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, ​ 2022 2021 ​ ​ (Unaudited) ​ ​ ​ ASSETS ​ ​ ​ ​ ​ Real estate assets ​ ​ Buildings and improvements ​ $ 7,217,231 $ 7,448,126 Land ​ ​ 908,424 ​ ​ 916,328 Furniture and equipment ​ ​ 498,473 ​ ​ 511,271 Construction in progress ​ ​ 84,884 ​ ​ 74,062 Total real estate assets ​ ​ 8,709,012 ​ ​ 8,949,787 Less accumulated depreciation ​ ( 2,246,659 ) ( 2,160,696 ) Real estate assets – net ​ 6,462,353 6,789,091 Investments in direct financing leases – net ​ 10,560 10,873 Mortgage notes receivable – net ​ 669,533 835,086 ​ ​ ​ 7,142,446 ​ ​ 7,635,050 Other investments – net ​ 608,190 469,884 Investments in unconsolidated joint ventures ​ 176,556 194,687 Assets held for sale ​ 190,723 261,151 Total investments ​ 8,117,915 8,560,772 ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents ​ 134,855 20,534 Restricted cash ​ 3,323 3,877 Contractual receivables – net ​ 9,945 11,259 Other receivables and lease inducements ​ ​ 266,890 ​ ​ 251,815 Goodwill ​ 648,948 651,417 Other assets ​ 293,829 138,804 Total assets ​ $ 9,475,705 $ 9,638,478 ​ ​ ​ ​ ​ ​ ​ LIABILITIES AND EQUITY ​ Revolving credit facility ​ $ 17,861 $ — Secured borrowings ​ 368,405 362,081 Senior notes and other unsecured borrowings – net ​ 4,898,609 4,891,455 Accrued expenses and other liabilities ​ 295,454 276,716 Total liabilities ​ 5,580,329 5,530,252 ​ ​ ​ ​ ​ ​ ​ Equity: ​ ​ Preferred stock $ 1.00 par value authorized – 20,000 shares, issued and outstanding – none ​ ​ — ​ ​ — Common stock $ 0.10 par value authorized – 350,000 shares, issued and outstanding – 234,176 shares as of September 30, 2022 and 239,061 shares as of December 31, 2021 ​ 23,417 ​ 23,906 Additional paid-in capital ​ 6,305,089 ​ 6,427,566 Cumulative net earnings ​ 3,392,822 ​ 3,011,474 Cumulative dividends paid ​ ( 6,029,603 ) ​ ( 5,553,908 ) Accumulated other comprehensive income (loss) ​ 6,243 ​ ( 2,200 ) Total stockholders’ equity ​ 3,697,968 ​ 3,906,838 Noncontrolling interest ​ 197,408 ​ 201,388 Total equity ​ 3,895,376 ​ 4,108,226 Total liabilities and equity ​ $ 9,475,705 $ 9,638,478 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, ​ ​ 2022 2021 ​ 2022 2021 Revenues ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Rental income ​ $ 207,588 ​ $ 247,164 ​ $ 635,899 ​ $ 705,880 ​ Income from direct financing leases ​ 256 ​ 257 ​ 768 ​ 772 ​ Mortgage interest income ​ 17,234 ​ 23,047 ​ 57,380 ​ 70,693 ​ Other investment income ​ 14,110 ​ 10,780 ​ 36,481 ​ 34,245 ​ Miscellaneous income ​ 242 ​ 424 ​ 2,866 ​ 1,270 ​ Total revenues ​ 239,430 ​ 281,672 ​ 733,394 ​ 812,860 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Expenses ​ ​ ​ ​ ​ Depreciation and amortization ​ 82,709 ​ 86,097 ​ 248,668 ​ 256,745 ​ General and administrative ​ 18,242 ​ 15,372 ​ 53,402 ​ 46,724 ​ Real estate taxes ​ ​ 4,175 ​ ​ 3,272 ​ ​ ​ 11,495 ​ ​ 9,002 ​ Acquisition, merger and transition related costs ​ 185 ​ — ​ 5,658 ​ 1,814 ​ Impairment on real estate properties ​ 10,015 ​ 4,942 ​ 21,221 ​ 42,453 ​ Recovery on direct financing leases ​ — ​ — ​ — ​ ( 717 ) ​ Provision for credit losses ​ 4,106 ​ 25,511 ​ 4,367 ​ 28,023 ​ Interest expense ​ 58,238 ​ 58,979 ​ 174,755 ​ 176,379 ​ Total expenses ​ 177,670 ​ 194,173 ​ 519,566 ​ 560,423 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other income (expense) ​ ​ ​ ​ ​ ​ ​ Other (expense) income – net ​ ( 176 ) ​ ( 767 ) ​ ( 5,038 ) ​ 4 ​ Loss on debt extinguishment ​ ( 376 ) ​ ( 642 ) ​ ( 389 ) ​ ( 30,707 ) ​ Gain on assets sold – net ​ ​ 40,930 ​ ​ 56,169 ​ ​ ​ 179,747 ​ ​ 160,634 ​ Total other income ​ 40,378 ​ 54,760 ​ 174,320 ​ 129,931 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income before income tax expense and income from unconsolidated joint ventures ​ 102,138 ​ 142,259 ​ 388,148 ​ 382,368 ​ Income tax expense ​ ( 1,191 ) ​ ( 976 ) ​ ( 3,535 ) ​ ( 2,873 ) ​ Income from unconsolidated joint ventures ​ 4,117 ​ 1,552 ​ 7,522 ​ 14,569 ​ Net income ​ 105,064 ​ 142,835 ​ 392,135 ​ 394,064 ​ Net income attributable to noncontrolling interest ​ ( 2,790 ) ​ ( 3,888 ) ​ ( 10,787 ) ​ ( 10,616 ) ​ Net income available to common stockholders ​ $ 102,274 ​ $ 138,947 ​ $ 381,348 ​ $ 383,448 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Earnings per common share available to common stockholders: ​ ​ ​ ​ ​ Basic: ​ ​ ​ ​ ​ ​ Net income available to common stockholders ​ $ 0.44 ​ $ 0.58 ​ $ 1.61 ​ $ 1.62 ​ Diluted: ​ ​ ​ ​ ​ Net income ​ $ 0.43 ​ $ 0.58 ​ $ 1.60 ​ $ 1.62 ​ ​ 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, ​ 2022 2021 2022 2021 Net income ​ $ 105,064 ​ $ 142,835 ​ $ 392,135 ​ $ 394,064 Other comprehensive income (loss): ​ ​ ​ ​ ​ ​ Foreign currency translation ​ ( 14,753 ) ​ ( 5,027 ) ​ ( 47,903 ) ​ ( 2,901 ) Cash flow hedges ​ 17,573 ​ 1,895 ​ 56,595 ​ 17,529 Total other comprehensive income (loss) ​ 2,820 ​ ( 3,132 ) ​ 8,692 ​ 14,628 Comprehensive income ​ 107,884 ​ 139,703 ​ 400,827 ​ 408,692 Comprehensive income attributable to noncontrolling interest ​ ( 2,868 ) ​ ( 3,803 ) ​ ( 11,036 ) ​ ( 11,000 ) Comprehensive income attributable to common stockholders ​ $ 105,016 ​ $ 135,900 ​ $ 389,791 ​ $ 397,692 ​ See notes to consolidated financial statements. ​ ​ 4 Table of Contents OMEGA HEALTHCARE INVESTORS, INC. CONSOLIDATED STATEMENTS OF EQUITY Three Months Ended September 30, 2022 and 2021 Unaudited (in thousands, except per share amounts) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Common ​ Additional ​ Cumulative ​ Cumulative ​ Other ​ Total ​ ​ ​ ​ ​ ​ Stock ​ Paid-in ​ Net ​ Dividends ​ Comprehensive ​ Stockholders’ ​ Noncontrolling ​ Total ​ Par Value Capital Earnings Paid Income (Loss) Equity Interest Equity Balance at June 30, 2022 ​ $ 23,410 ​ $ 6,295,907 ​ $ 3,290,548 ​ $ ( 5,872,269 ) ​ $ 3,501 ​ $ 3,741,097 ​ $ 199,615 ​ $ 3,940,712 Stock related compensation ​ ​ — ​ ​ 6,855 ​ ​ — ​ ​ — ​ ​ — ​ ​ 6,855 ​ ​ — ​ ​ 6,855 Issuance of common stock ​ ​ 7 ​ ​ 2,327 ​ ​ — ​ ​ — ​ ​ — ​ ​ 2,334 ​ ​ — ​ ​ 2,334 Common dividends declared ($ 0.67 per share) ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 157,334 ) ​ ​ — ​ ​ ( 157,334 ) ​ ​ — ​ ​ ( 157,334 ) Omega OP Units distributions ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 5,080 ) ​ ​ ( 5,080 ) Capital contribution from noncontrolling interest holder in consolidated JV ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 5 ​ ​ 5 Other comprehensive income ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 2,742 ​ ​ 2,742 ​ ​ 78 ​ ​ 2,820 Net income ​ ​ — ​ ​ — ​ ​ 102,274 ​ ​ — ​ ​ — ​ ​ 102,274 ​ ​ 2,790 ​ ​ 105,064 Balance at September 30, 2022 ​ $ 23,417 ​ $ 6,305,089 ​ $ 3,392,822 ​ $ ( 6,029,603 ) ​ $ 6,243 ​ $ 3,697,968 ​ $ 197,408 ​ $ 3,895,376 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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 ​ See notes to consolidated financial statements. ​ 5 Table of Contents OMEGA HEALTHCARE INVESTORS, INC. CONSOLIDATED STATEMENTS OF EQUITY Nine Months Ended September 30, 2022 and 2021 Unaudited (in thousands, except per share amounts) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Common ​ Additional ​ Cumulative ​ Cumulative ​ Other ​ Total ​ ​ ​ ​ ​ ​ Stock ​ Paid-in ​ Net ​ Dividends ​ Comprehensive ​ Stockholders’ ​ Noncontrolling ​ Total ​ Par Value Capital Earnings Paid Income (Loss) Equity Interest Equity Balance at December 31, 2021 ​ $ 23,906 ​ $ 6,427,566 ​ $ 3,011,474 ​ $ ( 5,553,908 ) ​ $ ( 2,200 ) ​ $ 3,906,838 ​ $ 201,388 ​ $ 4,108,226 Stock related compensation ​ ​ — ​ ​ 20,652 ​ ​ — ​ ​ — ​ ​ — ​ ​ 20,652 ​ ​ — ​ ​ 20,652 Issuance of common stock ​ ​ 32 ​ ​ 5,793 ​ ​ — ​ ​ — ​ ​ — ​ ​ 5,825 ​ ​ — ​ ​ 5,825 Repurchase of common stock ​ ​ ( 521 ) ​ ​ ( 141,746 ) ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 142,267 ) ​ ​ — ​ ​ ( 142,267 ) Common dividends declared ($ 2.01 per share) ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 475,695 ) ​ ​ — ​ ​ ( 475,695 ) ​ ​ — ​ ​ ( 475,695 ) Vesting/exercising of Omega OP Units ​ ​ — ​ ​ ( 7,176 ) ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 7,176 ) ​ ​ 7,176 ​ ​ — Conversion and redemption of Omega OP Units to common stock ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 9,704 ) ​ ​ ( 9,704 ) Omega OP Units distributions ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 15,418 ) ​ ​ ( 15,418 ) Capital contribution from noncontrolling interest holder in consolidated JV ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 2,930 ​ ​ 2,930 Other comprehensive income ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 8,443 ​ ​ 8,443 ​ ​ 249 ​ ​ 8,692 Net income ​ ​ — ​ ​ — ​ ​ 381,348 ​ ​ — ​ ​ — ​ ​ 381,348 ​ ​ 10,787 ​ ​ 392,135 Balance at September 30, 2022 ​ $ 23,417 ​ $ 6,305,089 ​ $ 3,392,822 ​ $ ( 6,029,603 ) ​ $ 6,243 ​ $ 3,697,968 ​ $ 197,408 ​ $ 3,895,376 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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 ​ 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, ​ ​ 2022 2021 Cash flows from operating activities ​ ​ Net income ​ $ 392,135 ​ $ 394,064 ​ Adjustment to reconcile net income to net cash provided by operating activities: ​ ​ ​ ​ Depreciation and amortization ​ 248,668 ​ 256,745 ​ Impairment on real estate properties ​ 21,221 ​ 42,453 ​ Recovery on direct financing leases ​ — ​ ( 717 ) ​ Provision for rental income ​ 28,625 ​ 22,357 ​ Provision for credit losses ​ 4,367 ​ 28,023 ​ Amortization of deferred financing costs and loss on debt extinguishment ​ 10,086 ​ 39,832 ​ Accretion of direct financing leases ​ 57 ​ 37 ​ Stock-based compensation expense ​ 20,515 ​ 16,913 ​ Gain on assets sold – net ​ ( 179,747 ) ​ ( 160,634 ) ​ Amortization of acquired in-place leases – net ​ ( 3,560 ) ​ ( 8,452 ) ​ Effective yield payable on mortgage notes ​ 1,537 ​ 1,085 ​ Interest paid-in-kind ​ ​ ( 6,979 ) ​ ​ ( 5,422 ) ​ Income from unconsolidated joint ventures ​ ​ ( 2,601 ) ​ ​ ( 1,530 ) ​ Change in operating assets and liabilities – net: ​ ​ ​ ​ Contractual receivables ​ 1,313 ​ ( 6,250 ) ​ Straight-line rent receivables ​ ( 54,563 ) ​ ( 38,401 ) ​ Lease inducements ​ 5,780 ​ 4,556 ​ Other operating assets and liabilities ​ ( 14,809 ) ​ ( 19,052 ) ​ Net cash provided by operating activities ​ 472,045 ​ 565,607 ​ Cash flows from investing activities ​ ​ ​ ​ ​ Acquisition of real estate ​ ( 141,361 ) ​ ( 615,907 ) ​ Acquisition deposit – net ​ — ​ 2,500 ​ Net proceeds from sale of real estate investments ​ 438,279 ​ 310,849 ​ Investments in construction in progress ​ ( 12,753 ) ​ ( 91,923 ) ​ Proceeds from sale of direct financing lease and related trust ​ ​ — ​ ​ 717 ​ Placement of mortgage loans ​ ( 9,030 ) ​ ( 84,012 ) ​ Collection of mortgage principal ​ 187,161 ​ 44,039 ​ Investments in unconsolidated joint ventures ​ ​ ( 113 ) ​ ​ ( 10,484 ) ​ Distributions from unconsolidated joint ventures in excess of earnings ​ 1,335 ​ 17,671 ​ Capital improvements to real estate investments ​ ( 37,721 ) ​ ( 28,955 ) ​ Receipts from insurance proceeds ​ 658 ​ 5,948 ​ Investments in other investments ​ ( 305,223 ) ​ ( 94,222 ) ​ Proceeds from other investments ​ 151,189 ​ 91,627 ​ Net cash provided by (used in) investing activities ​ 272,421 ​ ( 452,152 ) ​ Cash flows from financing activities ​ ​ ​ Proceeds from long-term borrowings ​ 597,403 ​ 2,220,128 ​ Payments of long-term borrowings ​ ( 587,394 ) ​ ( 2,121,429 ) ​ Payments of financing related costs ​ ( 389 ) ​ ( 48,934 ) ​ Net proceeds from issuance of common stock ​ 5,825 ​ 272,429 ​ Repurchase of common stock ​ ( 142,267 ) ​ — ​ Dividends paid ​ ( 475,557 ) ​ ( 477,068 ) ​ Noncontrolling members’ contributions to consolidated joint venture ​ ​ 27 ​ ​ — ​ Redemption of OP Units ​ ​ ( 9,704 ) ​ ​ — ​ Distributions to Omega OP Unit Holders ​ ( 15,418 ) ​ ( 20,105 ) ​ Net cash used in financing activities ​ ( 627,474 ) ​ ( 174,979 ) ​ Effect of foreign currency translation on cash, cash equivalents and restricted cash ​ ( 3,225 ) ​ ( 29 ) ​ Increase (decrease) in cash, cash equivalents and restricted cash ​ 113,767 ​ ( 61,553 ) ​ Cash, cash equivalents and restricted cash at beginning of period ​ 24,411 ​ 167,558 ​ Cash, cash equivalents and restricted cash at end of period ​ $ 138,178 ​ $ 106,005 ​ ​ See notes to consolidated financial statements . ​ ​ 7 Table of Contents OMEGA HEALTHCARE INVESTORS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Unaudited September 30, 2022 ​ 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,” or “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 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 loans with healthcare operating companies and affiliates (collectively, our “operators”). In addition to our core investments, we make loans to operators and/or their principals. From time to time, we also acquire equity interests in joint ventures or entities that support the long-term healthcare industry and our operators. 