DIVERSIFIED HEALTHCARE TRUST

Previous wording

We are a REIT organized under Maryland law that primarily owns medical office and life science properties, senior living communities and other healthcare related properties throughout the United States. As of March 31, 2025, we owned 343 properties located in 34 states and Washington, D.C., including 11 properties classified as held for sale and two closed senior living communities.

Current wording

We are a REIT organized under Maryland law that primarily owns medical office and life science properties, senior living communities and other healthcare related properties throughout the United States. As of June 30, 2025, we owned 341 properties located in 34 states and Washington, D.C., including 21 properties classified as held for sale and one closed senior living community.

Previous wording

As of March 31, 2025, we owned an equity interest in each of the Seaport JV and the LSMD JV that own medical office and life science properties located in five states with an aggregate of approximately 2.2 million rentable square feet that were 99% leased with an average (by annualized rental income) remaining lease term of 14.9 years.

Current wording

As of June 30, 2025, we owned an equity interest in each of the Seaport JV and the LSMD JV that own medical office and life science properties located in five states with an aggregate of approximately 2.2 million rentable square feet that were 99% leased with an average (by annualized rental income) remaining lease term of 14.7 years.

Previous wording

During the three months ended March 31, 2025, we entered into new and renewal leases in our Medical Office and Life Science Portfolio segment as summarized in the following table (dollars and square feet in thousands, except per square foot amounts):

Current wording

During the three and six months ended June 30, 2025, we entered into new and renewal leases in our Medical Office and Life Science Portfolio segment as summarized in the following tables (dollars and square feet in thousands, except per square foot amounts):

Previous wording

We operate in, and report financial information for, the following two segments: Medical Office and Life Science Portfolio and SHOP. Our Medical Office and Life Science Portfolio segment primarily consists of medical office properties leased to medical providers and other medical related businesses, as well as life science properties primarily leased to biotech laboratories and other similar tenants. Our SHOP segment consists of managed senior living communities that provide short term and long term residential living and, in some instances, care and other services for residents where we pay fees to managers to operate the communities on our behalf.

Current wording

We operate in, and report financial information for, the following two segments: SHOP and Medical Office and Life Science Portfolio. Our SHOP segment consists of managed senior living communities that provide short term and long term residential living and, in some instances, care and other services for residents where we pay fees to managers to operate the communities on our behalf. Our Medical Office and Life Science Portfolio segment primarily consists of medical office properties leased to medical providers and other medical related businesses, as well as life science properties primarily leased to biotech laboratories and other similar tenants.

Previous wording

The following table summarizes the results of operations of each of our segments for the three months ended March 31, 2025 and 2024:

Current wording

The following table summarizes the results of operations of each of our segments for the three and six months ended June 30, 2025 and 2024:

Previous wording

Residents fees and services. Residents fees and services are the revenues earned at our managed senior living communities. We recognize these revenues as services are provided and related fees are accrued. Residents fees and services increased at our comparable properties primarily due to increases in occupancy and average monthly rate at our communities as shown in the table above. The activity for our non-comparable properties primarily reflects the five communities classified as held for sale as of March 31, 2025 and the 13 communities transitioned to an existing third party manager during the 2024 period.

Current wording

Residents fees and services. Residents fees and services are the revenues earned at our managed senior living communities. We recognize these revenues as services are provided and related fees are accrued. Residents fees and services increased at our comparable properties primarily due to increases in occupancy and average monthly rate at our communities as shown in the table above. The activity for our non-comparable properties primarily reflects the 15 communities classified as held for sale as of June 30, 2025 and nine communities transitioned to an existing third party manager during the 2024 period.

Previous wording

Property operating expenses. Property operating expenses consist of real estate taxes, utility expenses, insurance, wages and benefit costs of community level personnel, repairs and maintenance expense, management fees, cleaning expense and other direct costs of operating these communities. Property operating expenses increased at our comparable properties primarily due to increases in labor costs, management fees as a result of higher revenues, utilities, marketing, real estate taxes and other direct costs, partially offset by reduced insurance costs due to a reduction in premiums. The activity for our non-comparable properties primarily reflects the five communities classified as held for sale as of March 31, 2025 and the 13 communities transitioned to an existing third party manager during the 2024 period.

