NATIONAL HEALTH INVESTORS INC

Previous wording

We depend on the operating success of our tenants, managers and borrowers and if their financial condition or business prospects deteriorate, our financial condition and results of operations could be adversely affected;

Current wording

We depend on the operating success of our managers, tenants and borrowers and if their financial condition or business prospects deteriorate, our financial condition and results of operations could be adversely affected;

Previous wording

Certain tenants in our portfolio account for a significant percentage of the rent we expect to generate from our portfolio, and the failure of any of these tenants to meet their obligations to us could materially and adversely affect our business, financial condition and results of operations and our ability to make distributions to our stockholders;

Current wording

A small number of tenants in our portfolio account for a significant percentage of the rent we expect to generate from our portfolio, and the failure of any of these tenants to meet their obligations to us could materially and adversely affect our business, financial condition and results of operations;

Previous wording

*Actual or perceived risks associated with pandemics, epidemics or outbreaks, such as the coronavirus pandemic (“COVID-19”), have had and may in the future have a material adverse effect on our operators’ business and results of operations;

Current wording

*Actual or perceived risks associated with pandemics, epidemics or outbreaks have had and may in the future have a material adverse effect on our managers’, tenants’ and borrowers’ business and results of operations;

Previous wording

*Two members of our Board of Directors are also members of the board of directors of National HealthCare Corporation (“NHC”), and their interests may differ from those of our stockholders;

Current wording

*A member of our Board of Directors is also the chairperson of the board of directors of National HealthCare Corporation (“NHC”), and his interests may differ from those of our stockholders;

Previous wording

We are exposed to the risk that the cash flows of our tenants, managers and borrowers may be adversely affected by increased liability claims and liability insurance costs;

Current wording

We are exposed to the risk that the cash flows of our managers, tenants and borrowers may be adversely affected by increased liability claims and liability insurance costs;

Previous wording

We are exposed to the risk that we may not be fully indemnified by our tenants, managers and borrowers against future litigation;

Current wording

We are exposed to the risk that we may not be fully indemnified by our managers, tenants and borrowers against future litigation;

Previous wording

We are subject to risks related to our joint venture investment with Life Care Services for Timber Ridge, an entrance-fee continuing care retirement community (“CCRC”), associated with Type A benefits offered to the residents of the CCRC and the related accounting requirements;

Current wording

We are subject to risks related to our investment with Life Care Services for Timber Ridge, an entrance-fee continuing care retirement community (“CCRC”), associated with Type A benefits offered to the residents of the CCRC and the related accounting requirements;

Previous wording

*We are exposed to risks associated with our investments in unconsolidated entities, including our lack of sole decision-making authority and our reliance on the financial condition of other interests;

Current wording

*We are exposed to risks associated with our investments in Timber Ridge OpCo, LLC, including our lack of sole decision-making authority, our reliance on the financial condition of other interests and related healthcare operations of the entity;

Previous wording

*A cybersecurity incident or other form of data breach involving Company information could cause a loss of confidential consumer and other personal information, give rise to remediation and other expenses, expose us to liability under privacy and security and consumer protection laws, and subject us to federal and state governmental inquiries, damage our reputation, and otherwise be disruptive to our business;

Current wording

*A cybersecurity incident or other form of data breach involving Company information could cause a loss of confidential consumer and other personal information, give rise to remediation and other expenses, expose us to liability under privacy and security and consumer protection laws, subject us to federal and state governmental inquiries, damage our reputation, and otherwise be disruptive to our business;

Previous wording

*Settlement provisions contained in the August 2024 forward sale agreements or any other forward sale agreement we may enter into could result in substantial dilution to our earnings per share or result in substantial cash payment obligations;

Current wording

*Settlement provisions contained in the August 2024 forward sale agreements and at-the-market forward sale agreements or any other forward sale agreement we may enter into could result in substantial dilution to our earnings per share or result in substantial cash payment obligations;

Previous wording

*In case of our bankruptcy or insolvency, any forward sale agreement that is in effect will automatically terminate, and we would not receive the expected proceeds from such forward sale of shares of our common stock;

Current wording

*In case of our bankruptcy or insolvency, any forward sale agreement in effect will automatically terminate, and we would not receive the expected proceeds from such forward sale of shares of our common stock;

