What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-08-01 compared with 2025-05-02 · 178 added, 130 removed, 230 unchanged (57% of the section changed)

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(3) the timing of our operators’ recovery from staffing shortages, increased costs and decreased occupancy resulting from inflation and the long-term impacts of the COVID-19 pandemic and the sufficiency of previous government support and current reimbursement rates to offset such costs and the conditions related thereto;

(4) additional regulatory and other changes in the healthcare sector, including potential changes to Medicaid or Medicare reimbursements, state regulatory initiatives or minimum staffing requirements for skilled nursing facilities (“SNFs”) that may further exacerbate labor and occupancy challenges for our operators;

(4) additional regulatory and other changes in the healthcare sector, including changes to Medicaid and Medicare reimbursements, the potential impact of recent changes to state Medicaid funding levels as well as state regulatory initiatives or minimum staffing requirements for skilled nursing facilities (“SNFs”) that may further exacerbate labor and occupancy challenges for our operators;

(5) the ability of our operators in bankruptcy to reject unexpired lease obligations, modify the terms of our mortgages and impede our ability to collect unpaid rent or interest during the pendency of a bankruptcy proceeding and retain security deposits for the debtor’s obligations, and other costs and uncertainties associated with operator bankruptcies;

(6) changes in tax laws and regulations affecting real estate investment trusts (“REITs”), including as the result of any policy changes driven by the current focus on capital providers to the healthcare industry;

(6) changes in tax laws and regulations affecting real estate investment trusts (“REITs”), including as the result of any federal or state policy changes driven by the current focus on capital providers to the healthcare industry;

(7) our ability to re-lease, otherwise transition or sell underperforming assets or assets held for sale on a timely basis and on terms that allow us to realize the carrying value of these assets or to redeploy the proceeds therefrom on favorable terms, including due to the potential impact of changes in the SNF and assisted living facility (“ALF”) markets or local real estate conditions;

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(13) the effect of economic, regulatory and market conditions generally and, particularly, in the healthcare industry and in jurisdictions where we conduct business, including the U.K.;

(14) changes in interest rates and the impacts of inflation and changes global tariffs;

(14) changes in interest rates and foreign currency exchange rates and the impacts of inflation and changes in global tariffs;

(15) the timing, amount and yield of any additional investments;

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● Government Regulation and Reimbursement

● First Quarter of 2025 and Recent Highlights

● Second Quarter of 2025 and Recent Highlights

● Results of Operations

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Omega is structured as an umbrella partnership REIT (“UPREIT”) under which all of Omega’s assets are owned directly or indirectly by, and all of Omega’s operations are conducted directly or indirectly through, its operating partnership subsidiary, OHI Healthcare Properties Limited Partnership (collectively with its subsidiaries, “Omega OP”).

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

As of June 30, 2025, Parent owned approximately 97% of the issued and outstanding units of partnership interest in Omega OP (“Omega OP Units”), and other investors owned approximately 3% of the outstanding Omega OP Units.

Omega has one reportable segment consisting of investments in healthcare-related real estate properties located in the United States (“U.S.”) and the United Kingdom (“U.K.”).

Our core business is to provide financing and capital to the long-term healthcare industry with a particular focus on SNFs, ALFs, and to a lesser extent, independent living facilities (“ILFs”), rehabilitation and acute care facilities (“specialty facilities”) and medical office buildings.

Our core business is to provide financing and capital to the long-term healthcare industry with a particular focus on SNFs, ALFs (including care homes in the U.K.), and to a lesser extent, independent living facilities (“ILFs”), rehabilitation and acute care facilities (“specialty facilities”) and medical office buildings.

Our core portfolio consists of our long-term leases and real estate loans with healthcare operating companies and affiliates (collectively, our “operators”).

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These loans, which may be either unsecured or secured by the collateral of the borrower, are classified as non-real estate loans.

From time to time, we also acquire equity interests in joint ventures or entities that support the long-term healthcare industry and our operators.

From time to time, we also acquire equity interests in joint ventures or entities that support the long-term healthcare industry and our operators, which may include ancillary service or technology companies, and in operating companies.

As healthcare delivery continues to evolve, we continuously evaluate potential investments, our assets, operators and markets to position our portfolio for long-term success.

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will be effective in offsetting these incremental costs and lost revenues.

In addition, there remains uncertainty as to the impact of potential regulatory changes, including the potential reforms of Medicaid or Medicare and state regulatory initiatives, as well as the continued ability of our operators to manage infectious diseases in our facilities.

In addition, there remains uncertainty as to the impact of potential and recent regulatory changes, including impacts related to the recent Medicaid changes in the One Big Beautiful Bill Act (“OBBBA”), as well as the impact of potential further reforms to Medicaid or Medicare and state regulatory initiatives.

While the OBBBA does not directly lower reimbursements related to long term care providers, it may impact our operators indirectly to the extent states in which they operate reduce reimbursement levels generally, which may occur as a result of reduced Medicaid funds available to states due to lower reimbursement levels for hospitals and other healthcare providers.

We continue to monitor these impacts as well as the impacts of other regulatory changes, as discussed below, which could have a material adverse effect on an operator’s results of operations and financial condition, which could adversely affect the operator’s ability to meet its obligations to us.

See “Government Regulation and Reimbursement” for additional information.

We continue to monitor these impacts as well as the impacts of other regulatory changes, as discussed below, including any significant limits on the scope of services eligible for reimbursement and on reimbursement rates and fees, which could have a material adverse effect on an operator’s results of operations and financial condition, which could adversely affect the operator’s ability to meet its obligations to us.

As discussed further in “Collectibility Issues” below, in recent periods we have had several operators that have failed to make contractual payments under their lease and loan agreements, and we have agreed to short-term payment deferrals, lease and portfolio restructurings and/or allowed several operators to apply security deposits or letters of credit to pay rent.

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The long-term care industry continues to recover from the long-term impacts of the COVID-19 pandemic although a certain level of labor shortages, lower occupancy and certain expense increases that began during the pandemic persist, with certain operators continuing to experience these challenges in a much more profound way.

In addition, the impact of these ongoing challenges, including labor pressures and inflationary cost increases, may depend on future developments, including the potential impacts of global tariffs, the sufficiency of reimbursement rate setting, particularly in light of any potential changes to the Medicaid and Medicare reimbursement programs, state regulatory initiatives, and the ultimate status of the federal minimum staffing rules for SNFs that were issued in April 2024 and have been successfully challenged in federal court, and the continued efficacy of infection control measures and regulations, all of which are uncertain and difficult to predict and may continue to adversely impact our business, results of operations, financial condition and cash flows.

