What changed in this filing

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Item 1. Financial Statements

2025-05-02 compared with 2024-10-31 · 314 added, 607 removed, 533 unchanged (63% of the section changed)

3 unchanged sentences

(in thousands, except per share amounts)

September 30,

Real estate assets

25 unchanged sentences

Preferred stock $ 1.00 par value authorized – 20,000 shares, issued and outstanding – none

Common stock $ 0.10 par value authorized – 350,000 shares, issued and outstanding – 268,231 shares as of September 30, 2024 and 245,282 shares as of December 31, 2023

Common stock $ 0.10 par value authorized – 350,000 shares, issued and outstanding – 286,238 shares as of March 31, 2025 and 279,129 shares as of December 31, 2024

Additional paid-in capital

12 unchanged sentences

Three Months Ended

Nine Months Ended

September 30,

Rental income

7 unchanged sentences

Impairment on real estate properties

(Recovery) provision for credit losses

Provision for credit losses

Interest expense

1 unchanged sentence

Other income (expense)

Other (expense) income – net

Other income – net

Loss on debt extinguishment

(Loss) gain on assets sold – net

Total other (expense) income

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

Gain (loss) on assets sold – net

Total other income

Income before income tax expense and income from unconsolidated joint ventures

Income tax expense

Income (loss) from unconsolidated joint ventures

Income from unconsolidated joint ventures

Net income attributable to noncontrolling interest

8 unchanged sentences

Three Months Ended

Nine Months Ended

September 30,

Other comprehensive income (loss)

1 unchanged sentence

Cash flow hedges

Total other comprehensive income (loss)

Total other comprehensive income

Comprehensive income

4 unchanged sentences

CONSOLIDATED STATEMENTS OF EQUITY

Three Months Ended September 30, 2024 and 2023

(in thousands, except per share amounts)

Comprehensive

Stockholders’

Noncontrolling

Income (Loss)

Balance at June 30, 2024

( 7,161,897 )

Stock related compensation

Issuance of common stock

Common dividends declared ($ 0.67 per share)

Vesting/exercising of Omega OP Units

Omega OP Units distributions

Other comprehensive income

Balance at September 30, 2024

( 7,335,238 )

Balance at June 30, 2023

( 6,501,899 )

Stock related compensation

Issuance of common stock

Common dividends declared ($ 0.67 per share)

Vesting/exercising of Omega OP Units

Omega OP Units distributions

Net change in noncontrolling interest holder in consolidated JV

Other comprehensive loss

Balance at September 30, 2023

( 6,666,439 )

See notes to consolidated financial statements.

OMEGA HEALTHCARE INVESTORS, INC.

CONSOLIDATED STATEMENTS OF EQUITY

Nine Months Ended September 30, 2024 and 2023

Three Months Ended March 31, 2025 and 2024

(in thousands, except per share amounts)

8 unchanged sentences

Vesting/exercising of Omega OP Units

Exchange and redemption of Omega OP Units for common stock

Omega OP Units distributions

Net change in noncontrolling interest holder in consolidated JV

Other comprehensive income

Balance at September 30, 2024

Balance at March 31, 2025

( 7,706,034 )

5 unchanged sentences

Vesting/exercising of Omega OP Units

Exchange and redemption of Omega OP Units for common stock

Conversion and redemption of Omega OP Units to common stock

Omega OP Units distributions

Net change in noncontrolling interest holder in consolidated JV

Other comprehensive income

Balance at September 30, 2023

Balance at March 31, 2024

( 6,995,876 )

See notes to consolidated financial statements.

OMEGA HEALTHCARE INVESTORS, INC.

1 unchanged sentence

Unaudited (in thousands)

Nine Months Ended September 30,

Three Months Ended March 31,

Cash flows from operating activities

2 unchanged sentences

Impairment on real estate properties

Provision for rental income

(Recovery) provision for credit losses

Straight-line rent and other write-offs

Provision for credit losses

Amortization of deferred financing costs and loss on debt extinguishment

Accretion of direct financing leases

Stock-based compensation expense

Gain on assets sold – net

Amortization of acquired in-place leases – net

(Gain) loss on assets sold – net

Straight-line rent and effective interest receivables

1 unchanged sentence

(Income) loss from unconsolidated joint ventures

Other non-cash items

Change in operating assets and liabilities – net:

4 unchanged sentences

Cash flows from investing activities

Acquisition deposit

Acquisition of real estate

1 unchanged sentence

Investments in construction in progress

Placement of loan principal

Investment in loan receivables and other

Collection of loan principal

4 unchanged sentences

Receipts from insurance proceeds

Net cash used in investing activities

Net cash provided by (used in) investing activities

Cash flows from financing activities

Proceeds from long-term borrowings

Payments of long-term borrowings

( 1,142,788 )

Payments of financing related costs

1 unchanged sentence

Dividends paid

Net payments to noncontrolling members of consolidated joint venture

Proceeds from derivative instruments

Redemption of Omega OP Units

Distributions to Omega OP Unit Holders

1 unchanged sentence

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

(Decrease) Increase in cash, cash equivalents and restricted cash

Decrease in cash, cash equivalents and restricted cash

Cash, cash equivalents and restricted cash at beginning of period

3 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024

March 31, 2025

NOTE 1 – BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

8 unchanged sentences

Omega has exclusive control over Omega OP’s day-to-day management pursuant to the partnership agreement governing Omega OP.

As of September 30, 2024, Parent owned 97 % of the issued and outstanding units of partnership interest in Omega OP (“Omega OP Units”), and other investors owned 3 % of the outstanding Omega OP Units.

As of March 31, 2025, Parent owned 97 % of the issued and outstanding units of partnership interest in Omega OP (“Omega OP Units”), and other investors owned 3 % of the outstanding Omega OP Units.

Basis of Presentation and Principles of Consolidation

6 unchanged sentences

All intercompany transactions and balances have been eliminated in consolidation.

We conduct our operations and report financial results as one business segment.

The presentation of financial results as one reportable segment is consistent with the way we operate our business and is consistent with the manner in which our Chief Operating Decision Maker (CODM), our Chief Executive Officer, evaluates performance and makes resource and operating decisions for the business.

Reclassification

Certain amounts in the prior year period have been reclassified to conform to the current period presentation.

Income from direct financing leases, which was previously reported separately on our Consolidated Statements of Operations, is now included in Rental Income for all periods presented.

In addition, we previously reported assets held for sale of $ 93.7 million on the Consolidated Balance Sheet as of December 31, 2023.

$ 12.2 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, 2023.

Of the $ 12.2 million reclassified net of $ 5.4 million of accumulated depreciation, $ 15.9 million relates to buildings, $ 0.6 million relates to land and $ 1.1 million relates to furniture and equipment.

We originally reclassified these assets as held for sale in the fourth quarter of 2023 as a result of receiving a notification from an operator of their intent to exercise a purchase option over the assets.

Due to regulatory issues encountered in the first quarter of 2024 during the due diligence process that limit our ability to sell these assets, they no longer qualify as assets held for sale.

Reclassifications

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

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 is intended to improve reportable segment disclosures, primarily through enhanced disclosures about significant segment expenses, as well as how the CODM uses the reported measure(s) of segment profit or loss in assessing performance.

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

ASU – 2024-01, Compensation – Stock Compensation (Topic 718):

Scope Application of Profits Interests and Similar Awards

In March 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2024-01, which adds an example that illustrates how to apply the scope guidance to determine whether a profits interest award should be accounted for as a share-based payment arrangement under Topic 718 or another accounting standard.

The guidance is effective for the annual periods beginning after December 15, 2024 and interim periods within those annual periods.

The amendments may be applied either retrospectively or prospectively on the date of adoption.

Early adoption is permitted.

The guidance is to be applied retrospectively to all periods presented in the financial statements.

We adopted the guidance in the first quarter of 2025.

The Company evaluated and concluded that there is no impact of this new guidance on its financial statements.

ASU – 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses

In November 2024, the FASB issued ASU 2024-03, which requires disclosure of certain costs and expenses on an interim and annual basis in the notes to the financial statements.

The guidance is effective for the first annual reporting period beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027.

The amendments in this update are to be applied on a prospective basis, with the option for retrospective application.

Early adoption is permitted.

We are currently evaluating the potential impact of adopting this new guidance on our consolidated financial statements and disclosures.

8 unchanged sentences

NOTE 2 – REAL ESTATE ASSETS

At September 30, 2024, our leased real estate properties included 587 SNFs, 282 ALFs, 19 ILFs, 19 specialty facilities and one medical office building.

At March 31, 2025, our leased real estate properties included 575 SNFs, 296 ALFs, 19 ILFs, 18 specialty facilities and one medical office building.

The following table summarizes the Company’s rental income:

Three Months Ended September 30,

Nine Months Ended September 30,

(in thousands)

Three Months Ended March 31,

(in thousands)

5 unchanged sentences

Asset Acquisitions

The following table summarizes the asset acquisitions that occurred during the nine months ended September 30, 2024:

The following table summarizes the asset acquisitions that occurred during the three months ended March 31, 2025:

Total Real Estate

3 unchanged sentences

Cash Yield (2)

(1) Represents the acquisition cost that was allocated to our real estate assets on a relative fair value basis.

This also represents the total cost of the acquisition unless specifically noted within the table, as the assets acquired in our acquisitions typically consists of only real estate assets.

From time to time we may have acquisitions in which additional assets and liabilities are assumed.

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

(2) Total consideration paid for this acquisition was $ 62.7 million.

We allocated $ 11.9 million of the purchase consideration to a deferred tax asset related to net operating losses acquired in the transaction.

See Note 13 - Taxes for additional information.

(3) Relates to our acquisition of the remaining 51 % ownership interest in the Cindat Joint Venture, discussed below under “Cindat Portfolio Acquisition.” Total costs to be allocated for this acquisition was $ 461.9 million, inclusive of our previously held equity interest of $ 97.0 million.

We allocated $ 53.8 million of the costs to be allocated to other assets acquired in the transaction and we allocated $ 13.0 million of the costs to be allocated to other liabilities assumed in the transaction.

(4) Reflects the yield based on cash consideration, the assumption of a mortgage loan, deferred contingent consideration and the previously held equity interest in the unconsolidated real estate joint venture.

See “Cindat Portfolio Acquisition” below for additional information.

Cindat Portfolio Acquisition

As of December 31, 2023, we held a 49 % interest in an unconsolidated real estate joint venture owning 63 facilities in the U.K.

(the “Cindat Joint Venture”) accounted for using the equity method of accounting.

As of December 31, 2023, our equity interest was $ 97.6 million.

The 63 facilities are subject to leases with two operators that have contractual rent of $ 43.6 million per annum with minimum escalators between 1.0 % to 2.0 % that can escalate further based on certain inflationary measures.

In July 2024, we acquired the remaining 51 % interest in the Cindat Joint Venture for total consideration of $ 364.9 million inclusive of:

(i) $ 98.9 million of cash consideration including direct transaction costs, (ii) the assumption of a £ 188.6 million ($ 243.2 million) mortgage loan with an estimated fair value of $ 264.0 million and (iii) deferred contingent consideration with an estimated fair value of $ 2.0 million.

The fair market value of the mortgage debt assumed was determined by discounting the remaining contractual cash flows using a current market rate of interest of comparable debt instruments.

The deferred contingent consideration payment, which will be between zero and $ 3.0 million, becomes payable to the sellers in December 2024 if certain contingencies are satisfied.

Following the acquisition, we own 100 % of the equity interests in the entity that owns the Cindat portfolio, and accordingly, we will consolidate its results in our consolidated financial statements going forward.

The acquired interest will be accounted for as an asset acquisition as substantially all of the fair value of the gross assets acquired is concentrated in a group of similar identifiable assets.

Under our existing accounting policy election, we follow the asset acquisition cost accumulation and allocation model.

Accordingly, we did not remeasure our previously held $ 97.0 million equity interest, as of the acquisition date, at fair value.

The following table summarizes the fair value of the assets and liabilities recorded as part of the acquisition as of the date of the acquisition:

(in thousands)

Costs to be allocated:

49 % equity method investment in Cindat Joint Venture

Consideration for additional 51 % interest in Cindat Joint Venture

Fair market value of debt assumed

Total acquisition cost to be allocated

Fair value of net assets acquired:

Real estate assets

Non-real estate loans receivable

Cash and cash equivalents

Restricted cash

Contractual receivables

Accrued expenses and other liabilities

Fair value of net assets acquired

In addition to the asset acquisitions disclosed above, we also made a £ 23.8 million deposit during the first quarter of 2025 which is discussed further in Note 18 – Commitments and Contingencies.

