What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2024-02-12 compared with 2023-02-14 · 726 added, 664 removed, 1899 unchanged (42% of the section changed)

20 unchanged sentences

Item 9B – Other Information

Rule 10b5-1 Trading Plans

No officers or directors, as defined in Rule 16a-1(f), adopted , modified and/or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement,” as defined in Regulation S-K Item 408, during the fourth quarter of 2023.

Item 9C – Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

59 unchanged sentences

We have audited the accompanying consolidated balance sheets of Omega Healthcare Investors, Inc.

(the Company) as of December 31, 2022 and 2021, the related consolidated statements of operations, comprehensive income, changes in equity and cash flows for each of the three years in the period ended December 31, 2022, and the related notes and financial statement schedules listed in the Index at Item 15(a)(2) (collectively referred to as the “consolidated financial statements”).

(the Company) as of December 31, 2023 and 2022, the related consolidated statements of operations, comprehensive income, equity and cash flows for each of the three years in the period ended December 31, 2023, and the related notes and financial statement schedules listed in the Index at Item 15(a)(2) (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, in conformity with U.S.

40 unchanged sentences

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of Omega Healthcare Investors, Inc.

as of December 31, 2022 and 2021, the related consolidated statements of operations, comprehensive income, changes in equity and cash flows for each of the three years in the period ended December 31, 2022, and the related notes and financial statement schedules listed in the Index at Item 15(a)(2) and our report dated February 14, 2023 expressed an unqualified opinion thereon.

as of December 31, 2023 and 2022, the related consolidated statements of operations, comprehensive income, equity and cash flows for each of the three years in the period ended December 31, 2023, and the related notes and financial statement schedules listed in the Index at Item 15(a)(2) and our report dated February 12, 2024 expressed an unqualified opinion thereon.

Basis for Opinion

53 unchanged sentences

( 6,186,986 )

Accumulated other comprehensive income (loss)

Accumulated other comprehensive income

Total stockholders’ equity

21 unchanged sentences

Other income (expense)

Other expense – net

Other income (expense) – net

Loss on debt extinguishment

1 unchanged sentence

Total other income

Income before income tax expense and income from unconsolidated joint ventures

Income before income tax expense and (loss) income from unconsolidated joint ventures

Income tax expense

Income from unconsolidated joint ventures

(Loss) income from unconsolidated joint ventures

Net income attributable to noncontrolling interest

2 unchanged sentences

Net income available to common stockholders

See accompanying notes.

17 unchanged sentences

Noncontrolling

Income (Loss)

Balance at December 31, 2020

( 4,916,097 )

Cumulative effect of accounting change (see Note 2)

Balance at January 1, 2020

( 4,303,546 )

Stock related compensation

9 unchanged sentences

Issuance of common stock

Repurchase of common stock

Common dividends declared ($ 2.68 per share)

2 unchanged sentences

Omega OP Units distributions

Capital contributions from noncontrolling holder in consolidated JV

Other comprehensive income

3 unchanged sentences

Issuance of common stock

Repurchase of common stock

Common dividends declared ($ 2.68 per share)

2 unchanged sentences

Omega OP Units distributions

Capital contributions from noncontrolling holder in consolidated JV

Net change in noncontrolling interest holder in consolidated JV

Other comprehensive income

18 unchanged sentences

Amortization of acquired in-place leases – net

Effective yield payable (receivable) on mortgage notes

Straight-line rent and effective interest receivables

Interest paid-in-kind

Income from unconsolidated joint ventures

Loss (income) from unconsolidated joint ventures

Change in operating assets and liabilities – net:

Contractual receivables

Straight-line rent receivables

Lease inducements

2 unchanged sentences

Cash flows from investing activities

Acquisition of a business, net of cash acquired

Acquisition of real estate

8 unchanged sentences

Capital improvements to real estate investments

Proceeds from net investment hedges

Receipts from insurance proceeds

Net cash provided by (used in) investing activities

Net cash (used in) provided by investing activities

Cash flows from financing activities

2 unchanged sentences

( 2,178,311 )

( 1,838,155 )

Payments of financing related costs

2 unchanged sentences

Dividends paid

Noncontrolling members’ contributions to consolidated joint venture

Net payments to noncontrolling members of consolidated joint venture

Proceeds from derivative instruments

Redemption of Omega OP Units

24 unchanged sentences

Consolidation

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.

The consolidated financial statements include the accounts of Omega Healthcare Investors, Inc, its wholly-owned subsidiaries, joint venture (“JVs”) and variable interest entities (“VIEs”) that it controls, through voting rights or other means.

All intercompany transactions and balances have been eliminated in consolidation.

GAAP requires us to identify entities for which control is achieved through means other than voting rights and to determine which business enterprise, if any, is the primary beneficiary of VIEs.

4 unchanged sentences

We may change our original assessment of a VIE upon subsequent events such as the modification of contractual arrangements that affects the characteristics or adequacy of the entity’s equity investments at risk and the disposition of all or a portion of an interest held by the primary beneficiary.

Our variable interests in VIEs may be in the form of equity ownership, leases, guarantees and/or loans with our operators.

Our variable interests in VIEs may be in the form of equity ownership, leases and/or loans with our operators.

We analyze our agreements and investments to determine whether our operators or unconsolidated joint ventures are VIEs and, if so, whether we are the primary beneficiary.

11 unchanged sentences

We perform this analysis on an ongoing basis.

As of December 31, 2022, we have one joint venture that is a consolidated VIE as we have concluded that we are the primary beneficiary through our equity investment in the entity.

We also have consolidated VIEs related to the Exchange Accommodation Titleholders (“EATs”) discussed in Note 3 – Real Estate Asset Acquisitions and Development.

As of December 31, 2021, we did no t have any VIEs that we consolidated.

As of December 31, 2023 and 2022, we have one joint venture that is a consolidated VIE as we have concluded that we are the primary beneficiary through our equity investment in the entity.

As of December 31, 2022, we also had consolidated VIEs related to the Exchange Accommodation Titleholders (“EATs”) discussed in Note 3 – Real Estate Asset Acquisitions and Development.

Revenue Recognition

Rental Income

Rental income from operating leases is recognized on a straight-line basis, inclusive of fixed annual escalators and lease inducements, over the lease term when we have determined that the collectibility of substantially all of the lease payments is probable.

Rental income from operating leases is recognized on a straight-line basis, inclusive of fixed annual escalators, over the lease term when we have determined that the collectibility of substantially all of the lease payments is probable.

Certain of our operating leases contain provisions for an increase based on the change in pre-determined formulas from year to year (e.g., increases in the Consumer Price Index).

We do not include in our measurement of our lease receivables these variable increases until the specific events that trigger the variable payments have occurred.

Certain payments made to operators are treated as lease inducements and are amortized as a reduction of revenue over the lease term.

Our leased real estate properties are leased under provisions of single or master leases with initial terms typically ranging from 5 to 15 years .

1 unchanged sentence

We assess the probability of collecting substantially all payments due under our leases on several factors, including, among other things, payment history, the financial strength of the lessee and any guarantors, as applicable, historical operations and operating trends, current and future economic conditions, and expectations of performance (which includes known substantial doubt about an operator’s ability to continue as a going concern).

If our evaluation of these factors indicates it is probable that we will be unable to collect substantially all rents, we recognize a charge to rental income to write off straight-line rent receivables and limit our rental income to the lesser of lease income on a straight-line basis plus variable rents when they become accruable or cash collected.

If our evaluation of these factors indicates it is not probable that we will be able to collect substantially all rents, we recognize a charge to rental income to write off straight-line rent receivables and limit our rental income to the lesser of lease income on a straight-line basis plus variable rents when they become accruable or cash collected.

Provisions for uncollectible lease payments are recognized as a direct reduction to rental income.

44 unchanged sentences

Internal fair value models and techniques used by the Company include discounted cash flow and Monte Carlo valuation models.

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, 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.

Real Estate Acquisitions

16 unchanged sentences

When evaluating below market leases we consider extension options controlled by the lessee in our evaluation.

OMEGA HEALTHCARE INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

● Other assets acquired and liabilities assumed are typically valued at stated amounts, which approximate fair value on the date of the acquisition.

● Assumed debt balances are valued by discounting the remaining contractual cash flows using a current market rate of interest.

● Noncontrolling interests are valued using a stock price on the acquisition date.

● Noncontrolling interests are valued using a stock price, if available, or by other methods to estimate the fair value on the acquisition date.

OMEGA HEALTHCARE INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

Real Estate Properties

28 unchanged sentences

Upon designation of a property as an asset held for sale, we record the property’s value at the lower of its carrying value or its estimated fair value, less estimated costs to sell, and we cease depreciation.

OMEGA HEALTHCARE INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

Lessee Accounting

5 unchanged sentences

As of December 31, 2023 and 2022, all of the leases where we are the lessee were classified as operating leases.

OMEGA HEALTHCARE INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

We have leases that contain both lease and non-lease components and have elected, as an accounting policy, to not separate lease components and non-lease components.

Operating and finance lease right-of-use ("ROU") assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term.

Our ROU assets and lease liabilities are included in other assets and accrued expenses and other liabilities, respectively, on our Consolidated Balance Sheets.

18 unchanged sentences

Changes to the allowance for credit losses on loans resulting from quarterly evaluations are recorded through provision for credit losses on the Consolidated Statements of Operations.

OMEGA HEALTHCARE INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

We assess the creditworthiness of our borrowers on a quarterly basis.

8 unchanged sentences

● Risk Rating 4 - Instruments with potential weaknesses identified (Special mention).

OMEGA HEALTHCARE INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

● Risk Rating 5 - Instruments with well-defined weaknesses that may result in possible losses (Substandard).

23 unchanged sentences

Under the equity method of accounting, the net equity investments of the Company are reflected in the accompanying Consolidated Balance Sheets and the Company’s share of net income and comprehensive income from the joint ventures are included in the accompanying Consolidated Statements of Operations and Consolidated Statements of Comprehensive Income, respectively.

OMEGA HEALTHCARE INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

On a periodic basis, management assesses whether there are any indicators that the value of the Company’s investments in the unconsolidated joint ventures may be other-than-temporarily-impaired.

3 unchanged sentences

We consider a number of assumptions that are subject to economic and market uncertainties including, among others, rental rates, operating costs, capitalization rates, holding periods and discount rates.

No impairment losses on our investments in unconsolidated joint ventures were recognized for the last three fiscal years.

OMEGA HEALTHCARE INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

In Substance Real Estate Investments

We provide loans to third parties for the acquisition, development and construction of real estate.

Under these arrangements, it is possible that we will participate in the expected residual profits of the project through the sale, refinancing or acquisition of the property.

We evaluate the characteristics of each arrangement, including its risks and rewards, to determine whether they are more similar to those associated with a loan or an investment in real estate.

Arrangements with characteristics implying loan classification are presented as real estate loans receivable and result in the recognition of interest income.

Arrangements with characteristics implying real estate joint ventures are treated as in substance real estate investments and presented as investments in unconsolidated joint ventures and are accounted for using the equity method.

The classification of each arrangement as either a real estate loan receivable or investment in unconsolidated joint venture involves judgment and relies on various factors, including market conditions, amount and timing of expected residual profits, credit enhancements in the form of guarantees, estimated fair value of the collateral, and significance of borrower equity in the project, among others.

The classification of such arrangements is performed at inception, and periodically reassessed when significant changes occur in the circumstances or conditions described above.

Cash and Cash Equivalents

3 unchanged sentences

Certain cash account balances exceed FDIC insurance limits of $ 250,000 per account and, as a result, there is a concentration of credit risk related to amounts in excess of the insurance limits.

We regularly monitor the financial stability of these financial institutions and believe that we are not exposed to any significant credit risk in cash, cash equivalents or restricted cash.

Restricted Cash

14 unchanged sentences

We test goodwill for potential impairment at least annually in the fourth quarter, or more frequently if an event or other circumstance indicates that we may not be able to recover the carrying amount of the net assets of the reporting unit.

In evaluating goodwill for impairment, we may assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount.

If we bypass the qualitative assessment, or if we conclude that it is more likely than not that the fair value of a reporting unit is less than its carrying value, then we perform a quantitative impairment test by comparing the fair value of a reporting unit with its carrying amount.

In evaluating goodwill for impairment, we assess qualitative factors such as a significant decline in real estate valuations, current macroeconomic conditions, state of the equity and capital markets and our overall financial and operating performance or a significant decline in the value of our market capitalization, to determine whether it is more likely than not that the fair value of our reporting unit is less than its carrying amount.

An impairment loss is recognized to the extent that the carrying amount, including goodwill, exceeds the reporting unit’s fair value.

Goodwill is not deductible for tax purposes.

15 unchanged sentences

We recognize stock-based compensation expense adjusted for estimated forfeitures to employees and directors, in general and administrative in our Consolidated Statements of Operations on a straight-line basis over the requisite service period of the awards.

OMEGA HEALTHCARE INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

Deferred Financing Costs and Original Issuance Premium and/or Discounts for Debt Issuance

4 unchanged sentences

Amortization of deferred financing costs and original issuance premiums or discounts totaled $ 13.7 million, $ 12.9 million and $ 12.3 million for the years ended December 31, 2023, 2022 and 2021, respectively, and are recorded in interest expense on our Consolidated Statements of Operations.

When financings are terminated, unamortized deferred financing costs and unamortized premiums or discounts, as well as charges incurred for the termination, are recognized as expense or income at the time the termination is made.

Gains and losses from the extinguishment of debt are presented in loss on debt extinguishment on our Consolidated Statements of Operations.

OMEGA HEALTHCARE INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

Earnings Per Share

7 unchanged sentences

As our ownership of a controlled subsidiary increases or decreases, any difference between the aggregate consideration paid to acquire the noncontrolling interests and our noncontrolling interest balance is recorded as a component of equity in additional paid-in capital, so long as we maintain a controlling ownership interest.

The noncontrolling interest for Omega represents the outstanding Omega OP Units held by outside investors and interests in a consolidated real estate joint venture not fully owned by Omega.

The noncontrolling interest for Omega primarily represents the outstanding Omega OP Units held by outside investors.

Each of the Omega OP Units (other than the Omega OP Units owned by Omega) is redeemable at the election of the Omega OP Unit holder for cash equal to the then-fair market value of one share of Omega common stock, par value $ 0.10 per share (“Omega Common Stock”), subject to Omega’s election to exchange the Omega OP Units tendered for redemption for unregistered shares of Omega Common Stock on a one -for-one basis, subject to adjustment as set forth in Omega OP’s partnership agreement.

8 unchanged sentences

operating subsidiaries held long-lived assets of $ 539.6 million and $ 453.4 million as of December 31, 2023 and 2022, respectively.

OMEGA HEALTHCARE INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

For our consolidated subsidiaries whose functional currency is not the USD, we translate their financial statements into the USD.

5 unchanged sentences

The resulting adjustment is reflected in results of operations within other expense - net, unless it is intercompany debt that is deemed to be long-term in nature in which case the adjustments are included in AOCI and a proportionate amount of gain or loss is allocated to noncontrolling interests, if applicable.

OMEGA HEALTHCARE INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

Derivative Instruments

16 unchanged sentences

Reclassifications

Certain line items on our Consolidated Balance Sheets, Consolidated Statements of Operations and Consolidated Statements of Cash Flows have been reclassified to conform to the current period presentation.

Certain line items on our Consolidated Statements of Cash Flows have been combined to conform to the current period presentation.

We previously reported assets held for sale of $ 261.2 million on the Consolidated Balance Sheet as of December 31, 2021.

As of December 31, 2022, $ 58.1 million of these assets no longer qualified as held for sale and were reclassified to assets held for use within the applicable line items in real estate assets – net on the Consolidated Balance Sheet as of December 31, 2021.

Of the $ 58.1 million reclassified net of $ 20.8 million of accumulated depreciation, $ 67.5 million relates to buildings, $ 2.8 million relates to land and $ 8.6 million relates to furniture and equipment.

We recorded a $ 3.2 million cumulative catch-up adjustment to depreciation and amortization expense related to these facilities concurrent with the reclassification in the fourth quarter of 2022.

OMEGA HEALTHCARE INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

Effective for the fourth quarter of 2022, Mortgage notes receivable - net has been renamed Real estate loans receivable - net, Other investments - net has been renamed Non-real estate loans receivable - net, and certain loans have been reclassified out of Other Investments - net into Real estate loans receivable - net.

Specifically, other real estate loans collateralized by second or third mortgage liens, a leasehold mortgage on, or an assignment of partnership interest in the related properties that were previously presented in Other Investments - net are now presented in Real estate loans receivable - net.

See the table below for the prior presentation compared to the current presentation.

Prior Presentation

Current Presentation

December 31, 2021

(in thousands)

Mortgage notes receivable, gross

Allowance for credit losses on mortgage notes receivable

Mortgage notes receivable – net

Mortgage notes receivable, net

Leasehold mortgages and other real estate loans, gross

Allowance for credit losses on leasehold mortgages and other real estate loans

Other investments, gross

Leasehold mortgages and other real estate loans – net

Allowance for credit losses on other investments

Real estate loans receivable – net

Other investments – net

Non-real estate loans receivable, gross

Allowance for credit losses on non-real estate loans receivable

Non-real estate loans receivable – net

We previously reported assets held for sale of $ 261.2 million on the Consolidated Balance Sheet as of December 31, 2021.

$ 58.1 million of these assets no longer qualify as held for sale and have been reclassified to assets held for use within the applicable line items in real estate assets – net on the Consolidated Balance Sheet as of December 31, 2021.

See further discussion on the held for sale reclassification in Note 4 – Assets Held for Sale.

Recently Adopted Accounting Pronouncements

ASU – 2021 -05, Leases (Topic 842):

Lessors – Certain Leases with Variable Lease Payments

On July 19, 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2021-05.

This guidance requires lessors to classify leases with variable lease payments, that do not depend on an index or rate, as an operating lease on the commencement date of the lease if specified criteria are met.

The guidance is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years.

Recent Accounting Pronouncements

ASU – 2023-07- Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, which expands public entities’ segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the CODM and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items, and interim disclosures of a reportable segment’s profit or loss and assets.

Additionally, all disclosure requirements under the guidance are also required for public entities with a single reportable segment.

The amendments are effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024.

Early adoption is permitted.

We early adopted this guidance prospectively effective July 1, 2021.

The adoption of the guidance did not have an impact on our consolidated financial statements.

The amendments should be applied retrospectively to all prior periods presented in the financial statements.

The Company is evaluating the amendment to determine its impact on the Company’s disclosures.

ASU – 2023-05 - Business Combinations—Joint Venture Formations (Subtopic 805-60):

Recognition and Initial Measurement

On August 23, 2023, the FASB issued ASU 2023-05 requiring certain joint ventures, upon formation, to apply a new basis of accounting and initially measure most of their assets and liabilities at fair value in their financial statements.

ASU 2023-05 does not affect the accounting by the joint venture’s investors.

The guidance is effective for all joint ventures with a formation date on or after January 1, 2025, and early adoption is permitted either prospectively or retrospectively.

The Company is still evaluating its adoption timeline, methodology and the impact on its consolidated financial statements.

ASU – 2022-02, Financial Instruments – Credit Losses (Topic 326):

4 unchanged sentences

During 2022, we had three loan modifications with two borrowers experiencing financial difficulty pursuant to ASU 2022-02, Guardian Healthcare (“Guardian”) and LaVie Care Centers, LLC (“LaVie,” f/k/a Consulate Health Care), that require additional disclosures.

During 2023, we had three loan modifications with two borrowers experiencing financial difficulty pursuant to ASU 2022-02, Maplewood Senior Living (along with affiliates, “Maplewood”) and Agemo Holdings, LLC (“Agemo”), that require additional disclosures.

The required disclosures for these loans are included in Note 5 – Contractual Receivables and Other Receivables and Lease Inducements, Note 7 – Real Estate Loans Receivable and Note 8 – Non-Real Estate Loans Receivable.

We have disclosed our gross write-offs of financing receivables and direct financing leases by year of origination in Note 9 – Allowance for Credit Losses.

OMEGA HEALTHCARE INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

ASU – 2020-04, Financial Instruments – Reference Rate Reform (Topic 848)

3 unchanged sentences

Deferral of the Sunset Date of Topic 848, which extended the practical expedients under ASU 2020-04 to December 31, 2024.

The Company has several derivative instruments (See Note 15 – Derivatives and Hedging), a $ 1.45 billion senior unsecured multicurrency revolving credit facility, and a $ 50 million senior unsecured term loan facility (See Note 14 – Borrowing Arrangements) that reference LIBOR.

Beginning in 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 is evaluating:

(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.

ASU – 2016-13, Financial Instruments - Credit Losses (Topic 326)

In June 2016, the FASB issued ASU 2016-13, which changed the impairment model for most financial assets.

The new model uses a forward-looking expected loss method, which will generally result in earlier recognition of allowances for credit losses.

The new approach requires the calculation of expected lifetime credit losses and is applied to financial assets measured at amortized cost, including loans, as well as certain off-balance sheet credit exposures such as unfunded loan commitments.

The allowance for credit loss on the loans is a valuation amount that is deducted from the amortized cost basis of the loans not held at fair value to present the net amount expected to be collected over the contractual term of the loans.

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

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

The Company had several derivative instruments that referenced LIBOR which were terminated during the second quarter of 2023 (see Note 15 – Derivatives and Hedging).

The Company also had a $ 1.45 billion senior unsecured multicurrency revolving credit facility and a $ 50.0 million senior unsecured term loan facility (see Note 14 – Borrowing Activities and Arrangements) that referenced LIBOR.

During the second quarter of 2023, the Company amended its $ 1.45 billion senior unsecured multicurrency revolving credit facility and $ 50.0 million senior unsecured term loan facility to adjust the interest on each loan from a LIBOR based interest rate to a Secured Overnight Financing Rate (“SOFR”) based interest rate.

For both loans we have elected to apply the optional expedient pursuant to Topic 848.

As such we will account for the amendments as if the modifications were not substantial and thus a continuation of the existing contract resulting in no change to the current loan carrying values or the related deferred financing costs.

OMEGA HEALTHCARE INVESTORS, INC.

9 unchanged sentences

(1) Initial annual cash yield reflects the initial annual contractual cash rent divided by the purchase price.

(2) In connection with this acquisition, the Company recorded $ 9.9 million of right-of-use assets and lease liabilities associated with ground leases assumed in the acquisition.