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 its 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, 2022, 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 Annual Report on Form 10-K for the year ended December 31, 2021. Omega’s consolidated financial statements include the accounts of (i) Parent, (ii) all direct and indirect wholly owned subsidiaries of Omega, including Omega OP, (iii) other entities in which Omega or Omega OP has a majority voting interest and control and (iv) variable interest entities (“VIEs”) of which Omega is the primary beneficiary. 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. 8 Table of Contents Reclassification Certain line items on our Consolidated Balance Sheets have been reclassified to conform to the current period presentation. 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. Recent Accounting Pronouncements ASU – 2022-02, Financial Instruments – Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures On March 31, 2022, the FASB issued ASU 2022-02, which eliminates the recognition and measurement guidance for troubled debt restructurings (“TDRs”) and requires additional disclosures for certain loan modifications. ASU 2022-02 also requires entities to disclose gross write-offs of financing receivables and net investments in leases by year of origination. Omega elected to early adopt ASU 2022-02 on a prospective basis effective January 1, 2022. In the second quarter of 2022, we had one loan modification to a borrower experiencing financial difficulty pursuant to ASU 2022-02, Guardian Healthcare (“Guardian”), that requires additional disclosures. The required disclosures for this loan are included in Note 4 – Contractual Receivables and Other Receivables and Lease Inducements and Note 5 – Mortgage Notes Receivable. We have disclosed our gross write-offs of financing receivables and direct financing leases by year of origination in Note 7 – Allowance for Credit Losses. ASU – 2020-04, Financial Instruments – Reference Rate Reform (Topic 848) On March 12, 2020, the FASB issued ASU 2020-04, which contains optional practical expedients for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting for contracts, hedging relationships, and other transactions that reference the London Interbank Offered Rate (“LIBOR”). The guidance may be elected over time until December 31, 2022, as reference rate reform activities occur. The Company has several derivative instruments (See Note 16 – Derivatives and Hedging), a $ 1.45 billion senior unsecured multicurrency revolving credit facility, and a $ 50.0 million senior unsecured term loan facility (See Note 15 – Borrowing Activities and Arrangements) that reference LIBOR. During the first quarter of 2020, we elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients preserves the presentation of derivatives consistent with past presentation. Our credit facilities that reference LIBOR contain customary LIBOR replacement language, including, but not limited to, the use of rates based on the secured overnight financing rate. The Company continues to evaluate: (i) how the transition away from LIBOR will impact the Company, (ii) whether any additional optional expedients provided by the standards will be adopted, and (iii) the impact that adopting ASU 2020-04 will have on our consolidated financial statements. 9 Table of Contents NOTE 2 – REAL ESTATE ASSETS At September 30, 2022, our leased real estate properties included 649 SNFs, 167 ALFs, 20 ILFs, 16 specialty facilities and two medical office buildings. The following table summarizes the Company’s rental income from operating leases: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, ​ ​ Nine Months Ended September 30, ​ ​ 2022 ​ 2021 ​ ​ 2022 ​ 2021 ​ ​ (in thousands) ​ ​ (in thousands) Rental income – operating leases ​ $ 203,456 ​ $ 243,831 ​ ​ $ 624,844 ​ $ 697,140 Variable lease income – operating leases ​ ​ 4,132 ​ ​ 3,333 ​ ​ ​ 11,055 ​ ​ 8,740 Total rental income ​ $ 207,588 ​ $ 247,164 ​ ​ $ 635,899 ​ $ 705,880 ​ Our variable lease income primarily represents the reimbursement of real estate taxes and ground lease expenses by operators that Omega pays directly. Asset Acquisitions The following table summarizes the asset acquisitions that occurred during the nine months ended September 30, 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Number of ​ ​ ​ Total Real Estate ​ Initial ​ ​ Facilities ​ Assets Acquired Annual ​ Period ​ SNF ALF Specialty ​ Country/State ​ (in millions) ​ Cash Yield (1) ​ Q1 — 1 — U.K. ​ $ 8.7 (2) 8.0 % Q1 ​ — 1 — ​ U.K. ​ ​ 5.0 ​ 8.0 % Q1 ​ — 27 — ​ U.K. ​ ​ 86.6 (2) 8.0 % Q1 ​ 1 — — ​ MD ​ ​ 8.2 (3) 9.5 % Q3 ​ — 4 — ​ U.K. ​ ​ 28.2 ​ 8.0 % Total 1 33 — ​ $ 136.7 ​ ​ (1) Initial annual cash yield reflects the initial annual contractual cash rent divided by the purchase price. (2) The total consideration paid for the one -facility U.K. acquisition and the 27 -facility U.K. acquisition was $ 8.2 million and $ 100.0 million, respectively. In connection with these acquisitions, we allocated $ 0.5 million of the purchase consideration to a deferred tax liability related to the one-facility U.K. acquisition, and $ 13.4 million to a deferred tax asset related to the 27 -facility U.K. acquisition. See Note 13 – Taxes for additional information. (3) Total consideration for the one -facility Maryland acquisition was paid on December 30, 2021, but the closing of the acquisition did not occur until January 1, 2022. NOTE 3 – ASSETS HELD FOR SALE, DISPOSITIONS AND IMPAIRMENTS Periodically we sell facilities to reduce our exposure to 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, ​ December 31, ​ 2022 2021 Number of facilities held for sale ​ 34 ​ ​ 41 Amount of assets held for sale (in thousands) $ 190,723 ​ $ 261,151 ​ During the three months ended September 30, 2022, we reclassified 20 facilities that were leased and operated by Agemo Holdings, LLC (“Agemo”) to assets held for sale in connection with our restructuring negotiations surrounding Agemo’s lease agreement. Nineteen of these facilities were subsequently sold during the fourth quarter of 2022 for aggregate gross cash proceeds of $ 315.8 million. 10 Table of Contents Asset Sales During the three and nine months ended September 30, 2022, we sold four and 44 facilities, subject to operating leases, for $ 51.4 million and $ 438.3 million in net cash proceeds, respectively. As a result of these sales, we recognized net gains of $ 40.9 million and $ 179.7 million during the three and nine months ended September 30, 2022, respectively. Our 2022 sales were primarily driven by restructuring transactions and negotiations related to our lease agreements with the following operators: Gulf Coast Health Care LLC (together with certain affiliates “Gulf Coast”), Guardian Healthcare (“Guardian”) and Agemo. In the first quarter of 2022, we sold 22 facilities that were previously leased and operated by Gulf Coast. The net cash proceeds from the sale, including related costs accrued for as of the end of the third quarter, were $ 303.9 million, and we recognized a net gain of $ 113.5 million. The agreement includes an earnout clause pursuant to which the buyer is obligated to pay an additional $ 18.7 million to Omega if certain financial metrics are achieved at the facilities in the three years following the sale. As we have determined it is not probable that we will receive any additional funds, we have not recorded any income related to the earnout clause. During the first and second quarter of 2022, we sold nine total facilities that were leased to Guardian for $ 39.5 million in net proceeds, which resulted in a net gain of $ 13.7 million. In the third quarter of 2022, we sold two facilities that were previously leased to Agemo for $ 42.6 million in net proceeds, which resulted in a net gain of $ 35.6 million. Real Estate Impairments During the three and nine months ended September 30, 2022, we recorded impairments on four and ten facilities of $ 10.0 million and $ 21.2 million, respectively. Of the $ 21.2 million, $ 3.5 million related to two facilities that were classified as held for sale (and subsequently sold) for which the carrying values exceeded the estimated fair values less costs to sell, and $ 17.7 million related to eight held-for-use facilities for which the carrying value exceeded the fair value. The impairments recorded on four facilities during the three months ended September 30, 2022 relate to the 2.2 % Operator discussed in Note 4 – Contractual Receivables and Other Receivables and Lease Inducements. To estimate the fair value of the facilities for the impairments noted above, we utilized a market approach that considered binding sale agreements (a Level 1 input), or non-binding offers from unrelated third parties and/or broker quotes (a Level 3 input). NOTE 4 – CONTRACTUAL RECEIVABLES AND OTHER RECEIVABLES AND LEASE INDUCEMENTS Contractual receivables relate to the amounts currently owed to us under the terms of our lease and loan agreements. Effective yield interest receivables relate to the difference between the interest income recognized on an effective yield basis over the term of the loan agreement and the interest currently due to us according to the contractual agreement. Straight-line rent receivables relate to the difference between the rental revenue recognized on a straight-line basis and the amounts currently due to us according to the contractual agreement. Lease inducements result from value provided by us to the lessee, at the inception, modification or renewal of the lease, and are amortized as a reduction of rental income over the non-cancellable lease term. A summary of our net receivables and lease inducements by type