Sabra Health Care REIT, Inc.

Previous wording

Our operations have been and are expected to continue to be impacted by economic and market conditions. Increases in interest rates and operating expenses, labor shortages, inflation and increased volatility in public equity and fixed income markets have led to increased costs and limited the availability of capital.

Current wording

Our operations have been and are expected to continue to be impacted by economic and market conditions. Increases in interest rates and operating expenses, inflation and increased volatility in public equity and fixed income markets have led to increased costs and limited the availability of capital.

Previous wording

During the six months ended June 30, 2025, we acquired one Senior Housing - Managed community and 24 units on the campus of one of our Senior Housing - Leased communities for aggregate consideration of $61.1 million, including acquisition costs. See Note 3, “Recent Real Estate Acquisitions (Consolidated),” in the Notes to Consolidated Financial Statements for additional information regarding this investment.

Current wording

During the nine months ended September 30, 2025, we acquired seven Senior Housing - Managed communities, three of which were acquired through a consolidated joint venture in which we have a 95% equity interest, and acquired 24 units on the campus of one of our Senior Housing - Leased communities for aggregate consideration of $283.1 million, including acquisition costs. Additionally, during the nine months ended September 30, 2025, we purchased the operations of four Senior Housing - Managed communities previously leased to the tenant under triple-net operating leases for $19.7 million. See Note 3, “Recent Real Estate Acquisitions (Consolidated),” in the Notes to Consolidated Financial Statements for additional information regarding these investments.

Previous wording

During the six months ended June 30, 2025, we completed the sale of five skilled nursing/transitional care facilities and one behavioral health facility for aggregate consideration, net of closing costs, of $37.1 million, of which $33.5 million was received on July 1, 2025. The net carrying value of the assets and liabilities of these facilities was $27.1 million, which resulted in an aggregate $10.0 million net gain on sale. We continue to evaluate additional assets for sale as part of our initiative to recycle capital and further improve our portfolio quality.

Current wording

During the nine months ended September 30, 2025, we completed the sale of seven skilled nursing/transitional care facilities and one behavioral health facility for aggregate consideration, net of closing costs, of $42.9 million. The net carrying value of the assets and liabilities of these facilities was $37.4 million, which resulted in an aggregate $5.5 million net gain on sale. We continue to evaluate additional assets for sale as part of our initiative to recycle capital and further improve our portfolio quality.

Previous wording

Our consolidated interim financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and in conjunction with the rules and regulations of the Securities and Exchange Commission (the “SEC”). The preparation of our financial statements requires significant management judgments, assumptions and estimates about matters that are inherently uncertain. These judgments affect the reported amounts of assets and liabilities and our disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. With different estimates or assumptions, materially different amounts could be reported in our financial statements. Additionally, other companies may utilize different estimates that may impact the comparability of our results of operations to those of companies in similar businesses. A discussion of the accounting policies that management considers critical in that they involve significant management judgments and assumptions, require estimates about matters that are inherently uncertain and because they are important for understanding and evaluating our reported financial results is included in Part II, Item 7 of our 2024 Annual Report on Form 10-K filed with the SEC. There have been no significant changes to our critical accounting policies during the six months ended June 30, 2025.

Current wording

Our consolidated interim financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and in conjunction with the rules and regulations of the Securities and Exchange Commission (the “SEC”). The preparation of our financial statements requires significant management judgments, assumptions and estimates about matters that are inherently uncertain. These judgments affect the reported amounts of assets and liabilities and our disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. With different estimates or assumptions, materially different amounts could be reported in our financial statements. Additionally, other companies may utilize different estimates that may impact the comparability of our results of operations to those of companies in similar businesses. A discussion of the accounting policies that management considers critical in that they involve significant management judgments and assumptions, require estimates about matters that are inherently uncertain and because they are important for understanding and evaluating our reported financial results is included in Part II, Item 7 of our 2024 Annual Report on Form 10-K filed with the SEC. There have been no significant changes to our critical accounting policies during the nine months ended September 30, 2025.

Previous wording

As of June 30, 2025, our investment portfolio consisted of 359 real estate properties held for investment, 13 investments in loans receivable, four preferred equity investments and two investments in unconsolidated joint ventures. As of June 30, 2024, our investment portfolio consisted of 374 real estate properties held for investment, one asset held for sale, 14 investments in loans receivable, five preferred equity investments and two investments in unconsolidated joint ventures. In general, we expect that income and expenses related to our portfolio will fluctuate in future periods in comparison to the corresponding prior periods as a result of investment and disposition activity and anticipated future changes in our portfolio.