In addition, the impact of these ongoing challenges, including labor pressures and inflationary cost increases, may depend on future developments, including the potential impacts of global tariffs, the sufficiency of reimbursement rate setting, the impact of recent changes to the Medicaid program on state reimbursement levels, the impacts of potential future Medicaid and Medicare reforms, and state regulatory initiatives, as well as the continued efficacy of infection control measures and regulations, all of which are uncertain and difficult to predict and may continue to adversely impact our business, results of operations, financial condition and cash flows.

A significant portion of our operators’ revenue is derived from government-funded reimbursement programs, consisting primarily of Medicare and Medicaid in the U.S.

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Congressional majorities at the federal level are increasing the political focus on entitlement program changes, which is creating uncertainty with respect to the level of government reimbursement available and the extent of industry regulation.

The July 2025 passage of the OBBBA enacted significant reforms regarding funding and operation of the Medicaid program, including an estimated $920 billion in cuts to Medicaid over the next decade, as well as additional reforms related to instituting a ten-year moratorium on federal nursing home minimum staffing requirements;

enactment of new home and community-based services (“HCBS”) waivers;

and freezing, rather than reducing, nursing home provider taxes, which supplement reimbursements available to SNFs as these provider taxes are subject to federal matching funds.

The OBBBA’s restrictions on provider taxes to other types of healthcare providers may impact our operators indirectly to the extent states reduce reimbursement levels generally to offset general provider tax reductions.

In addition to quality and value-based reimbursement reforms, CMS has implemented a number of initiatives focused on the reporting of certain facility-specific quality of care indicators that could affect our operators, including publicly released quality ratings for all of the nursing homes that participate in Medicare or Medicaid under the CMS “Five Star Quality Rating System.” Facility rankings, ranging from five stars (“much above average”) to one star (“much below average”) are updated on a monthly basis.

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In addition, the CMS Nursing Home Care Compare website and the Five Star Quality Rating System were updated to include revisions to the inspection process, adjustment of staffing rating thresholds, the implementation of new quality measures and the inclusion of a staff turnover percentage (over a 12-month period).

Beginning July 30, 2025, CMS will publish aggregated performance data, including average overall Five Star ratings, health inspection ratings, staffing, and quality measure ratings for “chains” or groups of Medicare-certified nursing homes that share at least one individual or organizational owner, officer, or entity with operational/managerial control.

Also beginning no later than July 30, 2025, COVID-19 vaccination data will be removed from all nursing home profiles on the CMS Nursing Home Care Compare.

Additionally, on April 22, 2024, CMS issued a final rule regarding minimum staffing requirements and increased inspections at SNFs, which CMS estimates exceed existing staffing standards in nearly all states.

The final rule is being implemented on a staggered phase-in basis based on geographic location and will require SNFs participating in Medicare and Medicaid to maintain a total nurse staffing standard of 3.48 hours per resident day (“HPRD”), which must include at least 0.55 HPRD of direct registered nurse care and 2.45 HPRD of direct nurse aide care.

Facilities would be permitted to use any combination of nurse staff (registered nurse, licensed practical nurse and licensed vocational nurse or nurse aide) to account for the additional 0.48 HPRD required to comply with the total nurse staffing standard.

In addition, the final rule requires SNFs to ensure a registered nurse is onsite 24 hours per day, seven days per week, although CMS indicated that a director of nursing role could fulfill such requirement.

The final rule also provides possible hardship exemptions for qualifying facilities for some parts of these requirements based on workforce unavailability and other factors.

The final rule was not accompanied by additional funding for our operators to offset the costs associated with meeting these increased staffing requirements in an industry that is already facing staffing shortages.

Multiple lawsuits have been filed in federal court to overturn the minimum staffing requirements on the basis that CMS exceeded its authority.

In April 2025, a federal court in Texas issued an order vacating the rule, which is subject to appeal.

The increased staffing requirements, if not overturned legislatively or by final legal action, or if not accompanied by increased state reimbursement to offset the increased financial burden, may have a future adverse impact on the financial condition of many of our operators, which may be material, but which likely would not be experienced until closer to the point of delayed implementation, ranging from within 90 days and five years of the final rule publication.

The final rule was initially slated to begin implementation on a staggered phase-in basis based on geographic location and required SNFs participating in Medicare and Medicaid to maintain certain nurse staffing and care standards.

The rule has been subject to successful legal challenges, which may be reversed if appealed.

Further, the OBBBA included a ten-year delay on enforcement of these minimum staffing requirements.

Further, on March 30, 2023, CMS issued a memorandum revising and enhancing enforcement efforts for infection control deficiencies found in SNFs that are targeted at higher-level infection control deficiencies that result in actual harm or immediate jeopardy to residents.

Similar to other serious survey deficiencies, penalties for the most serious infection control deficiencies include civil monetary penalties and discretionary payment denials for new resident admissions.

On November 15, 2023, CMS issued a final rule that requires SNFs participating in the Medicare or Medicaid programs to disclose certain ownership and managerial information regarding their relationships with certain entities that lease real estate to SNFs, including REITs, beginning August 1, 2025.

The CMS announcement noted concerns regarding the quality of care provided at SNFs owned by private equity firms, REITs and other investment firms.

Further, in 2024, several U.S.

The CMS announcement of the final rule noted concerns regarding the quality of care provided at SNFs owned by private equity firms, REITs and other investment firms.

Additionally, in 2024, several U.S.

senators proposed legislation that would, if enacted, restrict certain investors, including REITs and private equity firms, from investing in healthcare facilities or impose penalties on certain landlords of or private equity investors in healthcare facilities whose operators subsequently enter into bankruptcy proceedings.

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The likelihood of any of these legislative measures passing at the federal level remains uncertain.

On April 22, 2024, CMS issued the Ensuring Access to Medicaid Services final rule, which requires that, beginning six years after the effective date of the final rule, states generally ensure that at least 80% of Medicaid home and community-based services (“HCBS”) payments be put toward compensation for direct care workers.

On April 22, 2024, CMS issued the Ensuring Access to Medicaid Services final rule, which requires that, beginning six years after the effective date of the final rule, states generally ensure that at least 80% of Medicaid HCBS payments be put toward compensation for direct care workers.

The final rule also requires more transparency regarding how much states pay for HCBS and how those rates are set.

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any such requirements, if enacted, could have a material adverse impact on the financial condition of our operators.

This uncertainty is further exacerbated by unknowns regarding how states will contend with federal funding losses due to the OBBBA’s Medicaid reimbursement cuts and how they will ultimately decide to reallocate funding to the extent that they want to offset the impact to other providers or Medicaid recipients.

Despite the OBBBA’s creation of a new category of 1915(c) HCBS waivers that would cover people who do not meet the existing requirement of needing an institutional level of care to receive HCBS, such HCBS could be scaled back at the state level as states face funding shortfalls, which may push seniors and individuals with disabilities into institutional nursing home settings.

