OMEGA HEALTHCARE INVESTORS INC 10-Q

Item 1 - Financial Statements OMEGA HEALTHCARE INVESTORS, INC. CONSOLIDATED BALANCE SHEETS (in thousands, except per share amounts) ​ ​ ​ ​ ​ ​ ​ ​ September 30, December 31, ​ 2021 2020 ​ ​ (Unaudited) ​ ​ ​ ASSETS ​ ​ ​ ​ ​ Real estate properties ​ ​ Real estate investments ​ $ 9,268,967 $ 8,702,154 Less accumulated depreciation ​ ( 2,174,546 ) ( 1,996,914 ) Real estate investments – net ​ 7,094,421 6,705,240 Investments in direct financing leases – net ​ 10,762 10,764 Mortgage notes receivable – net ​ 873,737 885,313 ​ ​ ​ 7,978,920 ​ ​ 7,601,317 Other investments – net ​ 434,028 467,442 Investments in unconsolidated joint ventures ​ 193,741 200,638 Assets held for sale ​ 21,528 81,452 Total investments ​ 8,628,217 8,350,849 ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents ​ 102,664 163,535 Restricted cash ​ 3,341 4,023 Contractual receivables – net ​ 16,658 10,408 Other receivables and lease inducements ​ ​ 236,964 ​ ​ 234,666 Goodwill ​ 651,354 651,737 Other assets ​ 140,751 82,231 Total assets ​ $ 9,779,949 $ 9,497,449 ​ ​ ​ ​ ​ ​ ​ LIABILITIES AND EQUITY ​ Revolving credit facility ​ $ — $ 101,158 Secured borrowings ​ 363,963 369,524 Senior notes and other unsecured borrowings – net ​ 4,909,090 4,698,570 Accrued expenses and other liabilities ​ 260,630 280,824 Deferred income taxes ​ 8,798 10,766 Total liabilities ​ 5,542,481 5,460,842 ​ ​ ​ ​ ​ ​ ​ Equity: ​ ​ Preferred stock $ 1.00 par value authorized – 20,000 shares, issued and outstanding - none ​ ​ — ​ ​ — Common stock $ .10 par value authorized – 350,000 shares, issued and outstanding – 238,939 shares as of September 30, 2021 and 231,199 as of December 31, 2020 ​ 23,893 ​ 23,119 Additional paid-in capital ​ 6,425,720 ​ 6,152,887 Cumulative net earnings ​ 2,978,183 ​ 2,594,735 Cumulative dividends paid ​ ( 5,393,284 ) ​ ( 4,916,097 ) Accumulated other comprehensive income (loss) ​ 1,476 ​ ( 12,768 ) Total stockholders’ equity ​ 4,035,988 ​ 3,841,876 Noncontrolling interest ​ 201,480 ​ 194,731 Total equity ​ 4,237,468 ​ 4,036,607 Total liabilities and equity ​ $ 9,779,949 $ 9,497,449 See notes to consolidated financial statements . 2 Table of Contents OMEGA HEALTHCARE INVESTORS, INC. CONSOLIDATED STATEMENTS OF OPERATIONS Unaudited (in thousands, except per share amounts) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ Nine Months Ended ​ September 30, September 30, ​ ​ 2021 2020 2021 2020 Revenues ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Rental income ​ $ 247,164 ​ $ 83,226 $ 705,880 ​ $ 526,258 ​ Income from direct financing leases ​ 257 ​ 258 772 ​ 775 ​ Mortgage interest income ​ 23,047 ​ 24,013 70,693 ​ 65,378 ​ Other investment income ​ 10,780 ​ 11,286 34,245 ​ 32,870 ​ Miscellaneous income ​ 424 ​ 394 1,270 ​ 3,315 ​ Total revenues ​ 281,672 ​ 119,177 812,860 ​ 628,596 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Expenses ​ ​ ​ ​ Depreciation and amortization ​ 86,097 ​ 81,072 256,745 ​ 247,301 ​ General and administrative ​ 15,372 ​ 14,812 46,724 ​ 44,704 ​ Real estate taxes ​ ​ 3,272 ​ ​ 2,127 ​ ​ 9,002 ​ ​ 9,448 ​ Acquisition, merger and transition related costs ​ — ​ 36 1,814 ​ 62 ​ Impairment on real estate properties ​ 4,942 ​ 28,105 42,453 ​ 43,732 ​ Recovery on direct financing leases ​ — ​ ( 324 ) ( 717 ) ​ ( 1,076 ) ​ Provision for credit losses ​ 25,511 ​ 32,076 28,023 ​ 33,577 ​ Interest expense ​ 58,979 ​ 54,262 176,379 ​ 164,716 ​ Total expenses ​ 194,173 ​ 212,166 560,423 ​ 542,464 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other income (expense) ​ ​ ​ ​ ​ ​ Other (expense) income – net ​ ( 767 ) ​ ( 63 ) 4 ​ ( 725 ) ​ Loss on debt extinguishment ​ ( 642 ) ​ ( 896 ) ( 30,707 ) ​ ( 896 ) ​ Gain (loss) on assets sold – net ​ ​ 56,169 ​ ​ ( 749 ) ​ ​ 160,634 ​ ​ 13,932 ​ Total other income (expense) ​ 54,760 ​ ( 1,708 ) 129,931 ​ 12,311 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income (loss) before income tax expense and income from unconsolidated joint ventures ​ 142,259 ​ ( 94,697 ) 382,368 ​ 98,443 ​ Income tax expense ​ ( 976 ) ​ ( 763 ) ( 2,873 ) ​ ( 2,626 ) ​ Income from unconsolidated joint ventures ​ 1,552 ​ 1,692 14,569 ​ 4,654 ​ Net income (loss) ​ 142,835 ​ ( 93,768 ) 394,064 ​ 100,471 ​ Net (income) loss attributable to noncontrolling interest ​ ( 3,888 ) ​ 2,477 ( 10,616 ) ​ ( 2,540 ) ​ Net income (loss) available to common stockholders ​ $ 138,947 ​ $ ( 91,291 ) $ 383,448 ​ $ 97,931 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Earnings per common share available to common stockholders: ​ ​ ​ ​ Basic: ​ ​ ​ ​ ​ Net income (loss) available to common stockholders ​ $ 0.58 ​ $ ( 0.40 ) $ 1.62 ​ $ 0.43 ​ Diluted: ​ ​ ​ ​ Net income (loss) ​ $ 0.58 ​ $ ( 0.40 ) $ 1.62 ​ $ 0.43 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ See notes to consolidated financial statements . ​ 3 Table of Contents OMEGA HEALTHCARE INVESTORS, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME Unaudited (in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ ​ Nine Months Ended ​ ​ ​ September 30, ​ September 30, ​ ​ 2021 2020 2021 2020 Net income (loss) ​ $ 142,835 ​ $ ( 93,768 ) ​ $ 394,064 ​ $ 100,471 ​ Other comprehensive (loss) income: ​ ​ ​ ​ ​ ​ ​ Foreign currency translation ​ ( 5,027 ) ​ 11,874 ​ ( 2,901 ) ​ ( 7,869 ) ​ Cash flow hedges ​ 1,895 ​ 5,723 ​ 17,529 ​ ( 1,608 ) ​ Total other comprehensive (loss) income ​ ( 3,132 ) ​ 17,597 ​ 14,628 ​ ( 9,477 ) ​ Comprehensive income (loss) ​ 139,703 ​ ( 76,171 ) ​ 408,692 ​ 90,994 ​ Comprehensive (income) loss attributable to noncontrolling interest ​ ( 3,803 ) ​ 2,014 ​ ( 11,000 ) ​ ( 2,306 ) ​ Comprehensive income (loss) attributable to common stockholders ​ $ 135,900 ​ $ ( 74,157 ) ​ $ 397,692 ​ $ 88,688 ​ ​ See notes to consolidated financial statements. ​ ​ 4 Table of Contents OMEGA HEALTHCARE INVESTORS, INC. CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY Three Months Ended September 30, 2021 and 2020 Unaudited (in thousands, except per share amounts) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Common ​ Additional ​ Cumulative ​ ​ ​ Other ​ Total ​ ​ ​ ​ ​ ​ Stock ​ Paid-in ​ Net ​ Cumulative ​ Comprehensive ​ Stockholders’ ​ Noncontrolling ​ Total ​ Par Value Capital Earnings Dividends Paid Income (Loss) Equity Interest Equity Balance at June 30, 2021 ​ $ 23,756 ​ $ 6,377,238 ​ $ 2,839,236 ​ $ ( 5,232,692 ) ​ $ 4,523 ​ $ 4,012,061 ​ $ 197,965 ​ $ 4,210,026 Stock related compensation ​ ​ — ​ ​ 5,750 ​ ​ — ​ ​ — ​ ​ — ​ ​ 5,750 ​ ​ — ​ ​ 5,750 Issuance of common stock ​ ​ 134 ​ ​ 47,572 ​ ​ — ​ ​ — ​ ​ ​ ​ ​ 47,706 ​ ​ — ​ ​ 47,706 Common dividends declared ($ 0.67 per share) ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 160,592 ) ​ ​ — ​ ​ ( 160,592 ) ​ ​ — ​ ​ ( 160,592 ) Vesting/exercising of Omega OP Units ​ ​ — ​ ​ ( 5,596 ) ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 5,596 ) ​ ​ 5,596 ​ ​ — Conversion and redemption of Omega OP Units to common stock ​ ​ 3 ​ ​ 756 ​ ​ — ​ ​ — ​ ​ — ​ ​ 759 ​ ​ ( 759 ) ​ ​ — Omega OP Units distributions ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 5,125 ) ​ ​ ( 5,125 ) Other comprehensive loss ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 3,047 ) ​ ​ ( 3,047 ) ​ ​ ( 85 ) ​ ​ ( 3,132 ) Net income ​ ​ — ​ ​ — ​ ​ 138,947 ​ ​ — ​ ​ — ​ ​ 138,947 ​ ​ 3,888 ​ ​ 142,835 Balance at September 30, 2021 ​ $ 23,893 ​ $ 6,425,720 ​ $ 2,978,183 ​ $ ( 5,393,284 ) ​ $ 1,476 ​ $ 4,035,988 ​ $ 201,480 ​ $ 4,237,468 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance at June 30, 2020 ​ $ 22,694 ​ $ 5,999,972 ​ $ 2,624,630 ​ $ ( 4,610,828 ) ​ $ ( 66,235 ) ​ $ 3,970,233 ​ $ 197,159 ​ $ 4,167,392 Stock related compensation ​ ​ — ​ ​ 5,122 ​ ​ — ​ ​ — ​ ​ — ​ ​ 5,122 ​ ​ — ​ ​ 5,122 Issuance of common stock ​ ​ 3 ​ ​ ( 730 ) ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 727 ) ​ ​ — ​ ​ ( 727 ) Common dividends declared ($ 0.67 per share) ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 152,640 ) ​ ​ — ​ ​ ( 152,640 ) ​ ​ — ​ ​ ( 152,640 ) Vesting/exercising of Omega OP Units ​ ​ — ​ ​ ( 3,355 ) ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 3,355 ) ​ ​ 3,355 ​ ​ — Conversion and redemption of Omega OP Units to common stock ​ ​ 1 ​ ​ 83 ​ ​ — ​ ​ — ​ ​ — ​ ​ 84 ​ ​ ( 84 ) ​ ​ — Omega OP Units distributions ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 4,562 ) ​ ​ ( 4,562 ) Other comprehensive income ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 17,134 ​ ​ 17,134 ​ ​ 463 ​ ​ 17,597 Net loss ​ ​ — ​ ​ — ​ ​ ( 91,291 ) ​ ​ — ​ ​ — ​ ​ ( 91,291 ) ​ ​ ( 2,477 ) ​ ​ ( 93,768 ) Balance at September 30, 2020 ​ $ 22,698 ​ $ 6,001,092 ​ $ 2,533,339 ​ $ ( 4,763,468 ) ​ $ ( 49,101 ) ​ $ 3,744,560 ​ $ 193,854 ​ $ 3,938,414 ​ See notes to consolidated financial statements. ​ ​ ​ ​ ​ 5 Table of Contents OMEGA HEALTHCARE INVESTORS, INC. CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY Nine Months Ended September 30, 2021 and 2020 Unaudited (in thousands, except per share amounts) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Common ​ Additional ​ Cumulative ​ ​ ​ Other ​ Total ​ ​ ​ ​ ​ ​ Stock ​ Paid-in ​ Net ​ Cumulative ​ Comprehensive ​ Stockholders’ ​ Noncontrolling ​ Total ​ Par Value Capital Earnings Dividends Paid Loss Equity Interest Equity Balance at December 31, 2020 ​ $ 23,119 ​ $ 6,152,887 ​ $ 2,594,735 ​ $ ( 4,916,097 ) ​ $ ( 12,768 ) ​ $ 3,841,876 ​ $ 194,731 ​ $ 4,036,607 Stock related compensation ​ ​ — ​ ​ 17,032 ​ ​ — ​ ​ — ​ ​ — ​ ​ 17,032 ​ ​ — ​ ​ 17,032 Issuance of common stock ​ ​ 771 ​ ​ 271,658 ​ ​ — ​ ​ — ​ ​ ​ ​ ​ 272,429 ​ ​ — ​ ​ 272,429 Common dividends declared ($ 2.01 per share) ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 477,187 ) ​ ​ — ​ ​ ( 477,187 ) ​ ​ — ​ ​ ( 477,187 ) Vesting/exercising of Omega OP units ​ ​ — ​ ​ ( 16,966 ) ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 16,966 ) ​ ​ 16,966 ​ ​ — Conversion and redemption of Omega OP Units to common stock ​ ​ 3 ​ ​ 1,109 ​ ​ — ​ ​ — ​ ​ — ​ ​ 1,112 ​ ​ ( 1,112 ) ​ ​ — Omega OP Units distributions ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 20,105 ) ​ ​ ( 20,105 ) Other comprehensive income ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 14,244 ​ ​ 14,244 ​ ​ 384 ​ ​ 14,628 Net income ​ ​ — ​ ​ — ​ ​ 383,448 ​ ​ — ​ ​ — ​ ​ 383,448 ​ ​ 10,616 ​ ​ 394,064 Balance at September 30, 2021 ​ $ 23,893 ​ $ 6,425,720 ​ $ 2,978,183 ​ $ ( 5,393,284 ) ​ $ 1,476 ​ $ 4,035,988 ​ $ 201,480 ​ $ 4,237,468 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance at December 31, 2019 ​ $ 22,663 ​ $ 5,992,733 ​ $ 2,463,436 ​ $ ( 4,303,546 ) ​ $ ( 39,858 ) ​ $ 4,135,428 ​ $ 201,166 ​ $ 4,336,594 Cumulative effect of accounting change ​ ​ — ​ ​ — ​ ​ ( 28,028 ) ​ ​ — ​ ​ — ​ ​ ( 28,028 ) ​ ​ ( 757 ) ​ ​ ( 28,785 ) ​ ​ ​ 22,663 ​ ​ 5,992,733 ​ ​ 2,435,408 ​ ​ ( 4,303,546 ) ​ ​ ( 39,858 ) ​ ​ 4,107,400 ​ ​ 200,409 ​ ​ 4,307,809 Stock related compensation ​ ​ — ​ ​ 14,380 ​ ​ — ​ ​ — ​ ​ — ​ ​ 14,380 ​ ​ — ​ ​ 14,380 Issuance of common stock ​ ​ 31 ​ ​ 1,535 ​ ​ — ​ ​ — ​ ​ — ​ ​ 1,566 ​ ​ — ​ ​ 1,566 Common dividends declared ($ 2.01 per share) ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 459,922 ) ​ ​ — ​ ​ ( 459,922 ) ​ ​ — ​ ​ ( 459,922 ) Vesting/exercising of Omega OP units ​ ​ — ​ ​ ( 8,788 ) ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 8,788 ) ​ ​ 8,788 ​ ​ — Conversion and redemption of Omega OP Units to common stock ​ ​ 4 ​ ​ 1,232 ​ ​ — ​ ​ — ​ ​ — ​ ​ 1,236 ​ ​ ( 1,236 ) ​ ​ — Omega OP Units distributions ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 16,413 ) ​ ​ ( 16,413 ) Other comprehensive loss ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 9,243 ) ​ ​ ( 9,243 ) ​ ​ ( 234 ) ​ ​ ( 9,477 ) Net income ​ ​ — ​ ​ — ​ ​ 97,931 ​ ​ — ​ ​ — ​ ​ 97,931 ​ ​ 2,540 ​ ​ 100,471 Balance at September 30, 2020 ​ $ 22,698 ​ $ 6,001,092 ​ $ 2,533,339 ​ $ ( 4,763,468 ) ​ $ ( 49,101 ) ​ $ 3,744,560 ​ $ 193,854 ​ $ 3,938,414 ​ See notes to consolidated financial statements. ​ ​ ​ ​ ​ 6 Table of Contents OMEGA HEALTHCARE INVESTORS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS Unaudited (in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ Nine Months Ended September 30, ​ ​ 2021 2020 Cash flows from operating activities ​ ​ Net income ​ $ 394,064 ​ $ 100,471 ​ Adjustment to reconcile net income to net cash provided by operating activities: ​ ​ ​ ​ Depreciation and amortization ​ 256,745 ​ 247,301 ​ Impairment on real estate properties ​ 42,453 ​ 47,210 ​ Recovery on direct financing leases ​ ( 717 ) ​ ( 1,076 ) ​ Provision for rental income ​ 22,357 ​ 144,502 ​ Provision for credit losses ​ 28,023 ​ 33,577 ​ Amortization of deferred financing costs and loss on debt extinguishment ​ 39,832 ​ 7,384 ​ Accretion of direct financing leases ​ 37 ​ 18 ​ Stock-based compensation expense ​ 16,913 ​ 14,380 ​ Gain on assets sold – net ​ ( 160,634 ) ​ ( 13,932 ) ​ Amortization of acquired in-place leases – net ​ ( 8,452 ) ​ ( 8,460 ) ​ Effective yield payable (receivable) on mortgage notes ​ 1,085 ​ ( 433 ) ​ Interest paid-in-kind ​ ​ ( 5,422 ) ​ ​ ( 5,789 ) ​ (Income) loss from