Current wording

As of September 30, 2025, our investment portfolio consisted of 363 real estate properties held for investment, 14 investments in loans receivable, four preferred equity investments and two investments in unconsolidated joint ventures. As of September 30, 2024, our investment portfolio consisted of 373 real estate properties held for investment, 14 investments in loans receivable, five preferred equity investments and two investments in unconsolidated joint ventures. In general, we expect that income and expenses related to our portfolio will fluctuate in future periods in comparison to the corresponding prior periods as a result of investment and disposition activity and anticipated future changes in our portfolio. The results of operations presented are not directly comparable due to ongoing acquisition and disposition activity, including our capital recycling initiative.

Previous wording

During the three months ended June 30, 2025, we recognized $99.8 million of rental income compared to $99.1 million for the three months ended June 30, 2024. The $0.7 million net increase in rental income is related to (i) a $1.8 million net increase of non-cash rent as the result of changing our estimates of collectability for certain leases within our triple-net leased portfolio, (ii) a $1.0 million increase due to lease amendments and annual rental increases based on changes in the Consumer Price Index and (iii) a $0.2 million increase from properties acquired after April 1, 2024. These increases are partially offset by a $1.8 million decrease from properties disposed of after April 1, 2024 and a $0.4 million decrease in revenue related to facilities that were transitioned to Senior Housing - Managed communities after April 1, 2024.

Current wording

During the three months ended September 30, 2025, we recognized $85.4 million of rental income compared to $94.6 million for the three months ended September 30, 2024. The $9.2 million net decrease in rental income is related to (i) an $11.0 million decrease in rent revenue, which includes $9.3 million of non-cash revenue write-offs and a $1.7 million decrease in cash revenue, related to facilities that were transitioned to Senior Housing - Managed communities after July 1, 2024, (ii) a $2.7 million decrease from properties disposed of after July 1, 2024 and (iii) a $1.5 million decrease related to facilities that were transitioned to new operators after July 1, 2024. These decreases are partially offset by (i) a $2.3 million net increase in non-cash rent as the result of changing our estimates of collectability for certain leases within our triple-net leased portfolio, (ii) a $2.2 million net increase in cash revenue related to percentage rent, expense recoveries and leases that are not accounted for on an accrual basis, (iii) a $1.0 million increase due to lease amendments and annual rental increases based on changes in the Consumer Price Index and (iv) a $0.2 million increase from properties acquired after July 1, 2024.

Previous wording

During the three months ended June 30, 2025, we recognized $79.0 million of resident fees and services compared to $67.9 million for the three months ended June 30, 2024. The $11.0 million net increase is due to a $6.6 million increase related to four Senior Housing - Managed communities acquired after April 1, 2024, a $0.8 million increase related to three facilities that were transitioned to Senior Housing - Managed communities after April 1, 2024 and the remaining increase is primarily related to increased occupancy and an increase in rates.

Current wording

During the three months ended September 30, 2025, we recognized $92.0 million of resident fees and services compared to $73.7 million for the three months ended September 30, 2024. The $18.3 million net increase is due to an $11.0 million increase related to eight Senior Housing - Managed communities acquired after July 1, 2024, a $5.4 million increase related to seven facilities that were transitioned to Senior Housing - Managed communities after July 1, 2024, a $0.6 million increase related to one Senior Housing - Managed community that was closed due to a fire in 2022 and did not fully reopen until November 2024, and theremaining increase is primarily related to increased occupancy and an increase in rates.

Previous wording

Interest and other income primarily consists of income earned on our loans receivable investments and preferred returns earned on our preferred equity investments. During the three months ended June 30, 2025, we recognized $10.3 million of interest and other income compared to $9.1 million for the three months ended June 30, 2024. The net increase of $1.2 million is due to a $0.8 million increase in late fee income and a $0.4 million increase from investments made after April 1, 2024.

Current wording

Interest and other income primarily consists of income earned on our loans receivable investments and preferred returns earned on our preferred equity investments. During the three months ended September 30, 2025, we recognized $12.7 million of interest and other income compared to $9.7 million for the three months ended September 30, 2024. The net increase of $3.0 million is primarily due to a $2.5 million increase in lease termination income and a $0.6 million increase in late fee income.

Previous wording

During the six months ended June 30, 2025, we incurred $87.1 million of depreciation and amortization expense compared to $84.6 million for the six months ended June 30, 2024. The net increase of $2.5 million is due toa $4.1 million increase from properties acquired after January 1, 2024 and a $1.6 million increase from additions to real estate. These increases are partially offset by a $1.9 million decrease from properties disposed of after January 1, 2024 and a $1.5 million decrease due to assets that have been fully depreciated.

