NATIONAL HEALTHCARE CORP

Previous wording

A primary area of management focus continues to be the rates of occupancy within our skilled nursing facilities. The overall census in owned and leased skilled nursing facilities for the three months ending June 30, 2025 was 89.4% compared to 89.0% for the same period a year ago. For the six months ended June 30, 2025, overall census in our owned and leased skilled nursing facilities was 89.3% compared to 88.7% for the same period a year ago.

Current wording

A primary area of management focus continues to be the rates of occupancy within our skilled nursing facilities. The overall census in owned and leased skilled nursing facilities for the three months ending September 30, 2025 was 90.0% compared to 88.3% for the same period a year ago. For the nine months ended September 30, 2025, overall census in our owned and leased skilled nursing facilities was 89.6% compared to 88.6% for the same period a year ago.

Previous wording

On August 1, 2024, the Company purchased White Oak Management, Inc. ("White Oak"). The White Oak portfolio consists of 15 skilled nursing facilities, two assisted living facilities, four independent living facilities, and a long-term care pharmacy. The White Oak operations have 1,928 licensed skilled nursing beds, 48 assisted living units, and 302 independent living units in the states of South Carolina and North Carolina.

Current wording

On August 1, 2024, the Company purchased the assets of White Oak Management, Inc. ("White Oak"). The White Oak portfolio consisted of 15 skilled nursing facilities, two assisted living facilities, four independent living facilities, and a long-term care pharmacy. The White Oak operations have 1,928 licensed skilled nursing beds, 48 assisted living units, and 302 independent living units in the states of South Carolina and North Carolina.

Previous wording

Our accrued professional liability and workers’ compensation reserves totaled $108,982,000 at June 30, 2025 and are a primary area of management focus. We have set aside restricted cash and cash equivalents and marketable securities to fund our estimated professional liability and workers’ compensation liabilities.

Current wording

Our accrued professional liability and workers’ compensation reserves totaled $114,032,000 at September 30, 2025 and are a primary area of management focus. We have set aside restricted cash and cash equivalents and marketable securities to fund our estimated professional liability and workers’ compensation liabilities.

Previous wording

In July 2025, CMS released its final rule outlining fiscal year 2026 Medicare payment rates and policy changes for skilled nursing facilities, which will begin on October 1, 2025. The fiscal year 2026 rule equates to a net 3.2% increase in Medicare Part A payments to SNFs in fiscal year 2026 compared to 2025 levels. The rule includes a market basket increase of 3.3%, an increase of 0.6% to the market basket forecast error adjustment, and a negative 0.7% productivity adjustment. These figures do not incorporate the SNF Value Based Purchasing (“VBP”) reduction for certain SNFs subject to the net reduction in payments under the SNF VBP; those adjustments are estimated to total $208.4 million in fiscal year 2026.

Current wording

In July 2025, CMS released its final rule outlining fiscal year 2026 Medicare payment rates and policy changes for skilled nursing facilities, which began on October 1, 2025. The fiscal year 2026 rule equates to a net 3.2% increase in Medicare Part A payments to SNFs in fiscal year 2026 compared to 2025 levels. The rule includes a market basket increase of 3.3%, an increase of 0.6% to the market basket forecast error adjustment, and a negative 0.7% productivity adjustment. These figures do not incorporate the SNF Value Based Purchasing (“VBP”) reduction for certain SNFs subject to the net reduction in payments under the SNF VBP; those adjustments are estimated to total $208.4 million in fiscal year 2026.

Previous wording

In July 2024, CMS released its final rule outlining fiscal year 2025 Medicare payment rates and policy changes for skilled nursing facilities, which began on October 1, 2024. The fiscal year 2025 rule equates to a net 4.2% increase in Medicare Part A payments to SNFs in fiscal year 2025 compared to 2024 levels. The rule includes a market basket increase of 3.0%, an increase of 1.7% to the market basket forecast error adjustment, and a negative 0.5% productivity adjustment. This final rule also changes CMS’ enforcement policies to impose more equitable and consistent civil monetary penalties ("CMPs") for health and safety violations as part of the agency’s ongoing work to increase the safety and care provided in America’s nursing homes. CMS revised the regulation to expand the type of CMPs that can be imposed to allow for more per instance and per day CMPs to be imposed, as appropriate. The 2025 final rule also updated the SNF Quality Reporting Program ("QRP") to better account for adverse social conditions that negatively impact individuals’ health or healthcare. CMS also finalized its proposal to adopt a data validation process for the SNF QRP beginning the same year.