Construction in Progress and Capital Expenditure Investments

We invested $ 25.4 million and $ 81.6 million under our construction in progress and capital improvement programs during the three and nine months ended September 30, 2024, respectively.

We invested $ 24.5 million and $ 52.4 million under our construction in progress and capital improvement programs during the three and nine months ended September 30, 2023, respectively.

As of September 30, 2024, construction in progress included three projects consisting of the development of a SNF in Virginia, a SNF in Florida and an ALF in Washington D.C.

We invested $ 35.3 million and $ 21.4 million under our construction in progress and capital improvement programs during the three months ended March 31, 2025 and 2024, respectively.

As of March 31, 2025, construction in progress included three projects consisting of the development of a SNF in Virginia, a SNF in Florida and a SNF in Maryland.

During the first quarter of 2025, we purchased a real estate property located in Maryland for approximately $ 4.0 million that will be redeveloped into a SNF.

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

We are committed to a maximum funding of $ 22.5 million for the development of the property.

As of March 31, 2025, $ 4.0 million was included in construction in progress related to this development project.

In February 2025, we placed a $ 201.8 million construction in progress project, Inspir Embassy Row, a development of an ALF in Washington D.C., into service and began recognizing rental income associated with this project.

The facility is subject to a 24-year single facility lease with an entity that is jointly owned by Maplewood Senior Living (along with affiliates, “Maplewood”) and a third-party investor.

The lease provides for an annual cash yield of 6 % in the first year following the completion of construction.

We recognized full contractual rental income of $ 2.1 million associated with the lease for the new facility for the three months ended March 31, 2025.

Direct Financing Lease

As of December 31, 2024, we had one direct financing lease with a net investment of $ 9.5 million.

During the first quarter of 2025, we terminated the direct financing lease, along with several operating leases with the same operator, and entered into a new consolidated operating lease for all facilities leased to the operator.

In connection with the termination of the direct financing lease, we reclassified $ 9.4 million from investment in direct financing lease to real estate assets.

In connection with the execution of the new consolidated lease agreement, we paid $ 10.0 million to the operator, which was treated as lease inducement.

As this operator is on a cash basis of revenue recognition, the inducement was immediately expensed and was recorded as a reduction to the rental income recognized for the three months ended March 31, 2025.

See additional discussion within Note 4 – Contractual Receivables and Other Receivables and Lease Inducements.

NOTE 3 – ASSETS HELD FOR SALE, DISPOSITIONS AND IMPAIRMENTS

1 unchanged sentence

The following is a summary of our assets held for sale:

September 30,

Number of facilities held for sale

Amount of assets held for sale (in thousands)

During the three and nine months ended September 30, 2024, we sold six facilities ( four ALFs and two SNFs) and 15 facilities ( 11 SNFs and four ALFs) subject to operating leases for $ 23.9 million and $ 68.8 million in net cash proceeds, respectively.

As a result of these sales, we recognized a net loss of $ 0.2 million and a net gain of $ 11.3 million, respectively.

During the three and nine months ended September 30, 2023, we sold 25 facilities ( 25 SNFs) and 37 facilities ( 35 SNFs, one ILF and one medical office building) subject to operating leases, for approximately $ 199.0 million and $ 261.3 million in net cash proceeds, respectively.

As a result of these sales, we recognized net gains of approximately $ 44.1 million and $ 70.0 million, respectively.

The $ 44.1 million of net gains includes a $ 50.2 million gain related to the sale of 11 facilities that occurred in December 2022 but that did not meet the contract criteria to be recognized under ASC 610-20 at the legal sale date.

We recognized the sale during the third quarter of 2023 following the early payoff of the $ 104.8 million senior seller financing that was provided to the buyer as part of the sale of the 11 facilities .

As of September 30, 2024 and December 31, 2023, we had two and one facility sales, respectively, that were not recognized as a result of not meeting the contract criteria under ASC 610-20 at the legal sale date.

During the three and nine months ended September 30, 2024, we received interest of $ 0.3 million and $ 0.9 million, respectively, related to seller financing provided in connection with sales that were not recognized.

During the three and nine months ended September 30, 2023, we received interest of $ 1.8 million and $ 6.2 million, respectively, related to seller financing provided in connection with sales that were not recognized.

During the three months ended March 31, 2025, we sold 27 facilities ( 26 SNFs and one ALF) for $ 120.9 million in net cash proceeds.

As a result of these sales, we recognized a net gain of $ 10.1 million.

For one 12-facility sale recognized during the quarter, Omega could receive additional consideration, at a future date, contingent upon the occurrence of certain events that are outside of our control.

Given these events are not within Omega’s control, the uncertainty surrounding the timing of the events, and the probability of collection, we have not recognized any of this additional consideration as of the sale date.

During the three months ended March 31, 2024, we sold four facilities ( four SNFs) for approximately $ 10.1 million in net cash proceeds.

As a result of these sales, we recognized a net loss of $ 1.4 million.

Sales Not Recognized

As of March 31, 2025 and December 31, 2024, we had three facility sales that were not recognized as a result of not meeting the contract criteria under ASC 610-20 at the legal sale date.

During the three months ended March 31, 2025 and 2024, we received interest of $ 1.1 million and $ 0.3 million, respectively, related to seller financing provided in connection with sales that were not recognized.

The interest received was deferred and recorded as a contract liability within accrued expenses and other liabilities on our Consolidated Balance Sheets.

Real Estate Impairments

During the three and nine months ended September 30, 2024, we recorded impairments on five and 12 facilities of $ 8.6 million and $ 22.1 million, respectively.

Of the $ 22.1 million, $ 13.0 million related to eight held for use facilities (of which $ 7.2 million related to four closed facilities) for which the carrying value exceeded the fair value and $ 9.1 million related to four facilities that were classified as held for sale for which the carrying values exceeded the estimated fair value less costs to sell .

During the three and nine months ended September 30, 2023, we recorded impairments on 19 and 25 facilities of $ 27.9 million and $ 88.0 million, respectively.

Of the $ 88.0 million, $ 85.4 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 and $ 2.6 million related to two facilities that were classified as held for sale for which the carrying values exceeded the estimated fair value less costs to sell.

During the three months ended March 31, 2025, we recorded an impairment of $ 1.2 million on one held for use facility for which the carrying value exceeded the fair value.

During the three months ended March 31, 2024, we recorded impairments of $ 5.3 million on three held for use facilities for which the carrying value exceeded the fair value.

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

5 unchanged sentences

A summary of our net receivables and lease inducements by type is as follows:

September 30,

(in thousands)

6 unchanged sentences

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

During the nine months ended September 30, 2024, we placed one new operator on a cash basis of revenue recognition.

In the first quarter of 2024, we entered into a lease with the new operator as part of the transition of facilities from another operator.

During the three months ended March 31, 2025, we did no t place any operators on a cash basis of revenue recognition .

During the three months ended March 31, 2024, we entered into a lease with a new operator as part of the transition of facilities from another operator.

As we had no previous relationship with this new operator and collection of substantially all contractual lease payments due from the new operator was not deemed probable, we placed the new operator on a cash basis of revenue recognition.

We placed this operator on a cash basis concurrent with the lease commencement date, so there was no straight-line rent write-off associated with moving the operator to a cash basis.

During the nine months ended September 30, 2023, we placed two new operators, which Omega had not previously had relationships with prior to the second quarter of 2023, on a cash basis of revenue recognition as collection of substantially all contractual lease payments due from them was not deemed probable.

Our new lease agreements with each of these operators were executed in the second quarter of 2023 as part of transitions of facilities from other operators .

We placed these operators 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.

We did no t have any straight-line receivable write-offs through rental income as a result of placing operators on a cash basis during either of the three and nine months ended September 30, 2024 and 2023, respectively.

As of September 30, 2024, we had 18 operators on a cash basis for revenue recognition, which represent 18.6 % and 22.0 % of our total revenues for the nine months ended September 30, 2024 and 2023, respectively.

We did no t have any straight-line receivable write-offs through rental income as a result of placing operators on a cash basis during either of the three months ended March 31, 2025 and 2024, respectively.

As of March 31, 2025, we had 20 operators on a cash basis for revenue recognition, which represent 18.6 % and 19.4 % of our total revenues for the three months ended March 31, 2025 and 2024, respectively.

Rent Deferrals and Application of Collateral

During the nine months ended September 30, 2024 and 2023, we allowed four and nine operators to defer $ 3.0 million and $ 35.0 million, respectively, of contractual rent and interest.

The deferrals during the nine months ended September 30, 2024 primarily related to Maplewood Senior Living (along with affiliates, “Maplewood”) ($ 2.5 million).

The deferrals during the nine months ended September 30, 2023 primarily related to the following operators:

LaVie Care Centers, LLC (“LaVie”) ($ 19.0 million), Healthcare Homes Limited ($ 8.2 million), Agemo Holdings, LLC (“Agemo”) ($ 1.9 million) and Maplewood ($ 1.3 million).

During the nine months ended September 30, 2024 and 2023, we received repayments of deferred rent of $ 1.2 million and $ 1.3 million, respectively.

Additionally, we allowed five and six operators to apply collateral, such as security deposits or letters of credit, to contractual rent and interest during the nine months ended September 30, 2024 and 2023, respectively.

The total collateral applied to contractual rent and interest was $ 1.7 million and $ 11.4 million for the nine months ended September 30, 2024 and 2023, respectively.

During the three months ended March 31, 2025 and 2024, we allowed two and three operators to defer $ 1.4 million and $ 0.9 million, respectively, of contractual rent and interest.

The deferrals during the three months ended March 31, 2025 and 2024 primarily related to Maplewood ($ 1.2 million and $ 0.7 million, respectively).

During the three months ended March 31, 2025 and 2024, we received repayments of deferred rent of $ 0.8 million and $ 0.5 million, respectively.

Additionally, we allowed one and four operators to apply collateral, such as security deposits or letters of credit, to contractual rent and interest during the three months ended March 31, 2025 and 2024, respectively.

The total collateral applied to contractual rent and interest was $ 4.3 million and $ 0.5 million for the three months ended March 31, 2025 and 2024, respectively.

Operator Collectibility Updates

In the fourth quarter of 2022, Omega began discussions with Maplewood to restructure its portfolio as a result of liquidity issues.

As of December 31, 2022, Omega had 17 operating facilities subject to a lease agreement with Maplewood, a construction in progress project in Washington D.C., and a $ 250.0 million secured revolving credit facility.

In view of Maplewood liquidity concerns, Omega and Maplewood entered into a comprehensive restructuring of Maplewood’s lease and loan agreements on January 31, 2023 that, among other things, fixed rent at $ 69.3 million per annum through December 2025, increased the capacity of the secured revolving credit facility to $ 320.0 million, converted portions of interest on the secured revolving credit facility from cash to paid-in-kind (“PIK”) for certain periods, provided Maplewood a one-time option termination fee of $ 12.5 million, and reduced Maplewood’s share of any future potential sales proceeds.

Shortly after the restructuring was completed, on March 31, 2023, Greg Smith, the principal and chief executive officer of Maplewood, passed away.

Smith had been a guarantor of Maplewood’s contractual obligations pursuant to a $ 40.0 million limited unconditional guaranty agreement.

Maplewood began to short pay contractual rent under its lease agreement during the second quarter of 2023, which continued through the end of the third quarter of 2024 as discussed further below.

Smith’s passing in 2023, Omega has been in discussions with the Greg Smith estate (the “Estate”) in order to protect our interests, including Mr.

Smith’s guaranty, and facilitate an orderly transition of Mr.

Smith’s controlling equity interest in Maplewood to key members of the existing Maplewood management team (the “Key Principals”).

Under the proposed transition, the Key Principals would become the new majority equity holders in the Maplewood entities.

In order to accelerate a negotiated transition process, in May 2024, Omega sent a demand letter to Maplewood and the Estate notifying them of multiple events of default under Maplewood’s lease, loan, and related agreements with Omega, including Mr.

Smith’s guaranty, including failure to pay full contractual rent and interest for periods in 2023 and 2024.

Omega exercised its contractual rights in connection with these defaults and demanded immediate repayment of past due contractual rent and replenishment of the security deposit, and accelerated all principal and accrued interest due to Omega under the revolving credit facility, which had $ 296.4 million outstanding as of September 30, 2024, including PIK interest that is not recorded for accounting purposes.

We also filed a lawsuit during the second quarter of 2024 to, among other things, foreclose on the pledged equity and assets of Maplewood.

After sending the demand letter, in June 2024, Omega executed a non-binding term sheet with the Key Principals outlining the terms of the proposed transition, which includes maintaining the Maplewood lease agreement and the secured revolving credit facility provided by Omega.