is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, ​ December 31, ​ ​ 2022 2021 ​ ​ (in thousands) ​ Contractual receivables – net ​ $ 9,945 ​ $ 11,259 ​ ​ ​ ​ ​ ​ ​ ​ ​ Effective yield interest receivables ​ $ 6,208 ​ $ 9,590 ​ Straight-line rent receivables ​ 173,266 ​ 148,455 ​ Lease inducements ​ 87,416 ​ 93,770 ​ Other receivables and lease inducements ​ $ 266,890 ​ $ 251,815 ​ ​ 11 Table of Contents Cash basis operators and straight-line receivable write-offs We review our collectability assumptions related to our operator leases on an ongoing basis. During the three and nine months ended September 30, 2022, we placed three and five additional operators, respectively, on a cash basis of revenue recognition, as collection of substantially all contractual lease payments due from them was no longer deemed probable. In connection with moving these operators to a cash basis, we recognized $ 13.2 million and $ 23.6 million in total straight-line accounts receivable and lease inducement write-offs through rental income during the three and nine months ended September 30, 2022, respectively. These amounts include the operators discussed in further detail below. As of September 30, 2022, we had 17 operators on a cash basis for revenue recognition. These operators represent 15.3 % of our total revenues (excluding the impact of write-offs) for the nine months ended September 30, 2022. We also wrote-off $ 3.2 million of straight-line rent receivable balances through rental income during the nine months ended September 30, 2022, as a result of transitioning 6 facilities between existing operators in the first quarter of 2022. Operator updates Agemo Agemo continued to not pay contractual rent and interest due under its lease and loan agreements during the nine months ended September 30, 2022. Agemo is on a cash basis of revenue recognition for lease purposes, so no rental income was recorded related to Agemo during the three and nine months ended September 30, 2022. Additionally, no interest income was recognized during the three and nine months ended September 30, 2022 on the two loans with Agemo because these loans are on non-accrual status and we are utilizing the cost recovery method, under which any payments, if received, are applied against the principal amount. See Note 6 – Other Investments. For the nine months ended September 30, 2021, revenue from Agemo represented approximately 4.7 % of our total revenues (excluding the impact of write-offs). On September 30, 2021, the Company entered a forbearance agreement related to Agemo’s defaults under its lease and loan agreements. The forbearance period under the agreement has been extended multiple times and the most recent amendment on October 31, 2022 extended the forbearance period through November 30, 2022 . Additionally, the Company had previously entered a restructuring agreement on May 7, 2018, with Agemo (the “2018 Restructuring”), that among other things, allowed for the deferral of $ 6.3 million of rent per annum for a 3-year period. The deferral period was extended multiple times, and the most recent amendment extending the deferral through April 2022, after which time the deferral period terminated, with the Company remaining subject to its forbearance agreement through November 30, 2022. As of September 30, 2022, the aggregate rent deferred under the Agemo lease agreement was $ 25.2 million. The Company is currently in ongoing negotiations to restructure and amend Agemo’s lease and loan agreements. Guardian Guardian did not make rent and interest payments under its lease and loan agreements during the first quarter of 2022 but resumed paying contractual rent and interest during the second quarter of 2022 and continued such payments in the third quarter of 2022, in accordance with the restructuring terms discussed further below. Guardian is on a cash basis of revenue recognition for lease purposes, and we recorded rental income of $ 3.7 million and $ 7.5 million for the three and nine months ended September 30, 2022, respectively, for the contractual rent payments that were received. Additionally, as discussed further in Note 5 – Mortgage Notes Receivable, no mortgage interest income has been recognized on the Guardian mortgage loan during the three and nine months ended September 30, 2022, as we are accounting for this loan under the cost recovery method. 12 Table of Contents During the first and second quarters of 2022, we completed significant restructuring activities related to the Guardian lease and loan portfolio. In the first quarter of 2022, we transitioned eight facilities previously leased to Guardian to two other operators as part of the planned restructuring. Additionally, during the six months ended June 30, 2022, we sold nine facilities previously leased to Guardian and three facilities previously subject to the Guardian mortgage loan. In the second quarter of 2022, we agreed to a formal restructuring agreement, master lease amendments and mortgage loan amendments with Guardian. As part of the restructuring agreement and related agreements, Omega agreed to, among other things: ● Extend the lease and loan maturity dates from January 31, 2027 to December 31, 2031 and allow Guardian the option to extend the maturity date for both the lease and loan through September 30, 2034 , subject to certain conditions; ● reduce the combined rent and mortgage interest to an aggregate $ 24.0 million per year as of July 1, 2022 ( $ 15.0 million in rent and $ 9.0 million in interest) with annual escalators of 2.25 % beginning in January 2023; and ● allow Guardian to retrospectively defer $ 18.0 million of aggregate contractual rent and interest that it failed to pay from October 2021 through March 2022 (consisting of $ 12.2 million of deferred rent and $ 5.8 of million deferred interest), with repayment required beginning after September 30, 2024, based on certain financial metrics, and in full by December 31, 2031, or the earlier termination of the lease for any reason. As of September 30, 2022, we have $ 7.4 million of letters of credit from Guardian as collateral. Revenue from Guardian represented approximately 1.0 % and 3.2 % of our total revenues (excluding the impact of straight-line write-offs) for the nine months ended September 30, 2022 and 2021, respectively. 3.7 % Operator From January through March 2022, an operator (the “3.7% Operator”) representing 3.7 % and 3.3 % of total revenue (excluding the impact of write-offs) for the nine months ended September 30, 2022 and 2021, respectively, did not pay its contractual amounts due under its lease agreement. In March 2022, the lease with the 3.7 % Operator was amended to allow for a short-term rent deferral for January through March 2022. The deferred rent balance accrues interest monthly at a rate of 5 % per annum. The 3.7 % Operator paid the contractual amount due under its lease agreement from April 2022 through September 2022. Omega holds a $ 1.0 million letter of credit and a $ 150 thousand security deposit from the 3.7 % Operator as collateral under its lease agreement. The 3.7 % Operator remains on a straight-line basis of revenue recognition. In July 2018, we entered into a $ 20.0 million revolving credit facility with the 3.7 % Operator, and the 3.7 % Operator paid contractual interest under the facility from January through September 2022. The 3.7 % Operator drew $ 4.0 million under the facility during the second quarter of 2022, and the line of credit under the facility was fully drawn as of June 30, 2022. As of September 30, 2022, the total outstanding principal due under the credit facility remains $ 20.0 million. The credit facility is secured by a first lien on the 3.7 % Operator’s accounts receivable. 1.4 % Operator In March 2022, an operator (the “1.4% Operator”), representing 1.4 % and 2.1 % of total revenue (excluding the impact of write-offs) for the nine months ended September 30, 2022 and 2021, respectively, did not pay its contractual amounts due under its lease agreement. In April 2022, the lease with the 1.4 % Operator was amended to allow the operator to apply its $ 2.0 million security deposit toward payment of March 2022 rent and to allow for a short-term rent deferral for April 2022 with regular rent payments required to resume in May 2022. The 1.4 % Operator paid contractual rent in May 2022, but it failed to pay the full contractual rent for June 2022 on a timely basis. We placed the 1.4 % Operator on a cash basis of revenue recognition during the second quarter of 2022, as collection of substantially all contractual lease payments due from the operator was no longer deemed probable. As a result, we wrote-off approximately $ 8.3 million of straight-line rent receivables through rental income. During the three months ended September 30, 2022, the 1.4 % Operator made partial contractual rent payments of $ 2.5 million in the aggregate, which were recorded in rental income. 13 Table of Contents 2.2 % Operator In June 2022, an operator (the “2.2% Operator”), representing 2.2 % and 2.0 % of total revenue (excluding the impact of write-offs) for the nine months ended September 30, 2022 and 2021, respectively, short-paid the contractual rent amount due under its lease agreement by $ 0.6 million. In July 2022, we drew the full $ 5.4 million letter of credit that was held as collateral from the 2.2 % Operator and applied $ 0.6 million of the proceeds to pay the unpaid portion of June 2022 rent. In the third quarter of 2022, the 2.2 % Operator continued to short-pay the contractual amount due under its lease agreement. As such, we applied $ 3.3 million of the remaining proceeds of the letter of credit to pay the unpaid portion of July, August and September 2022 rent. We are in discussions to sell or release to another operator a portion of the facilities included in the 2.2 % Operator’s master lease. We placed the 2.2 % Operator on a cash basis of revenue recognition during the third quarter of 2022, as collection of substantially all contractual lease payments due from the operator was no longer deemed probable. As a result of placing the 2.2 % Operator on a cash basis, we wrote-off approximately $ 10.5 million of straight-line rent receivables and lease inducements through rental income. As of September 30, 2022, $ 1.5 million of proceeds from the letter of credit remain as collateral to the master lease. 