Current wording

In July 2024, CMS released its final rule outlining fiscal year 2025 Medicare payment rates and policy changes for skilled nursing facilities, which began on October 1, 2024. The fiscal year 2025 rule equated to a net 4.2% increase in Medicare Part A payments to SNFs in fiscal year 2025 compared to 2024 levels. The rule included a market basket increase of 3.0%, an increase of 1.7% to the market basket forecast error adjustment, and a negative 0.5% productivity adjustment. This final rule also changed CMS’ enforcement policies to impose more equitable and consistent civil monetary penalties ("CMPs") for health and safety violations as part of the agency’s ongoing work to increase the safety and care provided in America’s nursing homes. CMS revised the regulation to expand the type of CMPs that can be imposed to allow for more per instance and per day CMPs to be imposed, as appropriate. The 2025 final rule also updated the SNF Quality Reporting Program ("QRP") to better account for adverse social conditions that negatively impact individuals’ health or healthcare. CMS also finalized its proposal to adopt a data validation process for the SNF QRP beginning the same year.

Previous wording

For the first six months of 2025, our average Medicare per diem rate for skilled nursing facilities increased 5.8% as compared to the same period in 2024.

Current wording

For the first nine months of 2025, our average Medicare per diem rate for skilled nursing facilities increased 5.9% as compared to the same period in 2024.

Previous wording

For the first six months of 2025, our average Medicaid per diem increased 7.2% compared to the same period in 2024.

Current wording

For the first nine months of 2025, our average Medicaid per diem increased 3.6% compared to the same period in 2024.

Previous wording

In November 2024, CMS released its final rule outlining fiscal year 2025 Medicare payment rates. CMS projects payments to home health agencies in fiscal year 2025 will increase by 0.5% or $85 million, relative to the prior year. This increase reflects a 2.7% home health payment update, reduced by a 1.8% decrease that reflects the permanent behavior adjustment and an estimated 0.4% decrease that reflects the updated fixed-dollar loss ratio for outlier payments. As required by the Bipartisan Budget Act of 2018, this rule proposes a permanent prospective adjustment to the CY2025 home health payment rate to account for the impact of implementing the Patient-Driven Groupings Model (“PDGM”). This adjustment accounts for differences between assumed behavior changes and actual behavior changes on estimated aggregate expenditures due to the CY2020 implementation of PDGM and the change to a 30-day unit of payment.

Current wording

In November 2024, CMS released its final rule outlining fiscal year 2025 Medicare payment rates. CMS projected payments to home health agencies in fiscal year 2025 will increase by 0.5% or $85 million, relative to the prior year. This increase reflects a 2.7% home health payment update, reduced by a 1.8% decrease that reflects the permanent behavior adjustment and an estimated 0.4% decrease that reflects the updated fixed-dollar loss ratio for outlier payments. As required by the Bipartisan Budget Act of 2018, this rule proposes a permanent prospective adjustment to the CY2025 home health payment rate to account for the impact of implementing the Patient-Driven Groupings Model (“PDGM”). This adjustment accounts for differences between assumed behavior changes and actual behavior changes on estimated aggregate expenditures due to the CY2020 implementation of PDGM and the change to a 30-day unit of payment.

Previous wording

In June 2025, CMS released its proposed rule outlining fiscal year 2026 Medicare payment rates. CMS projects payments to home health agencies in fiscal year 2026 will decrease by 6.4% or $1.1 billion, relative to the prior year. This update includes a 3.2% market basket update, reduced by a 0.8 percentage point cut for productivity. The rule also includes several reductions that CMS proposes as necessary to achieve budget neutral implementation of PDGM, including a 4.1% permanent reduction to the standard payment rate to prevent future overpayments, as well as a temporary but indefinite 5.0% reduction to recoup past overpayments. CMS also proposes a 0.5% reduction related to high-cost outlier payments.