Previous wording

*The uncertainty regarding the U.S. federal income tax treatment of the cash that we might receive from cash settlement of the sale of shares under any forward sale agreements could jeopardize our ability to meet the REIT qualification requirements;

Current wording

*The U.S. federal income tax treatment of the cash that we might receive from cash settlement of the forward sale agreements in unclear and could jeopardize our ability to meet the real estate investment trust (‘REIT”) qualification requirements;

Previous wording

We depend on the ability to continue to qualify for taxation as a real estate investment trust (“REIT”) for U.S. federal income tax purposes;

Current wording

We depend on the ability to continue to qualify for taxation as a REIT for U.S. federal income tax purposes;

Previous wording

National Health Investors, Inc., established in 1991 as a Maryland corporation, is a self-managed REIT specializing in sale- leaseback, joint venture, and mortgage and mezzanine financing of need-driven and discretionary senior housing and medical facility investments. We operate through two reportable business segments: Real Estate Investments and SHOP. Our Real Estate Investments segment consists of real estate investments and leases, and mortgage and other notes receivable in independent living facilities (“ILFs”), assisted living facilities (“ALFs”), entrance-fee communities (“EFCs”), senior living campuses (“SLCs”), skilled nursing facilities (“SNFs”) and hospitals (“HOSPs”). We fund our real estate investments primarily through: (1) operating cash flow, (2) debt, including note offerings, bank lines of credit and term debt, both unsecured and secured, and (3) the sale of equity securities. Our SHOP segment is comprised of the operations of 15 ILFs that provide residential living and other services for residents located throughout the United States that are operated on behalf of the Company by independent managers pursuant to the terms of separate management agreements. The third-party managers, or related parties of the managers, own equity interests in the respective ventures.

Current wording

National Health Investors, Inc., established in 1991 as a Maryland corporation, is a self-managed REIT specializing in sale- leaseback, joint venture, and mortgage and mezzanine financing of need-driven and discretionary senior housing and medical facility investments. We operate through two reportable segments: Real Estate Investments and SHOP. Our Real Estate Investments segment consists of real estate investments, leases, and mortgage and other notes receivable in independent living facilities (“ILFs”), assisted living facilities (“ALFs”), entrance-fee communities (“EFCs”), senior living campuses (“SLCs”), skilled nursing facilities (“SNFs”) and hospitals (“HOSPs”). We fund our investments primarily through: (1) operating cash flow,

Previous wording

As of September 30, 2024, we had investments in real estate and mortgage and other notes receivable involving 178 facilities located in 31 states. These real estate investments consisted of 106 senior housing properties, 70 SNFs and two HOSPs, excluding two properties classified as assets held for sale. Our Real Estate Investments portfolio as of September 30, 2024 was comprised of properties with an original aggregate cost of approximately $2.5 billion, rented under primarily triple-net leases to 25 tenants, and $252.0 million aggregate carrying value of mortgages and other notes receivable, excluding an allowance for expected credit losses of $19.4 million, due from 16 borrowers.

Current wording

As of March 31, 2025, we had investments in real estate and mortgage and other notes receivable involving 190 facilities located in 32 states. These investments were comprised of 118 senior housing properties, 70 SNFs and two HOSPs with an aggregate gross investment of approximately $2.7 billion, rented under primarily triple-net leases to 30 tenants, and with $278.7 million in aggregate carrying value of mortgage and other notes receivable, excluding an allowance for expected credit losses of $18.9 million, due from 17 borrowers.

Previous wording

We classify all of the properties in our Real Estate Investments portfolio as either senior housing or medical properties. Because our leases represent different underlying revenue sources and result in differing risk profiles, we further classify our senior housing communities as either need-driven (ALFs and SLCs) or discretionary (ILFs and EFCs).

Current wording

We classify all of the properties in our Real Estate Investments segment as either senior housing or medical facilities. Because our leases represent different underlying revenue sources and result in differing risk profiles, we further classify our senior housing properties as either need-driven (ALFs and SLCs) or discretionary (ILFs and EFCs).

Previous wording

Medical Facilities within our portfolio receive payment primarily from Medicare, Medicaid and health insurance. These properties include SNFs and HOSPs that attract patients who have a need for acute or complex medical attention, preventative medicine, or rehabilitation services. Medical properties are subject to state and federal regulatory oversight and, in the case of hospitals, Joint Commission accreditation.