(3) In connection with this acquisition, the Company also provided $ 104.6 million of mezzanine financing discussed further in Note 7 – Real Estate Loans Receivable and Note 8 – Non-Real Estate Receivable.

(4) Of the 10 % initial annual cash yield for this acquisition, 2 % can be deferred.

2022 Acquisitions

The following table summarizes the significant asset acquisitions that occurred in 2022:

Total Real Estate

Assets Acquired

Country/State

(in millions)

Cash Yield (1)

(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.

7 unchanged sentences

As of December 31, 2022, we had completed the reverse 1031 exchange for three of the acquired facilities and the remaining four acquired facilities remained in the possession of the EATs.

During the second quarter of 2023, the remaining four facilities were released from the possession of the EATs, as we did not identify any qualifying exchange transactions.

The EATs were classified as VIEs as they do not have sufficient equity investment at risk to permit the entity to finance its activities.

2 unchanged sentences

The EATs also held cash of $ 23.9 million as of December 31, 2022.

2021 Acquisitions and Other

OMEGA HEALTHCARE INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

2021 Acquisitions

The following table summarizes the significant asset acquisitions that occurred in 2021:

11 unchanged sentences

We recognized approximately $ 45.0 million of rental income for the year ended December 31, 2021 under this master lease, which includes 24 facilities representing 2,552 operating units.

OMEGA HEALTHCARE INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

2020 Acquisitions

The following table summarizes the significant transactions that occurred in 2020:

Total Real Estate

Assets Acquired

Country/State

(in millions)

Cash Yield (1)

(1) Initial annual cash yield reflects the initial annual contractual cash rent divided by the purchase price.

Construction in progress and capital expenditure investments

We invested $ 82.5 million, $ 64.4 million and $ 140.0 million, respectively under our construction in progress and capital improvement programs during the years ended December 31, 2023, 2022 and 2021.

During the second quarter of 2023, we purchased land located in Virginia (not reflected in the table above) for approximately $ 0.8 million that we plan to develop into a SNF.

Concurrent with the acquisition, we amended our lease with an existing operator to include the land in the lease.

We are committed to a maximum funding of $ 15.2 million for the development of the land.

As of December 31, 2023, $ 2.4 million was included in construction in progress related to this development project.

In the second quarter of 2021, we placed a $ 41.1 million construction project for a new build ALF in New Jersey into service and began recognizing revenue associated with this project in the third quarter of 2021.

7 unchanged sentences

We are committed to a maximum funding of $ 177.7 million for the redevelopment of the real estate property, subject to ordinary development related cost changes (see Note 20 - Commitments and Contingencies) .

Excluding the initial acquisition cost associated with the land, Omega capitalized costs of $ 51.2 million, $ 14.9 million and $ 1.9 million, respectively, related to this development project for the years ended December 31, 2023, 2022 and 2021.

As of December 31, 2023, $ 136.0 million was included in construction in progress related to this development project.

OMEGA HEALTHCARE INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

NOTE 4 – ASSETS HELD FOR SALE, DISPOSITIONS AND IMPAIRMENTS

3 unchanged sentences

Amount of assets held for sale (in thousands)

In the fourth quarter of 2022, we reclassified 13 facilities with aggregate net book values of $ 58.1 million, from assets held for sale to assets held for use within the applicable line items in real estate assets – net.

Of the $ 58.1 million reclassified net of $ 20.8 million of accumulated depreciation, $ 67.5 million relates to buildings, $ 2.8 million relates to land and $ 8.6 relates to furniture and equipment.

We originally reclassified these facilities as held for sale in the fourth quarter of 2021, but we no longer believe these facilities qualify as assets held for sale.

We recorded a $ 3.2 million cumulative catch-up adjustment to depreciation and amortization expense related to these facilities concurrent with the reclassification in the fourth quarter of 2022.

During the fourth quarter of 2023, we reclassified a total of four SNFs, with an aggregate net book value of $ 27.6 million, to assets held for sale as a result of the exercise of a purchase option by an operator.

The estimated fair value of the facilities, based on the estimated proceeds from the sale, exceeds the net book value and as a result, no impairment was recorded in connection with reclassifying these assets to held for sale.

2023 Activity

During the year ended December 31, 2023, we sold 69 facilities ( 64 SNFs, two ALFs, one ILF, one specialty facility and one MOB) subject to operating leases for $ 585.0 million in net cash proceeds, recognizing net gains of $ 79.7 million.

Our 2023 facility sales were primarily driven by restructuring transactions and negotiations related to our lease agreements with Guardian and LaVie.

In the second quarter of 2023, we sold five facilities that were previously leased to Guardian and were included in assets held for sale as of March 31, 2023.

The net cash proceeds from the sale were $ 23.8 million, and we did no t recognize any gain or loss on the sale because we had already impaired the facilities down to the estimated fair value less costs to sell during the first quarter of 2023.

Additionally, we sold one facility, also previously leased to Guardian, for a sales price of $ 12.0 million during the second quarter of 2023, which was fully financed by Omega through a $ 12.0 million first lien mortgage on the facility.

The one facility sale during the second quarter of 2023 and related seller financing did not meet the contract criteria to be recognized under ASC 610-20.

During the year ended December 31, 2023, we received interest of $ 0.7 million related to such seller financing, which was deferred and recorded as a contract liability within accrued expenses and other liabilities on our Consolidated Balance Sheets.

In the third quarter of 2023, we sold seven facilities subject to operating agreements with LaVie for $ 84.4 million in purchase consideration, which included cash proceeds of $ 14.8 million and an aggregate $ 69.6 million pay-off of the outstanding principal and accrued interest on seven HUD mortgages on the sold properties made by the buyer, on Omega’s behalf.

The sale resulted in a net loss of $ 5.5 million.

Also in the third quarter of 2023, we recognized the sale of 11 facilities, previously leased to LaVie, related to a December 2022 transaction, further discussed below, that did not meet the contract criteria to be recognized under ASC 610-20 at the legal sale date.

During the third quarter of 2023, Omega received an aggregate $ 104.8 million of principal prepayments for the mortgage from the seller.

As a result of the principal prepayments, the Company determined the transaction met the contract criteria under ASC 610-20 and recognized the sale, resulting in a $ 50.2 million gain during the year ended December 31, 2023, which includes a $ 25 million contract liability and $ 5.7 million of deferred interest income received to date.

In the fourth quarter of 2023, we sold 30 facilities subject to operating agreements with LaVie for $ 317.9 million in purchase consideration, which included cash proceeds of $ 104.6 million and an aggregate $ 213.3 million pay-off of the outstanding principal and accrued interest on 22 HUD mortgages on the sold properties made by the buyer, on Omega’s behalf.

The sale resulted in a net gain of $ 6.5 million.

OMEGA HEALTHCARE INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

One of the two facilities that were classified as held for sale as of December 31, 2022 was subsequently sold during the first quarter of 2023 for gross cash proceeds of $ 19.5 million.

2022 Activity

2 unchanged sentences

Gulf Coast Health Care LLC (together with certain affiliates “Gulf Coast”), Guardian Healthcare (“Guardian”) and Agemo Holdings, LLC (“Agemo”).

In addition, during the fourth quarter of 2022, we sold 11 facilities previously leased to and operated by LaVie which did not meet the contract criteria to be recognized under ASC 610-20, further discussed below, and as such are not included in the amounts above.

In addition, during the fourth quarter of 2022, we sold 11 facilities previously leased to and operated by LaVie which did not meet the contract criteria to be recognized under ASC 610-20.

As discussed above, this sale was recognized in the third quarter of 2023, and as such are not included in the 2022 sale amounts above.

In the first quarter of 2022, we sold 22 facilities that were previously leased and operated by Gulf Coast.

4 unchanged sentences

In the third and fourth quarter of 2022, we sold 22 facilities that were previously leased to Agemo for $ 358.7 million in net proceeds, which resulted in a net gain of $ 218.9 million.

In December 2022, in connection with restructuring negotiations with LaVie, we sold 11 facilities to a third party previously leased to LaVie for a sales price of $ 129.8 million.

Omega provided $ 104.8 million in senior seller financing, collateralized by first lien mortgages on the 11 facilities, to fund a portion of the purchase price.

The senior note has a December 29, 2027 maturity date and bears interest at 8 % with required monthly interest payments (due in arrears beginning February 1, 2023), with no principal payments due until the maturity date.

The remaining consideration received under the purchase agreement is the assumption of a $ 25.0 million liability by the buyer from Omega.

The 11-facility sale does not meet the contract criteria to be recognized under ASC 610-20 and we will continue to account for these facilities on our Consolidated Balance Sheets and depreciate the facilities until the recognition requirements under ASC 610-20 are met.

A contract liability was recorded and related expense of $ 25.0 million was recognized on our Consolidated Balance Sheets within accrued expenses and other liabilities and Consolidated Statements of Operations within acquisition, merger and transition costs, respectively.

The liability will be relieved once the sale is recognized.

The loan receivable associated with the seller financing will not be recorded on our Consolidated Balance Sheets until the sale is recognized, and any cash interest received will be deferred and recorded as a contract liability within accrued expenses and other liabilities on our Consolidated Balance Sheets.

2021 Activity

During the year ended December 31, 2021, we sold 48 facilities for approximately $ 318.5 million in net cash proceeds, recognizing a net gain of approximately $ 161.6 million.

2020 Activity

During the year ended December 31, 2020, we sold 43 facilities for approximately $ 180.9 million in net cash proceeds, recognizing a net gain of approximately $ 19.1 million.

OMEGA HEALTHCARE INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

Real Estate Impairments

1 unchanged sentence

During the year ended December 31, 2023, we recorded impairments of approximately $ 91.9 million on 25 facilities.

Of the $ 38.5 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 $ 35.0 million related to 20 held-for-use facilities for which the carrying value exceeded the fair value, of which $ 17.2 million relates to 12 facilities leased to and operated by LaVie that are expected to be impacted by the on-going restructuring negotiations.

Of the $ 91.9 million, $ 2.6 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 $ 89.3 million related to 23 held for use facilities (of which $ 48.0 million relates to three facilities that were closed during the year) for which the carrying value exceeded the fair value.

Of the $ 89.3 million, $ 51.7 million related to 20 facilities that were subsequently sold during the year but did not meet the criteria to be classified as held for sale when the impairments were recognized.

2022 Activity

During the year ended December 31, 2022, we recorded impairments of approximately $ 38.5 million on 22 facilities.

Of the $ 38.5 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 $ 35.0 million related to 20 held for use facilities for which the carrying value exceeded the fair value, of which $ 17.2 million relates to 12 facilities that were leased to and operated by LaVie.

$ 10.0 million of the 2022 impairments recorded on four held-for-use facilities relate to the 2.0 % Operator discussed in Note 5 – Contractual Receivables and Other Receivables and Lease Inducements.

1 unchanged sentence

During the year ended December 31, 2021, we recorded impairments of approximately $ 44.7 million on 14 facilities which were sold or classified as held for sale for which the carrying values exceeded the estimated fair values less costs to sell.

2020 Activity

During the year ended December 31, 2020, we recorded impairments of approximately $ 76.0 million on 25 facilities.

Our impairments were offset by approximately $ 3.5 million of insurance proceeds received related to a facility that was previously destroyed and impaired.

Of the $ 76.0 million, $ 41.5 million related to 14 facilities which were sold or classified as held for sale for which the carrying values exceeded the estimated fair values less costs to sell, and $ 34.5 million related to 11 held-for-use facilities for which it was determined that the carrying value exceeded the fair value.

The $ 34.5 million relates to facilities subject to a lease with Daybreak Ventures, LLC (“Daybreak”) (see Note 5 – Contractual Receivables and Other Receivables and Lease Inducements), which were planned for resale or transitioned to another existing operator and it was determined that the new cash flows were not sufficient to support the carrying value of the facility.

OMEGA HEALTHCARE INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

To estimate the fair value of the facilities, for the impairments noted above, we utilized a market approach which considered binding sale agreements (a Level 1 input) or non-binding offers from unrelated third parties and/or broker quotes (a Level 3 input).

11 unchanged sentences

Other receivables and lease inducements

OMEGA HEALTHCARE INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

Cash basis operators and straight-line receivable write-offs

We review our collectibility assumptions related to our operator leases on an ongoing basis.

During the years ended December 31, 2022, 2021 and 2020, we placed nine , six and four additional operators on a cash basis of revenue recognition, respectively, as collection of substantially all contractual lease payments due from them was no longer deemed probable.

In connection with placing these operators on a cash basis, we recognized $ 119.8 million, $ 36.0 million and $ 129.5 million in total straight-line accounts receivable and lease inducement write-offs through rental income during the years ended December 31, 2022, 2021 and 2020, respectively.

During the year ended December 31, 2023, we placed one existing operator and two new operators on a cash basis of revenue recognition as collection of substantially all contractual lease payments due from them was not deemed probable.

There was no straight-line write-off associated with placing the existing operator on a cash basis of revenue recognition because the lease agreement did not contain any rent escalators.

Omega did not previously have relationships with the two new operators placed on a cash basis of revenue recognition prior to the second quarter of 2023.

The new lease agreements with each of the two new operators were executed in the second quarter of 2023 as part of transitions of facilities from other operators, and we placed them on a cash basis concurrent with the respective lease commencement dates, so there were no straight-line rent write-offs associated with moving these operators to a cash basis.

During the years ended December 31, 2022 and 2021, we placed nine and six additional operators on a cash basis of revenue recognition, respectively, as collection of substantially all contractual lease payments due from them was no longer deemed probable.

In connection with placing these operators on a cash basis, we recognized $ 119.8 million and $ 36.0 million in total straight-line accounts receivable and lease inducement write-offs through rental income during the years ended December 31, 2022 and 2021, respectively.

During the year ended December 31, 2023, we transitioned the portfolios of four cash basis operators with an aggregate of 48 facilities to new or amended leases with five operators.

We are recognizing revenue on a straight-line basis for the leases associated with these five operators.

The aggregate initial contractual rent related to the 48 facilities transitioned to these five operators is $ 48.0 million per annum.

The transitioned facilities included 14 facilities related to the operator referred to as the “ 1.2 % Operator” below and 20 facilities related to the operator referred to as the “ 2.0 % Operator” below for the year ended December 31, 2022.

In connection with the transition of the 14 facilities, Omega made or agreed to make termination payments of $ 15.5 million in aggregate that were recorded as initial direct costs related to the lease with the new operator of the 14 transitioned facilities in the first quarter of 2023.

These termination payments are deferred and recognized within depreciation and amortization expense on a straight-line basis over the term of the master lease.

OMEGA HEALTHCARE INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

During the years ended December 31, 2023, 2022 and 2021, we also wrote-off $ 8.1 million, $ 3.2 million and $ 1.3 million of straight-line rent receivable balances through rental income as a result of transitioning facilities between existing operators.

As of December 31, 2023, we had 19 operators on a cash basis for revenue recognition, which represent 23.9 %, 32.5 % and 34.2 % of our total revenues (excluding the impact of write-offs) for the years ended December 31, 2023, 2022 and 2021, respectively.

As of December 31, 2022, we had 20 operators on a cash basis for revenue recognition, which represent 36.5 % and 39.2 % of our total revenues (excluding the impact of write-offs) for the years ended December 31, 2022 and 2021, respectively.

During the years ended December 31, 2022, 2021 and 2020, we also wrote-off $ 3.2 million, $ 1.3 million and $ 3.6 million of straight-line rent receivable balances through rental income as a result of transitioning facilities between existing operators.

Rent Deferrals and Application of Collateral

During the years ended December 31, 2023, 2022 and 2021, we allowed ten , ten and two operators to defer $ 35.9 million, $ 27.0 million and $ 15.6 million ($ 9.3 million of which was granted retrospectively) of contractual rent and interest, respectively.

The deferrals during the year ended December 31, 2023 primarily related to the following operators:

LaVie ($ 19.0 million), Healthcare Homes Limited (“Healthcare Homes”) ($ 8.2 million), Agemo ($ 1.9 million) and Maplewood ($ 1.8 million).

Additionally, we allowed six , seven and two operators to apply collateral, such as security deposits or letters of credit, to contractual rent and interest during the years ended December 31, 2023, 2022 and 2021, respectively.

The total collateral applied to contractual rent and interest was $ 17.6 million, $ 11.0 million and $ 11.8 million for the years ended December 31, 2023, 2022 and 2021 respectively.

Operator updates

2 unchanged sentences

We placed Agemo on a cash basis of revenue recognition during the third quarter of 2020 as we received information regarding substantial doubt of their ability to continue as a going concern.

As a result, we wrote-off approximately $ 13.4 million of contractual rent receivables and $ 61.9 million of straight-line rent receivables and lease inducements.

Agemo continued to make their rental and interest payments to us until July 2021.

After July 2021, Agemo made one month of contractual rent and interest payments for the remainder of fiscal year 2021.

During the third and fourth quarters of 2021, we recorded $ 8.7 million of revenue by collecting rental and interest payments and we recorded $ 8.5 million of revenue by drawing on a letter of credit and through application of collateral held by Omega.

On September 30, 2021, the Company entered into a forbearance agreement related to Agemo’s defaults under its lease and loan agreements (the “Agemo Forbearance Agreement”), which was amended to extend the forbearance period through January 2022 and the lease agreement was amended to extend the Agemo Rent Deferral through January 2022.

Agemo continued to not pay contractual rent and interest due under its lease and loan agreements during the year ended December 31, 2022.

No rental income was recorded related to Agemo during the year ended December 31, 2022.

Additionally, no interest income was recognized during the year ended December 31, 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 8 – Non-real Estate Loans Receivable for additional details on our loans with Agemo.

For the years ended December 31, 2021 and 2020, Agemo generated approximately 3.9 % and 5.6 %, respectively, of our total revenues (excluding the impact of write-offs).

The Agemo Forbearance Agreement has been amended multiple times throughout 2022 and the most recent 2022 amendment on December 30, 2022 extended the forbearance period through January 31, 2023 .

The Agemo Forbearance Agreement was amended multiple times throughout 2022 and the most recent 2022 amendment on December 30, 2022 extended the forbearance period through January 31, 2023 .

In 2022, the Agemo Rent Deferral period was also extended multiple times, and the most recent amendment extended the deferral through April 2022, after which time the deferral period terminated, with the Company remaining subject to the Agemo Forbearance Agreement through January 31, 2023.

8 unchanged sentences

● extend the initial Agemo lease term from December 31, 2030 , to December 31, 2036 with three consecutive tenant 10-year extension options;

● refinance and restructure the $ 25.0 million secured working capital loan (the “Agemo WC Loan”), the $ 32.0 million term loan (the “Agemo Term Loan”) and the aggregate deferred rent balance of $ 25.2 million into two replacement loans to Agemo that mature on December 31, 2036, with aggregate principal of $ 82.2 million and an annual interest rate of 5.71 % .

Guardian did not make rent and interest payments under its lease and mortgage loan agreements during the fourth quarter of 2021.

As a result of Guardian’s non-payment of contractual rent and the anticipated restructuring of its agreements, in the fourth quarter of 2021, we placed Guardian on a cash basis of revenue recognition and wrote-off approximately $ 14.0 million of straight-line rent receivables and lease inducements through rental income.

In the fourth quarter of 2021, we began negotiations to restructure Guardian’s lease and loan agreements.

In connection with the restructuring negotiations, on December 30, 2021, we acquired 2 facilities, previously subject to the Guardian mortgage loan, in consideration for a reduction of $ 8.7 million in the mortgage principal and added the facilities to the master lease agreement.

Guardian continued to not pay contractual rent and interest due under its lease and mortgage loan agreements during the first quarter of 2022.

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 to a third party that were 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;

● 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 million of 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.

OMEGA HEALTHCARE INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

Following the execution of the restructuring agreement, Guardian resumed paying contractual rent and interest during the second quarter of 2022 and continued such payments in the third and fourth quarters of 2022, in accordance with the restructuring terms.

For the year ended December 31, 2022, we recorded rental income of $ 11.3 million for the contractual rent payments that were received.

Additionally, as discussed further in Note 7 – Real Estate Loans Receivable, no mortgage interest income has been recognized on the Guardian mortgage loan during the year ended December 31, 2022, as we are accounting for this loan under the cost recovery method.

Revenue from Guardian represents approximately 1.1 %, 2.5 % and 3.5 % of our total revenues (excluding the impact of straight-line write-offs) for the years ended December 31, 2022, 2021 and 2020, respectively.

As of December 31, 2022, we have $ 7.4 million of letters of credit from Guardian as collateral.

In the fourth quarter of 2022, Omega began the process of restructuring our portfolio with LaVie, which primarily consists of two master lease agreements and two term loan agreements.

Agemo resumed making contractual rent and interest payments during the second quarter of 2023 in accordance with the restructuring terms discussed above.

We recorded rental income of $ 17.4 million for the year ended December 31, 2023 for the contractual rent payments that were received.

No interest income was recognized during the year ended December 31, 2023 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 are applied against the principal amount.

See Note 8 – Non-Real Estate Loans Receivable for further discussion on the impact of the restructuring on the loans.

Revenue from Agemo represents approximately 1.8 %, 0.0 % and 3.9 % of our total revenues (excluding the impact of write-offs) for the years ended December 31, 2023, 2022 and 2021, respectively.

In the fourth quarter of 2022, Omega began the process of restructuring the portfolio with LaVie, which primarily consists of two master lease agreements and two term loan agreements.

On December 30, 2022, we sold 11 facilities previously subject to one of the two leases agreements with LaVie.

6 unchanged sentences

● require Omega to pay LaVie a $ 35.0 million termination fee in connection with transitioning the 11 facilities sold in the fourth quarter and the additional facilities sold in the restructure ( $ 25.0 million was assumed by the third-party buyer of the 11 facilities).

The restructuring discussions are still ongoing and subject to change, but we anticipate additional restructuring activity related to this operator in 2023.

As a result of the restructuring activities during 2022 and future expected restructuring activities, during the fourth quarter of 2022, we placed LaVie on a cash basis of revenue recognition and wrote-off approximately $ 58.0 million of straight-line rent receivables and lease inducements.

Revenue from LaVie represents approximately 11.1 %, 9.5 % and 9.4 % of our total revenues (excluding the impact of straight-line write-offs) for the years ended December 31, 2022, 2021 and 2020, respectively.