0.5 % Operator In June 2022, we placed an operator (the “0.5% Operator”), representing approximately 0.5 % of total revenue (excluding the impact of write-offs) for the nine months ended September 30, 2022 and 2021, respectively, on a cash basis of revenue recognition. The change in our evaluation of the collectability of future rent payments due from the 0.5 % Operator was a result of information received from the operator during the second quarter of 2022 regarding substantial doubt as to its ability to continue as a going concern. As a result of placing the 0.5 % Operator on a cash basis, we wrote-off approximately $ 2.1 million of straight-line rent receivables through rental income. All facilities included in the 0.5 % Operator’s master lease are included in assets held for sale as of September 30, 2022. Other Operators During the nine months ended September 30, 2022, we allowed four other operators, representing an aggregate 2.8 % and 3.1 % of total revenue (excluding the impact of write-offs) for the nine months ended September 30, 2022 and 2021, respectively, to apply an aggregate of $ 3.4 million of their security deposits to pay rent to accommodate short term liquidity issues, with regular rent payments required to resume shortly thereafter. These operators also are required to begin replenishing their security deposits in 2023. Additionally, we granted two of these operators short-term deferrals for a portion of their respective rent due during the nine months ended September 30, 2022. As of September 30, 2022, two of the four operators that were allowed to apply security deposits to rent are current on their respective lease obligations. The two operators that are not current on contractual obligations are on a cash basis of revenue recognition as of September 30, 2022. We placed one of the operators on a cash basis of revenue recognition during the third quarter of 2022. As a result of placing that operator on a cash basis during the third quarter of 2022, we wrote-off approximately $ 2.6 million of straight-line rent receivables through rental income. NOTE 5 – MORTGAGE NOTES RECEIVABLE As of September 30, 2022, mortgage notes receivable relate to seven fixed rate mortgage notes on 52 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. 14 Table of Contents The principal amounts outstanding of mortgage notes receivable, net of allowances, were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, ​ December 31, ​ ​ 2022 2021 ​ ​ (in thousands) ​ Mortgage note due 2031 ; interest at 11.02 % ​ $ 78,309 ​ $ 103,762 ​ Mortgage notes due 2030 ; interest at 10.96 % (1) ​ 503,440 ​ 653,564 ​ Other mortgage notes outstanding (2) ​ 149,641 ​ 151,361 ​ Mortgage notes receivable, gross ​ 731,390 ​ 908,687 ​ Allowance for credit losses on mortgage notes receivable ​ ( 61,857 ) ​ ( 73,601 ) ​ Total mortgage notes receivable – net ​ $ 669,533 ​ $ 835,086 ​ (1) Approximates the weighted average interest rate on 37 facilities as of September 30, 2022. (2) Other mortgage notes outstanding have a weighted average interest rate of 8.85 % per annum as of September 30, 2022 and maturity dates ranging from 2023 through 2032 . Mortgage Note due 2031 As discussed in Note 4 – Contractual Receivables and Other Receivables and Lease Inducements, Guardian did not make rent and interest payments under its lease and loan agreements during the first quarter of 2022 but resumed making contractual rent and interest payments during the second and third quarters of 2022, in accordance with the restructuring terms agreed to in the second quarter of 2022. The mortgage loan is on non-accrual status and is being accounted for under the cost recovery method, so the $ 2.3 million and $ 3.7 million of interest payments that we received during the three and nine months ended September 30, 2022, respectively, were applied directly against the principal balance outstanding. On February 15, 2022, Guardian completed the sale of three facilities subject to the Guardian mortgage loan with Omega. Concurrent with the sale, Omega agreed to release the mortgage liens on these facilities in exchange for a partial paydown of $ 21.7 million. In connection with the partial paydown, we recorded a $ 5.1 million recovery for credit losses in the first quarter of 2022 related to the Guardian mortgage loan. In the second quarter of 2022, we agreed to a formal restructuring agreement and amendments to the master lease and mortgage loan with Guardian, which among other adjustments, extended the loan maturity and allowed for the deferral of certain contractual interest as discussed in Note 4 – Contractual Receivables and Other Receivables and Lease Inducements. These amendments were treated as a loan modification. In the third quarter of 2022, we reserved an additional $ 1.0 million through provision for credit losses due to a decrease in the estimated fair value of the four facilities that are collateral under the mortgage. As of September 30, 2022, the amortized cost basis of the Guardian mortgage loan is $ 78.3 million, which represents 10.8 % of the total amortized cost basis of all mortgage receivables. As of September 30, 2022, the mortgage loan is secured by three SNFs and one ALF located in Pennsylvania. Mortgage Notes due 2030 On June 30, 2022, Ciena Healthcare (“Ciena”) repaid $ 57.1 million under the $ 415.0 million amortizing mortgage (the “Ciena Master Mortgage”), $ 15.1 million under the $ 44.7 million mortgage and $ 41.5 million under four additional mortgages. Concurrent with these repayments, we released the mortgage liens on six facilities in exchange for the partial repayment and extended the maturity date of all of the Ciena mortgage notes to June 30, 2030 (with exception of two loans with an aggregate principal balance of $ 37.7 million with maturity dates in 2022 and 2023 ). On September 9, 2022, Ciena repaid $ 35.3 million under the Ciena Master Mortgage and $ 9.5 million under three additional mortgages. Concurrently with these partial repayments, we released the mortgage liens on two facilities in exchange for such partial repayments. 15 Table of Contents NOTE 6 – OTHER INVESTMENTS Our other investments consist of fixed and variable rate loans to our operators and/or their principals. These loans may be either unsecured or secured by the collateral of the borrower. A number of the secured loans are collateralized by leasehold mortgages on, or assignments or pledges of the membership interest in, the related properties, corporate guarantees and/or personal guarantees. We deem these to be “real estate related loans” that are included as qualifying assets under our quarterly REIT asset tests. As of September 30, 2022, we had 39 loans with 20 different operators. A summary of our other investments is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, ​ December 31, ​ ​ 2022 2021 ​ ​ ​ (in thousands) ​ Other investment notes due 2024 ; interest at 13.17 % (1) ​ $ 96,456 $ 90,752 ​ Other investment note due 2030 ; interest at 7.00 % ​ 236,218 ​ 201,613 ​ Other investment note due 2024 ; interest at 12.00 % (2) ​ — ​ ​ 40,232 ​ Other investment notes due 2022 - 2025 ; interest at 12.03 % (1) ​ ​ 44,200 ​ ​ 9,992 ​ Other investment notes outstanding (3) ​ 20,000 ​ 12,084 ​ Real estate related loans – other investments, gross ​ ​ 396,874 ​ ​ 354,673 ​ Other investment notes due 2024 - 2025 ; interest at 8.12 % (1) ​ ​ 55,791 ​ 55,791 ​ Other investment notes due 2022 - 2028 ; interest at 10.49 % (1) ​ ​ 53,560 ​ ​ 22,142 ​ Other investment notes outstanding (4) ​ 163,026 ​ 106,672 ​ Non-real estate related loans – other investments, gross ​ ​ 272,377 ​ ​ 184,605 ​ Total other investments, gross ​ ​ 669,251 ​ ​ 539,278 ​ Allowance for credit losses on other investments ​ ​ ( 61,061 ) ​ ​ ( 69,394 ) ​ Total other investments – net ​ $ 608,190 ​ $ 469,884 ​ (1) Approximates the weighted average interest rate as of September 30, 2022. (2) During the third quarter of 2022, this loan was fully repaid. (3) As of September 30, 2022, includes one real estate related loan with an interest rate of 12.00 % and a maturity date of December 2, 2027 . (4) Other investment notes that are non-real estate related loans have a weighted average interest rate of 8.20 % as of September 30, 2022 with maturity dates ranging from 2022 through 2032 (with $ 10.5 million maturing in the remainder of 2022). Interest revenue on other investment loans is included within other investment income on the Consolidated Statement of Operations. A summary of our other investments income by real estate and non-real estate loans, as defined above, is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, ​ Nine Months Ended September 30, ​ 2022 2021 ​ 2022 2021 ​ (in thousands) ​ (in thousands) Real estate related loans – interest income $ 10,566 $ 8,036 ​ $ 27,987 $ 23,628 Non-real estate related loans – interest income 3,544 ​ 2,744 ​ 8,494 ​ 10,617 Total other investment income $ 14,110 ​ $ 10,780 ​ $ 36,481 ​ $ 34,245 ​ Other investment note due 2030 On June 22, 2022, we amended the secured revolving credit facility with Maplewood Senior Living (together with its affiliates, “Maplewood”) to increase the maximum commitment under the facility from $ 220.5 million to $ 250.5 million. Advances made under this facility bear interest at a fixed rate of 7 % per annum, and the facility matures on June 30, 2030 . As of September 30, 2022, $ 236.2 million remains outstanding on this credit facility to Maplewood. Maplewood was determined to be a VIE when this loan was originated in 2020. Please see further discussion in Note 8 – Variable Interest Entities. Other investment notes due 2024-2025 Agemo continued to not pay contractual rent under its lease agreement and interest on the Agemo WC Loan and the Agemo Term Loan during the nine months ended September 30, 2022. We have continued to monitor the fair value of the collateral associated with the Agemo WC Loan on a quarterly basis. During the three and nine months ended September 30, 2022, we recorded an additional provision for credit losses of $ 4.8 million and $ 10.8 million, respectively, related to the Agemo WC Loan because of a reduction in the fair value of the underlying collateral assets supporting the current carrying values. As discussed in Note 4 – Contractual Receivables and Other Receivables and Lease Inducements, the Company is currently in ongoing negotiations to restructure and amend Agemo’s lease and loan agreements. 16 Table of Contents Other investment notes due 2022-2025 On June 28, 2022, we entered into a $ 35.6 million mezzanine loan with an existing operator related to new operations undertaken by the operator. The loan bears interest at a fixed rate of 12 % per annum and matures on June 30, 2025 . The loan also requires quarterly principal payments of $ 1.0 million commencing on January 1, 2023 and additional payments contingent on the operator’s achievement of certain metrics. The loan is secured by a leasehold mortgage and a pledge of the operator’s equity interest in a joint venture. Other investment notes due 2022-2028 In connection with the $ 35.6 million mezzanine loan discussed above, we also entered into a short-term $ 90.0 million revolving line of credit with the same operator to finance working capital requirements of the new operations. The line of credit consists of two $ 45.0 million tranches that bear interest at fixed rates of 10 % per annum and 12 % per annum and mature on June 30, 2023 and June 1, 2023 (or earlier based on certain state reimbursement conditions), respectively. The revolving line of credit is secured by a first priority interest on the operator’s accounts receivable related to the new operations. As of September 30, 2022, the outstanding principal under this revolving line of credit was $ 30.0 million. Other investment notes outstanding – real estate related loans Preferred Equity Investment in Joint Venture - $ 20 million On June 2, 2022, we made a $ 20.0 million preferred equity investment, which is treated as a loan for accounting purposes, in a new real estate joint venture that was formed to acquire an acute care hospital in New York. Omega’s preferred equity investment bears a 12 % return