unconsolidated joint ventures ​ ​ ( 1,530 ) ​ ​ 153 ​ Change in operating assets and liabilities – net: ​ ​ ​ ​ Contractual receivables ​ ( 6,250 ) ​ 5,359 ​ Straight-line rent receivables ​ ( 38,401 ) ​ ( 16,112 ) ​ Lease inducements ​ 4,556 ​ ( 23,391 ) ​ Other operating assets and liabilities ​ ( 19,052 ) ​ ( 20,265 ) ​ Net cash provided by operating activities ​ 565,607 ​ 510,897 ​ Cash flows from investing activities ​ ​ ​ ​ ​ Acquisition of real estate ​ ( 615,907 ) ​ ( 27,230 ) ​ Refund of acquisition deposit ​ 2,500 ​ — ​ Net proceeds from sale of real estate investments ​ 310,849 ​ 117,164 ​ Investments in construction in progress ​ ( 91,923 ) ​ ( 61,991 ) ​ Proceeds from sale of direct financing lease and related trust ​ ​ 717 ​ ​ 15,220 ​ Placement of mortgage loans ​ ( 84,012 ) ​ ( 59,922 ) ​ Collection of mortgage principal ​ 44,039 ​ 4,005 ​ Investments in unconsolidated joint ventures ​ ​ ( 10,484 ) ​ ​ ( 2,175 ) ​ Distributions from unconsolidated joint ventures in excess of earnings ​ 17,671 ​ 2,852 ​ Capital improvements to real estate investments ​ ( 28,955 ) ​ ( 27,018 ) ​ Receipts from insurance proceeds ​ 5,948 ​ 346 ​ Investments in other investments ​ ( 94,222 ) ​ ( 116,462 ) ​ Proceeds from other investments ​ 91,627 ​ 99,239 ​ Net cash used in investing activities ​ ( 452,152 ) ​ ( 55,972 ) ​ Cash flows from financing activities ​ ​ ​ Proceeds from long-term borrowings ​ 2,220,128 ​ 939,466 ​ Payments of long-term borrowings ​ ( 2,121,429 ) ​ ( 911,329 ) ​ Payments of financing related costs ​ ( 48,934 ) ​ ( 896 ) ​ Net proceeds from issuance of common stock ​ 272,429 ​ 1,387 ​ Dividends paid ​ ( 477,068 ) ​ ( 459,743 ) ​ Distributions to Omega OP Unit Holders ​ ( 20,105 ) ​ ( 16,413 ) ​ Net cash used in financing activities ​ ( 174,979 ) ​ ( 447,528 ) ​ Effect of foreign currency translation on cash, cash equivalents and restricted cash ​ ( 29 ) ​ ( 662 ) ​ (Decrease) increase in cash, cash equivalents and restricted cash ​ ( 61,553 ) ​ 6,735 ​ Cash, cash equivalents and restricted cash at beginning of period ​ 167,558 ​ 33,380 ​ Cash, cash equivalents and restricted cash at end of period ​ $ 106,005 ​ $ 40,115 ​ ​ See notes to consolidated financial statements . ​ ​ 7 Table of Contents OMEGA HEALTHCARE INVESTORS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Unaudited September 30, 2021 NOTE 1 – BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES Business Overview and Organization Omega Healthcare Investors, Inc. (“Parent”) is a Maryland corporation that, together with its consolidated subsidiaries (collectively, “Omega”, the “Company”, “we”, “our”, “us”) invests in healthcare-related real estate properties located in the United States (“U.S.”) and the United Kingdom (“U.K.”). Our core business is to provide financing and capital to operators (we use the term “operator” to refer to our tenants and mortgagors and their affiliates who manage and/or operate our properties) within the long-term healthcare industry with a particular focus on skilled nursing facilities (“SNFs”), assisted living facilities (“ALFs”), and to a lesser extent, independent living facilities (“ILFs”), rehabilitation and acute care facilities (“specialty facilities”) and medical office buildings. Our core portfolio consists of long-term “triple net” leases and mortgage agreements. Omega has elected to be taxed as a real estate investment trust (“REIT”) for federal income tax purposes and is structured as an umbrella partnership REIT (“UPREIT”) under which all of Omega’s assets are owned directly or indirectly by, and all of Omega’s operations are conducted directly or indirectly through, its operating partnership subsidiary, OHI Healthcare Properties Limited Partnership (collectively with subsidiaries, “Omega OP”). Omega has exclusive control over Omega OP’s day-to-day management pursuant to the partnership agreement governing Omega OP. As of September 30, 2021, Parent owned approximately 97 % of the issued and outstanding units of partnership interest in Omega OP (“Omega OP Units”), and other investors owned approximately 3 % of the outstanding Omega OP Units. Basis of Presentation and Principles of Consolidation The accompanying unaudited consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all the information and notes required by U.S. generally accepted accounting principles (“GAAP”) for complete financial statements. In our opinion, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The results of operations for the interim periods reported herein are not necessarily indicative of results to be expected for the full year. These unaudited consolidated financial statements should be read in conjunction with the financial statements and the footnotes thereto included in our latest Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 22, 2021. Omega’s consolidated financial statements include the accounts of (i) Parent, (ii) Omega OP, (iii) all direct and indirect wholly owned subsidiaries of Omega and (iv) other entities in which Omega or Omega OP has a majority voting interest and control. All intercompany transactions and balances have been eliminated in consolidation, and Omega’s net earnings are reduced by the portion of net earnings attributable to noncontrolling interests. Segments We conduct our operations and report financial results as one business segment. The presentation of financial results as one reportable segment is consistent with the way we operate our business and is consistent with the manner in which our Chief Operating Decision Maker (CODM), our Chief Executive Officer, evaluates performance and makes resource and operating decisions for the business. Reclassification Certain line items on our Consolidated Balance Sheets, Consolidated Statements of Operations, Consolidated Statements of Changes in Equity and Consolidated Statements of Cash Flows have been reclassified to conform to the current period presentation. 8 Table of Contents Risks and Uncertainties including COVID-19 The Company is subject to certain risks and uncertainties affecting the healthcare industry, including those stemming from the 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. 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. Accounting Pronouncements Adopted in 2021 On July 19, 2021, the Financial Accounting Standards Board issued ASU 2021-05, Leases (Topic 842): Lessors – Certain Leases with Variable Lease Payments . This guidance requires lessors to classify leases with variable lease payments, that do not depend on an index or rate, as an operating lease on the commencement date of the lease if specified criteria are met. The guidance is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted. We early adopted this guidance prospectively effective July 1, 2021. The adoption of the guidance did not have an impact on our unaudited consolidated financial statements . NOTE 2 – REAL ESTATE INVESTMENTS A summary of our investments in real estate properties subject to operating leases is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, ​ December 31, ​ ​ 2021 2020 ​ ​ (in thousands) ​ Buildings ​ $ 7,394,094 ​ $ 6,961,509 ​ Land ​ 940,088 ​ 883,765 ​ Furniture and equipment ​ 532,157 ​ 518,664 ​ Site improvements ​ 329,290 ​ 308,087 ​ Construction in progress ​ 73,338 ​ 30,129 ​ Total real estate investments ​ 9,268,967 ​ 8,702,154 ​ Less accumulated depreciation ​ ( 2,174,546 ) ​ ( 1,996,914 ) ​ Real estate investments – net ​ $ 7,094,421 ​ $ 6,705,240 ​ ​ At September 30, 2021, our leased real estate properties included 715 SNFs, 134 ALFs, 35 specialty facilities and two medical office buildings. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, ​ ​ Nine Months Ended September 30, ​ ​ 2021 ​ 2020 ​ ​ 2021 ​ 2020 ​ ​ (in thousands) ​ ​ (in thousands) Rental income – operating leases ​ $ 243,831 ​ $ 81,424 ​ ​ $ 697,140 ​ $ 517,384 Variable lease income – operating leases ​ ​ 3,333 ​ ​ 1,802 ​ ​ ​ 8,740 ​ ​ 8,874 Total rental income ​ $ 247,164 ​ $ 83,226 ​ ​ $ 705,880 ​ $ 526,258 ​ 9 Table of Contents Asset Acquisitions The following table summarizes the significant asset acquisitions that occurred during the first nine months of 2021: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Number of ​ ​ ​ Total ​ Initial ​ ​ Facilities Country/ Investment Annual ​ Period ​ SNF ALF Specialty ​ State ​ (in millions) ​ Cash Yield (1) ​ Q1 — 17 7 AZ, CA, FL, IL, NJ, OR, PA, TN, TX, VA, WA ​ $ 511.3 (2) 8.43 % Q1 ​ 6 — — ​ FL ​ ​ 83.1 ​ 9.25 % Q3 ​ — 2 — ​ U.K. ​ ​ 9.6 ​ 7.89 % Total 6 19 7 ​ $ 604.0 ​ ​ (1) The initial annual cash yield reflects the initial annual cash rent divided by the purchase price. (2) On January 20, 2021, we acquired 24 facilities from Healthpeak Properties, Inc. The acquisition involved the assumption of an in-place master lease with Brookdale Senior Living Inc. During the second quarter of 2021, we acquired one parcel of land (not reflected in the table above) for approximately $ 10.4 million. During the third quarter of 2021, we purchased a real estate property located in Washington, D.C. (not reflected in the table above) for approximately $ 68.0 million and plan to redevelop the property into a 174 bed ALF. Concurrent with the acquisition, we entered into a single facility lease for this property with Maplewood Senior Living (“Maplewood”) through August 31, 2045. For accounting purposes, the lease will commence upon the substantial completion of construction of the ALF, which is currently expected to be in the first quarter of 2025. The lease provides for the accrual of financing costs at a rate of 5 % per annum during the construction phase. The lease provides for an annual cash yield of 6 % in the first year following the completion of construction, increasing to 7 % in year two and 8 % in year three with 2.5 % annual escalators thereafter. We are committed to a maximum funding of $ 177.7 million for the redevelopment of the real estate property, subject to ordinary development related cost changes (see Note 18 - Commitments and Contingencies). NOTE 3 – ASSETS HELD FOR SALE, DISPOSITIONS AND IMPAIRMENTS Periodically we will sell facilities to reduce our concentration in certain operators, geographies, and non-strategic assets or due to the exercise of a tenant purchase option. The following is a summary of our assets held for sale: ​ ​ ​ ​ ​ ​ ​ September 30, 2021 ​ December 31, 2020 Number of Facilities Held for Sale ​ 11 (1) ​ 22 Amount of Assets Held for Sale (in thousands) $ 21,528 ​ $ 81,452 (1) Number of facilities excludes one parcel of land. Asset Sales During the three and nine months ended September 30, 2021, we sold 15 and 45 facilities, subject to operating leases, for approximately $ 109.7 million and $ 310.8 million in net cash proceeds, recognizing net gains of approximately $ 56.2 million and $ 160.6 million. Real Estate Impairments During the three and nine months ended September 30, 2021, we recorded impairments on six and 13 facilities of approximately $ 4.9 million and $ 42.5 million, respectively. Our recorded impairments were primarily the result of reclassifying 12 facilities to assets held for sale for which the carrying values exceeded the estimated fair values less costs to sell. We also recognized an impairment on one held for use facility because of the closure of the facility in the first quarter. To estimate the fair value of these facilities, we utilized a market approach which considered binding sale agreements (a Level 1 input) or non-binding offers from unrelated third parties and/or broker quotes (a Level 3 input). 