Current wording

Property operating expenses. Property operating expenses consist of real estate taxes, utility expenses, insurance, wages and benefit costs of community level personnel, repairs and maintenance expense, management fees, cleaning expense and other direct costs of operating these communities. Property operating expenses increased at our comparable properties primarily due to increases in labor costs, marketing, contract labor costs and management fees as a result of higher revenues and other direct costs, partially offset by decreased insurance costs due to a reduction in premiums. The activity for our non-comparable properties primarily reflects the 15 communities classified as held for sale as of June 30, 2025 and nine communities transitioned to an existing third party manager during the 2024 period.

Previous wording

Property operating expenses. Property operating expenses consist of real estate taxes, utility expenses, insurance, management fees, salaries and benefit costs of property level personnel, repairs and maintenance expense, cleaning expense and other direct costs of operating these properties. The increase in property operating expenses at our comparable properties is primarily due to an increase in snow removal expenses, repairs and maintenance and utilities due to increases in usage and rates at certain of our properties. The increases in property operating expenses at our comparable properties were partially offset by a decrease in real estate taxes at certain of our properties due to refunds realized and a reduction in assessed values as a result of successful appeals during the three months ended March 31, 2025. Property operating expenses decreased at our non-comparable properties primarily due to dispositions since January 1, 2024.

Current wording

Property operating expenses. Property operating expenses consist of real estate taxes, utility expenses, insurance, management fees, salaries and benefit costs of property level personnel, repairs and maintenance expense, cleaning expense and other direct costs of operating these properties. The decrease in property operating expenses at our comparable properties is primarily due to a decrease in insurance costs and other direct costs. Property operating expenses decreased at our non-comparable properties primarily due to dispositions since April 1, 2024.

Previous wording

General and administrative expense. General and administrative expense consists of fees paid to RMR under our business management agreement, legal and accounting fees, fees and expenses of our Trustees, equity compensation expense and other costs relating to our status as a publicly traded company. General and administrative expense increased primarily due to $2,407 of estimated incentive management fees that we recognized for the three months ended March 31, 2025, compared to $849 for the three months ended March 31, 2024, as a result of our total shareholder return exceeding the returns for the MSCI U.S. REIT/Health Care REIT Index over the applicable measurement period.

Current wording

General and administrative expense. General and administrative expense consists of fees paid to RMR under our business management agreement, legal and accounting fees, fees and expenses of our Trustees, equity compensation expense and other costs relating to our status as a publicly traded company. General and administrative expense increased primarily due to $4,148 of estimated incentive management fees that we recognized for the three months ended June 30, 2025, compared to a $849 reversal as of June 30, 2024, as a result of our total shareholder return exceeding the returns for the MSCI U.S. REIT/Health Care REIT Index over the applicable measurement period.

Previous wording

Gain (loss) on sale of properties. For information regarding gain (loss) on sale of properties, see Note 3 to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Current wording

Loss on sale of properties. For information regarding loss on sale of properties, see Note 3 to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Previous wording

Interest and other income. The decrease in interest and other income is primarily due to lower average invested cash balances during the three months ended March 31, 2025 compared to the 2024 period.

Current wording

Interest and other income. The increase in interest and other income is primarily due to higher average invested cash balances during the three months ended June 30, 2025 compared to the 2024 period.

Previous wording

Interest expense. Interest expense increased primarily due to the execution of a $120,000 mortgage loan in May 2024 at a fixed interest rate of 6.864% per annum and an increase in the discount accretion for our senior secured notes due 2026. During the three months ended March 31, 2025 and 2024, we recognized discount accretion of $22,122 and $20,659, respectively, for our senior secured notes due 2026. These increases were partially offset by the redemption during 2024 of an aggregate $120,000 of our outstanding 9.75% senior unsecured notes due 2025.

Current wording

Interest expense. Interest expense decreased primarily due to the redemption during 2025 of an aggregate $380,000 of our remaining 9.75% senior unsecured notes due 2025. Additionally, there was a decrease in discount accretion for our senior secured notes due 2026 due to the partial redemption of an aggregate $299,158 of these notes during 2025. During the three months ended June 30, 2025 and 2024, we recognized discount accretion of $16,307 and $21,440, respectively, for our senior secured notes due 2026. These decreases were partially offset by the execution of a $120,000 mortgage loan in May 2024 at a fixed interest rate of 6.864% per annum and four mortgage financings totaling $343,157 during 2025.