Current wording

During the three months ended September 30, 2025, we incurred $48.5 million of depreciation and amortization expense compared to $42.7 million for the three months ended September 30, 2024. The net increase of $5.8 million is due to (i) a $4.9 million increase from properties acquired after July 1, 2024, (ii) a $1.3 million increase due to accelerating amortization of lease intangibles related to facilities that were transitioned to Senior Housing - Managed communities after July 1, 2024 and (iii) a $1.2 million increase from additions to real estate. These increases are partially offset by (i) a $0.9 million decrease from properties disposed of after July 1, 2024 and (ii) a $0.9 million decrease due to assets that have been fully depreciated.

Previous wording

We incur interest expense comprised of costs of borrowings plus the amortization of deferred financing costs related to our indebtedness. During the three months ended June 30, 2025, we incurred $27.5 million of interest expense compared to $29.3 million for the three months ended June 30, 2024. The $1.8 million net decrease is primarily related to a $1.3 million decrease in non-cash interest expense related to our interest rate hedges and a $0.4 million net decrease related to borrowings outstanding under the Credit Agreement (as defined below).

Current wording

We incur interest expense comprised of costs of borrowings plus the amortization of deferred financing costs related to our indebtedness. During the three months ended September 30, 2025, we incurred $28.9 million of interest expense compared to $29.5 million for the three months ended September 30, 2024. The $0.6 million net decrease is primarily related to a $0.9 million decrease in non-cash interest expense related to our interest rate hedges.

Previous wording

During the three months ended June 30, 2025, we recognized $3.7 million of triple-net portfolio operating expenses compared to $4.4 million for the three months ended June 30, 2024. The $0.7 million net decrease is due to a $0.5 million decrease due to facilities that have since transitioned to new operators who are now paying the property taxes directly and a $0.2 million decrease from properties disposed of after April 1, 2024.

Current wording

During the three months ended September 30, 2025, we recognized $3.7 million of triple-net portfolio operating expenses compared to $4.3 million for the three months ended September 30, 2024. The $0.6 million net decrease is due to a $0.3 million decrease due to facilities that have since transitioned to new operators who are now paying the property taxes directly and a $0.2 million decrease from properties disposed of after July 1, 2024.

Previous wording

During the three months ended June 30, 2025, we recognized $57.4 million of Senior Housing - Managed portfolio operating expenses compared to $50.4 million for the three months ended June 30, 2024. The $7.0 million net increase is primarily due to (i) a $4.1 million increase related to four Senior Housing - Managed communities acquired after April 1, 2024, (ii) a $1.1 million increase related to three facilities that were transitioned to Senior Housing - Managed communities after April 1, 2024, (iii) a $1.1 million increase in employee compensation primarily due to increased labor rates and staffing, (iv) a $0.8 million increase in management fees, dining expenses and housekeeping costs due to increased occupancy and (v) a $0.4 million increase in utilities primarily due to increased rates and usage.

Current wording

During the three months ended September 30, 2025, we recognized $65.9 million of Senior Housing - Managed portfolio operating expenses compared to $54.2 million for the three months ended September 30, 2024. The $11.7 million net increase is primarily due to (i) a $6.7 million increase related to eight Senior Housing - Managed communities acquired after July 1, 2024, (ii) a $3.9 million increase related to seven facilities that were transitioned to Senior Housing - Managed communities after July 1, 2024, (iii) a $0.7 million increase in management fees, dining expenses and housekeeping costs due to increased occupancy, (iv) a $0.4 million increase in employee compensation primarily due to increased labor rates and staffing and (v) a

Previous wording

General and administrative expenses include compensation-related expenses as well as professional services, office costs, other costs associated with asset management, and acquisition costs. During the three months ended June 30, 2025, general and administrative expenses were $12.5 million compared to $12.7 million for the three months ended June 30, 2024. The $0.2 million net decrease is primarily related to a $0.2 million net decrease in compensation driven by changes in performance-based payout assumptions on incentive compensation.

Current wording

General and administrative expenses include compensation-related expenses as well as professional services, office costs, other costs associated with asset management, and acquisition costs. During the three months ended September 30, 2025, general and administrative expenses were $12.6 million compared to $12.4 million for the three months ended September 30, 2024. The $0.2 million net increase is primarily related to increased legal and professional fees due to increased transaction activity.

Previous wording

During each of the three months ended June 30, 2025 and 2024, we recognized a $0.2 million recovery of loan losses associated with our loans receivable investments.

Current wording

During the three months ended September 30, 2025 and 2024, we recognized a $0.2 million and a $0.1 million recovery of loan losses, respectively, associated with our loans receivable investments.

Previous wording

During the three months ended June 30, 2025, we recognized a $4.1 million impairment of real estate related to a closed facility. During the three months ended June 30, 2024, we recognized a $15.3 million impairment of real estate related to four facilities that have sold.