per annum and must be mandatorily redeemed by the joint venture at the earlier of December 2027 or the occurrence of certain significant events within the joint venture. We have determined that the joint venture is a VIE, but we are not the primary beneficiary as we do not have the power to direct the activities that most significantly impact the joint venture’s economic performance. Please see further discussion in Note 8 – Variable Interest Entities. Other investment notes outstanding – non-real estate related loans Working Capital Loan – $ 20 million During the three and nine months ended September 30, 2022, we recognized provisions for credit losses of $ 0.9 million and $ 3.2 million, respectively, related to a $ 20.0 million working capital loan (the “$ 20.0 million WC loan”) that we entered into in November 2021 with an operator that managed, on an interim basis for a 4-month period, the operations of 23 facilities formerly leased to Gulf Coast. The $ 20.0 million WC Loan is secured by the accounts receivables of these facilities during the interim period of operation. The remaining accounts receivable outstanding that collateralize the loan is insufficient to support the current outstanding balance, and as a result, we recorded the additional reserves to reduce the carrying value of the loan to the fair value of the collateral. The $ 20.0 million WC Loan is on non-accrual status and is being accounted for under the cost recovery method, so the $ 32.7 thousand of interest payments that we received during the three months ended September 30, 2022 were applied directly against the principal balance outstanding. As of September 30, 2022, the outstanding principal under this loan was $ 5.8 million. Term Loan – $ 25 million On March 25, 2022, we entered into a $ 25.0 million term loan with LaVie Care Centers, LLC (“LaVie,” f/k/a Consulate Health Care) that bears interest at a fixed rate of 8.5 % per annum and matures on March 31, 2032 . This term loan requires quarterly principal payments of $ 1.3 million commencing January 1, 2028 and is secured by a second priority lien on the operator’s accounts receivable. As of September 30, 2022, the outstanding principal under this term loan was $ 25.0 million. 17 Table of Contents Mezzanine Loan - $ 40 million On September 1, 2022, we entered into a $ 40.0 million mezzanine loan with a new operator. The loan bears interest at a fixed rate of 12 % per annum and matures on September 14, 2027 . The loan also requires semi-annual principal payments of $ 1.7 million in January and July, commencing on January 1, 2023, and additional payments contingent on the occurrence of certain conditions. The loan is secured by an equity interest in subsidiaries of the operator. Revolving Credit Facility - $ 45 million On August 25, 2022, the Company amended the terms of a $ 15 million revolving credit facility that was previously issued in July 2019, bearing interest at a fixed rate of 7.5 % per annum and maturing on July 8, 2022 . This revolving credit facility was subsequently amended during the nine months ended September 30, 2022 to increase the maximum principal to $ 45 million, extend the maturity date to December 31, 2024 and require monthly principal payments of $ 0.5 million beginning in July 2022, which increase to $ 1.0 million in November 2022, to $ 1.5 million in June 2023 and to $ 2.5 million in October 2023. NOTE 7 – ALLOWANCE FOR CREDIT LOSSES A rollforward of our allowance for credit losses for the nine months ended September 30, 2022 is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Rating ​ Financial Statement Line Item Allowance for Credit Loss as of December 31, 2021 ​ Provision (recovery) for Credit Loss for the nine months ended September 30, 2022 ​ Write-offs charged against allowance for the nine months ended September 30, 2022 ​ Allowance for Credit Loss as of September 30, 2022 ​ ​ ​ (in thousands) 2 ​ Mortgage notes receivable $ 15 ​ $ ( 3 ) ​ $ — ​ $ 12 3 ​ Mortgage notes receivable ​ 1,973 ​ ​ ( 345 ) ​ ​ — ​ ​ 1,628 4 ​ Mortgage notes receivable ​ 19,461 ​ ​ ( 5,746 ) ​ ​ — ​ ​ 13,715 5 ​ Mortgage notes receivable ​ 135 ​ ​ ( 86 ) ​ ​ — ​ ​ 49 6 ​ Mortgage notes receivable ​ 52,017 ​ ​ ( 5,564 ) ​ (1) — ​ ​ 46,453 ​ ​ Sub-total ​ 73,601 ​ ​ ( 11,744 ) ​ ​ — ​ ​ 61,857 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 3 ​ Investment in direct financing leases ​ 530 ​ ​ ( 530 ) ​ ​ — ​ ​ — 4 ​ Investment in direct financing leases ​ - ​ ​ 785 ​ ​ — ​ ​ 785 ​ ​ Sub-total ​ 530 ​ ​ 255 ​ ​ — ​ ​ 785 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 1 ​ Other investments ​ — ​ ​ 212 ​ ​ — ​ ​ 212 2 ​ Other investments ​ 29 ​ ​ 247 ​ ​ — ​ ​ 276 3 ​ Other investments ​ 4,600 ​ ​ 3,010 ​ (2) — ​ ​ 7,610 4 ​ Other investments ​ 1,172 ​ ​ 157 ​ ​ — ​ ​ 1,329 5 ​ Other investments ​ 7,861 ​ ​ 12,522 ​ (3) — ​ ​ 20,383 6 ​ Other investments ​ 55,732 ​ (5) ( 1,966 ) ​ (4) ( 22,515 ) (5) ​ 31,251 ​ ​ Sub-total ​ 69,394 ​ ​ 14,182 ​ ​ ( 22,515 ) ​ ​ 61,061 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2 ​ Off-balance sheet note commitments ​ 7 ​ ​ 94 ​ ​ — ​ ​ 101 3 ​ Off-balance sheet note commitments ​ 458 ​ ​ ( 209 ) ​ ​ — ​ ​ 249 4 ​ Off-balance sheet note commitments ​ 216 ​ ​ ( 216 ) ​ ​ — ​ ​ — 4 ​ Off-balance sheet mortgage commitments ​ 117 ​ ​ ( 102 ) ​ ​ — ​ ​ 15 6 ​ Off-balance sheet note commitments ​ 143 ​ (7) 2,107 ​ (6) ( 2,250 ) ​ (7) — ​ ​ Sub-total ​ 941 ​ ​ 1,674 ​ ​ ( 2,250 ) ​ ​ 365 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ 144,466 ​ $ 4,367 ​ $ ( 24,765 ) ​ $ 124,068 (1) Amount relates to the recoveries, net of provision, recorded on the Guardian mortgage loan during the nine months ended September 30, 2022. See Note 5 – Mortgage Notes Receivable for additional information on the recoveries recorded. (2) Reflects additional provisions of $ 0.9 million and $ 3.2 million recorded on the $ 20 million WC loan during the three and nine months ended September 30, 2022 as discussed in Note 6 – Other Investments. (3) Reflects additional provisions of $ 4.8 million and $ 10.8 million recorded on the Agemo WC Loan during the three and nine months ended September 30, 2022. See Note 6 – Other Investments for additional information on the Agemo WC Loan provision. (4) During the three and nine months ended September 30, 2022, we received $ 0.5 million and $ 2.0 million, respectively, of interest and fee payments from Gulf Coast under the $ 25.0 million senior secured DIP facility, the outstanding principal of which was fully reserved against in the fourth quarter of 2021. The DIP facility is on non-accrual status, and the payments received in the three and nine months ended September 30, 2022 have been applied against the outstanding principal using the cost recovery method. In the three and nine months ended September 30, 2022, we recorded a recovery for credit loss equal to the amount of payments applied against the principal. (5) During the third quarter of 2022, we wrote-off the loan balance and reserve for two loans (the $ 25.0 million senior secured DIP facility and one other loan) that expired during the quarter which had previously been fully reserved. (6) During the second quarter of 2022, we recorded an additional reserve of $ 2.2 million related to the remaining commitment under the $ 25.0 million senior secured DIP facility. (7) During the third quarter of 2022, the remaining commitment under the $ 25.0 million senior secured DIP facility was funded, and the facility expired, which resulted in a write-off of the loan and reserve balances. 18 Table of Contents 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 at December 31, 2020 ​ 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 ​ $ ( 65 ) ​ $ — ​ $ 23 3 ​ Mortgage notes receivable ​ 954 ​ ​ 1,603 ​ ​ — ​ ​ 2,557 4 ​ Mortgage notes receivable ​ 26,865 ​ ​ ( 1,825 ) (1) ​ — ​ ​ 25,040 5 ​ Mortgage notes receivable ​ 433 ​ ​ 9,025 (1) ​ — ​ ​ 9,458 6 ​ Mortgage notes receivable ​ 4,905 ​ ​ — ​ ​ — ​ ​ 4,905 ​ ​ Sub-total ​ 33,245 ​ ​ 8,738 ​ ​ — ​ ​ 41,983 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 3 ​ Investment in direct financing leases ​ 694 ​ ​ ( 35 ) ​ ​ — ​ ​ 659 ​ ​ Sub-total ​ 694 ​ ​ ( 35 ) ​ ​ — ​ ​ 659 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2 ​ Other investments ​ 94 ​ ​ ( 38 ) ​ ​ — ​ ​ 56 3 ​ Other investments ​ 5,113 ​ ​ 628 ​ ​ — ​ ​ 5,741 4 ​ Other investments ​ 24,397 ​ ​ ( 22,675 ) (2) ​ — ​ ​ 1,722 5 ​ Other investments ​ 1,853 ​ ​ 6,260 (3) ​ ( 95 ) ​ ​ 8,018 6 ​ Other investments ​ — ​ ​ 35,954 (2) ​ — ​ ​ 35,954 ​ ​ Sub-total ​ 31,457 ​ ​ 20,129 ​ ​ ( 95 ) ​ ​ 51,491 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2 ​ Off-balance sheet note commitments ​ 116 ​ ​ ( 90 ) ​ ​ — ​ ​ 26 3 ​ Off-balance sheet note commitments ​ 2,305 ​ ​ ( 1,300 ) ​ ​ — ​ ​ 1,005 4 ​ Off-balance sheet note commitments ​ — ​ ​ 373 ​ ​ — ​ ​ 373 4 ​ Off-balance sheet mortgage commitments ​ 24 ​ ​ 208 ​ ​ — ​ ​ 232 ​ ​ Sub-total ​ 2,445 ​ ​ ( 809 ) ​ ​ — ​ ​ 1,636 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ 67,841 ​ $ 28,023 ​ $ ( 95 ) ​ $ 95,769 (1) Amount reflects the movement of reserves associated with our mortgage loan with 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. (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 reserve the remaining carrying value of the Agemo Term Loan. (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. A summary of our amortized cost basis by year of origination and credit quality indicator is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Rating Financial Statement Line Item 2022 2021 2020 2019 2018 2017 2016 & older Revolving Loans Balance as of September 30, 2022 ​ ​ (in thousands) 1 Mortgage notes receivable $ — $ — $ — $ — $ — $ — $ 64,243 $ — $ 64,243 2 Mortgage notes receivable ​ — ​ — ​ 21,325 ​ — ​ — ​ — ​ — ​ — ​ 21,325 3 Mortgage notes receivable ​ — ​ 72,420 ​ — ​ — ​ — ​ — ​ — ​ — ​ 72,420 4 Mortgage notes receivable ​ 122 ​ 25,021 ​ 89,501 ​ 5,084 ​ 29,147 ​ 11,291 ​ 321,948 ​ — ​ 482,114 5 Mortgage notes receivable ​ — ​ — ​ — ​ — ​ — ​ — ​ 6,602 ​ — ​ 6,602 6 Mortgage notes receivable ​ — ​ — ​ — ​ — ​ — ​ — ​ 84,686 ​ — ​ 84,686 ​ Sub-total ​ 122 ​ 97,441 ​ 110,826 ​ 5,084 ​ 29,147 ​ 11,291 ​ 477,479 ​ — ​ 731,390 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 4 Investment in direct financing leases ​ — ​ — ​ — ​ — ​ — ​ — ​ 11,345 ​ — ​ 11,345 ​ Sub-total ​ — ​ — ​ — ​ — ​ — ​ — ​ 11,345 ​ — ​ 11,345 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 1 Other Investments ​ 20,000 ​ — ​ — ​ — ​ — ​ — ​ — ​ — ​ 20,000 2 Other investments ​ 30,000 ​ — ​ — ​ — ​ — ​ — ​ — ​ 51,799 ​ 81,799 3 Other investments ​ 35,600 ​ — ​ — ​ 14,563 ​ 10,800 ​ — ​ 1,756 ​ 251,565 ​ 314,284 4 Other investments ​ 39,614 ​ — ​ — ​ 2,422 ​ 96,456 ​ — ​ 1,000 ​ 20,000 ​ 159,492 5 Other investments ​ 25,000 ​ 8,235 ​ — ​ — ​ 24,548 ​ — ​ — ​ — ​ 57,783 6 Other investments ​ — ​ — ​ — ​ — ​ 4,650 ​ — ​ 31,243 ​ — ​ 35,893 ​ Sub-total ​ 150,214 ​ 8,235 ​ — ​ 16,985 ​ 136,454 ​ — ​ 33,999 ​ 323,364 ​ 669,251 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ 150,336 $ 105,676 $ 110,826 $ 22,069 $ 165,601 $ 11,291 $ 522,823 $ 323,364 $ 1,411,986 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year to date gross write-offs $ — $ ( 18,052 ) $ — $ — $ ( 4,463 ) $ — $ — $ — $ ( 