In the first quarter of 2023, as part of the restructuring, we have agreed to a partial rent deferral in the first four months of 2023.

In doing so, we agreed to allow LaVie to defer up to $ 10.0 million of contractual rent from January 2023 through April 2023 under one of our lease agreements for 32 facilities.

Omega is in discussions to allow LaVie to defer up to $ 9.1 million of contractual rent from January 2023 through April 2023 under another lease agreement for 41 facilities.

In January 2023, as a result, LaVie deferred the full contractual payment of $ 2.5 million under the 32-facility lease and paid $ 2.5 million of the $ 4.7 million of contractual rent due under the 41-facility lease.

During the year ended December 31, 2020, we received a one-time rent payment of approximately $ 55.4 million from Maplewood, in conjunction with the restructuring of its master lease and loans with Omega (see Note 8 – Non-real Estate Loans Receivable).

This payment was accounted for as an adjustment to straight-line rent receivables and was being amortized over the remaining term of the master lease prior to Maplewood being placed on a cash basis of revenue recognition in the fourth quarter of 2022.

OMEGA HEALTHCARE INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

During the fourth quarter of 2022, Omega began discussions with Maplewood to restructure their portfolio, which includes a lease agreement and $ 250.5 million revolving credit facility.

During 2023, we continued the process of restructuring our portfolio with LaVie by amending the lease agreements with LaVie to allow for a partial rent deferral of $ 19.0 million for the first four months of 2023, transitioning two facilities previously subject to the master lease with LaVie to another operator during the second quarter of 2023 and selling seven facilities previously subject to the master lease with LaVie to a third party during the third quarter of 2023.

In the fourth quarter of 2023, Omega sold an additional 30 facilities and amended the master lease with LaVie to further reduce monthly rent to $ 3.3 million.

LaVie began to short pay contractual rent during the third quarter of 2023, which continued into the fourth quarter of 2023 with LaVie paying $ 5.3 million of contractual rent, a short pay of $ 7.8 million of the $ 13.1 million due under its lease agreement.

For the year ended December 31, 2023, LaVie paid total contractual rent of $ 37.0 million, a total short pay of $ 21.1 million of the $ 58.1 million due under the lease agreement after reflecting the deferral discussed above.

As LaVie was placed on a cash basis of revenue recognition for lease purposes in the fourth quarter of 2022, only the $ 5.3 million and $ 37.0 million, respectively, of contractual rent payments that were received from LaVie were recorded as rental income during the three months and year ended December 31, 2023.

In January 2024, LaVie paid $ 1.45 million of contractual rent, a short pay of $ 1.85 million of the $ 3.3 million due under its lease agreement.

Revenue from LaVie represents approximately 3.8 %, 11.1 % and 9.5 % of our total revenues (excluding the impact of straight-line write-offs) for the years ended December 31, 2023, 2022 and 2021, respectively.

During the fourth quarter of 2022, Omega began discussions with Maplewood to restructure their portfolio, which includes a lease agreement and revolving credit facility.

During the fourth quarter of 2022, we placed Maplewood on a cash basis of revenue recognition and wrote-off approximately $ 29.3 million of straight-line rent receivables and lease inducements.

Revenue from Maplewood represents approximately 8.9 %, 7.9 % and 5.3 % of our total revenues (excluding the impact of straight-line write-offs) for the years ended December 31, 2022, 2021 and 2020, respectively.

In the first quarter of 2023, we agreed to a formal restructuring agreement, master lease amendments and loan amendments with Maplewood.

5 unchanged sentences

● increase the capacity of the secured revolving credit facility from $ 250.5 million to $ 320.0 million, inclusive of payment-in-kind (“PIK”) interest applied to principal ;

● convert the 7 % per annum cash interest due on the secured revolving credit facility to all PIK interest in 2023, 1 % cash interest and 6 % PIK interest in 2024, 4 % cash interest and 3 % PIK interest in 2025 and through the maturity date;

● reduce Maplewood’s share of any future potential sales proceeds (in excess of our gross investment) by the unpaid deferred rent balance and the $ 22.5 million of capital expenditures.

● convert the 7 % per annum cash interest due on the secured revolving credit facility to all PIK interest in 2023, 1 % cash interest and 6 % PIK interest in 2024, and 4 % cash interest and 3 % PIK interest in 2025 and through the maturity date;

● pay a one-time option termination fee of $ 12.5 million to Maplewood;

● reduce Maplewood’s share of any future potential sales proceeds (in excess of our gross investment) by the unpaid deferred rent balance, the $ 22.5 million of capital expenditures and the $ 12.5 million option termination fee payment.

OMEGA HEALTHCARE INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

Maplewood began to short pay contractual rent during the second quarter of 2023, which continued into the fourth quarter of 2023 with Maplewood paying $ 9.8 million of contractual rent, a short pay of $ 7.5 million of the $ 17.3 million due under its lease agreement in the fourth quarter of 2023.

Omega applied $ 1.8 million of Maplewood’s security deposit towards the fourth quarter shortfall and recognized rental income of $ 11.6 million for the three months ended December 31, 2023.

The security deposit was fully exhausted in the fourth quarter of 2023.

For the year ended December 31, 2023, Maplewood paid total contractual rent of $ 57.8 million, a total short pay of $ 11.5 million of the $ 69.3 million due under the lease agreement for the year.

Omega applied all $ 4.8 million of Maplewood’s security deposit towards the total year to date shortfall and recognized rental income of $ 62.6 million for the year ended December 31, 2023.

The $ 12.5 million option termination fee payment made in the first quarter of 2023 in connection with the restructuring agreement was accounted for as a lease inducement.

As Maplewood is on a cash basis of revenue recognition, the inducement was immediately expensed and was recorded as a reduction to the $ 62.6 million of rental income recognized for the year ended December 31, 2023.

In January 2024, Maplewood short-paid the contractual rent amount due under its lease agreement by $ 2.0 million.

We continue to take actions to preserve our rights and are in discussions with Maplewood to address the deficiency.

As discussed further in Note 5 – Real Estate Loans Receivable, we recorded interest income of $ 1.5 million on the secured revolving credit facility during the three months ended March 31, 2023 for the contractual interest payment received related to December 2022, as the loan was placed on non-accrual status for interest recognition during the fourth quarter of 2022.

Revenue from Maplewood represents approximately 6.6 %, 8.9 % and 7.9 % of our total revenues (excluding the impact of straight-line write-offs) for the years ended December 31, 2023, 2022 and 2021, respectively.

Guardian did not make rent and interest payments under its lease and mortgage loan agreements during the fourth quarter of 2021.

In the fourth quarter of 2021, we began negotiations to restructure Guardian’s lease and loan agreements.

Guardian continued to not pay contractual rent and interest due under its lease and mortgage loan agreements during the first quarter of 2022.

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.

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;

OMEGA HEALTHCARE INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

Following the execution of the restructuring agreement, Guardian resumed paying contractual rent and interest during the second quarter of 2022 and continued such payments throughout the third and fourth quarters of 2022, in accordance with the restructuring terms.

For the year ended December 31, 2022, we recorded rental income of $ 11.3 million for the contractual rent payments that were received.

Guardian continued to make contractual rent and interest payments in accordance with the restructuring terms during the first and second quarters of 2023.

As discussed in Note 4 – Assets Held For Sale, Dispositions and Impairments, we sold 6 facilities previously leased to Guardian in the second quarter of 2023 and amended the master lease agreement to further reduce rent to $ 1.5 million.

As discussed further in Note 7 – Real Estate Loans Receivable, Guardian also sold the remaining 4 facilities subject to Guardian mortgage loan in the second quarter of 2023 and used the proceeds from the sale to make a principal repayment to Omega, in the same amount, against the mortgage note.

Following the repayment, Omega agreed to release the mortgage liens on the facilities.

In August 2023, Guardian failed to make the contractual rent payment due under its lease agreement and continued to fail to make the required contractual rent payments due under its lease agreement throughout the remainder of 2023.

During the third and fourth quarters of 2023, we applied $ 2.9 million and $ 4.4 million, respectively, of Guardian’s security deposit to fund the unpaid rent.

As Guardian is on a cash basis of revenue recognition, we recorded rental income of $ 4.4 million and $ 16.8 million for the three months and year ended December 31, 2023, respectively, for the contractual rent payments that were received from Guardian and through the application of Guardian’s security deposit.

Following the application of the security deposit in the third and fourth quarters of 2023, we had a $ 0.1 million security deposit remaining as of December 31, 2023, which can be applied to future rent shortfalls.

We are in discussions to sell or release to another operator the facilities included in Guardian’s master lease.

In January 2024, Guardian did not pay the contractual rent amount due under its lease agreement of $ 1.5 million.

Additionally, as discussed further in Note 7 – Real Estate Loans Receivable, no mortgage interest income has been recognized on the Guardian mortgage loan during the years ended December 31, 2023 and 2022, respectively, as we were accounting for this loan under the cost recovery method.

Revenue from Guardian represents approximately 1.7 %, 1.1 % and 2.5 % of our total revenues (excluding the impact of straight-line write-offs) for the years ended December 31, 2023, 2022 and 2021, respectively.

Healthcare Homes

In December 2022, we agreed to allow Healthcare Homes, a U.K.

based operator representing 3.1 %, 2.9 % and 2.4 % of total revenue (excluding the impact of write-offs) for the years ended December 31, 2023, 2022 and 2021, respectively, the ability to defer up to £ 6.7 million of contractual rent from January 2023 through April 2023 with regular payments required to resume in May 2023.

During the fourth quarter of 2023, the rent deferral agreement and lease agreement were amended to, among other things, extend the repayment period for the rent deferral to six years, with full repayment due by April 1, 2030, and grant Omega the right to extend the lease by two years.

During the three and six months ended June 30, 2023, Healthcare Homes elected to defer £ 1.7 million ($ 2.1 million in USD) and £ 6.7 million ($ 8.2 million in USD), respectively, of contractual rent in accordance with the December 2022 agreement.

In May 2023, Healthcare Homes resumed making full contractual rent payments.

Healthcare Homes has remained on a straight-line basis of revenue recognition.

During the second quarter of 2021, Gulf Coast stopped paying contractual rent under its master lease agreement because of on-going liquidity issues.

6 unchanged sentences

Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”).

As described in Gulf Coast’s filings with the Bankruptcy Court, we entered into a Restructuring Support Agreement (the “Support Agreement”) that forms the basis for Gulf Coast’s restructuring and liquidation.

As described in Gulf Coast’s filings with the Bankruptcy Court, we entered into a Restructuring Support Agreement (the “Support Agreement”) that formed the basis for Gulf Coast’s restructuring and liquidation.

The Support Agreement established a timeline for the implementation of Gulf Coast’s restructuring and liquidation, including the transition of management of the operations of the facilities to a third-party operator.

As part of the Support Agreement, we committed to provide up to $ 25 million of senior secured debtor-in-possession (“DIP”) financing to Gulf Coast, which is discussed in further detail in Note 8 – Non-real Estate Loans Receivable.

As part of the Support Agreement, we provided $ 25 million of senior secured debtor-in-possession (“DIP”) financing to Gulf Coast, which is discussed in further detail in Note 8 – Non-Real Estate Loans Receivable.

In November 2021, Gulf Coast entered into management and operations transfer agreements (“MOTAs”) with a new manager (“New Manager”), pursuant to which the management of 23 of the 24 facilities subject to the master lease with Omega were performed by New Manager during an interim period until the license for the facilities subject to the MOTAs could be obtained by a new operator (“New Operator”).

During the interim period, no rent was being paid by Gulf Coast, and we have provided a $ 20 million working capital loan to New Manager, discussed in further detail in Note 8 – Non-real Estate Loans Receivable.

During the interim period, no rent was paid by Gulf Coast, and we provided a $ 20 million working capital loan to New Manager, discussed in further detail in Note 8 – Non-Real Estate Loans Receivable.

The Bankruptcy Court approved the MOTAs on November 24, 2021 and the operations were transitioned effective December 1, 2021.

8 unchanged sentences

Following the application of these offsets, Omega has no further obligations under the Subordinated Debt.

See Note 20 – Commitments and Contingencies for additional discussion regarding an ongoing lawsuit related to the Subordinated Debt.

See Note 20 – Commitments and Contingencies for additional discussion regarding ongoing litigation related to the Subordinated Debt.

As discussed in Note 4 – Assets Held For Sale, Dispositions and Impairments, we sold 22 facilities that were previously leased and operated by Gulf Coast in the first quarter of 2022.

We transitioned one facility that was previously leased and operated by Gulf Coast to another operator in the second quarter of 2022.

Daybreak previously leased and operated 58 facilities from Omega.

During the third quarter of 2017, we placed Daybreak on a cash basis for revenue recognition as a result of nonpayment of funds owed to us.

We elected to terminate our relationship with Daybreak and we transitioned 31 Daybreak facilities to existing operators during 2020.

The total annual contractual rent from the 31 transitioned facilities was approximately $ 12.4 million.

In 2021, we transitioned 14 additional facilities to existing operators with annual contractual rent of approximately $ 4.0 million and sold the remaining four Daybreak facilities.

The transition and sale of these facilities completed our exit from our relationship with Daybreak.

OMEGA HEALTHCARE INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

Genesis Healthcare, Inc.

During the year ended December 31, 2020, we wrote-off approximately $ 64.9 million of contractual receivables, straight-line rent receivables, and lease inducements through rental income in 2020 as a result of placing Genesis Healthcare, Inc.

(“Genesis”) on a cash basis based on information the Company received from Genesis during the third quarter of 2020 regarding substantial doubt as to their ability to continue as a going concern.

Genesis represents approximately 6.6 %, 5.9 % and 7.6 %, respectively, of our total revenues (excluding the impact of write-offs) for the years ended December 31, 2022, 2021 and 2020.

Genesis continued to make their rental and interest payments to us during the years ended December 31, 2022, 2021 and 2020.

3.8 % Operator

3 unchanged sentences

The 3.8 % Operator paid the contractual amount due under its lease agreement from April 2022 through December 2023.

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.

Omega holds a $ 1.1 million security deposit from the 3.8 % Operator as collateral under its lease agreement.

The 3.8 % Operator remains on a straight-line basis of revenue recognition.

We have a revolving credit facility with the 3.7 % Operator, that was amended in the fourth quarter of 2022 to increase the capacity to $ 25.0 million, that is fully drawn as of December 31, 2022.

We have a revolving credit facility with the 3.8 % Operator that has a maximum capacity of $ 25.0 million with an outstanding principal balance of $ 23.7 million as of December 31, 2023.

The credit facility is secured by a first lien on the accounts receivable of the 3.8 % Operator.

1 unchanged sentence

See Note 8 – Non-Real Estate Loans Receivable for additional details.

OMEGA HEALTHCARE INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

1.2 % Operator

4 unchanged sentences

During the third and fourth quarters of 2022, the 1.2 % Operator made partial contractual rent payments totaling $ 4.0 million.

We are in discussions to sell or release to another operator a portion of the facilities included in the 1.2 % Operator’s master lease.

As discussed above, we transitioned all 14 facilities previously include in the 1.2 % Operator’s master lease to another operator during the first quarter of 2023.

2.0 % Operator

5 unchanged sentences

In the fourth quarter of 2022, the 2.0 % Operator paid $ 2.2 million in contractual rent and we applied the remaining $ 1.5 million of collateral against the remaining unpaid rent.

As of February 1, 2023, we have transitioned 19 of the 23 facilities previously included in the 2.0 % Operator’s master lease to other operators and are in discussions to re-lease the remaining four facilities to another operator.

OMEGA HEALTHCARE INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

0.4 % Operator

In June 2022, we placed an operator (the “0.4% Operator”), representing 0.4 %, 0.5 % and 0.6 % of total revenue (excluding the impact of write-offs) for the years ended December 31, 2022, 2021 and 2020, respectively, on a cash basis of revenue recognition.

The change in our evaluation of the collectibility of future rent payments due from the 0.4 % 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 0.4 % Operator on a cash basis, we wrote-off approximately $ 2.1 million of straight-line rent receivables through rental income.

For the year ended December 31, 2022, the 0.4 % Operator failed to pay four months of rent representing $ 2.0 million.

0.9 % Operator

In November and December 2022, an operator that was already on a cash basis of revenue recognition (the “0.9% Operator”), representing 0.9 %, 1.0 % and 1.0 % of total revenue (excluding the impact of write-offs) for the years ended December 31, 2022, 2021 and 2020, respectively, did not pay its contractual amounts due under its lease and loan agreements.

Healthcare Homes Limited

In December 2022, we agreed to allow Healthcare Homes Limited (“Healthcare Homes”), a U.K.

based operator representing 2.9 %, 2.4 % and 2.3 % of total revenue (excluding the impact of write-offs) for the years ended December 31, 2022, 2021 and 2020, respectively, the ability to defer up to £ 6.7 million of contractual rent from January 2023 through April 2023 with regular payments required to resume in May 2023.

The deferred rent balance accrues interest monthly at a rate of 8 % per annum and must be fully repaid by December 31, 2024.

Healthcare Homes remains current as of December 31, 2022 and is on a straight-line basis of revenue recognition.

Other Operators

During the year ended December 31, 2022, in addition to the operators specifically discussed above, we allowed four other operators, representing an aggregate 2.7 %, 3.2 % and 3.6 % of total revenue (excluding the impact of write-offs) for the years ended December 31, 2022, 2021 and 2020, 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 three of these operators short-term deferrals for a portion of their respective rent due during the year ended December 31, 2022.

As of December 31, 2022, three of the four operators that were allowed to apply security deposits to rent are current on their respective lease obligations after taking into account rent deferrals and/or the application of security deposits.

The one operator that is not current on contractual obligations is on a cash basis of revenue recognition as of December 31, 2022.

During the fourth quarter of 2022, we transitioned three of the facilities previously included in the 2.0 % Operator’s master lease to another operator.

As discussed above, during the first quarter of 2023, we transitioned the remaining 20 facilities previously included in the 2.0 % Operator’s master lease to other operators.

Lease Inducements

For the years ended December 31, 2021 and 2020, we provided fundings of $ 22.3 million, and $ 34.1 million, respectively, to our operators subject to operating leases, which were accounted for as lease inducements and will be amortized as a reduction to rental income over the remaining term of the leases.

As discussed in the “Maplewood” section above, the $ 12.5 million option termination fee payment made in the first quarter of 2023 in connection with the Maplewood restructuring agreement was accounted for as a lease inducement.

In addition, for the year ended December 31, 2023, we provided a funding of $ 3.4 million to Healthcare Homes, which was accounted for as a lease inducement and will be amortized as a reduction to rental income over the remaining contractual term of the lease.

For the year ended December 31, 2021, we provided fundings of $ 22.3 million to our operators subject to operating leases, which were accounted for as lease inducements and will be amortized as a reduction to rental income over the remaining term of the leases.

Of the $ 22.3 million funded in 2021, $ 20 million was paid to LaVie and $ 2.3 million was paid to four other existing operators.

Of the $ 34.1 million funded in 2020, $ 23.9 million was paid to Maplewood for development and start-up related costs and the remaining $ 10.2 million was paid to three other operators.

OMEGA HEALTHCARE INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

NOTE 6 –LEASES

5 unchanged sentences

Total rental income

Our variable lease income primarily represents the reimbursement of real estate taxes and ground lease expenses by operators that Omega pays directly.

Our variable lease income primarily represents the reimbursement of real estate taxes by operators that Omega pays directly.

OMEGA HEALTHCARE INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

The following amounts reflect the future minimum lease payments due to us for the remainder of the initial terms of our operating leases as of December 31, 2023:

(in thousands)

As of December 31, 2022, the Company is a lessee under ground leases and/or facility leases related to 10 SNFs, one ALF and two offices.

For the years ended December 31, 2022, 2021 and 2020, the expenses associated with these operating leases were $ 2.2 million, respectively and are included within general and administrative expense on the Statements of Operations.

As of December 31, 2023, the Company is a lessee under ground leases and/or facility leases related to 10 SNFs, four ALFs and two offices.

For the years ended December 31, 2023, 2022 and 2021, the expenses associated with these operating leases were $ 2.8 million, $ 2.2 million and $ 2.2 million, respectively and are included within general and administrative expense on the Statements of Operations.

The following table summarizes the balance sheet information related to leases where the Company is a lessee:

2 unchanged sentences

Accrued expenses and other liabilities – lease liabilities

OMEGA HEALTHCARE INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

In connection with a 6-facility asset acquisition in the first quarter of 2023, the Company recorded $ 9.9 million of right-of-use assets and lease liabilities associated with ground leases assumed in the acquisition.

Direct Financing Leases

8 unchanged sentences

Number of direct financing leases

During the year ended December 31, 2021, we received $ 0.7 million from a bankruptcy court created Distribution Trust related to a direct financing lease with a former operator which is recorded in recovery on direct financing leases on our Consolidated Statement of Operations.

OMEGA HEALTHCARE INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

NOTE 7 – REAL ESTATE LOANS RECEIVABLE

Real estate loans consist of mortgage loans and other real estate loans which are primarily collateralized by a first, second or third mortgage lien or a leasehold mortgage on, or an assignment of the partnership interest in the related properties.

As of December 31, 2022, our real estate loans receivable consists of seven fixed rate mortgages on 52 long-term care facilities and 12 other real estate loans.

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

The other real estate loans are with four of our operators as of December 31, 2022.

As of December 31, 2023, our real estate loans receivable consists of ten fixed rate mortgages on 55 long-term care facilities and 17 other real estate loans.

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

The other real estate loans are with seven of our operators as of December 31, 2023.

We monitor compliance with the loans and when necessary have initiated collection, foreclosure and other proceedings with respect to certain outstanding real estate loans.

3 unchanged sentences

interest at 11.18 % (1)

Mortgage notes due 2037 ;

interest at 10.50 %

Mortgage note due 2025 ;

interest at 7.85 %

Mortgage note due 2028 ;

interest at 10.00 %

Mortgage note due 2031 ;

interest at 11.27 %

Other mortgage notes outstanding (2)

8 unchanged sentences

interest at 13.20 % (1)

Other real estate loan due 2024 ;

interest at 12.00 %

Other real estate loans outstanding (4)

Leasehold mortgages and other real estate loans – gross

Allowance for credit losses on leasehold mortgages and other real estate loans

Leasehold mortgages and other real estate loans – net

Other real estate loans – gross

Allowance for credit losses on other real estate loans

Other real estate loans – net

Total real estate loans receivable – net

(1) Approximates the weighted average interest rate on facilities as of December 31, 2023.

