

First, the Act defers the application of 80% of taxable income limitation, which was added to the Code by the 2017 Act, to our TRS’s taxable years ended December 31, 2021, in addition to modifying the computation of the 80% limitation.

However, the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) modified the NOL carryback rules and deferred the application for the NOL carry-forward rules.

The CARES Act signed into law on March 27, 2020 modified the NOL carryforward rules applicable to certain of the NOL carryforwards possessed by our TRSs.

First, the CARES Act defers the application of 80% of taxable income limitation, which was added to the Code by the 2017 Act, to our TRSs until their taxable years ended December 31, 2021, in addition to modifying the computation of the 80% limitation.

Additionally, the CARES Act permits the carryback of NOLs generated by our TRSs in 2018, 2019, and 2020 for up to five years to offset taxable income reported in any of those prior tax years and recover income taxes paid in such prior tax years.

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We also do not expect that Omega or any Omega entity, including our TRSs, will realize a material tax benefit as a result of the changes to the provisions of the Code made by the CARES Act.

For the three months ended March 31, 2020 and 2019, we recorded approximately $ 0.4 million and $ 0.2 million, respectively, of state and local income tax provisions.

For the three months ended March 31, 2020 and 2019, we recorded approximately $ 0.6 million and $ 0.5 million, respectively, of tax provisions for foreign income taxes.

For the three months ended June 30, 2020 and 2019, we recorded approximately $ 0.2 million and $ 0.3 million, respectively, of state and local income tax provisions.

For the six months ended June 30, 2020 and 2019, we recorded approximately $ 0.6 million and $ 0.4 million, respectively, of state and local income tax provisions.

For the three months ended June 30, 2020 and 2019, we recorded approximately $ 0.7 million and $ 0.5 million, respectively, of tax provisions for foreign income taxes.

For the six months ended June 30, 2020 and 2019, we recorded approximately $ 1.3 million and $ 1.1 million, respectively, of tax provisions for foreign income taxes.

The expenses were included in income tax expense on our Consolidated Statements of Operations.

NOTE 13 – STOCK-BASED COMPENSATION

Stock-based compensation expense was $ 4.6 million and $ 4.1 million for the three months ended March 31, 2020 and 2019, respectively.

The following is a summary of our stock-based compensation expense for the three and six months ended June 30, 2020 and 2019, respectively.

Three Months Ended

Six Months Ended

(in thousands)

Stock-based compensation expense

Time Based Restricted Equity Awards

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Total secured and unsecured borrowings – net (7)

(1) Reflects the weighted average annual contractual interest rate on the mortgages at March 31, 2020;

secured by real estate assets with a net carrying value of $ 610.7 million as of March 31, 2020.

(1) Reflects the weighted average annual contractual interest rate on the mortgages at June 30, 2020;

secured by real estate assets with a net carrying value of $ 603.7 million as of June 30, 2020.

(2) Borrowing is the debt of a consolidated joint venture.

(3) During the first quarter of 2020, we drew approximately $ 300 million on our existing $ 1.25 billion revolving credit facility as a precautionary measure due to the COVID-19 outbreak.

This borrowing is included in cash and cash equivalents on our Consolidated Balance Sheets as of March 31, 2020.

This borrowing was included in cash and cash equivalents on our Consolidated Balance Sheets as of March 31, 2020.

We repaid this $ 300 million borrowing in June 2020.

(4) Actual borrowing in British Pounds Sterling and remeasured to USD.

(5) Omega OP or wholly owned subsidiaries of Omega OP are the obligor on these borrowings.

(6) Includes $ 0.2 million of net deferred financing costs related to the Omega OP term loan as of March 31, 2020.

(6) Includes $ 0.2 million of net deferred financing costs related to the Omega OP term loan as of June 30, 2020.

(7) All borrowings are direct borrowings of Omega unless otherwise noted.

Subordinated Debt

In connection with a 2010 acquisition, we assumed five separate $ 4.0 million subordinated notes bearing interest at 9 % per annum that mature on December 21, 2021.

Interest on these notes is due quarterly with the principal balance due at maturity.

These subordinated notes may be prepaid at any time without penalty.

To the extent that the operator of the facilities fails to pay rent when due to us under our existing master lease, we have the right to offset the amounts owed to us against the amounts we owe to the lender under the notes.

In the fourth quarter of 2019, we had recorded a reserve of $ 6.5 million in connection with the operator’s failure to pay rent, and we began offsetting certain interest and principal amounts payable by us against this reserve.

During the second quarter of 2020, expressly subject to our reservation of rights under the terms of the notes and related agreement, we reversed this reserve, and ceased offsetting amounts against our note payments, as a result of the operator’s payment of all current and past due rent.

$ 400 Million Forward Starting Swaps

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Certain of our other secured and unsecured borrowings are subject to customary affirmative and negative covenants, including financial covenants.

As of March 31, 2020 and December 31, 2019, we were in compliance with all affirmative and negative covenants, including financial covenants, for our secured and unsecured borrowings.

As of June 30, 2020 and December 31, 2019, we were in compliance with all affirmative and negative covenants, including financial covenants, for our secured and unsecured borrowings.

Omega OP, the guarantor of Parent’s outstanding senior notes, does not directly own any substantive assets other than its interest in non-guarantor subsidiaries.

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The net carrying amount of cash and cash equivalents, restricted cash, contractual receivables, other assets and accrued expenses and other liabilities reported in the Consolidated Balance Sheets approximates fair value because of the short maturity of these instruments (Level 1).

At March 31, 2020 and December 31, 2019, the net carrying amounts and fair values of our other financial instruments were as follows:

March 31, 2020

At June 30, 2020 and December 31, 2019, the net carrying amounts and fair values of our other financial instruments were as follows:

June 30, 2020

December 31, 2019

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Stephenson, and Daniel J.