Current wording

Medical Facilities within our Real Estate Investments segment receive payment primarily from Medicare, Medicaid and health insurance. These properties include SNFs and HOSPs that attract patients who have a need for acute or complex medical attention, preventative medicine, or rehabilitation services. Medical properties are subject to state and federal regulatory oversight and, in the case of hospitals, Joint Commission accreditation.

Previous wording

Our SHOP segment is comprised of two ventures that own the underlying independent living operations of 15 ILFs. These ventures, in which NHI owns a majority interest, are structured to comply with REIT requirements that utilize the TRS for activities that would otherwise be non-qualifying for REIT purposes. These properties are operated by third-party property managers that manage our communities in exchange for the receipt of a management fee, and as such, we are not directly exposed to the credit risk of the property managers in the same manner or to the same extent as we are to our triple-net lease tenants. However, we rely on the property managers’ personnel, expertise, technical resources and information systems, proprietary information, good faith and judgment to manage our communities efficiently and effectively. We also rely on the property managers to set appropriate resident fees and otherwise operate our communities in compliance with the terms of our management agreements and all applicable laws and regulations. As of September 30, 2024, our SHOP segment consisted of 15 ILFs located in eight states, with a combined 1,732 units.

Current wording

Our SHOP segment is comprised of two ventures that own the underlying independent living operations of 15 ILFs. These ventures, consolidated by the Company, are structured to comply with REIT requirements and utilize the TRS for activities that would otherwise be non-qualifying for REIT purposes. The properties are operated by two third-party property managers in exchange for a management fee, and as such, we are not directly exposed to the credit risk of the property managers in the same manner or to the same extent as we are to our triple-net tenants. However, we rely on the property managers’ personnel, expertise, technical resources and information systems, proprietary information, good faith and judgment to manage our communities efficiently and effectively. We also rely on the property managers to set appropriate resident fees and otherwise operate our communities in compliance with the terms of our management agreements and all applicable laws and regulations. As of March 31, 2025, our SHOP segment consisted of 15 ILFs located in eight states, with a combined 1,732 units.

Previous wording

The following tables summarize our portfolio, excluding $2.6 million for our corporate office, $5.7 million in assets held for sale and a credit loss reserve of $19.4 million, as of and for the nine months ended September 30, 2024 ($ in thousands):

Current wording

The following tables summarize our portfolio, excluding $2.6 million for our corporate office and a credit loss reserve of $18.9 million, as of and for the three months ended March 31, 2025 ($ in thousands):

Previous wording

The following table summarizes the geographic concentration of net operating income (“NOI”) of our portfolio, excluding Non-segment/Corporate NOI, for the nine months ended September 30, 2024 and 2023 ($ in thousands).

Current wording

The following table summarizes the geographic concentration of net operating income (“NOI”) of our portfolio, excluding Non-segment/Corporate NOI, for the three months ended March 31, 2025 and 2024 ($ in thousands).

Previous wording

For the nine months ended September 30, 2024, operators of facilities in our Real Estate Investments portfolio that provided 3% or more individually, and 61% collectively, of our total revenues were (parent company, in alphabetical order): Bickford Senior Living (“Bickford”); Chancellor Health Care; Discovery Senior Living (“Discovery”); Encore Senior Living (“Encore”); Health Services Management; Life Care Services; NHC; Senior Living Communities (“Senior Living”); and The Ensign Group.

Current wording

For the three months ended March 31, 2025, operators of facilities in our Real Estate Investments portfolio that provided 3% or more individually, and 59% collectively, of our total revenues were (parent company, in alphabetical order): Bickford Senior Living (“Bickford”); Discovery Senior Living (“Discovery”); Encore Senior Living (“Encore”); Health Services Management; NHC; Senior Living Communities (“Senior Living”); Spring Arbor and The Ensign Group.

Previous wording

As of September 30, 2024, our average effective annualized NOI for the Real Estate Investments segment was $9,621 per bed for SNFs, $14,264 per unit for SLCs, $16,673 per unit for ALFs, $8,281 per unit for ILFs, $21,608 per unit for EFCs and $69,135 per bed for the HOSPs. As of September 30, 2024, our average effective annualized NOI per unit for the SHOP reportable segment was $6,992.