Current wording

In June 2025, CMS released its proposed rule outlining fiscal year 2026 Medicare payment rates. CMS projects payments to home health agencies in fiscal year 2026 will decrease by 6.4% or $1.1 billion, relative to the prior year. This update includes a 3.2% market basket update, reduced by a 0.8 percentage point cut for productivity. The rule also includes several reductions that CMS proposes as necessary to achieve budget neutral implementation of PDGM, including a 4.1% permanent reduction to the standard payment rate to prevent future overpayments. In addition to the proposed permanent adjustment, CMS also proposes to apply a 5.0% temporary adjustment on a prospective basis to account for retrospective PDGM overpayments. CMS states they are not proposing a future reduction would be applied after fiscal year 2026, but they will continue to analyze claims data each year for further temporary adjustments. CMS states the CMS also proposes a 0.5% reduction related to high-cost outlier payments.

Previous wording

In April 2025, CMS released its proposed rule outlining fiscal year 2026 Medicare payment rates. CMS issued a rate increase of 2.4%, or $695 million, effective October 1, 2025. This increase results from the proposed 3.2% inpatient hospital market basket percentage increase reduced by a proposed 0.8% point productivity adjustment, required by law. The FY2026 hospice payment update also includes an update to the statutory aggregate cap amount, which limits the overall payments per patient that are made annually. The proposed hospice cap amount for FY2026 is $35,293.

Current wording

In August 2025, CMS released its final rule outlining fiscal year 2026 Medicare payment rates. CMS issued a rate increase of 2.6%, or $750 million, effective October 1, 2025. This increase results from the proposed 3.3% inpatient hospital market basket percentage increase reduced by a proposed 0.7% point productivity adjustment, required by law. The FY2026 hospice payment update also includes an update to the statutory aggregate cap amount, which limits the overall payments per patient that are made annually. The proposed hospice cap amount for FY2026 is $35,361.

Previous wording

The following table and discussion set forth items from the interim condensed consolidated statements of operations as a percentage of net operating revenues and grant income for the three and six months ended June 30, 2025 and 2024.

Current wording

The following table and discussion set forth items from the interim condensed consolidated statements of operations as a percentage of net operating revenues and grant income for the three and nine months ended September 30, 2025 and 2024.

Previous wording

Results for the quarter ended June 30, 2025 compared to the second quarter of 2024 include a 24.7% increase in net operating revenues and grant income. The net operating revenues increase was due to a 9.6% increase in same-facility net operating revenues, as well as the August 1, 2024 acquisition of White Oak.

Current wording

Results for the quarter ended September 30, 2025 compared to the third quarter of 2024 include a 12.5% increase in net operating revenues. The net operating revenues increase was due to a 8.7% increase in same-facility net operating revenues, as well as the August 1, 2024 acquisition of White Oak.

Previous wording

For the quarter ended June 30, 2025, GAAP net income attributable to NHC was $23,722,000 compared to net income of $26,844,000 for the same period in 2024. Excluding the unrealized gains and losses in our marketable equity securities portfolio and other non-GAAP adjustments, adjusted net income for the quarter ended June 30, 2025 was $25,710,000 compared to $15,612,000 for the same period in 2024, an increase of 64.7%. The increase in non-GAAP earnings for the three months ended June 30, 2025 compared to the same period in 2024 was primarily due to the continued increase in skilled nursing census, skilled nursing per diem increases from some of our government payors, the continued reduction of agency staffing expense, and the White Oak operations being accretive to earnings.