10 Table of Contents NOTE 4 – CONTRACTUAL RECEIVABLES AND OTHER RECEIVABLES AND LEASE INDUCEMENTS A summary of our net receivables by type is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, ​ December 31, ​ ​ 2021 2020 ​ ​ (in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ Contractual receivables – net ​ $ 16,658 ​ $ 10,408 ​ ​ ​ ​ ​ ​ ​ ​ ​ Effective yield interest receivables ​ $ 10,031 ​ $ 12,195 ​ Straight-line rent receivables ​ 149,134 ​ 139,046 ​ Lease inducements ​ 77,799 ​ 83,425 ​ Other receivables and lease inducements ​ $ 236,964 ​ $ 234,666 ​ ​ Agemo Holdings, LLC In August and September 2021, Agemo Holdings, LLC (“Agemo”), a nonconsolidated variable interest entity (“VIE”), failed to pay contractual rent and interest due under their lease and loan agreements. Subsequent to quarter end, Agemo also failed to make contractual payments in October 2021. Agemo was formed in May 2018 by Signature Healthcare, LLC, as part of an out-of-court restructuring agreement, to be the holding company of their leases and loans with Omega. We placed Agemo on a cash basis of revenue recognition during the third quarter of 2020 as collection of substantially all contractual lease payments due from them was deemed no longer probable because of information received regarding substantial doubt of their ability to continue as a going concern. Agemo continued to make their rental and interest payments to us until August 2021. During August and September 2021, we recorded $ 8.4 million of revenue by drawing on the letter of credit and through application of the security deposit balance. See Note 6 – Other Investments for additional details on our loans with Agemo. For the nine months ended September 30, 2021 and 2020, Agemo generated approximately 4.7 % and 6.0 %, respectively, of our total revenues (excluding the impact of write-offs in 2020). As part of the 2018 restructuring agreement with Agemo discussed above, Omega agreed to, among other terms, defer rent of $ 6.3 million per annum through April 2021. During the nine months ended September 30, 2021, the Agemo lease was amended to allow for the extension of the rent deferral through October 2021, which represents an additional deferral of approximately $ 3.2 million of rent. Additionally, in the third quarter, we entered into a forbearance agreement with Agemo pursuant to which we agreed to forbear from exercising remedies under our lease and loan agreements until October 31, 2021. The forbearance period and rent deferral period were subsequently extended to November 30, 2021. Gulf Coast Health Care, LLC During the second quarter of 2021, Gulf Coast Health Care LLC (together with certain affiliates “Gulf Coast”) stopped paying contractual rent under its master lease agreement for 24 facilities because of on-going liquidity issues. As discussed further in Note 21 - Subsequent Events, on October 14, 2021, Gulf Coast commenced voluntary cases under chapter 11 of the United States Bankruptcy Code. Gulf Coast represents approximately 2.6 % and 2.8 % of our total revenues (excluding the impact of write-offs in 2021) for the nine months ended September 30, 2021 and 2020, respectively. 11 Table of Contents As a result of Gulf Coast’s non-payment of contractual rent, in the second quarter of 2021, we placed Gulf Coast on a cash basis of revenue recognition and wrote-off straight-line rent receivable balances of $ 17.4 million through rental income. Subsequent to placing Gulf Coast on a cash basis of revenue recognition in June 2021, we recognized $ 9.8 million of contractual rent during the second and third quarters, based on our ability to offset any uncollected rent receivables against Gulf Coast’s security deposit and against certain debt obligations of Omega, as discussed further below. We held a security deposit of $ 3.3 million from Gulf Coast, which we have applied against Gulf Coast’s obligations in the second and third quarters of 2021. In relation to Gulf Coast, Omega, through subsidiaries, is the obligor on five notes due to third parties with aggregate outstanding principal of $ 20.0 million (collectively, the “Subordinated Debt”) that bear interest at 9 % per annum with a maturity date of December 21, 2021 (see Note 15 – Borrowing Activities and Arrangements). Under the terms of the Subordinated Debt, to the extent Gulf Coast fails to pay rent when due to us under its master lease, Gulf Coast’s unpaid rent can be used to offset Omega’s obligations under the Subordinated Debt (on a quarterly basis with respect to interest and, under some circumstances, on an annual basis with respect to principal). As of September 30, 2021, we have offset $ 0.9 million of accrued interest under the Subordinated Debt against the uncollected receivables of Gulf Coast. We intend to offset any unpaid contractual receivables, after reflecting the application of security deposits and interest offsets, against the principal of the Subordinated Debt in the fourth quarter of 2021. As of September 30, 2021, we have $ 5.6 million of contractual rent receivables outstanding from Gulf Coast, after reflecting the application of security deposits and interest offsets, and without giving effect to our legal acceleration of rent discussed below. As a result of Gulf Coast’s non-payment of contractual rent, in August 2021, we exercised our right to accelerate the full amount of rent due under Gulf Coast’s master lease agreement, payment of which will be subject to the Bankruptcy Code and approval of the bankruptcy court in Gulf Coast’s chapter 11 cases. In August 2021, following an assertion by the holders of the Subordinated Debt that our prior exercise of offset rights had resulted in defaults under the terms of the Subordinated Debt, we also filed suit in the Circuit Court for Baltimore County against the holders of the Subordinated Debt seeking a declaratory judgment to, among other items, declare that the aggregate amount of unpaid rent due from Gulf Coast under the master lease agreement exceeds all amounts which otherwise would be due and owing by Omega under the Subordinated Debt, and that all principal and interest due and owing under the Subordinated Debt are to be offset in full as of December 31, 2021. In October 2021, the defendants in the case filed a motion to dismiss for lack of personal jurisdiction. While Omega believes it is entitled to the enforcement of the offset rights sought in the action, the outcome of litigation is unpredictable, and Omega cannot predict the outcome of the declaratory judgment action. Other straight-line receivables and write-offs In addition to the Gulf Coast straight-line receivable write-off in the second quarter discussed above, during the nine months ended September 30, 2021, we wrote-off straight-line rent receivable balances of $ 3.4 million through rental income primarily due to placing three other operators ( 1 operator in the first quarter and 2 operators in the third quarter) on a cash basis of revenue recognition. We determined that collection of substantially all contractual lease payments with these operators was no longer probable for various reasons. The placement of an operator on a cash basis of revenue recognition during the first quarter was because the operator stopped paying contractual rent under our lease agreement. The two operators placed on a cash basis of revenue recognition during the third quarter are current with rent payments as of September 30, 2021. The three operators collectively represent approximately 0.3 % and 0.5 % , respectively, of our total revenues (excluding the impact of write-offs in 2021) for the nine months ended September 30, 2021 and 2020. NOTE 5 – MORTGAGE NOTES RECEIVABLE As of September 30, 2021, mortgage notes receivable relate to six fixed rate mortgage notes on 65 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 six states that are operated by six independent healthcare operating companies. 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. 12 Table of Contents The principal amounts outstanding of mortgage notes receivable, net of allowances, were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, ​ December 31, ​ ​ 2021 2020 ​ ​ (in thousands) ​ Mortgage note due 2027 ; interest at 10.81 % ​ $ 112,500 ​ $ 112,500 ​ Mortgage notes due 2029 ; interest at 10.78 % (1) ​ 651,304 ​ 670,015 ​ Other mortgage notes outstanding (2) ​ 151,916 ​ 136,043 ​ Mortgage notes receivable, gross ​ 915,720 ​ 918,558 ​ Allowance for credit losses on mortgage notes receivable ​ ( 41,983 ) ​ ( 33,245 ) ​ Total mortgages — net ​ $ 873,737 ​ $ 885,313 ​ (1) Approximates the weighted average interest rate on 45 facilities as of September 30, 2021. As of September 30, 2021, the carrying amount includes a construction mortgage that was originated during the third quarter of 2021 with an outstanding principal balance of $ 7.4 million that matures in 2023 and a facility mortgage with an outstanding principal balance of $ 21.3 million that matures in 2021 , with the remaining loan balance maturing in 2029 . During the second quarter of 2021, one construction mortgage with an original maturity date of 2021 was extended to 2029 and converted into a facility mortgage. During the third quarter of 2021, we acquired a facility which was previously subject to a $ 13.9 million construction mortgage and subsequently leased the property back to the operator that was the borrower under the mortgage. (2) Other mortgages outstanding have a weighted average interest rate of 8.84 % per annum as of September 30, 2021 and maturity dates ranging from 2023 through 2032 . Other mortgage notes outstanding On July 1, 2021, we financed six SNFs in Ohio and amended an existing $ 6.4 million mortgage, inclusive of 2 Ohio SNFs, to include the six facilities in a consolidated $ 72.4 million mortgage for eight Ohio facilities bearing interest at an initial rate of 10.5 % per annum. In conjunction with this transaction, we also acquired three Maryland facilities that were previously subject to a mortgage issued by Omega bearing interest at 13.75 % per annum with a principal balance of $ 36.0 million that was included in other mortgage notes outstanding. The purchase price for these three facilities was equal to the remaining mortgage principal amount, and the three acquired Maryland facilities were subsequently leased back to the seller for a term expiring on December 31, 2032 , assuming Omega exercises the options under the agreement. The base rent in the initial year is approximately $ 5.0 million and includes annual escalators of 2.5 %. ​ ​ ​ ​ NOTE 6 – OTHER INVESTMENTS Our other investments consist of fixed and variable rate loans to our operators and/or their principals to fund working capital and capital expenditures. These loans may be either unsecured or secured by the collateral of the borrower. Interest income related to other investments is recorded as other investment income in the consolidated statement of operations. A summary of our other investments is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, ​ December 31, ​ ​ 2021 2020 ​ ​ ​ (in thousands) ​ Other investment notes due 2024 ; interest at 13.14 % (1)(2) ​ $ 88,929 $ 83,636 ​ Other investment notes due 2024 - 2025 ; interest at 8.12 % (1) ​ ​ 56,190 ​ 56,987 ​ Other investment note due 2023 ; interest at 12.00 % ​ 40,167 ​ ​ 49,973 ​ Other investment notes due 2030 ; interest at 7.00 % ​ 187,048 ​ 147,148 ​ Other investment notes outstanding (3) ​ 113,185 ​ 161,155 ​ Total other investments, gross ​ ​ 485,519 ​ ​ 498,899 ​ Allowance for credit losses on other investments ​ ​ ( 51,491 ) ​ ​ ( 31,457 ) ​ Total other investments - net ​ $ 434,028 ​ $ 467,442 ​ (1) Approximates the weighted average interest rate as of September 30, 2021. (2) Includes two term loans, secured by a first priority lien and a security interest in certain collateral, with Genesis Healthcare, Inc. that have outstanding principal amounts of $ 69.8 million and $ 19.1 million, as of September 30, 2021. These loans both were scheduled to mature on July 29, 2020 , but the maturity dates were extended to January 1, 2024 during the first quarter of 2021. (3) Other investment notes have a weighted average interest rate of 8.81 % as of September 30, 2021 with maturity dates ranging from 2021 through 2031 . 13 Table of Contents Other investment notes due 2024-2025 As discussed in Note 4 – Contractual Receivables and Other Receivables and Lease Inducements, Agemo failed to pay contractual rent and interest to us from August 2021 through October 2021. As of September 30, 2021, we have two loans outstanding to Agemo, a term loan with remaining principal of $ 32.0 million that bears interest at 9 % per annum and matures on December 31, 2024 (the “Agemo Term Loan”) and a $ 25.0 million secured working capital loan bearing interest at 7 % per annum that matures on April 30, 2025 (the “Agemo WC Loan”). The Agemo Term Loan is secured by a security interest in certain collateral of Agemo and the Agemo WC Loan is secured by a collateral package that includes a second lien on the accounts receivable of Agemo. During the third quarter of 2020, we evaluated both loans for impairment upon receiving information from Agemo regarding substantial doubt of its ability to continue as a going concern. Based on our evaluation, we recorded a provision for credit loss of $ 22.7 million in the third quarter of 2020 to reduce the carrying value of the loans to the fair value of the underlying collateral. We have continued to monitor the fair value of the collateral associated with these loans on a quarterly basis. In the third quarter of 2021, we recorded an additional provision for credit losses of $ 16.7 million related to these loans as a result of a reduction in the fair value of the underlying collateral assets supporting the current carrying values. The reduction in fair value of the collateral assets was primarily driven by the application of Agemo’s $ 9.3 million letter of credit to Omega’s uncollected receivables, that supported the value of the Agemo Term Loan, and a reduction in Agemo’s working capital accessible to Omega as collateral, after considering other liens on the assets. NOTE 7 – ALLOWANCE FOR CREDIT LOSSES ​ The allowance for credit losses on loans is measured using relevant information about past events, including historical credit loss experience, current conditions, and reasonable and supportable forecasts that affect the collectibility of the remaining cash flows over the