(2) Other mortgage notes outstanding have a weighted average interest rate of 8.85 % per annum as of December 31, 2022 and maturity dates ranging from 2023 through 2032 (with $ 6.5 million maturing in 2023 ).

(3) As of December 31, 2022, includes one real estate loan with an interest rate of 12.00 % and a maturity date of December 2, 2027 .

OMEGA HEALTHCARE INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

(2) Other mortgage notes outstanding have a weighted average interest rate of 9.45 % per annum as of December 31, 2023 with maturity dates ranging from 2024 through 2026 .

Two of the mortgage notes with an aggregate principal balance of $ 12.9 million are past due and have been written down, through our allowance for credit losses, to the estimated fair value of the underlying collateral of $ 1.5 million.

(3) Other real estate loans due 2023-2030 included five loans with a maturity date of December 31, 2023 that were subsequently fully repaid in January 2024.

(4) Other real estate loans outstanding have a weighted average interest rate of 11.25 % as of December 31, 2023, with maturity dates ranging from 2027 to 2033 .

Interest income on real estate loans is included within interest income on the Consolidated Statements of Operations and is summarized as follows:

2 unchanged sentences

Mortgage notes – interest income

Leasehold mortgages and other real estate loans – interest income

Other real estate loans – interest income

Total real estate loans interest income

OMEGA HEALTHCARE INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

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 $ 40.4 million with maturity dates in 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.

At December 31, 2022, the $ 506.3 million of Mortgage Notes with Ciena consisted of the following:

● $ 415 million Ciena Master Mortgage that matures in 2030 .

At December 31, 2023, Omega had $ 514.9 million of Mortgage Notes with Ciena Healthcare Management, Inc (“Ciena”) consisting of the following:

● A Ciena master mortgage with initial principal of $ 415 million that matures in 2030 (the “Ciena Master Mortgage”).

The Ciena Master Mortgage note bore an initial interest rate of 9.0 % per annum which increases by 0.225 % per annum.

In May 2020, we amended the Ciena Master Mortgage to increase the interest rate by 54 basis points from 10.13 % per annum to 10.67 % per annum and we sold eight SNFs and one ALF located in Michigan to Ciena for $ 83.5 million (as discussed below).

During 2022, Ciena repaid $ 92.4 million under the Ciena Master Mortgage.

Concurrent with this repayment, we released the mortgage liens on five facilities in exchange for the partial repayment.

As of December 31, 2023, the outstanding principal balance of the Ciena Master Mortgage note is $ 277.8 million and it is secured by 19 facilities.

The interest rate on the Ciena Master Mortgage was 11.57 % at December 31, 2023.

● Additional borrowings in the form of incremental facility mortgages, construction and/or improvement mortgages with maturities through 2030 (with exception to one construction mortgage with principal of $ 19.1 million that matures in 2023 ) with initial annual interest rates ranging between 8.5 % and 10 % and fixed annual escalators of 2 % or 2.5 % over the prior year’s interest rate, or a fixed increase of 0.225 % per annum.

As of December 31, 2022, the outstanding principal balance of these mortgage notes which are secured by three facilities is $ 94.3 million.

● Multiple incremental facility mortgages, construction and/or improvement mortgages with maturities through 2030 (with the exception of one construction mortgage with principal of $ 28.1 million that matures in 2024 ) with initial annual interest rates ranging between 8.5 % and 10 % and fixed annual escalators of 2 % or 2.5 % over the prior year’s interest rate, or a fixed increase of 0.225 % per annum.

During the second quarter of 2021, one construction mortgage, included in the mortgage notes described above, with an original maturity date of 2021 was extended to 2029 and converted into a facility mortgage.

During the third quarter of 2021, we acquired a facility which was previously subject to a $ 13.9 million construction mortgage, also included in the notes described above, and subsequently leased the property back to Ciena.

● $ 44.7 million mortgage note related to five SNFs located in Michigan.

During 2022, Ciena repaid $ 51.0 million under seven additional mortgages.

Concurrent with this repayment, we released the mortgage liens on two facilities in exchange for the partial repayment.

As of December 31, 2023, the outstanding principal balance of these mortgage notes which are secured by three facilities is $ 104.4 million.

● A $ 44.7 million mortgage note related to five SNFs located in Michigan.

The mortgage note matures on June 30, 2030 and bore an initial annual interest rate of 9.5 % which increases each year by 0.225 % .

The interest rate on the mortgage note was 10.4 % at December 31, 2022.

During the second quarter of 2022, we released the mortgage lien on one facility under this mortgage loan in exchange for a $ 15.1 million repayment (as discussed above).

During 2022, Ciena repaid $ 15.1 million under this mortgage.

Concurrent with this repayment, we released the mortgage liens on one facility in exchange for the partial repayment.

As of December 31, 2023, the outstanding principal balance of this mortgage note is $ 28.6 million and it is secured by four SNFs.

Additionally, the Company committed to fund an additional $ 9.6 million to Ciena if certain performance metrics are achieved by the portfolio.

OMEGA HEALTHCARE INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

● $ 83.5 million mortgage note related to eight SNFs and one ALF located in Michigan.

The interest rate on the mortgage note was 10.63 % at December 31, 2023.

● A $ 83.5 million mortgage note related to eight SNFs and one ALF located in Michigan.

These nine facilities were formerly leased to Ciena and were sold to Ciena by issuance of a first mortgage on May 1, 2020.

2 unchanged sentences

As of December 31, 2023, the outstanding principal balance of this mortgage note is $ 82.8 million.

● $ 21.3 million mortgage note related to one SNF located in Ohio.

● A $ 21.3 million mortgage note related to one SNF located in Ohio.

The mortgage note had an original maturity date of March 31, 2022 and bore an initial annual interest rate of 9.5 % .

1 unchanged sentence

As of December 31, 2023, the outstanding principal balance of this mortgage note is $ 21.3 million.

Subsequent to year end, the mortgage note was amended to extend the maturity date to December 31, 2024 and to increase the interest rate to 10 % beginning January 1, 2024.

The mortgage notes with Ciena are cross-defaulted and cross-collateralized with our existing master lease and other non-real estate loans with Ciena.

OMEGA HEALTHCARE INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

Mortgage Note due 2037

On July 1, 2021, we financed six SNFs in Ohio and amended an existing $ 6.4 million mortgage, inclusive of two Ohio SNFs, to include the six facilities in a consolidated $ 72.4 million mortgage for eight Ohio facilities bearing interest at an initial rate of 10.5 % per annum.

The mortgage loan originally had a maturity date of December 31, 2032 , which was subsequently amended in the second quarter of 2023 to December 31, 2037 .

As of December 31, 2023, the outstanding principal balance of this mortgage note is $ 72.4 million.

Mortgage Note due 2025

In connection with our acquisition of MedEquities Realty Trust, Inc.

on May 17, 2019, the Company acquired a first mortgage lien issued to Lakeway Realty, L.L.C., an unconsolidated joint venture discussed in Note 11 – Investments in Joint Ventures.

The loan had original principal of approximately $ 73.0 million and bore interest at 8 % per annum based on a 25-year amortization schedule with a March 20, 2025 maturity date.

We determined the acquisition date fair value of the acquired mortgage was $ 69.1 million.

As of December 31, 2023, this mortgage had a carrying value of $ 62.0 million.

Mortgage Note due 2028

On December 28, 2023, we funded a $ 50.0 million mortgage loan to a new operator for the purpose of acquiring four Illinois facilities.

The mortgage loan bears interest at 10 % and matures on December 28, 2028 .

Interest is payable monthly in arrears.

The loan is secured by a first mortgage lien on the four facilities.

Mortgage Note due 2031

On January 17, 2014, we entered into a $ 112.5 million first mortgage loan with Guardian.

The loan was originally secured by seven SNFs and two ALFs located in Pennsylvania and Ohio.

The mortgage is cross-defaulted and cross-collateralized with our existing master lease with the operator.

The mortgage was cross-defaulted and cross-collateralized with our existing master lease with the operator.

In March 2018, we extended the maturity date to January 31, 2027 and provided an option to extend the maturity for a five year period through January 31, 2032 and a second option to extend the maturity through September 30, 2034 .

In the third quarter of 2021, we reduced the risk rating on the mortgage loan from a 4 to a 5, primarily due to the increased likelihood of a restructuring that would result in the modification of the mortgage loan terms.

As discussed in Note 5 – Contractual Receivables and Other Receivables and Lease Inducements, Guardian failed to pay contractual rent and interest to us during the fourth quarter of 2021.

The mortgage loan was placed on non-accrual status for interest recognition in October 2021 and is being accounted for under the cost recovery method.

The mortgage loan was placed on non-accrual status for interest recognition in October 2021 and was being accounted for under the cost recovery method.

On December 30, 2021, we acquired two facilities, previously subject to the Guardian mortgage loan, in consideration for a reduction of $ 8.7 million in the mortgage principal and added the facilities to the master lease agreement.

Following Guardian’s non-payment of rent and interest during the fourth quarter of 2021 and further negotiations with Guardian in the fourth quarter, we elected to further reduce the risk rating on the loan from a 5 to a 6 in the fourth quarter of 2021 and to evaluate the risk of loss on the loan on an individual basis.

Following Guardian’s non-payment of rent and interest during the fourth quarter of 2021 and further negotiations with Guardian in the fourth quarter, we elected to evaluate the risk of loss on the loan on an individual basis.

As the fair value of the 7 properties that collateralized the mortgage loan were estimated to be less than the remaining principal as of December 31, 2021 of $ 103.8 million, we reserved an additional $ 38.2 million through provision for credit losses in the fourth quarter of 2021.

1 unchanged sentence

We also fully reserved approximately $ 1.0 million of contractual interest receivable related to the mortgage loan with Guardian in the fourth quarter of 2021.

OMEGA HEALTHCARE INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

Guardian continued to not pay contractual rent and interest due under its lease and mortgage loan agreements during the first quarter of 2022.

3 unchanged sentences

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 5 – Contractual Receivables and Other Receivables and Lease Inducements.

These amendments were treated as a loan modification.

These amendments were treated as a loan modification provided to a borrower experiencing financial difficulty.

Following the execution of the restructuring agreement, Guardian resumed paying contractual rent and interest during the second quarter of 2022 and continued such payments throughout the remainder of 2022, in accordance with the restructuring terms.

In the third and fourth quarters of 2022, we reserved an additional $ 0.3 million, in aggregate, through provision for credit losses due to a decrease in the estimated fair value of the four facilities that are collateral under the mortgage.

OMEGA HEALTHCARE INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

As of December 31, 2022, the amortized cost basis of the Guardian mortgage loan is $ 76.0 million, which represents 6.6 % of the total amortized cost basis of all real estate loan receivables.

The total reserve as of December 31, 2022 related to the mortgage loan was $ 40.8 million and reduced the loan carrying value to the estimated fair value of the collateral of $ 35.2 million as of December 31, 2022.

As of December 31, 2022, the mortgage loan is secured by three SNFs and one ALF located in Pennsylvania.

During the year ended December 31, 2022, we received $ 6.0 million of interest payments that were applied directly against the principal balance outstanding using the cost recovery method.

In the second quarter of 2023, Guardian completed the sale of the four remaining facilities subject to the mortgage note with Omega.

Guardian used $ 35.2 million of proceeds from the sale of the facilities to make a principal repayment to Omega, in the same amount, against the mortgage note.

Following the repayment, Omega agreed to release the mortgage liens on these facilities and forgive the remaining $ 46.8 million of outstanding principal due under the mortgage note.

We had previously established an allowance for credit loss to reserve this loan down to $ 35.2 million in anticipation of this settlement.

During the years ended December 31, 2023 and 2022, we received $ 3.9 million and $ 6.0 million, respectively, of interest payments that we applied against the outstanding principal balance of the loan and recognized a recovery for credit loss equal to the amount of payments applied against principal.

Other mortgage notes outstanding

As of December 31, 2022, our other mortgage notes outstanding represents 4 mortgage loans to 4 operators with liens on 11 facilities.

Included below are new mortgage loans within this bucket that were entered into during the years ended December 31, 2022, and 2021.

Mortgage Note due 2032 ;

interest at 10.50 %

In conjunction with this transaction, we also acquired three Maryland facilities that were previously subject to a mortgage issued by Omega bearing interest at 13.75 % per annum with a principal balance of $ 36.0 million that was included in other mortgage notes outstanding.

The purchase price for these three facilities was equal to the remaining mortgage principal amount, and the three acquired Maryland facilities were subsequently leased back to the seller for a term expiring on December 31, 2032 , assuming Omega exercises the options under the agreement.

The base rent in the initial year is approximately $ 5.0 million and includes annual escalators of 2.5 %.

As of December 31, 2022, the outstanding principal balance of this mortgage note is $ 72.4 million.

As of December 31, 2023, our other mortgage notes outstanding represent five mortgage loans to five operators with liens on six facilities.

Included below are significant new mortgage loans within this bucket that were entered into during the years ended December 31, 2023 and 2022 and significant updates to any existing loans.

Mortgage Note due 2026

interest at 7.85 %

In connection with the MedEquities Merger on May 17, 2019, the Company acquired a first mortgage lien issued to Lakeway Realty, L.L.C, an unconsolidated joint venture discussed in Note 11 – Investments in Joint Ventures, in the original principal amount of approximately $ 73.0 million bearing interest at 8 % per annum based on a 25-year amortization schedule and maturing on March 20, 2025 .

We determined the acquisition date fair value of the acquired mortgage was $ 69.1 million.

As of December 31, 2022 and 2021, this mortgage has a carrying value of $ 63.8 million and $ 65.5 million, respectively.

In October 2023, we funded a $ 29.5 million mortgage loan to a new operator for the purpose of acquiring two Pennsylvania facilities.

The mortgage loan bears interest at 10 % and matures on October 1, 2026 .

Interest is payable monthly in arrears;

however, under certain conditions prior to August 31, 2025, the borrower can elect to pay a portion of interest as PIK interest.

The maximum PIK interest allowable under the mortgage loan is $ 3.0 million.

Due to the fact that the borrower can elect to pay a portion of interest as PIK interest, this loan will initially be accounted for on a non-accrual status for interest recognition.

The loan is secured by a first mortgage lien on the two facilities.

Other real estate loan due 2035

On July 31, 2020, we entered into a $ 220.5 million secured revolving credit facility with Maplewood as a part of an overall restructuring with this operator.

$ 132.1 million of the facility was drawn at closing which was used to repay our prior secured revolving credit facilities with aggregate capacity of $ 65.0 million with Maplewood, as well as other lease obligations owed to us, of which approximately $ 55.4 million was scheduled to be repaid at termination of the master lease.

Loan proceeds under the new credit facility may also be used to fund Maplewood’s working capital needs.

Advances made under this facility bear interest at a fixed rate of 7 % per annum and the facility matures on June 30, 2030 .

Loan proceeds under the credit facility may be used to fund Maplewood’s working capital needs.

Advances made under this facility bear interest at a fixed rate of 7 % per annum and the facility originally matured on June 30, 2030 .

On June 22, 2022, we amended the secured revolving credit facility with Maplewood to increase the maximum commitment under the facility from $ 220.5 million to $ 250.5 million.

3 unchanged sentences

As a result of the anticipated restructuring, we placed the Maplewood revolving credit facility on non-accrual status for interest recognition during the fourth quarter of 2022 due to the anticipated restructuring of its lease and loan agreement.

As of December 31, 2022, $ 250.5 million remains outstanding on this credit facility to Maplewood.

OMEGA HEALTHCARE INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

As discussed in Note 5 – Contractual Receivables and Other Receivables and Lease Inducements, in the first quarter of 2023, Omega entered into a restructuring agreement and a loan amendment that modified the senior revolving credit facility.

As part of the restructuring agreement and loan amendment, Omega agreed to extend the maturity date to June 2035, increase the capacity of the senior revolving credit facility from $ 250.5 million to $ 320.0 million, including PIK interest applied to the principal, and to convert the 7 % cash interest due on the senior revolving credit facility to all PIK interest in 2023, 1 % cash interest and 6 % PIK interest in 2024, 4 % cash interest and 3 % PIK interest in 2025 and through the maturity date.

Other real estate loans due 2024

Our other investment notes due in 2024 consists of two secured term loans with Genesis with initial borrowings of $ 48.0 million and $ 16.0 million at issuance.

The $ 48.0 million term loan was issued in July 2016 (the “2016 Term Loan”), with subsequent amendments in 2018, 2019 and 2021, and currently bears interest at a fixed rate of 14 % per annum, of which 9 % per annum is paid-in-kind.

The 2016 Term Loan was initially scheduled to mature on July 29, 2020 , but through the amendments noted above, the maturity date of this loan was extended to January 1, 2024 .

The $ 16.0 million secured term loan was issued on March 6, 2018 (the “2018 Term Loan”), and amended in 2021, and bears interest at a fixed rate of 10 % per annum, of which 5 % per annum is paid-in-kind.

The 2018 Term Loan was initially scheduled to mature on July 29, 2020 , but through the amendments noted above was extended to January 1, 2024 .

Both the 2016 and 2018 Term Loans are on an accrual status as of December 31, 2022.

Both the 2016 and 2018 Term Loans are secured by a first priority lien on and security interest in certain collateral of Genesis.

As of December 31, 2022, there was approximately $ 78.1 million and $ 20.3 million outstanding on the 2016 and 2018 Term Loans, respectively.

In the first quarter of 2023, Omega entered into a restructuring agreement and a loan amendment that modified the revolving credit facility.

As part of the restructuring agreement and loan amendment, Omega agreed to extend the maturity date to June 2035, increase the capacity of the senior revolving credit facility from $ 250.5 million to $ 320.0 million, including PIK interest applied to the principal, and to convert the 7 % cash interest due on the senior revolving credit facility to all PIK interest in 2023, 1 % cash interest and 6 % PIK interest in 2024, and 4 % cash interest and 3 % PIK interest in 2025 and through the maturity date.

The maximum PIK interest allowable under the credit facility, as amended, is $ 52.2 million.

This amendment was treated as a loan modification provided to a borrower experiencing financial difficulty.

During the three months ended March 31, 2023, we recorded interest income of $ 1.5 million on the secured revolving credit facility for the contractual interest payment received related to December 2022, as the loan was placed on non-accrual status for interest recognition during the fourth quarter of 2022.

We did not record any interest income related to the PIK interest during the year ended December 31, 2023.

As of December 31, 2023, the amortized cost basis of this loan was $ 263.5 million, which represents 20.2 % of the total amortized cost basis of all real estate loan receivables.

As of December 31, 2023, the remaining commitment under the secured revolving credit facility, including the unrecognized PIK interest, was $ 39.0 million.

Other real estate loans due 2023-2030

3 unchanged sentences

The loan is secured by a leasehold mortgage and a pledge of the operator’s equity interest in a joint venture.

Other real estate loan due 2024

Our other investment note due in 2024 consisted of a $ 60.0 million mezzanine loan, with an operator, that was acquired and financed in 2016 and subsequently amended and refinanced in May 2018.

The loan was amended again in 2022.

As amended, the mezzanine loan bore interest at a fixed interest rate of 12 % per annum and contractually matured on May 31, 2024 .

During the third quarter of 2022, this loan was fully repaid .

As of December 31, 2023, the outstanding principal balance of this loan is $ 31.6 million.

On April 14, 2023, we entered into two mezzanine loans, with principal balances of $ 68.0 million and $ 6.6 million, respectively, with an existing operator and its affiliates in connection with the operator’s acquisition of 13 SNFs in West Virginia.

The $ 68.0 million loan matures on April 13, 2029 and bears interest at a variable rate that results in a blended interest rate of 12 % per annum across this loan and three other loans, including the $ 6.6 million mezzanine loan and both $ 15.0 million mezzanine loans discussed under Notes due 2024-2029 in Note 8 – Non-Real Estate Loans Receivable.

The $ 68.0 million loan requires quarterly principal payments of $ 1.0 million commencing on July 1, 2023 and additional payments contingent on certain metrics.

The $ 68.0 million loan is secured by a leasehold mortgage and a pledge of the operator’s equity interest in subsidiaries of the operator.

The $ 6.6 million mezzanine loan matures on April 14, 2029 and bears interest at a rate of 8 % per annum.

The $ 6.6 million mezzanine loan was made to a new real estate joint venture, RCA NH Holdings RE Co., LLC, that we formed in April 2023 with the acquiring operator (see Note 11 – Investments in Joint Ventures for additional information on this joint venture).

Other real estate loans due 2024

Our other real estate loans due in 2024 consist of two secured term loans with Genesis with initial borrowings of $ 48.0 million and $ 16.0 million at issuance.

The $ 48.0 million term loan was issued in July 2016 (the “2016 Term Loan”), with subsequent amendments in 2018, 2019, 2021 and 2023, and currently bears interest at a fixed rate of 14 % per annum, of which 9 % per annum is paid-in-kind.

The 2016 Term Loan was initially scheduled to mature on July 29, 2020 , but through the amendments noted above, the maturity date of this loan was extended to March 29, 2024 .

The $ 16.0 million secured term loan was issued on March 6, 2018 (the “2018 Term Loan”), with subsequent amendments in 2021 and 2023, and bears interest at a fixed rate of 10 % per annum, of which 5 % per annum is paid-in-kind.

The 2018 Term Loan was initially scheduled to mature on July 29, 2020 , but through the amendments noted above was extended to March 29, 2024 .

Both the 2016 and 2018 Term Loans are on an accrual status as of December 31, 2023.

Both the 2016 and 2018 Term Loans are secured by a first priority lien on and security interest in certain collateral of Genesis.

As of December 31, 2023, there was approximately $ 85.4 million and $ 21.4 million outstanding on the 2016 and 2018 Term Loans, respectively.

Other real estate loans outstanding

As of December 31, 2023, our other real estate loans outstanding represent four loans to four operators.

Included below are the significant new loans entered into during the years ended December 31, 2023 and 2022 and significant updates to any existing loans.

OMEGA HEALTHCARE INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

$ 8.7 million Mezzanine Loan

In October 2023, we funded a $ 8.7 mezzanine loan to a new operator in connection with the funding of a $ 29.5 million mortgage loan to the same operator for the purpose of acquiring two Pennsylvania facilities, as discussed above.

The mezzanine loan bears interest at 7 % and matures on October 1, 2028 .