Previous wording

Loss on modification or early extinguishment of debt. During the three months ended March 31, 2025 we recorded a loss on early extinguishment of debt in connection with the partial redemption of an aggregate $299,158 of our outstanding senior secured notes due 2026.

Current wording

Loss on modification or early extinguishment of debt. During the three months ended June 30, 2025, we recorded a loss on early extinguishment of debt in connection with the redemption of all $380,000 of our remaining 9.75% senior secured notes due 2025.

Previous wording

Equity in net earnings of investees. Equity in net earnings of investees is the change in the fair value of our investments in our joint ventures and also represents our proportionate share of the earnings of our equity method investment in AlerisLife. For further information regarding our investment in AlerisLife, see Notes 3 and 11 to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Current wording

Equity in net earnings (losses) of investees. Equity in net earnings (losses) of investees is the change in the fair value of our investments in our joint ventures and also represents our proportionate share of the earnings of our equity method investment in AlerisLife. For further information regarding our investment in AlerisLife, see Notes 3 and 11 to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Previous wording

Rental income. Rental income increased at our comparable properties primarily due to increases in property operating expense reimbursements at certain of our properties and a termination fee totaling $600 paid during the three months ended March 31, 2025 by a former tenant at one of our properties. This space was subsequently re-leased to another tenant in April 2025. The increase in rental income at our comparable properties was partially offset by decreased transient parking at one of our properties. Rental income decreased at our non-comparable properties primarily due to dispositions since January 1, 2024 and vacancies at two of our properties classified as held for sale.

Current wording

Rental income. Rental income decreased at our comparable properties primarily due to vacancies at certain of our properties, partially offset by a termination fee totaling $600 paid during the six months ended June 30, 2025 by a former tenant at one of our properties. This space was subsequently re-leased to another tenant in April 2025. Rental income decreased at our non-comparable properties primarily due to dispositions since January 1, 2024.

Previous wording

Gain on insurance recoveries. During the three months ended March 31, 2025, we recognized a gain on insurance recoveries related to cash received from our insurance provider in excess of our losses for a claim that was finalized. For further information regarding this gain on insurance recoveries, see Note 3 to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Current wording

Gain on insurance recoveries. During the six months ended June 30, 2025, we recognized a gain on insurance recoveries related to cash received from our insurance provider in excess of our losses for a claim that was finalized. For further information regarding this gain on insurance recoveries, see Note 3 to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Previous wording

We present certain "non-GAAP financial measures" within the meaning of the applicable rules of the Securities and Exchange Commission, or the SEC, including funds from operations, or FFO, normalized funds from operations, or Normalized FFO, and NOI for the three months ended March 31, 2025 and 2024. These measures do not represent cash generated by operating activities in accordance with GAAP and should not be considered alternatives to net income (loss) as indicators of our operating performance or as measures of our liquidity. These measures should be considered in conjunction with net income (loss) as presented in our condensed consolidated statements of comprehensive income (loss). We consider these non-GAAP measures to be appropriate supplemental measures of operating performance for a REIT, along with net income (loss). We believe these measures provide useful information to investors because by excluding the effects of certain historical amounts, such as depreciation and amortization, they may facilitate a comparison of our operating performance between periods and with other REITs and, in the case of NOI, reflecting only those income and expense items that are generated and incurred at the property level may help both investors and management to understand the operations of our properties.

Current wording

We present certain "non-GAAP financial measures" within the meaning of the applicable rules of the Securities and Exchange Commission, or the SEC, including funds from operations, or FFO, normalized funds from operations, or Normalized FFO, and NOI for the three and six months ended June 30, 2025 and 2024. These measures do not represent cash generated by operating activities in accordance with GAAP and should not be considered alternatives to net income (loss) as indicators of our operating performance or as measures of our liquidity. These measures should be considered in conjunction with net income (loss) as presented in our condensed consolidated statements of comprehensive income (loss). We consider these non-GAAP measures to be appropriate supplemental measures of operating performance for a REIT, along with net income (loss). We believe these measures provide useful information to investors because by excluding the effects of certain historical amounts, such as depreciation and amortization, they may facilitate a comparison of our operating performance between periods and with other REITs and, in the case of NOI, reflecting only those income and expense items that are generated and incurred at the property level may help both investors and management to understand the operations of our properties.