Current wording

As of March 31, 2025, our average effective annualized NOI for the lease properties in our Real Estate Investments segment was $10,465 per bed for SNFs, $14,159 per unit for SLCs, $18,497 per unit for ALFs, $8,060 per unit for ILFs, $21,673 per unit for EFCs and $49,758 per bed for the HOSPs. As of March 31, 2025, our average effective annualized NOI for the SHOP segment was $7,122 per unit.

Previous wording

In October 2024, we acquired a portfolio of ten assisted living and memory care communities located in North Carolina for a total purchase price of $121.0 million, excluding $0.3 million in closing costs. The 15-year master lease, which includes two five-year extension options, has an initial lease rate of 8.25% with fixed annual escalators of 2%. The master lease includes a $10.0 million earnout incentive which will be added to the respective lease base if funded.

Current wording

In March 2025, we acquired a 120-unit assisted living and memory care community in Bergen County, New Jersey. The acquisition price was $46.3 million, including $0.3 million in closing costs. The 15-year lease, which includes two five-year extension options, has an initial lease rate of 7.95% with fixed annual escalators of 2%. The lease includes a $0.8 million capital improvement funds, which will be added to the respective lease base, if funded.

Previous wording

In August 2024, we entered into an agreement to fund up to $27.7 million on a construction loan with TST Lake City IRF, LLC for the development of an in-patient rehabilitation facility to be located in Lake City, Florida. The four-year loan agreement provides for an annual interest rate of 9.0% and two one-year extensions.

Current wording

In May 2025, we entered into an agreement to fund up to $28.0 million on a construction loan for the development of an 84-unit assisted living and memory care facility to be located in Wyoming, Michigan and operated by Encore. The loan agreement provides for an annual interest rate of 9.0%.

Previous wording

Assets Held for Sale and Impairments of Long-Lived Assets

Current wording

Impairments of Long-Lived Assets

Previous wording

We lease a SLC that is subject to an outstanding purchase and sale agreement for the tenant to acquire the property for approximately $38.5 million. The purchase and sale agreement, as amended, expires in June 2025. The property continues to be classified as held and used and is leased pursuant to the existing triple-net lease that generates approximately $2.8 million in annual rent and expires in July 2027. The property will be reclassified to assets held for sale when the sale becomes probable, including when the tenant demonstrates its ability to obtain sufficient financing to close on the sale of the property within the terms of the purchase and sale agreement. The property had a net investment of $19.3 million as of September 30, 2024.

Current wording

We lease a SLC that is subject to an outstanding purchase and sale agreement for the tenant to acquire the property for approximately $38.5 million. The purchase and sale agreement, as amended, expires in June 2025. The property continues to be classified as held and used and is leased pursuant to the existing triple-net lease that generates approximately $2.8 million in annual rent and expires in July 2027. The property will be reclassified to assets held for sale when the sale becomes probable, including when the tenant demonstrates its ability to obtain sufficient financing to close on the sale of the property within the terms of the purchase and sale agreement. The property had a net investment of $18.9 million as of March 31, 2025.

Previous wording

Our leases for real estate properties are typically structured as “triple-net leases” on single-tenant properties having an initial leasehold term of 10 to 15 years with one or more five-year renewal options. As such, there may be reporting periods in which we experience few, if any, lease renewals or expirations. During the three and nine months ended September 30, 2024, we did not have any significant renewing or expiring leases. Most of our existing leases contain annual escalators in rent payments. For financial statement purposes, rental income is generally recognized on a straight-line basis over the term of the lease.

Current wording

Our leases for real estate are typically structured as “triple-net leases” on single-tenant properties having an initial leasehold term of 10 to 15 years with one or more five-year renewal options. As such, there may be reporting periods in which we experience few, if any, lease renewals or expirations. During the three months ended March 31, 2025, we did not have any significant renewing or expiring leases. Most of our existing leases contain annual escalators in rent payments. For financial statement purposes, rental income is recognized on a straight-line basis over the term of the lease.

Previous wording

Certain of our leases contain purchase options allowing tenants to acquire the leased properties at a fixed base price plus a specified share in any appreciation, fixed base price, or a fixed minimum internal rate of return on our investment. At September 30, 2024, tenants had purchase options on four properties with an aggregate net investment of $77.8 million that will become exercisable between 2027 and 2031. Rental income from these properties with tenant purchase options was $2.5 million and $6.3 million for three and nine months ended September 30, 2024, respectively. Rental income from these properties with tenant purchase options was $1.8 million and $5.4 million for three and nine months ended September 30, 2023, respectively.