Reimbursement Generally

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Additionally, rate setting is subject to changes based on state budgetary constraints and national and state level political factors, both of which could result in decreased or insufficient reimbursement to the industry even in an environment where costs are rising.

The change in presidential administrations and U.S.

Congressional majorities are increasing the political focus on entitlement programs such as Medicaid, which is creating uncertainty with respect to the level of reimbursement available and the extent of regulation of the industry.

Under the OBBBA that was enacted in July 2025, certain states may experience reductions in their federal matching dollars under the Medicaid program.

To the extent these states reduce reimbursements to our operators to offset the impact of these reductions to other providers, this may negatively impact our operators and their financial condition.

Given the federal political focus on entitlement programs such as Medicaid, there remains uncertainty as to any future reforms to entitlement programs and reimbursement levels that impact our operators.

Since our operators’ profit margins on Medicaid patients are generally relatively low, more than modest reductions in Medicaid reimbursement or increases in the percentage of Medicaid patients have in the past, and may in the future, adversely affect our operators’ results of operations and financial condition, which in turn could adversely impact us.

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We continue to monitor rate adjustment activity, particularly in states in which we have a meaningful presence.

Medicare reimbursement rate setting takes effect annually each October for the following fiscal year.

On July 31, 2025, CMS issued a final rule regarding the government fiscal year 2026 Medicare payment rates and quality payment programs for SNFs, with aggregate Medicare Part A payments projected to increase by $1.16 billion, or 3.2%, for fiscal year 2026 compared to fiscal year 2025.

This estimated reimbursement increase is attributable to a 3.2% net market basket update to the payment rates, which is based on a 3.3% SNF market basket increase plus a 0.6% market basket forecast error adjustment and less a 0.7% productivity adjustment.

In addition to the payment rate update, CMS stated that it has rebased and revised the SNF market basket to reflect a 2022 base year.

The annual update is reduced by 2% for SNFs that fail to submit required quality data to CMS under the SNF Quality Reporting Program.

CMS has indicated that these impact figures did not incorporate the SNF Value-Based Program reductions that are estimated to be $208.36 million in fiscal year 2026.

While Medicare reimbursement rate setting, which takes effect annually each October, has historically included forecasted inflationary adjustments, the degree to which those forecasts accurately reflect current expense levels remains uncertain.

While Medicare reimbursement rate setting has historically included forecasted inflationary adjustments, the degree to which those forecasts accurately reflect current expense levels remains uncertain.

Additionally, it remains uncertain whether these adjustments will ultimately be offset by other factors, including any adjustments related to the impact of various payment models, such as those described below.

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The full 2% Medicare sequestration went into effect as of July 1, 2022 and gradually increases to 4% from 2030 through 2031.

Further, the OBBBA, absent further legislative action, requires an automatic 4% reduction in Medicare reimbursement rates beginning in 2026 as a budget enforcement tool triggered by the OBBBA’s impact on the federal deficit.

As a part of the COVID-19 1135 waiver provisions, in 2020 CMS added physical therapy, occupational therapy and speech-language pathology to the list of approved telehealth providers for the Medicare Part B programs provided by a SNF, which also allowed for the facility to bill an originating site fee to CMS for telehealth services provided to Medicare Part B beneficiary residents of the facility when the services were provided by a physician from an alternate location through expiration of the public health emergency.

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For example, in November 2024, one of the Company’s skilled nursing operators disclosed that it had received civil investigative demands from the federal government regarding its reimbursement and referral practices.

In addition, California prosecutors announced in March 2021 an investigation into a skilled nursing provider that is affiliated with one of our operators, alleging the chain manipulated the submission of staffing level data in order to improve its Five Star rating.

Additionally, it was reported in May 2025 that the DOJ initiated a criminal investigation regarding United Healthcare’s practices related to its Medicare Advantage business, although the exact nature and scope of the criminal investigation remains unclear.

In 2020, the DOJ launched a National Nursing Home Initiative to coordinate and enhance civil and criminal enforcement actions against nursing homes with grossly substandard deficiencies.

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An adverse resolution of any of these enforcement activities or investigations incurred by our operators may involve injunctive relief and/or substantial monetary penalties, either or both of which could have a material adverse effect on their reputation, business, results of operations and cash flows.

First Quarter of 2025 and Recent Highlights

● During the three months ended March 31, 2025, we acquired six facilities for aggregate consideration of $58.3 million.

Second Quarter of 2025 and Recent Highlights

● During the three and six months ended June 30, 2025, we acquired 57 facilities and 63 facilities for aggregate consideration of $502.1 million and $560.4 million, respectively.

The initial cash yield (the initial annual contractual cash rent divided by the purchase price) on these asset acquisitions was between 9.9% and 10.0%.

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

● We funded $20.0 million under two new real estate loans with a weighted average interest rate of 10.8% during the three months ended March 31, 2025.

Additionally, we advanced $6.5 million under existing real estate loans during the three months ended March 31, 2025.

Principal repayments of $43.5 million were received on real estate loans during the three months ended March 31, 2025.

● In April 2025, we acquired 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%.

● We invested $27.4 million and $62.7 million under our construction in progress and capital improvement programs during the three and six months ended June 30, 2025, respectively.

● We funded $25.6 million and $45.7 million under 12 and 14 new real estate loans originated during 2025 with weighted average interest rates of 10.0% and 10.3% during the three and six months ended June 30, 2025, respectively.

Additionally, we advanced $3.2 million and $9.7 million under existing real estate loans during the three and six months ended June 30, 2025, respectively.

Principal repayments of $21.3 million and $64.8 million were received on real estate loans during the three and six months ended June 30, 2025, respectively.

Dispositions and Impairments

● 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, recognizing a net gain of $10.1 million.

● 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 and six months ended June 30, 2025, we sold seven facilities (six SNFs and one ALF) and 34 facilities (32 SNFs and two ALFs) for $62.1 million and $183.0 million in net cash proceeds, recognizing net gains of $22.9 million and $33.0 million, respectively.

● During the three and six months ended June 30, 2025, we recorded impairments of $14.2 million and $15.4 million on three facilities and four facilities, respectively .

Of the $15.4 million, $9.1 million related to two held for use facilities, and $6.3 million related to two facilities that were classified as held for sale.

Financing Activities

● During the three months ended March 31, 2025, we sold 7.1 million shares of common stock under our $1.25 billion At-The-Market Offering Program (“ATM Program”) and Dividend Reinvestment and Common Stock Purchase Plan (“DRCSPP”), generating aggregate gross proceeds of $264.2 million.

● We repaid $400 million of 4.50% senior notes on the January 15, 2025 maturity date using available cash.

● On June 6, 2025, Omega amended its charter to increase the number of authorized shares of Omega common stock from 350.0 million to 700.0 million.