On July 31, 2024, we entered into a settlement agreement (the “Settlement Agreement”) with the Estate and submitted it to the probate court for approval.

The Settlement Agreement, among other things, grants Omega the right to direct the assignment of Mr.

Smith’s equity to the Key Principals or their designee(s), with the Estate remaining liable under Mr.

In the first quarter of 2025, Maplewood paid $ 13.6 million of contractual rent, a short pay of $ 6.0 million of the $ 19.6 million (consisting of $ 17.3 million of contractual rent and $ 2.3 million of contractual interest) due under its lease and loan agreements.

These amounts do not include contractual rent and payments related to Inspir Embassy Row in Washington D.C.

of $ 2.1 million, which is separately disclosed in Note 2 – Real Estate Assets.

Maplewood initially short-paid the contractual rent amount due under its lease agreement during the second quarter of 2023 and has not made full contractual rent and interest payments since that time.

Maplewood is on a cash basis of revenue recognition for lease purposes, and we recorded rental income of $ 13.6 million and $ 11.3 million for the three months ended March 31, 2025 and 2024, respectively, for contractual rent payments that were received from Maplewood.

As discussed further in Note 5 – Real Estate Loans Receivable, no interest income was recorded on the Maplewood secured revolving credit facility during the three months ended March 31, 2025 and 2024 as the loan is on non-accrual status for interest recognition.

In April 2025, Maplewood short-paid the contractual rent and interest amounts due under its lease and loan agreements by $ 2.1 million.

As previously disclosed, we entered into a settlement agreement with the Greg Smith, principal and chief executive officer of Maplewood, estate (the “Estate”) in the third quarter of 2024 that, among other things, grants Omega the right to direct the assignment of Mr.

Smith’s equity to the key members of the existing Maplewood management team or their designee(s) or another designee of Omega’s choosing, with the Estate remaining liable under Mr.

Smith’s guaranty until the transition is complete or one year from the court’s approval date, if earlier, and requires Omega to refrain from exercising contractual rights or remedies in connection with the defaults.

On August 26, 2024, the probate court approved the Settlement Agreement, and in October 2024, following the probate court’s final and non-appealable order approving the Settlement Agreement, we requested and were granted a dismissal without prejudice of our lawsuit against, among others, the Estate.

We are still awaiting regulatory approvals related to licensure of the operating assets before the transition will be completed.

In the third quarter of 2024, Maplewood paid $ 12.1 million of contractual rent, a short pay of $ 6.0 million of the $ 18.1 million (consisting of $ 17.3 million of contractual rent and $ 0.8 million of contractual interest) due under its lease and loan agreements.

Maplewood’s $ 4.8 million security deposit was fully exhausted in the fourth quarter of 2023, so we were unable to apply collateral to unpaid rent and interest in 2024.

Maplewood is on a cash basis of revenue recognition for lease purposes, and we recorded rental income of $ 12.1 million and $ 17.3 million for the three months ended September 30, 2024 and 2023, respectively.

We recorded rental income of $ 35.2 million and $ 50.9 million for the nine months ended September 30, 2024 and 2023, respectively.

Rental income in all periods was limited to payments that were received from Maplewood or the application of available collateral held by Omega.

The $ 12.5 million option termination fee payment made by Omega in the first quarter of 2023 in connection with the restructuring agreement was recorded as a reduction to the $ 50.9 million of gross rental income recognized for the nine months ended September 30, 2023.

As discussed further in Note 5 – Real Estate Loans Receivable, we recorded interest income of zero and $ 1.5 million on the Maplewood secured revolving credit facility during the three and nine months ended September 30, 2023, respectively.

No interest income was recorded during the three and nine months ended September 30, 2024.

In October 2024, Maplewood short-paid the contractual rent and interest amounts due under its lease and loan agreements by $ 1.9 million.

We began restructuring our facilities and agreements with LaVie in the fourth quarter of 2022, as a result of on-going liquidity issues at LaVie, and these activities have continued into 2023 and 2024.

In January 2023, we amended our lease agreements with LaVie t o allow for a partial rent deferral of $ 19.0 million for the first four months of 2023.

During 2023, we transitioned two facilities, previously subject to the master lease with LaVie, to another operator and sold 37 facilities, previously subject to the master lease with LaVie, to a third party.

In the first quarter of 2024, we sold two facilities and transitioned two facilities to another operator, all of which were previously subject to the master lease with LaVie.

In June 2024, LaVie commenced voluntary cases under Chapter 11 of the U.S.

In the first quarter of 2025, LaVie Care Centers, LLC (“LaVie”) paid full contractual rent of $ 9.3 million.

As LaVie is on a cash basis of revenue recognition for lease purposes, rental income recorded was equal to cash received of $ 9.3 million and $ 4.4 million during the three months ended March 31, 2025 and 2024, respectively.

We did no t recognize any interest income related to LaVie during the three months ended March 31, 2025 and 2024 as the three loans outstanding have PIK interest and are on non-accrual status.

For additional discussion on the LaVie loans please see Note 6 – Non-Real Estate Loans Receivable.

In April 2025, LaVie paid full contractual rent of $ 3.1 million due under its lease agreement.

LaVie commenced voluntary cases under Chapter 11 of the U.S.

Bankruptcy Code in the U.S.

Bankruptcy Court for the Northern District of Georgia, Atlanta Division (the “Bankruptcy Court”).

LaVie will continue to operate, as a debtor-in-possession, the 30 facilities subject to a master lease agreement with Omega, unless and until LaVie’s leasehold interest under the master lease agreement is rejected or assumed and assigned.

We committed to provide, along with another lender, $ 10 million of a $ 20 million junior secured debtor-in-possession (“DIP”) financing to LaVie, as further discussed in Note 6 – Non-Real Estate Loans Receivable.

As a condition of the DIP financing, LaVie is required to pay Omega full contractual rent under its lease agreement.

We determined LaVie was a variable interest entity after it became a debtor-in-possession and following the issuance of the DIP financing loan.

Omega is not the primary beneficiary of LaVie because we do not have the power to control the activities that most significantly impact LaVie’s economic performance.

See Note 8 – Variable Interest Entities, for additional disclosures surrounding our VIEs.

Prior to its bankruptcy filing, LaVie paid Omega $ 1.5 million in April 2024 and $ 1.5 million in May 2024.

The April 2024 and May 2024 payments were short of full contractual rent by $ 1.7 million and $ 1.5 million, respectively.

Following the bankruptcy filing, LaVie paid contractual rent of $ 2.9 million in June 2024, which reflects full contractual rent prorated for the period after LaVie entered bankruptcy and a $ 0.1 million short pay for the several days prior to the filing.

In the third quarter of 2024, LaVie resumed making full contractual rent payments of $ 9.2 million due under its lease agreement.

As LaVie is on a cash basis of revenue recognition for lease purposes, rental income recorded was equal to cash received of $ 9.2 million and $ 7.4 million during the three months ended September 30, 2024 and 2023, respectively and $ 19.5 million and $ 31.7 million during the nine months ended September 30, 2024 and 2023, respectively.

We did no t recognize any interest income related to LaVie during the nine months ended September 30, 2024 and 2023 as the three loans outstanding have PIK interest and are on non-accrual status.

In October 2024, LaVie paid full contractual rent of $ 3.0 million due under its lease agreement.

In August 2023, Guardian Healthcare (“Guardian”) failed to make the contractual rent payment due under its lease agreement and subsequently did not make any required contractual rent payments due under its lease agreement through the end of the first quarter of 2024.

In April 2024, we transitioned the remaining six facilities previously included in Guardian’s master lease to a new operator for minimum initial contractual rent of $ 5.5 million per annum with the potential to increase contractual rent dependent on revenue received by the operator.

We recorded rental income of $ 2.9 million and $ 5.8 million related to our lease with the new operator for the three and nine months ended September 30, 2024, respectively.

Agemo failed to pay contractual rent and interest during the first quarter of 2023.

Following the execution of a restructuring agreement between Omega and Agemo in the first quarter of 2023, Agemo resumed making contractual rent and interest payments during the second quarter of 2023 and has made all required contractual rent and interest payments through the third quarter of 2024.

Rental income includes $ 6.0 million and $ 5.8 million related to our lease with Agemo for the three months ended September 30, 2024 and 2023, respectively, and $ 17.9 million and $ 11.6 million for the nine months ended September 30, 2024 and 2023, respectively.

As Agemo is a cash basis operator, rental income is limited to the contractual rent payments that were received during the respective periods.

We did no t recognize interest income on our loans with Agemo during the nine months ended September 30, 2024 and 2023.

See Note 6 – Non-Real Estate Loans Receivable for discussion regarding our loans and interest with Agemo.

During the nine months ended September 30, 2023, we re-leased 48 facilities that were previously subject to leases with four cash basis operators to other operators.

Following the transition, we have no remaining relationships with these four cash basis operators.

All of the operators to which the 48 facilities were transitioned have leases for which Omega is recognizing revenue on a straight-line basis.

The aggregate initial contractual rent for the 48 facilities under these leases is $ 48.0 million per annum.

In connection with the transition of certain of these facilities, in the first quarter of 2023, Omega made termination payments of $ 15.5 million that were recorded as initial direct costs related to a lease with a new operator.

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

Bankruptcy Court for the Northern District of Georgia, Atlanta Division (the “Bankruptcy Court”) in June 2024.

On December 5, 2024, a plan of reorganization was confirmed by the Bankruptcy Court, pursuant to which the LaVie master lease agreement will be assumed and assigned by certain of the debtor(s) to operators designated by the Plan Sponsor upon the effective date of the plan.

Genesis Healthcare, Inc.

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

Genesis continued to make their rent and interest payments to us until March 2025, when it failed to make the rent payment due under its lease agreement and the interest payment due under one of its three loan agreements.

As Genesis is on a cash basis of revenue recognition, we recognized rental income of $ 12.5 million related to Genesis during the three months ended March 31, 2025, which includes $ 8.3 million for contractual rent payments received and $ 4.2 million from the application of proceeds from the letter of credit that was held as collateral from Genesis.

During the three months ended March 31, 2024, we recognized rental income of $ 11.9 million for contractual rent payments received from Genesis.

In addition, we recognized $ 4.2 million (which includes $ 0.1 million from the application of proceeds from the letter of credit) related to three loans with Genesis and $ 3.5 million of interest income related to two loans with Genesis during the three months ended March 31, 2025 and 2024, respectively.

After the application of proceeds from the letter of credit, there is $ 3.5 million remaining under the letter of credit.

For additional information on the loans with Genesis, see Note 6 – Non-real Estate Loans Receivable and Note 7 – Allowance for Credit losses.

In April 2025, Genesis paid full contractual rent and interest of $ 4.8 million.

Lease Inducements

As discussed in Note 2 – Real Estate Assets, in connection with a new lease agreement entered into during the first quarter of 2025, we agreed to provide a one-time payment of $ 10.0 million to an operator as a lease inducement.

NOTE 5 – REAL ESTATE LOANS RECEIVABLE

Real estate loans consist of mortgage notes 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 September 30, 2024, our real estate loans receivable consists of 17 fixed rate mortgage notes on 68 long-term care facilities and 15 other real estate loans.

As of March 31, 2025, our real estate loans receivable consists of 21 fixed rate mortgage notes on 95 long-term care facilities and 19 other real estate loans.

The facilities subject to the mortgage notes are operated by 16 independent healthcare operating companies and are located in 11 U.S.

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A summary of our real estate loans receivable by loan type and by borrower and/or guarantor is as follows:

September 30,

As of March 31, 2025

Average Years

Interest Rate

(in thousands)

Mortgage notes due 2030 ;

interest at 11.20 % (1)(2)

Mortgage notes due 2037 ;

interest at 10.61 % (1)

Mortgage notes due 2024 ;

interest at 10.00 % (1)

Mortgage note due 2025 ;

interest at 7.85 %

Mortgage note due 2028 ;

interest at 10.00 %

Other mortgage notes outstanding (3)

Mortgage notes receivable – gross

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Mortgage notes receivable – net

Other real estate loan due 2035 ;

interest at 7.00 %

Other real estate loans due 2025 - 2030 ;

interest at 11.76 % (1)

Other real estate loans due 2025 ;

interest at 10.00 % (4)

Other real estate loans outstanding (5)

Other real estate loans – gross

2 unchanged sentences

Total real estate loans receivable – net

(1) Approximates the weighted average interest rate on facilities as of September 30, 2024.