Current wording

During the three months ended September 30, 2025, we recognized a $2.6 million impairment of real estate related to a closed facility. No impairment of real estate was recognized during the three months ended September 30, 2024.

Previous wording

During the three months ended June 30, 2025 and 2024, we recognized $14.7 million and $0.1 million of other income, respectively. During the three months ended June 30, 2025, we reclassified $17.2 million of gain related to six previously terminated interest rate swaps from accumulated other comprehensive loss to other income as the related forecasted transactions were determined to be probable not to occur and recognized a $1.0 million gain on insurance proceeds related to damage from a fire that occurred at one of our Senior Housing - Managed communities, partially offset by $3.2 million of transition expenses related to the transition of Senior Housing - Managed communities to new operators.

Current wording

During the three months ended September 30, 2025, we recognized $0.8 million of other expense, including $1.2 million of lease termination expense related to four communities that were transitioned from our triple-net portfolio to Senior Housing - Managed communities, partially offset by $0.6 million of other income related to insurance proceeds received related to a fire that occurred at one of our Senior Housing - Managed communities in 2022. No other expense was recognized during the three months ended September 30, 2024.

Previous wording

Net Gain on Sales of Real Estate

Current wording

Net Loss on Sales of Real Estate

Previous wording

During the three months ended June 30, 2025, we recognized an aggregate net gain of $10.0 million related to the disposition of five skilled nursing/transitional care facilities and one behavioral health facility. During the three months ended June 30, 2024, we recognized an aggregate net gain of $1.8 million related to the disposition of four skilled nursing/transitional care facilities.

Current wording

During the three months ended September 30, 2025, we recognized an aggregate net loss of $4.4 million primarily related to the disposition of two skilled nursing/transitional care facilities. During the three months ended September 30, 2024, we recognized an aggregate net loss of $5.7 million related to the disposition of four skilled nursing/transitional care facilities.

Previous wording

During the three months ended June 30, 2025, we recognized $0.8 millionof income from our unconsolidated joint ventures compared to $0.1 million of income for the three months ended June 30, 2024. The $0.8 million net improvement is primarily related to a $0.5 million increase in revenues net of operating expenses primarily due to increased occupancy and rates and a $0.2 million decrease in depreciation expense due to assets that have been fully depreciated.

Current wording

During the three months ended September 30, 2025, we recognized $1.2 millionof income from our unconsolidated joint ventures compared to $0.2 million of income for the three months ended September 30, 2024. The $1.0 million net improvement is primarily related to a $0.6 million increase in revenues net of operating expenses primarily due to increased occupancy and rates and a $0.5 million decrease in depreciation expense due to assets that have been fully depreciated.

Previous wording

During the three months ended June 30, 2025, we recognized $0.5 million of income tax expense compared to $0.4 million for the three months ended June 30, 2024. The $0.1 million change is primarily due to higher taxable income.

Current wording

During the three months ended September 30, 2025, we recognized $0.4 million of income tax expense compared to $0.3 million of income tax benefit for the three months ended September 30, 2024. The $0.7 million change is primarily due to higher taxable income.

Previous wording

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

Current wording

Comparison of results of operations for the nine months ended September 30, 2025 versus the nine months ended September 30, 2024 (dollars in thousands):

Previous wording

(1)Represents the dollar amount increase (decrease) for the six months ended June 30, 2025 compared to the six months ended June 30, 2024 as a result of investments/dispositions made after January 1, 2024.

Current wording

(1)Represents the dollar amount increase (decrease) for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 as a result of investments/dispositions made after January 1, 2024.

Previous wording

(2)Represents the dollar amount increase (decrease) for the six months ended June 30, 2025 compared to the six months ended June 30, 2024 that is not a direct result of investments/dispositions made after January 1, 2024.

Current wording

(2)Represents the dollar amount increase (decrease) for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 that is not a direct result of investments/dispositions made after January 1, 2024.

Previous wording

During the six months ended June 30, 2025, we recognized $195.9 million of rental income compared to $190.9 million for the six months ended June 30, 2024. The $5.0 million net increase in rental income is related to (i) a $4.7 million net increase of non-cash rent as the result of changing our estimates of collectability for certain leases within our triple-net leased portfolio, (ii) a $1.7 million increase due to lease amendments and annual rental increases based on changes in the Consumer Price Index, (iii) a $1.4 million net increase in cash revenue related to percentage rent, expense recoveries and leases that are not accounted for on an accrual basis and (iv) a $1.1 million increase from properties acquired after January 1, 2024. These increases are partially offset by a $3.9 million decrease from properties disposed of after January 1, 2024 and a $0.7 million decrease in revenue related to facilities that were transitioned to Senior Housing - Managed communities after January 1, 2024.