22,515 ) ​ 19 Table of Contents Interest Receivable on Mortgage and Other Investment Loans We have elected the practical expedient to exclude interest receivable from our allowance for credit losses. As of September 30, 2022, $ 10.0 million of contractual interest receivable is recorded in contractual receivables – net, and $ 6.2 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. We write-off interest receivable to provision for credit losses in the period we determine the interest is no longer considered collectible. NOTE 8 – VARIABLE INTEREST ENTITIES Unconsolidated Variable Interest Entities We hold variable interests in several VIEs through our investing and financing activities, which are not consolidated, as we have concluded that we are not the primary beneficiary of these entities as we do not have the power to direct activities that most significantly impact the VIE’s economic performance and/or the variable interest we hold does not obligate us to absorb losses or provide us with the right to receive benefits from the VIE which could potentially be significant. Below is a summary of our assets, liabilities and collateral associated with these unconsolidated VIEs as of September 30, 2022 and December 31, 2021: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, ​ December 31, ​ ​ ​ 2022 ​ 2021 ​ ​ ​ (in thousands) ​ Assets ​ ​ ​ ​ ​ ​ ​ Real estate assets – net ​ $ 988,173 ​ $ 1,144,851 ​ Assets held for sale ​ ​ 129,239 ​ ​ 191,016 ​ Other investments – net ​ 264,473 ​ ​ 230,768 ​ Contractual receivables – net ​ 1,485 ​ ​ 1,227 ​ Other receivables and lease inducements ​ 29,311 ​ ​ 22,795 ​ Other assets ​ ​ 746 ​ ​ — ​ Total assets ​ 1,413,427 ​ 1,590,657 ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities ​ ​ ​ ​ ​ ​ ​ Net in-place lease liability ​ ​ ( 286 ) ​ ​ ( 305 ) ​ Security deposit ​ ​ ( 4,829 ) ​ ​ ( 4,715 ) ​ Contingent liability ​ ​ ( 43,915 ) ​ ​ ( 43,915 ) ​ Other liabilities ​ ​ ( 746 ) ​ ​ — ​ Total liabilities ​ ( 49,776 ) ​ ( 48,935 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ Collateral ​ ​ ​ Letters of credit ​ — ​ ​ — ​ Personal guarantee ​ ( 48,000 ) ​ ​ ( 48,000 ) ​ Other collateral (1) ​ ( 1,117,412 ) ​ ​ ( 1,335,867 ) ​ Total collateral ​ ( 1,165,412 ) ​ ​ ( 1,383,867 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ Maximum exposure to loss ​ $ 198,239 ​ $ 157,855 ​ (1) Amount excludes accounts receivable that Omega has a security interest in as collateral under the two working capital loans with operators that are unconsolidated VIEs. The fair value of the accounts receivable available to Omega was $ 8.3 million and $ 29.2 million as of September 30, 2022 and December 31, 2021, respectively. In determining our maximum exposure to loss from the unconsolidated VIEs, 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. 20 Table of Contents The table below reflects our total revenues from the operators that are considered unconsolidated VIEs for the three and nine months ended September 30, 2022 and 2021: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, ​ Nine Months Ended September 30, ​ ​ ​ 2022 ​ 2021 ​ 2022 ​ 2021 Revenue ​ ​ ​ ​ ​ Rental income ​ ​ $ 21,120 ​ $ 33,392 ​ $ 63,222 ​ $ 95,292 Other investment income ​ ​ 4,839 ​ 3,551 ​ 12,940 ​ 11,726 Total ​ ​ $ 25,959 ​ $ 36,943 ​ $ 76,162 ​ $ 107,018 ​ Consolidated VIEs During the first quarter of 2022, we entered into a joint venture, which owns two ALFs, for a $ 3.2 million cash contribution, representing 52.4 % of the outstanding equity of the joint venture. We also sold an ALF to the joint venture for $ 7.7 million in net proceeds during the first quarter of 2022. The joint venture is a VIE, and we have concluded that we are the primary beneficiary of this VIE based on a combination of our ability to direct the activities that most significantly impact the joint venture’s economic performance and our rights to receive residual returns or the obligation to absorb losses arising from the joint venture. Accordingly, this joint venture has been consolidated. Omega is not required to make any additional capital contributions to the joint venture, and it is expected to be funded from the ongoing operations of the underlying properties. As of September 30, 2022, this joint venture has $ 25.6 million of total assets and $ 20.2 million of total liabilities, which are included in our Consolidated Balance Sheets. As a result of consolidating the joint venture, in the first quarter of 2022, we recorded a $ 2.9 million noncontrolling interest to reflect the contributions of the minority interest holder of the joint venture. No gain or loss was recognized on the initial consolidation of the VIE or upon the sale of the ALF to the joint venture. ​ NOTE 9 – INVESTMENTS IN JOINT VENTURES Unconsolidated Joint Ventures 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 ​ 9/30/2022 ​ 2022 2021 Second Spring Healthcare Investments ​ 15 % ​ 11/1/2016 ​ $ 50,032 ​ SNF ​ — ​ $ 10,849 $ 11,355 Second Spring II LLC ​ 15 % ​ 3/10/2021 ​ ​ 10,330 ​ SNF ​ — ​ ​ — ​ 8 Lakeway Realty, L.L.C. ​ 51 % ​ 5/17/2019 ​ ​ 73,834 ​ Specialty facility ​ 1 ​ ​ 70,465 ​ ​ 71,286 Cindat Joint Venture ​ 49 % ​ 12/18/2019 ​ ​ 105,688 ​ ALF ​ 65 ​ ​ 94,870 ​ ​ 111,792 OMG Senior Housing, LLC ​ 50 % ​ 12/6/2019 ​ ​ — ​ Specialty facility ​ 1 ​ — ​ — OH CHS SNP, Inc. ​ 9 % ​ 12/20/2019 ​ ​ 1,013 ​ N/A ​ N/A ​ ​ 372 ​ ​ 246 ​ ​ ​ ​ ​ ​ $ 240,897 ​ ​ ​ ​ ​ $ 176,556 ​ $ 194,687 (1) Our investment includes our transaction costs, if any. The following table reflects our income (loss) from unconsolidated joint ventures for the three and nine months ended September 30, 2022 and 2021: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, ​ Nine Months Ended September 30, Entity ​ 2022 2021 ​ 2022 2021 ​ ​ (in thousands) Second Spring Healthcare Investments (1) ​ $ 300 ​ $ 309 ​ $ 882 ​ $ 12,013 Second Spring II LLC ​ ​ — ​ ​ ( 1 ) ​ ​ ( 2 ) ​ ​ ( 757 ) Lakeway Realty, L.L.C. ​ ​ 656 ​ 637 ​ ​ 1,976 ​ 1,923 Cindat Joint Venture ​ 3,339 ​ 707 ​ 4,972 ​ 1,839 OMG Senior Housing, LLC ​ ( 140 ) ​ ( 105 ) ​ ( 319 ) ​ ( 309 ) OH CHS SNP, Inc. ​ ( 38 ) ​ 5 ​ 13 ​ ( 140 ) Total ​ $ 4,117 ​ $ 1,552 ​ $ 7,522 ​ $ 14,569 (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. 21 Table of Contents Asset Management Fees We receive asset management fees from certain joint ventures for services provided. For the three months ended September 30, 2022 and 2021, we recognized approximately $ 0.1 million and $ 0.2 million, respectively, of asset management fees. For the nine months ended September 30, 2022 and 2021, we recognized approximately $ 0.5 million and $ 0.7 million, respectively, of asset management fees. These fees are included in miscellaneous income in the accompanying Consolidated Statements of Operations. NOTE 10 – GOODWILL AND OTHER INTANGIBLES The following is a summary of our goodwill as of September 30, 2022 and December 31, 2021: ​ ​ ​ ​ ​ (in thousands) Balance as of December 31, 2021 ​ $ 651,417 Foreign currency translation ​ ( 2,469 ) Balance as of September 30, 2022 ​ $ 648,948 ​ The following is a summary of our intangibles as of September 30, 2022 and December 31, 2021: ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, ​ December 31, ​ ​ 2022 ​ 2021 ​ ​ ​ (in thousands) ​ Assets: ​ ​ ​ ​ Above market leases ​ $ 5,929 ​ $ 5,929 ​ Accumulated amortization ​ ( 4,445 ) ( 4,313 ) ​ Net above market leases ​ $ 1,484 ​ $ 1,616 ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities: ​ ​ ​ ​ Below market leases ​ $ 71,072 ​ $ 66,324 ​ Accumulated amortization ​ ( 47,093 ) ( 38,091 ) ​ Net below market leases ​ $ 23,979 ​ $ 28,233 ​ ​ 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, 2022 and 2021, our net amortization related to intangibles was $ 1.0 million and $ 1.1 million, respectively. For the nine months ended September 30, 2022 and 2021, our net amortization related to intangibles was $ 3.6 million and $ 8.5 million, respectively. The estimated net amortization related to these intangibles for the remainder of 2022 and the next four years is as follows: remainder of 2022 – $ 1.0 million; 2023 – $ 3.9 million; 2024 – $ 3.7 million; 2025 – $ 3.5 million and 2026 – $ 2.7 million. As of September 30, 2022, the weighted average remaining amortization period of above market lease assets is approximately ten years and below market lease liabilities is approximately seven years . ​ 22 Table of Contents NOTE 11 – CONCENTRATION OF RISK As of September 30, 2022, our portfolio of real estate investments (including properties associated with mortgages, direct financing leases, assets held for sale and consolidated joint ventures) consisted of 941 healthcare facilities, located in 42 states and the U.K. and operated by 65 third-party operators. Our investment in these facilities, net of impairments and allowances, totaled approximately $ 9.6 billion at September 30, 2022, with approximately 97 % of our real estate investments related to long-term healthcare facilities. Our portfolio is made up of (i) 650 SNFs, 167 ALFs, 20 ILFs, 16 specialty facilities and two medical office buildings, (ii) fixed rate mortgages on 48 SNFs, two ALFs and two specialty facilities, and (iii) 34 facilities that are held for sale. At September 30, 2022, we also held other investments of approximately $ 608.2 million, consisting primarily of secured loans to third-party operators of our facilities and $ 176.6 million of investments in six unconsolidated joint ventures. At September 30, 2022, we had investments with two operators or managers that approximated or exceeded 10% of our total investments: Maplewood and LaVie. Maplewood generated approximately 9.3 % and 7.9 % of our total revenues for the three months ended September 30, 2022 and 2021, respectively, and 9.1 % and 7.7 % of our total revenues for the nine months ended September 30, 2022 and 2021, respectively. LaVie generated approximately 11.5 % and 9.3 % of our total revenues for the three months ended September 30, 2022 and 2021, respectively, and 11.4 % and 9.3 % of our total revenues for the nine months ended September 30, 2022 and 2021, respectively. At September 30, 2022, the three states in which we had our highest concentration of investments were Florida ( 13.1 %), Texas ( 10.3 %) and Indiana ( 6.6 %). NOTE 12 – STOCKHOLDERS’ EQUITY $ 500 Million Stock Repurchase Program On January 27, 2022, the Company authorized the repurchase of up to $ 500 million of our outstanding common stock from time to time through March 2025. The Company is authorized to repurchase shares of its common stock in open market and privately negotiated transactions, pursuant to Rule 10b5-1 trading plans or in any other manner as determined by the Company’s management and in accordance with applicable law. The timing and amount of stock repurchases will be determined, in management’s discretion, based on a variety of factors, including but not limited to market conditions, other capital management needs and opportunities and corporate and regulatory considerations. The Company has no obligation to repurchase any amount of its common stock, and such repurchases, if any, may be discontinued at any time. Under Maryland law, shares repurchased become authorized but unissued shares. The Company reduced the common stock at par value and to the