Current wording

Certain of our leases contain purchase options allowing tenants to acquire the leased properties at a fixed base price plus a specified share in any appreciation, fixed base price, or a fixed minimum internal rate of return on our investment. At March 31, 2025, tenants had purchase options on four properties with an aggregate net investment of $76.6 million that will become exercisable between 2028 and 2031. Rental income from these properties with tenant purchase options was $2.5 million and $1.8 million for three months ended March 31, 2025 and 2024, respectively.

Previous wording

The following table contains information regarding concentration in our Real Estate Investments portfolio of tenants or affiliates of tenants that exceed 10% of total revenues as of and for the nine months ended September 30, 2024 and 2023, excluding $2.6 million for our corporate office, a credit loss reserve of $19.4 million and $354.9 million in real estate assets for the SHOP segment ($ in thousands):

Current wording

The following table contains information regarding concentration in our Real Estate Investments portfolio of tenants or affiliates of tenants that exceed 10% of total revenues as of and for the three months ended March 31, 2025 and 2024, excluding $2.6 million for our corporate office, a credit loss reserve of $18.9 million and $359.8 million in real estate assets for the SHOP segment ($ in thousands):

Previous wording

3 There is no tenant concentration in “Resident fees and services” because these agreements are with individual residents.

Current wording

2 There is no tenant concentration in “Resident fees and services” because these agreements are with individual residents.

Previous wording

Straight-line rent revenue of $(0.4) million and $(0.9) million and interest income of $2.7 million and $2.8 million were recognized from the Senior Living investments for the nine months ended September 30, 2024 and 2023, respectively. Straight-line rent revenue of $0.2 million and $(0.9) million was recognized from NHC for the nine months ended September 30, 2024 and 2023, respectively. Interest income of $2.1 million and $2.2 million was recognized from the Bickford notes receivable for the nine months ended September 30, 2024 and 2023, respectively. Reference Note 3 to the condensed consolidated financial statements included in this report.

Current wording

Straight-line rents revenue of $(0.2) million and $(0.7) million and interest income of $0.9 million and $0.9 million were recognized from the Senior Living investments for the three months ended March 31, 2025 and 2024, respectively. Straight-line rents revenue of $0.2 million and $0.1 million was recognized from NHC for the three months ended March 31, 2025 and 2024, respectively. Interest income of $0.6 million and $0.7 million was recognized from the Bickford notes receivable for the three months ended March 31, 2025 and 2024, respectively. Reference Note 3 and 4 to the condensed consolidated financial statements included in this report.

Previous wording

We have three tenants on the cash basis of accounting for revenue recognition for their leasing arrangements based on our assessment of each tenant’s ability to satisfy its contractual obligations. Cash rents received from these tenants for the three and nine months ended September 30, 2024 and 2023 were as follows ($ in thousands):

Current wording

We had two tenants, including Bickford, on the cash basis of accounting for revenue recognition for their leasing arrangements based on our assessment of each tenant’s ability to satisfy its contractual obligations as of March 31, 2025. As of March 31. 2024, we had three tenants, including Bickford, on the cash basis of accounting for revenue recognition for their leasing arrangements. Cash rents received from these tenants for the three months ended March 31, 2025 and 2024 were as follows ($ in thousands):

Previous wording

As of September 30, 2024 and December 31, 2023, we had a $10.0 million mortgage note receivable and a $14.5 million mezzanine loan due from affiliates of SLM that are designated as non-performing. Interest income recognized, representing cash received, from the non-performing loans was $0.3 million and $1.1 million for the three and nine months ended September 30,

Current wording

As of March 31, 2025, we had a $14.5 million mezzanine loan designated as non-performing due from affiliates of SLM. Interest income recognized, representing cash received, from the mezzanine loan was $0.4 million for three months ended March 31, 2024. The credit loss reserve related to the non-performing loan with SLM totaled $13.3 million at March 31, 2025.

Previous wording

The following table summarizes the average portfolio occupancy for Senior Living, Bickford and the SHOP segment for the periods indicated, excluding development properties in operation less than 24 months, notes receivable, and properties transitioned to new tenants or disposed of.