● During the three and six months ended June 30, 2025, we sold 6.8 million and 13.9 million shares of common stock under our $1.25 billion At-The-Market Offering Program (“ATM Program”) and Dividend Reinvestment and Common Stock Purchase Plan (“DRCSPP”), generating aggregate gross proceeds of $258.3 million and $522.5 million, respectively.

● On June 20, 2025, the Company issued $600 million of Senior Notes due 2030 (the “2030 Senior Notes”) that mature on July 1, 2030 and bear interest at a fixed rate of 5.200% per annum, payable semi-annually on January 1 and July 1 of each year, commencing on January 1, 2026.

The 2030 Senior Notes were sold at an issue price of 99.118% of their face value, resulting in a discount of $5.3 million.

We incurred $5.6 million of deferred costs in connection with the issuance.

● In April 2025, the maturity date of the $1.45 billion senior unsecured multicurrency revolving credit facility (“Revolving Credit Facility”) was extended from April 30, 2025 to October 30, 2025.

● Omega repaid the $50 million term loan (“OP Term Loan”) on April 29, 2025, prior to its original maturity date.

● In July 2025, the maturity date of the 2025 Term Loan was extended from August 8, 2025 to August 8, 2026 following Omega’s election to utilize one of two 12-month extension options.

Other Highlights

● We advanced $14.4 million under existing non-real estate loans during the three months ended March 31, 2025.

Principal repayments of $16.0 million were received on non-real estate loans during the three months ended March 31, 2025.

● We funded $3.8 million and $3.9 million under one and four new non-real estate loans originated during 2025 with a weighted average interest rate of 10.0% during the three and six months ended June 30, 2025, respectively.

We advanced $10.2 million and $24.6 million under existing non-real estate loans during the three and six months ended June 30, 2025, respectively.

Principal repayments of $12.6 million and $28.6 million were received on non-real estate loans during the three and six months ended June 30, 2025, respectively.

Collectibility Issues

● During the three months ended March 31, 2025, we did not place any operators on a cash basis of revenue recognition.

We also did not have any straight-line receivable write-offs through rental income during the three months ended March 31, 2025.

We provided one cash basis operator with a lease inducement of $10.0 million in connection with an execution of a new lease, which was recorded as a reduction to the rental income recognized for the three months ended March 31, 2025.

As of March 31, 2025, 20 operators are on a cash basis.

These operators represent 18.6% of our total revenues for the three months ended March 31, 2025.

● In the first quarter of 2025, Maplewood Senior Living (along with affiliates, “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 for the three months ended March 31, 2025 for contractual rent payments that were received from Maplewood.

No interest income was recorded on the Maplewood secured revolving credit facility during the three months ended March 31, 2025 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.

● 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 during the three months ended March 31, 2025.

We did not recognize any interest income related to LaVie during the three months ended March 31, 2025 as the three loans outstanding have PIK interest and are on non-accrual status.

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

● During the three and six months ended June 30, 2025, we placed two new operators, which Omega did not previously have a relationship with prior to 2025, and one existing operator on a cash basis of revenue recognition as collection of substantially all contractual lease payments due from them was not deemed probable.

We wrote off $15.5 million of straight-line rent receivable associated with placing the existing operator on a cash basis of revenue recognition as we received information regarding substantial doubt of its ability to continue as a going concern.

The lease agreements with the two new operators were executed in 2025 as part of the transition of facilities from other operators.

As we had no previous relationship with these new operators and collection of substantially all contractual lease payments due from the new operator was not deemed probable, we placed the new operators on a cash basis of revenue recognition concurrent with the lease commencement dates, so there were no straight-line rent receivable write-offs associated with placing these operators on a cash basis.

As of June 30, 2025, 22 operators are on a cash basis.

These operators represent 17.5% of our total revenues for the six months ended June 30, 2025.

● For the three months and six ended June 30, 2025, Maplewood paid $14.4 million and $28.0 million of contractual rent, respectively, falling short of the $17.3 million and $34.6 million of contractual rent due under its lease agreement for those periods, respectively.

These amounts exclude contractual rent and payments related to Inspir Embassy Row in Washington D.C.

of $3.2 million and $5.3 million for the three and six months ended June 30, 2025, respectively, which were paid in full.

Maplewood also did not pay any of the $3.1 million and $5.4 million of contractual interest due under the secured revolving credit facility for the three and six months ended June 30, 2025, respectively.

Maplewood is on a cash basis of revenue recognition for lease purposes, and we recorded rental income of $14.4 million and $28.0 million for the three and six months ended June 30, 2025, respectively, for contractual rent payments that were received from Maplewood.

No interest income was recorded on the Maplewood secured revolving credit facility during the three months ended June 30, 2025, as the loan is on non-accrual status for interest recognition.

In July 2025, Maplewood short-paid the contractual rent and interest amounts due under its lease and loan agreements by $1.8 million.

● For the three months and six ended June 30, 2025, LaVie Care Centers, LLC (“LaVie”) paid full contractual rent of $6.2 million and $15.5 million, respectively.

As LaVie is on a cash basis of revenue recognition for lease purposes, rental income recorded was equal to cash received of $6.2 million and $15.5 million, respectively, during the three and six months ended June 30, 2025.

We did not recognize any interest income related to LaVie during the three and six months ended June 30, 2025 as the loans outstanding have PIK interest and are on non-accrual status.

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”) 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.

● In March 2025, Genesis Healthcare, Inc.

(“Genesis”) 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.

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 during the three months ended March 31, 2025.

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

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

● On April 23, 2025, the Board of Directors declared a cash dividend of $0.67 per share.

The dividend will be paid on May 15, 2025 to stockholders of record as of the close of business on May 5, 2025.

Bankruptcy Court for the Northern District of Georgia, Atlanta Division 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 was to be assumed and assigned by certain of the debtor(s) to operators designated by the Plan Sponsor upon the effective date of the plan.

The plan of reorganization was effective as of June 1, 2025, which resulted in the LaVie master lease agreement being assumed by and assigned to ENDMT LLC (“Avardis”) and amended and restated.

The amended master lease has a lease term ending December 31, 2037 and requires monthly rent payments of $3.1 million, which escalate 2.5% annually.

Avardis paid full contractual rent of $3.1 million in June and July 2025, following the effective date of the plan of reorganization.

Avardis is on a straight-line basis for rental income recognition, and we recognized $3.6 million of rental income related to Avardis for June 2025.

● After Genesis Healthcare, Inc.

(“Genesis”) missed its rent payment due under its lease agreement and its interest payment due under one of its three loan agreements in March 2025, it made all required rent and interest payments during the second quarter of 2025.

As Genesis is on a cash basis of rental revenue recognition, we recognized rental income of $12.8 million and $25.3 million, respectively, related to Genesis during the three and six months ended June 30, 2025.