(2) All mortgage notes mature in 2030 with the exception of two mortgage notes with an aggregate outstanding principal balance of $ 52.8 million that mature in 2024.

(3) Other mortgage notes outstanding consists of 10 loans to multiple borrowers that have a weighted average interest rate of 10.44 % as of September 30, 2024, with maturity dates ranging from 2024 through 2027 (with $ 8.7 million maturing in 2024).

(1) Consists of mortgage notes with maturity dates ranging from 2025 through 2037 (with $ 194.1 million maturing in 2025).

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.

(4) During the third quarter of 2024, we modified the priority of collateral available to use under the loan agreements for two loans with aggregate principal balances of $ 113.6 million and $ 106.8 million as of September 30, 2024 and December 31, 2023, respectively.

As a result of these modifications, we adjusted the presentation of the loans from real estate loans receivable to non-real estate loans receivable as of September 30, 2024.

See Note 6 – Non-Real Estate loans Receivable for additional information.

Additionally, we issued a new $ 13.0 million other real estate loan to the same borrower during the third quarter of 2024.

(5) Other real estate loans outstanding consists of nine loans to multiple borrowers that have a weighted average interest rate of 10.9 % as of September 30, 2024, with maturity dates ranging from 2027 through 2033 .

(2) Consists of other real estate loans with maturity dates ranging from 2025 through 2035 (with $ 39.6 million maturing in 2025).

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

Three Months Ended September 30,

Nine Months Ended September 30,

(in thousands)

Three Months Ended March 31,

(in thousands)

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Total real estate loans interest income

During the three and nine months ended September 30, 2024, we funded $ 54.9 million and $ 209.0 million under 10 and 19 real estate loans, respectively, that were originated during 2024 with weighted average interest rates of 10.2 %.

We also advanced $ 0.4 million and $ 3.8 million under existing real estate loans during the three and nine months ended September 30, 2024, respectively.

The following is a summary of advances and principal repayments under our real estate loans:

Three Months Ended March 31,

(in thousands)

Advances on new real estate loans receivable (1)

Advances on existing real estate loans receivable

Principal repayments on real estate loans receivable (2)

Net cash advances (repayments) on real estate loans receivable

(1) Consists of advances under two and seven new real estate loans with a weighted average interest rate of 10.8 % and 9.6 % during the three months ended March 31, 2025 and 2024, respectively.

(2) Includes $ 40.6 million of early repayments on mortgage notes with a weighted average interest rate of 11.6 % , as of March 31, 2025, subject to the master mortgage agreement with Ciena Healthcare Management, Inc (“Ciena”).

Excludes principal recoveries on loans written off in prior periods and cash recoveries related to interest payments received on loans that are written down to fair value and are being accounted for under the cost recovery method in which any payments received are applied directly against the principal balance outstanding.

Included below is additional discussion on any significant new loans issued and significant updates to any existing loans.

Mortgage Notes due 2024

In May 2024, we funded an aggregate $ 71.7 million under two new mortgage loans to an existing U.K.

Both mortgage loans bear interest at 10.0 % and mature on October 28, 2024.

Interest is payable monthly in arrears and no principal payments are due until maturity.

The loan is secured by a first mortgage lien on two parcels of land that the U.K.

operator intends to develop into two facilities.

Other mortgage notes outstanding

In January 2024, we funded $ 11.7 million under a new mortgage loan to a new operator.

In June 2024, we amended the loan and funded an additional $ 18.0 million under the mortgage loan.

The mortgage loan bears interest at 10.0 % and matures on January 31, 2027 .

Interest is payable monthly in arrears and no principal payments are due until maturity.

The loan is secured by a first mortgage lien on three SNFs and one ALF.

Other real estate loan due 2035

As discussed within Note 4 – Contractual Receivables and Other Receivables and Lease Inducements, Omega sent a demand letter to Maplewood during the second quarter of 2024 notifying Maplewood that due to multiple existing events of default under Maplewood’s lease, loan, and related agreements, Omega had exercised its contractual rights to immediately accelerate the outstanding principal and accrued interest under the secured revolving loan agreement.

After sending the demand letter, in June 2024 Omega executed a non-binding term sheet with the Key Principals outlining the terms of a proposed transition, which includes the assignment of Mr.

Smith’s equity in Maplewood to the Key Principals and maintaining the existing Maplewood lease agreement and the secured revolving credit facility (without reflecting the acceleration of the maturity) provided by Omega.

On July 31, 2024, we entered into the Settlement Agreement with the Estate and submitted it to the probate court for approval.

The Settlement Agreement, among other things, grants Omega the right to direct the assignment of Mr.

Smith’s equity to the Key Principals or their designee(s), with the Estate remaining liable under Mr.

Maplewood Revolving Credit Facility

We have a $ 320 million revolving credit facility with Maplewood (the “Maplewood Revolver”) that bears interest at 7 % per annum ( 4 % cash interest and 3 % PIK for 2025) and matures in June 2035 .

The amortized cost basis of the Maplewood Revolver was $ 263.6 million as of March 31, 2025 and December 31, 2024.

Due to liquidity issues of the borrower, the Maplewood Revolver is on non-accrual status.

During the three months ended March 31, 2025 and 2024, Maplewood failed to make aggregate cash interest payments of $ 2.3 million and $ 0.5 million that were required under the loan agreement.

As such, we did no t record any interest income for the Maplewood Revolver during the three months ended March 31, 2025 and 2024.

As discussed within Note 4 – Contractual Receivables and Other Receivables and Lease Inducements, Omega entered into a settlement agreement with the Estate during the third quarter of 2024 that, among other things, grants Omega the right to direct the assignment of Mr.

Smith’s equity to the key members of the existing Maplewood management team or their designee(s), with the Estate remaining liable under Mr.

We are still awaiting regulatory approvals related to licensure of the operating assets before the transition will be completed.

There is no certainty that the regulatory approvals will be received or that this transition will be completed as intended, on a timely basis, or at all.

If the proposed transition plan is not completed, we may incur a substantial loss on the revolving loan with Maplewood up to the amortized cost basis of the loan.

We adjusted the internal risk rating on the loan, utilized as a component of our allowance for credit loss calculation, from a 3 to a 4 in the second quarter of 2023 when Maplewood began to short-pay contractual rent under its lease agreement.

In the first quarter of 2024, we again adjusted the internal risk rating from a 4 to 5 to reflect the increased risk of the loan as a result of the missed interest payments in the first quarter of 2024, discussed below, and due to the status of the on-going negotiations with the Estate.

We believe the internal risk rating of a 5 appropriately reflects the risks as of September 30, 2024.

If the proposed transition plan is not completed, we may incur a substantial loss on the Maplewood Revolver up to the amortized cost basis of the loan.

As of March 31, 2025, the internal risk rating on the loan is a 5, which reflects the risk of the loan as a result of the missed interest payments starting in 2024, discussed above, and due to the status of the on-going negotiations with the Estate.

We believe the internal risk rating of a 5 appropriately reflects the risks as of March 31, 2025.

See the allowance for credit losses attributable to real estate loans with a 5 internal risk rating within Note 7 – Allowance for Credit Losses.

As of September 30, 2024, the amortized cost basis of this loan was $ 263.6 million, which represents 18.9 % of the total amortized cost basis of all real estate loan receivables.

During the nine months ended September 30, 2024, Maplewood failed to make aggregate cash interest payments of $ 2.0 million that were required under the loan agreement.

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 no t record any interest income related to the PIK interest during the three and nine months ended September 30, 2024 and 2023.

Omega and Maplewood previously entered into a restructuring agreement and a loan amendment during the first quarter of 2023 that modified Maplewood’s secured revolving credit facility.

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

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

Other real estate loans outstanding

In July 2024, we made a $ 27.3 million preferred equity investment in a new real estate joint venture that was formed to acquire a facility in Massachusetts, which is treated as a real estate loan receivable for accounting purposes.

Omega’s preferred equity investment bears a 10.0 % return per annum and provides for mandatory redemption by the joint venture at the earlier of July 2030 or the occurrence of certain significant events within the joint venture.

We have determined that the joint venture is a VIE, but we are not the primary beneficiary as we do not have the power to direct the activities that most significantly impact the joint venture’s economic performance, so this $ 27.3 million preferred equity investment is included in the unconsolidated VIE table presented in Note 8 – Variable Interest Entities.

NOTE 6 – NON-REAL ESTATE LOANS RECEIVABLE

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

As of September 30, 2024, we had 47 loans with 27 different borrowers.

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 March 31, 2025, we had 45 loans with 29 different borrowers.

A summary of our non-real estate loans by borrower and/or guarantor is as follows:

September 30,

As of March 31, 2025

Average Years

Interest Rate

(in thousands)

Notes due 2026 ;

interest at 13.22 % (1)

Notes due 2036 ;

interest at 5.63 %

Notes due 2024 - 2026 ;

interest at 11.00 % (1)

Notes due 2024 - 2029 ;

interest at 12.00 % (1)(2)

Note due 2025 ;

interest at 9.12 % (3)

Notes due 2024 and 2036 ;

interest at 2.98 % (1)

Other notes outstanding (4)

Working capital loans receivable

Other loans receivable

Non-real estate loans receivable – gross

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Total non-real estate loans receivable – net

(1) Approximates the weighted average interest rate as of September 30, 2024.

(2) During the second quarter of 2024, two working capital loans with maturity dates of June 30, 2024 were repaid in full.

These two loans had an aggregate outstanding principal balance of $ 39.5 million as of December 31, 2023.

(3) During the first quarter of 2024, this loan was amended to, among other items, extend the maturity date to December 31, 2025 , modify the mandatory principal payments required under the loan, reduce the maximum principal under the loan from $ 55.0 million to $ 45.0 million and increase the interest rate on borrowings in excess of $ 15.0 million to 8.0 % in January 2024, with further interest rate increases to 9.0 % and 10.0 % in April 2024 and June 2024, respectively.

The interest rate remains at 7.5 % for borrowings that do not exceed $ 15.0 million.

The interest rate above represents the weighted average interest rate as of September 30, 2024.

(4) Other notes outstanding have a weighted average interest rate of 8.61 % as of September 30, 2024, with maturity dates ranging from 2024 through 2030 (with $ 5.3 million maturing in 2024 ).

Four of the other notes outstanding with an aggregate principal balance of $ 10.8 million are past due, three of which have been written down to the estimated fair value of the underlying collateral of zero , through our allowance for credit losses.

The one other past due other note outstanding has sufficient collateral to support the principal balance outstanding of $ 1.1 million as of September 30, 2024.

For the three and nine months ended September 30, 2024, non-real estate loans generated interest income of $ 6.3 million and $ 20.5 million, respectively.

For the three and nine months ended September 30, 2023, non-real estate loans generated interest income of $ 5.7 million and $ 16.0 million, respectively.

(1) Consists of revolving working capital loans receivable collateralized by the accounts receivable of the borrower with maturity dates ranging from 2025 to 2029 (with $ 54.4 million maturing in 2025).

(2) Consists of other loans receivable with maturity dates ranging from 2025 to 2037 (with $ 41.5 million maturing in 2025 ).

Three of the other notes outstanding with an aggregate principal balance of $ 19.3 million are past due and have been reserved down to the estimated fair value of the underlying collateral of zero through our allowance for credit losses.

For the three months ended March 31, 2025 and 2024, non-real estate loans generated interest income of $ 10.0 million and $ 7.1 million, respectively.

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

During the three and nine months ended September 30, 2024, we funded $ 23.5 million and $ 33.9 million, respectively, under four and seven non-real estate loans that were originated during 2024 with a weighted average interest rate of 9.9 %.

We advanced $ 0.4 million and $ 14.1 million under non-real estate loans during the three and nine months ended September 30, 2024, respectively.

We received principal repayments of $ 37.4 million and $ 90.2 million on non-real estate loans during the three months and nine months ended September 30, 2024, respectively.

The following is a summary of advances and principal repayments under our non-real estate loans:

Three Months Ended March 31,

(in thousands)

Advances on new non-real estate loans receivable

Advances on existing non-real estate loans receivable

Principal repayments on non-real estate loans receivable (1)

Net cash advances (repayments) on non-real estate loans receivable

(1) Excludes principal recoveries on loans written off in prior periods and cash recoveries related to interest payments received on loans that are written down to fair value and are being accounted for under the cost recovery method in which any payments received are applied directly against the principal balance outstanding.

Included below is additional discussion on any significant new loans issued and/or significant updates to any existing loans.

Notes due 2026

Notes due in 2026 consists of two term loans with Genesis Healthcare Inc., (“Genesis”) with principal balances of $ 91.4 million and $ 22.2 million as of September 30, 2024, respectively, that previously were included as real estate loans receivables within our Consolidated Balance Sheets.