contractual term of the loans. We elected to disaggregate our financial assets within the scope of Accounting Standards Codification 326 based on the type of financial instrument. These segments were further disaggregated based on our internal credit ratings. We assess our internal credit ratings on a quarterly basis. Our internal credit ratings consider several factors including the collateral and/or security, the performance of borrowers underlying facilities, if applicable, available credit support (e.g., guarantees), borrowings with third parties, and other ancillary business ventures and real estate operations of the borrower. Our internal ratings range between 1 and 7. An internal rating of 1 reflects the lowest likelihood of loss and a 7 reflects the highest likelihood of loss. We have a limited history of incurred losses and consequently have elected to employ external data to perform our expected credit loss calculation. We have elected a probability of default (“PD”) and loss given default (“LGD”) methodology. Our model’s historic inputs consider PD and LGD data for residential care facilities published by the Federal Housing Administration along with Standards & Poor’s one-year global corporate default rates. Our historical loss rates revert to historical averages after 36 periods. Our model’s current conditions and supportable forecasts consider internal credit ratings, current and projected U.S. unemployment rates published by the U.S. Bureau of Labor Statistics and the Federal Reserve Bank of St. Louis and the weighted average life to maturity of the underlying financial asset. As of September 30, 2021, $ 10.6 million of contractual interest receivable is recorded in contractual receivables – net and $ 10.0 million of effective yield interest receivables is recorded in other receivables and lease inducements on our Consolidated Balance Sheets, both of which are excluded from our allowance for credit losses. During the third quarter of 2020, we determined that interest receivable of $ 3.8 million (related to the Agemo term loans) was no longer considered collectible. As such, we reserved approximately $ 3.8 million of interest receivable through the provision for credit losses during the three month period ended September 30, 2020. 14 Table of Contents Periodically, the Company may identify an individual loan for impairment. A loan is considered impaired when, based on current information and events, it is probable that we will be unable to collect all amounts due as scheduled according to the contractual terms of the loan agreements. Our assessment of collectibility considers several factors, including, among other things, payment history, the financial strength of the borrower and any guarantors, historical operations and operating trends, current and future economic conditions, expectations of performance (which includes known substantial doubt about an operator’s ability to continue as a going concern) and the value of the underlying collateral of the agreement, if any. Consistent with this definition, all loans on non-accrual status may be deemed impaired. To the extent circumstances improve and the risk of collectibility is diminished, we will return these loans to full accrual status. When we identify a loan impairment, the loan is written down to the present value of the expected future cash flows. In cases where expected future cash flows are not readily determinable, the loan is written down to the fair value of the underlying collateral. We may base our valuation on a loan’s observable market price, if any, or the fair value of collateral, net of sales costs, if the repayment of the loan is expected to be provided solely by the sale of the collateral. A rollforward of our allowance for credit losses for the nine months ended September 30, 2021 is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Rating ​ Financial Statement Line Item Allowance for Credit Loss as of December 31, 2020 Provision (recovery) for Credit Loss for the three months ended September 30, 2021 Write-offs charged against allowance for the three months ended September 30, 2021 Provision (recovery) for Credit Loss for the nine months ended September 30, 2021 Write-offs charged against allowance for the nine months ended September 30, 2021 Allowance for Credit Loss as of September 30, 2021 ​ ​ ​ (in thousands) 2 ​ Mortgage Notes Receivable $ 88 $ ( 12 ) $ - $ ( 65 ) $ - $ 23 3 ​ Mortgage Notes Receivable ​ 954 ​ 1,580 ​ - ​ 1,603 ​ - ​ 2,557 4 ​ Mortgage Notes Receivable ​ 26,865 ​ ( 1,705 ) (1) - ​ ( 1,825 ) (1) - ​ 25,040 5 ​ Mortgage Notes Receivable ​ 433 ​ 9,240 (1) - ​ 9,025 (1) - ​ 9,458 6 ​ Mortgage Notes Receivable ​ 4,905 ​ - ​ - ​ - ​ - ​ 4,905 ​ ​ Sub-total ​ 33,245 ​ 9,103 ​ - ​ 8,738 ​ - ​ 41,983 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 3 ​ Investment in Direct Financing Leases ​ 694 ​ 33 ​ - ​ ( 35 ) ​ - ​ 659 ​ ​ Sub-total ​ 694 ​ 33 ​ - ​ ( 35 ) ​ - ​ 659 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2 ​ Other Investments ​ 94 ​ 20 ​ - ​ ( 38 ) ​ - ​ 56 3 ​ Other Investments ​ 5,113 ​ 894 ​ - ​ 628 ​ - ​ 5,741 4 ​ Other Investments ​ 24,397 ​ ( 27,164 ) (2) - ​ ( 22,675 ) (2) - ​ 1,722 5 ​ Other Investments ​ 1,853 ​ 6,327 (3) - ​ 6,260 (3) ( 95 ) ​ 8,018 6 ​ Other Investments ​ - ​ 35,954 (2) - ​ 35,954 (2) - ​ 35,954 ​ ​ Sub-total ​ 31,457 ​ 16,031 ​ - ​ 20,129 ​ ( 95 ) ​ 51,491 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2 ​ Off-Balance Sheet Note Commitments ​ 116 ​ ( 53 ) ​ - ​ ( 90 ) ​ - ​ 26 3 ​ Off-Balance Sheet Note Commitments ​ 2,305 ​ ( 177 ) ​ - ​ ( 1,300 ) ​ - ​ 1,005 4 ​ Off-Balance Sheet Note Commitments ​ - ​ 373 ​ - ​ 373 ​ - ​ 373 4 ​ Off-Balance Sheet Mortgage Commitments ​ 24 ​ 201 ​ - ​ 208 ​ - ​ 232 ​ ​ Sub-total ​ 2,445 ​ 344 ​ - ​ ( 809 ) ​ - ​ 1,636 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ 67,841 $ 25,511 $ - $ 28,023 $ ( 95 ) $ 95,769 (1) Amount reflects the movement of reserves associated with a $ 112.5 million mortgage for 9 facilities with Guardian Healthcare (“Guardian”) due to a reduction of our internal risk rating from a 4 to a 5 on the loan in the third quarter of 2021. The risk rating reduction was primarily due to concerns regarding the fair value of the collateral associated with the mortgage loan as well as an increase in the probability of a modification to the loan that may result in a troubled debt restructuring. As discussed further in Note 21 – Subsequent Events, in October 2021, Guardian stopped paying contractual rent and interest under its lease and loan agreements. (2) Amount reflects the movement of $ 27.2 million of reserves from Other Investments with a rating of 4 to Other Investments with a rating of 6 as a result of a reduction of our internal credit rating from a 4 to a 6 on the Agemo Term Loan and one other loan during the third quarter of 2021. The provision for Other Investments with a rating of 6 also reflects $ 8.8 million of additional allowance recorded in the third quarter of 2021 to fully impair the remaining carrying value of the Agemo Term Loan. See Note 6 – Other Investments for additional information on the conditions that drove the Agemo Term Loan impairment and ratings reduction. (3) The provision includes an additional $ 7.9 million of allowance recorded on the Agemo WC Loan during the third quarter of 2021. We also reduced the internal rating on the Agemo WC Loan from a 4 to a 5 during the third quarter of 2021. See Note 6 – Other Investments for additional information on the conditions that drove the Agemo WC Loan impairment and rating reduction. 15 Table of Contents A rollforward of our allowance for credit losses for the nine months ended September 30, 2020 is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Rating ​ Financial Statement Line Item Allowance for Credit Loss at December 31, 2019 Allowance for Credit Loss on January 1, 2020 Provision (recovery) for Credit Loss for the three months ended September 30, 2020 Write-offs charged against allowance for the three months ended September 30, 2020 Provision (recovery) for Credit Loss for the nine months ended September 30, 2020 Write-offs charged against allowance for the nine months ended September 30, 2020 Allowance for Credit Loss as of September 30, 2020 ​ ​ ​ (in thousands) 2 ​ Mortgage Notes Receivable $ - $ - $ ( 36 ) $ - $ 97 $ - $ 97 3 ​ Mortgage Notes Receivable ​ - ​ 901 ​ ( 11 ) ​ - ​ ( 85 ) ​ - ​ 816 4 ​ Mortgage Notes Receivable ​ - ​ 19,293 ​ ( 415 ) ​ - ​ 3,359 ​ - ​ 22,652 5 ​ Mortgage Notes Receivable ​ - ​ 829 ​ ( 66 ) ​ - ​ ( 475 ) ​ - ​ 354 6 ​ Mortgage Notes Receivable ​ 4,905 ​ 363 ​ 25 ​ - ​ ( 2 ) ​ - ​ 5,266 ​ ​ Sub-total ​ 4,905 ​ 21,386 ​ ( 503 ) ​ - ​ 2,894 ​ - ​ 29,185 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 3 ​ Investment in Direct Financing Leases ​ 217 ​ 611 ​ 6 ​ - ​ 1 ​ ( 217 ) ​ 612 ​ ​ Sub-total ​ 217 ​ 611 ​ 6 ​ - ​ 1 ​ ( 217 ) ​ 612 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2 ​ Other Investments ​ - ​ 195 ​ ( 41 ) ​ - ​ ( 112 ) ​ - ​ 83 3 ​ Other Investments ​ - ​ 1,434 ​ 2,911 ​ - ​ 2,499 ​ - ​ 3,933 4 ​ Other Investments ​ - ​ 3,158 ​ 23,574 ​ - ​ 22,748 ​ - ​ 25,906 5 ​ Other Investments ​ - ​ 1,901 ​ ( 86 ) ​ - ​ ( 631 ) ​ - ​ 1,270 ​ ​ Sub-total ​ - ​ 6,688 ​ 26,358 ​ - ​ 24,504 ​ - ​ 31,192 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2 ​ Off-Balance Sheet Note Commitments ​ - ​ - ​ 16 ​ - ​ 16 ​ - ​ 16 3 ​ Off-Balance Sheet Note Commitments ​ - ​ - ​ 2,389 ​ - ​ 2,389 ​ - ​ 2,389 4 ​ Off-Balance Sheet Mortgage Commitments ​ - ​ 100 ​ ( 36 ) ​ - ​ ( 73 ) ​ - ​ 27 ​ ​ Sub-total ​ - ​ 100 ​ 2,369 ​ - ​ 2,332 ​ - ​ 2,432 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ 5,122 $ 28,785 $ 28,230 $ - $ 29,731 $ ( 217 ) $ 63,421 ​ A summary of our amortized cost basis by year of origination and credit quality indicator is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Rating Financial Statement Line Item 2021 2020 2019 2018 2017 2016 2015 & older Revolving Loans ​ Balance as of September 30, 2021 ​ ​ (in thousands) 1 Mortgage Notes Receivable $ - $ - $ - $ - $ - $ - $ 65,874 $ - ​ $ 65,874 2 Mortgage Notes Receivable ​ - ​ 21,325 ​ - ​ - ​ - ​ - ​ - ​ - ​ ​ 21,325 3 Mortgage Notes Receivable ​ 72,420 ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ ​ 72,420 4 Mortgage Notes Receivable ​ 14,230 ​ 89,351 ​ 4,996 ​ 44,341 ​ 46,404 ​ 39,505 ​ 391,151 ​ - ​ ​ 629,978 5 Mortgage Notes Receivable ​ - ​ - ​ - ​ - ​ - ​ - ​ 119,746 ​ - ​ ​ 119,746 6 Mortgage Notes Receivable ​ - ​ - ​ - ​ - ​ - ​ - ​ 6,377 ​ - ​ ​ 6,377 ​ Sub-total ​ 86,650 ​ 110,676 ​ 4,996 ​ 44,341 ​ 46,404 ​ 39,505 ​ 583,148 ​ - ​ ​ 915,720 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 3 Investment in Direct Financing Leases ​ - ​ - ​ - ​ - ​ - ​ - ​ 11,421 ​ - ​ ​ 11,421 ​ Sub-total ​ - ​ - ​ - ​ - ​ - ​ - ​ 11,421 ​ - ​ ​ 11,421 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2 Other Investments ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ 18,200 ​ ​ 18,200 3 Other Investments ​ - ​ - ​ 19,706 ​ 27,810 ​ - ​ - ​ 3,167 ​ 203,598 ​ ​ 254,281 4 Other Investments ​ 667 ​ - ​ 11,222 ​ 88,929 ​ - ​ 41,167 ​ - ​ 5,000 ​ ​ 146,985 5 Other Investments ​ - ​ - ​ - ​ 30,099 ​ - ​ - ​ - ​ - ​ ​ 30,099 6 Other Investments ​ - ​ - ​ - ​ 4,463 ​ - ​ 31,491 ​ - ​ - ​ ​ 35,954 ​ Sub-total ​ 667 ​ - ​ 30,928 ​ 151,301 ​ - ​ 72,658 ​ 3,167 ​ 226,798 ​ ​ 485,519 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total ​ $ 87,317 $ 110,676 $ 35,924 $ 195,642 $ 46,404 $ 112,163 $ 597,736 $ 226,798 ​ $ 1,412,660 16 Table of Contents ​ NOTE 8 – VARIABLE INTEREST ENTITIES As of September 30, 2021 and December 31, 2020, Agemo and Maplewood are both VIEs. As of September 30, 2021, we have not consolidated any VIEs, as we have concluded that we are not the primary beneficiary. This conclusion is based on the fact that 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 entities. Below is a summary of our assets, liabilities and collateral associated with these operators as of September 30, 2021 and December 31, 2020: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, 2021 ​ December 31, 2020 ​ ​ ​ Agemo Maplewood ​ Agemo Maplewood ​ ​ ​ (in thousands) ​ (in thousands) ​ Assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Real estate investments – net ​ $ 334,996 $ 814,396 ​ $ 371,010 $ 750,488 ​ Assets held for sale ​ ​ — ​ — ​ ​ — ​ — ​ Other investments – net ​ 16,699 (1) 187,048 ​ ​ 34,253 147,148 ​ Contractual receivables – net ​ — (1) 1,091 ​ ​ 346 887 ​ Straight-line rent receivables ​ — ​ ( 45,263 ) ​ ​ — ( 56,664 ) ​ Lease inducement ​ ​ — ​ 65,647 ​ ​ — ​ 69,666 ​ Other assets ​ ​ — ​ 673 ​ ​ — ​ — ​ Total Assets ​ 351,695 1,023,592 ​ ​ 405,609 ​ 911,525 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net in-place lease liability ​ ​ — ​ ( 311 ) ​ ​ — ​ ( 331 ) ​ Security deposit ​ ​ ( 115 ) ​ ( 4,651 ) ​ ​ — ​ — ​ Contingent liability ​ ​ — ​ ( 43,915 ) ​ ​ — ​ ( 43,915 ) ​ Other liabilities ​ ​ — ​ ( 673 ) ​ ​ — ​ — ​ Total Liabilities ​ ( 115 ) ( 49,550 ) ​ ​ — ​ ( 44,246 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Collateral ​ ​ ​ ​ ​ Letters of credit ​ — (1) — ​ ​ ( 9,253 ) — ​ Personal guarantee ​ ( 8,000 ) ​ ( 40,000 ) ​ ​ ( 8,000 ) ( 40,000 ) ​ Other collateral ​ ( 334,996 ) (2) ( 814,396 ) ​ ​ ( 371,010 ) ( 750,488 ) ​ Total Collateral ​ ( 342,996 ) ( 854,396 ) ​ ​ ( 388,263 ) ​ ( 790,488 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Maximum exposure to loss ​ $ 8,584 $ 119,646 ​ $ 17,346 $ 76,791 ​ (1) As discussed in Note 4 – Contractual Receivables and Other Receivables and Lease Inducements, we applied Agemo’s entire letter of credit against their uncollected rent receivables during the third quarter of 2021. As discussed in Note 6 – Other Investments and Note 7 – Allowance for Credit Loss, we recorded an additional reserve of $ 16.7 million on our loans with Agemo during the third quarter of 2021. (2) Amount excludes Agemo’s accounts receivable that Omega has a second priority security interest on as collateral under the Agemo WC Loan. The fair value of the accounts receivable available to Omega was $ 16.7 million and $ 25.0 million as of September 30, 2021 and December 31, 2020, respectively. In determining our maximum exposure to loss from the VIE, we considered the underlying carrying value of the real estate subject to leases with the operator and other collateral, if any, supporting our other investments, which may include accounts receivable, security deposits, letters of credit or personal guarantees, if any, as well as other liabilities recognized with respect to these operators. 