Current wording

For the quarter ended September 30, 2025, GAAP net income attributable to NHC was $39,239,000 compared to net income of $42,789,000 for the same period in 2024. Excluding the unrealized gains and losses in our marketable equity securities portfolio and other non-GAAP adjustments, adjusted net income for the quarter ended September 30, 2025 was $24,744,000 compared to $19,910,000 for the same period in 2024, an increase of 24.3%. The increase in non-GAAP earnings for the three months ended September 30, 2025 compared to the same period in 2024 was primarily due to the continued increase in skilled nursing census, skilled nursing per diem increases from some of our government payors, the continued reduction of agency staffing expense, and the White Oak operations being accretive to earnings.

Previous wording

The total census at owned and leased skilled nursing facilities for the quarter averaged 89.4%, compared to an average of 89.0% for the same quarter a year ago. Overall, the composite skilled nursing facility per diem increased 6.7% compared to the same quarter a year ago. Our Medicare per diem rates increased 6.4% and managed care per diem rates increased 8.5% compared to the same quarter a year ago. Medicaid and private pay per diem rates increased 8.3% and 9.1%, respectively, compared to the same quarter a year ago. For the three months ended June 30, 2025 and 2024, respectively, $1,812,000 and $2,585,000 have been included in our net patient revenues for supplemental Medicaid payments.

Current wording

The total census at owned and leased skilled nursing facilities for the quarter averaged 90.0%, compared to an average of 88.3% for the same quarter a year ago. Overall, the composite skilled nursing facility per diem was flat compared to the same quarter a year ago. Our Medicare per diem rates increased 6.1% and managed care per diem rates decreased 7.1% compared to the same quarter a year ago. The average managed care per diem is lower due to the delayed timing of incentive quality payments from our NHC Advantage managed care program. Excluding the incentive quality payments from NHC Advantage, the average Medicare Advantage skilled nursing per diem increased 2.7% during the third quarter of 2025 compared to the same period a year ago. Medicaid per diem rates decreased 1.9% and private pay per diem rates increased 3.5% compared to the same quarter a year ago. For the three months ended September 30, 2025 and 2024, respectively, $1,838,000 and $5,267,000 have been included in our net patient revenues for supplemental Medicaid payments.

Previous wording

The White Oak operations attributed to an increase of $56,855,000 in net patient revenues for the quarter ended June 30, 2025 compared to the same period in 2024.

Current wording

The White Oak operations attributed to an increase of $20,026,000 in net patient revenues for the quarter ended September 30, 2025 compared to the same period in 2024.

Previous wording

Other revenues increased $266,000, or 2.4%, compared to the same quarter last year, as further detailed in Note 4 to our interim condensed consolidated financial statements.

Current wording

Other revenues increased $148,000, or 1.3%, compared to the same quarter last year, as further detailed in Note 4 to our interim condensed consolidated financial statements.

Previous wording

Total costs and expenses for the three months ended June 30, 2025 compared to the same period of 2024 increased $62,682,000, or 22.5% to $340,820,000 from $278,138,000.

Current wording

Total costs and expenses for the three months ended September 30, 2025 compared to the same period of 2024 increased $34,874,000, or 11.0% to $352,283,000 from $317,409,000.

Previous wording

Salaries, wages, and benefits increased $46,458,000, or 25.8%, to $226,534,000 from $180,076,000. Salaries, wages, and benefits as a percentage of net operating revenues was 60.4% compared to 59.9% for the three months ended June 30, 2025 and 2024, respectively. Although we continue to face workforce and labor shortages within all of our operations, we are working diligently to find solutions to reduce and eliminate agency nurse staffing expense within our healthcare operations. For the second quarter of 2025, our agency nurse staffing expense was $981,000 compared to $4,098,000 for the second quarter of 2024.

Current wording

Salaries, wages, and benefits increased $19,781,000, or 9.3%, to $233,176,000 from $213,395,000. Salaries, wages, and benefits as a percentage of net operating revenues was 60.9% compared to 62.7% for the three months ended September 30, 2025 and 2024, respectively. Although we continue to face workforce and labor shortages within all of our operations, we are working diligently to find solutions to reduce and eliminate agency nurse staffing expense within our healthcare operations. For the third quarter of 2025, our agency nurse staffing expense was $1,207,000 compared to $3,099,000 for the third quarter of 2024.