Current wording

During the nine months ended September 30, 2025, we recognized $281.2 million of rental income compared to $285.4 million for the nine months ended September 30, 2024. The $4.2 million net decrease in rental income is related to (i) an $11.7 million decrease in revenue, which includes $9.4 million of non-cash revenue write-offs and a $2.2 million decrease in cash revenue, related to facilities that were transitioned to Senior Housing - Managed communities after January 1, 2024, (ii) a $6.8 million decrease from properties disposed of after January 1, 2024 and (iii) a $0.6 million decrease related to facilities transitioned to new operators after January 1, 2024. These decreases are partially offset by (i) a $7.0 million net increase of non-cash rent as the result of changing our estimates of collectability for certain leases within our triple-net leased portfolio, (ii) a $3.2 million net increase in cash revenue related to percentage rent, expense recoveries and leases that are not accounted for on an accrual basis, (iii) a $2.9 million increase due to lease amendments and annual rental increases based on changes in the Consumer Price Index and (iv) a $1.2 million increase from properties acquired after January 1, 2024.

Previous wording

Our reported rental and related revenues may be subject to increased variability in the future as a result of lease accounting standards. If at any time we cannot determine that it is probable that substantially all rents over the life of a lease are collectible, rental revenue will be recognized only to the extent of payments received and all receivables associated with the lease will be written off, irrespective of amounts expected to be collectible. However, there can be no assurances regarding the timing and amount of these revenues. Amounts due under the terms of all of our lease agreements are subject to contractual increases, and contingent rental income may be earned from certain lease agreements. No material contingent rental income was derived during the six months ended June 30, 2025 and 2024.

Current wording

Our reported rental and related revenues may be subject to increased variability in the future as a result of lease accounting standards. If at any time we cannot determine that it is probable that substantially all rents over the life of a lease are collectible, rental revenue will be recognized only to the extent of payments received and all receivables associated with the lease will be written off, irrespective of amounts expected to be collectible. However, there can be no assurances regarding the timing and amount of these revenues. Amounts due under the terms of all of our lease agreements are subject to contractual increases, and contingent rental income may be earned from certain lease agreements. No material contingent rental income was derived during the nine months ended September 30, 2025 and 2024.

Previous wording

During the six months ended June 30, 2025, we recognized $156.4 million of resident fees and services compared to $134.0 million for the six months ended June 30, 2024. The $22.5 million net increase is due toa $12.5 million increase related to four Senior Housing - Managed communities acquired after January 1, 2024, a $2.3 million increase related to five facilities that were transitioned to Senior Housing - Managed communities after January 1, 2024 and the remaining increase is primarily related to increased occupancy and an increase in rates.

Current wording

During the nine months ended September 30, 2025, we recognized $248.4 million of resident fees and services compared to $207.7 million for the nine months ended September 30, 2024. The $40.7 million net increase is due toa $23.5 million increase related to 10 Senior Housing - Managed communities acquired after January 1, 2024, a $7.8 million increase related to nine facilities that were transitioned to Senior Housing - Managed communities after January 1, 2024, a $1.9 million increase related to one Senior Housing - Managed community that was closed due to a fire in 2022 and did not fully reopen until November 2024, and the remaining increase is primarily related to increased occupancy and an increase in rates.

Previous wording

Interest and other income primarily consists of income earned on our loans receivable investments and preferred returns earned on our preferred equity investments. During the six months ended June 30, 2025, we recognized $20.4 million of interest and other income compared to $18.0 million for the six months ended June 30, 2024. The net increase of $2.4 million is due to (i) a $1.3 million increase in late fee income, (ii) a $0.8 million increase from investments made after January 1, 2024 and (iii) a $0.2 million increase in bank interest income.

Current wording

Interest and other income primarily consists of income earned on our loans receivable investments and preferred returns earned on our preferred equity investments. During the nine months ended September 30, 2025, we recognized $33.1 million of interest and other income compared to $27.7 million for the nine months ended September 30, 2024. The net increase of $5.3 million is due to a $2.5 million increase in lease termination income, a $1.9 million increase in late fee income and a $1.0 million increase from investments made after January 1, 2024, partially offset by a $0.1 million decrease from investments repaid after January 1, 2024.

Previous wording

During the three months ended June 30, 2025, we incurred $43.6 million of depreciation and amortization expense compared to $41.7 million for the three months ended June 30, 2024. The net increase of $1.9 million is due to a $2.1 million increase from properties acquired after April 1, 2024 and a $1.1 million increase from additions to real estate. These increases are partially offset by a $0.9 million decrease from properties disposed of after April 1, 2024.