The $ 91.4 million term loan bore interest at a fixed rate of 14 % per annum, of which 9 % per annum was permitted to be paid-in-kind.

The $ 22.2 million term loan bore interest at a fixed rate of 10 % per annum, of which 5 % per annum was permitted to be paid-in-kind.

As amended, both loans had a maturity date of June 30, 2025 .

On September 30, 2024, the loans were amended to (i) modify the priority of certain real estate collateral securing the loans, (ii) extend the maturity date to June 30, 2026 and (iii) keep the existing interest rates but reduce the portion of contractual interest permitted to be paid in kind to 3.5 % per annum on the $ 91.4 million term loan and to 2.5 % per annum on the $ 22.2 million term loan beginning September 1, 2025.

Following the modification to the priority of certain real estate collateral available to us under the loan agreements, we adjusted our presentation of these loans from real estate loans receivable to non-real estate loans receivable as of September 30, 2024.

Notes due 2036 ;

interest at 5.63 %

As discussed in Note 4 – 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.

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 .

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

Agemo resumed making interest payments for the Agemo Replacement Loans in May 2023 in accordance with the terms of the restructuring agreement.

The Agemo Replacement Loans are on non-accrual status, and we are utilizing the cost recovery method, under which any payments we receive are applied against the principal amount.

During the three months and nine months ended September 30, 2024, we received $ 1.2 million and $ 3.6 million, respectively, of interest payments from Agemo that we applied against the outstanding principal of the loans, and we recognized a recovery for credit loss equal to the amount of payments applied against principal.

During the three months and nine months ended September 30, 2023, we received $ 1.2 million and $ 2.0 million, respectively, of interest payments from Agemo that we applied against the outstanding principal of the loans, and we recognized a recovery for credit loss equal to the amount of payments applied against principal.

As of September 30, 2024, the amortized cost basis of these loans was $ 74.3 million, which represents 16.1 % of the total amortized cost basis of all non-real estate loan receivables.

The total reserve as of September 30, 2024 related to the Agemo Replacement Loans was $ 72.0 million, which reserves the loan down to the fair value of the underlying collateral, consisting of a second lien on the accounts receivable of Agemo.

Notes due 2024 and 2036 ;

interest at 2.98 %

As discussed in Note 4 – Contractual Receivables and Other Receivables and Lease Inducements, on June 2 and 3, 2024, LaVie commenced voluntary cases under Chapter 11 of the U.S.

Bankruptcy Code in the Bankruptcy Court.

As described in LaVie’s filings with the Bankruptcy Court, we provided $ 10.0 million of DIP financing to LaVie in order to support sufficient liquidity to, among other things, effectively operate its facilities during bankruptcy.

Another lender, TIX 33433, LLC, also agreed to provide $ 10.0 million of DIP financing to LaVie, which is pari passau to Omega’s loan.

The DIP loan bears interest at 10.0 % and is paid-in-kind in arrears on a monthly basis.

The principal is due upon maturity.

Currently, the DIP loan matures on the earlier of (i) October 31, 2024, (ii) the effective date of a plan of reorganization or liquidation in the Chapter 11 cases or (iii) upon an event of default as defined in the DIP loan agreement.

The DIP lenders hold a second priority interest in the assets of LaVie, which include cash and accounts receivable.

Proceeds of any future asset sales, claims and causes of action and debt or equity issuances all serve as collateral for the DIP loans.

Given the risks associated with the bankruptcy process, we elected to evaluate the risk of loss on the DIP loan on an individual basis.

As the fair value of the collateral available to Omega was estimated to be less than the outstanding principal of $ 4.5 million as of June 30, 2024, we reserved $ 4.2 million through the provision for credit losses in the second quarter of 2024 to write the loan down to the estimated fair value of the collateral of $ 0.3 million.

The DIP loan was also placed on non-accrual status for interest recognition, and we will utilize the cost recovery method for any proceeds received on the DIP loan.

We also have two existing term loans with LaVie, an $ 8.3 million unsecured term loan and a $ 25.0 million secured term loan, that bear interest at 2.0 % (which is all PIK interest) and mature on November 30, 2036 .

The $ 8.3 million term loan was previously fully reserved in our allowance for credit losses.

The $ 25.0 million secured term loan was previously reserved down to $ 3.6 million, the estimated fair value of the collateral which consisted of a second priority lien on LaVie’s accounts receivable.

As a result of the issuance of the DIP loans discussed above, Omega’s collateral position under the $ 25.0 million secured term loan decreased from second to third priority.

We estimated that there will be insufficient collateral available for this loan following the decrease in priority and therefore recognized a $ 3.6 million provision for credit losses in the second quarter of 2024 to fully reserve the $ 25.0 million secured term loan.

We did no t record any interest income for any LaVie loans for the three and nine months ended September 30, 2024 and 2023.

LaVie Non-Real Estate Loans

As of March 31, 2025, we had three non-real estate loans outstanding with LaVie that are all fully reserved, which includes a $ 10.0 million debtor-in-possession (“DIP”) financing provided during the second quarter of 2024 related to the bankruptcy filing.

All three loans are on non-accrual status.

During the first quarter of 2025, we funded an additional $ 4.0 million under the DIP loan, bringing the DIP loan principal balance outstanding to $ 10.0 million as of March 31, 2025.

We reserved an additional $ 4.0 million through the provision for credit losses to reserve the DIP loan down to zero following the additional draws during the first quarter of 2025.

We did no t record any interest income for any LaVie loans for the three months ended March 31, 2025 and 2024.

Genesis Non-Real Estate Loans

As of March 31, 2025, we had two non-real estate loans outstanding with Genesis that had an aggregate balance of $ 118.3 million both maturing on June 30, 2026 .

The loans currently bear interest at a weighted average fixed interest rate of 13.2 % per annum, of which 8.2 % is paid-in-kind and 5 % is cash interest.

The loans are collateralized by a first lien on the equity of several ancillary businesses of Genesis.

Genesis made all required interest payments under both of the non-real estate loans during the first quarter of 2025.

As discussed in Note 4 - Contractual Receivables and Other Receivables and Lease Inducements, Omega applied collateral to cover March 2025 contractual rent under its lease agreement and March 2025 contractual interest due under a $ 13.0 million other real estate loan agreement with Genesis.

As part of our ongoing credit loss procedures, we evaluated the fair value of the collateral available to us under the two non-real estate loan agreements and estimate there is sufficient collateral to support the outstanding principal on the loans.

NOTE 7 – ALLOWANCE FOR CREDIT LOSSES

A rollforward of our allowance for credit losses for the nine months ended September 30, 2024 is as follows:

A rollforward of our allowance for credit losses for the three months ended March 31, 2025 is as follows:

Financial Statement Line Item

Allowance for Credit Loss as of December 31, 2024

Provision (Recovery) for Credit Loss for the nine months ended September 30, 2024 (1)

Write-offs charged against allowance for the nine months ended September 30, 2024

Allowance for Credit Loss as of September 30, 2024

Provision (Recovery) for Credit Loss for the three months ended March 31, 2025 (1)

Write-offs charged against allowance for the three months ended March 31, 2025

Other reductions to the allowance for the three months ended March 31, 2025

Allowance for Credit Loss as of March 31, 2025

(in thousands)

19 unchanged sentences

Unfunded non-real estate loan commitments

(1) During the nine months ended September 30, 2024, we received proceeds of $ 5.0 million from the liquidating trust related to the $ 25.0 million debtor in possession facility to Gulf Coast Health Care LLC, which resulted in a recovery for credit losses of $ 5.0 million that is not included in the rollforward above since we had previously written-off the loan balance and related reserves.

(2) Amount reflects the movement of reserves associated with Maplewood’s secured revolving credit facility due to an adjustment to the internal risk rating on the loan from a 4 to a 5 during the first quarter of 2024.

See Note 5 – Real Estate Loans Receivable for additional information.

(3) This amount includes cash recoveries of $ 3.5 million related to interest payments received on loans that are written down to fair value and are being accounted for under the cost recovery method in which any payments received are applied directly against the principal balance outstanding.

(1) During the three months ended March 31, 2025, we received proceeds of $ 1.4 million from the liquidating trust related to the $ 25.0 million debtor in possession facility to Gulf Coast Health Care LLC and proceeds of $ 0.3 million related to one other real estate loan, which resulted in a recovery for credit losses of $ 1.7 million.

Both of the aforementioned loans and related reserves were previously written off so the $ 1.7 million aggregate recovery is not included in the rollforward above.

(2) Amount reflects the movement of reserves associated with the $ 13.0 million other real estate loan with Genesis due to an adjustment to the internal risk rating on the loan from 4 to 5 during the first quarter of 2025.

As discussed in further detail in Note 4 - Contractual Receivables and Other Receivables and Lease Inducements, Omega applied collateral in order to cover interest due in March 2025 on the loan.

(3) Represents the allowance for credit losses related to an investment in direct financing lease that was reclassified to real estate assets in connection with the termination of the lease in the first quarter of 2025 as discussed further in Note 2 – Real Estate Assets.

(4) The amount includes cash recoveries of $ 1.6 million related to interest payments received on loans that are written down to fair value and are being accounted for under the cost recovery method in which any payments received are applied directly against the principal balance outstanding.

This amount also includes $ 3.1 million related to principal payments received on loans that were fully reserved.

A rollforward of our allowance for credit losses for the nine months ended September 30, 2023 is as follows:

A rollforward of our allowance for credit losses for the three months ended March 31, 2024 is as follows:

Financial Statement Line Item

Allowance for Credit Loss at December 31, 2023

Provision (Recovery) for Credit Loss for the nine months ended September 30, 2023

Write-offs charged against allowance for the nine months ended September 30, 2023

Other additions to the allowance for the nine months ended September 30, 2023

Allowance for Credit Loss as of September 30, 2023

Provision (Recovery) for Credit Loss for the three months ended March 31, 2024 (1)

Write-offs charged against allowance for the three months ended March 31, 2024

Allowance for Credit Loss as of March 31, 2024

(in thousands)

4 unchanged sentences

Real estate loans receivable

Investment in direct financing leases

7 unchanged sentences

Unfunded real estate loan commitments

Unfunded non-real estate loan commitments

1 unchanged sentence

Unfunded non-real estate loan commitments

(1) 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.

(2) 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.

Unfunded non-real estate loan commitments

(1) During the three months ended March 31, 2024, we received proceeds of $ 2.3 million from the liquidating trust related to the $ 25.0 million senior unsecured debtor in possession facility to Gulf Coast Health Care LLC, which resulted in a recovery for credit losses of $ 2.3 million that is not included in the rollforward above since we had previously written-off loan balance and related reserve.

(2) Amount reflects the movement of reserves associated with the Maplewood Revolver due to an adjustment to the internal risk rating on the loan from 4 to 5 during the first quarter of 2024.

See Note 5- Real Estate Loans Receivable for additional information.

(3) The amount includes cash recoveries of $ 1.2 million related to interest payments received on loans that are written down to fair value and are being accounted for under the cost recovery method in which any payments received are applied directly against the principal balance outstanding.

3 unchanged sentences

Revolving Loans

Balance as of September 30, 2024

Balance as of March 31, 2025

(in thousands)

5 unchanged sentences

Real estate loans receivable

Investment in direct financing leases

Non-real estate loans receivable

6 unchanged sentences

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

As of September 30, 2024 and December 31, 2023, we have excluded $ 10.3 million and $ 10.2 million, respectively, of contractual interest receivables and $ 1.7 million and $ 3.1 million, respectively, of effective yield interest receivables from our allowance for credit losses.

As of March 31, 2025 and December 31, 2024, we have excluded $ 12.7 million and $ 11.1 million, respectively, of contractual interest receivables and $ 2.0 million and $ 1.8 million, respectively, of effective yield interest receivables from our allowance for credit losses.

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

During the three months ended September 30, 2024 and 2023, we recognized $ 0.6 million and $ 47 thousand, respectively, of interest income related to loans on non-accrual status as of September 30, 2024.

During the nine months ended September 30, 2024 and 2023, we recognized $ 2.8 million and $ 1.6 million, respectively, of interest income related to loans on non-accrual status as of September 30, 2024.

During the three months ended March 31, 2025 and 2024, we recognized $ 0.5 million and $ 1.0 million, respectively, of interest income related to loans on non-accrual status as of March 31, 2025.