Previous wording

The White Oak operations attributed to an increase of $37,564,000 in salaries, wages, and benefits for the three months ended June 30, 2025 compared to the same period in the prior year.

Current wording

The White Oak operations attributed to an increase of $13,158,000 in salaries, wages, and benefits for the three months ended September 30, 2025 compared to the same period in the prior year.

Previous wording

Other operating expenses increased $13,789,000, or 17.6%, to $91,943,000 for the 2025 period compared to $78,154,000 for the 2024 period. Other operating expenses as a percentage of net operating revenues was 24.5% and 26.0% for the three months ended June 30, 2025 and 2024, respectively. The White Oak operations attributed to an increase of $12,815,000 in other operating expenses for the three months ended June 30, 2025 as compared to the same period in the prior year.

Current wording

Other operating expenses increased $14,095,000, or 17.1%, to $96,604,000 for the 2025 period compared to $82,509,000 for the 2024 period. Other operating expenses as a percentage of net operating revenues was 25.2% and 24.3% for the three months ended September 30, 2025 and 2024, respectively. The White Oak operations attributed to an increase of $5,357,000 in other operating expenses for the three months ended September 30, 2025 as compared to the same period in the prior year. We also incurred unfavorable claims activity within our professional liability captive insurance company during the third quarter of 2025. The unfavorable claims activity resulted in additional other operating expenses of $4,219,000 for the third quarter of 2025 compared to the same period in the prior year.

Previous wording

Non–operating income increased by $176,000 compared to the same period last year, as further detailed in Note 5 to our interim condensed consolidated financial statements.

Current wording

Non–operating income increased by $436,000 compared to the same period last year, as further detailed in Note 5 to our interim condensed consolidated financial statements.

Previous wording

The income tax provision for the three months ended June 30, 2025 is $8,055,000 (an effective income tax rate of 25.0%).

Current wording

The income tax provision for the three months ended September 30, 2025 is $13,400,000 (an effective income tax rate of 24.6%).

Previous wording

Results for the six months ended June 30, 2025 compared to the same period of 2024 include a 25.2% increase in net operating revenues and grant income. The net operating revenues increase was due to a 9.5% increase in same-facility net operating revenues, as well as the August 1, 2024 acquisition of White Oak.

Current wording

Results for the nine months ended September 30, 2025 compared to the same period of 2024 include a 20.6% increase in net operating revenues and grant income. The net operating revenues increase was due to a 9.2% increase in same-facility net operating revenues, as well as the August 1, 2024 acquisition of White Oak.

Previous wording

For the six months ended June 30, 2025, GAAP net income attributable to NHC was $55,927,000 compared to net income of $53,057,000 for the same period in 2024. Excluding the unrealized gains in our marketable equity securities portfolio and other non-GAAP adjustments, adjusted net income for the six months ended June 30, 2025 was $50,549,000 compared to $30,998,000 for the same period in 2024, an increase of 63.1%. The increase in non-GAAP earnings for the six months ended June 30, 2025 compared to the same period in 2024 was primarily due to the continued increase in skilled nursing census, skilled nursing per diem increases from some of our government payors, the continued reduction of agency staffing expense, and the White Oak operations being accretive to earnings.

Current wording

For the nine months ended September 30, 2025, GAAP net income attributable to NHC was $95,166,000 compared to net income of $95,846,000 for the same period in 2024. Excluding the unrealized gains in our marketable equity securities portfolio and other non-GAAP adjustments, adjusted net income for the nine months ended September 30, 2025 was $75,293,000 compared to $50,909,000 for the same period in 2024, an increase of 47.9%. The increase in non-GAAP earnings for the nine months ended September 30, 2025 compared to the same period in 2024 was primarily due to the continued increase in skilled nursing census, skilled nursing per diem increases from some of our government payors, the continued reduction of agency staffing expense, and the White Oak operations being accretive to earnings.