Current wording

During the nine months ended September 30, 2025, we incurred $135.6 million of depreciation and amortization expense compared to $127.3 million for the nine months ended September 30, 2024. The net increase of $8.3 million is due to (i)an $8.2 million increase from properties acquired after January 1, 2024, (ii)a $2.7 million increase from additions to real estateand (iii) a $1.5 million increase due to accelerating amortization of lease intangibles related to facilities that were transitioned to Senior Housing - Managed communities after January 1, 2024. These increases are partially offset by (i) a $2.9 million decrease from properties disposed of after January 1, 2024 and (ii) a $1.4 million decrease due to assets that have been fully depreciated.

Previous wording

We incur interest expense comprised of costs of borrowings plus the amortization of deferred financing costs related to our indebtedness. During the six months ended June 30, 2025, we incurred $54.6 million of interest expense compared to $57.7 million for the six months ended June 30, 2024. The $3.1 million net decrease is primarily related toa $2.7 million decrease in non-cash interest expense related to our interest rate hedges and a $0.3 million net decrease related to borrowings outstanding under the Credit Agreement.

Current wording

We incur interest expense comprised of costs of borrowings plus the amortization of deferred financing costs related to our indebtedness. During the nine months ended September 30, 2025, we incurred $83.5 million of interest expense compared to $87.2 million for the nine months ended September 30, 2024. The $3.6 million net decrease is primarily related toa $3.5 million decrease in non-cash interest expense related to our interest rate hedges.

Previous wording

During the six months ended June 30, 2025, we recognized $7.2 million of triple-net portfolio operating expenses compared to $8.7 million for the six months ended June 30, 2024. The $1.5 million net decrease isdue to a $1.0 million decrease due to facilities that have since transitioned to new operators who are now paying the property taxes directly and a $0.5 million decrease from properties disposed of after January 1, 2024.

Current wording

During the nine months ended September 30, 2025, we recognized $10.9 million of triple-net portfolio operating expenses compared to $13.0 million for the nine months ended September 30, 2024. The $2.1 million net decrease isdue to a $1.4 million decrease due to facilities that have since transitioned to new operators who are now paying the property taxes directly and a $0.6 million decrease from properties disposed of after January 1, 2024.

Previous wording

During the six months ended June 30, 2025, we recognized $113.9 million of Senior Housing - Managed portfolio operating expenses compared to $100.0 million for the six months ended June 30, 2024. The $13.8 million net increase is primarily due to (i) a $7.7 million increase related to four Senior Housing - Managed communities acquired after January 1, 2024, (ii) a $2.0 million increase related to five facilities that were transitioned to Senior Housing - Managed communities after January 1, 2024, (iii) a $1.8 million increase in employee compensation primarily due to increased labor rates and staffing, (iv) a $1.6 million increase in management fees, dining expenses and housekeeping costs due to increased occupancy and (v) a $0.9 million increase in utilities primarily due to increased rates and usage.

Current wording

During the nine months ended September 30, 2025, we recognized $179.8 million of Senior Housing - Managed portfolio operating expenses compared to $154.3 million for the nine months ended September 30, 2024. The $25.5 million net increase is primarily due to (i) a $14.4 million increase related to 10 Senior Housing - Managed communities acquired after January 1, 2024, (ii) a $5.8 million increase related to nine facilities that were transitioned to Senior Housing - Managed communities after January 1, 2024, (iii) a $2.4 million increase in employee compensation primarily due to increased labor rates and staffing, (iv) a $1.3 million increase in management fees, dining expenses and housekeeping costs due to increased occupancy, (v) a $1.0 million increase related to one Senior Housing - Managed community that was closed due to a fire in 2022 and did not fully reopen until November 2024 and (vi) a $0.9 million increase in utilities primarily due to increased rates and usage, partially offset by a $0.8 million decrease in repairs and maintenance expense.

Previous wording

General and administrative expenses include compensation-related expenses as well as professional services, office costs, other costs associated with asset management, and acquisition costs. During the six months ended June 30, 2025, general and administrative expenses were $25.2 million compared to $24.6 million for the six months ended June 30, 2024. The $0.6 million net increase isprimarily related to a $0.6 million net increase in compensation driven by changes in performance-based payout assumptions on incentive compensation and annual salary adjustments and a $0.5 million increase in legal fees due to increased transaction activity. These increases are partially offset by a $0.4 million decrease in insurance expense due to lower rates.