Previous wording

Our calculations of FFO and Normalized FFO for the three months ended March 31, 2025 and 2024 and reconciliations of net income (loss), the most directly comparable financial measure under GAAP reported in our condensed consolidated financial statements, to FFO and Normalized FFO appear in the following table. This table also provides a comparison of distributions to shareholders, FFO and Normalized FFO and net income (loss) per share for these periods.

Current wording

Our calculations of FFO and Normalized FFO for the three and six months ended June 30, 2025 and 2024 and reconciliations of net income (loss), the most directly comparable financial measure under GAAP reported in our condensed consolidated financial statements, to FFO and Normalized FFO appear in the following table. This table also provides a comparison of distributions to shareholders, FFO and Normalized FFO and net income (loss) per share for these periods.

Previous wording

The calculation of NOI by reportable segment is included above in this Item 2. The following table includes the reconciliation of net loss to NOI for the three months ended March 31, 2025 and 2024.

Current wording

The calculation of NOI by reportable segment is included above in this Item 2. The following table includes the reconciliation of net loss to NOI for the three and six months ended June 30, 2025 and 2024.

Previous wording

The change in cash (used in) provided by operating activities for the three months ended March 31, 2025 compared to the prior period was primarily due to the accreted interest of $34,700 paid during the 2025 period as a result of the partial redemption of our outstanding senior secured notes due 2026.

Current wording

The decrease in cash provided by operating activities for the six months ended June 30, 2025 compared to the prior period was primarily due to the accreted interest of $34,700 paid during the 2025 period as a result of the partial redemption of our outstanding senior secured notes due 2026, partially offset by higher cash flows at our SHOP communities.

Previous wording

The change in cash provided by (used in) investing activities for the three months ended March 31, 2025 compared to the prior period was primarily due to an increase in proceeds from the sale of properties, a $17,000 cash dividend paid to us by AlerisLife, our purchase on February 16, 2024 of approximately 34.0% of the then outstanding AlerisLife common shares from ABP Trust at the tender offer price of $1.31 per share for a total purchase price, including transaction related costs, of $15,459 and a decrease in real estate improvements. These changes were partially offset by $5,800 of contributions made to the Seaport JV.

Current wording

The change in cash provided by (used in) investing activities for the six months ended June 30, 2025 compared to the prior period was primarily due to an increase in proceeds from the sale of properties, a $17,000 cash dividend paid to us by AlerisLife and our purchase on February 16, 2024 of approximately 34.0% of the then outstanding AlerisLife common shares from ABP Trust at the tender offer price of $1.31 per share for a total purchase price, including transaction related costs, of $15,459. These changes were partially offset by $8,500 of contributions made to the Seaport JV in the 2025 period.

Previous wording

As of March 31, 2025, we had estimated unspent leasing related obligations at our medical office and life science properties of approximately $28,429, of which we expect to spend approximately $23,627 during the next 12 months. We expect to fund these obligations using operating cash flows, cash on hand, proceeds from the disposition of certain properties and future financing activities.

Current wording

As of June 30, 2025, we had estimated unspent leasing related obligations at our medical office and life science properties of approximately $25,528, of which we expect to spend approximately $22,968 during the next 12 months. We expect to fund these obligations using operating cash flows, cash on hand, proceeds from the disposition of certain properties and future financing activities.

Previous wording

During the three months ended March 31, 2025, we sold 24 properties for an aggregate sales price of $320,825, excluding closing costs. Subsequent to March 31, 2025, we sold one property for a sales price of $11,150, excluding closing costs. As of May 2, 2025, we had 19 properties under agreements or letters of intent to sell for an aggregate sales price of $115,773, excluding closing costs. The net proceeds from the sales of two of these properties, which have an expected aggregate sales price, excluding closing costs, of $13,118, are required to be used to partially redeem our outstanding senior secured notes due 2026, if the sales of such properties are completed. We may not complete the sales of any or all of the properties we currently plan to sell. Also, we may sell some or all of these properties at amounts that are less than currently expected and/or less than the carrying values of such properties and we may incur losses on any such sales as a result. For further information regarding our dispositions, see Note 3 to our Consolidated Financial Statements included in Part IV, Item 15 of this Annual Report on Form 10-K.