Previous wording

The total census at owned and leased skilled nursing facilities for the six months ended June 30, 2025 averaged 89.3%, compared to an average of 88.7% for the same period a year ago. Overall, the composite skilled nursing facility per diem increased 5.7% compared to the same period a year ago. Our Medicare per diem rates increased 5.8% and managed care per diem rates increased 6.5% compared to the same period a year ago. Medicaid and private pay per diem rates increased 7.2% and 9.3%, respectively, compared to the same period a year ago. For the six months ended June 30, 2025 and 2024, respectively, $3,684,000 and $6,047,000 have been included in our net patient revenues for supplemental Medicaid payments.

Current wording

The total census at owned and leased skilled nursing facilities for the nine months ended September 30, 2025 averaged 89.6%, compared to an average of 88.6% for the same period a year ago. Overall, the composite skilled nursing facility per diem increased 3.7% compared to the same period a year ago. Our Medicare per diem rates increased 5.9% and managed care per diem rates increased 2.0% compared to the same period a year ago. The average managed care per diem is lower due to the delayed timing of incentive quality payments from our NHC Advantage managed care program. Excluding the incentive quality payments from NHC Advantage, the average Medicare Advantage skilled nursing per diem increased 5.3% for the nine months ending September 30, 2025 compared to the same period a year ago. Medicaid and private pay per diem rates increased 3.6% and 7.2%, respectively, compared to the same period a year ago. For the nine months ended September 30, 2025 and 2024, respectively, $5,522,000 and $11,314,000 have been included in our net patient revenues for supplemental Medicaid payments.

Previous wording

Total costs and expenses for the six months ended June 30, 2025 compared to the same period of 2024 increased $124,111,000, or 22.2% to $683,750,000 from $559,639,000.

Current wording

Total costs and expenses for the nine months ended September 30, 2025 compared to the same period of 2024 increased $158,985,000, or 18.1% to $1,036,033,000 from $877,048,000.

Previous wording

Salaries, wages, and benefits increased $91,450,000, or 25.2%, to $454,664,000 from $363,214,000. Salaries, wages, and benefits as a percentage of net operating revenues was 60.7% compared to 60.8% for the six months ended June 30, 2025 and 2024, respectively. Although we continue to face workforce and labor shortages within all of our operations, we are working diligently to find solutions to reduce and eliminate agency nurse staffing expense within our healthcare operations. For the six months ended June 30, 2025, our agency nurse staffing expense was $2,468,000 compared to $9,384,000 for the same period of 2024.

Current wording

Salaries, wages, and benefits increased $111,231,000, or 19.3%, to $687,840,000 from $576,609,000. Salaries, wages, and benefits as a percentage of net operating revenues was 60.8% compared to 61.5% for the nine months ended September 30, 2025 and 2024, respectively. Although we continue to face workforce and labor shortages within all of our operations, we are working diligently to find solutions to reduce and eliminate agency nurse staffing expense within our healthcare operations. For the nine months ended September 30, 2025, our agency nurse staffing expense was $3,675,000 compared to $12,483,000 for the same period of 2024.

Previous wording

Other operating expenses increased $28,817,000, or 18.5%, to $184,400,000 for the 2025 period compared to $155,583,000 for the 2024 period. Other operating expenses as a percentage of net operating revenues was 24.6% and 26.0% for the six months ended June 30, 2025 and 2024, respectively. The White Oak operations attributed to an increase of $25,584,000 in other operating expenses for the six months ended June 30, 2025 as compared to the same period in the prior year. The three exited Missouri operations during the first quarter of 2024 resulted in other operating expenses decreasing $2,281,000 for the six months ended June 30, 2025 compared to the same period last year.

Current wording

Other operating expenses increased $42,912,000, or 18.0%, to $281,004,000 for the 2025 period compared to $238,092,000 for the 2024 period. Other operating expenses as a percentage of net operating revenues was 24.8% and 25.4% for the nine months ended September 30, 2025 and 2024, respectively. The White Oak operations attributed to an increase of $30,941,000 in other operating expenses for the nine months ended September 30, 2025 as compared to the same period in the prior year. We have also incurred unfavorable claims activity within our professional liability captive insurance company during 2025. The unfavorable claims activity resulted in additional other operating expenses of $6,685,000 for the nine months ending September 30, 2025 compared to the same period in the prior year.