NOTE 8 – VARIABLE INTEREST ENTITIES

1 unchanged sentence

We hold variable interests in several VIEs through our investing and financing activities, which are not consolidated, as we have concluded that we are not the primary beneficiary of these entities as we do not have the power to direct activities that most significantly impact the VIE’s economic performance and/or the variable interest we hold does not obligate us to absorb losses or provide us with the right to receive benefits from the VIE which could potentially be significant.

Below is a summary of our assets, liabilities, collateral and maximum exposure to loss associated with these unconsolidated VIEs as of September 30, 2024 and December 31, 2023:

September 30,

Below is a summary of our assets, liabilities, collateral and maximum exposure to loss associated with these unconsolidated VIEs as of March 31, 2025 and December 31, 2024:

(in thousands)

Real estate assets – net

Assets held for sale

Real estate loans receivable – net

12 unchanged sentences

Maximum exposure to loss

(1) Amount excludes accounts receivable that Omega has a security interest in as collateral under the three loans with operators that are unconsolidated VIEs.

The fair value of the accounts receivable available to Omega was $ 5.8 million and $ 8.9 million as of September 30, 2024 and December 31, 2023, respectively.

(1) Amount excludes accounts receivable that Omega has a security interest in as collateral under the two working capital loans with operators that are unconsolidated VIEs.

The fair value of the accounts receivable available to Omega was $ 3.8 million and $ 5.5 million as of March 31, 2025 and December 31, 2024, respectively.

In determining our maximum exposure to loss from the unconsolidated VIEs, we considered the underlying carrying value of the real estate subject to leases with the operator and other collateral, if any, supporting our other investments, which may include accounts receivable, security deposits, letters of credit or personal guarantees, if any, as well as other liabilities recognized with respect to these operators.

The table below reflects our total revenues from the operators that are considered unconsolidated VIEs, following the date they were determined to be VIEs, for the three and nine months ended September 30, 2024 and 2023:

Three Months Ended September 30,

Nine Months Ended September 30,

(in thousands)

The table below reflects our total revenues from the operators that are considered unconsolidated VIEs, following the date they were determined to be VIEs, for the three months ended March 31, 2025 and 2024:

Three Months Ended March 31,

(in thousands)

2 unchanged sentences

Consolidated VIEs

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

The Company consolidates Omega OP, a VIE in which the Company is considered the primary beneficiary.

The Company, as managing member, has the power to direct the activities of Omega OP that most significantly affect Omega OP’s performance, and through its interest in Omega OP, has both the right to receive benefits from and the obligation to absorb losses of Omega OP.

Additionally, 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.

As of September 30, 2024 and December 31, 2023, this joint venture has $ 24.6 million and $ 27.9 million, respectively, of total assets, and $ 20.8 million and $ 20.7 million, respectively, of total liabilities.

Of the $ 20.8 million of total liabilities held by the joint venture at September 30, 2024, $ 20.5 million relates to a mortgage loan advanced by Omega during the second quarter 2024 to pay-off an existing third-party mortgage loan of the joint venture, as discussed in Note 15 – Borrowing Activities and Arrangements.

The $ 20.5 million Omega mortgage loan is eliminated in consolidation and is not reflected in our Consolidated Balance Sheets.

As of March 31, 2025 and December 31, 2024, this joint venture has $ 24.0 million and $ 24.3 million, respectively, of total assets, and $ 20.8 million of total liabilities which are included in our Consolidated Balance Sheets.

NOTE 9 – INVESTMENTS IN JOINT VENTURES

2 unchanged sentences

Carrying Amount

September 30,

Second Spring Healthcare Investment

Lakeway Realty, L.L.C.

Specialty facility

Cindat Joint Venture (3)

OMG Senior Housing, LLC (4)

Specialty facility

OH CHS SNP, Inc.

RCA NH Holdings RE Co., LLC (2)(5)

WV Pharm Holdings, LLC (2)(5)

OMG-Form Senior Holdings, LLC (2)(5)

CHS OHI Insight Holdings, LLC

(1) Ownership percentages and facility counts are as of September 30, 2024.

(2) As of September 30, 2024 and December 31, 2023, we had an aggregate of $ 79.1 million and $ 79.6 million, respectively, of loans outstanding with these joint ventures.

(3) As of June 30, 2024, we held a 49 % interest in an unconsolidated joint venture owning 63 facilities in the U.K.

(the “Cindat Joint Venture”).

In July 2024, we acquired the remaining 51 % ownership interest in the Cindat Joint Venture, such that we now own 100 % of the ownership interest in the entity that owns the Cindat portfolio.

See Note 2 – Real Estate Assets for additional information.

(4) During the third quarter of 2024, this joint venture sold one specialty facility to an unrelated third party for approximately $ 40.7 million in net cash proceeds and recognized a gain on sale of approximately $ 12.9 million ( $ 6.5 million of which represents the Company’s share of the gain).

(5) These joint ventures are unconsolidated VIEs and therefore are included in the tables in Note 8 – Variable Interest Entities.

The following table reflects our income (loss) from unconsolidated joint ventures for the three and nine months ended September 30, 2024 and 2023:

Three Months Ended September 30,

Nine Months Ended September 30,

(in thousands)

Second Spring Healthcare Investments

Lakeway Realty, L.L.C.

Cindat Joint Venture

OMG Senior Housing, LLC (1)

OH CHS SNP, Inc.

OMG-Form Senior Holdings, LLC

(1) The income from this unconsolidated joint venture for the three and nine months ended September 30, 2024 includes a $ 6.5 million gain on sale of real estate investments.

Second Spring Healthcare Investment

Other Real Estate JVs (2)(3)

Other Healthcare JVs (3)(4)

(1) Ownership percentages and facility counts are as of March 31, 2025.

(2) Includes three joint ventures formed for the purpose of owning or providing financing for SNFs, ALFs or specialty facilities.

(3) As of March 31, 2025, and December 31, 2024, we had an aggregate of $ 18.5 million of loans outstanding with these joint ventures.

(4) Includes six joint ventures engaged in business that support the long-term healthcare industry and our operators.

NOTE 10 – GOODWILL AND OTHER INTANGIBLES

The following is a summary of our goodwill as of September 30, 2024 and December 31, 2023:

The following is a summary of our goodwill as of March 31, 2025 and December 31, 2024:

(in thousands)

1 unchanged sentence

Foreign currency translation

Balance as of September 30, 2024

The following is a summary of our intangible assets and liabilities as of September 30, 2024 and December 31, 2023:

September 30,

Balance as of March 31, 2025

The following is a summary of our intangible assets and liabilities as of March 31, 2025 and December 31, 2024:

(in thousands)

5 unchanged sentences

Net below market leases

(1) As of September 30, 2024, includes $ 30.6 million of intangible assets related to above market leases assumed in connection with the acquisition of the remaining 51 % interest in the Cindat Joint Venture during the third quarter of 2024 (see Note 2 – Real Estate Assets for additional information).

Above market leases, net of accumulated amortization, are included in other assets on our Consolidated Balance Sheets.

1 unchanged sentence

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

For the three months ended September 30, 2024 and 2023, our net amortization related to intangibles was $ 1.2 million and $ 2.1 million, respectively.

For the nine months ended September 30, 2024 and 2023, our net amortization related to intangibles was $ 2.3 million and $ 8.9 million, respectively.

The 2024 and 2023 net amortization amounts for the three and nine months ended resulted in an increase to rental income.

For the three months ended March 31, 2025 and 2024, our net amortization related to intangibles was $( 0.2 ) million and $ 0.5 million, respectively.

The estimated net amortization expense related to these intangibles for the remainder of 2025 and the next four years is as follows:

3 unchanged sentences

2028 – $( 2.0 ) million and 2029 – $( 2.1 ) million.

As of September 30, 2024, the weighted average remaining amortization period of above market lease assets is 11 years and below market lease liabilities is seven years .

As of March 31, 2025, the weighted average remaining amortization period of above market lease assets is ten years and below market lease liabilities is nine years .

NOTE 11 – CONCENTRATION OF RISK

As of September 30, 2024, our portfolio of real estate investments (including properties associated with mortgages, direct financing leases, assets held for sale and consolidated joint ventures) consisted of 991 healthcare facilities, located in 42 states and the U.K.

As of March 31, 2025, our portfolio of real estate investments (including properties associated with mortgages, direct financing leases, assets held for sale and consolidated joint ventures) consisted of 1,004 healthcare facilities, located in 42 states, Washington, D.C.

and operated by 86 third-party operators.

Our investment in these facilities, net of impairments and allowances, totaled $ 9.9 billion at September 30, 2024, with 97 % of our real estate investments related to long-term healthcare facilities.

Our portfolio is made up of (i) 587 SNFs, 282 ALFs, 19 ILFs, 19 specialty facilities and one medical office building, (ii) fixed rate mortgages on 52 SNFs, 13 ALFs, two specialty facilities and one ILF, and (iii) 15 facilities that are held for sale.

At September 30, 2024, we also held other real estate loans receivable (excluding mortgages) of $ 453.3 million, non-real estate loans receivable of $ 335.7 million and $ 92.6 million of investments in eight unconsolidated joint ventures.

As of September 30, 2024 and December 31, 2023, we had investments with one operator or manager that approximated or exceeded 10% of our total investments:

Maplewood generated 4.4 % and 7.2 % of our total revenues for the three months ended September 30, 2024 and 2023, respectively and 4.6 % and 5.6 % of our total revenues for the nine months ended September 30, 2024 and 2023, respectively.

The revenue associated with Maplewood for the nine months ended September 30, 2023 reflects a reduction of revenue of $ 12.5 million related to a termination fee payment made by Omega as discussed in Note 4 – Contractual Receivables and Other Receivables and Lease Inducements.

During the three and nine months ended September 30, 2024, we also have one operator with total revenues that exceeded 10% of our total revenues:

Our investment in these facilities, net of impairments and allowances, totaled $ 10.0 billion at March 31, 2025, with 98 % of our real estate investments related to long-term healthcare facilities.

Our portfolio is made up of (i) 575 SNFs, 296 ALFs, 19 ILFs, 18 specialty facilities and one medical office building and (ii) fixed rate mortgages on 50 SNFs, 43 ALFs, one specialty facility and one ILF.

At March 31, 2025, we also held other real estate loans receivable (excluding mortgages) of $ 499.2 million, non-real estate loans receivable of $ 329.7 million and $ 88.7 million of investments in 11 unconsolidated joint ventures.

As of March 31, 2025 and December 31, 2024, we had investments with one operator or manager that approximated or exceeded 10% of our total investments:

Maplewood generated 6.3 % and 4.7 % of our total revenues for the three months ended March 31, 2025 and 2024, respectively.

During the three months ended March 31, 2025, we also have one operator with total revenues that exceeded 10% of our total revenues:

CommuniCare Health Services, Inc.

(“CommuniCare”).

CommuniCare generated 11.1 % and 12.5 % of our total revenues for the three months ended September 30, 2024 and 2023, respectively and 12.1 % and 11.2 % of our total revenues for the nine months ended September 30, 2024 and 2023.

As of September 30, 2024, CommuniCare represented 8.3 % of our total investments.

As of September 30, 2024, the three states in which we had our highest concentration of investments were Texas ( 9.7 %), Indiana ( 6.4 %) and California ( 5.7 %).

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

CommuniCare generated 11.0 % and 12.9 % of our total revenues for the three months ended March 31, 2025 and 2024, respectively.

As of March 31, 2025, CommuniCare represented 8.4 % of our total investments.

As of March 31, 2025, the three geographic locations in which we had our highest concentration of investments were the U.K.

( 14.9 %), Texas ( 8.6 %) and Indiana ( 6.2 %).

NOTE 12 – STOCKHOLDERS’ EQUITY

Stock Repurchase Program

During the three months ended March 31, 2025 and 2024, we did no t repurchase any shares of our outstanding common stock under the $ 500 Million Stock Repurchase Program, which expired in March 2025.

The following is a summary of our declared cash dividends on common stock:

Dividend per Common Share

February 10, 2025

February 18, 2025

April 30, 2024

August 5, 2024

August 15, 2024

November 4, 2024

November 15, 2024

Dividend Reinvestment and Common Stock Purchase Plan

The following is a summary of the shares issued under the Dividend Reinvestment and Common Stock Purchase Plan for the three and nine months ended September 30, 2024 and 2023 (in thousands):

The following is a summary of the shares issued under the Dividend Reinvestment and Common Stock Purchase Plan for the three months ended March 31, 2025 and 2024 (in thousands):

Shares issued

1 unchanged sentence

Three Months Ended

September 30, 2023

March 31, 2024

Three Months Ended

September 30, 2024

Nine Months Ended

September 30, 2023

Nine Months Ended

September 30, 2024

March 31, 2025

At-The-Market Offering Programs

During the second quarter of 2021, Omega entered into an “at-the-market” (“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”) could be sold from time to time.