Current wording

During the six months ended June 30, 2025, we sold 26 properties for an aggregate sales price of $337,225, excluding closing costs. Subsequent to June 30, 2025, we sold three properties for an aggregate sales price of $8,800, excluding closing costs. As of August 1, 2025, we had 49 properties under agreements or letters of intent to sell for an aggregate sales price of $279,923, excluding closing costs. The net proceeds from the sales of 11 of these properties, which have an expected aggregate sales price, excluding closing costs, of $90,588, are required to be used to partially redeem our outstanding senior secured notes due 2026, if the sales of such properties are completed. We may not complete the sales of any or all of the properties we currently plan to sell. Also, we may sell some or all of these properties at amounts that are less than currently expected and/or less than the carrying values of such properties and we may incur losses on any such sales as a result. For further information regarding our dispositions, see Note 3 to our Consolidated Financial Statements included in Part IV, Item 15 of this Annual Report on Form 10-K.

Previous wording

The change in cash used in financing activities for the three months ended March 31, 2025 compared to the prior period was primarily due to the partial redemption of our outstanding senior secured notes due 2026, partially offset by our execution of a $140,000 mortgage loan in the 2025 period.

Current wording

The change in cash (used in) provided by financing activities for the six months ended June 30, 2025 compared to the prior period was primarily due to the redemption of our outstanding senior secured notes due 2025 and partial redemption of our outstanding senior secured notes due 2026, partially offset by our execution of four mortgage financings for aggregate proceeds, excluding closing costs, of $343,157 in the 2025 period.

Previous wording

As of March 31, 2025, we had $302,577 of cash and cash equivalents. We typically use cash balances, net proceeds from offerings of securities, debt issuances or dispositions of assets and cash flows from our operations to fund our operations, debt repayments, distributions, acquisitions, investments, capital expenditures and other general business purposes.

Current wording

As of June 30, 2025, we had $141,769 of cash and cash equivalents. We typically use cash balances, net proceeds from offerings of securities, debt issuances or dispositions of assets and cash flows from our operations to fund our operations, debt repayments, distributions, acquisitions, investments, capital expenditures and other general business purposes.

Previous wording

During the three months ended March 31, 2025, we paid a quarterly cash distribution to our shareholders totaling approximately $2,413 using existing cash balances. On April 10, 2025, we declared a quarterly distribution payable to common shareholders of record on April 22, 2025 in the amount of $0.01 per share, or approximately $2,413. We expect to pay this distribution on or about May 15, 2025 using cash on hand. For further information regarding the distribution we paid during 2025, see Note 7 to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Current wording

During the six months ended June 30, 2025, we paid quarterly cash distributions to our shareholders totaling approximately $4,826 using existing cash balances. On July 10, 2025, we declared a quarterly distribution payable to common shareholders of record on July 21, 2025 in the amount of $0.01 per share, or approximately $2,414. We expect to pay this distribution on or about August 14, 2025 using cash on hand. For further information regarding the distribution we paid during 2025, see Note 7 to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Previous wording

Our $641,376 in outstanding senior secured notes due 2026 are fully and unconditionally guaranteed, on a joint, several and senior secured basis, by the Collateral Guarantors, and on a joint, several and unsecured basis, by all our subsidiaries other than the Collateral Guarantors and certain excluded subsidiaries. These notes and the guarantees provided by the Collateral Guarantors are secured by a first priority lien and security interest in each of the collateral properties and 100% of the equity interests in each of the Collateral Guarantors. No cash interest will accrue on these notes prior to maturity. The accreted value of these notes will increase at a rate of 11.25% per annum compounded semiannually on January 15 and July 15 of each year. We have a one-time option to extend the maturity date of these senior secured notes by one year, to January 15, 2027, subject to satisfaction of certain conditions and payment of an extension fee. If we exercise this option, interest payments will be due semiannually during the extension period at an initial interest rate of 11.25% with increases of 50 basis points every 90 days these senior secured notes remain outstanding. We are currently under letters of intent to sell two additional properties securing our senior secured notes due 2026 for an aggregate sales price of $13,118, excluding closing costs. The net proceeds from these sales are required to be used to partially redeem these senior secured notes, if these sales are completed.