Previous wording

Non–operating income decreased by $1,430,000 compared to the same period last year, as further detailed in Note 5 to our interim condensed consolidated financial statements. In January 2024, the Company sold its ownership interest in a homecare agency located in Nashville, Tennessee. The total consideration paid to the company was $2,100,000, which resulted in a gain of $1,024,000

Current wording

Non–operating income decreased by $994,000 compared to the same period last year, as further detailed in Note 5 to our interim condensed consolidated financial statements. In January 2024, the Company sold its ownership interest in a homecare agency located in Nashville, Tennessee. The total consideration paid to the company was $2,100,000, which resulted in a gain of $1,024,000

Previous wording

The income tax provision for the six months ended June 30, 2025 is $19,487,000 (an effective income tax rate of 25.7%).

Current wording

The income tax provision for the nine months ended September 30, 2025 is $32,887,000 (an effective income tax rate of 25.2%).

Previous wording

Specifically, the Company believes the presentation of non-GAAP financial information that excludes the unrealized gains or losses on our marketable equity securities, gains on sale of unconsolidated companies, gains on sale of property and equipment, and share-based compensation expense is helpful in allowing investors to assess the Company’s operations more accurately.

Current wording

Specifically, the Company believes the presentation of non-GAAP financial information that excludes the unrealized gains or losses on our marketable equity securities, gains on sales of assets, and share-based compensation expense is helpful in allowing investors to assess the Company’s operations more accurately.

Previous wording

Our primary sources of cash include revenues from the operations of our healthcare and senior living facilities, management and accounting services, rental income, and investment income. Our primary uses of cash include salaries, wages and other operating costs of our healthcare and senior living facilities, the cost of additions to and acquisitions of real property, facility rent expenses, and dividend distributions. These sources and uses of cash are reflected in our interim condensed consolidated statements of cash flows and are discussed in further detail below.

Current wording

Our primary sources of cash include revenues from the operations of our healthcare and senior living facilities, management and accounting services, rental income, and investment income. Our primary uses of cash include salaries, wages and other operating costs of our healthcare and senior living facilities, the cost of additions to and acquisitions of real property, facility rent expenses, long-term debt payments, and dividend distributions. These sources and uses of cash are reflected in our interim condensed consolidated statements of cash flows and are discussed in further detail below.

Previous wording

Net cash provided by operating activities for the six months ended June 30, 2025 was $102,074,000 as compared to $60,307,000 in the same period last year. Cash provided by operating activities consisted of net income of $56,403,000 and adjustments for non–cash items of $12,704,000. There was cash provided by working capital in the amount of $32,831,000 for the six months ended June 30, 2025 compared to $4,052,000 for the same period a year ago.

Current wording

Net cash provided by operating activities for the nine months ended September 30, 2025 was $168,271,000 as compared to $94,514,000 in the same period last year. Cash provided by operating activities consisted of net income of $97,412,000 and adjustments for non–cash items of $8,384,000. There was cash provided by working capital in the amount of $62,731,000 for the nine months ended September 30, 2025 compared to $7,015,000 for the same period a year ago.

Previous wording

Net cash used in investing activities totaled $22,902,000 for the six months ended June 30, 2025, compared to $990,000 for the six months ended June 30, 2024. Cash used for property and equipment additions was $16,341,000 and $13,788,000 for the six months ended June 30, 2025, and 2024, respectively. Purchases, net of proceeds from sales, of marketable securities resulted in cash used in investing activities of $3,821,000 for the six months ended June 30, 2025. Proceeds from the sale of marketable securities, net of purchases, resulted in cash provided by investing activities of $15,764,000 for the six months ended June 30, 2024.