Current wording

General and administrative expenses include compensation-related expenses as well as professional services, office costs, other costs associated with asset management, and acquisition costs. During the nine months ended September 30, 2025, general and administrative expenses were $37.8 million compared to $37.0 million for the nine months ended September 30, 2024. The $0.8 million net increase isprimarily related to a $0.4 million net increase in compensation driven by changes in performance-based payout assumptions on incentive compensation and annual salary adjustments and a $0.7 million increase in legal and professional fees due to increased transaction activity. These increases are partially offset by a $0.5 million decrease in insurance expense due to lower rates.

Previous wording

During the six months ended June 30, 2025 and 2024, we recognized a $0.4 million and a $0.3 million recovery of loan losses, respectively, associated with our loans receivable investments.

Current wording

During the nine months ended September 30, 2025 and 2024, we recognized a $0.6 million and a $0.4 million recovery of loan losses, respectively, associated with our loans receivable investments.

Previous wording

During the six months ended June 30, 2025, we recognized a $4.1 million impairment of real estate related to a closed facility. During the six months ended June 30, 2024, we recognized an $18.5 million impairment of real estate related to six facilities that have sold.

Current wording

During the nine months ended September 30, 2025, we recognized a $6.7 million impairment of real estate related to two closed facilities. During the nine months ended September 30, 2024, we recognized an $18.5 million impairment of real estate primarily related to six facilities that have sold.

Previous wording

During the six months ended June 30, 2025, we recognized $14.7 million of other income, including the reclassification of $17.2 million of gain related to six previously terminated interest rate swaps from accumulated other comprehensive loss to other income as the related forecasted transactions were determined to be probable not to occur and a $1.0 million gain on insurance proceeds related to damage from a fire that occurred at one of our Senior Housing - Managed communities, partially offset by $3.2 million of transition expenses related to the transition of Senior Housing - Managed communities to new operators. During the six months ended June 30, 2024, we recognized $0.8 million of other income primarily related to business interruption insurance income related to one Senior Housing - Managed community that was closed due to a fire.

Current wording

During the nine months ended September 30, 2025, we recognized $14.0 million of other income, including the reclassification of $17.2 million of gain related to six previously terminated interest rate swaps from accumulated other comprehensive loss to other income as the related forecasted transactions were determined to be probable not to occur and $1.7 million of other income related to insurance proceeds received related to a fire that occurred at one of our Senior Housing - Managed communities in 2022, partially offset by $3.3 million of transition expenses related to the transition of Senior Housing - Managed communities to new operators and $1.2 million of lease termination expense related to the transition of four facilities from our triple-net portfolio to Senior Housing - Managed communities. During the nine months ended September 30, 2024, we recognized $0.8 million of other income primarily related to business interruption insurance income related to one Senior Housing - Managed community that was closed due to a fire in 2022.

Previous wording

Net Gain on Sales of Real Estate

Current wording

Net Gain (Loss) on Sales of Real Estate

Previous wording

During the six months ended June 30, 2025, we recognized a net gain of $10.0 million related to the disposition of five skilled nursing/transitional care facilities and one behavioral health facility. During the six months ended June 30, 2024, we recognized an aggregate net gain of $1.8 million related to the disposition of four skilled nursing/transitional care facilities.

Current wording

During the nine months ended September 30, 2025, we recognized a net gain of $5.5 million primarily related to the disposition of seven skilled nursing/transitional care facilities and one behavioral health facility. During the nine months ended September 30, 2024, we recognized an aggregate net loss of $4.0 million related to the disposition of eight skilled nursing/transitional care facilities.

Previous wording

During the six months ended June 30, 2025, we recognized $1.1 million of income from our unconsolidated joint ventures compared to $0.5 million of loss for the six months ended June 30, 2024. The $1.6 million net improvement is primarily related to (i)a $1.0 million increase in revenues net of operating expenses primarily due to increased occupancy and rates, (ii) a $0.4 million decrease in interest expense primarily due to decreased interest rates and (iii) a $0.2 million decrease in depreciation expense due to assets that have been fully depreciated.

Current wording

During the nine months ended September 30, 2025, we recognized $2.3 million of income from our unconsolidated joint ventures compared to $0.3 million of loss for the nine months ended September 30, 2024. The $2.6 million net improvement is primarily related to (i)a $1.6 million increase in revenues net of operating expenses primarily due to increased occupancy and rates, (ii) a $0.7 million decrease in depreciation expense due to assets that have been fully depreciated and (iii) a $0.3 million decrease in interest expense primarily due to decreased interest rates.