During the third quarter of 2024, we terminated the 2021 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 $ 1.25 billion (the “2024 ATM Program,” and together with the 2021 ATM Program, the “ATM Programs”) may be sold from time to time (i) by Omega through several financial institutions acting as a sales agent or directly to the financial institutions as principals, or (ii) by several financial institutions acting as forward sellers on behalf of any forward purchasers pursuant to a forward sale agreement.

Under the 2024 ATM Program, compensation for sales of the shares will not exceed 2 % of the gross sales price per share for shares sold through each financial institution.

The use of forward sales under the 2024 ATM Program generally allows Omega to lock in a price on the sale of shares of common stock when sold by the forward sellers but defer receiving the net proceeds from such sales until the shares of our common stock are issued at settlement on a later date.

We did not utilize the forward provisions under the 2024 ATM Program during the three months ended September 30, 2024.

The following is a summary of the shares issued under our ATM Programs for the three months and nine ended September 30, 2024 and 2023 (in thousands except average price per share):

The following is a summary of the shares issued under our former $ 1.0 billion 2021 At-The-Market Offering Program (the “2021 ATM Program”) and our current $ 1.25 billion 2024 At-The-Market Offering Program (the “2024 ATM Program,” and together with the 2021 ATM Program, the “ATM Programs”) for the three months ended March 31, 2025 and 2024 (in thousands except average price per share):

Average Net Price

3 unchanged sentences

Three Months Ended

September 30, 2023

March 31, 2024

Three Months Ended

September 30, 2024

Nine Months Ended

September 30, 2023

Nine Months Ended

September 30, 2024

March 31, 2025

(1) Represents the average price per share after issuance costs.

We did not utilize the forward provisions under the ATM Programs during the three months ended March 31, 2025 and 2024.

Accumulated Other Comprehensive Income (Loss)

The following is a summary of our accumulated other comprehensive income (loss), net of tax as of September 30, 2024 and December 31, 2023:

September 30,

The following is a summary of our accumulated other comprehensive income (loss), net of tax as of March 31, 2025 and December 31, 2024:

(in thousands)

5 unchanged sentences

Total accumulated other comprehensive income for Omega

During the three months ended September 30, 2024 and 2023, we reclassified $ 2.7 million and $ 1.1 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.

During the nine months ended September 30, 2024 and 2023, we reclassified $ 7.9 million and $ 3.2 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.

During the three months ended March 31, 2025 and 2024, we reclassified $ 1.4 million and $ 2.6 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 13 – TAXES

Omega was organized, has operated and intends to continue to operate in a manner that enables Omega to qualify for taxation as a REIT under Sections 856 through 860 of the Code.

On a quarterly and annual basis, we perform several analyses to test our compliance within the REIT taxation rules.

If we fail to meet the requirements for qualification as a REIT in any tax year, we will be subject to federal income tax on our taxable income at regular corporate rates and may not be able to qualify as a REIT for the four subsequent years, unless we qualify for certain relief provisions that are available in the event we fail to satisfy any of the requirements.

We are also subject to federal taxation of 100 % of the net income derived from the sale or other disposition of property, other than foreclosure property, that we held primarily for sale to customers in the ordinary course of a trade or business.

We believe that we do not hold assets for sale to customers in the ordinary course of business and that none of the assets currently held for sale or that have been sold would be considered a prohibited transaction within the REIT taxation rules.

As a REIT under the Code, we generally will not be subject to federal income taxes on the REIT taxable income that we distribute to stockholders, subject to certain exceptions.

In 2023, we distributed dividends in excess of our taxable income.

We currently own stock in certain subsidiary REITs.

These subsidiary entities are required to individually satisfy all of the rules for qualification as a REIT.

If we fail to meet the requirements for qualification as a REIT for any of the subsidiary REITs, it may cause Omega to fail the requirements for qualification as a REIT also.

We have elected to treat certain of our active subsidiaries as taxable REIT subsidiaries (“TRSs”).

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

As of September 30, 2024, 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 $ 9.8 million.

Our NOL carry-forward was partially reserved as of September 30, 2024, 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.

The majority of our U.K.

portfolio elected to enter the U.K.

REIT regime with an effective date of April 1, 2023.

As of September 30, 2024, we have aggregate NOL carryforwards of $ 83.8 million associated with two U.K.

subsidiaries.

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.

The following is a summary of deferred tax assets and liabilities (which are recorded in other assets and accrued expenses and other liabilities in our Consolidated Balance Sheets):

September 30,

(in thousands)

Federal net operating loss carryforward

Valuation allowance on deferred tax asset

Foreign net operating loss carryforward (1)

Net deferred tax asset

Foreign deferred tax liability (2)

Net deferred tax liability

(1) As discussed in Note 2 – Real Estate Assets, in connection with our acquisition of one U.K.

entity in the second quarter of 2024, we acquired foreign net operating losses of $ 47.8 million resulting in a NOL deferred tax asset of $ 11.9 million.

(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.

REIT regime effective April 1, 2023.

Income taxes included within the financial statements primarily represents U.S.

federal, state and local income taxes as well as non-U.S.

income based or withholding taxes on certain investments located in jurisdictions outside the U.S.

The following is a summary of our provision for income taxes:

Three Months Ended September 30,

Nine Months Ended September 30,

(in millions)

Three Months Ended March 31,

(in thousands)

Federal, state and local income tax expense

Foreign income tax expense

Foreign tax expense

Total income tax expense (1)

(1) The above amounts do not include gross income receipts or franchise taxes payable to certain states and municipalities.

The income tax expense for both the three months ended March 31, 2025 and 2024 was primarily due to income from foreign jurisdictions that subject to foreign income taxes and withholding taxes.

As of March 31, 2025 and December 31, 2024, deferred tax assets totaled $ 19.6 million and $ 19.4 million, respectively, and deferred tax liabilities totaled zero .

Our deferred tax assets relate primarily to loss carryforwards.

NOTE 14 – STOCK-BASED COMPENSATION

The following is a summary of our Stock-based compensation expense for the three and nine months ended September 30, 2024 and 2023, respectively.

Three Months Ended

Nine Months Ended

September 30,

(in thousands)

Stock-based compensation expense

Stock-based compensation expense was $ 15.8 million and $ 9.2 million for the three months ended March 31, 2025 and 2024, respectively.

Stock-based compensation expense of $ 15.8 million for the three months ended March 31, 2025 includes $ 6.6 million of non-cash stock-based compensation expense associated with the transition discussed in the “Leadership Transition” section below.

Stock-based compensation expense is included within general and administrative expenses on our Consolidated Statements of Operations.

We granted 259,781 time-based profits interest units (“PIUs”) during the first quarter of 2024 to certain officers and employees, and those units vest on December 31, 2026 ( three years after the grant date), subject to continued employment and vesting in connection with certain other events.

We granted 2,297,064 performance-based PIUs during the first quarter of 2024 to certain officers and employees, which are earned based on the level of performance over the performance period (normally three years ) and vest quarterly in the four th year, subject to continued employment and vesting in connection with certain other events.

We also granted 71,106 performance-based restricted stock units (“RSUs”) during the first quarter of 2024 to certain employees, which are earned based on the level of performance over the performance period (normally three years ) and vest on December 31, 2026, subject to continued employment.

We granted 24,257 time-based PIUs and 22,488 time-based RSUs to directors during the second quarter of 2024, and those units vest on Omega’s 2025 annual meeting date, subject to the director’s continued service and vesting in certain other events.

We granted 3,065 time-based restricted stock units (“RSUs) and 215,606 time-based profits interest units (“PIUs”) during the first quarter of 2025 to certain officers and employees, and those units vest on December 31, 2027 ( three years after the grant date), subject to continued employment and vesting in connection with certain other events.

We granted 1,832,700 performance-based PIUs and 28,027 performance-based RSUs during the first quarter of 2025 to certain officers and employees, which are earned based on the level of performance over the performance period (normally three years ) and vest quarterly in the four th year, subject to continued employment and vesting in connection with certain other events.

We also granted 63,578 performance-based RSUs during the first quarter of 2025 to certain employees, which are earned based on the level of performance over the performance period (normally three years ) and vest on December 31, 2027, subject to continued employment.

Time-based and performance-based grants made to named executive officers and key employees that meet certain conditions under the Company’s retirement policy (length of service, age, etc.) vest on an accelerated basis pursuant to the terms of our 2018 Stock Incentive Plan.

Leadership Transition

In January 2025, the Company and Daniel J.

Booth, Chief Operating Officer, mutually agreed that Mr.

Booth’s employment agreement with the Company would terminate effective January 2, 2025.

The Company entered into a Transition Agreement and Release (the “Transition Agreement”) as of January 1, 2025 with Mr.

Booth in connection with his departure and transitioning of his responsibilities.

The Transition Agreement provides that Mr.

Booth will be entitled to receive the payments and benefits due in connection with a termination of employment by the Company without cause pursuant to his Employment Agreement, as amended, dated effective January 1, 2024, provided that vesting of his previously granted equity incentives shall be prorated through January 1, 2026, and he shall be entitled to certain continued benefits under his supplemental life insurance policy.

In connection with the transition discussed above and the modification of certain of Mr.

Booth’s equity awards, the Company incurred incremental non-cash stock-based compensation expense of $ 6.6 million, which is reflected within general and administrative expense within the consolidated statements of operations in the first quarter of 2025.

General and administrative expense also includes the accrual of $ 2.2 million of transition payments to Mr.

Booth to be made over the 24 month period and other costs incurred related to the transaction.

NOTE 15 – BORROWING ACTIVITIES AND ARRANGEMENTS

1 unchanged sentence

Interest Rate

September 30,

(in thousands)

Secured borrowings:

HUD mortgages (1)(2)

2024 term loan (3)

2026 mortgage loan (1)

12 unchanged sentences

2033 notes (3)

2033 notes (4)

2025 term loan (3)(6)

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Total secured and unsecured borrowings – net (9)(10)

(1) Wholly owned subsidiaries of Omega OP are or were the obligors on these borrowings.

(2) During the first quarter of 2024, the remaining nine HUD mortgages with outstanding principal of $ 41.6 million were paid off.

The payoff also included a $ 1.3 million prepayment fee, which is included in loss on debt extinguishment on our Consolidated Statements of Operations.

(3) Borrowing was the debt of the consolidated joint venture discussed in Note 8 – Variable Interest Entities which was formed in the first quarter of 2022.

The borrowing was secured by two ALFs, which are owned by the joint venture.

During the second quarter of 2024, Omega repaid this loan using available cash and proceeds from our $ 1.45 billion senior unsecured multicurrency revolving credit facility (“Revolving Credit Facility”).

(1) Wholly owned subsidiaries of Omega OP are the obligors on this borrowing.

(2) Represents the remaining fair value adjustment associated with the 2026 mortgage loan, that was assumed as part of an asset acquisition in July 2024, that is being amortized over the remaining contractual term of the loan.

(3) Guaranteed by Omega OP.

(5) As of September 30, 2024, there were no borrowings outstanding under Omega’s Revolving Credit Facility.

The applicable interest rate on the USD tranche and on the GBP borrowings under the alternative currency tranche of the credit facility were 6.16 % and 6.27 % , respectively, as of September 30, 2024.

(6) The Company repaid the $ 400 million of 4.95 % senior notes on the April 1, 2024 maturity date using available cash and proceeds from our Revolving Credit Facility.

(4) As of March 31, 2025 and December 31, 2024, there were no borrowings outstanding under Omega’s $ 1.45 billion senior unsecured multicurrency revolving credit facility (“Revolving Credit Facility”).

The applicable interest rate on the USD tranche and on the GBP borrowings under the alternative currency tranche of the Revolving Credit Facility were 5.64 % and 5.77 % , respectively, as of March 31, 2025.

In April 2025, the maturity date was extended from April 30, 2025 to October 30, 2025 following Omega’s election to utilize one of two six-month extension options.

(5) The Company repaid the $ 400 million of 4.50 % senior notes that matured on January 15, 2025 using available cash.

(6) 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 % .

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

(9) 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 % .

(8) The weighted average interest rate of the $ 50 million term loan (“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 % .

Omega previously provided notification in January 2025 to extend the maturity date from April 30, 2025 to October 30, 2025 .

Subsequent to quarter end, Omega elected to repay the OP Term Loan on April 29, 2025, prior to its original maturity date.

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

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

As of September 30, 2024 and December 31, 2023, we were in compliance with all applicable covenants for our borrowings .