Interest is payable monthly in arrears;

however, under certain conditions prior to August 31, 2025, the borrower can elect to pay a portion of interest as PIK interest.

The maximum PIK interest allowable under the mezzanine loan is $ 0.6 million.

Due to the fact that the borrower can elect to pay a portion of interest as PIK interest, this loan will initially be accounted for on a non-accrual status for interest recognition.

The loan is secured by a second mortgage lien on the two facilities.

Preferred Equity Investment in Joint Venture - $ 20 million

3 unchanged sentences

As such, this $ 20.0 million preferred equity investment is included in the unconsolidated VIE table presented in Note 10 – Variable Interest Entities.

OMEGA HEALTHCARE INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

NOTE 8 – NON-REAL ESTATE LOANS RECEIVABLE

Our non-real estate loans consist of fixed and variable rate loans to operators and/or principals.

These loans may be either unsecured or secured by the collateral of the borrower, which may include the working capital of the borrower.

These loans may be either unsecured or secured by the collateral of the borrower, which may include the working capital of the borrower and/or personal guarantees.

As of December 31, 2023, we had 44 loans with 23 different borrowers.

9 unchanged sentences

interest at 7.50 % (2)

Notes due 2036 ;

interest at 2.00 %

Note due 2027 ;

2 unchanged sentences

Non-real estate loans receivable – gross

Allowance for credit losses on other investments

Allowance for credit losses on non-real estate loans receivable

Total non-real estate loans receivable – net

(1) Approximate weighted average interest rate as of December 31, 2023.

(2) Includes one loan with a principal balance of $ 1.5 million that was to mature in 2022 but remains outstanding as of December 31, 2022.

We are in negotiations to extend the loan.

(2) During the year ended December 31, 2023, the interest rate was amended to increase the interest rate on borrowings in excess of $ 45 million to 10 % through October 15, 2023, and to 12 % thereafter.

The interest rate remains at 7.5 % for borrowings that do not exceed $ 45 million.

All borrowings in excess of $ 45 million had been repaid by December 31, 2023.

(3) Other notes outstanding have a weighted average interest rate of 8.04 %, as of December 31, 2023, with maturity dates ranging from 2024 through 2030 (with $ 9.4 million maturing in 2024 ).

We have two loans within other notes outstanding with aggregate principal of $ 9.8 million that were to mature in 2022 , but remain outstanding as of December 31, 2022.

We are in negotiations to extend a $ 4.4 million loan to 2024 and we have fully reserved the other $ 5.4 million loan.

Three of the other notes outstanding with an aggregate principal balance of $ 9.2 million are past due and have been written down to the estimated fair value of the underlying collateral of zero , through our allowance for credit losses.

For the years ended December 31, 2023, 2022 and 2021, non-real estate loans generated interest income of $ 22.1 million, $ 13.6 million and $ 12.7 million, respectively.

Interest income on non-real estate loans is included within interest income on the Consolidated Statements of Operations.

Notes due 2024 - 2025

Notes due in 2024 - 2025 consist of a $ 32 million secured term loan (the “Agemo Term Loan”) and a $ 25.0 million secured working capital loan (the “Agemo WC Loan”) with Agemo.

The Agemo Term Loan was acquired in 2016 and bears interest at 9 % per annum.

The Agemo Term Loan matures on December 31, 2024 and is secured by a security interest in certain collateral of Agemo.

The Agemo WC Loan was issued on May 7, 2018 and bears interest at 7 % per annum.

The Agemo WC Loan matures on April 30, 2025 and is primarily secured by a collateral package that includes a second lien on the accounts receivable of Agemo.

The proceeds of the Agemo WC Loan were used to pay operating expenses, settlement payments, fees, taxes and other costs approved by the Company.

During the third quarter of 2020, we evaluated both loans for impairment upon receiving information from Agemo regarding substantial doubt of its ability to continue as a going concern.

Based on our evaluation, we recorded a provision for credit loss of $ 22.7 million in the third quarter of 2020 to reduce the carrying value of the loans to the fair value of the underlying collateral.

We also fully reserved approximately $ 3.8 million of contractual interest receivable related to the Agemo Term Loan in the third quarter of 2020 (see Note 9 – Allowance for Credit Losses).

OMEGA HEALTHCARE INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

Notes due 2024 - 2029

Notes due 2024 - 2029 consist of 14 loans with the same operator, the majority of which are primarily short-term revolving lines of credit that are collateralized by the accounts receivable of certain operations of the operator.

The most significant of the outstanding loans is a revolving line of credit that we entered into on June 28, 2022 in connection with the $ 35.6 million mezzanine loan discussed in Note 7 – Real Estate Loans Receivable above.

The loan proceeds were used by this operator to finance working capital requirements of new operations in a new state to the operator.

The line of credit bears interest at a fixed rate of 10 % per annum and had an original maturity date of June 30, 2023 (or earlier based on certain state reimbursement conditions), which was subsequently extended during 2023 to June 30, 2024 .

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 December 31, 2023, the outstanding principal under this revolving line of credit was $ 33.0 million.

During the second quarter of 2023, we entered into two $ 15.0 million mezzanine loans with the same operator and its affiliates in connection with the operator’s acquisition of 13 SNFs in West Virginia (discussed in Note 7 – Real Estate Loans Receivable).

The first $ 15.0 million mezzanine loan (the “2028 Mezz Loan”) matures on April 1, 2028 and bears interest at a variable rate based on the one-month term SOFR plus 8.6 % per annum.

The 2028 Mezz Loan requires monthly principal payments commencing on May 1, 2023 and is secured by a pledge of the operator’s equity interest in its subsidiaries.

The second $ 15.0 million mezzanine loan (the “2029 Mezz Loan”) matures on April 13, 2029 and bears interest at a fixed rate of 12 % per annum.

The 2029 Mezz Loan also requires quarterly principal payments commencing on July 1, 2023 and additional payments contingent on the operator’s achievement of certain metrics.

The 2029 Mezz Loan is secured by a pledge of the operator’s equity interest in its subsidiaries.

In connection with the 2028 Mezz Loan and 2029 Mezz Loan, we also provided a $ 3.3 million working capital loan to a new joint venture, WV Pharm Holdings, LLC, which we formed in April 2023 with the acquiring operator (see Note 11 – Investments in Joint Ventures for additional information on this joint venture).

Notes due 2036 ;

interest at 5.63 %

As of December 31, 2022, Notes due 2036 consisted of a $ 32 million secured term loan (the “Agemo Term Loan”) and a $ 25.0 million secured working capital loan (the “Agemo WC Loan”) with Agemo.

The Agemo Term Loan was acquired in 2016 and bore interest at 9 % per annum.

The Agemo Term Loan had a maturity date of December 31, 2024 and was secured by a security interest in certain collateral of Agemo.

The Agemo WC Loan was issued on May 7, 2018 and bore interest at 7 % per annum.

The Agemo WC Loan had a maturity date of April 30, 2025 and was primarily secured by a collateral package that includes a second lien on the accounts receivable of Agemo.

The proceeds of the Agemo WC Loan were used to pay operating expenses, settlement payments, fees, taxes and other costs approved by the Company.

As discussed in Note 5 – Contractual Receivables and Other Receivables and Lease Inducements, Agemo failed to pay contractual rent and interest to us from August 2021 through October 2021 and in December 2021.

5 unchanged sentences

During the year ended December 31, 2022, we recorded additional provisions for credit losses of $ 10.8 million related to the Agemo WC Loan because of reductions in the fair value of the underlying collateral assets supporting the current carrying values.

At December 31, 2022, the total carrying value of our loans outstanding with Agemo, net of allowances for credit losses, is approximately $ 5.9 million.

OMEGA HEALTHCARE INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

As discussed in Note 5 – Contractual Receivables and Other Receivables and Lease Inducements, in the first quarter of 2023, Omega entered into a restructuring agreement and a replacement loan agreement that modified the existing Agemo loans.

Under the restructuring agreement, previously written off contractual unpaid interest related to the Agemo WC Loan and the Agemo Term Loan was forgiven.

The outstanding principal of the Agemo Term Loan was rolled into a $ 32.0 million loan (“Agemo Replacement Loan A”).

The outstanding principal of the Agemo WC Loan and the aggregate rent deferred and outstanding under the Agemo lease agreement will be combined into a $ 50.2 million loan (“Agemo Replacement Loan B” and with Agemo Replacement Loan A, the “Agemo Replacement Loans”).

The Agemo Replacement Loans bear interest at 5.71 % per annum and mature on December 31, 2036 .

No interest payments will accrue or are required to be paid until March 1, 2023, contingent upon Agemo’s compliance with certain conditions of the restructuring agreement.

After three years, Agemo is required to make principal payments on the Agemo Replacement Loans dependent on certain cash flow metrics.

The outstanding principal of the Agemo Term Loan was refinanced into a new $ 32.0 million loan (“Agemo Replacement Loan A”).

The outstanding principal of the Agemo WC Loan and the aggregate rent deferred and outstanding under the Agemo lease agreement was combined and refinanced into a new $ 50.2 million loan (“Agemo Replacement Loan B” and with Agemo Replacement Loan A, the “Agemo Replacement Loans”).

The Agemo Replacement Loans bear interest at 5.63 % per annum through October 2024, which increases to 5.71 % per annum until maturity.

The Agemo Replacement Loans mature on December 31, 2036 .

Interest payments were scheduled to resume on April 1, 2023, contingent upon Agemo’s compliance with certain conditions of the restructuring agreement;

however, Agemo had the option to defer the interest payment due on April 1, 2023.

Beginning in January 2025, Agemo will be required to make principal payments on the Agemo Replacement Loans dependent on certain metrics.

These amendments were treated as loan modifications provided to a borrower experiencing financial difficulty.

Both of 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.

Prior to the restructuring, the principal of the Agemo WC Loan and the Agemo Term Loan were written down to $ 5.9 million and zero , respectively, the fair value of the underlying collateral of these loans.

No changes to the collateral supporting the loans were made because of the refinancing of these loans into the Agemo Replacement Loans.

Additional principal of $ 25.2 million related to deferred rent due under the master lease was combined with the principal of the Agemo WC Loan under Agemo Replacement Loan B.

This deferred rent balance was previously written off when the Agemo master lease was taken to a cash basis of revenue recognition in 2020.

We believe it is not probable that we will collect the additional $ 25.2 million of principal balance associated with the deferred rent under Agemo Replacement Loan B.

As such, we added an additional allowance for credit losses of $ 25.2 million related to Agemo Replacement Loan B concurrent with the increase in loan principal during the first quarter of 2023.

There is no income statement impact as a result of this additional reserve due to the balance previously being written off.

Agemo exercised its option to defer the interest payments due on April 1, 2023 and resumed making interest payments in May 2023 in accordance with the restructuring terms discussed above.

During the year ended December 31, 2023, we received $ 3.2 million of interest payments from Agemo that we applied against the outstanding principal of the loans and recognized a recovery for credit loss equal to the amount of payments applied against the principal.

As of December 31, 2023, the amortized cost basis of these loans was $ 77.9 million, which represents 19.6 % of the total amortized cost basis of all non-real estate loans receivables.

As of December 31, 2023, the total reserves related to the Agemo Replacement loans was $ 71.9 million.

Notes due 2024 - 2026

Notes due 2022 - 2028 consists of eight loans with the same operator that are primarily short-term revolving lines of credit that are collateralized by the accounts receivable of certain operations of the operator.

The most significant of the outstanding loans is a short-term $ 90.0 million revolving line of credit that we entered into on June 28, 2022 in connection with the $ 35.6 million mezzanine loan discussed in Note 7 – Real Estate Loans Receivable above.

The loan proceeds were used by this operator to finance working capital requirements of new operations in a new state to the operator.

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 December 31, 2022, the outstanding principal under this revolving line of credit was $ 33.0 million.

On December 19, 2023, the Company entered into a $ 50.0 million secured term loan with a principal of an operator that bears interest at a fixed rate of 11 % per annum and matures on December 19, 2026 .

In connection with entering into this loan, we also entered into two lease amendments to extend the term of two leases with entities associated with this principal.

The loan is collateralized by a pledge of equity interests in a closely held corporation of which the principal is the majority owner.

The loan requires monthly interest and principal payments commencing January 19, 2024.

OMEGA HEALTHCARE INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

Note due 2024

On July 8, 2019, the Company entered into a $ 15 million unsecured revolving credit facility agreement with a principal of an operator that bears interest at a fixed rate of 7.5 % per annum and originally matured on July 8, 2022 .

The loan is collateralized by the assets of the principal and is cross-collateralized with the lease and other loans of the operator of which this borrower is the principal.

During 2022, this revolving credit facility was amended multiple times to increase the maximum principal to $ 48 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 January 2023, to $ 1.5 million in August 2023 and to $ 2.5 million in December 2023.

No principal payment amounts were required for the months of November and December 2022.

During 2023, this revolving credit facility was further amended to increase the maximum principal to $ 55 million, increase the interest rate on certain borrowings as discussed above and modify the principal payment schedule.

During the third and fourth quarters of 2023, the borrower failed to make aggregate contractual principal payments of $ 8.5 million due under the revolving credit facility.

In February 2024, we amended the revolving credit facility agreement to, among other items, extend the maturity date to December 31, 2025 and to modify the mandatory principal payments required under the loan, such that the $ 8.5 million of missed principal payments are no longer past due and will be paid over the remaining loan term.

Additionally, the amendment increased the interest rate on principal balances exceeding $ 15.0 million to 8 % in January 2024, with further interest rate increases to 9 % and 10 % in April 2024 and June 2024, respectively.

Notes due 2036 ;

interest at 2.00 %

On September 1, 2021, we entered into an $ 8.3 million term loan with LaVie to be funded through monthly advances in the amount of $ 0.7 million from September 2021 through August 2022.

This term loan bears interest at a fixed rate of 7 % per annum (which may be paid-in-kind for the first year of the loan), matures on March 31, 2031 and requires monthly principal payments of $ 0.1 million commencing September 1, 2022.

This term loan bore interest at a fixed rate of 7 % per annum (which may be paid-in-kind for the first year of the loan), originally matured on March 31, 2031 and required monthly principal payments of $ 0.1 million commencing September 1, 2022.

The loan is secured by a guarantee from LaVie’s parent entities.

On March 25, 2022, we entered into a $ 25.0 million term loan with LaVie 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.

OMEGA HEALTHCARE INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

During the fourth quarter of 2022, we amended these loans with LaVie to, among other terms, extend the loan maturities to November 30, 2036 to align with the lease term, and starting in January 2023, reduce the interest rates to 2 %, remove the requirement to make any principal payments until the maturity dates and to convert from monthly cash interest payments to interest paid-in-kind.

These amendments were treated as loan modifications.

In the fourth quarter of 2022, we reduced the risk rating on these loans from a 5 to a 6, primarily due to the modifications of the loan terms.

On March 25, 2022, we entered into a $ 25.0 million term loan with LaVie that bore interest at a fixed rate of 8.5 % per annum and originally matured on March 31, 2032 .

This term loan required 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.

These amendments were treated as loan modifications to a borrower experiencing financial difficulty.

Given the modifications, we evaluated the risk of loss on these loans on an individual basis based on the fair value of the collateral.

7 unchanged sentences

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.

The loan bore interest at a fixed rate of 12 % per annum with a September 14, 2027 maturity date.

In February 2023, this loan was repaid.

Note due 2024

No principal payment amounts were required for the months of November and December 2022.

OMEGA HEALTHCARE INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

Other notes outstanding

As of December 31, 2022, our other notes outstanding represents 15 loans to operators that primarily consists of term loans and working capital loans or revolving credit facilities.

As of December 31, 2023, our other notes outstanding represent 23 loans to operators and/or principals that primarily consists of term loans and working capital loans or revolving credit facilities.

Many of these loans are not individually significant and the use of proceeds of these loans can vary.

5 unchanged sentences

Advances under the working capital loan are not required to be repaid until maturity.

The $ 20.0 million WC loan is secured by the accounts receivables of these facilities during the interim period of operation.

OMEGA HEALTHCARE INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

The $ 20.0 million WC loan is secured by the accounts receivable of these facilities during the interim period of operation.

During the year ended December 31, 2022, we recognized provisions for credit losses of $ 5.2 million related to the $ 20.0 million WC loan, which resulted in the loan being fully reserved.

1 unchanged sentence

The $ 20.0 million WC Loan was placed on non-accrual status during the third quarter of 2022 and is being accounted for under the cost recovery method.

As of December 31, 2022, the outstanding principal under this loan was $ 5.4 million.

During the year ended December 31, 2023, we recognized a recovery for credit loss of $ 0.8 million for principal payments received on this loan.

As of December 31, 2023, the outstanding principal under this loan was $ 4.6 million, which is fully reserved.

Gulf Coast – DIP Facility

As discussed in Note 5 – Contractual Receivables and Other Receivables and Lease Inducements, in October 2021, we provided an up to $ 25.0 million senior secured DIP facility (the “DIP Facility”) with Gulf Coast, in order to provide liquidity for the operations of the Gulf Coast facilities during its Chapter 11 cases.

A portion of the funding under the DIP Facility was tied to certain milestones and other conditions, including the transition of the management of the operations of the facilities.

At December 31, 2021, these milestones and conditions had been met and the full capacity of the DIP Facility was available to be borrowed upon by Gulf Coast.

The DIP Facility bears interest at LIBOR (subject to a 1 % floor) plus 12 % per annum and has an unused commitment fee equal to .50 % of the average daily balance of the undrawn commitments.

Interest and fees are payable monthly and the principal is due at maturity, unless the amount outstanding thereunder is accelerated prior to maturity.

The DIP financing is guaranteed by all debtors in Gulf Coast’s Chapter 11 cases and is secured by liens on substantially all of their assets, including post-petition accounts receivable, subject in certain cases to other priorities or exceptions.

As discussed in Note 5 – Contractual Receivables and Other Receivables and Lease Inducements, in October 2021, we provided a $ 25.0 million senior secured DIP facility (the “DIP Facility”) to Gulf Coast, in order to provide liquidity for the operations of the Gulf Coast facilities during its Chapter 11 cases.

The DIP Facility bore interest at LIBOR (subject to a 1 % floor) plus 12 % per annum and had an unused commitment fee equal to .50 % of the average daily balance of the undrawn commitments.

Interest and fees were payable monthly and the principal was due at maturity.

The DIP financing was guaranteed by all debtors in Gulf Coast’s Chapter 11 cases and was secured by liens on substantially all of their assets, including post-petition accounts receivable, subject in certain cases to other priorities or exceptions.

As of December 31, 2021, $ 20.5 million was outstanding under the DIP Facility, which was fully reserved for as discussed further below.

Given the uncertainty and complexity surrounding the bankruptcy process and the deteriorated credit of Gulf Coast, we evaluated the DIP facility on an individual basis and elected to measure the risk of loss on the DIP Facility based on the fair value of the collateral.

Based on the cash forecasts provided by Gulf Coast as part of the Support Agreement and on-going monthly reporting, we estimated that the collateral will have insufficient value to support the loan at maturity and that we will be unable to collect on substantially all principal amounts advanced to Gulf Coast under the DIP Facility.

Given the uncertainty and complexity surrounding the bankruptcy process and the deteriorated credit of Gulf Coast, we estimated that the collateral would have insufficient value to support the loan at maturity and that we would be unable to collect on substantially all principal amounts advanced to Gulf Coast under the DIP Facility.

Upon funding, we fully reserved all principal amounts advanced under the DIP Facility.

1 unchanged sentence

See further discussion within Note 9 – Allowance for Credit Losses.

Additionally, we have placed the loan on non-accrual status and used the cost recovery method to apply any interest and fees received directly against the principal of the loan.

Additionally, we placed the loan on non-accrual status and used the cost recovery method to apply any interest and fees received directly against the principal of the loan.

During the year ended December 31, 2021, we received $ 0.5 million of interest and fee payments that we applied against the outstanding principal and recognized a recovery for credit loss equal to the amount of payments applied against the principal.

OMEGA HEALTHCARE INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

During the year ended December 31, 2022, we recorded an additional net provision for credit losses of $ 0.2 million related to the DIP Facility, which reflects the full reserve of additional advances of $ 2.2 million made under the facility during 2022 and a $ 2.0 million recovery for interest and fee payments received during 2022 that were applied against the outstanding principal.

The DIP facility matured on August 15, 2022 , which resulted in a write-off of the loan and reserve balances.

During the year ended December 31, 2023, we received proceeds of $ 1.0 million from the liquidating trust which resulted in a recovery for credit losses of $ 1.0 million.

Revolving Credit Facility – $ 25 million

2 unchanged sentences

The credit facility is secured by a first lien on the accounts receivable of the 3.8 % Operator.

Following the amendment in the fourth quarter, the 3.7 % Operator drew $ 7.8 million under the credit facility during the fourth quarter of 2021.

This revolving credit facility was further amended in the fourth quarter of 2022 to increase the maximum principal to $ 25 million, with any borrowed amount in excess of $ 20 million to be repaid no later than June 30, 2023 .

During 2022, the 3.7 % Operator drew $ 9.0 million under the facility and the line of credit of $ 25.0 million was fully drawn as of December 31, 2022.

OMEGA HEALTHCARE INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

During the third quarter of 2023, this revolving credit facility was further amended to increase the maximum principal to $ 25 million, increase the interest rate to 8.5 % beginning in October 2024 and extend the maturity date to December 31, 2025 .

As of December 31, 2023, $ 23.7 million was outstanding on the revolving credit facility.

As discussed in Note 5 – Contractual Receivables and Other Receivables and Lease Inducements, from January through March 2022, the 3.8 % Operator paid contractual interest under the credit facility but failed to pay contractual rent due under its lease agreement.

In March 2022, the lease with the 3.8 % Operator was amended to allow for a short-term rent deferral for January through March 2022.

The 3.7 % Operator paid the contractual amount due under its lease and loan agreements from April 2022 through December 2022.

The 3.8 % Operator has since paid the contractual amounts due under its lease and loan agreements from April 2022 through December 2023.

Promissory Notes – $ 20 million

2 unchanged sentences

All three loans require quarterly principal payments commencing on January 3, 2023.

Second Spring Healthcare Investments

On April 17, 2020, we provided a $ 17.6 million unsecured loan to a subsidiary of Second Spring Healthcare Investments (an entity in which we have an approximate 15 % ownership interest, see Note 11 – Investments in Joint Ventures) bearing interest at the greater of the prime interest rate or 3-month LIBOR plus 2.75 % per annum which was due on demand.