In addition, we recognized $4.1 million and $8.3 million, respectively, of interest income related to three loans with Genesis during the three and six months ended June 30, 2025.

As of June 30, 2025, the two remaining loans are on an accrual basis due to the collateral supporting the loans.

As of June 30, 2025, there was $3.5 million remaining under the letter of credit.

In July 2025, Genesis commenced voluntary cases under Chapter 11 of the U.S.

Bankruptcy Code in the U.S.

Bankruptcy Court for the Northern District of Texas, Dallas Division.

Genesis will continue to operate, as a debtor-in-possession (“DIP”), the 31 facilities subject to a master lease agreement with Omega, unless and until Genesis’ leasehold interest under the master lease agreement is rejected or assumed and assigned.

We committed to provide, along with other lenders, up to $8.0 million of a $30.0 million junior secured DIP financing to Genesis to support sufficient liquidity to, among other things, operate its facilities during bankruptcy.

The DIP loan bears PIK interest at 15.0% per annum, payable monthly in arrears.

The principal is due upon maturity.

Currently, the DIP loan matures on the earlier of (i) February 4, 2026, (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 third and fourth priority security interest in all of Genesis’ assets, which includes a third priority security interest in cash and accounts receivable.

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

The interim DIP order approved the DIP budget, which allows payments due under the DIP loan and Omega’s existing term loans to be satisfied in kind during the bankruptcy, except for budgeted adequate protection payments that will be made on Omega’s existing non-real estate loans.

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

In July 2025, prior to filing for bankruptcy, Genesis paid full contractual rent and interest due of $4.8 million.

As discussed in Note 6 – Non-real Estate Loans Receivable, 8.2% per annum of the total 13.2% per annum interest on the term loans is PIK interest.

● On July 25, 2025, the Board of Directors declared a cash dividend of $0.67 per share.

The dividend will be paid on August 15, 2025 to stockholders of record as of the close of business on August 4, 2025.

Results of Operations

The following is our discussion of the consolidated results of operations, financial position and liquidity and capital resources, which should be read in conjunction with our unaudited consolidated financial statements and accompanying notes.

Comparison of results of operations for the three months ended March 31, 2025 and 2024 (dollars in thousands):

Comparison of results of operations for the three and six months ended June 30, 2025 and 2024 (dollars in thousands):

Three Months Ended

Six Months Ended

Rental income

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Impairment on real estate properties

Provision for credit losses

(Recovery) provision for credit losses

Interest expense

2 unchanged sentences

Loss on debt extinguishment

Gain (loss) on assets sold – net

Gain on assets sold – net

Income tax expense

Income from unconsolidated joint ventures

The following is a description of certain of the changes in revenues for the three months ended March 31, 2025 compared to the same period in 2024:

● The increase in rental income was primarily the result of (i) a $26.8 million increase related to facility acquisitions made throughout 2024 and 2025, a construction in progress project placed in service in 2025, lease extensions and other rent escalations, (ii) $7.6 million net increase in rental income from cash basis operators, primarily related to LaVie and Maplewood, as a result of receiving higher cash rent payments period over period from these operators and (iii) a $0.4 million net increase related to impact of facility transitions, primarily from non-paying cash basis operators to straight-line basis operators.

The increase was partially offset by a $10.0 million lease inducement provided to a cash basis operator that was recorded as a reduction to rental income in the first quarter of 2025.

● The increase in interest income was primarily due to a $10.8 million increase related to new loans and additional fundings on existing loans made throughout 2024 and 2025, partially offset by a $3.7 million decrease related to principal repayments on our loans during 2024 and 2025.

The following is a description of certain of the changes in our expenses for the three months ended March 31, 2025 compared to the same period in 2024:

(Loss) income from unconsolidated joint ventures

Three Months Ended June 30, 2025 and 2024

The following is a description of certain of the changes in revenues for the three months ended June 30, 2025 compared to the same period in 2024:

● The increase in rental income was primarily the result of (i) a $31.5 million increase related to facility acquisitions made throughout 2024 and 2025, a construction in progress project placed in service in 2025, lease extensions and other rent escalations, (ii) an $8.1 million net increase in rental income from cash basis operators, primarily related to Maplewood, as a result of receiving higher cash rent payments period over period from these operators, (iii) a $2.8 million increase related to higher rental income from our leases with operators in the U.K.

primarily due to the strengthening of the British Pound Sterling against the U.S.

Dollar and (iv) a $0.5 million net increase related to the impact of facility transitions, primarily from non-paying cash basis operators to straight-line basis operators, partially offset by a $17.5 million decrease resulting from straight-line receivable write-offs in the second quarter of 2025.

● The increase in interest income was primarily due to an $8.8 million increase related to new loans and additional fundings on existing loans made throughout 2024 and 2025, partially offset by (i) a $2.9 million decrease related to principal repayments on our loans during 2024 and 2025 and (ii) a $0.9 million decrease related to loans on non-accrual status in which we have recognized less interest income period over period as a result of receiving fewer cash payments.

The following is a description of certain of the changes in our expenses for the three months ended June 30, 2025 compared to the same period in 2024:

● The increase in depreciation and amortization expense primarily relates to facility acquisitions and capital additions, partially offset by facility sales and facilities reclassified to assets held for sale.

● The increase in general and administrative (“G&A”) expense primarily relates to $6.6 million of incremental non-cash stock-based compensation expense and $2.2 million of incremental payroll expense related to the termination of the employment agreement of our former Chief Operating Officer in the first quarter of 2025.

● The increase in general and administrative (“G&A”) expense primarily relates to (i) a $0.6 million increase in operator initiatives, (ii) a $0.4 million increase in professional service costs and (iii) a $0.3 million increase in payroll and benefits.

● The 2025 impairments were recognized in connection with one held for use facility and two facilities that were classified as held for sale.

The 2024 impairments were recognized in connection with two facilities that were classified as held for sale and two held for use facilities.

The 2025 and 2024 impairments were primarily the result of decisions to exit certain non-strategic facilities and/or terminate our relationships with certain non-strategic operators.

● The decrease in recovery for credit losses primarily relates to an increase in the general reserve recorded primarily resulting from increases in loss rates utilized in the estimate of expected credit losses for loans, partially offset by a net decrease in aggregate specific provisions recorded during the second quarter of 2025 compared to same period in 2024 and decreases in loan balances.

● The decrease in interest expense primarily relates to (i) a net decrease in the amortization of deferred financing fees and discounts as a result of the amortization of the fair value adjustment associated with the 2026 mortgage loan, (ii) the repayment of $400 million of 4.50% senior notes in January 2025 and (iii) the repayment of the OP Term Loan in April 2025.

The overall decrease was partially offset by (i) an increase in interest due to the assumption of the £188.6 million 2026 mortgage loan as part of our acquisition of the remaining 51% interest in the Cindat Joint Venture in July 2024 and (ii) an increase in interest due to the issuance of the 2030 Senior Notes in June 2025.

Other Income (Expense)

The increase in total other income (expense) was primarily due to (i) a $10.4 million increase in other income – net primarily related to increased interest income on short-term investments due to higher invested cash in the second quarter of 2025 compared to the same period in 2024 and gains related to foreign currency and financial instruments in the first quarter of 2025 and (ii) a $10.0 million increase in gain on assets sold related to the sale of seven facilities in the second quarter of 2025 compared to the sale of five facilities during the same period in 2024.

Income Tax Expense

The increase in income tax expense was primarily due to an increase in taxable income in the U.K.

as a result of acquisitions in 2024 and 2025.

Six Months Ended June 30, 2025 and 2024

The following is a description of certain of the changes in revenues for the six months ended June 30, 2025 compared to the same period in 2024:

● The increase in rental income was primarily the result of (i) a $55.6 million increase related to facility acquisitions made throughout 2024 and 2025, a construction in progress project placed in service in 2025, lease extensions and other rent escalations, (ii) $17.9 million net increase in rental income from cash basis operators, primarily related to LaVie and Maplewood, as a result of receiving higher cash rent payments period over period from these operators, (iii) a $1.4 million net increase related to impact of facility transitions, primarily from non-paying cash basis operators to straight-line basis operators and (iv) a $3.2 million increase related to higher rental income from our leases with operators in the U.K.

primarily due to the strengthening of the British Pound Sterling against the U.S.

The increase was partially offset by (i) a $17.5 million decrease resulting from straight-line receivable write-offs in the second quarter of 2025 and (ii) a $10.0 million lease inducement provided to a cash basis operator that was recorded as a reduction to rental income in the first quarter of 2025.

● The increase in interest income was primarily due to a $19.5 million increase related to new loans and additional fundings on existing loans made throughout 2024 and 2025, partially offset by (i) a $6.1 million decrease related to principal repayments on our loans during 2024 and 2025 and (ii) a $1.3 million decrease related to loans on non-accrual status in which we have recognized less interest income period over period a result of receiving fewer cash payments.

The following is a description of certain of the changes in our expenses for the six months ended June 30, 2025 compared to the same period in 2024:

● The increase in G&A expense primarily relates to (i) $6.6 million of incremental non-cash stock-based compensation expense and $2.2 million of incremental payroll expense related to the termination of the employment agreement of our former Chief Operating Officer in the first quarter of 2025, (ii) $1.2 million related to other increases in payroll and benefits, (iii) a $0.7 million increase in operator initiatives and (iv) a $0.5 million increase in professional service costs.

Additional information is disclosed in Note 14 – Stock-Based Compensation.

● The decrease in acquisition, merger and transition related costs primarily relates to costs incurred related to the transition of facilities with troubled operators.

● The 2025 impairments were recognized in connection with one held for use facility for which the carrying value exceeded the fair value.

The 2024 impairments were recognized in connection with three held for use facilities for which the carrying value exceeded the fair value.

● The 2025 impairments were recognized in connection with two held for use facilities and two facilities that were classified as held for sale.

The 2024 impairments were recognized in connection with two facilities that were classified as held for sale and five held for use facilities.

The 2025 and 2024 impairments were primarily the result of decisions to exit certain non-strategic facilities and/or terminate our relationships with certain non-strategic operators.

● The decrease in provision for credit losses primarily relates to a decrease in the general reserve recorded primarily resulting from decreases in loss rates utilized in the estimate of expected credit losses for loans partially offset by increases in loan balances, partially offset by a net increase in aggregate specific provisions recorded during the first quarter of 2025 compared to same period in 2024.

● The decrease in interest expense primarily relates to (i) the repayment of $400 million of 4.50% senior notes in January 2025, (ii) the repayment of $400 million of 4.95% senior notes in April 2024 and (iii) the payoff of all remaining HUD mortgages in the first quarter of 2024.

The overall decrease was partially offset by an increase due to the assumption of the £188.6 million mortgage loan as part of our acquisition of the remaining 51% interest in the Cindat Joint Venture in July 2024.

● The change in provision for credit losses primarily relates to an increase in the general reserve recorded primarily resulting from increases in loss rates utilized in the estimate of expected credit losses for loans, partially offset by decreases in loan balances and a net increase in aggregate specific provisions recorded during the six months ended June 30, 2025 compared to same period in 2024.

● The decrease in interest expense primarily relates to (i) a net decrease in the amortization of deferred financing fees and discounts as a result of the amortization of the fair value adjustment associated with the 2026 mortgage loan, (ii) the repayment of $400 million of 4.50% senior notes in January 2025, (iii) the repayment of the OP Term Loan in April 2025, (iv) the repayment of $400 million of 4.95% senior notes in April 2024 and (v) the payoff of all remaining HUD mortgages in the first quarter of 2024.

The overall decrease was partially offset by (i) an increase due to the assumption of the £188.6 million mortgage loan as part of our acquisition of the remaining 51% interest in the Cindat Joint Venture in July 2024 and (ii) an increase in interest due to the issuance of $600 million of the 2030 Senior Notes in June 2025.

Other Income (Expense)

The increase in total other income (expense) was primarily due to (i) a $11.5 million increase in gain on assets sold related to the sale of 27 facilities in the first quarter of 2025 compared to the sale of four facilities during the same period in 2024 and (ii) a $1.3 million decrease in loss on debt extinguishment related to the early repayment of nine HUD mortgages during the first quarter of 2024, partially offset by a $2.2 million decrease in other income – net primarily related to decreased interest income on short-term investments due to lower invested cash in the first quarter of 2025 compared to the same period in 2024.

The increase in total other income (expense) was primarily due to (i) a $21.4 million increase in gain on assets sold related to the sale of 34 facilities in 2025 compared to the sale of nine facilities during the same period in 2024, (ii) an $8.2 million increase in other income – net primarily related to increased interest income on short-term investments due to higher invested cash in 2025 compared to the same period in 2024 and gains associated with foreign currency and financial instruments in 2025 and (iii) a $1.5 million decrease in loss on debt extinguishment related to the early repayment of nine HUD mortgages during the first quarter of 2024.

Income Tax Expense

14 unchanged sentences

Investors and potential investors in our securities should not rely on this measure as a substitute for any GAAP measure, including net income.

The following table presents our Nareit FFO results for the three months ended March 31, 2025 and 2024:

The following table presents our Nareit FFO results for the three and six months ended June 30, 2025 and 2024:

Three Months Ended

Six Months Ended

(in thousands)

Net income (1)

(Deduct gain) add back loss from real estate dispositions

(in thousands)

Deduct gain from real estate dispositions

Elimination of non-cash items included in net income:

1 unchanged sentence

Depreciation – unconsolidated joint ventures

Add back impairments on real estate properties

(1) The three months ended March 31, 2025 and 2024 include the application of $4.3 million and $0.5 million, respectively, of security deposits (letter of credit and cash deposits) in revenue.

Impairment on real estate properties

Liquidity and Capital Resources

3 unchanged sentences

Capital Structure

At March 31, 2025, we had total assets of $9.7 billion, total equity of $4.9 billion and total debt of $4.5 billion in our consolidated financial statements, with such debt representing 47.5% of total capitalization.

At March 31, 2025 and December 31, 2024, the weighted average annual interest rate of our debt was 4.6%.

Additionally, as of March 31, 2025, 94.7% of our debt with outstanding principal balances has fixed interest payments after reflecting the impact of interest rate swaps that are designated as cash flow hedges.

As of March 31, 2025, we had long-term credit ratings of Baa3 from Moody’s and BBB- from S&P Global and Fitch.

At June 30, 2025, we had total assets of $10.5 billion, total equity of $5.2 billion and total debt of $5.0 billion in our consolidated financial statements, with such debt representing 49.2% of total capitalization.

At June 30, 2025 and December 31, 2024, the weighted average annual interest rate of our debt was 4.6%.

Additionally, as of June 30, 2025, 95.0% of our debt with outstanding principal balances has fixed interest payments after reflecting the impact of interest rate swaps that are designated as cash flow hedges.

As of June 30, 2025, we had long-term credit ratings of Baa3 from Moody’s and BBB- from S&P Global and Fitch.

Credit ratings impact our ability to access capital and directly impact our cost of capital as well.

For example, our Revolving Credit Facility accrues interest and fees at a rate per annum equal to SOFR plus a margin that depends upon our credit rating.

A downgrade in credit ratings by Moody’s, S&P Global and/or Fitch may have a negative impact on the interest rates and fees for our Revolving Credit Facility, OP Term Loan and our $428.5 million term loan with a maturity date on August 8, 2025 (the “2025 Term Loan”).

Our Revolving Credit Facility and OP Term Loan had original maturity dates in April 2025.

A downgrade in credit ratings by Moody’s, S&P Global and/or Fitch may have a negative impact on the interest rates and fees for our Revolving Credit Facility and the 2025 Term Loan.

On June 20, 2025, Omega issued 2030 Senior Notes that mature on July 1, 2030 and bear interest at a fixed rate of 5.200% per annum, payable semi-annually on January 1 and July 1 of each year, commencing on January 1, 2026.

The 2030 Senior Notes were sold at an issue price of 99.118% of their face value, resulting in a discount of $5.3 million.

We incurred $5.6 million of deferred costs in connection with the issuance.

In April 2025, the maturity date of the Revolving Credit Facility was extended from April 30, 2025 to October 30, 2025.

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

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

The 2025 Term Loan matures on August 8, 2025.

However, we also have the option to extend the 2025 Term Loan for two sequential 12-month periods.

Our next senior note maturity is the $600 million of 5.250% senior notes due January 2026.

As of March 31, 2025, we had $368.0 million of cash and cash equivalents on our Consolidated Balance Sheets.

As of March 31, 2025, we had $656.5 million of potential common share issuances remaining under the ATM Program and $1.45 billion of availability under our Revolving Credit Facility.

This combination of liquidity sources, along with cash from operating activities, provides us with the ability to repay the senior notes due in January 2026.

We also could elect to refinance these notes based on our evaluation of market conditions at maturity.

We have one remaining option to extend the maturity date of the Revolving Credit Facility for an additional six months.

As of June 30, 2025, we had no borrowings on the Revolving Credit Facility.

In July 2025, the maturity date of the 2025 Term Loan was extended from August 8, 2025 to August 8, 2026.

We have one remaining option to extend the maturity date of the 2025 Term Loan an additional 12-month period.

Our next senior note maturity is the $600 million of 5.250% senior notes due January 2026, which can be redeemed at par value on or after October 15, 2025.

We also have a British Pound Sterling denominated mortgage loan, with $251.6 million outstanding as of June 30, 2025, that matures in August 2026 but can be repaid as early as November 2025 without penalty.

As of June 30, 2025, we had $734.2 million of cash and cash equivalents on our Consolidated Balance Sheets, $548.6 million of potential common share issuances remaining under the ATM Program and $1.45 billion of availability under our Revolving Credit Facility.

This combination of liquidity sources, along with cash from operating activities, provides us with the ability to repay our upcoming debt maturities.

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

As of March 31, 2025 and December 31, 2024, we were in compliance with all affirmative and negative covenants, including financial covenants, for our secured and unsecured borrowings.

As of June 30, 2025 and December 31, 2024, we were in compliance with all affirmative and negative covenants, including financial covenants, for our secured and unsecured borrowings.

Supplemental Guarantor Information

Parent has issued $3.8 billion aggregate principal of senior notes outstanding at March 31, 2025 that were registered under the Securities Act of 1933, as amended.

Parent has issued $4.4 billion aggregate principal of senior notes outstanding at June 30, 2025 that were registered under the Securities Act of 1933, as amended.

The senior notes are guaranteed by Omega OP.

6 unchanged sentences

However, the guarantees are effectively subordinated to any secured debt of Omega OP.

As of March 31, 2025, there were no significant restrictions on the ability of Omega OP to make distributions to Omega.

At March 31, 2025, we had 286.2 million shares of common stock outstanding, and our shares had a market value of $10.9 billion.

The following is a summary of activity under our equity programs during the three months ended March 31, 2025:

● We issued 4.4 million shares of common stock under our ATM Program for aggregate gross proceeds of $164.4 million during the three months ended March 31, 2025.

As of June 30, 2025, there were no significant restrictions on the ability of Omega OP to make distributions to Omega.

At June 30, 2025, we had 293.1 million shares of common stock outstanding, and our shares had a market value of $10.7 billion.

The following is a summary of activity under our equity programs during the three and six months ended June 30, 2025:

● We issued 2.9 million and 7.3 million shares of common stock under our ATM Program for aggregate gross proceeds of $107.9 million and $272.3 million during the three and six months ended June 30, 2025, respectively.

We did not utilize the forward provisions under the ATM Program.

We have $656.5 million of potential common share issuances remaining under the ATM Program as of March 31, 2025.

● We issued 2.7 million shares of common stock under the DRCSPP during the three months ended March 31, 2025.

Aggregate gross proceeds from these sales were $99.8 million during the three months ended March 31, 2025.

We have $548.6 million of potential common share issuances remaining under the ATM Program as of June 30, 2025.

● We issued 4.0 million and 6.7 million shares of common stock under the DRCSPP during the three and six months ended June 30, 2025, respectively.

Aggregate gross proceeds from these sales were $150.4 million and $250.2 million during the three and six months ended June 30, 2025, respectively.

● We did not repurchase any shares of our outstanding common stock under the $500 Million Stock Repurchase Program, which expired in March 2025.

4 unchanged sentences

To the extent that we do not distribute all of our net capital gain or distribute at least 90%, but less than 100% of our “REIT taxable income” as adjusted, we will be subject to tax thereon at regular corporate rates.

For the three months ended March 31 , 2025, we paid dividends of $189.2 million to our common stockholders.

For the six months ended June 30 , 2025, we paid dividends of $383.8 million to our common stockholders.

On February 18, 2025, we paid dividends of $0.67 per outstanding common share to the common stockholders of record as of the close of business on February 10, 2025.

On May 15, 2025, we paid dividends of $0.67 per outstanding common share to the common stockholders of record as of the close of business on May 5, 2025.

Material Cash Requirements

During the three months ended March 31 , 2025, there were no significant changes to our material cash requirements from those disclosed in the section “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2024.

As of March 31, 2025, we had $227.8 million of commitments to fund the construction of new facilities, capital improvements and other commitments under lease agreements.

During the six months ended June 30 , 2025, other than the issuance of the 2030 Senior Notes discussed above, there were no significant changes to our material cash requirements from those disclosed in the section “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2024.

As of June 30, 2025, we had $228.7 million of commitments to fund the construction of new facilities, capital improvements and other commitments under lease agreements.

Additionally, we have commitments to fund $37.9 million of advancements under existing real estate loans and $60.7 million of advancements under existing non-real estate loans.

5 unchanged sentences

Cash Flow Summary

Cash, cash equivalents and restricted cash totaled $404.1 million as of March 31 , 2025, a decrease of $144.7 million as compared to the balance at December 31, 2024.

The following is a summary of our sources and uses of cash flows for the three months ended March 31 , 2025 as compared to the three months ended March 31, 2024 (dollars in thousands):

Three Months Ended March 31,

Cash, cash equivalents and restricted cash totaled $772.6 million as of June 30 , 2025, an increase of $223.8 million as compared to the balance at December 31, 2024.

The following is a summary of our sources and uses of cash flows for the six months ended June 30 , 2025 as compared to the six months ended June 30, 2024 (dollars in thousands):

Six Months Ended June 30,

Increase/(Decrease)

3 unchanged sentences

Financing activities

The following is a discussion of changes in cash, cash equivalents and restricted cash for the three months ended March 31 , 2025 compared to the months ended March 31, 2024.

The following is a discussion of changes in cash, cash equivalents and restricted cash for the six months ended June 30 , 2025 compared to the months ended June 30, 2024.

Operating Activities – The increase in net cash provided by operating activities is driven primarily by an increase of $86.4 million of net income, net of $20.3 million of non-cash items, primarily due to a year over year increase in rental income and interest income as discussed in our material changes analysis under Results of Operations above.

The $9.2 million change in the net movements of the operating assets and liabilities also contributed to the overall increase in cash provided by operating activities.

Investing Activities – The increase in cash provided by investing activities primarily related to (i) a $110.8 million increase in proceeds from the sales of real estate investments and (ii) a $55.4 million increase in loan repayments, net of placements as a result of paydowns on mortgage loans due from Ciena Healthcare Management, Inc.

and on other loans during the first quarter of 2025.

The overall increase in cash provided by investing activities was partially offset by (i) a $45.1 million increase in real estate acquisitions, (ii) the funding of a $30.1 million acquisition deposit in the first quarter of 2025 for a 44-facility asset acquisition that closed in April 2025, (iii) a $13.8 million increase in capital improvements to real estate investments and construction in progress primarily related to an ALF in Washington D.C.

that was placed into service in February 2025, (iv) a $8.4 million decrease in proceeds from net investment hedges related to the termination of two foreign currency forward contracts during the first quarter of 2024 and (v) a $1.3 million decrease in receipts from insurance proceeds.

Financing Activities – The increase in cash used in financing activities primarily related to (i) a $358.7 million increase in repayments on long-term borrowings driven by the repayment of the $400 million of 4.50% senior notes that matured on January 15, 2025, (ii) a $24.5 million increase in dividends paid primarily related to share issuances during 2024 and 2025, and (iii) a $8.2 million increase in distributions to Omega OP Unit holders.

The overall increase in cash used in financing activities was partially offset by (i) a $228.4 million increase in net proceeds from issuance of common stock as a result of increased volume under our ATM Programs and DRCSPP and (ii) a $1.3 million decrease in payment of financing related costs related to the early repayment of nine HUD mortgages during the first quarter of 2024 .

Investing Activities – The increase in cash used in investing activities primarily related to (i) a $432.4 million increase in real estate acquisitions primarily as a result of a 45-facility acquisition in the U.K.

and Bailiwick of Jersey in the second quarter of 2025, (ii) a $6.5 million increase in capital improvements to real estate investments and construction in progress, (iii) a $3.8 million decrease in proceeds from derivative instruments related to the termination of two foreign currency forward contracts during the first quarter of 2024, (iv) a $1.3 million decrease in receipts from insurance proceeds and (v) a $0.9 million increase in investments in unconsolidated joint ventures.

The overall increase in cash used in investing activities was partially offset by (i) a $138.1 million increase in proceeds from the sales of real estate investments and (ii) a $118.3 million decrease in loan placements, net of repayments as a result of fewer new loans advanced in 2025 compared to 2024 and paydowns on mortgage loans due from Ciena Healthcare Management, Inc.

and on other loans during the six months ended June 30, 2025.

Financing Activities – The increase in cash provided by financing activities primarily related to (i) a $555.1 million decrease in repayments on long-term borrowings, net of proceeds and (ii) a $242.7 million increase in net proceeds from issuance of common stock as a result of increased volume under our ATM Program and DRCSPP.

The overall increase in cash provided by financing activities was partially offset by (i) a $53.1 million increase in dividends paid primarily related to share issuances during 2024 and 2025, (ii) a $9.3 million increase in distributions to Omega OP Unit holders , (iii) a $4.6 million increase in payment of financing related costs and (iv) a $3.7 million increase in redemption of Omega OP units.

Critical Accounting Policies and Estimates

6 unchanged sentences

There have been no material changes to our critical accounting policies or estimates since December 31, 2024.

Item 3 – Quantitative and Qualitative Disclosures about Market Risk

During the quarter ended March 31, 2025, there were no material changes in our primary market risk exposures or how those exposures are managed from the information disclosed under Item 7A of our Annual Report on Form 10-K for the year ended December 31, 2024.

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 2. Management’s Discussion and Analysis