Current wording

Our $641,376 in outstanding senior secured notes due 2026 are fully and unconditionally guaranteed, on a joint, several and senior secured basis, by the Collateral Guarantors, and on a joint, several and unsecured basis, by all our subsidiaries other than the Collateral Guarantors and certain excluded subsidiaries. These notes and the guarantees provided by the Collateral Guarantors are secured by a first priority lien and security interest in each of the collateral properties and 100% of the equity interests in each of the Collateral Guarantors. No cash interest will accrue on these notes prior to maturity. The accreted value of these notes will increase at a rate of 11.25% per annum compounded semiannually on January 15 and July 15 of each year. We have a one-time option to extend the maturity date of these senior secured notes by one year, to January 15, 2027, subject to satisfaction of certain conditions and payment of an extension fee. If we exercise this option, interest payments will be due semiannually during the extension period at an initial interest rate of 11.25% with increases of 50 basis points every 90 days these senior secured notes remain outstanding. We are currently under agreements or letters of intent to sell 11 properties securing our senior secured notes due 2026 for an aggregate sales price of $90,588, excluding closing costs. The net proceeds from these sales are required to be used to partially redeem these senior secured notes, if these sales are completed.

Previous wording

In March 2025, we executed a $140,000 floating rate mortgage loan secured by 14 SHOP communities. This mortgage loan matures in March 2028 and requires that interest be paid at an annual rate of SOFR plus a premium of 2.50% with interest-only payments through March 2027, and we have two six-month extension options of the interest-only period, subject to satisfaction of certain conditions. In connection with this mortgage loan, we have purchased an interest rate cap with a SOFR strike rate equal to 4.50% pursuant to the terms of the applicable loan agreement. The net proceeds from this mortgage loan were approximately $136,228 after deducting estimated closing costs, and in April 2025, we used these proceeds and cash on hand to partially redeem $140,000 of our then outstanding 9.75% senior unsecured notes due 2025.

Current wording

In March 2025, we executed a $140,000 floating rate mortgage loan secured by 14 SHOP communities. This mortgage loan matures in March 2028 and requires that interest be paid at an annual rate of SOFR plus a premium of 2.50% with interest-only payments through April 2027, and we have two six-month extension options of the interest-only period, subject to satisfaction of certain conditions. In connection with this mortgage loan, we have purchased an interest rate cap with a SOFR strike rate equal to 4.50% pursuant to the terms of the applicable loan agreement.

Previous wording

In April 2025, we executed a $108,873 fixed rate mortgage loan secured by seven SHOP communities. This mortgage loan matures in May 2035 and requires that interest be paid at an annual rate of 6.22%, with interest-only payments through May 2030. Also in April 2025, we provided notice to the holders of our 9.75% senior unsecured notes due June 2025 to redeem $140,000 of these notes in May 2025 using these loan proceeds and cash on hand. Additionally, we have executed term sheets with additional lenders for expected aggregate proceeds of $94,030 for loans that will be secured by an aggregate of six SHOP communities. We intend to use these proceeds and cash on hand to fully redeem the remaining outstanding principal amount of our 9.75% senior unsecured notes due in June 2025, which is our next significant debt maturity. The closings of the additional loans are subject to conditions; accordingly, we cannot be sure if we will close such loans for the expected proceeds or at all or that these closings will not be delayed.

Current wording

In April 2025, we executed a $108,873 fixed rate mortgage financing secured by seven SHOP communities. These mortgage loans mature in May 2035 and require that interest be paid at an annual rate of 6.22% with interest-only payments through May 2030.