This loan was repaid in 2021.

As of December 31, 2023, the loans have total outstanding principal of $ 17.2 million.

$ 10.0 million Mezzanine Loan and Working Capital Loan

On June 30, 2023, the Company entered into a $ 10.0 million mezzanine loan and a revolving working capital loan with an existing operator in connection with the operator’s acquisition of a portfolio of facilities in Pennsylvania.

The $ 10.0 million mezzanine loan matures on June 30, 2028 and bears interest at a fixed rate of 11 % per annum.

The $ 10.0 million mezzanine loan also requires monthly amortizing payments of principal and interest in the amount of $ 0.2 million.

The $ 10.0 million mezzanine loan is secured by an equity interest in a subsidiary of the operator.

The working capital loan matures on June 30, 2026 and bears interest at a fixed rate of 10 % per annum.

The working capital loan has a maximum principal of $ 34.0 million for the first year that decreases to $ 20.0 million thereafter.

The working capital loan is secured by the accounts receivable of the acquired facilities.

As of December 31, 2023, the revolving working capital loan and mezzanine loan have outstanding principal balances of $ 12.0 million and $ 9.4 million, respectively.

OMEGA HEALTHCARE INVESTORS, INC.

1 unchanged sentence

NOTE 9 – ALLOWANCE FOR CREDIT LOSSES

In the fourth quarter of 2022, we revised the presentation of certain loans subject to our allowance for credit losses as discussed in Note 2 – Summary of Significant Accounting Policies.

The disclosures below have been reclassified to conform to the revised presentation.

A rollforward of our allowance for credit losses, summarized by financial instrument type and internal credit risk rating, for the years ended December 31, 2023, 2022 and 2021 is as follows:

3 unchanged sentences

Write-offs charged against allowance for the year ended December 31, 2023

Other additions to the allowance for the year ended December 31, 2023

Allowance for Credit Loss as of December 31, 2023

5 unchanged sentences

Real estate loans receivable

Investment in direct financing leases

Non-real estate loans receivable

Unfunded real estate loan commitments

Unfunded non-real estate loan commitments

(1) During the year ended December 31, 2023, we received proceeds of $ 1.0 million from the liquidating trust related to the DIP facility which resulted in a recovery for credit losses of $ 1.0 million that is not included in the rollforward above since we had previously written-off the loan balance and related reserves.

(2) This amount relates to the write-off of the allowance for the Guardian mortgage note in connection with the settlement and partial forgiveness of the note in the second quarter of 2023.

See Note 7 – Real Estate Loans Receivable for additional details.

(3) This amount relates to the additional $ 25.2 million allowance recorded during the first quarter of 2023 to reserve the aggregate deferred rent amount that is included within Agemo Replacement Loan B.

See Note 8 – Non-Real Estate Loans Receivable for additional details.

OMEGA HEALTHCARE INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

Financial Statement Line Item

Allowance for Credit Loss at December 31, 2021

Provision (recovery) for Credit Loss for the year ended December 31, 2022

Write-offs charged against allowance for the year ended December 31, 2022

Allowance for Credit Loss as of December 31, 2022

(in thousands)

Real estate loans receivable

Investment in direct financing leases

5 unchanged sentences

Non-real estate loans receivable

Off-balance sheet non-real estate loan commitments

Off-balance sheet real estate loan commitments

Off-balance sheet non-real estate loan commitments

Off-balance sheet real estate loan commitments

Off-balance sheet non-real estate loan commitments

(1) During the third quarter of 2022, we wrote-off the loan balance and reserve for one real estate loan with a rating of 6 that expired during the third quarter which had previously been fully reserved.

(2) Reflects additional provisions of $ 10.8 million recorded on the Agemo WC Loan during the year ended December 31, 2022.

Unfunded real estate loan commitments

Unfunded non-real estate loan commitments

(1) During the third quarter of 2022, we wrote-off the loan balance and reserve for a loan that expired during the quarter which had previously been fully reserved.

(2) This provision includes an additional $ 10.8 million allowance recorded on the Agemo WC Loan during the year ended December 31, 2022.

See Note 8 – Non-Real Estate Loans Receivable for additional information on the Agemo WC Loan.

(3) Reflects aggregate provisions of $ 23.3 million recorded on the LaVie $ 25.0 million term loan and on the $ 8.3 million term loan during the fourth quarter of 2022.

(3) This provision includes an additional $ 23.3 million allowance recorded on the LaVie $ 25.0 million term loan and on the $ 8.3 million term loan during the fourth quarter of 2022.

See Note 8 – Non-Real Estate Loans Receivable for additional information on the LaVie term loans.

(4) Reflects an additional provision of $ 5.2 million recorded on the $ 20 million WC loan during the year ended December 31, 2022 as discussed in Note 8 – Non-real Estate Loans Receivable.

(4) This provision includes an additional $ 5.2 million allowance recorded on the $ 20 million WC loan during the year ended December 31, 2022 as discussed in Note 8 – Non-Real Estate Loans Receivable.

(5) In the second quarter of 2022 we recorded an additional reserve of $ 2.2 million related to the remaining commitment under the DIP facility as we were notified of the operator’s intent to draw the funds in the third quarter of 2022.

19 unchanged sentences

Non-real estate loans receivable

Off-balance sheet non-real estate loan commitments

Off-balance sheet real estate loan commitments

Off-balance sheet non-real estate loan commitments

Off-balance sheet real estate loan commitments

Off-balance sheet non-real estate loan commitments

Unfunded real estate loan commitments

Unfunded non-real estate loan commitments

(1) Amount reflects the movement of reserves associated with our mortgage loan with Guardian due to a reduction of our internal risk rating on the loan from a 4 to a 6 during 2021.

11 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

Financial Statement Line Item

Allowance for Credit Loss at December 31, 2019

Allowance for Credit Loss at January 1, 2020

Provision (recovery) for Credit Loss for the year ended December 31, 2020

Write-offs charged against allowance for the year ended December 30, 2020

Allowance for Credit Loss as of December 31, 2020

(in thousands)

Real estate loans receivable

Investment in direct financing leases

Non-real estate loans receivable

Off-balance sheet non-real estate loan commitments

Off-balance sheet real estate loan commitments

Included below is a summary of the amortized cost basis of our financial instruments by year of origination and internal risk rating and a summary of our gross write-offs by year of origination:

8 unchanged sentences

Real estate loans receivable

Investment in direct financing leases

5 unchanged sentences

Year to date gross write-offs

OMEGA HEALTHCARE INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

Interest Receivable on Real Estate Loans and Non-real Estate Loans

2 unchanged sentences

We write-off interest receivable to provision for credit losses in the period we determine the interest is no longer considered collectible.

For the years ended December 31, 2021 and 2020, we wrote-off interest receivables of $ 1.0 million (related to the Guardian mortgage loan, see Note 7 – Real Estate Loans Receivable) and $ 3.8 million (related to the Agemo Term Loan, see Note 8 – Non-real Estate Loans Receivable) through the provision for credit losses.

For the year ended December 31, 2021, we wrote-off interest receivables of $ 1.0 million (related to the Guardian mortgage loan, see Note 7 – Real Estate Loans Receivable).

This write-off is not reflected in the roll forward of the allowance for credit losses above.

2 unchanged sentences

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.

OMEGA HEALTHCARE INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

Below is a summary of our assets, liabilities, collateral, and maximum exposure to loss associated with these unconsolidated VIEs as of December 31, 2023 and 2022:

3 unchanged sentences

Real estate loans receivable – net

Investments in unconsolidated joint ventures

Non-real estate loans receivable – net

Contractual receivables – net

Other receivables and lease inducements

Net in-place lease liability

Security deposit

Contingent liability

Other liabilities

Accrued expenses and other liabilities

Total liabilities

Letters of credit

Personal guarantee

7 unchanged sentences

The fair value of the accounts receivable available to Omega was $ 8.9 million and $ 5.9 million as of December 31, 2023 and December 31, 2022, respectively.

OMEGA HEALTHCARE INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

In determining our maximum exposure to loss from these VIEs, we considered the underlying carrying value of the real estate subject to leases with these operators 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.

4 unchanged sentences

Interest income

(1) The rental income for the year ended December 31, 2023, reflects the $ 12.5 million option termination fee payment made to Maplewood in the first quarter of 2023 that was accounted for as a lease inducement (see Note 5 – Contractual Receivables and Other Receivables and Lease Inducements).

The rental income for the year ended December 31, 2022, reflects the write-off of approximately $ 29.3 million of straight-line rent receivables and lease inducements related to Maplewood (see Note 5 – Contractual Receivables and Other Receivables and Lease Inducements).

The rental income for the year ended December 31, 2020, reflects the write-off of approximately $ 75.3 million of contractual rent receivables, straight-line rent receivables and lease inducements related to Agemo (see Note 5 – Contractual Receivables and Other Receivables and Lease Inducements).

OMEGA HEALTHCARE INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

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 own a partial equity interest in a joint venture that we have determined is a VIE.

We have consolidated this VIE because 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 and obligation to absorb losses arising from 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.

5 unchanged sentences

See further discussion of EATs that are consolidated in Note 3 – Real Estate Asset Acquisitions and Development.

OMEGA HEALTHCARE INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

NOTE 11 – INVESTMENTS IN JOINT VENTURES

6 unchanged sentences

Investment (1)

December 31, 2023

Second Spring Healthcare Investments (2)

Second Spring II LLC (3)

Lakeway Realty, L.L.C.

4 unchanged sentences

OH CHS SNP, Inc.

RCA NH Holdings RE Co., LLC (5)(6)

WV Pharm Holdings, LLC (5)(6)

OMG-Form Senior Holdings, LLC (6)(7)

CHS OHI Insight Holdings, LLC

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

(2) The Company made a loan of $ 17.6 million in April 2020 to the venture which is included in other investments.

See Note 8 – Non-real Estate Loans Receivable.

(2) During the first quarter of 2021, this joint venture sold 16 SNFs to an unrelated third party for approximately $ 328 million in net proceeds and recognized a gain on sale of approximately $ 102.2 million ( $ 14.9 million of which represents the Company’s share of the gain).

During the first quarter of 2021, this joint venture also sold five SNFs to Second Spring II LLC for approximately $ 70.8 million in net proceeds.

During 2020, this joint venture sold 16 SNFs subject to an operating lease for approximately $ 259.1 million in net cash proceeds and recognized a gain on sale of approximately $ 40.4 million ( $ 5.9 million of which represents the Company’s share of the gain).

(3) We acquired a 15 % interest in Second Spring II LLC for approximately $ 10.3 million.

During the first quarter of 2021, this joint venture acquired five SNFs from Second Spring Healthcare Investments for approximately $ 70.8 million.

During the second and third quarters of 2021, this joint venture sold five SNFs to an unrelated third party for approximately $ 65 million in net proceeds and recognized a loss on sale of approximately $ 0.4 million ( $ 0.1 million of which represents the Company’s share of the loss).

(3) We acquired an interest in a joint venture that owns the Lakeway Regional Medical Center (the “Lakeway Hospital”) in Lakeway, Texas.

8 unchanged sentences

Our initial basis difference of approximately $ 35 million is being amortized on a straight-line basis over approximately 40 years to income (loss) from unconsolidated joint ventures in the Consolidated Statements of Operations.

(5) These joint ventures were entered into in connection with an existing operator’s acquisition of SNFs in West Virginia during the second quarter of 2023, as discussed in Note 7 – Real Estate Loans Receivable and Note 8 – Non-Real Estate Loans Receivable.

The acquiring operator in the transaction is the majority owner of these joint ventures.

As of December 31, 2023, we have an aggregate of $ 9.8 million of loans outstanding with these joint ventures.

(6) These joint ventures are unconsolidated VIEs and therefore are included in the tables in Note 10 – Variable Interest Entities.

(7) During the second quarter of 2023, we funded $ 7.7 million under a mortgage loan with this joint venture.

OMEGA HEALTHCARE INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

The following table reflects our income (loss) from unconsolidated joint ventures for the years ended December 31, 2023, 2022 and 2021:

7 unchanged sentences

OH CHS SNP, Inc.

OMG-Form Senior Holdings, LLC

(1) The income from this unconsolidated joint venture for the year ended December 31, 2021 includes a $ 14.9 million gain on sale of real estate investments.

OMEGA HEALTHCARE INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

(2) The assets held by this joint venture have been liquidated, and we have no remaining operations related to this joint venture.

(3) Includes $ 2.5 million of fair value losses associated with derivative instruments.

Asset Management Fees

16 unchanged sentences

Foreign currency translation

Sale of subsidiary (1)

Balance as of December 31, 2023

2 unchanged sentences

We included $ 6.7 million of goodwill in the net assets disposed in connection with the transaction.

Our investment in the acquiring entity is included within other assets in the consolidated balance sheet as December 31, 2022.

Our investment in the acquiring entity is included within other assets in the consolidated balance sheet as of December 31, 2022.

OMEGA HEALTHCARE INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

The following is a summary of our lease intangibles as of December 31, 2023 and 2022:

9 unchanged sentences

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.

OMEGA HEALTHCARE INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

For the years ended December 31, 2023, 2022 and 2021, our net amortization related to intangibles was $ 9.4 million, $ 5.7 million and $ 9.5 million, respectively.

5 unchanged sentences

2028 – $ 0.9 million and $ 2.4 million thereafter.

As of December 31, 2022, the weighted average remaining amortization period of above market lease assets is approximately ten years and of below market lease liabilities is approximately seven years .

As of December 31, 2023, the weighted average remaining amortization period of above market lease assets is approximately 13 years and of below market lease liabilities is approximately seven years .

NOTE 13 - CONCENTRATION OF RISK

2 unchanged sentences

Our investment in these facilities, net of impairments and allowances, totaled approximately $ 9.1 billion at December 31, 2023, with approximately 97 % of our real estate investments related to long-term healthcare facilities.

Our portfolio is made up of (i) 665 SNFs, 169 ALFs, 20 ILFs, 16 specialty facilities and two MOBs, (ii) fixed rate mortgages on 48 SNFs, two ALFs and two specialty facilities, and (iii) two facilities that are held for sale.

At December 31, 2022, we also held other real estate loans (excluding mortgages) receivable of $ 394.6 million and non-real estate loans receivable of $ 225.3 million, consisting primarily of secured loans to third-party operators of our facilities, and $ 178.9 million of investments in six unconsolidated joint ventures.

At December 31, 2022, we had investments with one operator/or manager that approximated or exceeded 10% of our total investments:

At December 31, 2021, we had investments with two operators/or managers that approximated or exceeded 10% of our total investments:

Maplewood and LaVie.

Our portfolio is made up of (i) 592 SNFs, 188 ALFs, 19 ILFs, 19 specialty facilities and one MOB, (ii) fixed rate mortgages on 45 SNFs, seven ALFs, two specialty facilities and one ILF, and (iii) 17 facilities that are held for sale.

At December 31, 2023, we also held other real estate loans (excluding mortgages) receivable of $ 513.4 million and non-real estate loans receivable of $ 275.6 million, consisting primarily of secured loans to third-party operators of our facilities, and $ 188.4 million of investments in nine unconsolidated joint ventures.

At December 31, 2023 and 2022, we had investments with one operator/or manager that approximated or exceeded 10% of our total investments:

Maplewood generated approximately 6.6 %, 8.9 % and 7.9 % of our total revenues (excluding the impact of write-offs) for the years ended December 31, 2023, 2022 and 2021, respectively.

LaVie generated approximately 11.1 %, 9.5 % and 9.4 % of our total revenues (excluding the impact of write-offs) for the years ended December 31, 2022, 2021 and 2020, respectively.

At December 31, 2022, the three states in which we had our highest concentration of investments were Florida ( 11.5 %), Texas ( 10.3 %) and Indiana ( 6.6 %).

During the year ended December 31, 2023, we also have one operator with total revenues (excluding the impact of write-offs) that exceeded 10% of our total revenues:

CommuniCare Health Services, Inc.

(“CommuniCare”).

CommuniCare generated approximately 11.5 %, 7.9 % and 6.3 % of our total revenues (excluding the impact of write-offs) for the years ended December 31, 2023, 2022 and 2021, respectively.

As of December 31, 2023, CommuniCare represented approximately 9.3 % of our total investments.

At December 31, 2023, the three states in which we had our highest concentration of investments were Texas ( 10.5 %), Indiana ( 6.9 %) and California ( 6.1 %).

In addition, our concentration of investments in the U.K.

OMEGA HEALTHCARE INVESTORS, INC.

21 unchanged sentences

2033 notes (6)

2025 term loan (6)(9)

OP term loan (10)(11)

12 unchanged sentences

(6) Guaranteed by Omega OP.

(7) During the second quarter of 2023, the Company transitioned its benchmark interest rate for its $ 1.45 billion senior unsecured multicurrency revolving credit facility from LIBOR to SOFR .

As of December 31, 2023, 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 6.67 % and 6.51 % as of December 31, 2023, respectively.

(8) In March 2021, we used a portion of the proceeds from the 2033 Senior Notes offering to fund the tender offer to redeem $ 350 million of the 4.375 % Senior Notes due 2023 .

In connection with this transaction, we recorded approximately $ 30.6 million in related fees, premiums, and expenses for the year ended December 31, 2021, which were recorded as Loss on debt extinguishment in our Consolidated Statement of Operations.

(9) In March 2021, we used the proceeds from this offering to pay down outstanding borrowings on the 2017 Revolving Credit Facility, repay the Sterling term loan, and fund the tender offer to purchase $ 350 million of the 4.375 % Senior Notes due 2023 and the payment of accrued interest and related fees, premiums and expenses.

(8) On August 1, 2023, the Company repaid the $ 350 million of 4.375 % senior notes that matured on August 1, 2023 using available cash.

(9) The weighted average interest rate of the $ 428.5 million 2025 term loan has been adjusted to reflect the impact of the interest rate swaps that effectively fix the SOFR-based portion of the interest rate at 4.047 % .

(10) Omega OP is the obligor on this borrowing.

(11) 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 .

(11) During the second quarter of 2023, the Company transitioned its benchmark interest rate for its $ 50.0 million senior unsecured term loan facility (the “OP term loan”) from LIBOR to SOFR .

The weighted average interest rate of the $ 50 million OP term loan has been adjusted to reflect the impact of the interest rate swaps that effectively fix the SOFR-based portion of the interest rate at 3.957 % .

(12) All borrowings are direct borrowings of Parent unless otherwise noted.

6 unchanged sentences

On October 31, 2019, we assumed approximately $ 389 million in mortgage loans guaranteed by HUD.

The HUD loans have maturity dates between 2046 and 2052 with fixed interest rates ranging from 2.82 % per annum to 3.24 % per annum.

The HUD loans had maturity dates between 2046 and 2052 with fixed interest rates ranging from 2.82 % per annum to 3.24 % per annum.

The HUD loans may be prepaid subject to an initial penalty of 10 % of the remaining principal balances in the first year and the prepayment penalty decreases each subsequent year by 1 % until no penalty is required.

On August 26, 2020, we paid approximately $ 13.7 million to retire two mortgage loans guaranteed by HUD that were assumed in 2019 and had an average interest rate of 3.08 % per annum with maturities in 2051 and 2052 .

The payoff included a $ 0.9 million prepayment fee which is included in loss on debt extinguishment on our Consolidated Statements of Operations.

On August 31, 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 Statements of Operations.

In connection with the sales made in the third and fourth quarters of 2023 (as discussed further in Note 4 – Assets Held for Sale, Dispositions and Impairments), 29 mortgage loans guaranteed by HUD in the aggregate amount of $ 281.7 million that were assumed in 2019 were retired.

These 29 loans had a weighted average fixed interest rate of 3.03 % per annum with maturities between 2046 and 2052 .

During the fourth quarter of 2023, we paid approximately $ 14.8 million to retire three mortgage loans guaranteed by HUD that were assumed in 2019 and had a weighted average fixed interest rate of 2.97 % per annum with maturity dates between 2046 and 2052 .

The payoff included a $ 0.5 million prepayment fee which is included in loss on debt extinguishment on our Consolidated Statements of Operations.

All HUD loans are subject to the regulatory agreements that require escrow reserve funds to be deposited with the loan servicer for mortgage insurance premiums, property taxes, debt service and capital replacement expenditures.

1 unchanged sentence

Unsecured Borrowings

2025 Term Loan

On August 8, 2023, Omega entered into a credit agreement (the “2025 Omega Credit Agreement”) providing it with a new $ 400 million senior unsecured term loan facility (the “2025 Term Loan”).

The 2025 Omega Credit Agreement contains an accordion feature permitting us, subject to compliance with customary conditions, to increase the maximum aggregate commitments thereunder to $ 500 million by requesting an increase in the aggregate commitments under the 2025 Term Loan.

On September 27, 2023, Omega exercised the accordion feature to increase the aggregate commitment under the 2025 Term Loan by $ 28.5 million.

The 2025 Term Loan bears interest at SOFR plus an adjustment of 0.1 % per annum plus an applicable percentage (with a range of 85 to 185 basis points) based on our credit rating.

The 2025 Term Loan matures on August 8, 2025 , subject to Omega’s option to extend such maturity date for two sequential 12 -month periods.

We recorded $ 3.3 million of deferred financing costs and a $ 1.4 million discount in connection with the 2025 Omega Credit Agreement.

OMEGA HEALTHCARE INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

Revolving Credit Facility

On April 30, 2021, Omega entered into a credit agreement (the “2021 Omega Credit Agreement”) providing us with a new $ 1.45 billion senior unsecured multicurrency revolving credit facility (the “Revolving Credit Facility”), replacing our previous $ 1.25 billion senior unsecured 2017 multicurrency revolving credit facility (the “2017 Revolving Credit Facility”).

On April 30, 2021, Omega entered into a credit agreement (the “Omega Credit Agreement”) providing us with a new $ 1.45 billion senior unsecured multicurrency revolving credit facility (the “Revolving Credit Facility”), replacing our previous $ 1.25 billion senior unsecured 2017 multicurrency revolving credit facility.

The Omega Credit Agreement contains an accordion feature permitting us, subject to compliance with customary conditions, to increase the maximum aggregate commitments thereunder to $ 2.5 billion, by requesting an increase in the aggregate commitments under the Revolving Credit Facility or by adding term loan tranches.