Current wording

Net cash used in investing activities totaled $20,924,000 for the nine months ended September 30, 2025, compared to $225,048,000 for the nine months ended September 30, 2024. Cash used for property and equipment additions was $26,049,000 and $19,944,000 for the nine months ended September 30, 2025 and 2024, respectively. In 2025, we contributed capital of $3,123,000 for two joint venture, multi-family developments that are under construction in Nashville, Tennessee compared to $8,370,000 for the same period in the prior year. Proceeds from the sale of marketable securities, net of purchases, resulted in cash provided by investing activities of $7,736,000 for the nine months ended September 30, 2025 compared to $15,040,000 for the same period a year ago.

Previous wording

For the six months ended June 30, 2025, we contributed capital of $2,419,000 to a joint venture, multi-family development that is under construction in Franklin, Tennessee compared to $4,856,000 for the same period in the prior year. We also contributed capital of $786,000 to a joint venture, multi-family development in Hermitage, Tennessee during the second quarter of 2025. In January 2024, the Company sold its ownership interest in a homecare agency resulting in proceeds from the sale of $2,100,000.

Current wording

On August 1, 2024, the acquisition of White Oak Senior Living resulted in cash used of $215,896,000. In January 2024, the Company sold its ownership interest in a homecare agency resulting in proceeds from the sale of $2,100,000.

Previous wording

Net cash used in financing activities totaled $45,732,000 for the six months ended June 30, 2025 compared to $19,680,000 for the six months ended June 30, 2024. During the first six months of 2025, cash of $27,000,000 was used to pay down the outstanding principal balance of the long-term debt. Cash used for dividend payments to common stockholders totaled $18,854,000 in the current year period compared to $18,137,000 for the same period a year ago. Proceeds from the issuance of common stock totaled $6,462,000 and $11,239,000 for the six months ended June 30, 2025 and 2024, respectively. We repurchased common shares outstanding in the amount of $6,384,000 and $11,402,000 for the six months ended June 30, 2025 and 2024, respectively.

Current wording

Net cash used in financing activities totaled $92,735,000 for the nine months ended September 30, 2025 compared to cash provided by financing activities in the amount of $119,640,000 for the nine months ended September 30, 2024. During the first nine months of 2025, cash of $63,875,000 was used to pay down the outstanding principal balance of the long-term debt. Cash used for dividend payments to common stockholders totaled $28,773,000 in the current year period compared to $27,545,000 for the same period a year ago. Proceeds from the issuance of common stock totaled $9,415,000 and $13,471,000 for the nine months ended September 30, 2025 and 2024, respectively. We repurchased common shares outstanding in the amount of $9,566,000 and $13,502,000 for the nine months ended September 30, 2025 and 2024, respectively.

Previous wording

We expect to meet our short-term liquidity requirements primarily from our cash flows from operating activities. In addition to cash flows from operations, we have current cash on hand of $110,992,000 and unrestricted marketable equity securities of $146,636,000. We also have unencumbered real estate and the borrowing capacity on our $50 million available line of credit. We believe these various resources are adequate to meet our contractual obligations and growth and development plans in the next twelve months.

Current wording

We expect to meet our short-term liquidity requirements primarily from our cash flows from operating activities. In addition to cash flows from operations, we have current cash on hand of $130,629,000 and unrestricted marketable equity securities of $166,754,000. We also have unencumbered real estate and the borrowing capacity on our $50 million available line of credit. We believe these various resources are adequate to meet our contractual obligations and growth and development plans in the next twelve months.

Previous wording

We expect to meet our long-term liquidity requirements primarily from our cash flows from operating activities, our current cash on hand of $110,992,000, our unrestricted marketable equity securities of $146,636,000, and our borrowing capacity on the $50 million available line of credit. We also have substantial value in our unencumbered real estate assets, which could potentially be used as collateral in future borrowing opportunities.

Current wording

We expect to meet our long-term liquidity requirements primarily from our cash flows from operating activities, our current cash on hand of $130,629,000, our unrestricted marketable equity securities of $166,754,000, and our borrowing capacity on the $50 million available line of credit. We also have substantial value in our unencumbered real estate assets, which could potentially be used as collateral in future borrowing opportunities.