extent the cost acquired exceeds par value, it is recorded through additional paid-in capital on our Consolidated Balance Sheets and Consolidated Statements of Equity. The following is a summary of the shares repurchased for the three and nine months ended September 30, 2022 (in millions except average price per share): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Average Price ​ ​ ​ Period Ended Shares Repurchased Per Share (1) Repurchase Cost (1) Three Months Ended September 30, 2022 — $ — $ — Nine Months Ended September 30, 2022 5.2 ​ 27.32 ​ 142.3 (1) Average price per share and repurchase cost includes the cost of commissions. Dividends The following is a summary of our declared cash dividends on common stock: ​ ​ ​ ​ ​ ​ Record ​ Payment ​ Dividend per Date Date Common Share February 7, 2022 ​ February 15, 2022 ​ $ 0.67 May 2, 2022 ​ May 13, 2022 ​ ​ 0.67 August 1, 2022 ​ August 15, 2022 ​ ​ 0.67 November 1, 2022 ​ November 15, 2022 ​ ​ 0.67 ​ 23 Table of Contents 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, 2022 and 2021 (in millions): ​ ​ ​ ​ ​ ​ ​ Period Ended Shares issued ​ Gross Proceeds Three Months Ended September 30, 2021 1.3 ​ $ 47.2 Three Months Ended September 30, 2022 0.1 ​ ​ 2.4 Nine Months Ended September 30, 2021 3.3 ​ ​ 124.5 Nine Months Ended September 30, 2022 0.3 ​ ​ 7.0 ​ At-The-Market Offering Programs The following is a summary of the shares issued under our former $ 500 million 2015 At-The-Market Offering Program (“2015 ATM Program”) and our current $ 1.0 billion 2021 At-The-Market Offering Program (“2021 ATM Program”) for the three and nine months ended September 30, 2022 and 2021 (in millions except average price per share): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Average Net Price ​ ​ ​ ​ ​ ​ ​ Period Ended Shares issued Per Share (1) Gross Proceeds Commissions Net Proceeds Three Months Ended September 30, 2021 0.1 $ 32.82 $ 1.3 $ 0.1 $ 1.2 Three Months Ended September 30, 2022 — ​ — ​ — ​ — ​ — Nine Months Ended September 30, 2021 4.2 ​ 36.56 ​ 155.1 ​ 3.3 ​ 151.8 Nine Months Ended September 30, 2022 — ​ — ​ — ​ — ​ — (1) Represents the average price per share after commissions. We did not utilize the forward provisions under the 2021 ATM Program during the nine months ended September 30, 2022. 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, ​ ​ 2022 2021 2022 2021 ​ ​ (in thousands) ​ Foreign Currency Translation: ​ ​ ​ ​ ​ ​ Beginning balance ​ $ ( 79,670 ) ​ $ ( 13,608 ) ​ $ ( 24,012 ) ​ $ ( 18,427 ) ​ Translation loss ​ ( 45,873 ) ​ ( 12,646 ) ​ ( 100,253 ) ​ ( 8,515 ) ​ Realized (loss) gain ​ ( 153 ) ​ ( 18 ) ​ ( 1,431 ) ​ 670 ​ Ending balance ​ ( 125,696 ) ​ ( 26,272 ) ​ ( 125,696 ) ​ ( 26,272 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Derivative Instruments: ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash flow hedges: ​ ​ ​ ​ ​ ​ ​ ​ ​ Beginning balance ​ 69,429 ​ 33,352 ​ 30,407 ​ 17,718 ​ Unrealized gain ​ 16,499 ​ 1,116 ​ 53,481 ​ 15,407 ​ Realized gain (1) ​ 1,074 ​ ​ 779 ​ 3,114 ​ ​ 2,122 ​ Ending balance ​ 87,002 ​ 35,247 ​ 87,002 ​ 35,247 ​ Net investment hedges: ​ ​ ​ ​ ​ ​ ​ ​ ​ Beginning balance ​ 12,920 ​ ( 16,024 ) ​ ( 9,588 ) ​ ( 13,331 ) ​ Unrealized gain ​ 31,273 ​ 7,637 ​ 53,781 ​ 4,944 ​ Ending balance ​ 44,193 ​ ( 8,387 ) ​ 44,193 ​ ( 8,387 ) ​ Total accumulated other comprehensive income before noncontrolling interest ​ 5,499 ​ 588 ​ 5,499 ​ 588 ​ Add: portion included in noncontrolling interest ​ 744 ​ 888 ​ 744 ​ 888 ​ Total accumulated other comprehensive income for Omega ​ $ 6,243 ​ $ 1,476 ​ $ 6,243 ​ $ 1,476 ​ (1) Recorded in interest expense on the Consolidated Statements of Operations. ​ ​ 24 Table of Contents ​ 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 2021, we distributed dividends in excess of our taxable income. We currently own stock in certain subsidiary REITs. These subsidiaries are required to individually satisfy all of the rules for qualification as a REIT. If we fail to meet the requirements for qualification as a REIT for any of these subsidiaries, it may cause Omega to fail the requirements for qualification as a REIT also. We have elected to treat certain of our active subsidiaries as taxable REIT subsidiaries (“TRSs”). Our domestic TRSs are subject to federal, state and local income taxes at the applicable corporate rates. Our foreign TRSs are subject to foreign income taxes and may cause us to 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, 2022, one of our domestic TRSs that is subject to income taxes at the applicable corporate rates had a net operating loss (“NOL”) carry-forward of approximately $ 10.2 million. Our domestic NOL carry-forward was fully reserved as of September 30, 2022, with a valuation allowance due to uncertainties regarding realization. Under current law, NOL carry-forwards generated up through December 31, 2017, may be carried forward for no more than 20 years, and NOL carry-forwards generated in taxable years ended after December 31, 2017, may be carried forward indefinitely. We do not anticipate that such changes will materially impact the computation of Omega’s taxable income, or the taxable income of any Omega entity, including our TRSs. As discussed in Note 2 – Real Estate Assets, in connection with the acquisition of one U.K. entity in the first quarter of 2022, we acquired foreign net operating losses of $ 55.0 million resulting in a NOL deferred tax asset of $ 13.4 million. The NOLs have no expiration date and may be available to offset future taxable income. We believe these foreign NOLs are realizable under a “more likely than not” measurement and have not recorded a valuation allowance against the deferred tax asset. 25 Table of Contents The following is a summary of deferred tax assets and liabilities (which are recorded in other assets and accrued expenses and other liabilities, respectively, in our Consolidated Balance Sheets): ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, ​ December 31, ​ 2022 2021 ​ ​ (in thousands) U.S. Federal net operating loss carryforward ​ $ 2,138 ​ $ 2,221 Valuation allowance on deferred tax asset ​ ( 2,138 ) ​ ( 2,221 ) Foreign net operating loss carryforward ​ ​ 10,456 ​ ​ — Foreign deferred tax liability (1) ​ ( 5,331 ) ​ ( 8,200 ) Net deferred tax asset (liability) ​ $ 5,125 ​ $ ( 8,200 ) (1) The deferred tax liability primarily resulted from inherited basis differences resulting from our acquisition of entities in the U.K. Subsequent adjustments to these accounts result from GAAP to tax differences related to depreciation, indexation and revenue recognition. The following is a summary of our provision for income taxes: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended Nine Months Ended ​ September 30, September 30, ​ ​ 2022 2021 2022 2021 ​ ​ (in millions) Provision for federal, state and local income taxes ​ $ 0.3 $ 0.4 $ 0.9 $ 1.0 Provision for foreign income taxes ​ ​ 0.9 ​ 0.6 ​ 2.6 ​ 1.9 Total provision for income taxes (1) ​ $ 1.2 ​ $ 1.0 ​ $ 3.5 ​ $ 2.9 (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, 2022 and 2021, respectively: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended Nine Months Ended ​ ​ September 30, September 30, ​ 2022 2021 2022 2021 ​ (in thousands) ​ Stock-based compensation expense $ 6,809 $ 5,706 $ 20,515 $ 16,913 ​ Stock-based compensation expense is included within general and administrative expenses on our Consolidated Statements of Operations. We granted 31,685 time-based restricted stock units (“RSUs”) and 170,294 time-based profits interest units (“PIUs”) during the first quarter of 2022 to certain officers and key employees, and those units vest on December 31, 2024 ( three years after the grant date), subject to continued employment and vesting in certain other events. We also granted 1,545,070 performance-based PIUs during the first quarter of 2022 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. Time-based and performance-based grants made to named executive officers and key employees that meet certain conditions under the Company’s retirement policy (length of service, age, etc.) vest on an accelerated basis pursuant to the 2018 Stock Incentive Plan. 26 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 2022 ​ 2022 2021 ​ ​ ​ ​ (in thousands) Secured borrowings: ​ ​ ​ HUD mortgages (1)(2) ​ 2046 - 2052 ​ 3.01 % ​ $ 346,606 ​ $ 359,806 2023 term loan (3) 2023 6.75 % ​ ​ 2,161 ​ ​ 2,275 2024 term loan (4) 2024 8.02 % ​ ​ 19,638 ​ ​ — Total secured borrowings ​ ​ ​ ​ ​ ​ ​ 368,405 ​ ​ 362,081 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Unsecured borrowings: ​ ​ ​ Revolving credit facility (5)(6) 2025 4.32 % ​ 17,861 ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Senior notes and other unsecured borrowings: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 notes (5) 2023 4.375 % ​ 350,000 ​ 350,000 2024 notes (5) 2024 4.950 % ​ 400,000 ​ 400,000 2025 notes (5) 2025 4.500 % ​ 400,000 ​ 400,000 2026 notes (5) 2026 5.250 % ​ 600,000 ​ 600,000 2027 notes (5) 2027 4.500 % ​ 700,000 ​ 700,000 2028 notes (5) 2028 4.750 % ​ 550,000 ​ 550,000 2029 notes (5) 2029 3.625 % ​ 500,000 ​ 500,000 2031 notes (5) ​ 2031 ​ 3.375 % ​ ​ 700,000 ​ ​ 700,000 2033 notes (5) ​ 2033 ​ 3.250 % ​ ​ 700,000 ​ ​ 700,000 OP term loan (7)(8) 2025 4.57 % ​ 50,000 ​ 50,000 Deferred financing costs – net ​ ​ ​ ( 23,451 ) ​ ( 26,980 ) Discount – net ​ ​ ( 27,940 ) ​ ( 31,565 ) Total senior notes and other unsecured borrowings – net ​ ​ 4,898,609 ​ 4,891,455 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total unsecured borrowings – net ​ ​ 4,916,470 ​ 4,891,455 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total secured and unsecured borrowings – net (9)(10) ​ ​ $ 5,284,875 ​ $ 5,253,536 (1) Reflects the weighted average annual contractual interest rate on the mortgages at September 30, 2022. Secured by real estate assets with a net carrying value of $ 505.9 million as of September 30, 2022. During the third quarter of 2022, we paid approximately $ 7.9 million to retire one mortgage loan guaranteed by HUD that was assumed in 2019 and had a fixed interest rate of 2.92 % per annum with a maturity date in 2051 . The payoff included a $ 0.4 million prepayment fee which is included in loss on debt extinguishment on our Consolidated Statement of Operations. (2) Wholly owned subsidiaries of Omega OP are the obligor on these borrowings. (3) Borrowing is the debt of a consolidated joint venture. (4) Borrowing is the debt of the consolidated joint venture discussed in Note 8 – Variable Interest Entities which was formed in the first quarter of 2022. The borrowing is secured by two ALFs, which are owned by the joint venture. (5) Guaranteed by Omega OP. (6) As of September 30, 2022, borrowings under Omega’s $ 1.45 billion senior unsecured multicurrency revolving credit facility consisted of £ 16.0 million British Pounds Sterling (“GBP”). The applicable interest rate on the US Dollar tranche and on the GBP borrowings under the alternative currency tranche of the credit facility were 4.32 % and 3.51 % as of September 30, 2022, respectively. (7) Omega OP is the obligor on this borrowing. (8) The interest rate swaps, that were cash flow hedges of Omega OP’s $ 50.0 million senior unsecured term loan facility’s (the “OP term loan”) interest payments and that effectively fixed the interest rate at 3.29 % , matured on February 10, 2022 . (9) All borrowings are direct borrowings of Parent unless otherwise noted. (10) Certain of our other secured and unsecured borrowings are subject to customary affirmative and negative covenants, including financial covenants. As of September 30, 2022 and December 31, 2021, we were in compliance with all applicable covenants for our borrowings . 