17 Table of Contents The table below reflects our total revenues from Agemo and Maplewood for the three and nine months ended September 30, 2021 and 2020: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, ​ Nine Months Ended September 30, ​ ​ ​ ​ 2021 ​ 2021 ​ 2020 ​ 2020 ​ 2021 ​ 2021 ​ 2020 ​ 2020 ​ ​ ​ ​ Agemo ​ Maplewood ​ Agemo ​ Maplewood ​ Agemo ​ Maplewood ​ Agemo ​ Maplewood ​ ​ ​ ​ (in thousands) ​ (in thousands) ​ Revenue ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Rental income ​ ​ $ 12,624 ​ $ 20,768 ​ $ ( 63,128 ) ​ $ 13,199 ​ $ 36,399 ​ $ 58,893 ​ $ ( 33,026 ) ​ $ 33,381 ​ Other investment income ​ ​ 240 ​ 3,311 ​ 1,059 ​ 1,979 ​ 2,575 ​ 9,151 ​ 3,597 ​ 4,833 ​ Total (1) ​ ​ $ 12,864 ​ $ 24,079 ​ $ ( 62,069 ) ​ $ 15,178 ​ $ 38,974 ​ $ 68,044 ​ $ ( 29,429 ) ​ $ 38,214 ​ (1) For the three months ended September 30, 2021 and 2020, we received cash (including letter of credit funds and security deposit balance) from Agemo of approximately $ 14.1 million and $ 13.4 million, respectively, pursuant to our lease and other investment agreements. For the nine months ended September 30, 2021 and 2020, we received cash (including letter of credit funds and security deposit balance) from Agemo of approximately $ 42.1 million and $ 40.1 million, respectively, pursuant to our lease and other investment agreements. For the three months ended September 30, 2021 and 2020, we received cash from Maplewood of approximately $ 21.5 million and $ 17.5 million, respectively, pursuant to our lease and other investment agreements. For the nine months ended September 30, 2021 and 2020, we received cash from Maplewood of approximately $ 60.5 million and $ 51.4 million, respectively, pursuant to our lease and other investment agreements. NOTE 9 – INVESTMENTS IN JOINT VENTURES AND OTHER EQUITY INVESTMENTS Unconsolidated Joint Ventures Omega owns an interest in a number of joint ventures that are accounted for under the equity method. These entities and their subsidiaries are not consolidated by the Company because it does not control, through voting rights or other means, the joint venture. The following is a summary of our investments in unconsolidated joint ventures (dollars in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Carrying Amount ​ ​ Ownership ​ Initial Investment ​ ​ ​ ​ Facility ​ Facilities at ​ September 30, ​ December 31, Entity ​ % ​ Date ​ ​ Investment (1) ​ Type ​ 9/30/2021 ​ 2021 2020 Second Spring Healthcare Investments (2) ​ 15 % ​ 11/1/2016 ​ $ 50,032 ​ SNF ​ — ​ $ 11,226 $ 17,700 Second Spring II LLC (3) ​ 15 % ​ 3/10/2021 ​ ​ 10,330 ​ SNF ​ — ​ ​ 75 ​ — Lakeway Realty, L.L.C. ​ 51 % ​ 5/17/2019 ​ ​ 73,834 ​ Specialty facility ​ 1 ​ ​ 71,579 ​ ​ 72,318 Cindat Joint Venture ​ 49 % ​ 12/18/2019 ​ ​ 105,688 ​ ALF ​ 66 ​ ​ 110,649 ​ ​ 110,360 OMG Senior Housing, LLC ​ 50 % ​ 12/6/2019 ​ ​ — ​ Specialty facility ​ 1 ​ — ​ — OH CHS SNP, Inc. ​ 9 % ​ 12/20/2019 ​ ​ 900 ​ N/A ​ N/A ​ ​ 212 ​ ​ 260 ​ ​ ​ ​ ​ ​ $ 240,784 ​ ​ ​ ​ ​ $ 193,741 ​ $ 200,638 (1) Our initial investment includes our transaction costs, if any. (2) During the first quarter of 2021, this joint venture sold 16 SNFs to an unrelated third-party for approximately $ 328 million in net proceeds and recognized a gain on sale of approximately $ 102.2 million ( $ 14.9 million of which represents the Company’s share of the gain). During the first quarter of 2021, this joint venture also sold five SNFs to Second Spring II LLC for approximately $ 70.8 million in net proceeds. (3) We acquired a 15 % interest in Second Spring II LLC for approximately $ 10.3 million. During the first quarter of 2021, this joint venture acquired five SNFs from Second Spring Healthcare Investments for approximately $ 70.8 million. During the second and third quarters of 2021, this joint venture sold five SNFs to an unrelated third-party for approximately $ 65 million in net proceeds and recognized a loss on sale of approximately $ 0.4 million ( $ 0.1 million of which represents the Company’s share of the loss). 18 Table of Contents The following table reflects our income (loss) from unconsolidated joint ventures for the three and nine months ended September 30, 2021 and 2020: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, ​ Nine Months Ended September 30, Entity ​ 2021 2020 ​ 2021 2020 ​ ​ (in thousands) Second Spring Healthcare Investments (1) ​ $ 309 ​ $ 1,666 ​ $ 12,013 ​ $ 2,947 Second Spring II LLC ​ ​ ( 1 ) ​ ​ — ​ ​ ( 757 ) ​ ​ — Lakeway Realty, L.L.C. ​ ​ 637 ​ 637 ​ ​ 1,923 ​ 1,860 Cindat Joint Venture ​ 707 ​ ( 398 ) ​ 1,839 ​ 493 OMG Senior Housing, LLC ​ ( 105 ) ​ ( 108 ) ​ ( 309 ) ​ ( 387 ) OH CHS SNP, Inc. ​ 5 ​ ( 105 ) ​ ( 140 ) ​ ( 259 ) Total ​ $ 1,552 ​ $ 1,692 ​ $ 14,569 ​ $ 4,654 (1) The income from this unconsolidated joint venture for the nine months ended September 30, 2021 includes a $ 14.9 million gain on sale of real estate investments. Asset Management Fees We receive asset management fees from certain joint ventures for services provided. For each of the three months ended September 30, 2021 and 2020, we recognized approximately $ 0.2 million and $ 0.3 million, respectively, of asset management fees. For each of the nine months ended September 30, 2021 and 2020, we recognized approximately $ 0.7 million and $ 1.0 million, respectively, of asset management fees. These fees are included in miscellaneous income in the accompanying Consolidated Statements of Operations. Other Equity Investments In the third quarter of 2021, we made an investment of $ 20.0 million in SafelyYou, Inc. (“SafelyYou”), a technology company that has developed artificial intelligence-enabled video that detects and helps prevent resident falls in ALFs and SNFs. Through our investment, we obtained preferred shares representing 5 % of the outstanding equity of SafelyYou and warrants to purchase SafelyYou common stock representing an additional 5 % of outstanding equity as of the date of our investment. SafelyYou has committed, for a specified period, to using the proceeds of our investment to install its technology in our facilities or other facilities of our operators. The vesting of the warrants is contingent upon SafelyYou’s attainment of certain installation targets in our facilities. To the extent these installation targets are not attained, the investment funds associated with the unvested warrants would be returned to Omega. The investment in the preferred shares and warrants are recorded within other assets on the Consolidated Balance Sheets. NOTE 10 – GOODWILL AND OTHER INTANGIBLES The following is a summary of our goodwill as of September 30, 2021: ​ ​ ​ ​ ​ (in thousands) Balance as of December 31, 2020 ​ $ 651,737 Foreign currency translation ​ ( 383 ) Balance as of September 30, 2021 ​ $ 651,354 ​ 19 Table of Contents The following is a summary of our intangibles as of September 30, 2021 and December 31, 2020: ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, ​ December 31, ​ ​ 2021 ​ 2020 ​ ​ ​ (in thousands) ​ Assets: ​ ​ ​ ​ Above market leases ​ $ 22,410 ​ $ 22,822 ​ Accumulated amortization ​ ( 20,721 ) ( 20,882 ) ​ Net above market leases ​ $ 1,689 ​ $ 1,940 ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities: ​ ​ ​ ​ Below market leases ​ $ 139,069 ​ $ 139,515 ​ Accumulated amortization ​ ( 109,699 ) ( 100,996 ) ​ Net below market leases ​ $ 29,370 ​ $ 38,519 ​ ​ Above market leases, net of accumulated amortization, are included in other assets on our Consolidated Balance Sheets. Below market leases, net of accumulated amortization, are included in accrued expenses and other liabilities on our Consolidated Balance Sheets. 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. For the three months ended September 30, 2021 and 2020, our net amortization related to intangibles was $ 1.1 million and $ 3.7 million, respectively. For both the nine months ended September 30, 2021 and 2020, our net amortization related to intangibles was $ 8.5 million. The estimated net amortization related to these intangibles for the remainder of 2021 and the subsequent four years is as follows: remainder of 2021 – $ 1.1 million; 2022 – $ 4.1 million; 2023 – $ 4.0 million; 2024 – $ 3.9 million and 2025 – $ 3.7 million. As of September 30, 2021, the weighted average remaining amortization period of above market lease assets is approximately ten years and below market lease liabilities is approximately eight years . ​ ​ NOTE 11 – CONCENTRATION OF RISK As of September 30, 2021, our portfolio of real estate investments (including properties associated with mortgages, direct financing leases, and assets held for sale) consisted of 963 healthcare facilities, located in 42 states and the U.K. and operated by 63 third-party operators. Our investment in these facilities, net of impairments and allowances, totaled approximately $ 10.2 billion at September 30, 2021, with approximately 98 % of our real estate investments related to healthcare facilities. Our portfolio is made up of (i) 716 SNFs, 134 ALFs, 35 specialty facilities, two medical office buildings, (ii) fixed rate mortgages on 60 SNFs, three ALFs and two specialty facilities, and (iii) 11 facilities that are held for sale. At September 30, 2021, we also held other investments of approximately $ 434.0 million, consisting primarily of secured loans to third-party operators of our facilities and $ 193.7 million of investments in six unconsolidated joint ventures. At September 30, 2021 we had investments with two operators/or managers that approximated or exceeded 10% of our total investments: Maplewood and Consulate Health Care (“Consulate”). Maplewood generated approximately 8 % and 5 % of our total revenues for the three months ended September 30, 2021 and 2020, respectively, and 8 % and 5 % of our total revenues for the nine months ended September 30, 2021 and 2020, respectively. Consulate generated approximately 9 % of our total revenues for the three months ended September 30, 2021 and 2020, respectively, and 9 % of our total revenues for the nine months ended September 30, 2021 and 2020, respectively. At September 30, 2021, the three states in which we had our highest concentration of investments were Florida ( 15 %), Texas ( 10 %) and Michigan ( 6 %). 