Previous wording

Our principal debt obligations at March 31, 2025 were: (1) $1,980,000 outstanding principal amount of senior unsecured notes; (2) $641,376 outstanding principal amount of senior secured notes; and (3) $267,044 aggregate principal amount of mortgage notes (excluding discounts, premiums and net debt issuance costs) secured by 23 properties. For further information regarding our indebtedness, see Note 5 to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Current wording

Our principal debt obligations at June 30, 2025 were: (1) $1,600,000 outstanding principal amount of senior unsecured notes; (2) $641,376 outstanding principal amount of senior secured notes; and (3) $329,809 aggregate principal amount of mortgage notes (excluding discounts, premiums and net debt issuance costs) secured by 36 properties. For further information regarding our indebtedness, see Note 5 to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Previous wording

Our senior notes are governed by our senior notes indentures and their supplements. Our senior notes indentures and their supplements provide for acceleration of payment of all amounts outstanding upon the occurrence and continuation of certain events of default. Our senior notes indentures and their supplements also contain covenants that restrict our ability to incur debts, including debts secured by mortgages on our properties, in excess of calculated amounts and require us to maintain various financial ratios. As of March 31, 2025, we believe we were in compliance with all of the covenants under our senior notes indentures and their supplements and our other debt obligations. Although we continue to take steps to enhance our ability to maintain sufficient liquidity, as noted elsewhere in this Quarterly Report on Form 10-Q, a protracted negative impact on the economy or the industries in which our properties and businesses operate resulting from wage or commodity price inflation, high interest rates, geopolitical risks or other economic, market or industry conditions, including the delayed recovery of the senior housing industry, economic downturns or a possible recession, may cause increased pressure on our ability to satisfy financial and other covenants. If our operating results and financial condition are significantly negatively impacted by economic conditions or otherwise, we may fail to satisfy our debt covenants and conditions.

Current wording

Our senior notes are governed by our senior notes indentures and their supplements. Our credit agreement, our mortgage loan agreements and our senior notes indentures and their supplements provide for acceleration of payment of all amounts outstanding upon the occurrence and continuation of certain events of default. Our credit agreement and our senior notes indentures and their supplements also contain covenants that restrict our ability to incur debts, including debts secured by mortgages on our properties, in excess of calculated amounts and require us to maintain various financial ratios. As of June 30, 2025, we believe we were in compliance with all of the covenants under our debt agreements. Although we continue to take steps to enhance our ability to maintain sufficient liquidity, as noted elsewhere in this Quarterly Report on Form 10-Q, a protracted negative impact on the economy or the industries in which our properties and businesses operate resulting from wage or commodity price inflation, high interest rates, geopolitical risks or other economic, market or industry conditions, including the delayed recovery of the senior housing industry, economic downturns or a possible recession, may cause increased pressure on our ability to satisfy financial and other covenants. If our operating results and financial condition are significantly negatively impacted by economic conditions or otherwise, we may fail to satisfy our debt covenants and conditions.

Previous wording

Our senior unsecured notes indentures and their supplements contain cross default provisions to any other debts of more than $20,000 ($50,000 or more in the case of our senior notes indentures and supplements entered in February 2016, February 2018, June 2020, February 2021 and December 2023).

Current wording

Our revolving credit facility contains cross default provisions to any other debts of more than $25,000. Our senior unsecured notes indentures and their supplements contain cross default provisions to any other debts of more than $20,000 ($50,000 or more in the case of our senior notes indentures and supplements entered in February 2016, February 2018, June 2020, February 2021 and December 2023).

Previous wording

On May 28, 2020, we issued $1,000,000 of our 9.75% senior notes due 2025. We subsequently redeemed $500,000, $120,000 and $140,000 of this debt during 2022, 2024 and 2025 respectively, with $240,000 remaining outstanding as of May 2, 2025. On February 3, 2021, we issued $500,000 of our 4.375% senior notes due 2031. As of March 31, 2025, all $380,000 of our 9.75% senior notes due 2025 and all $500,000 of our 4.375% senior notes due 2031 were fully and unconditionally guaranteed, on a joint, several and unsecured basis, by all of our subsidiaries except certain excluded subsidiaries. The notes and related guarantees are effectively subordinated to all of our and the subsidiary guarantors' secured indebtedness, respectively, to the extent of the value of the applicable collateral, and are structurally subordinated to all indebtedness and other liabilities and any preferred equity of any of our subsidiaries that do not guarantee the notes. Our remaining $1,100,000 of senior unsecured notes do not have the benefit of any guarantees.