The Revolving Credit Facility bears interest at LIBOR (or in the case of loans denominated in GBP, the Sterling overnight index average reference rate plus an adjustment of 0.1193 % per annum, and in the case of loans denominated in Euros, the Euro interbank offered rate, or EURIBOR) plus an applicable percentage (with a range of 95 to 185 basis points) based on our credit ratings.

The Revolving Credit Facility matures on April 30, 2025 , subject to Omega’s option to extend such maturity date for two six-month periods.

The Revolving Credit Facility may be drawn in Euros, GBP, Canadian Dollars (collectively, “Alternative Currencies”) or USD, with a $ 1.15 billion tranche available in USD and a $ 300 million tranche available in Alternative Currencies.

For purposes of the Revolving Credit Facility, references to LIBOR include the Canadian dealer offered rates for amounts offered in Canadian Dollars and any other Alternative Currency rate approved in accordance with the terms of the 2021 Omega Credit Agreement for amounts offered in any other non-LIBOR quoted currency, as applicable.

The Revolving Credit Facility includes customary LIBOR replacement language, including, but not limited to, the use of rates for U.S.

dollar-denominated borrowings based on the secured overnight financing rate (“SOFR”) recommended by the Alternative Reference Rates Committee, a steering committee comprised of U.S.

financial market participants, as a replacement rate for LIBOR.

The Revolving Credit Facility bears interest at SOFR plus an adjustment of 0.11448 % per annum (or in the case of loans denominated in GBP, the Sterling overnight index average reference rate plus an adjustment of 0.1193 % per annum, and in the case of loans denominated in Euros, the Euro interbank offered rate, or EURIBOR) plus an applicable percentage (with a range of 95 to 185 basis points) based on our credit ratings.

SOFR is a broad measure of the cost of borrowing cash in the overnight U.S.

Treasury repo market, and is administered by the Federal Reserve Bank of New York.

The Revolving Credit Facility matures on April 30, 2025 , subject to Omega’s option to extend such maturity date for two six-month periods.

We incurred $ 12.9 million of deferred costs in connection with the Omega Credit Agreement.

OMEGA HEALTHCARE INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

On April 30, 2021, Omega OP entered into a credit agreement (the “Omega OP Credit Agreement”) providing it with a new $ 50 million senior unsecured term loan facility (the “OP Term Loan”).

The OP Term Loan replaces the $ 50 million senior unsecured term loan obtained in 2017 (the “2017 OP Term Loan”) and the related credit agreement.

The OP Term Loan bears interest at LIBOR plus an applicable percentage (with a range of 85 to 185 basis points) based on our credit ratings.

The OP Term Loan includes customary LIBOR replacement language, including, but not limited to, the use of rates based on SOFR.

The OP Term Loan replaces the $ 50 million senior unsecured term loan obtained in 2017 and the related credit agreement.

The OP Term Loan bears interest at SOFR plus an adjustment of 0.11448 % per annum plus an applicable percentage (with a range of 85 to 185 basis points) based on our credit ratings.

The OP Term Loan matures on April 30, 2025 , subject to Omega OP’s option to extend such maturity date for two , six-month periods.

We incurred $ 0.4 million of deferred costs in connection with the Omega OP Credit Agreement.

2017 Omega Credit Facilities

On May 25, 2017, Omega entered into a credit agreement (the “2017 Omega Credit Agreement”) for a new $ 1.8 billion senior unsecured revolving and term loan credit facility, consisting of a $ 1.25 billion senior unsecured multicurrency revolving credit facility (the “2017 Revolving Credit Facility”), a $ 425 million senior unsecured U.S.

Dollar term loan facility (the “U.S.

Term Loan”), and a £ 100 million senior unsecured British Pound Sterling term loan facility (the “Sterling Term Loan” and, together with the 2017 Revolving Credit Facility and the U.S.

Term Loan Facility, collectively, the “2017 Omega Credit Facilities”).

The 2017 Revolving Credit Facility bore interest at LIBOR plus an applicable percentage (with a range of 100 to 195 basis points) based on our ratings from Standard & Poor’s, Moody’s and/or Fitch Ratings.

Term Loan Facility and the Sterling Term Loan Facility bore interest at LIBOR plus an applicable percentage (with a range of 90 to 190 basis points) based on our ratings from Standard & Poor’s, Moody’s and/or Fitch Ratings.

In 2020, we repaid the outstanding balance on our U.S.

Term Loan and wrote-off $ 0.8 million of unamortized deferred costs to loss on debt extinguishment on our Consolidated Statements of Operations.

In 2021, we repaid the outstanding balance on our 2017 Revolving Credit Facility and Sterling Term Loan using a portion of the proceeds from the 2033 Senior Notes offering and wrote-off $ 0.2 million of unamortized deferred costs relating to the Sterling Term Loan to loss on debt extinguishment on our Consolidated Statements of Operations.

In April 2021, the 2017 Revolving Credit Facility was replaced by the Revolving Credit Facility.

2017 OP Term Loan

On May 25, 2017, Omega OP entered into a credit agreement (the “2017 Omega OP Credit Agreement”) providing it with a new $ 100 million senior unsecured term loan facility (the “2017 OP Term Loan”).

The 2017 OP Term Loan bore interest at LIBOR plus an applicable percentage (with a range of 90 to 190 basis points) based on our ratings from Standard & Poor’s, Moody’s and/or Fitch Ratings.

In April 2021, the 2017 OP Term loan was replaced by the OP Term Loan.

Amended 2015 Term Loan Facility

On May 25, 2017, Omega entered into an amended and restated credit agreement (the “Amended 2015 Credit Agreement”), which amended and restated our previous $ 250 million senior unsecured term loan facility (the “Amended 2015 Term Loan Facility”).

The Amended 2015 Term Loan Facility bore interest at LIBOR plus an applicable percentage (with a range of 140 to 235 basis points) based on our ratings from Standard & Poor’s, Moody’s and/or Fitch Ratings.

We repaid the Amended 2015 Term Loan Facility in October 2020 with proceeds from the senior notes issuance and wrote-off $ 0.7 million of unamortized deferred costs to loss on debt extinguishment on our Consolidated Statements of Operations.

OMEGA HEALTHCARE INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

Subordinated Debt

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

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

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

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

As discussed in Note 5 – Contractual Receivables and Other Receivables and Lease Inducements, to the extent that the operator of the facilities (Gulf Coast) failed to pay rent when due to us under our existing master lease, we had the right to offset the amounts owed to us against the amounts we owe to the lender under the notes.

4 unchanged sentences

Substantially all of our assets are held by non-guarantor subsidiaries.

OMEGA HEALTHCARE INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

The required principal payments, excluding the premium or discount and deferred financing costs on our secured and unsecured borrowings, for each of the five years following December 31, 2023 and the aggregate due thereafter are set forth below:

1 unchanged sentence

NOTE 15 – 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 December 31, 2023, we have 12 interest rate swaps with $ 478.5 million in notional value that was entered into during 2023 (discussed further below).

The swaps are designated as cash flow hedges of the interest payments on two of Omega’s variable interest loans.

Additionally, we have ten foreign currency forward contracts with £ 250.0 million in notional value issued at a weighted average GBP-USD forward rate of 1.3234 that are designated as net investment hedges.

Cash Flow Hedges of Interest Rate Risk

2 unchanged sentences

These interest rate swap agreements are used to hedge the variable cash flows associated with variable-rate debt.

As a result of exposure to interest rate movements associated with the Amended 2015 Term Loan Facility, on December 16, 2015, we entered into various forward-starting interest rate swap arrangements, which effectively converted $ 250 million of our variable-rate debt based on one-month LIBOR to an aggregate fixed rate of approximately 3.80 % effective December 30, 2016.

The effective fixed rate achieved by the combination of the Amended 2015 Term Loan Facility and the interest rate swaps could fluctuate up by 55 basis points or down by 40 basis points based on future changes to our credit ratings.

Each of these swaps had a scheduled maturity date of December 15, 2022 .

In October 2020, we terminated these $ 250.0 million of notional value interest rate swaps in connection with the repayment of the Amended 2015 Term Loan Facility and paid our swap counterparties $ 10.3 million which is recorded in loss on debt extinguishment on our Consolidated Statements of Operations.

On March 27, 2020 , we entered into five forward starting swaps totaling $ 400 million, indexed to 3-month LIBOR, that were issued at a weighted average fixed rate of approximately 0.8675 % and were subsequently designated as cash flow hedges of interest rate risk associated with interest payments on a forecasted issuance of fixed rate long-term debt, initially expected to occur within the next five years .

The swaps had an effective date of August 1, 2023 and an expiration date of August 1, 2033 .

In conjunction with the October 2020 issuance of $ 700 million of 3.375 % Senior Notes due 2031 and the March 2021 issuance of $ 700 million aggregate principal amount of our 3.25 % Senior Notes due 2033 , we applied hedge accounting for these five forward starting swaps and began amortization.

Simultaneously, we re-designated these swaps in new cash flow hedging relationships of interest rate risk associated with interest payments on another forecasted issuance of long-term debt.

We were hedging our exposure to the variability in future cash flows for forecasted transactions over a maximum period of 46 months (excluding forecasted transactions related to the payment of variable interest on existing financial instruments).

As a result of these transactions, the aggregate unrealized gain of $ 41.2 million ($ 9.5 million gain related to the October 2020 issuance and $ 31.7 million gain related to the March 2021 issuance) included within accumulated other comprehensive income at the time of the bond issuances is being ratably reclassified as a reduction to interest expense, net over 10 years.

On May 30, 2023, the five forward starting swaps were terminated, and Omega received a net cash settlement of $ 92.6 million from the swap counterparties.

The incremental $ 51.4 million of gains related to the forward swaps, recorded in accumulated other comprehensive income, were frozen at the time of termination and will be recognized ratably over 10 years in earnings when the next qualifying debt issuance occurs.

Consistent with our accounting policy and historical practice, the $ 92.6 million net cash settlement from the forward swap termination is reflected within net cash used in financing activities in the Consolidated Statements of Cash Flows.

OMEGA HEALTHCARE INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

On March 27, 2020 , we entered into five forward starting swaps totaling $ 400 million that are indexed to 3-month LIBOR.

We designated the forward starting swaps as cash flow hedges of interest rate risk associated with interest payments on a forecasted issuance of fixed rate long-term debt, initially expected to occur within the next five years .

The swaps are effective on August 1, 2023 and expire on August 1, 2033 and were issued at a weighted average fixed rate of approximately 0.8675 %.

In March 2021, in conjunction with the issuance of $ 700 million aggregate principal amount of our 3.25 % Senior Notes due 2033 , we discontinued hedge accounting for these five forward starting swaps.

Simultaneously, we re-designated these swaps in new cash flow hedging relationships of interest rate risk associated with interest payments on another forecasted issuance of long-term debt.

We are hedging our exposure to the variability in future cash flows for forecasted transactions over a maximum period of 46 months (excluding forecasted transactions related to the payment of variable interest on existing financial instruments).

In addition to the forward swaps discussed above, we also assumed various interest rate swap contracts in connection with the MedEquities Merger on May 17, 2019.

We designated the interest rate swap contracts as cash flow hedges of interest rate risk associated with the 2017 Omega OP Credit Agreement.

The assumed interest rate swap contracts effectively converted $ 75 million of our 2017 Omega OP Credit Agreement to an aggregate fixed rate of approximately 3.29 % through February 10, 2022.

In June 2023, we entered into an interest rate swap with a notional amount of $ 50.0 million.

The swap is effective June 30, 2023 and terminates on April 30, 2027 .

This interest rate swap is designated as a hedge against our exposure to changes in interest payment cash flow fluctuations in the variable interest rates on the OP Term Loan.

The interest rate swap contract effectively converts our $ 50.0 million OP Term Loan to an aggregate fixed rate of approximately 5.521 % through its maturity.

The effective fixed rate achieved by the combination of the Omega OP Credit Agreement and the interest rate swaps could fluctuate up by 40 basis points or down by 60 basis points based on future changes to our credit ratings.

In October 2020, we terminated $ 25.0 million of notional value interest rate swaps in connection with the partial repayment and paid our swap counterparty $ 0.6 million which is recorded in loss on debt extinguishment on our Consolidated Statements of Operations.

On February 10, 2022, the two remaining interest rate swaps 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 OP Term Loan is unhedged for the period after February 10, 2022 through its maturity on April 30, 2025 .

In August 2023, we entered into ten interest rate swaps with $ 400.0 million in notional value.

The swaps are effective August 14, 2023 and terminate on August 6, 2027 .

The interest rate swaps are designated as hedges against our exposure to changes in interest payment cash flows as a result of the variable interest rate on the 2025 Term Loan.

The interest rate swap contracts effectively convert our $ 400.0 million 2025 Term Loan to an aggregate fixed rate of approximately 5.565 % .

In September 2023, in connection with the exercise of the accordion feature on the 2025 Term Loan, we entered into one additional interest rate swap with $ 28.5 million in notional value to hedge the additional $ 28.5 million under the 2025 Term Loan.

This swap is effective September 29, 2023 and terminates on August 6, 2027 .

These 11 interest rate swap contracts effectively convert our $ 428.5 million 2025 Term Loan to a new combined aggregate fixed rate of approximately 5.597 % through its maturity.

The effective fixed rate achieved by the combination of the 2025 Omega Credit Agreement and the interest rate swaps could fluctuate up by 40 basis points or down by 60 basis points based on future changes to our credit ratings.

Foreign Currency Forward Contracts and Debt Designated as Net Investment Hedges

We use debt denominated in GBP and foreign currency forward contracts to hedge a portion of our net investments, including certain intercompany loans, in the U.K.

We have historically used debt denominated in GBP and foreign currency forward contracts to hedge a portion of our net investments, including certain intercompany loans, in the U.K.

against fluctuations in foreign exchange rates.

GBP denominated borrowings under the Sterling term loan and the 2017 Revolving Credit Facility were previously used to hedge a portion of our investments in the U.K.

against fluctuations in GBP against the USD.

The GBP denominated borrowings under both debt instruments were deemed an effective hedge from issuance in May 2017 until the settlement of the Sterling term loan and the repayment of the GBP denominated borrowings under the 2017 Revolving Credit Facility in March 2021.

Concurrent with the settlement of the GBP denominated debt, we entered into four foreign currency forwards with notional amounts totaling £ 174.0 million, that mature on March 8, 2024 , to hedge a portion of our net investments in the U.K., including an intercompany loan and an investment in our U.K.

In March 2021, we entered into four foreign currency forward contracts with notional amounts totaling £ 174.0 million, that mature on March 8, 2024 , to hedge a portion of our net investments in the U.K., including an intercompany loan and an investment in our U.K.

joint venture, effectively replacing the terminated net investment hedge.

The forwards were issued at a weighted average GBP-USD forward rate of 1.3890 .

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 .

1 unchanged sentence

subsidiaries, including an intercompany loan.

On December 27, 2023, we terminated two foreign currency forward contracts that were entered into in March 2021 with notional amounts totaling £ 104.0 million.

Omega received a net cash settlement of $ 11.4 million as a result of termination, which is included within net cash used in investing activities in the Consolidated Statements of Cash Flows.

The $ 11.4 million related to the termination will remain in accumulated other comprehensive income until the underlying hedged items are liquidated.

Concurrent with the termination of the two foreign currency forward contracts, also on December 27, 2023, we entered into six new foreign currency forward contracts with notional amounts totaling £ 104.0 million and a GBP-USD forward rate of 1.2916 , each of which mature between March 8, 2027 and March 8, 2030 .

Consistent with the terminated forwards, the new currency forward contracts hedge an intercompany loan between a U.S.

OMEGA HEALTHCARE INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

The location and the fair value of derivative instruments designated as hedges, at the respective balance sheet dates, were as follows:

3 unchanged sentences

Net investment hedges:

OMEGA HEALTHCARE INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

Accrued expenses and other liabilities

The fair value of the interest rate swaps and foreign currency forwards is derived from observable market data such as yield curves and foreign exchange rates and represents a Level 2 measurement on the fair value hierarchy.

11 unchanged sentences

2024 term loan

2025 term loan

4.38 % notes due 2023 – net

8 unchanged sentences

HUD mortgages – net

OMEGA HEALTHCARE INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

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).

2 unchanged sentences

● Real estate loans receivable:

The fair value of the real estate loans 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).

The fair value of the real estate loans receivable are estimated using a discounted cash flow analysis, using current interest rates being offered for similar loans to borrowers with similar credit ratings (Level 3).

● Non-real estate loans receivable:

Non-real estate loans receivable 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).

OMEGA HEALTHCARE INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

● Revolving credit facility, OP term loan, 2023 term loan and 2024 term loan:

The fair values of notes receivable are estimated using a discounted cash flow analysis, using current interest rates being offered for similar loans to borrowers with similar credit ratings (Level 3).

● Revolving credit facility, OP term loan, 2023 term loan, 2024 term loan and 2025 term loan:

The carrying amount of these approximate fair value because the borrowings are interest rate adjusted.

1 unchanged sentence

● Senior notes:

The fair value of the senior unsecured notes payable was estimated based on (Level 1) publicly available trading prices.

The fair value of the senior unsecured notes payable was estimated based on publicly available trading prices (Level 1).

● HUD mortgages:

11 unchanged sentences

If we fail to meet the requirements for qualification as a REIT for any of the subsidiary REITs, it may cause the Parent REIT to fail the requirements for qualification as a REIT also.

OMEGA HEALTHCARE INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

We have elected to treat certain of our active subsidiaries as TRSs.

3 unchanged sentences

As of December 31, 2023, one of our TRSs that is subject to income taxes at the applicable corporate rates had a net operating loss (“NOL”) carry-forward of approximately $ 9.9 million.

Our NOL carry-forward was fully reserved as of December 31, 2022, with a valuation allowance due to uncertainties regarding realization.

Our NOL carry-forward was partially reserved as of December 31, 2023, 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.

Our foreign subsidiaries are subject to foreign income taxes and withholding taxes.

As discussed in Note 3 – Real Estate Asset Acquisitions and Development, 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.

As of December 31, 2023, one of our U.K.

subsidiaries had a NOL carryforward of approximately $ 38.0 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.

OMEGA HEALTHCARE INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

The Organization for Economic Co-operation and Development (OECD) has a framework to implement a global minimum corporate tax of 15% for companies with global revenues and profits above certain thresholds (referred to as Pillar 2), with certain aspects of Pillar 2 effective January 1, 2024 and other aspects effective January 1, 2025.

While it is uncertain whether the U.S.

will enact legislation to adopt Pillar 2, the U.K.

has adopted legislation.

We do not expect Pillar 2 to have a material impact on our effective tax rate or our consolidated results of operation, financial position, and cash flows.

The majority of our U.K.

portfolio elected to enter the U.K.

REIT regime with an effective date of April 1, 2023.

In connection with entering the U.K.

REIT regime, we recognized several adjustments to our deferred tax balances in the first quarter of 2023 as summarized below.

The following is a summary of our provision for income taxes:

7 unchanged sentences

(3) The above amounts do not include gross income receipts or franchise taxes payable to certain states and municipalities.

OMEGA HEALTHCARE INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

The following is a summary of deferred tax assets and liabilities:

4 unchanged sentences

Foreign deferred tax liability (1)

Net deferred tax asset (liability)

Net deferred tax asset

Foreign deferred tax liability (2)

Net deferred tax liability

(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 foreign deferred tax liabilities were eliminated upon the majority of our U.K.

portfolio entering the U.K.

(2) The deferred tax liability resulted from book to tax differences recorded in the U.S.

relating to depreciation and revenue recognition in the U.K.

recognized upon the majority of our U.K.

portfolio entering the U.K.

NOTE 18 – STOCKHOLDERS’ EQUITY

Stock Repurchase Program

On March 20, 2020, Omega’s Board of Directors authorized the repurchase of up to $ 200 million of its outstanding common stock from time to time over the twelve months ending March 20, 2021.

Omega did no t repurchase any of its outstanding common stock under this announced program during 2020 or 2021.

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.

6 unchanged sentences

The average price per share and repurchase cost includes the cost of commissions.

OMEGA HEALTHCARE INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

Omega did not repurchase any of its outstanding common stock under this announced program during 2023.

At-The-Market Offering Program

2 unchanged sentences

We paid each Manager compensation for sales of the shares up to 2 % of the gross sales price per share for shares sold through such Manager under the applicable Equity Shelf Agreements.

OMEGA HEALTHCARE INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

During the second quarter of 2021, we terminated the 2015 ATM Program and entered into a new ATM Equity Offering Sales Agreement pursuant to which shares of common stock having an aggregate gross sales price of up to $ 1.0 billion (the “2021 ATM Program”) may be sold from time to time (i) by Omega through several financial institutions acting as a sales agent or directly to the financial institutions as principals, or (ii) by several financial institutions acting as forward sellers on behalf of any forward purchasers pursuant to a forward sale agreement.

23 unchanged sentences

February 15, 2023

August 1, 2022

July 31, 2023

August 15, 2023

November 1, 2022

October 31, 2023

November 15, 2023

17 unchanged sentences

The following is a summary of our accumulated other comprehensive income (loss), net of tax where applicable:

As of and for the

Year Ended December 31,

(in thousands)

Foreign currency translation

Beginning balance

Translation (loss) gain

Realized (loss) gain

Ending balance

Derivative Instruments:

Cash flow hedges:

Beginning balance

Unrealized gain

Realized gain (loss) (1)

Ending balance

Net investment hedges:

Beginning balance

Unrealized gain (loss)

Ending balance

Derivative instruments designated as cash flow hedges (1)

Derivative instruments designated as net investment hedges

Total accumulated other comprehensive income (loss) before noncontrolling interest

1 unchanged sentence

Total accumulated other comprehensive income (loss) for Omega

Expenses related to our effective cash flow hedges are recorded within interest expense.

As noted in Note 15 – Derivatives and Hedging, we terminated $ 250.0 million of notional value interest rate swaps in October 2020 and reclassified the remaining balance in AOCI to loss on debt extinguishment on the Consolidated Statements of Operations.

OMEGA HEALTHCARE INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

During the years ended December 31, 2023, 2022 and 2021, we reclassified $ 6.7 million, $ 4.2 million and $ 2.9 million, respectively, of realized gains out of accumulated other comprehensive income into interest expense on our Consolidated Statements of Operations associated with our cash flow hedges.