20 Table of Contents NOTE 12 – STOCKHOLDERS’ EQUITY Dividends The following is a summary of our declared cash dividends on common stock: ​ ​ ​ ​ ​ ​ Record ​ Payment ​ Dividend per Date Date Common Share February 8, 2021 ​ February 16, 2021 ​ $ 0.67 May 3, 2021 ​ May 17, 2021 ​ ​ 0.67 August 2, 2021 ​ August 13, 2021 ​ ​ 0.67 November 5, 2021 ​ November 15, 2021 ​ ​ 0.67 ​ Dividend Reinvestment and Common Stock Purchase Plan The following is a summary of the shares issued under the Dividend Reinvestment and Common Stock Purchase Plan for the three and nine months ended September 30, 2020 and 2021: ​ ​ ​ ​ ​ ​ ​ Shares issued Gross Proceeds ​ Period Ended (in millions) (in millions) Three Months Ended September 30, 2020 — $ — Three Months Ended September 30, 2021 1.3 ​ 47.2 Nine Months Ended September 30, 2020 0.1 ​ 3.7 Nine Months Ended September 30, 2021 3.3 ​ 124.5 ​ At-The-Market Offering Programs During the third quarter of 2015, Omega entered into Equity Distribution Agreements with several financial institutions to sell $ 500.0 million of shares of common stock from time to time through an “at-the-market” (“ATM”) offering program (the “2015 ATM Program”). During the second quarter of 2021, we terminated the 2015 ATM Program and entered into a new ATM Equity Offering Sales Agreement pursuant to which shares of common stock having an aggregate gross sales price of up to $ 1.0 billion (the “2021 ATM Program”) may be sold from time to time (i) by Omega through several financial institutions acting as a sales agent or directly to the financial institutions as principals, or (ii) by several financial institutions acting as forward sellers on behalf of any forward purchasers pursuant to a forward sale agreement. Under the 2021 ATM Program, compensation for sales of the shares will not exceed 2 % of the gross sales price per share for shares sold through each financial institution. The use of forward sales under the 2021 ATM Program generally allows Omega to lock in a price on the sale of shares of common stock when sold by the forward sellers but defer receiving the net proceeds from such sales until the shares of our common stock are issued at settlement on a later date. We did not utilize the forward provisions under the 2021 ATM Program during the second or third quarter of 2021. The following is a summary of the shares issued under the 2021 and 2015 ATM Programs for the three and nine months ended September 30, 2020 and 2021: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Shares issued Average Net Price Gross Proceeds Commissions Net Proceeds ​ Period Ended (in millions) Per Share (1) (in millions) Three Months Ended September 30, 2020 — $ — $ — $ — $ — Three Months Ended September 30, 2021 0.1 ​ 32.82 ​ 1.3 ​ 0.1 ​ 1.2 Nine Months Ended September 30, 2020 0.1 ​ 34.64 ​ 2.0 ​ 0.3 ​ 1.7 Nine Months Ended September 30, 2021 4.2 ​ 36.56 ​ 155.1 ​ 3.3 ​ 151.8 (1) Represents the average price per share after commissions. 21 Table of Contents Accumulated Other Comprehensive Income (Loss) The following is a summary of our accumulated other comprehensive income (loss), net of tax where applicable: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of and for the As of and for the ​ ​ ​ Three Months Ended ​ Nine Months Ended ​ ​ ​ September 30, ​ September 30, ​ ​ 2021 2020 2021 2020 ​ ​ (in thousands) ​ Foreign Currency Translation: ​ ​ ​ ​ ​ ​ Beginning balance ​ $ ( 13,608 ) ​ $ ( 68,795 ) ​ $ ( 18,427 ) ​ $ ( 35,100 ) ​ Translation (loss) gain ​ ( 12,646 ) ​ 21,808 ​ ( 8,515 ) ​ ( 11,818 ) ​ Realized (loss) gain ​ ( 18 ) ​ 19 ​ 670 ​ ( 50 ) ​ Ending balance ​ ( 26,272 ) ​ ( 46,968 ) ​ ( 26,272 ) ​ ( 46,968 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Derivative Instruments: ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash flow hedges: ​ ​ ​ ​ ​ ​ ​ ​ ​ Beginning balance ​ 33,352 ​ ( 9,699 ) ​ 17,718 ​ ( 2,369 ) ​ Unrealized gain ​ 1,116 ​ 7,223 ​ 15,407 ​ 1,401 ​ Realized gain (loss) (1) ​ 779 ​ ​ ( 1,500 ) ​ 2,122 ​ ​ ( 3,008 ) ​ Ending balance ​ 35,247 ​ ( 3,976 ) ​ 35,247 ​ ( 3,976 ) ​ Net investment hedges: ​ ​ ​ ​ ​ ​ ​ ​ ​ Beginning balance ​ ( 16,024 ) ​ 9,533 ​ ( 13,331 ) ​ ( 4,420 ) ​ Unrealized gain (loss) ​ 7,637 ​ ( 9,953 ) ​ 4,944 ​ 4,000 ​ Ending balance ​ ( 8,387 ) ​ ( 420 ) ​ ( 8,387 ) ​ ( 420 ) ​ Total accumulated other comprehensive income (loss) before noncontrolling interest ​ 588 ​ ( 51,364 ) ​ 588 ​ ( 51,364 ) ​ Add: portion included in noncontrolling interest ​ 888 ​ 2,263 ​ 888 ​ 2,263 ​ Total accumulated other comprehensive income (loss) for Omega ​ $ 1,476 ​ $ ( 49,101 ) ​ $ 1,476 ​ $ ( 49,101 ) ​ (1) Recorded in interest expense on the Consolidated Statements of Operations. ​ ​ ​ NOTE 13 – TAXES Omega was organized, has operated, and intends to continue to operate in a manner that enables Omega to qualify for taxation as a REIT under Sections 856 through 860 of the Code. On a quarterly and annual basis, we perform several analyses to test our compliance within the REIT taxation rules. If we fail to meet the requirements for qualification as a REIT in any tax year, we will be subject to federal income tax on our taxable income at regular corporate rates and may not be able to qualify as a REIT for the four subsequent years, unless we qualify for certain relief provisions that are available in the event we fail to satisfy any of the requirements. We are also subject to federal taxation of 100 % of the net income derived from the sale or other disposition of property, other than foreclosure property, that we held primarily for sale to customers in the ordinary course of a trade or business. We believe that we do not hold assets for sale to customers in the ordinary course of business and that none of the assets currently held for sale or that have been sold would be considered a prohibited transaction within the REIT taxation rules. As a REIT under the Code, we generally will not be subject to federal income taxes on the REIT taxable income that we distribute to stockholders, subject to certain exceptions. In 2020, we distributed dividends in excess of our taxable income. We currently own stock in entities that have elected to be taxed as a REIT. These subsidiary REITs are required to individually satisfy all of the rules for qualification as a REIT. 22 Table of Contents We have elected to treat certain of our active subsidiaries as taxable REIT subsidiaries (“TRSs”). Our domestic TRSs are subject to income taxes at the applicable corporate rates. Our foreign TRSs are subject to foreign income taxes and may be subject to current-year income inclusion relating to ownership of a controlled foreign corporation for U.S. income tax purposes. As of September 30, 2021, one of our TRSs that is subject to income taxes at the applicable corporate rates had a net operating loss (“NOL”) carry-forward of approximately $ 6.5 million. Our NOL carry-forward was fully reserved as of September 30, 2021, with a valuation allowance due to uncertainties regarding realization. The following is a summary of our provision for income taxes: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended Nine Months Ended ​ September 30, September 30, ​ ​ 2021 2020 2021 2020 ​ ​ (in millions) Provision for federal, state and local income taxes ​ $ 0.4 $ 0.3 $ 1.0 $ 0.8 Provision for foreign income taxes ​ ​ 0.6 ​ 0.5 ​ 1.9 ​ 1.8 Total provision for income taxes (1) ​ $ 1.0 ​ $ 0.8 ​ $ 2.9 ​ $ 2.6 (1) The above amounts do not include gross receipts or franchise taxes payable to certain states and municipalities. ​ NOTE 14 – STOCK-BASED COMPENSATION The following is a summary of our stock-based compensation expense for the three and nine months ended September 30, 2021 and 2020, respectively. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended Nine Months Ended ​ ​ September 30, September 30, ​ 2021 2020 2021 2020 ​ (in thousands) ​ Stock-based compensation expense $ 5,706 $ 5,122 $ 16,913 $ 14,380 ​ We granted 22,051 time-based restricted stock units (“RSUs”) and 142,719 time-based profits interest units (“PIUs”) during the first quarter of 2021 to certain officers and key employees, and those units vest on December 31, 2023 ( three years after the grant date), subject to continued employment and vesting in certain other events. We also granted 1,232,178 performance-based PIUs during the first quarter of 2021 to certain officers and key employees, which are earned based on the level of performance over the performance period (normally three years ) and vest quarterly in the four th year, subject to continued employment and vesting in certain other events. 23 Table of Contents NOTE 15 – BORROWING ACTIVITIES AND ARRANGEMENTS The following is a summary of our borrowings: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Annual ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest Rate ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ as of ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, ​ September 30, ​ December 31, ​ ​ Maturity 2021 2021 2020 ​ ​ ​ ​ (in thousands) ​ Secured borrowings ​ ​ ​ HUD mortgages (1)(2) ​ 2046 - 2052 ​ 3.01 % $ 361,688 ​ $ 367,249 ​ Term loan (3) 2022 3.75 % ​ 2,275 ​ ​ 2,275 ​ Total secured borrowings ​ ​ ​ ​ ​ ​ 363,963 ​ ​ 369,524 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Unsecured borrowings ​ ​ ​ Revolving borrowings: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2017 Revolving credit facility (4) N/A N/A ​ — ​ 101,158 ​ Revolving credit facility (4) 2025 1.28 % — ​ — ​ Total revolving borrowings ​ ​ ​ ​ ​ ​ — ​ ​ 101,158 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Senior notes and other unsecured borrowings: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 notes (4)(5) 2023 4.375 % 350,000 ​ 700,000 ​ 2024 notes (4) 2024 4.950 % 400,000 ​ 400,000 ​ 2025 notes (4) 2025 4.500 % 400,000 ​ 400,000 ​ 2026 notes (4) 2026 5.250 % 600,000 ​ 600,000 ​ 2027 notes (4) 2027 4.500 % 700,000 ​ 700,000 ​ 2028 notes (4) 2028 4.750 % 550,000 ​ 550,000 ​ 2029 notes (4) 2029 3.625 % 500,000 ​ 500,000 ​ 2031 notes (4) ​ 2031 ​ 3.375 % ​ 700,000 ​ ​ 700,000 ​ 2033 notes (4)(6) ​ 2033 ​ 3.250 % ​ 700,000 ​ ​ — ​ Subordinated debt (2)(7) 2021 9.000 % 20,000 ​ 20,000 ​ Sterling term loan (4)(8) N/A N/A ​ — ​ 136,700 ​ 2017 OP term loan (9) N/A N/A ​ — ​ 50,000 ​ OP term loan (9)(10) 2025 3.29 % 50,000 ​ — ​ Deferred financing costs – net ​ ( 28,157 ) ​ ( 26,421 ) ​ Discount – net ​ ( 32,753 ) ​ ( 31,709 ) ​ Total senior notes and other unsecured borrowings – net ​ 4,909,090 ​ 4,698,570 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total unsecured borrowings – net ​ 4,909,090 ​ 4,799,728 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total secured and unsecured borrowings – net (11)(12) ​ $ 5,273,053 ​ $ 5,169,252 ​ (1) Reflects the weighted average annual contractual interest rate on the mortgages at September 30, 2021. Secured by real estate assets with a net carrying value of $ 551.3 million as of September 30, 2021. (2) Wholly owned subsidiaries of Omega OP are the obligor on these borrowings. (3) Borrowing is the debt of a consolidated joint venture. (4) Guaranteed by Omega OP. (5) In March 2021, we used a portion of the proceeds from the 2033 Senior Notes offering to fund the tender offer to purchase $ 350 million of the 4.375 % Senior Notes due 2023 . In connection with this transaction, we recorded approximately $ 29.7 million in related fees, premiums, and expenses which were recorded as Loss on debt extinguishment in our Consolidated Statement of Operations. (6) We used the proceeds from this offering to pay down outstanding borrowings on the 2017 Revolving Credit Facility, repay the Sterling term loan, and fund the tender offer to purchase $ 350 million of the 4.375 % Senior Notes due 2023 and the payment of accrued interest and related fees, premiums and expenses. (7) As discussed in Note 4 – Contractual Receivables and Other Receivables and Lease Inducements, to the extent Gulf Coast fails to pay rent when due to us under its master lease, this Subordinated debt is subject to offset. (8) Actual borrowing is in GBP and remeasured to USD. The Sterling term loan was settled in March 2021 using proceeds from the 3.250 % 2033 Senior Notes offering. (9) Omega OP is the obligor on this borrowing. (10) The weighted average interest rate of the OP Term Loan has been adjusted to reflect the impact of the interest rate swaps that effectively fix the LIBOR based portion of the interest rate at 1.84 % . (11) All borrowings are direct borrowings of Parent unless otherwise noted. (12) Certain of our other secured and unsecured borrowings are subject to customary affirmative and negative covenants, including financial covenants. As of September 30, 2021 and December 31, 2020, we were in compliance with all affirmative and negative covenants, including financial covenants, for our secured and unsecured borrowings . 