Current wording

On February 3, 2021, we issued $500,000 of our 4.375% senior notes due 2031. As of June 30, 2025, all $500,000 of our 4.375% senior notes due 2031 were fully and unconditionally guaranteed, on a joint, several and unsecured basis, by all of our subsidiaries except certain excluded subsidiaries. The notes and related guarantees are effectively subordinated to all of our and the subsidiary guarantors' secured indebtedness, respectively, to the extent of the value of the applicable collateral, and are structurally subordinated to all indebtedness and other liabilities and any preferred equity of any of our subsidiaries that do not guarantee the notes. Our remaining $1,100,000 of senior unsecured notes do not have the benefit of any guarantees.

Previous wording

A subsidiary guarantor's guarantee of our 9.75% senior notes due 2025 and our 4.375% senior notes due 2031, as applicable, and all other obligations of such subsidiary guarantor under the indenture governing the notes will automatically terminate and such subsidiary guarantor will automatically be released from all of its obligations under such subsidiary guarantee and the indenture under certain circumstances, including on or after the date (a) the notes have an investment grade rating from two rating agencies and one of such investment grade ratings is a mid-BBB investment grade rating and (b) no default or event of default has occurred and is continuing under the indenture. Our non-guarantor subsidiaries are separate and distinct legal entities and have no obligation, contingent or otherwise, to pay any amounts due on our 9.75% senior notes due 2025 or our 4.375% senior notes due 2031 or the respective guarantees, or to make any funds available therefor, whether by dividend, distribution, loan or other payments. The rights of holders of our 9.75% senior notes due 2025 and our 4.375% senior notes due 2031, as applicable, to benefit from any of the assets of our non-guarantor subsidiaries are subject to the prior satisfaction of claims of those subsidiaries' creditors and any preferred equity holders. As a result, our 9.75% senior notes due 2025 and our 4.375% senior notes due 2031 and the respective guarantees are structurally subordinated to all indebtedness, guarantees and other liabilities of our subsidiaries that do not guarantee our 9.75% senior notes due 2025 and our 4.375% senior notes due 2031, including guarantees of other indebtedness of ours, payment obligations under lease agreements, trade payables and preferred equity.

Current wording

A subsidiary guarantor's guarantee of our 4.375% senior notes due 2031 and all other obligations of such subsidiary guarantor under the indenture governing the notes will automatically terminate and such subsidiary guarantor will automatically be released from all of its obligations under such subsidiary guarantee and the indenture under certain circumstances, including on or after the date (a) the notes have an investment grade rating from two rating agencies and one of such investment grade ratings is a mid-BBB investment grade rating and (b) no default or event of default has occurred and is continuing under the indenture. Our non-guarantor subsidiaries are separate and distinct legal entities and have no obligation, contingent or otherwise, to pay any amounts due on our 4.375% senior notes due 2031 or their guarantees, or to make any funds available therefor, whether by dividend, distribution, loan or other payments. The rights of holders of our 4.375% senior notes due 2031 to benefit from any of the assets of our non-guarantor subsidiaries are subject to the prior satisfaction of claims of those subsidiaries' creditors and any preferred equity holders. As a result, our 4.375% senior notes due 2031 and their guarantees are structurally subordinated to all indebtedness, guarantees and other liabilities of our subsidiaries that do not guarantee our 4.375% senior notes due 2031, including guarantees of other indebtedness of ours, payment obligations under lease agreements, trade payables and preferred equity.

Previous wording

For the three months ended March 31, 2025, substantially all of our NOI was generated from properties where a majority of the revenues are derived from our tenants' and residents' private resources, and a small amount of our NOI was generated from properties where a majority of the revenues are derived from Medicare and Medicaid payments. Nonetheless, we own, and our tenants, managers and operators operate, facilities in many states that participate in federal and state healthcare payment programs, including the federal Medicare and state Medicaid programs and other federal and state healthcare payment programs. Also, some of our medical office and life science property tenants participate in federal Medicare and state Medicaid programs and other government healthcare payment programs.

Current wording

For the six months ended June 30, 2025, substantially all of our NOI was generated from properties where a majority of the revenues are derived from our tenants' and residents' private resources, and a small amount of our NOI was generated from properties where a majority of the revenues are derived from Medicare and Medicaid payments. Nonetheless, we own, and our tenants, managers and operators operate, facilities in many states that participate in federal and state healthcare payment programs, including the federal Medicare and state Medicaid programs and other federal and state healthcare payment programs. Also, some of our medical office and life science property tenants participate in federal Medicare and state Medicaid programs and other government healthcare payment programs.