NOTE 19 – STOCK-BASED COMPENSATION

1 unchanged sentence

For the years ended December 31, 2023, 2022 and 2021, we recognized stock-based compensation of $ 35.1 million, $ 27.3 million and $ 21.4 million, respectively, related to these plans.

For purposes of measuring stock-based compensation expense, we consider whether an adjustment to the observable market price is necessary to reflect material nonpublic information that is known to us at the time the award is granted.

No adjustments were deemed necessary for the years ended December 31, 2023, 2022 or 2021.

OMEGA HEALTHCARE INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

Time-Based Restricted Equity Awards

25 unchanged sentences

Expected volatility (1)

(1) Expected volatility is using 50 % historical volatility and 50 % implied volatility.

OMEGA HEALTHCARE INVESTORS, INC.

10 unchanged sentences

Cancelled during 2021

Forfeited during 2021

Vested during 2021

28 unchanged sentences

The 2018 Plan increased the number of shares of common stock available for issuance under the 2013 Plan by 4.5 million.

On June 5, 2023, our stockholders approved an amendment to the 2018 Plan to increase the number of shares of common stock authorized for issuance from 10.5 million shares to 17.2 million shares, an increase of 6.7 million shares.

As of December 31, 2023, approximately 6.4 million shares of common stock were reserved for issuance to our employees, directors and consultants under our stock incentive plans.

4 unchanged sentences

Stephenson, and Daniel J.

Booth , are defendants in a purported securities class action lawsuit pending in the U.S.

Booth , were named as defendants in a purported securities class action lawsuit 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.

Following a mediation, the plaintiffs and defendants reached an agreement in principle on a settlement of the Securities Class Action and thereafter executed a stipulation of settlement dated December 9, 2022 (“Settlement”), subject to the approval of the District Court.

On December 27, 2022, the District Court granted preliminary approval of the settlement, and scheduled a hearing for April 25, 2023 on final approval of the Settlement.

Pursuant to the preliminary approval order, and subject to final approval by the District Court, the Settlement payment of $ 30.75 million has been transmitted to an escrow account by the Company’s directors and officers insurers.

The Settlement does not include any admission of wrongdoing or liability on the part of the Company or the individual defendants, and upon final approval by the Court, provides for a dismissal of, and a release of all claims against the defendants by a class of persons and/or entities who purchased or otherwise acquired Company securities from February 8, 2017 through October 31, 2017.

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 Settlement proceeds are to be paid by insurance, the Company concurrently recorded a receivable for $ 31 million within other assets on the Consolidated Balance Sheet, and consequently there is no impact to the Consolidated Statements of Operations related to this matter.

Brought by lead plaintiff Royce Setzer and additional plaintiff Earl Holtzman, the Securities Class Action purported 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 sought monetary damages, interest, fees and expenses of attorneys and experts, and other relief.

The Securities Class Action alleged 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 plaintiffs and defendants executed a stipulation of settlement dated December 9, 2022 (“Settlement”), which provided for a dismissal and release of all claims against the defendants by a class of persons and/or entities who purchased or otherwise acquired Company securities from February 8, 2017 through October 31, 2017 without any admission of wrongdoing or liability on the part of the Company or the individual defendants.

On April 25, 2023, following notice to class members and a hearing, the court entered judgment approving the Settlement, which became effective May 25, 2023.

Upon the effective date of the Settlement, the Settlement payment of $ 30.75 million was permitted to be transmitted from an escrow account funded by the Company’s directors and officers insurers to a settlement fund to be distributed to class members by a third party administrator.

In the second quarter of 2023, after the Company fulfilled all of its obligations pursuant to the court-approved Settlement, the Company reversed the previously recorded $ 31 million legal reserve, which is included within accrued expenses and other liabilities on the Consolidated Balance Sheets, and the related $ 31 million receivable related to the insurance reimbursement, which was included within other assets on the Consolidated Balance Sheets.

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.

OMEGA HEALTHCARE INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

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 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 (“Orianna”), the alleged non-disclosures that were 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.

OMEGA HEALTHCARE INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

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.

The complaints allege, among other things, that the named defendants are responsible for the Company’s failure to disclose the financial condition of Orianna.

Those actions were consolidated.

Prior to filing suit, each of these stockholders had made demands on the Board of Directors in 2018 that the Company bring such lawsuits.

2 unchanged sentences

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.

The complaint alleges, among other things, that the named defendants are responsible for the Company’s failure to disclose the financial condition of Orianna, as well as certain alleged discriminatory conduct and lack of diversity concerning the Company.

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 and individual defendants have reached an agreement in principle with each of the derivative plaintiffs to resolve these derivative actions, as reflected by written memoranda of understanding.

The proposed settlements contemplate the Company’s adoption of certain non-monetary corporate governance enhancements and initiatives.

The parties are currently negotiating formal stipulations of settlement that will incorporate the substantive terms of the memoranda of understanding and detail the proposed settlements’ operational terms, which will be subject to court approval.

The settlements are without any admission of the allegations in the complaints, which the defendants deny.

While the Company believes that it was and is in compliance with all applicable laws, in the fourth quarter of 2023, the Company recorded a $ 2.8 million legal reserve related to this matter which is included within accrued expenses and other liabilities on the Consolidated Balance Sheets.

As the settlement amounts are to be paid by insurance, the Company concurrently recorded a receivable for $ 2.8 million within other assets on the Consolidated Balance Sheet, and consequently there is no impact to the Consolidated Statements of Operations related to this matter.

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 (the “Debt Holders”) 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.

In August 2021, we filed suit in the Circuit Court for Baltimore County (the “Court”) against the holders of certain Subordinated Debt (the “Debt Holders”) associated with our Gulf Coast master lease agreement, following an assertion by the Debt 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 3, 2022, the Court granted the noteholders’ motion to dismiss for lack of personal jurisdiction, and Omega filed a timely appeal of the ruling.

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 (a) it is ultimately litigated in the Court if Omega Obligor prevails in its appeal or (b) if the order granting the motion to dismiss for lack of personal jurisdiction is affirmed.

On or about January 19, 2023, the Debt Holders served a lawsuit against the Omega Obligor in the Superior Court of the State of Delaware, asserting claims for (i) breach of the instruments evidencing the Subordinated Debt, (ii) declaratory judgment, and (iii) unjust enrichment, all claims that are factually based on the claims that are the subject of Omega Obligor’s suit in the Court and that are now on appeal.

In October 2021, the Debt Holders filed a motion to dismiss for lack of personal jurisdiction.

On November 3, 2022, the Court granted the Debt Holders’ motion to dismiss for lack of personal jurisdiction, and Omega filed a timely appeal of the ruling.

On or about January 19, 2023, the Debt Holders served a lawsuit against the Omega Obligor in the Superior Court of the State of Delaware (the “Delaware Court”), asserting claims for (i) breach of the instruments evidencing the Subordinated Debt, (ii) declaratory judgment, and (iii) unjust enrichment, all claims that are factually based on the claims that are the subject of Omega Obligor’s suit in the Court and that are now on appeal.

On February 8, 2023, Omega Obligor filed a motion to dismiss or, in the alternative, to stay this action pending the outcome of the above-referenced lawsuit in Maryland.

The motion is presently pending before the Delaware state court.

Omega believes that the claims are baseless and is evaluating procedural and substantive legal options in connection with this recently filed suit.

On July 10, 2023, the Delaware state court case stayed the proceeding pending further developments in the Maryland litigation.

Omega believes that the claims are baseless and is evaluating procedural and substantive legal options in connection with this recently filed suit to the extent the stay is lifted.

OMEGA HEALTHCARE INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

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 (the “Potential Claims”).

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.

On September 29, 2020, the DOJ 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.

As of November 7, 2022, Lakeway Realty, L.L.C., one of its members, MRT of Lakeway TX-ACH, LLC, and Omega (together, “Defendants”), the U.S., the State of Texas and certain named relators entered into a settlement agreement pursuant to which Defendants were released from the Potential Claims from March 2, 2015 through August 31, 2016, in exchange for Omega’s agreement to pay approximately $ 3.1 million.

Defendants admitted no liability associated with the Potential Claims.

In the second quarter of 2022, the Company recorded a $ 3.0 million legal reserve related to this matter, which is included in other (expense) income – net on the Consolidated Statements of Operations.

The settlement was paid in the fourth quarter of 2022 and Omega has no remaining legal reserves related to this matter as of December 31, 2022.

In addition to the matters above, we are subject to various other legal proceedings, claims and other actions arising out of the normal course of business.

5 unchanged sentences

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.

OMEGA HEALTHCARE INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

We have committed to fund the construction of new leased and mortgaged facilities, capital improvements and other commitments.

1 unchanged sentence

Our remaining commitments at December 31, 2023, are outlined in the table below (in thousands):

Construction and capital expenditure mortgage loan commitments

Lessor construction and capital commitments under lease agreements

Non-real estate loan commitments

Other real estate loan commitments

Construction and capital expenditure mortgage loan commitments

Total remaining commitments (1)

(1) Includes $ 93.3 million related to our $ 177.7 million commitment relating to the redevelopment of the real estate property located in Washington, D.C.

discussed in Note 3 – Real Estate Asset Acquisitions and Development.

(2) This amount includes $ 57.0 million related to the $ 90.0 million short-term revolving line of credit discussed in Note 8 – Non-real Estate Loans Receivable.

(1) Includes finance costs .

OMEGA HEALTHCARE INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued

NOTE 21 – SUPPLEMENTAL DISCLOSURE TO CONSOLIDATED STATEMENTS OF CASH FLOWS

10 unchanged sentences

Non-cash investing activities

Non-cash acquisition of business

Non-cash acquisition of real estate

Non-cash proceeds from sale of real estate investments

Non-cash proceeds from sale of business

3 unchanged sentences

Non-cash financing activities

Non-cash (repayment) borrowing of other long-term borrowings

Non-cash repayment of other long-term borrowings

Non-cash contribution from noncontrolling member in consolidated joint venture

Change in fair value of cash flow hedges

Change in fair value of hedges

Remeasurement of debt denominated in a foreign currency

5 unchanged sentences

(in thousands, except per share amounts)

net income attributable to noncontrolling interests

Net income available to common stockholders

Net income available to common stockholders – basic

net income attributable to OP Units

Net income available to common stockholders – diluted

Denominator for basic earnings per share

6 unchanged sentences

Earnings per share – diluted:

Net income available to common stockholders

NOTE 23 – SUBSEQUENT EVENTS

In January and February 2024, we funded $ 27.3 million in mortgage and other real estate loans.

The loans have a weighted-average interest rate of 9.6 % with maturity dates ranging from January 31, 2027 through January 31, 2029 .

The loans are secured by first or second mortgage liens on the facility.

OMEGA HEALTHCARE INVESTORS, INC.

19 unchanged sentences

25 years - 31 years

California (ALF, SH, SNF)

California (ALF, SNF, SF)

5 years - 35 years

9 unchanged sentences

Illinois (ALF)

Indiana (ALF, ILF, IRF, MOB, SH, SNF)

Indiana (ALF, ILF, SNF, SF)

20 years - 40 years

9 unchanged sentences

20 years - 33 years

Michigan (SNF)

Michigan (ALF, SNF)

Minnesota (ALF, ILF, SNF)

2 unchanged sentences

Missouri (SNF)

25 years - 33 years

Montana (SNF)

1 unchanged sentence

20 years - 33 years

Nevada (BHS, SH, SNF)

Nevada (SNF, SF)

25 years - 33 years

6 unchanged sentences

25 years - 36 years

Ohio (ALF, BHP, BHS, SH, SNF)

Ohio (ALF, SNF, SF)

25 years - 39 years

8 unchanged sentences

20 years - 33 years

Tennessee (ALF, BHP, SNF)

Tennessee (ALF, SNF, SF)

20 years - 31 years

Texas (ALF, BHS, ILF, IRF, MOB, SH, SNF)

Texas (ALF, ILF, MOB, SNF, SF)

20 years - 40 years

11 unchanged sentences

( 2,458,809 )

(1) The real estate included in this schedule is being used in either the operation of skilled nursing facilities (“SNF”), assisted living facilities (“ALF”), independent living facilities (“ILF”), specialty facilities (consisting of behavioral health substance facilities (“BHS”), behavioral health psychology facilities (“BHP”), independent rehabilitation facilities (“IRF”) and specialty hospitals (“SH”)) or medical office buildings (“MOB”), located in the states or country indicated.

(1) The real estate included in this schedule is being used in either the operation of skilled nursing facilities (“SNF”), assisted living facilities (“ALF”), independent living facilities (“ILF”), specialty facilities (“SF”) (consisting of specialty hospitals, long-term acute care hospitals, independent rehabilitation facilities, behavioral health substance facilities, behavioral health psychology facilities and traumatic brain injury facilities) or medical office buildings (“MOB”), located in the states or country indicated.

(2) Certain of the real estate indicated are security for the HUD loan borrowings totaling $ 41.9 million at December 31, 2023.

8 unchanged sentences

Balance at close of period

(a) Includes approximately $ 19.1 million, $ 58.6 million and $ 8.2 million of non-cash consideration exchanged and/or valuation adjustments during the years ended December 31, 2020, 2021 and 2022, respectively.

(a) Includes approximately $ 8.2 million and $ 58.6 million of non-cash consideration exchanged and/or valuation adjustments during the years ended December 31, 2022 and 2021, respectively.

Year Ended December 31,

23 unchanged sentences

Interest payable monthly until maturity

Pennsylvania (3 SNFs and 1 ALF)

Interest payable monthly until maturity

Texas (1 specialty facility)

Interest plus approximately $ 161.3 of principal payable monthly with $ 59,546 due at maturity

Illinois (1 SNF, 2 ALFs and 1 ILF)

Interest payable monthly until maturity

Pennsylvania (2 SNFs)

Interest paid-in-kind for first year, then interest paid monthly until maturity

Tennessee ( 1 ALF)

Interest payable monthly until maturity

Oregon (1 ALF)

Interest payable monthly until maturity

Massachusetts (1 specialty facility)

Interest plus approximately $ 60.0 of principal payable monthly with $ 6,197 due at maturity

Tennessee ( 1 SNF)

Michigan (1 SNF)

Interest payable monthly until maturity

Interest plus approximately $ 28.7 of principal payable monthly with $ 13,791 due at maturity

Interest payable monthly until maturity

3 unchanged sentences

Interest payable monthly until maturity

Interest plus approximately $ 5.8 of principal payable monthly with $ 50,782 due at maturity

Construction Mortgages

3 unchanged sentences

(1) Loans included in this schedule represent first mortgages, capital expenditure mortgages and construction mortgages on facilities used in the delivery of long-term healthcare of which such facilities are located in the states indicated.

(2) Interest on the loans escalates annually at a fixed rate.

(2) Interest on the loans escalates at a fixed rate.

(3) The aggregate cost for federal income tax purposes is approximately $ 754.4 million (unaudited).

9 unchanged sentences

Balance at close of period

(a) The 2020 amount includes $ 0.6 million of non-cash interest paid-in-kind and $ 86.9 million of non-cash placement of mortgage capital.

The 2021 amount includes $ 0.2 million of non-cash interest paid-in-kind and $ 7.0 million of non-cash placement of mortgage principal.

The 2022 amount includes $ 1.2 million of non-cash interest paid-in-kind.

(b) The 2021 amount includes $ 58.6 million of non-cash principal reductions.

The 2022 amount includes $ 6.0 million of interest payments that were directly applied against the principal balance outstanding using the cost recovery method.

(a) The 2023, 2022 and 2021 amounts include $ 2.3 million, $ 1.2 million and $ 0.2 million, respectively, of non-cash interest paid-in-kind.

The 2021 amount also includes $ 7.0 million of non-cash placement of mortgage capital.

(b) The 2023 and 2022 amounts include $ 3.9 million and $ 6.0 million, respectively, of interest payments that were directly applied against the principal balance outstanding using the cost recovery method.

The 2023 and 2021 amounts also include $ 37.0 million and $ 58.6 million, respectively, of non-cash principal reductions.

(5) Mortgage written down to the fair value of the underlying collateral.

(6) Mortgages included in the schedule which were extended during 2023 aggregated approximately $ 100.5 million.

(7) Subsequent to year end, this mortgage note was amended to extend the maturity date to December 31, 2024.

(8) The allowance for credit loss on mortgage loans represents the allowance calculated utilizing a PD and LGD methodology.

133 unchanged sentences

Bank National Association (Incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K, filed March 10, 2021).

Description of Securities registered under Section 12 of the Securities Exchange Act of 1934.*

Description of Securities registered under Section 12 of the Securities Exchange Act of 1934 (Incorporated by reference to Exhibit 4.10 to the Company’s Annual Report on Form 10-K, filed February 14, 2023).

Form of Directors and Officers Indemnification Agreement (Incorporated by reference to Exhibit 10.1 to the Company’s Annual Report on Form 10-K, filed February 23, 2018).

1 unchanged sentence

Credit Agreement, dated as of April 30, 2021, among the Company, certain subsidiaries of the Company identified therein as guarantors, the lenders named therein and Bank of America, N.A., as administrative agent for such lenders (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed May 4, 2021).

Conforming Changes Amendment to Credit Agreement, dated as of June 7, 2023, between the Company and Bank of America, N.A., as administrative agent (Incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q, filed August 3, 2023).

Credit Agreement, dated as of April 30, 2021, among OHI Healthcare Properties Limited Partnership, the lenders named therein and Bank of America, N.A., as administrative agent for such lenders (Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K, filed May 4, 2021).

Conforming Changes Amendment to Credit Agreement, dated as of June 7, 2023, between OHI Healthcare Properties Limited Partnership and Bank of America, N.A., as administrative agent (Incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q, filed August 3, 2023).

At-the Market Equity Offering Sales Agreement, dated May 20, 2021, among the Company, the Sales Agents, the Forward Sellers and the Forward Purchasers (Incorporated by reference to Exhibit 1.1 to the Company’s Current Report on Form 8-K, filed May 20, 2021).

1 unchanged sentence

2018 Stock Incentive Plan (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed June 11, 2018).

2019 Form of Time-Based Restricted Stock Units Agreement pursuant to the Omega Healthcare Investors, Inc.

2018 Stock Incentive Plan (Incorporated by reference to Exhibit 10.8A of the Company’s Annual Report on Form 10-K filed February 26, 2019).

2019 Form of Time-Based Profits Interest Units Agreement pursuant to the Omega Healthcare Investors, Inc.

2018 Stock Incentive Plan (Incorporated by reference to Exhibit 10.8B of the Company’s Annual Report on Form 10-K filed February 26, 2019).

2019 Form of TSR-Based Performance Restricted Stock Units Agreement pursuant to the Omega Healthcare Investors, Inc.

2018 Stock Incentive Plan (Incorporated by reference to Exhibit 10.8C of the Company’s Annual Report on Form 10-K filed February 26, 2019).

2019 Form of TSR-Based Performance Profits Interest Units Agreement pursuant to the Omega Healthcare Investors, Inc.

2018 Stock Incentive Plan (Incorporated by reference to Exhibit 10.8D of the Company’s Annual Report on Form 10-K filed February 26, 2019).

2019 Form of Relative TSR-Based Performance Restricted Stock Units Agreement pursuant to the Omega Healthcare Investors, Inc.

2018 Stock Incentive Plan (Incorporated by reference to Exhibit 10.8E of the Company’s Annual Report on Form 10-K filed February 26, 2019).

2019 Form of Relative TSR-Based Performance Profits Interest Units Agreement pursuant to the Omega Healthcare Investors, Inc.

2018 Stock Incentive Plan (Incorporated by reference to Exhibit 10.8F of the Company’s Annual Report on Form 10-K filed February 26, 2019).

2020 Form of Time-Based Restricted Stock Units Agreement pursuant to the Omega Healthcare Investors, Inc.

2018 Stock Incentive Plan (Incorporated by reference to Exhibit 10.8G of the Company’s Annual Report on Form 10-K filed February 28, 2020).

2020 Form of Time-Based Profits Interest Units Agreement pursuant to the Omega Healthcare Investors, Inc.

2018 Stock Incentive Plan (Incorporated by reference to Exhibit 10.8H of the Company’s Annual Report on Form 10-K filed February 28, 2020).

2020 Form of TSR-Based Performance Restricted Stock Units Agreement pursuant to the Omega Healthcare Investors, Inc.

2018 Stock Incentive Plan (Incorporated by reference to Exhibit 10.8I of the Company’s Annual Report on Form 10-K filed February 28, 2020).

2020 Form of TSR-Based Performance Profits Interest Units Agreement pursuant to the Omega Healthcare Investors, Inc.

2018 Stock Incentive Plan (Incorporated by reference to Exhibit 10.8J of the Company’s Annual Report on Form 10-K filed February 28, 2020).

2020 Form of Relative TSR-Based Performance Restricted Stock Units Agreement pursuant to the Omega Healthcare Investors, Inc.

2018 Stock Incentive Plan (Incorporated by reference to Exhibit 10.8K of the Company’s Annual Report on Form 10-K filed February 28, 2020).

2020 Form of Relative TSR-Based Performance Profits Interest Units Agreement pursuant to the Omega Healthcare Investors, Inc.

2018 Stock Incentive Plan (Incorporated by reference to Exhibit 10.8L of the Company’s Annual Report on Form 10-K filed February 28, 2020).

Amendment to Omega Healthcare Investors, Inc.

2018 Stock Incentive Plan, effective June 5, 2023 (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed June 5, 2023).

Form of Time-Based Restricted Stock Units Agreement pursuant to the Omega Healthcare Investors, Inc.

18 unchanged sentences

Deferred Cash Compensation Plan (June 30, 2018) (Incorporated by reference to Exhibit 10.2 to Omega Healthcare Investor Inc.’s Form 10-Q filed August 8, 2018).

Credit Agreement, dated as of August 8, 2023, among Omega Healthcare Investors, Inc., certain subsidiaries of Omega Healthcare Investors, Inc.

identified therein as guarantors, the lenders named therein and Bank of America, N.A., as administrative agent for such lenders (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed August 11, 2023).

Subsidiaries of the Registrant.*

5 unchanged sentences

Section 1350 Certification of the Chief Financial Officer of Omega Healthcare Investors, Inc.*

Omega Healthcare Investors, Inc.

Incentive Compensation Recovery Policy.* +

The following financial statements from the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, formatted in Inline XBRL:

39 unchanged sentences

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

What changed 10-K

Item 9A. Controls and Procedures