Current wording

The following table summarizes the average portfolio occupancy for Senior Living, Bickford and SHOP for the periods indicated, excluding development properties in operation less than 24 months, notes receivable, and properties transitioned to new tenants or disposed of.

Previous wording

2 Includes Chesapeake, Virginia building which opened in the second quarter of 2022. NHI exercised its purchase option in February 2023.

Current wording

2 Includes the Chesapeake, Virginia building which opened in the second quarter of 2022. NHI exercised its purchase option in February 2023.

Previous wording

3 There are no longer any significant PPP funds included in any of the coverages above. Senior Living operates nine discretionary CCRC properties and one need-driven assisted living community. Bickford pro forma coverages at the increased rent, effective April 2024, are 1.61x for T12 and 1.33x for Prior T12.

Current wording

3 There are no longer any significant PPP funds included in any of the coverages above. Senior Living operates nine discretionary CCRC properties and one need-driven assisted living community. Bickford pro forma coverages at the increased rent, effective April 2024, are 1.66x and1.47x for the trailing twelve months ending December 31, 2024 and 2023, respectively. Including the April 2024 rent increase and deferred rent repayments, results in Bickford proforma coverages were 1.46x and 1.31x for the trailing twelve months ending December 31, 2024 and 2023, respectively.

Previous wording

In addition to inflation risk and increased interest rates, our borrowers and tenants experience periods of significant financial pressures and difficulties similar to those encountered by other healthcare providers. Our Condensed Consolidated Statements of Income for the nine months ended September 30, 2024 reflect impairment charges of our long-lived assets of approximately $0.7 million. We reduced the carrying value of any impaired property to estimated fair value, or with respect to the properties classified as held for sale, to estimated fair value less estimated transaction costs. We have no significant intangible assets currently recorded on our Condensed Consolidated Balance Sheet as of September 30, 2024, that would require assessment for impairment.

Current wording

In addition to inflation risk and increased interest rates, our borrowers and tenants experience periods of significant financial pressures and difficulties similar to those encountered by other healthcare providers. We have no significant intangible assets currently recorded on our Condensed Consolidated Balance Sheet as of March 31, 2025, that would require assessment for impairment.

Previous wording

We have established a reserve for estimated credit losses of $19.4 million and a liability of $0.2 million for estimated credit losses on unfunded loan commitments as of September 30, 2024. We evaluate the reserves for estimated credit losses on a quarterly basis and make adjustments based on current circumstances as considered necessary.

Current wording

We have established a reserve for estimated credit losses of $18.9 million and a liability of $0.1 million for estimated credit losses on unfunded loan commitments as of March 31, 2025. We evaluate the reserves for estimated credit losses on a quarterly basis and make adjustments based on current circumstances as considered necessary.

Previous wording

•Rental income recognized from our tenants increased $1.1 million, or 1.7%, primarily as a result of new investments funded since September 2023 partially offset by a decrease in rent received from cash basis tenants of approximately $0.3 million and as a result of properties disposed of since September 2023. See Note 3 to the condensed consolidated financial statements included in this report.

Current wording

•Rental income recognized from our tenants increased $6.7 million, or 10.7%, primarily as a result of new investments funded since March 2024 partially offset by a decrease in rent received from cash basis tenants of approximately $0.3 million and as a result of properties disposed of since March 2024. See Note 3 to the condensed consolidated financial statements included in this report.

Previous wording

•Funds received for reimbursement of property operating expenses totaled $2.8 million for the three months ended September 30, 2024, compared to $2.9 million for the three months ended September 30, 2023, and are reflected as a component of rental income. These expenses are recognized in operating expenses in the line item “Taxes and insurance on leased properties” in the Condensed Consolidated Statements of Income. The decrease in the reimbursement income and corresponding property expenses is due to decreased amounts received from tenants and expenses paid on their behalf.

Current wording

•Escrow funds received for reimbursement of property operating expenses totaled $2.9 million for the three months ended March 31, 2025, compared to $2.7 million for the three months ended March 31, 2024, and are reflected as a component of rental income. These expenses are recognized in operating expenses in the line item “Taxes and insurance on leased properties” in the Condensed Consolidated Statements of Income. The increase in the reimbursement income and corresponding property expenses is due to increased amounts received from tenants and expenses paid on their behalf.