24 Table of Contents Unsecured Borrowings Revolving Credit Facility On April 30, 2021, Omega entered into a credit agreement (the “2021 Omega Credit Agreement”) providing us with a new $ 1.45 billion senior unsecured multicurrency revolving credit facility (the “Revolving Credit Facility”), replacing our previous $ 1.25 billion senior unsecured 2017 multicurrency revolving credit facility (the “2017 Revolving Credit Facility”). The 2021 Omega Credit Agreement contains an accordion feature permitting us, subject to compliance with customary conditions, to increase the maximum aggregate commitments thereunder to $ 2.5 billion, by requesting an increase in the aggregate commitments under the Revolving Credit Facility or by adding term loan tranches. The Revolving Credit Facility bears interest at LIBOR (or in the case of loans denominated in GBP, the Sterling overnight index average reference rate plus an adjustment of 0.1193 % per annum) plus an applicable percentage (with a range of 95 to 185 basis points) based on our credit ratings. The Revolving Credit Facility matures on April 30, 2025, subject to Omega’s option to extend such maturity date for two six-month periods. The Revolving Credit Facility may be drawn in Euros, GBP, Canadian Dollars (collectively, “Alternative Currencies”) or USD, with a $ 1.15 billion tranche available in USD and a $ 300 million tranche available in Alternative Currencies. For purposes of the Revolving Credit Facility, references to LIBOR include the Canadian dealer offered rates for amounts offered in Canadian Dollars and any other Alternative Currency rate approved in accordance with the terms of the 2021 Omega Credit Agreement for amounts offered in any other non-London interbank offered rate quoted currency, as applicable. We incurred $ 12.9 million of deferred costs in connection with the 2021 Omega Credit Agreement. OP Term Loan On April 30, 2021, Omega OP entered into a credit agreement (the “2021 Omega OP Credit Agreement”) providing it with a new $ 50 million senior unsecured term loan facility (the “OP Term Loan”). The OP Term Loan replaces the $ 50 million senior unsecured term loan obtained in 2017 (the “2017 OP Term Loan”) and the related credit agreement. The OP Term Loan bears interest at LIBOR plus an applicable percentage (with a range of 85 to 185 basis points) based on our credit ratings. The OP Term Loan matures on April 30, 2025 , subject to Omega OP’s option to extend such maturity date for two , six-month periods. We incurred $ 0.4 million of deferred costs in connection with the 2021 Omega OP Credit Agreement. NOTE 16 – DERIVATIVES AND HEDGING We are exposed to, among other risks, the impact of changes in foreign currency exchange rates as a result of our investments in the U.K. and interest rate risk related to our capital structure. As a matter of policy, we do not use derivatives for trading or speculative purposes. Our risk management program is designed to manage the exposure and volatility arising from these risks, and utilizes foreign currency forward contracts, interest rate swaps and debt issued in foreign currencies to offset a portion of these risks. Cash Flow Hedges of Interest Rate Risk We enter into interest rate swaps in order to maintain a capital structure containing targeted amounts of fixed and floating-rate debt and manage interest rate risk. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for our fixed-rate payments. These interest rate swap agreements are used to hedge the variable cash flows associated with variable-rate debt. 25 Table of Contents On March 27, 2020 , we entered into five forward starting swaps totaling $ 400 million. We designated the forward starting swaps as cash flow hedges of interest rate risk associated with interest payments on a forecasted issuance of fixed rate long-term debt, initially expected to occur within the next five years . The swaps are effective on August 1, 2023 and expire on August 1, 2033 and were issued at a fixed rate of approximately 0.8675 %. In March 2021, in conjunction with the issuance of $ 700 million aggregate principal amount of our 3.25 % Senior Notes due 2033 , we discontinued hedge accounting for these five forward starting swaps. Amounts reported in accumulated other comprehensive income (“AOCI”) related to these discontinued cash flow hedging relationships will be reclassified to interest expense over a ten-year term. Simultaneously, we re-designated these swaps in new cash flow hedging relationships of interest rate risk associated with interest payments on another forecasted issuance of long-term debt. We are hedging our exposure to the variability in future cash flows for forecasted transactions over a maximum period of 46 months (excluding forecasted transactions related to the payment of variable interest on existing financial instruments). In addition to the forward swaps discussed above, we also have two interest rate swaps that were entered into in May 2019 with aggregate notional amounts of $ 50.0 million. These interest rate swaps are designated as hedges against our exposure to changes in interest payment cash flow fluctuations in the variable interest rates on the OP Term Loan . ​ Foreign Currency Forward Contracts and Debt Designated as Net Investment Hedges British pound (“GBP”) denominated borrowings under the Sterling term loan and the 2017 Revolving Credit Facility, were previously used to hedge a portion of our investments in the U.K. against fluctuations in GBP against the USD. The GBP denominated borrowings under both debt instruments were deemed an effective hedge from issuance in May 2017 until the settlement of the Sterling term loan and the repayment of the GBP denominated borrowings under the 2017 Revolving Credit Facility in March 2021. Gains and losses associated with these nonderivative net investment hedges were recorded in foreign currency translation within other comprehensive income (loss) (“OCI”). Concurrent with the settlement of the GBP denominated debt, we entered into four foreign currency forwards with notional amounts totaling £ 174.0 million, that mature on March 8, 2024 , to hedge a portion of our net investments in the U.K., effectively replacing the terminated net investment hedge. The gains and losses associated with these foreign currency forwards are also recorded in foreign currency translation within OCI. Amounts associated with these net investment hedges would be reclassified out of AOCI into earnings when our hedged net investment in the U.K. is either sold or substantially liquidated. The location and the fair value of derivative instruments designated as hedges, at the respective balance sheet dates, were as follows: ​ ​ ​ ​ ​ ​ ​ September 30, ​ December 31, ​ 2021 2020 Cash flow hedges: (in thousands) Other assets $ 36,864 ​ $ 17,005 Accrued expenses and other liabilities $ 318 ​ $ 955 ​ ​ ​ ​ ​ ​ Net investment hedges: ​ ​ ​ ​ ​ Other assets $ 7,954 ​ $ — Accrued expenses and other liabilities $ — ​ $ — ​ The fair value of the interest rate swaps and foreign currency forwards is derived from observable market data such as yield curves and foreign exchange rates and represents a Level 2 measurement on the fair value hierarchy. NOTE 17 – FINANCIAL INSTRUMENTS 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). 26 Table of Contents At September 30, 2021 and December 31, 2020, the net carrying amounts and fair values of our other financial instruments were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, 2021 ​ December 31, 2020 ​ Carrying Fair Carrying Fair ​ Amount Value Amount Value ​ ​ (in thousands) Assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Investments in direct financing leases – net ​ $ 10,762 ​ $ 10,762 $ 10,764 ​ $ 10,764 Mortgage notes receivable – net ​ 873,737 ​ ​ 920,305 ​ ​ 885,313 ​ ​ 924,353 Other investments – net ​ 434,028 ​ ​ 443,051 ​ ​ 467,442 ​ ​ 474,552 Total ​ $ 1,318,527 ​ $ 1,374,118 ​ $ 1,363,519 ​ $ 1,409,669 Liabilities: ​ ​ ​ ​ 2017 Revolving credit facility ​ $ — ​ $ — $ 101,158 ​ $ 101,158 Revolving credit facility ​ ​ — ​ ​ — ​ — ​ ​ — Term loan ​ ​ 2,275 ​ ​ 2,275 ​ ​ 2,275 ​ ​ 2,275 Sterling term loan ​ — ​ ​ — ​ ​ 136,453 ​ ​ 136,700 2017 OP term loan ​ — ​ ​ — ​ ​ 49,896 ​ ​ 50,000 OP Term loan ​ 49,635 ​ ​ 50,000 ​ ​ — ​ ​ — 4.375 % notes due 2023 – net ​ 348,958 ​ ​ 370,531 ​ ​ 696,981 ​ ​ 770,635 4.95 % notes due 2024 – net ​ 397,472 ​ ​ 435,064 ​ ​ 396,714 ​ ​ 441,194 4.50 % notes due 2025 – net ​ 397,495 ​ ​ 435,968 ​ ​ 396,924 ​ ​ 444,652 5.25 % notes due 2026 – net ​ 596,966 ​ ​ 680,964 ​ ​ 596,437 ​ ​ 697,993 4.50 % notes due 2027 – net ​ 692,007 ​ ​ 779,618 ​ ​ 690,909 ​ ​ 794,294 4.75 % notes due 2028 – net ​ 543,656 ​ ​ 617,886 ​ ​ 542,899 ​ ​ 633,950 3.625 % notes due 2029 – net ​ ​ 490,379 ​ ​ 525,580 ​ ​ 489,472 ​ ​ 532,248 3.375 % notes due 2031 – net ​ ​ 683,145 ​ ​ 711,956 ​ ​ 681,802 ​ ​ 731,541 3.25 % notes due 2033 – net ​ ​ 689,357 ​ ​ 692,769 ​ ​ — ​ ​ — HUD mortgages – net ​ ​ 361,688 ​ ​ 396,606 ​ ​ 367,249 ​ ​ 409,004 Subordinated debt – net ​ 20,020 ​ ​ 20,408 ​ ​ 20,083 ​ ​ 21,599 Total ​ $ 5,273,053 ​ $ 5,719,625 ​ $ 5,169,252 ​ $ 5,767,243 ​ 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 (see Note 2 – Summary of Significant Accounting Policies in our Annual Report on Form 10-K for the year ended December 31, 2020). The use of different market assumptions and estimation methodologies may have a material effect on the reported estimated fair value amounts. The following methods and assumptions were used in estimating fair value disclosures for financial instruments. ● Mortgage notes receivable: The fair value of the mortgage notes receivables are estimated using a discounted cash flow analysis, using interest rates being offered for similar loans to borrowers with similar credit ratings (Level 3). ● Other investments: Other investments are primarily comprised of notes receivable. The fair values of notes receivable are estimated using a discounted cash flow analysis, using interest rates being offered for similar loans to borrowers with similar credit ratings (Level 3). ● Revolving line of credit and OP Term loan: The carrying amount of these approximate fair value because the borrowings are interest rate adjusted. Differences between carrying value and the fair value in the table above are due to the inclusion of deferred financing costs in the carrying value. 27 Table of Contents ● Senior notes: The fair value of the senior unsecured notes payable was estimated based on (Level 1) publicly available trading prices. ● Subordinated debt: The fair value of our borrowings under these agreements are estimated using a present value technique based on inputs from trading activity provided by a third-party (Level 2). ● HUD mortgages: The fair value of our borrowings under HUD debt agreements are estimated using an expected present value technique based on quotes obtained by HUD debt brokers (Level 2). ​ NOTE 18 – COMMITMENTS AND CONTINGENCIES Litigation Shareholder Litigation The Company and certain of its officers, C. Taylor Pickett, Robert O. Stephenson, and Daniel J. Booth , are defendants in a purported securities class action lawsuit pending in the U.S. District Court for the Southern District of New York (the “Securities Class Action”). Brought by lead plaintiff Royce Setzer and additional plaintiff Earl Holtzman, the Securities Class Action purports to assert claims for violations of Section 10(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and Rule 10b-5 promulgated thereunder, as well as Section 20(a) of the Exchange Act, and seeks an unspecified amount of monetary damages, interest, fees and expenses of attorneys and experts, and other relief. The Securities Class Action alleges that the defendants violated the Exchange Act by making materially false and/or misleading statements, and by failing to disclose material adverse facts about the Company’s business, operations, and prospects, including the financial and operating results of one of the Company’s operators, the ability of such operator to make timely rent payments, and the impairment of certain of the Company’s leases and the uncollectibility of certain receivables. The initial complaint was dismissed with prejudice by the U.S. District Court, but the dismissal was overturned by the U.S. Court of Appeals for the Second Circuit in 2020. Thereafter, the plaintiffs filed a Second Consolidated Amended Complaint in August 2020. In November 2020, the Company and the officers named in the Securities Class Action filed a Motion to Dismiss the Second Consolidated Amended Complaint. On September 28, 2021, the Court issued an order denying the motion to dismiss insofar as it requested dismissal of the entire action on grounds of loss causation, and granting it insofar as it sought dismissal of any claims arising out of defendants’ statements in February 2017. Because the dismissed claims were the basis for defendants’ efforts to begin the alleged class period in February 2017, the decision means that the alleged class period runs from May 3, 2017 to October 31, 2017. Certain derivative actions have also been brought against the officers named in the Securities Class Action, and certain current and former directors of the Company, alleging claims relating to the matters at issue in the Securities Class Action. These derivative actions are currently stayed pending certain developments in the Securities Class Action. In 2018, Stourbridge Investments LLC, a purported stockholder of the Company, filed a derivative action purportedly on behalf of the Company in the U.S. District Court for the Southern District of New York, alleging violations of Section 14(a) of the Exchange Act and state-law claims including breach of fiduciary duty. The complaint alleges, among other things, that the named defendants are responsible for the Company’s failure to disclose the financial condition of Orianna Health Systems, the alleged non-disclosures that are also the subject of the Securities Class Action described above. The plaintiff did not make a demand on the Company to bring the action prior to filing it, but rather alleges that demand would have been futile. The case has been stayed pending the entry of judgment or a voluntary dismissal with prejudice in the Securities Class Action. 