2026 Mortgage Loan

As discussed in Note 2 – Real Estate Assets, we assumed a £ 188.6 million mortgage loan (“2026 Mortgage Loan”) as part of our acquisition of the remaining 51 % interest in the Cindat Joint Venture.

The 2026 Mortgage Loan matures in August 2026 but can be repaid without a prepayment penalty beginning November 2025.

The 2026 Mortgage Loan bears interest at SONIA plus an applicable margin of 5.38 %.

As part of the transaction, we assumed four interest rate cap contracts that ensure the annual interest rate on the 2026 Mortgage Loan does not exceed 10.38 %.

The fair value adjustment on the 2026 Mortgage Loan was $ 20.7 million and is being amortized into interest expense over the remaining contractual term of the loan.

The net premium of $ 19.7 million in the table above relates to the fair value adjustment on the 2026 Mortgage Loan.

We incurred $ 4.9 million of deferred costs in connection with the assumption of the 2026 Mortgage Loan included in the table above.

As of March 31, 2025 and December 31, 2024, we were in compliance with all applicable covenants for our borrowings .

NOTE 16 – DERIVATIVES AND HEDGING

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Our risk management program is designed to manage the exposure and volatility arising from these risks, and utilizes foreign currency forward contracts, interest rate swaps and debt issued in foreign currencies to offset a portion of these risks.

As of September 30, 2024, we have 12 interest rate swaps with $ 478.5 million in notional value and four interest rate caps with £ 190.0 million in notional value.

As of March 31, 2025, we have 12 interest rate swaps with $ 478.5 million in notional value and four interest rate caps with £ 190.0 million in notional value.

The swaps and the majority of the caps are designated as cash flow hedges of the interest payments on three of Omega’s variable interest loans.

Additionally, we have 11 foreign currency forward contracts with £ 258.0 million in notional value issued at a weighted average GBP-USD forward rate of 1.2899 that are designated as net investment hedges.

On February 27, 2024, we terminated two foreign currency forward contracts that were entered into in March 2021 with notional amounts totaling £ 70.0 million.

Omega received a net cash settlement of $ 8.4 million as a result of termination, which is included within net cash used in investing activities in the Consolidated Statements of Cash Flows.

The $ 8.4 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 February 27, 2024, we entered into three new foreign currency forward contracts with notional amounts totaling £ 78.0 million and a GBP-USD forward rate of 1.2707 , each of which mature between March 8, 2027 and March 7, 2031 .

The new currency forward contracts hedge an intercompany loan between a U.S.

As discussed in Note 2 – Real Estate Assets, we assumed four interest rate cap contracts as a part of our acquisition of the remaining 51 % interest in the Cindat Joint Venture.

The interest rate caps terminate on August 26, 2026.

The interest rate cap contracts ensure that the annual interest rate on the 2026 Mortgage Loan does not exceed 10.38 %.

The location and fair value of derivative instruments designated as hedges, at the respective balance sheet dates, were as follows:

September 30,

Cash flow hedges:

6 unchanged sentences

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

At September 30, 2024 and December 31, 2023, the net carrying amounts and fair values of our other financial instruments were as follows:

September 30, 2024

At March 31, 2025 and December 31, 2024, the net carrying amounts and fair values of our other financial instruments were as follows:

March 31, 2025

December 31, 2024

6 unchanged sentences

2025 term loan

4.50 % notes due 2025 – net

5 unchanged sentences

3.25 % notes due 2033 – net

HUD mortgages – net

Fair value estimates are subjective in nature and are dependent on a number of important assumptions, including estimates of future cash flows, risks, discount rates and relevant comparable market information associated with each financial instrument (see Note 2 – Summary of Significant Accounting Policies in our Annual Report on Form 10-K for the year ended December 31, 2024).

6 unchanged sentences

The fair values of notes receivable are estimated using a discounted cash flow analysis, using interest rates being offered for similar loans to borrowers with similar credit ratings (Level 3).

● Revolving Credit Facility, OP term loan, 2024 term loan and 2025 term loan:

● Revolving Credit Facility, OP Term Loan and 2025 term loan:

The carrying amount of these approximate fair value because the borrowings are interest rate adjusted.

1 unchanged sentence

● 2026 mortgage loan:

The 2026 mortgage loan was recorded at fair market value in July 2024, as of the date we assumed it as part of our acquisition of the remaining 51 % interest in the Cindat Joint Venture.

The 2026 mortgage loan was recorded at fair market value in July 2024, as of the date it was assumed.

The fair market value was determined by discounting the remaining contractual cash flows using a current market rate of interest of comparable debt instruments.

2 unchanged sentences

The fair value of the senior unsecured notes payable was estimated based on (Level 1) publicly available trading prices .

● HUD mortgages:

The fair value of our borrowings under HUD debt agreements was estimated using an expected present value technique based on quotes obtained by HUD debt brokers (Level 2).

NOTE 18 – COMMITMENTS AND CONTINGENCIES

Shareholder Litigation

Certain derivative actions were brought against three of the Company’s officers, C.

Taylor Pickett, Robert O.

Stephenson, and Daniel J.

Booth, and certain current and former directors of the Company, asserting claims for breach of duty primarily relating to matters at issue in a securities class action in the Southern District of New York that was settled in 2023, including alleged failures 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, Orianna Health Systems (“Orianna”), the ability of Orianna to make timely rent payments and the impairment of certain of the Company’s leases and the uncollectibility of certain receivables concerning Orianna.

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 “Stourbridge Matter”).

The complaint alleged, among other things, that the named defendants were responsible for the Company’s failure to disclose the financial condition of Orianna.

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.

The complaints alleged, 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 (together, the “Swan Matter”).

In addition, in late 2020, Robert Wojcik, a purported shareholder of the Company, filed a derivative action in the U.S.

District Court for the District of Maryland, purportedly on behalf of the Company, asserting violations of Section 14(a) of the Exchange Act, Sections 10(b) and 21D of the Exchange Act, as well as claims for breach of fiduciary duty, unjust enrichment, abuse of control, gross mismanagement, and waste of corporate assets (the “Wojcik Matter”).

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.

In 2023, the Company and individual defendants 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 contemplated the Company’s adoption of certain non-monetary corporate governance enhancements and initiatives.

In February 2024, formal stipulations of settlement incorporating the substantive terms of the memoranda of understanding and detailing the proposed settlements’ operational terms were submitted for court approval.

The court overseeing the Swan Matter issued an order in May 2024 granting final approval to a proposed settlement reached with the plaintiffs in the Stourbridge Matter and the Swan Matter, which order became final and non-appealable as of June 20, 2024.

The court overseeing the Wojcik Matter issued an order as of August 8, 2024 granting final approval to a proposed settlement reached with the plaintiff in the Wojcik Matter, which order became final and non-appealable as of September 9, 2024.

The proposed 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 the derivative actions which was included within accrued expenses and other liabilities on the Consolidated Balance Sheets.

As the settlement amounts were 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 was no impact to the Consolidated Statements of Operations related to these matters.

In the second quarter of 2024, the Company’s insurers funded $ 2.8 million to an escrow account established for the purpose of paying the settlement amounts in accordance with the terms of the applicable settlement, and the Company reversed the previously recorded $ 2.8 million legal reserve within accrued expenses and other liabilities and the related $ 2.8 million receivable within other assets on the Consolidated Balance Sheets.

Gulf Coast Subordinated Debt

12 unchanged sentences

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

As of September 30, 2024, our maximum funding commitment under these indemnification agreements was $ 13.5 million.

As of March 31, 2025, our maximum funding commitment under these indemnification agreements was $ 7.8 million.

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

2 unchanged sentences

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

Our remaining commitments at September 30, 2024, are outlined in the table below (in thousands):

Our remaining commitments at March 31, 2025, are outlined in the table below (in thousands):

Lessor construction and capital commitments under lease agreements

3 unchanged sentences

(1) Includes finance costs.

During the third quarter of 2024, we amended the existing master lease with Brookdale Senior Living Inc.

(“Brookdale”) to extend the maturity date from December 2027 to December 2037.

As part of the amendment, we agreed to provide up to $ 80.0 million in funding for capital expenditures on the facilities subject to the master lease (included in the table above).

The annual rent under the lease will not be adjusted for fundings of capital expenditures in the aggregate amount of up to $ 30.0 million of the $ 80.0 million commitment.

With respect to the remaining $ 50.0 million of the $ 80.0 million commitment, the annual rent under the lease will increase by the amount of each capital expenditure multiplied by 9.5 %.

In February 2025, Omega executed a purchase agreement for a portfolio of facilities in the U.K.

and in the Bailiwick of Jersey for a purchase price of £ 238 million, which is not included in the table above.

Concurrently with execution of the purchase agreement, Omega made a £ 23.8 million deposit (or $ 30.1 million) into escrow that is refundable only upon the occurrence of certain regulatory and seller conditions that result in the termination of the purchase.

The acquisition deposit was included in other assets in our Consolidated Balance Sheets as of March 31, 2025.

The acquisition closed during the second quarter of 2025.

Please see Note 22 – Subsequent Events, for additional information on the acquisition .

NOTE 19 – EARNINGS PER SHARE

The following tables set forth the computation of basic and diluted earnings per share:

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

(in thousands, except per share amounts)

adjustments to basic numerator (1)

Net income available to common stockholders – basic

10 unchanged sentences

Net income available to common stockholders

(1) Includes adjustments to remove income related to non-controlling interests and participating shares including time-based and performance-based PIUs and time-based and performance-based RSUs.

NOTE 20 – SUPPLEMENTAL DISCLOSURE TO CONSOLIDATED STATEMENTS OF CASH FLOWS

The following are supplemental disclosures to the Consolidated Statements of Cash Flows for the nine months ended September 30, 2024 and 2023:

Nine Months Ended September 30,

The following are supplemental disclosures to the Consolidated Statements of Cash Flows for the three months ended March 31, 2025 and 2024:

Three Months Ended March 31,

(in thousands)

6 unchanged sentences

Taxes paid during the period

Non-cash investing activities:

Non-cash acquisition of real estate (see Note 2)

Non-cash investment in non-real estate loans receivable (see Note 2)

Non-cash financing activities:

Assumption of debt (see Note 2 and Note 15)

Change in fair value of hedges

Remeasurement of debt denominated in a foreign currency

NOTE 21 – SEGMENTS

We conduct our operations and report financial results as one business segment.

The presentation of financial results as one reportable segment is consistent with the way we operate our business and is consistent with the manner in which our Chief Operating Decision Maker (“CODM”), our Chief Executive Officer, evaluates performance and makes resource and operating decisions for the business.

The CODM evaluates performance and makes resource and operating decisions for the business based on net income that is reported on the Consolidated Statements of Operations.

The measure of segment assets is reported on the Consolidated Balance Sheets as total assets.

The CODM uses net income to evaluate whether to make new investments, borrow or pay-off debt and/or issue or repurchase equity.

The Company’s CODM periodically reviews interest expense and treats it as a significant segment expense.

Interest expense is the largest recurring cash expense of the Company because debt is one of our primary sources of funds for new investments.

Dependent on market conditions, our CODM seeks to mitigate the effects of fluctuations in interest rates by matching the terms of new investments with long-term fixed rate borrowings to the extent possible.

Additionally, the CODM also utilizes hedging instruments as discussed in Note 16 – Derivatives and Hedging, to help manage interest rate risk and limit significant fluctuations in interest expense for variable rate borrowings.

Interest expense related to the Company’s reportable segment is as follows:

Three Months Ended March 31,

(in thousands)

Interest expense

Interest – amortization of deferred financing costs (1)

Interest expense – net

(1) Includes amortization of deferred financing costs, discounts and premiums.

NOTE 22 – SUBSEQUENT EVENTS

In October 2024, we funded $ 79.6 million in real estate loans to three operators.

The loans have a weighted average interest rate of 10.8 % and maturity dates ranging from October 2025 through September 2029 .

In October 2024, we acquired three facilities in the U.K.

for aggregate consideration of $ 39.7 million and leased them to an existing operator.

The facility has a weighted average initial annual cash yield of 10.0 % with annual escalators of 2.5 % .

In April 2025, we closed on the acquisition for which we funded a £ 23.8 million deposit during the first quarter of 2025, as detailed in Note 18 – Commitments and Contingencies.

The acquisition included 45 facilities in the U.K.

( 43 facilities) and in the Bailiwick of Jersey ( 2 facilities) for total consideration, including transaction expenses, of £ 259.8 million.

The facilities will be leased to 4 existing operators and 2 new operators with a weighted average initial cash yield of 10.0 %.

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

What changed 10-Q

Item 1. Financial Statements