27 Table of Contents 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. As of September 30, 2022, we have five forward starting swaps with $ 400.0 million in notional value, indexed to 3-month LIBOR, that were issued at a weighted average fixed rate of 0.8675 % and are designated as cash flow hedges. Additionally, we have six foreign currency forward contracts with £ 250.0 million in notional valued issued at a weighted average GBP-USD forward rate of 1.3641 (including the two new foreign currency forwards discussed below) that are designated as net investment hedges. On May 17, 2022, we entered into two new foreign currency forward contracts with notional amounts totaling £ 76.0 million and a GBP-USD forward rate of 1.3071 , each of which mature on May 21, 2029 . These currency forward contracts hedge a portion of our net investments in U.K. subsidiaries and our U.K. joint venture. On February 10, 2022, two of our interest rate swaps that we entered into in May 2019 with aggregate notional amounts of $ 50.0 million matured. These interest rate swap contracts were designated as hedges against our exposure to changes in interest payment cash flow fluctuations in the variable interest rates on the OP term loan. The location and fair value of derivative instruments designated as hedges, at the respective balance sheet dates, were as follows: ​ ​ ​ ​ ​ ​ ​ September 30, ​ December 31, ​ 2022 2021 Cash flow hedges: (in thousands) Other assets $ 92,561 ​ $ 32,849 Accrued expenses and other liabilities $ — ​ $ 96 ​ ​ ​ ​ ​ ​ Net investment hedges: ​ ​ ​ ​ ​ Other assets $ 60,536 ​ $ 6,754 ​ The fair value of the forward starting 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). 28 Table of Contents At September 30, 2022 and December 31, 2021, the net carrying amounts and fair values of our other financial instruments were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, 2022 ​ December 31, 2021 ​ Carrying Fair Carrying Fair ​ Amount Value Amount Value ​ ​ (in thousands) Assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Investments in direct financing leases – net ​ $ 10,560 ​ $ 10,560 $ 10,873 ​ $ 10,873 Mortgage notes receivable – net ​ 669,533 ​ ​ 671,387 ​ ​ 835,086 ​ ​ 869,715 Other investments – net ​ 608,190 ​ ​ 614,646 ​ ​ 469,884 ​ ​ 476,664 Total ​ $ 1,288,283 ​ $ 1,296,593 ​ $ 1,315,843 ​ $ 1,357,252 Liabilities: ​ ​ ​ ​ Revolving credit facility ​ $ 17,861 ​ $ 17,861 $ — ​ $ — 2023 term loan ​ ​ 2,161 ​ ​ 2,161 ​ ​ 2,275 ​ ​ 2,275 2024 term loan ​ 19,638 ​ ​ 19,750 ​ ​ — ​ ​ — OP term loan ​ 49,737 ​ ​ 50,000 ​ ​ 49,661 ​ ​ 50,000 4.375 % notes due 2023 – net ​ 349,527 ​ ​ 348,366 ​ ​ 349,100 ​ ​ 365,243 4.95 % notes due 2024 – net ​ 398,483 ​ ​ 395,592 ​ ​ 397,725 ​ ​ 427,184 4.50 % notes due 2025 – net ​ 398,256 ​ ​ 389,844 ​ ​ 397,685 ​ ​ 427,440 5.25 % notes due 2026 – net ​ 597,671 ​ ​ 580,884 ​ ​ 597,142 ​ ​ 667,524 4.50 % notes due 2027 – net ​ 693,472 ​ ​ 649,523 ​ ​ 692,374 ​ ​ 766,003 4.75 % notes due 2028 – net ​ 544,664 ​ ​ 504,383 ​ ​ 543,908 ​ ​ 607,249 3.625 % notes due 2029 – net ​ ​ 491,588 ​ ​ 406,855 ​ ​ 490,681 ​ ​ 519,430 3.375 % notes due 2031 – net ​ ​ 684,935 ​ ​ 533,484 ​ ​ 683,592 ​ ​ 705,810 3.25 % notes due 2033 – net ​ ​ 690,276 ​ ​ 493,640 ​ ​ 689,587 ​ ​ 683,151 HUD mortgages – net ​ ​ 346,606 ​ ​ 269,508 ​ ​ 359,806 ​ ​ 394,284 Total ​ $ 5,284,875 ​ $ 4,661,851 ​ $ 5,253,536 ​ $ 5,615,593 ​ 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, 2021). 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 credit facility, OP term loan, 2023 term loan and 2024 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. ● Senior notes: The fair value of the senior unsecured notes payable was estimated based on (Level 1) publicly available trading prices. ● 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). 29 Table of Contents 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 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. Following a mediation, the plaintiffs and defendants reached an agreement in principle in October 2022 on a settlement of the Securities Class Action. The Company recorded a $ 31 million legal reserve related to the Securities Class Action in the third quarter of 2022, which is included within accrued expenses and other liabilities on the Consolidated Balance Sheets. As the Company anticipates that the settlement proceeds will be paid by insurance, we concurrently recorded a receivable for $ 31 million within other assets on the Consolidated Balance Sheet, and consequently there is no impact to the Consolidated Statement of Operations related to this matter. The settlement agreement in principle is subject to negotiation of a definitive settlement agreement, and also subject to the approval of the District Court. The District Court has suspended deadlines under the Scheduling Order in the case, pending a definitive agreement and the court approval process. 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. 30 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. Other Gulf Coast Subordinated Debt In August 2021, we filed suit in the Circuit Court for Baltimore County (the “Court”) 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 an indirect subsidiary of Omega (“Omega Obligor”) under the Subordinated Debt, and that all principal and interest due and owing under the Subordinated Debt may be (and was) 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. On November 2, 2022, the Court indicated its intention to grant the noteholders’ motion to dismiss for lack of personal jurisdiction. A decision has not been made whether to appeal this order, if it is issued. While Omega believes Omega Obligor is entitled to the enforcement of the offset rights sought in the action, Omega cannot predict the outcome of the declaratory judgment action, irrespective of whether it is ultimately litigated in the Court or, if the order granting the motion to dismiss for lack of personal jurisdiction is issued, or if it is issued and upheld on appeal in another court. 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 limited liability company that owns Lakeway Hospital, 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, among other items, 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. 31 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, and we understand that the settlement did not fully resolve the investigation referenced in the CID. The documents relating to the settlement are not publicly available. While 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, in the second quarter of 2022, the Company recorded a $ 3.0 million legal reserve related to this matter which is included within accrued expenses and other liabilities on the Consolidated Balance Sheets with the related expense included in other (expense) income – net on the Consolidated Statements of Operations. Other 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, 2022, our maximum funding commitment under these indemnification agreements was approximately $ 3.9 million. Claims under these indemnification agreements generally 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, 2022, are outlined in the table below (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Construction and capital expenditure mortgage loan commitments $ 10,381 ​ ​ Lessor construction and capital commitments under lease agreements ​ 189,757 ​ ​ Other investment loan commitments (1) ​ 88,004 ​ ​ Total remaining commitments (2) ​ $ 288,142 ​ ​ (1) This amount includes $ 60.0 million related to the $ 90 million short-term revolving line of credit discussed in Note 6 – Other Investments. (2) Includes finance costs . 32 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, ​ ​ 2022 2021 2022 2021 ​ ​ (in thousands, except per share amounts) ​ Numerator: ​ ​ ​ ​ ​ ​ Net income ​ $ 105,064 ​ $ 142,835 ​ $ 392,135 ​ $ 394,064 ​ Deduct: net income attributable to noncontrolling interests ​ ( 2,790 ) ​ ( 3,888 ) ​ ​ ( 10,787 ) ​ ( 10,616 ) ​ Net income available to common stockholders ​ $ 102,274 ​ $ 138,947 ​ $ 381,348 ​ $ 383,448 ​ Denominator: ​ ​ ​ ​ ​ Denominator for basic earnings per share ​ 234,788 ​ 239,282 ​ 236,721 ​ 236,027 ​ Effect of dilutive securities: ​ ​ ​ ​ ​ ​ ​ ​ ​ Common stock equivalents ​ 1,744 ​ 634 ​ 1,138 ​ 903 ​ Noncontrolling interest – Omega OP Units ​ 6,752 ​ 6,701 ​ 6,863 ​ 6,547 ​ Denominator for diluted earnings per share ​ 243,284 ​ 246,617 ​ 244,722 ​ 243,477 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Earnings per share – basic: ​ ​ ​ ​ ​ Net income available to common stockholders ​ $ 0.44 ​ $ 0.58 ​ $ 1.61 ​ $ 1.62 ​ Earnings per share – diluted: ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income ​ $ 0.43 ​ $ 0.58 ​ $ 1.60 ​ $ 1.62 ​ ​ ​ ​ 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, 2022 and 2021: ​ ​ ​ ​ ​ ​ ​ ​ ​ Nine Months Ended September 30, ​ ​ 2022 2021 ​ (in thousands) ​ Reconciliation of cash and cash equivalents and restricted cash: ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents ​ $ 134,855 ​ $ 102,664 ​ Restricted cash ​ 3,323 ​ 3,341 ​ Cash, cash equivalents and restricted cash at end of period ​ $ 138,178 ​ $ 106,005 ​ ​ ​ ​ ​ ​ ​ ​ ​ Supplemental information: ​ ​ ​ ​ ​ Interest paid during the period, net of amounts capitalized ​ $ 171,057 ​ $ 166,934 ​ Taxes paid during the period ​ $ 4,627 ​ $ 5,028 ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-cash investing activities: ​ ​ ​ Non-cash acquisition of real estate ​ $ ( 9,818 ) ​ $ ( 49,857 ) ​ Non-cash placement of mortgages ​ $ — ​ $ ( 7,000 ) ​ Non-cash collection of mortgage principal ​ $ — ​ $ 49,587 ​ Non-cash proceeds from other investments ​ $ — ​ $ 7,000 ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-cash financing activities: ​ ​ ​ Non-cash contribution from noncontrolling interest holder in consolidated joint venture ​ $ 2,903 ​ $ — ​ Change in fair value of cash flow hedges ​ $ 113,590 ​ $ 28,450 ​ Remeasurement of debt denominated in a foreign currency ​ $ ( 5,462 ) ​ $ 3,010 ​ ​ 33 Table of Contents NOTE 21 – SUBSEQUENT EVENTS In the fourth quarter of 2022, the Company entered into three unsecured loans with principal amounts of $ 17.0 million, $ 2.5 million and $ 5.0 million. The $ 17 million loan and $ 2.5 million loan bear interest at 9 % and mature on September 30, 2027 . The $ 5.0 million loan bears interest at 10 % and matures on October 29, 2027 . All three loans require quarterly principal payments commencing on January 3, 2022. As discussed in Note 3 – Assets Held For Sale, Dispositions and Impairments and Note 4 – Contractual Receivables and Other Receivables and Lease Inducements, in the fourth quarter of 2022 we sold 19 facilities that were leased and operated by Agemo in connection with our restructuring negotiations surrounding Agemo’s lease and loan agreements. ​ ​ ​ ​ 34 Table of Contents