28 Table of Contents In 2019, purported stockholder Phillip Swan by his counsel, and stockholders Tom Bradley and Sarah Smith by their counsel, filed derivative actions in the Baltimore City Circuit Court of Maryland, purportedly on behalf of the Company, asserting claims for breach of fiduciary duty, waste of corporate assets and unjust enrichment against the named defendants. Those actions have been consolidated and stayed in the Maryland court pending completion of fact discovery in the Securities Class Action. Prior to filing suit, each of these stockholders had made demands on the Board of Directors in 2018 that the Company bring such lawsuits. After an investigation and due consideration, and in the exercise of its business judgment, the Board of Directors determined that it is not in the best interests of the Company to commence litigation against any current or former officers or directors based on the matters raised in the demands. In addition, in late 2020, Robert Wojcik, a purported shareholder of the Company, filed a derivative action in the U.S. District Court for the District of Maryland, purportedly on behalf of the Company, asserting violations of Section 14(a) of the Exchange Act, Sections 10(b) and 21D of the Exchange Act, as well as claims for breach of fiduciary duty, unjust enrichment, abuse of control, gross mismanagement, and waste of corporate assets. Wojcik also did not make a demand on the Company prior to filing suit. The case has been stayed pending the entry of judgment or a voluntary dismissal with prejudice in the Securities Class Action. The Company believes that the claims asserted against it in these lawsuits are without merit and intends to vigorously defend against them. Other Gulf Coast Subordinated Debt In August 2021, we filed suit in the Circuit Court for Baltimore County against the holders of certain Subordinated Debt associated with our Gulf Coast master lease agreement, following an assertion by the holders that our prior exercise of offset rights in connection with Gulf Coast’s non-payment of rent had resulted in defaults under the terms of the Subordinated Debt. The suit seeks a declaratory judgment to, among other items, declare that the aggregate amount of unpaid rent due from Gulf Coast under the master lease agreement exceeds all amounts which otherwise would be due and owing by Omega under the Subordinated Debt, and that all principal and interest due and owing under the Subordinated Debt are to be offset in full as of December 31, 2021. In October 2021, the defendants in the case filed a motion to dismiss for lack of personal jurisdiction. While Omega believes it is entitled to the enforcement of the offset rights sought in the action, the outcome of litigation is unpredictable, and Omega cannot predict the outcome of the declaratory judgment action. See Note 4 – Contractual Receivables and Other Receivables and Lease Inducements – Gulf Coast Health Care, LLC. Lakeway Realty, L.L.C. In September 2016, MedEquities received a Civil Investigative Demand (“CID”) from the U.S. Department of Justice (“DOJ”), which indicates that it is conducting an investigation regarding alleged violations of the False Claims Act, Stark Law and Anti-Kickback Statute in connection with claims that may have been submitted to Medicare and other federal payors for services rendered to patients at Lakeway Hospital or by providers with financial relationships with Lakeway Hospital. As a result of the acquisition of MedEquities, the Company owns a 51 % interest in an unconsolidated partnership that owns Lakeway Hospital (the “Lakeway Realty, L.L.C.”). The CID requested certain documents and information related to the acquisition and ownership of Lakeway Hospital through Lakeway Realty, L.L.C. The Company has learned that the DOJ is investigating MedEquities’ conduct in connection with its investigation of financial relationships related to Lakeway Hospital, including allegations by the DOJ that these relationships violate and continue to violate the Anti-Kickback Statute and, as a result, related claims submitted to federal payors violated and continue to violate the False Claims Act. The Company is cooperating fully with the DOJ in connection with the CID and has produced all of the information that has been requested to date. 29 Table of Contents On September 29, 2020, the Department of Justice announced it had reached a settlement of a False Claims Act case with Lakeway Regional Medical Center wherein Lakeway Regional Medical Center agreed to pay $ 1.1 million for inducing certain physicians to refer patients by offering a low risk and high return investment in the form of a joint venture to purchase and then lease back the hospital to Lakeway Regional Medical Center. A MedEquities subsidiary was a party to this transaction but was not included in settlement discussions. The documents relating to the settlement are not publicly available. The Company believes that the acquisition, ownership and leasing of Lakeway Hospital through the Lakeway Partnership was and is in compliance with all applicable laws. However, due to the uncertainties surrounding this matter and its ultimate outcome, we are unable to determine whether it is probable that any loss has been incurred. In addition, we are subject to various other legal proceedings, claims and other actions arising out of the normal course of business. While any legal proceeding or claim has an element of uncertainty, management believes that the outcome of each lawsuit, claim or legal proceeding that is pending or threatened, or all of them combined, will not have a material adverse effect on our consolidated financial position or results of operations. Indemnification Agreements In connection with certain facility transitions, we have agreed to indemnify certain operators in certain events. As of September 30, 2021, our maximum funding commitment under these indemnification agreements was approximately $ 8.5 million. Claims under these indemnification agreements may be made within 18 months to 72 months of the transition date. These indemnification agreements were provided to certain operators in connection with facility transitions and generally would be applicable in the event that the prior operators do not perform under their transition agreements. Commitments We have committed to fund the construction of new leased and mortgaged facilities, capital improvements and other commitments. We expect the funding of these commitments to be completed over the next several years. Our remaining commitments at September 30, 2021, are outlined in the table below (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total commitments (1) $ 743,154 ​ ​ Amounts funded to date (2) ​ ( 502,020 ) ​ ​ Remaining commitments (3) ​ $ 241,134 ​ ​ (1) Includes our $ 177.7 million commitment relating to the redevelopment of the real estate property located in Washington, D.C. discussed in Note 2 – Real Estate Investments. (2) Includes finance costs. (3) This amount excludes our remaining commitments to fund under our other investments of approximately $ 60.1 million. 30 Table of Contents NOTE 19 – EARNINGS PER SHARE The following tables set forth the computation of basic and diluted earnings per share: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended Nine Months Ended ​ ​ September 30, September 30, ​ ​ 2021 2020 2021 2020 ​ ​ (in thousands, except per share amounts) ​ Numerator: ​ ​ ​ ​ ​ ​ Net income (loss) ​ $ 142,835 ​ $ ( 93,768 ) ​ $ 394,064 ​ $ 100,471 ​ Deduct: net (income) loss attributable to noncontrolling interests ​ ( 3,888 ) ​ 2,477 ​ ​ ( 10,616 ) ​ ( 2,540 ) ​ Net income (loss) available to common stockholders ​ $ 138,947 ​ $ ( 91,291 ) ​ $ 383,448 ​ $ 97,931 ​ Denominator: ​ ​ ​ ​ ​ Denominator for basic earnings per share ​ 239,282 ​ 227,507 ​ 236,027 ​ 227,393 ​ Effect of dilutive securities: ​ ​ ​ ​ ​ ​ ​ ​ ​ Common stock equivalents ​ 634 ​ — ​ 903 ​ 1,065 ​ Noncontrolling interest – Omega OP Units ​ 6,701 ​ 6,168 ​ 6,547 ​ 6,078 ​ Denominator for diluted earnings per share ​ 246,617 ​ 233,675 ​ 243,477 ​ 234,536 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Earnings per share - basic: ​ ​ ​ ​ ​ Net income (loss) available to common stockholders ​ $ 0.58 ​ $ ( 0.40 ) ​ $ 1.62 ​ $ 0.43 ​ Earnings per share – diluted: ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income (loss) (1) ​ $ 0.58 ​ $ ( 0.40 ) ​ $ 1.62 ​ $ 0.43 ​ (1) F or the three months ended September 30, 2020, approximately 904 potential common shares/units are not included in the computation of diluted earnings per share as a net loss exists and therefore the effect would be an antidilutive per share amount. ​ ​ ​ ​ ​ ​ NOTE 20 – SUPPLEMENTAL DISCLOSURE TO CONSOLIDATED STATEMENTS OF CASH FLOWS The following are supplemental disclosures to the Consolidated Statements of Cash Flows for the nine months ended September 30, 2021 and 2020: ​ ​ ​ ​ ​ ​ ​ ​ ​ Nine Months Ended September 30, ​ ​ 2021 2020 ​ (in thousands) ​ Reconciliation of cash and cash equivalents and restricted cash: ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents ​ $ 102,664 ​ $ 35,951 ​ Restricted cash ​ 3,341 ​ 4,164 ​ Cash, cash equivalents and restricted cash at end of period ​ $ 106,005 ​ $ 40,115 ​ ​ ​ ​ ​ ​ ​ ​ ​ Supplemental information: ​ ​ ​ ​ ​ Interest paid during the period, net of amounts capitalized ​ $ 166,934 ​ $ 174,247 ​ Taxes paid during the period ​ $ 5,028 ​ $ 5,493 ​ ​ ​ ​ ​ ​ ​ ​ ​ Non cash investing activities ​ ​ ​ Non cash acquisition of real estate ​ $ ( 49,857 ) ​ $ — ​ Non cash proceeds from sale of real estate investments ​ $ — ​ $ 83,910 ​ Non cash placement of mortgages ​ $ ( 7,000 ) ​ $ ( 86,936 ) ​ Non cash collection of mortgage principal ​ $ 49,857 ​ $ — ​ Non cash investment in other investments ​ $ — ​ $ ( 121,139 ) ​ Non cash proceeds from other investments ​ $ 7,000 ​ $ 68,025 ​ ​ ​ ​ ​ ​ ​ ​ ​ Non cash financing activities ​ ​ ​ Non cash borrowing of other long-term borrowings ​ $ — ​ $ 6,459 ​ Change in fair value of cash flow hedges ​ $ 28,450 ​ $ ( 1,637 ) ​ Remeasurement of debt denominated in a foreign currency ​ $ 3,010 ​ $ ( 4,000 ) ​ ​ ​ ​ ​ ​ ​ 31 Table of Contents NOTE 21 – SUBSEQUENT EVENTS Gulf Coast On October 14, 2021, Gulf Coast commenced voluntary cases under chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”). Gulf Coast operates 24 facilities subject to a master lease with Omega and represents approximately 2.6 % of Omega’s total revenues (excluding the impact of write-offs in 2021) for the nine months ended September 30, 2021. As described in Gulf Coast’s filings with the Bankruptcy Court, we have entered into a Restructuring Support Agreement (the “Support Agreement”) that is expected to form the basis for Gulf Coast’s restructuring and liquidation. The Support Agreement establishes a timeline (subject to Gulf Coast’s assumption of the Support Agreement with the approval of the Bankruptcy Court) for the implementation of Gulf Coast’s planned restructuring and liquidation, including the potential transition of management of the operations of the facilities to a third-party operator. In order to provide liquidity to Gulf Coast during its chapter 11 cases, we have committed to provide up to $ 25 million of senior secured debtor-in-possession (“DIP”) financing, a portion of which funding is tied to certain milestones, including the transition of the management of the operations of the facilities. The DIP financing is guaranteed by all debtors and is secured by liens on substantially all of their assets, including post-petition accounts receivable, subject in certain cases to other priorities. The Bankruptcy Court has approved on an interim basis the debtors’ borrowing of up to $ 15.75 million of DIP financing. The Bankruptcy Court has scheduled a hearing to consider approval of all borrowings available under the DIP facility on a final basis on November 12, 2021. See Note 4 – Contractual Receivables and Other Receivables and Lease Inducements, for additional information on the financial statement impact of Gulf Coast’s nonpayment of rent during the third quarter of 2021 and the Company’s rights with respect to certain offsetting amounts. Guardian In October 2021, Guardian failed to make contractual rent and interest payments under its lease agreement for 26 operating facilities and on its $ 112.5 million mortgage loan agreement, bearing interest at 10.81 %, for nine facilities, due to on-going liquidity issues. We have had discussions with Guardian regarding restructuring certain lease and mortgage loan terms but have yet to reach an agreement. As of September 30, 2021, we had $ 7.4 million of letters of credit from Guardian as collateral which may be applied against our uncollected rent and interest receivables. As discussed in Note 7 – Allowance for Credit Losses, during the third quarter of 2021, we reduced the risk rating on the mortgage loan from a 4 to a 5. Guardian represents approximately 3.2 % and 3.5 % of our total revenues (excluding the impact of straight-line write-offs) for the nine months ended September 30, 2021, and 2020, respectively. ​ ​ ​ 32 Table of Contents