Booth was filed against the Company and certain of its officers in the United States District Court for the Southern District of New York (the “Court”), Case No.

Booth was filed against the Company and certain of its officers in the United States District Court for the Southern District of New York (the “ District Court”), Case No.

1:17-cv-08983-NRB.

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1:17-cv-09024-NRB.

Thereafter, the Court considered a series of applications by various shareholders to be named lead plaintiff, consolidated the two actions and designated Royce Setzer as the lead plaintiff.

Pursuant to a Scheduling Order entered by the Court, lead plaintiff Setzer and additional plaintiff Earl Holtzman filed a Consolidated Amended Class Action Complaint on May 25, 2018 (the “Securities Class Action”).

Thereafter, the District Court considered a series of applications by various shareholders to be named lead plaintiff, consolidated the two actions and designated Royce Setzer as the lead plaintiff.

Pursuant to a Scheduling Order entered by the District Court, lead plaintiff Setzer and additional plaintiff Earl Holtzman filed a Consolidated Amended Class Action Complaint on May 25, 2018 (the “Securities Class Action”).

The Securities Class Action purports to be a class action brought on behalf of shareholders who acquired the Company’s securities between May 3, 2017 and October 31, 2017.

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The Company and the officers named in the Securities Class Action filed a Motion to Dismiss on July 17, 2018.

On March 25, 2019, the Court entered an order dismissing with prejudice all claims against all defendants.

Plaintiffs have appealed the order to the United States Court of Appeals for the Second Circuit.

The appeal is fully briefed, and the Court of Appeals heard oral argument on November 13, 2019.

The Company is awaiting a decision on the appeal.

In the District Court, on March 26, 2020, Plaintiffs filed a motion for an indicative ruling regarding relief from final judgement based on allegedly newly-discovered evidence and for leave to file an amended complaint.

The Company believes that the motion is without merit and filed an opposition on May 1, 2020.

On March 25, 2019, the District Court entered an order dismissing with prejudice all claims against all defendants.

Plaintiffs appealed the order to the United States Court of Appeals for the Second Circuit and the Court of Appeals heard oral argument on November 13, 2019.

On August 3, 2020, the United States Court of Appeals for the Second Circuit issued a ruling reversing the District Court’s order of dismissal and remanding the case to the District Court for further proceedings.

In addition, in the District Court, on March 26, 2020, Plaintiffs filed a motion for an indicative ruling regarding relief from final judgment based on allegedly newly-discovered evidence and for leave to file an amended complaint.

The Company filed an opposition on May 1, 2020.

On August 3, 2020, after the Second Circuit Court of Appeals issued its Opinion, Plaintiffs requested that the District Court treat this motion as solely a motion to amend.

The Board of Directors received a demand letter, dated April 9, 2018, from an attorney representing Phillip Swan (“Swan”), a purported current shareholder of the Company, relating to the subject matter covered by the Securities Class Action (the “Swan Shareholder Demand”).

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In connection with certain facility transitions, we have agreed to indemnify certain operators in certain events.

As of March 31, 2020, our maximum funding commitment under these indemnification agreements was approximately $ 13.1 million.

As of June 30, 2020, our maximum funding commitment under these indemnification agreements was approximately $ 10.3 million.

Claims under these indemnification agreements may be made within 18 months to 72 months of the transition date.

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We expect the funding of these commitments to be completed over the next several years.

Our remaining commitments at March 31, 2020, are outlined in the table below (in thousands):

Our remaining commitments at June 30, 2020, are outlined in the table below (in thousands):

Total commitments

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Three Months Ended

Six Months Ended

(in thousands, except per share amounts)

net (income) loss attributable to noncontrolling interests

net income attributable to noncontrolling interests

Net income available to common stockholders/Omega OP Unit holders

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Earnings per share/unit – diluted:

Three Months Ended

Six Months Ended

(in thousands, except per share amounts)

net loss attributable to noncontrolling interests

Net income available to Omega OP Unit holders

Denominator for basic earnings per unit

Effect of dilutive securities:

Omega OP Unit equivalents

Denominator for diluted earnings per unit

Earnings per unit - basic:

Net income available to Omega OP Unit holders

Earnings per unit - diluted:

NOTE 18 – SUPPLEMENTAL DISCLOSURE TO CONSOLIDATED STATEMENTS OF CASH FLOWS

The following are supplemental disclosures to the consolidated statements of cash flows for the three months ended March 31, 2020 and 2019:

Three Months Ended March 31,

The following are supplemental disclosures to the consolidated statements of cash flows for the six months ended June 30, 2020 and 2019:

Six Months Ended June 30,

(in thousands)

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Non cash investing activities

Non cash acquisition of a business (see Note 2)

Non cash acquisition of real estate (see Note 2)

Non cash proceeds from sale of real estate investments (see Note 4)

Non cash placement of mortgages (see Note 4)

Non cash collection of mortgage principal

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Non cash financing activities

Debt assumed in merger (see Note 2)

Stock exchanged in merger (see Note 2)

Non cash borrowing of other long-term borrowings

Change in fair value of cash flow hedges

Remeasurement of debt denominated in a foreign currency

NOTE 19 – SUBSEQUENT EVENT

During the third quarter of 2020, we amended our master lease with Maplewood Real Estate Holdings, LLC (“Maplewood”), an operator of primarily senior housing facilities, and provided a new credit facility to Maplewood.

The new credit facility expanded Maplewood’s borrowing capacity by approximately $ 100 million to $ 220 million, in part to provide Maplewood additional liquidity in view of expected ongoing delays and costs associated with COVID-19.

Maplewood refinanced existing notes and certain other funded obligations to us of approximately $ 120 million in aggregate via borrowings from the new credit facility.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements