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Item 7. Management’s Discussion and Analysis

2026-02-09 compared with 2025-02-13 · 152 added, 155 removed, 215 unchanged (59% of the section changed)

18 unchanged sentences

As of December 31, 2025, Parent owned approximately 95% of the issued and outstanding units of partnership interest in Omega OP (“Omega OP Units”), and other investors owned approximately 5% 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 skilled nursing facilities (“SNFs”), assisted living facilities (“ALFs”), and to a lesser extent, independent living facilities (“ILFs”), rehabilitation and acute care facilities (“specialty facilities”) and medical office buildings (“MOBs”).

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

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

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

Real estate loans consist of mortgage loans and other real estate loans that 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.

Additionally, during the fourth quarter of 2025, we began utilizing the structure authorized by the REIT Investment Diversification and Empowerment Act of 2007 (commonly referred to as “RIDEA”), whereby we own and operate healthcare facilities through third-party managers (collectively, our “managers”).

In addition to our core investments, we make loans to operators and/or their principals.

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.

Our portfolio of real estate investments (including properties associated with mortgages, direct financing leases, assets held for sale and consolidated joint ventures) at December 31, 2024, included 1,026 healthcare facilities, located in 42 states and the U.K.

that are operated by 87 third-party operators.

Our real estate investment in these facilities, net of impairments and allowances, totaled approximately $10.1 billion at December 31, 2024, with approximately 98% of our real estate investments related to long-term healthcare facilities.

The portfolio is made up of (i) 589 SNFs, (ii) 290 ALFs, (iii) 19 ILFs, (iv) 18 specialty facilities, (v) one MOB, (vi) real estate loans, including mortgages on 52 SNFs, 43 ALFs, one specialty facility and one ILF and (vii) 12 facilities that are held for sale.

At December 31, 2024, we also held other real estate loans (excluding mortgages) receivable of $485.5 million and non-real estate loans receivable of $332.3 million, consisting primarily of secured loans to third-party operators of our facilities, and $88.7 million of investments in 11 unconsolidated joint ventures, which comprise 5 SNFs, one ALF and one specialty facility.

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 of December 31, 2025, our portfolio of real estate investments consisted of 1,027 operating healthcare facilities (including properties associated with mortgages, assets held for sale and consolidated joint ventures), along with other real estate loans receivable (excluding mortgages) of $482.6 million and $414.1 million of investments in 15 unconsolidated entities.

These healthcare facilities are located in 42 states, Washington, D.C., the U.K.

and the Bailiwick of Jersey (“Jersey”), and are operated or managed by 89 third-party operators or managers.

Our investment in these facilities, net of impairments and allowances, totaled approximately $10.5 billion at December 31, 2025, with approximately 98% of our real estate investments related to long-term healthcare facilities.

Our portfolio is made up of (i) 561 SNFs, 339 ALFs, 19 ILFs, 16 specialty facilities and one CCRC, (ii) fixed rate mortgages on 47 SNFs, 42 ALFs and two ILFs and (iii) one property adjacent to one of our existing facilities that is held for sale.

At December 31, 2025, our total investments also include non-real estate loans receivable of $330.3 million, consisting primarily of secured loans to third-party operators of our facilities.

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

1 unchanged sentence

Outlook, Trends and Other Conditions

Our industry continues to recover from the impacts of the COVID-19 pandemic, which significantly and adversely impacted SNFs and long-term care providers during the height of the pandemic due to the higher rates of virus transmission and fatality among the elderly and frail populations that these facilities serve.

While certain of our operators have experienced a level of recovery from pandemic-driven challenges such as occupancy declines, labor shortages, staffing expense increases, and other cost increases, certain of our other operators remain negatively impacted by these factors in a much more profound way.

In addition, our operators have been and continue to be adversely affected by inflation-related cost increases, which may exacerbate labor shortages and increase labor costs, among other impacts, and may be adversely impacted by immigration restrictions and changes to immigration enforcement policy to the extent they contribute to labor shortages.

There continues to be uncertainty regarding the duration of these impacts for those operators, particularly given uncertainty as to whether reimbursement increases from the federal government, the states and the U.K.

Our operators continue to face a number of industry challenges, including staffing shortages in certain regions, which have persisted since the COVID-19 pandemic.

In addition, our operators have been and continue to be adversely affected by inflation-related cost increases and may be adversely impacted by recently announced global tariffs, each of which may increase expenses, exacerbate labor shortages and increase labor costs, among other adverse impacts.

Our operators also may be adversely impacted by immigration restrictions and changes to immigration enforcement policy to the extent they contribute to labor shortages.

There continues to be uncertainty regarding the extent and duration of these impacts for those operators, particularly given uncertainty as to whether reimbursement increases from the federal government, the states and the U.K.

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 ultimate scope and impact of recently issued U.S.

federal minimum staffing rules for our industry, and the continued ability of our operators to manage infectious diseases in our facilities.

See Item 1 – Business – Government Regulation and Reimbursement for additional information.

We continue to monitor these impacts as well as the impacts of other regulatory changes, as discussed in Item 1 – Business – Government Regulation and Reimbursement, 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 2024, 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.

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

While the OBBBA does not directly lower reimbursements related to long term care providers, it may indirectly impact our operators to the extent states in which they operate reduce reimbursement levels generally.

This may occur as a result of reduced Medicaid funds allocated by states to long-term care providers due to lower reimbursement levels for hospitals and other healthcare providers.

We continue to monitor these reimbursement 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.

While we continue to believe that longer term demographics will drive increasing demand for needs-based skilled nursing care, we remain cautious as some of the long-term impacts noted above may continue to have an impact on certain of our operators and their financial conditions.

2025 and Recent Highlights

● We acquired 114 facilities for total consideration of $740.5 million in 2024.

The initial cash yield (the initial annual contractual cash rent divided by the purchase price) on these asset acquisitions was between 9.5% and 11.5%.

Of the 114 facilities acquired during 2024, 63 facilities relate to our acquisition of the remaining 51% interest in the Cindat Joint Venture in July 2024 for total consideration of $364.9 million.

See Note 3 – Real Estate Asset Acquisitions and Development for additional information.

● We acquired 71 facilities for total consideration of $690.4 million in 2025, including four facilities that we own and operate utilizing a RIDEA structure.

See Note 3 – Real Estate Asset Acquisitions and Development to the Consolidated Financial Statements for additional information.

● We invested $114.5 million under our construction in progress and capital improvement programs in 2025.

● We funded $370.2 million under 29 new real estate loans with a weighted average interest rate of 10.5% in 2024.

In February 2025, we placed the $201.8 million Inspir Embassy Row construction in progress project into service and began recognizing rental income from the facility.

● We funded $65.4 million under 19 new real estate loans originated during 2025 with a weighted average interest rate of 10.3% in 2025.

We also advanced $17.3 million under existing real estate loans in 2025.

We received principal repayments of $115.7 million on real estate loans during 2025.

We committed to fund up to $87.6 million Canadian dollars for a real estate loan for the development of several long-term care facilities in Canada that executed in December 2025, which will be our first transaction in Canada.

● In October 2025, the Company formed a JV with affiliates of Saber Healthcare Holdings, LLC (“Saber”) to own and lease 64 facilities that were previously wholly owned by affiliates of Saber.

The Company issued approximately 5.5 million Omega OP Units with a fair value of $222.4 million in exchange for a 49% equity interest in the JV.

● In December 2025, the Company formed two JVs to own and operate, through a RIDEA structure, a CCRC in North Carolina.

The Company acquired a 49% equity interest in each of the JVs for aggregate consideration of $42.7 million.

Dispositions and Impairments

● In 2024, we sold 21 facilities (14 SNFs, six ALFs and one specialty facility) for approximately $95.0 million in net cash proceeds, recognizing a net gain of approximately $13.2 million.

● In 2024, we recorded impairments on real estate properties of approximately $23.8 million on 14 facilities.

Of the $23.8 million, $10.9 million related to six facilities that were classified as held for sale for which the carrying value exceeded the fair value less costs to sell, and $12.9 million related to eight held for use facilities (of which $7.2 million relates to four closed facilities) for which the carrying values exceeded the estimated fair value.

Of the $12.9 million, $5.3 million related to three facilities that were subsequently sold during the year but did not meet the criteria to be classified as held for sale when the impairments were recognized.

● In 2025, we sold 49 facilities (45 SNFs and four ALFs) for approximately $282.8 million in net cash proceeds, recognizing a net gain of approximately $67.3 million.

● In 2025, we recorded impairments on real estate properties of approximately $22.6 million on eight facilities.

Of the $22.6 million, $6.3 million related to two facilities that were classified as held for sale and $16.3 million related to six held for use facilities.

Financing Activities

● In 2024, we sold 33.8 million shares of common stock under our ATM Program (defined below) and Dividend Reinvestment and Common Stock Purchase Plan (“DRCSPP”), generating aggregate gross proceeds of $1.2 billion.

● We repaid the $400 million of 4.95% senior notes on the April 1, 2024 maturity date using available cash and proceeds from our $1.45 billion senior unsecured multicurrency revolving credit facility (“Revolving Credit Facility”).

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

The payoff included a $1.3 million prepayment fee that was recognized as a loss on extinguishment of debt.

● During the first quarter of 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.

Concurrent with the termination of the two foreign currency forward contracts, also during the first quarter of 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.

● During the third quarter of 2024, we terminated our 2021 $1.0 billion At-The-Market Offering Program (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 sale price of up to $1.25 billion (the “2024 ATM Program,” and together with the 2021 ATM Program, the “ATM Program”) may be sold from time to time.

● As part of the Cindat JV acquisition in July 2024, we assumed a £188.6 million mortgage loan that matures in August 2026 (the “2026 Mortgage Loan”) but can be repaid without a prepayment penalty beginning November 2025.

The 2026 Mortgage Loan bears interest at the Sterling Overnight Index Average (“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 does not exceed 10.38%.

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

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

● 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.

● 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.

● On September 30, 2025, the Company entered into a new credit agreement consisting of a new four-year $2.0 billion senior unsecured multicurrency revolving credit facility (the “Revolving Credit Facility”) and a three-year $300.0 million delayed draw term loan facility (the “2028 Term Loan”), replacing our previous $1.45 billion senior unsecured 2021 multicurrency revolving credit facility (the “2021 Revolving Credit Facility”) that was scheduled to mature on October 30, 2025.

● On October 15, 2025, the Company redeemed, at par value, the $600.0 million of 5.250% Senior Notes with a scheduled maturity of January 15, 2026.

● During the fourth quarter of 2025, we terminated our 2021 $1.25 billion At-The-Market Offering Program (the “2024 ATM Program”) and entered into a new ATM Equity Offering Sales Agreement pursuant to which shares of common stock having an aggregate gross sale price of up to $2.00 billion (the “2025 ATM Program,” and together with the 2024 ATM Program, the “ATM Program”) may be sold from time to time.

In 2025, we sold 16.3 million shares of common stock under our ATM Program and Dividend Reinvestment and Common Stock Purchase Plan (“DRCSPP”), generating aggregate gross proceeds of $612.1 million.

● During the fourth quarter of 2025, we fully repaid the $428.5 million term loan (the “2026 Term Loan”) prior to the August 8, 2026 maturity date.

In connection with this repayment, we redesignated nine of the interest rate swaps, with $300 million of notional value, as hedges against our exposure to changes in interest payment cash flows on the 2028 Term Loan.

We terminated two of the interest rates swaps with notional value of $128.5 million and paid our swap counterparty $1.7 million.

Other Highlights

● During 2024, we advanced $60.6 million under 13 new non-real estate loans with a weighted average interest rate of 8.4%.

● During 2025, we advanced $17.5 million under seven new non-real estate loans originated during 2025 with a weighted average interest rate of 11.9%.

We also advanced $37.9 million under existing non-real estate loans during 2025.

We received principal repayments of $68.1 million on non-real estate loans during 2025.

Please see a description of our non-real estate loans in Item 1 – Business – Investment Strategy & Types.

Collectibility Issues

● During the year ended December 31, 2024, we placed one existing operator and three new operators, which Omega did not previously have a relationship with prior to 2024, on a cash basis of revenue recognition as collection of substantially all contractual lease payments due from them was not deemed probable.

There was a $2.8 million straight-line rent receivable write-off associated with placing the existing operator on a cash basis of revenue recognition.

The lease agreements with the three new operators were executed in 2024 as part of the transition of facilities from other operators, and we placed them on a cash basis 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 December 31, 2024, 21 operators are on a cash basis.

These operators represent an aggregate 20.5% and 22.1% of our total revenues for the years ended December 31, 2024 and 2023, respectively.

This includes the impact of straight-line rent receivable, lease inducement and effective yield interest write-offs of $4.2 million and $20.6 million for the years ended December 31, 2024 and 2023, respectively.

● Throughout 2024, Maplewood Senior Living (along with affiliates, “Maplewood”) continued to short-pay the contractual rent amount due under its lease agreement, paying $47.5 million of contractual rent, a short pay of $21.8 million of the $69.3 million due under its lease agreement.

In addition, Maplewood did not pay the $2.7 million of contractual interest due under its secured revolving credit facility (the “Maplewood Revolver”) agreement during 2024.

● During the year ended December 31, 2025, we placed three operators on a cash basis of revenue recognition.

We recognized straight-line rent receivable write-offs of $15.5 million for the year ended December 31, 2025 in connection with placing certain operator leases on a cash basis of revenue recognition.

Several of the operator leases placed on a cash basis of revenue recognition in the comparative years related to new operator leases, so there were no related straight-line rent receivable write-offs associated with these operator leases.

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 December 31, 2025, we had 20 operator leases on a cash basis for revenue recognition, which represent 19.0% and 19.9% of our total revenues for the years ended December 31, 2025 and 2024, respectively.

● As discussed in Note 5 – Contractual Receivables and Other Receivables and Lease Inducements, in the fourth quarter of 2025, we received the final regulatory approvals related to the licensure of the operating assets, and the transition of the equity of Maplewood Senior Living (along with affiliates “Maplewood”) from the Greg Smith estate to Maplewood’s key management team members was completed.

Concurrently with the transition of the equity to the Key Principals, on December 11, 2025, Omega entered into a restructuring agreement and amended its master lease agreement for 17 facilities (the “Master Lease”) and its revolving credit facility with Maplewood (the “Maplewood Revolver”).

As part of the restructuring agreement and amendments, Omega and Maplewood agreed, among other terms, to (i) reinstate the 2.5% annual contractual rent escalators that were allowed to be deferred as part of the 2023 restructuring agreement terms, resulting in contractual rent of $76.5 million for 2026 for the 17 facilities under the Master Lease, increasing annually by 2.5% thereafter, (ii) allow for the deferral of monthly rent (with 5% interest if outstanding longer than 18 months) if certain conditions are met, but require a minimum amount of contractual rent to be paid annually including $62.1 million for 2026 and $70.0 million for 2027, increasing annually by 2.5% thereafter, (iii) provide up to $43.0 million of incentive payments payable to Maplewood based on achievement of certain metrics and conditions, (iv) extend the maturity date of the Maplewood Revolver from June 2035 to June 2037, (v) retrospectively allow the payment of interest due on the Maplewood Revolver dating back to January 1, 2023 to be paid-in-kind (“PIK”) and (vi) reduce Maplewood’s share of any future potential sales proceeds (in excess of our gross investment) by any incentive payments made to Maplewood.

The single facility lease for the Inspir Embassy Row property in Washington D.C.

was not modified as part of the restructuring.

During 2025, Maplewood paid total contractual rent of $58.9 million compared to the $69.3 million of contractual rent due under the lease agreement for the year after reflecting the impact of deferred escalators.

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

of $11.9 million.

As Maplewood is on a cash basis of revenue recognition, we have recorded $58.9 million of revenue related to Maplewood for the year ended December 31, 2025 for the contractual rent payments that we received.

Following the missed interest payments in the first quarter of 2024, we reviewed the characteristics associated with the loan and borrower and adjusted the internal risk rating on the loan, utilized as a component of our allowance for credit loss calculation, from a 4 to a 5 to reflect the increased risk associated with the loan.

As discussed in Note 5 – Contractual Receivables and Other Receivables and Lease Inducements, in May 2024, Omega sent a demand letter to Maplewood notifying it of multiple events of default under its 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, demanded immediate repayment of past due contractual rent and replenishment of the security deposit and accelerated all principal and accrued interest due under the Maplewood Revolver.

On July 31, 2024, we entered into a settlement agreement (the “Settlement Agreement”) with the Greg Smith estate (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 members of the existing Maplewood management team (the “Key Principals”), 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.

In the proposed transition, the Key Principals would become the new majority equity holders in the Maplewood entities, which would maintain the Maplewood lease agreement and the Maplewood Revolver provided by Omega.

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.

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 Maplewood Revolver up to the amortized cost basis of the loan.

As of December 31, 2024, the amortized cost basis of the Maplewood Revolver was $263.6 million, which represents 17.8% of the total amortized cost basis of all of Omega’s real estate loan receivables.

See Note 7 – Real Estate Loans Receivable.

In January 2025, Maplewood short-paid the contractual rent and interest amounts due under its lease and loan agreements by $1.5 million.

● During the first quarter of 2024, we continued the process of restructuring our portfolio with LaVie Care Centers, LLC (“LaVie”) by selling two facilities and transitioning two facilities to another operator, all of which were previously subject to the master lease with LaVie.

Concurrent with the sales and transitions, we amended the master lease agreement with LaVie to reduce monthly rent to $3.2 million.

In the first quarter of 2024, LaVie paid $4.4 million of contractual rent, a short pay of $5.5 million of the $9.9 million due under its lease agreement.

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

In addition, prior to the amendment, Maplewood missed cash interest payments of $11.9 million due under the Maplewood Revolver.

As the loan is on non-accrual status, the previously missed cash interest payments due under the loan were never recognized as interest income.

Therefore, subsequent to the Maplewood Revolver amendment, the missed cash interest payments will increase the principal balance of the loan but will not be included in the amortized cost basis of the loan.

As of December 31, 2025, the amortized cost basis of the Maplewood Revolver was $263.6 million, which represents 18.1% of the total amortized cost basis of all of Omega’s real estate loans receivable.

See Note 7 – Real Estate Loans Receivable to the Consolidated Financial Statements for more information.

In January 2026, Maplewood paid $6.3 million under its lease agreements, $1.1 million of which relates to Inspir Embassy Row in Washington D.C.

● As discussed in Note 5 – Contractual Receivables and Other Receivables and Lease Inducements to the Consolidated Financial Statements, LaVie Care Centers, LLC (“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.

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 reorganized debtor(s) upon the effective date of the plan.

As described in LaVie’s filings with the Bankruptcy Court, we committed to provide, along with another lender, $10 million of a $20 million junior secured debtor-in-possession (“DIP”) financing to LaVie.

Omega recognized an aggregate $9.6 million provision for credit losses during 2024 on LaVie’s $25.0 million secured term loan and DIP financing loan as a result of insufficient collateral supporting the loans.

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, which continued through the fourth quarter of 2024 with LaVie making a full contractual rent payment of $9.1 million.

As LaVie is on a cash basis of revenue recognition for lease purposes, only the $28.6 million of contractual rent payments that we received from LaVie were recorded as rental income during the year ended December 31, 2024.

● Beginning in August 2023, Guardian Healthcare (“Guardian”) did not pay its contractual amounts due under its lease agreement.

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 $8.3 million related to the lease with the new operator during the year ended December 31, 2024.

● Following Omega and Agemo Holdings, LLC (“Agemo”) entering into a restructuring agreement during the first quarter of 2023, Agemo resumed making contractual rent and interest payments during the second quarter of 2023 and continued to make the required contractual rent and interest payments throughout the remainder of 2023 and 2024.

Agemo is on a cash basis of revenue recognition for lease purposes, and we recorded rental income of $23.8 million for the year ended December 31, 2024 for the contractual rent payments that were received.

Additionally, as Agemo’s loans are on non-accrual status and are being accounted for under the cost recovery method, the $4.8 million of interest payments that we received during the year ended December 31, 2024 were applied directly against the principal balance outstanding.

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 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.

The plan of reorganization was made effective on May 1, 2025, which resulted in the LaVie master lease agreement being assumed by and assigned to ENDMT LLC (“Avardis”) and subsequently 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.

During the first and second quarters of 2025, LaVie paid full contractual rent of $15.5 million through the date the plan of reorganization became effective.

Since assuming the lease, Avardis has paid full contractual rent of $21.9 million in the year ended December 31, 2025.

Avardis is on a straight-line basis for rental income recognition, and we recognized $25.5 million of rental income related to Avardis for the year ended December 31, 2025.

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

● As discussed in Note 5 – Contractual Receivables and Other Receivables and Lease Inducements to the Consolidated Financial Statements, in July 2025, Genesis Healthcare, Inc.

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

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

On January 14, 2026, 101 W State Street Holdings, LLC (“WSSH”) was named the winning bidder in the auction to acquire Genesis’ assets, and on January 26, 2026, the Bankruptcy Court approved the sale to WSSH, subject to satisfaction of the terms and conditions of the purchase and sale agreement between Genesis and WSSH.

To the extent that the transaction is consummated, closing is not expected in the next 90-120 days.

Genesis has not yet elected to assume and assign the Omega lease to WSSH.

If the transaction closes, it is anticipated that the cash proceeds of the sale will be sufficient to repay the DIP and Omega term loans.

Please see Note 8 – Non-Real Estate Loans Receivable and Note 20 – Commitments and Contingencies to the Consolidated Financial Statements for additional disclosures regarding the term loans.

Since commencing the bankruptcy process in July 2025, Genesis made all required contractual rent and interest payments through the end of 2025.

As Genesis is on a cash basis of revenue recognition, we recognized rental income of $51.2 million related to Genesis during the year ended December 31, 2025, which includes $47.0 million for contractual rent payments received and $4.2 million from the application of proceeds from the letter of credit in March 2025 that was held as collateral from Genesis.

In addition, we recognized interest income of $17.1 million (which includes $0.1 million from the application of proceeds from the letter of credit) related to loans with Genesis during the year ended December 31, 2025.

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

As of December 31, 2025, the remaining two term loans and the DIP loan are on an accrual basis due to the collateral supporting the loans.

In January 2026, Genesis paid full contractual rent and interest of $4.5 million.

● Quarterly cash dividends paid during 2025 aggregated to $2.68 per share.

On January 29, 2025, the Board of Directors declared a cash dividend of $0.67 per share.

On January 29, 2026, the Board declared a cash dividend of $0.67 per share.

The dividend will be paid on February 17, 2026 to stockholders of record as of the close of business on February 9, 2026.

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Impairment on real estate properties

(Recovery) provision for credit losses

Provision (recovery) for credit losses

Interest expense

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Other income – net

Loss on debt extinguishment

Gain (loss) on debt extinguishment

Gain on assets sold – net

Income tax expense

Income (loss) from unconsolidated joint ventures

(Loss) income from unconsolidated entities

Following is a description of certain of the changes in revenues for the year ended December 31, 2025 compared to 2024:

● The increase in rental income was primarily the result of (i) a $59.5 million increase related to facility acquisitions made throughout 2023 and 2024, lease extensions and other rent escalations, (ii) an increase related to a one-time option termination payment of $12.5 million to Maplewood that was recorded as a reduction to rental income during the first quarter of 2023 and (iii) a $4.0 million increase as a result of fewer straight-line rent receivable write-offs in 2024 compared to 2023, partially offset by a $15.2 million net decrease in rental income from cash basis operators, including Maplewood and LaVie, as a result of not recording straight-line lease revenue and/or receiving lower cash rent payments period over period from these operators.

● The increase in interest income was primarily due to a $39.2 million increase related to new and refinanced loans and additional fundings to existing operators made throughout 2023 and 2024, partially offset by (i) a $2.6 million decrease related to early principal payments on our loans during 2023 and 2024 and (ii) a $0.8 million net decrease related to loans placed on non-accrual status, primarily the Maplewood Revolver , in which we have recognized less interest income period over period as a result of receiving less cash payments or the loans converting to PIK interest.

As noted above, during the year ended December 31, 2024, we funded $378.1 million in new or existing real estate loans and $75.4 million in new or existing non-real estate loans.

● The increase in rental income was primarily the result of (i) a $102.8 million increase related to facility acquisitions made throughout 2024 and 2025, lease extensions and other rent escalations, (ii) a $26.1 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 $7.1 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 $1.9 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 (i) a $13.8 million decrease resulting from higher straight-line receivable write-offs in 2025 compared to 2024 and (ii) a $10.0 million lease inducement provided to a cash basis operator that was recorded as a reduction to rental income in 2025.

● The increase in interest income was primarily due to a $28.3 million increase related to new loans and additional fundings on existing loans made throughout 2024 and 2025, partially offset by a $10.3 million decrease related to principal repayments on our loans during 2024 and 2025.

● The increase in miscellaneous income was primarily the result of residual profits received related to an other real estate loan that was paid off during the fourth quarter of 2025.

Following is a description of certain of the changes in our expenses for the year ended December 31, 2025 compared to 2024:

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

● The increase in general and administrative (“G&A”) expense primarily relates to (i) a $3.2 million increase in payroll and benefits, (ii) a $1.6 million increase in stock-based compensation expense (see Note 19 – Stock-Based Compensation to the Consolidated Financial Statements for a full summary of stock-compensation movements over the last three years) and (iii) a $0.5 million increase in professional service costs.

● The increase in acquisition, merger and transition related costs primarily relates to costs incurred related to (i) transition costs following our acquisition of the remaining 51% interest in the Cindat Joint Venture and (ii) the transition of facilities with troubled operators.

● The 2024 impairments were recognized in connection with six facilities that were classified as held for sale for which the carrying values exceeded the estimated fair values less costs to sell and eight held for use facilities for which the carrying value exceeded the fair value.

The 2023 impairments were recognized in connection with two facilities that were classified as held for sale for which the carrying values exceeded the estimated fair value less costs to sell and 23 held for use facilities for which the carrying value exceeded the fair value.

The 2024 and 2023 impairments were primarily the result of decisions to exit certain non-strategic facilities and/or operators.

● The change in (recovery) provision for credit losses primarily relates to (i) decreases 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, and a net decrease in aggregate specific provisions recorded during 2024 compared to specific provisions recorded during 2023 (see Note 9 – Allowance for Credit Losses to the Consolidated Financial Statements for a full summary of allowance movements over the last three years).

● The decrease in interest expense primarily relates to (i) the repayment of $350 million of 4.375% senior notes in August 2023, (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 increases due to (i) the issuance of a $428.5 million term loan in the third quarter of 2023, (ii) the assumption of the 2026 Mortgage Loan as part of our acquisition of the remaining 51% interest in the Cindat Joint Venture in July 2024 and (iii) increased borrowings on our Revolving Credit Facility during 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 (i) a $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) other increases in payroll and benefits and (iii) an increase in operator initiatives .

Additional information is disclosed in Note 19 – Stock-Based Compensation to the Consolidated Financial Statements.

● The decrease in acquisition, merger and transition related costs primarily relates to (i) transition costs following our acquisition of the remaining 51% interest in the unconsolidated real estate joint venture owning 63 facilities in the U.K.

(the “ Cindat Joint Venture”) in 2024 and (ii) the transition of facilities with troubled operators.

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

The 2024 impairments were recognized in connection with six facilities that were classified as held for sale and eight 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 change in provision (recovery) for credit losses primarily relates to (i) increases 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 decrease in aggregate specific provisions recorded during 2025 compared to specific provisions recorded during 2024 (see Note 9 – Allowance for Credit Losses to the Consolidated Financial Statements for a full summary of allowance movements over the last three years).

● 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 the 2026 Term Loan in December 2025, (iii) the repayment of the 2026 Mortgage Loan in November 2025, (iv) the repayment of $600 million of 5.25% senior notes in October 2025, (v) the repayment of $400 million of 4.50% senior notes in January 2025, (vi) the repayment of the OP Term Loan in April 2025, (vii) the repayment of $400 million of 4.95% senior notes in April 2024 and (viii) the payoff of all remaining HUD mortgages in the first quarter of 2024.

The overall decrease was partially offset by increases due to (i) the issuance of the 2030 Senior Notes in June 2025, (ii) the funding of the 2028 Term Loan in November 2026 and (iii) the assumption of the 2026 Mortgage Loan as part of our acquisition of the remaining 51% interest in the Cindat Joint Venture in July 2024.

Other Income (Expense)

The decrease in total other income (expense) was primarily due to (i) a $66.5 million decrease in gain on assets sold resulting from the sale of 21 facilities in 2024 compared to the sale of 69 facilities in 2023 as we continue to exit certain facilities, operator relationships and/or states to improve the strength of our overall portfolio and (ii) a $13.5 million change in other income (expense) – net primarily related to decreased interest income on short-term investments due to lower invested cash in 2024 and foreign currency and fair value losses on financial instruments in 2024.

The increase in total other income (expense) was primarily due to (i) a $54.1 million increase in gain on assets sold resulting from the sale of 49 facilities in 2025 compared to the sale of 21 facilities in 2024, (ii) a $43.2 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 $6.7 million increase in gain on debt extinguishment primarily related to the remaining amortized premium associated with the fair value adjustment.

Income Tax Expense

The increase in income tax expense was primarily due to (i) adjustments made to our deferred tax assets and liabilities in the first quarter of 2023 as a result of the majority of our U.K.

portfolio entering into the U.K.

REIT regime effective April 1, 2023 and (ii) an increase in taxable income in the U.K.

as a result of acquisitions in 2023 and 2024 including our acquisition of the remaining 51% interest in the Cindat Joint Venture in July 2024.

Income (Loss) from Unconsolidated Joint Ventures

The change in income (loss) income from unconsolidated joint ventures was primarily due to one unconsolidated joint venture, OMG Senior Holdings, LLC, which sold one facility during the third quarter of 2024 for a $12.9 million gain ($6.5 million of which represents the Company’s share of the gain).

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.

(Loss) Income from Unconsolidated Entities

The change in (loss) income from unconsolidated entities was primarily due to one unconsolidated joint venture, which sold one facility during the third quarter of 2024 for a $12.9 million gain, $6.5 million of which represents the Company’s share of the gain.

Funds From Operations

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(in thousands)

Net income (1)

Deduct gain from real estate dispositions

Deduct gain from real estate dispositions - unconsolidated joint ventures

Deduct gain from real estate dispositions - unconsolidated entities

Elimination of non-cash items included in net income:

Depreciation and amortization

Depreciation – unconsolidated joint ventures

Add back impairments on real estate properties

(1) The years ended December 31, 2024, 2023 and 2022 include the application of $2.2 million, $17.6 million and $11.0 million, respectively, of security deposits (letter of credit and cash deposits) in revenue.

Depreciation – unconsolidated entities

Impairments on real estate properties

Liquidity and Capital Resources

Sources and Uses

Our primary sources of cash include rental income and interest receipts, existing availability under our Revolving Credit Facility, proceeds from our DRCSPP and 2024 ATM Program, facility sales, the issuance of additional debt, including unsecured notes and term loans, and proceeds from real estate loan and non-real estate loan payoffs.

Our primary sources of cash include rental income, interest receipts, existing availability under our Revolving Credit Facility, proceeds from our DRCSPP and 2025 ATM Program, facility sales, the issuance of additional debt, including unsecured notes and term loans and proceeds from real estate loan and non-real estate loan payoffs.

We anticipate that these sources will be adequate to fund our cash flow needs through the next twelve months, which include common stock dividends and distributions to noncontrolling interest members, debt service payments (including principal and interest), real estate investments (including facility acquisitions, capital improvement programs and other capital expenditures), real estate loan and non-real estate loan advances and normal recurring G&A expenses (primarily consisting of employee payroll and benefits and expenses relating to third parties for legal, consulting and audit services).

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These notes bear fixed interest rates between 3.25% and 5.20% per annum.

● A $1.45 billion Revolving Credit Facility that bears interest at Secured Overnight Financing Rate (“SOFR”) plus an adjustment of 0.11448% per annum ( or in the case of loans denominated in GBP, the SONIA reference rate plus an adjustment of 0.1193% per annum) plus an applicable percentage (with a range of 95 to 185 basis points) based on our credit ratings.

The Revolving Credit Facility matures on April 30, 2025, subject to Omega’s option to extend such maturity date for two six-month periods.

As of December 31, 2024, Omega had zero outstanding on the Revolving Credit Facility.

In January 2025, Omega provided notification to extend the maturity date to October 30, 2025.

● A $428.5 million senior unsecured term loan facility (the “2025 Term Loan”) that bears interest at SOFR plus an adjustment of 0.1% per annum plus an applicable percentage (with a range of 85 to 185 basis points) based on our credit ratings.

We have 11 interest rate swaps designated as cash flow hedges, with notional value of $428.5 million, that effectively fix the SOFR-based portion of the 2025 Term Loan interest rate at 4.047%.

The 2025 Term Loan matures on August 8, 2025, subject to Omega’s option to extend such maturity date for two sequential 12-month periods.

● The 2026 Mortgage Loan with £184.6 million or $231.1 million outstanding that bears interest at SONIA plus an applicable margin of 5.38%.

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

The 2026 Mortgage Loan matures in August 2026.

● A $50.0 million senior unsecured term loan facility (the “OP Term Loan”) that bears interest at SOFR plus an adjustment of 0.11448% per annum plus an applicable percentage (with a range of 85 to 185 basis points) based on our credit ratings.

We have an interest rate swap designated as a cash flow hedge , with a notional value of $50.0 million, that effectively fixes the SOFR-based portion of the OP Term Loan at 3.957%.

The OP Term Loan matures on April 30, 2025, subject to Omega OP’s option to extend such maturity date for two six-month periods.

In January 2025, Omega provided notification to extend the maturity date to October 30, 2025.

● A $2.0 billion Revolving Credit Facility that bears interest at Secured Overnight Financing Rate (“SOFR”) plus (i) an applicable percentage (with a range of 72.5 to 140 basis points) based on the Company’s debt ratings and (ii) a facility fee based on the same ratings (with a range of 12.5 to 30 basis points).

The Revolving Credit Facility matures on September 28, 2029, subject to Omega’s option to extend such maturity for two consecutive six-month periods.

As of December 31, 2025, Omega had $242.0 million outstanding on the Revolving Credit Facility.

● A $300.0 million 2028 Term Loan that bears interest at SOFR plus an applicable percentage (with a range of 80 to 160 basis points) based on the Company’s debt ratings.

The 2028 Term Loan Credit Facility matures on September 29, 2028, subject to Omega’s option to extend such maturity for two consecutive twelve-months periods.

We have nine interest rate swaps designated as cash flow hedges, with notional value of $300.0 million, that effectively fix the SOFR-based portion of the 2028 Term Loan interest rate at 4.019%.

As of December 31, 2025, Omega had $300.0 million outstanding on the 2028 Term Loan.

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

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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 2025 Term Loan.

As of December 31, 2024, we had $400 million of 4.50% senior notes due January 2025 (which were repaid on January 15, 2025 using available cash).

Our Revolving Credit Facility, OP Term Loan and 2025 Term Loan also mature in 2025.

As noted above, we have remaining options under each of these loans to extend the maturity dates beyond 2025.

We will evaluate market conditions during the course of 2025 and determine if it is advantageous to further extend the terms of, refinance and/or pay off these loans.

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 2028 Term Loan.

As of December 31, 2025, we had approximately $27.0 million of cash and cash equivalents on our Consolidated Balance Sheets and $1.8 billion of availability under our Revolving Credit Facility.

Our next senior note maturity is the $600 million of 5.25% senior notes due January 2026.

As discussed below, we also have $821.0 million of potential sales remaining under the ATM Program.

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

Our next senior note maturity is $700 million of 4.50% senior notes that are due in April 2027.

As discussed below, we also have $2.0 billion of potential sales remaining under the ATM Program.

This combination of liquidity sources, along with cash from operating activities, provides us with ability to repay the debt obligations maturing in 2026.

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

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We have not utilized the forward provisions under the ATM Program.

We have $821.0 million of sales remaining under the 2024 ATM Program as of December 31, 2024.

We have $2.0 billion of sales remaining under the 2025 ATM Program as of December 31, 2025.

● We have a DRCSPP that allows for the reinvestment of dividends and the optional purchase of our common stock.

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(in thousands)

Debt (1)(2)(3)

Interest payments on long-term debt (2)

1 unchanged sentence

(1) The $4.3 billion of debt outstanding includes:

(i) $50 million under the OP Term Loan due April 2025, (ii) $428.5 million under the 2025 Term Loan due August 2025, (iii) $400 million of 4.50% Senior Notes due January 2025 (which were repaid on January 15, 2025 using available cash), (iv) $600 million of 5.25% Senior Notes due January 2026, (v) $700 million of 4.5% Senior Notes due April 2027, (vi) $550 million of 4.75% Senior Notes due January 2028, (vii) $500 million of 3.625% Senior Notes due October 2029, (viii) $700 million of 3.375% Senior Notes due February 2031, (ix) $700 million of 3.25% Senior Notes due April 2033 and (x) $231.1 million under the 2026 Mortgage Loan.

Other than the $50 million outstanding under the OP Term Loan and the $231.1 million outstanding under the 2026 Mortgage Loan, Parent is the obligor of all outstanding debt.

(2) Based on foreign currency exchange rates in effect as of December 31, 2024.

(3) Does not include the impact of Omega providing notification to extend the maturity date of the OP Term Loan to October 30, 2025 in January 2025.

(i) $700 million of 4.5% Senior Notes due April 2027, (ii) $550 million of 4.75% Senior Notes due January 2028, (iii) $500 million of 3.625% Senior Notes due October 2029, (iv) $600 million of 5.20% Senior Notes due July 2030, (v) $700 million of 3.375% Senior Notes due February 2031, (vi) $700 million of 3.25% Senior Notes due April 2033, (vii) $300.0 million under the 2028 Term Loan and (viii) $242.0 million under the Revolving Credit Facility.

Parent is the obligor of all outstanding debt.

(2) Based on variable interest rates in effect as of December 31, 2025 and including the impact of interest rate swaps designated as cash flow hedges.

(3) Based on foreign currency exchange rates in effect as of December 31, 2025.

(4) See Note 6 – Leases to our Consolidated Financial Statements for additional information.

Capital Expenditures and Funding Commitments

In addition to the obligations in the table above, as of December 31, 2024, we also had $221.8 million of commitments to fund the construction of new leased and mortgaged facilities, capital improvements and other commitments.

Additionally, we have commitments to fund $50.4 million of advancements under existing other real estate loans and $65.7 million of advancements under existing non-real estate loans.

In addition to the obligations in the table above, as of December 31, 2025, we also had $207.8 million of commitments to fund the construction of new facilities, capital improvements and other commitments under lease agreements.

Additionally, we have commitments to fund $90.9 million of advancements under existing real estate loans and $37.4 million of advancements under existing non-real estate loans.

These commitments are expected to be funded over the next several years and are dependent upon the operators’ election to use the commitments.

Other Arrangements

We own interests in certain unconsolidated joint ventures as described in Note 11 to the Consolidated Financial Statements – Investments in Joint Ventures.

Our risk of loss is generally limited to our investment in the joint venture and any outstanding loans receivable.

We own interests in certain unconsolidated joint entities as described in Note 11 to the Consolidated Financial Statements – Investments in Unconsolidated Entities.

Our risk of loss is generally limited to our investment in the entity and any outstanding loans receivable.

We also hold variable interests in certain unconsolidated entities through our loan and other investments.

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For a discussion of our consolidated cash flows for the year ended December 31, 2024 as compared to the year ended December 31, 2023, see “Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our 2024 Form 10-K .

Cash, cash equivalents and restricted cash totaled $548.7 million as of December 31, 2024, an increase of $104.0 million as compared to the balance at December 31, 2023.

Cash, cash equivalents and restricted cash totaled $54.6 million as of December 31, 2025, a decrease of $494.2 million as compared to the balance at December 31, 2024.

The following is a discussion of changes in cash, cash equivalents and restricted cash due to operating, investing and financing activities, which are presented in our Consolidated Statements of Cash Flows.

Operating Activities –The increase in net cash provided by operating activities is primarily driven by an increase of $164.9 million of net income, net of $26.7 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 $48.0 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 used in investing activities related primarily to (i) a $490.0 million decrease in proceeds from the sales of real estate investments due to significant restructuring activities related to Guardian and LaVie in 2023, (ii) a $146.2 million increase in real estate acquisitions driven by several large portfolio acquisitions in the U.K.

in 2024, (iii) a $24.2 million increase in capital improvements to real estate investments and construction in progress primarily as a result of on-going construction of an ALF in Washington D.C., (iv) a $7.8 million decrease in distributions from unconsolidated joint ventures in excess of earnings, (v) a $7.0 million increase in loan placements, net of repayments due to new loans advanced in 2024 partially offset by significant paydowns on loans during 2024, (vi) a $3.7 million decrease in receipts from insurance proceeds and (vii) a $2.9 million decrease in proceeds from net investment hedges, partially offset by an $11.4 million decrease in investments in unconsolidated joint ventures.

Financing Activities –The change in cash provided by (used in) financing activities was primarily related to a $899.2 million increase in cash proceeds from the issuance of common stock as a result of increased volume under our ATM Program and DRSCPP, partially offset by (i) a $259.6 million increase in repayments on other long-term borrowings, net of proceeds, primarily due to repayment of $400 million of 4.95% senior notes in April 2024, (ii) a $92.6 million decrease in proceeds from derivative instruments as a result of the termination of our forward starting swaps in the second quarter of 2023, (iii) a $41.6 million increase in dividends paid primarily related to share issuances during 2024, (iv) a $3.2 million increase in payment of financing related costs related to costs incurred in connection with the assumption of the 2026 Mortgage Loan as part of our acquisition of the remaining 51% interest in the Cindat Joint Venture and (v) a $2.9 million increase in distributions to Omega OP Unit holders.

The increase was partially offset by a $35.8 million change in the net movements of the operating assets and liabilities.

Investing Activities –The decrease in cash used in investing activities related primarily to (i) a $335.4 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 2025, (ii) a $187.7 million increase in proceeds from the sales of real estate investments, (iii) an $11.9 million increase in distributions from unconsolidated entities in excess of earnings and (iv) a $3.8 million increase in receipts from insurance proceeds, partially offset by (i) a $274.4 million increase in real estate acquisitions primarily as a result of a 45-facility acquisition in the U.K.

and Jersey in the second quarter of 2025, (ii) a $121.1 million increase in investments in unconsolidated entities, (iii) a $7.7 million increase in capital improvements to real estate investments and construction in progress and (iv) a $4.2 million decrease in proceeds from foreign currency forward contracts related to the termination of two foreign currency forward contracts during the first quarter of 2024.

Financing Activities –The change in cash (used in) provided by financing activities was primarily related to (i) a $628.9 million decrease in cash proceeds from the issuance of common stock as a result of decreased volume under our ATM Program and DRCSPP in 2025, (ii) a $97.6 million increase in repayments on other long-term borrowings, net of proceeds, primarily due to repayment of various debts during the fourth quarter of 2025, (iii) a $94.9 million increase in dividends paid primarily related to share issuances during 2024 and 2025, (iv) a $20.2 million increase in payment of financing related costs related to related to the 2025 Omega Credit Agreement entered into in September 2025, (v) a $14.6 million increase in distributions to Omega OP Unit holders and (vi) a $5.6 million increase in redemption of Omega OP Units.

Supplemental Guarantor Information

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Accordingly, separate consolidated financial statements of Omega OP have not been presented.

Parent and Omega OP, on a combined basis, have no material assets, liabilities or operations other than financing activities (including borrowings under the outstanding senior notes, Revolving Credit Facility and term loans) and their investments in non-guarantor subsidiaries.

Parent and Omega OP, on a combined basis, have no material assets, liabilities or operations other than financing activities (including borrowings under the outstanding senior notes, Revolving Credit Facility and 2028 Term Loan) and their investments in non-guarantor subsidiaries.

Omega OP is currently the sole guarantor of our senior notes.

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As of December 31, 2025 and 2024, we had outstanding straight-line rent receivables of $268.7 million and $238.7 million, respectively, and lease inducements of $7.5 million and $8.8 million, respectively.

During 2025, we wrote-off approximately $15.5 million of straight-line rent receivables to rental income as a result of placing one existing operator on a cash-basis.

Also, during 2025, we placed two new operators on a cash-basis concurrent with the lease commencement dates, so there were no straight-line rent write-offs in connection with these operators.

During 2024, we wrote-off approximately $2.8 million of contractual receivables, straight-line rent receivables and lease inducements to rental income primarily as a result of placing one existing operator on a cash-basis.

Also, during 2024, we placed three new operators on a cash-basis concurrent with the lease commencement dates, so there were no straight-line rent receivable write-offs in connection with these operators.

During 2023, we placed three operators on a cash-basis but did not write-off any contractual receivables, straight-line rent receivables and lease inducements to rental income in connection with these operators, as two related to new lease agreements and one related to an operator with a lease that had no rent escalators.

Changes in the assessment of probability are accounted for on a cumulative basis as if the lease had always been accounted for based on the current determination of the likelihood of collection, potentially resulting in increased volatility of rental income.

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This analysis requires us to use judgment in determining whether indicators of impairment exist, probabilities of potential outcomes and to estimate the expected future undiscounted cash flows or estimated fair values of the facility which impact our assessment of impairment, if any.

During 2024, we recorded impairments on real estate properties of approximately $23.8 million on 14 facilities.

During 2025, we recorded impairments on real estate properties of approximately $22.6 million on eight facilities.

During 2024, we recorded impairments on real estate properties of approximately $23.8 million on 14 facilities.

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Louis and the weighted average life to maturity of the underlying financial asset.

During 2024 and 2023, we recorded a (recovery) provision for credit losses of approximately ($15.5) million and $44.6 million, respectively.

During 2025 and 2024, we recorded a provision (recovery) for credit losses of approximately $2.3 million and ($15.5) million, respectively.

As of December 31, 2025 and 2024, we had a total allowance for credit loss of $180.5 million and $198.6 million, respectively.

A 10% increase or decrease in the FHA default rates as of December 31, 2025 would result in an additional provision or recovery for credit losses of $3.1 million.

If the weighted average yield to maturity on our portfolio increases or decreases by 10%, this will result in an additional provision or recovery for credit losses of $6.9 million or $7.0 million, respectively.

If the weighted average years to maturity on our portfolio increases or decreases by 10%, this will result in an additional provision or recovery for credit losses of $7.5 million.

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

What changed 10-K

Item 7. Management’s Discussion and Analysis