Previous wording

We believe that net income as defined by GAAP is the most appropriate earnings measure. We also believe that funds from operations (“FFO”), as defined in accordance with the definition used by the National Association of Real Estate Investment Trusts (“Nareit”), and adjusted funds from operations (“AFFO”) (and related per share amounts) are important non-GAAP supplemental measures of our operating performance. Because the historical cost accounting convention used for real estate assets requires straight-line depreciation (except on land), such accounting presentation implies that the value of real estate assets diminishes predictably over time. However, since real estate values have historically risen or fallen with market and other conditions, presentations of operating results for a REIT that use historical cost accounting for depreciation could be less informative. Thus, Nareit created FFO as a supplemental measure of operating performance for REITs that excludes historical cost depreciation and amortization, among other items, from net income, as defined by GAAP. FFO is defined as net income, computed in accordance with GAAP, excluding gains or losses from real estate dispositions and our share of gains or losses from real estate dispositions related to our unconsolidated joint ventures, plus real estate depreciation and amortization, net of amounts related to noncontrolling interests, plus our share of depreciation and amortization related to our unconsolidated joint ventures, and real estate impairment charges of both consolidated and unconsolidated entities when the impairment is directly attributable to decreases in the value of the depreciable real estate held by the entity. AFFO is defined as FFO excluding stock-based compensation expense, non-cash rental and related revenues, non-cash interest income, non-cash interest expense, non-cash portion of loss on extinguishment of debt, provision for (recovery of) loan losses and other reserves, non-cash lease termination income and deferred income taxes, as well as other non-cash revenue and expense items (including noncapitalizable acquisition costs, transaction costs related to operator transitions and organizational or other restructuring activities, gain/loss on derivative instruments, and non-cash revenue and expense amounts related to noncontrolling interests) and our share of non-cash adjustments related to our unconsolidated joint ventures. We believe that the use of FFO and AFFO (and the related per share amounts), combined with the required GAAP presentations, improves the understanding of our operating results among investors and makes comparisons of operating results among REITs more meaningful. We consider FFO and AFFO to be useful measures for reviewing comparative operating and financial performance because, by excluding the applicable items listed above, FFO and AFFO can help investors compare our operating performance between periods or as compared to other companies. While …

Excerpt shortened here; the source contains the full paragraph.

Current wording

We believe that net income as defined by GAAP is the most appropriate earnings measure. We also believe that funds from operations (“FFO”), as defined in accordance with the definition used by the National Association of Real Estate Investment Trusts (“Nareit”), and adjusted funds from operations (“AFFO”) (and related per share amounts) are important non-GAAP supplemental measures of our operating performance. Because the historical cost accounting convention used for real estate assets requires straight-line depreciation (except on land), such accounting presentation implies that the value of real estate assets diminishes predictably over time. However, since real estate values have historically risen or fallen with market and other conditions, presentations of operating results for a REIT that use historical cost accounting for depreciation could be less informative. Thus, Nareit created FFO as a supplemental measure of operating performance for REITs that excludes historical cost depreciation and amortization, among other items, from net income, as defined by GAAP. FFO is defined as net income, computed in accordance with GAAP, excluding gains or losses from real estate dispositions and our share of gains or losses from real estate dispositions related to our unconsolidated joint ventures, plus real estate depreciation and amortization, net of amounts related to noncontrolling interests, plus our share of depreciation and amortization related to our unconsolidated joint ventures, and real estate impairment charges of both consolidated and unconsolidated entities when the impairment is directly attributable to decreases in the value of the depreciable real estate held by the entity. AFFO is defined as FFO excluding stock-based compensation expense, non-cash rental and related revenues, non-cash interest income, non-cash interest expense, non-cash portion of loss on extinguishment of debt, provision for (recovery of) loan losses and other reserves, non-cash lease termination income and deferred income taxes, as well as other non-cash revenue and expense items (including noncapitalizable acquisition costs, transaction costs related to operator transitions and organizational or other restructuring activities, gain/loss on derivative instruments, and non-cash revenue and expense amounts related to noncontrolling interests) and our share of non-cash adjustments related to our unconsolidated joint ventures. We believe that the use of FFO and AFFO (and the related per share amounts), combined with the required GAAP presentations, improves the understanding of our operating results among investors and makes comparisons of operating results among REITs more meaningful. We consider FFO and AFFO to be useful measures for reviewing comparative operating and financial performance because, by excluding the applicable items listed above, FFO and AFFO can help investors compare our operating performance between periods or as compared to other companies. While …

Excerpt shortened here; the source contains the full paragraph.

Previous wording

The following table reconciles our calculations of FFO and AFFO for the three and six months ended June 30, 2025 and 2024, to net income, the most directly comparable GAAP financial measure, for the same periods (in thousands, except share and per share amounts):

Current wording

The following table reconciles our calculations of FFO and AFFO for the three and nine months ended September 30, 2025 and 2024, to net income, the most directly comparable GAAP financial measure, for the same periods (in thousands, except share and per share amounts):