Community Healthcare Trust Inc

Previous wording

During the year ended December 31, 2024, the Company acquired nine real estate properties for an aggregate purchase price of approximately $72.1 million. Upon acquisition, the properties, totaling approximately 261,000 square feet, were 99.3% leased in the aggregate with lease expirations through 2039.

Current wording

During the year ended December 31, 2025, the Company acquired three real estate properties for an aggregate purchase price of approximately $64.5 million. Upon acquisition, the properties, totaling approximately 113,000 square feet, were 100.0% leased in the aggregate with lease expirations through 2040.

Previous wording

The Company has two properties with an aggregate carrying balance of $6.8 million classified as held for sale. See Note 4 – Real Estate Acquisitions, Disposition, and Assets Held for Sale in the Consolidated Financial Statements for more details.

Current wording

The Company has one property with a carrying balance of $5.3 million classified as held for sale at December 31,2025. During the year ended December 31,2025, the Company recorded impairment charges of $1.1 million on this property. See Note 4 – Real Estate Acquisitions, Dispositions, and Assets Held for Sale in the Consolidated Financial Statements for more details.

Previous wording

The Company also has seven properties under definitive purchase agreements, to be acquired after completion and occupancy, for an aggregate expected purchase price of approximately $169.5 million. The Company's expected returns on these investments are approximately 9.1% to 9.75%. The Company anticipates closing on one of these properties in the first quarter of 2025 with the remainder throughout 2025, 2026 and 2027; however, the Company cannot provide assurance as to the timing of when, or whether, these transactions will actually close.

Current wording

The Company has five properties under definitive purchase agreements, to be acquired after completion and occupancy, for an aggregate expected purchase price of approximately $122.5 million. The Company's expected returns on these investments are approximately 9.1% to 9.75%. The Company anticipates closing on one of these properties in the first quarter of 2026 with the remainder throughout 2026 and 2027; however, the Company cannot provide assurance as to the timing of when, or whether, these transactions will actually close.

Previous wording

As of December 31, 2024, our real estate portfolio was approximately 90.9% leased, excluding real estate assets held for sale. During the year ended December 31, 2024, we had expiring or terminated leases related to approximately 551,000 square feet, and we leased or renewed leases related to approximately 517,000 square feet.

Current wording

As of December 31, 2025, our real estate portfolio was approx imately 90.6% leased, excluding the real estate asset held for sale. During the year ended December 31, 2025, we had expiring or terminated leases related to approximately 712,000 square feet, and we leased or renewed leases related to approximately 683,000 square feet.

Previous wording

Certain of the Company's leases provide the lessee with a purchase option or a right of first refusal to purchase the leased property. The purchase option provisions generally allow the lessee to purchase the leased property at fair value or at an amount greater than the Company's gross investment in the leased property at the time of the purchase. The Company had an aggregate gross investment of approximately $31.5 million in nine real estate properties as of December 31, 2024 that were subject to exercisable purchase options.

Current wording

Certain of the Company's leases provide the lessee with a purchase option or a right of first refusal to purchase the leased property. The purchase option provisions generally allow the lessee to purchase the leased property at fair value or at an amount greater than the Company's gross investment in the leased property at the time of the purchase. The Company had an aggregate gross investment of approximately $42.0 million in 13 real estate properties as of December 31, 2025 that were subject to exercisable purchase options.

Previous wording

Approximately 7.3% to 11.3% of our leases (based on annualized rent) will expire in each of the next 5 years. Management expects that many of the tenants will renew their leases, but in cases where they do not renew, the Company believes it will generally be able to re-lease the space to existing or new tenants without significant loss of rental income. See "Properties" in Item 2 for a schedule of the Company's lease expirations.

Current wording

Approximately 6.1% to 9.0% of our leases (based on annualized rent) will expire in each of the next 5 years. Management expects that many of the tenants will renew their leases, but in cases where they do not renew, the Company believes it will generally be able to re-lease the space to existing or new tenants without significant loss of rental income. See "Properties" in Item 2 for a schedule of the Company's lease expirations.

Previous wording

Inflation has significantly increased during the past couple of years and a prolonged period of high and persistent inflation could cause an increase in our expenses, capital expenditures, and cost of our variable-rate borrowings which could have a material impact on our financial position or results of operations. Many of our lease agreements contain provisions designed to mitigate the adverse impact of inflation, including annual rent increases based on stated increases or CPI increases. In response to inflationary pressures, the Federal Reserve began raising interest rates in 2022. Though these higher interest rates have just begun to decline, these higher rates may adversely impact real estate asset values and increase our interest expense on our variable-rate borrowings under our revolving credit facility.

Current wording

Inflation has significantly increased during the past several years and a prolonged period of high and persistent inflation could cause an increase in our expenses, capital expenditures, and cost of our variable-rate borrowings which could have a material impact on our financial position or results of operations. Many of our lease agreements contain provisions designed to mitigate the adverse impact of inflation, including annual rent increases based on stated increases or CPI increases. In response to inflationary pressures, the Federal Reserve raised interest rates in 2022 and 2023, however, the Federal Reserve lowered interest rates in 2024 and 2025, and may provide additional rate changes during 2026. Higher interest rates may adversely impact real estate asset values and increase our interest expense on our variable-rate borrowings under our revolving credit facility.

Previous wording

The Company's consolidated results of operations for 2024 compared to 2023 were significantly impacted by acquisitions and other capital improvements in our real estate, including depreciation and amortization on our real estate portfolio, collectibility of lease payments, interest and notes receivable, general and administrative expenses, including the impact of changes to executive compensation programs and the accelerated amortization of stock-based compensation upon the passing of our former CEO in 2023, and interest expense.

Current wording

The Company's consolidated results of operations for 2025 compared to 2024 were significantly impacted by acquisitions, including depreciation and amortization on our real estate portfolio, asset dispositions, leasing activities, collectibility of lease payments, notes receivable and related interest, interest expense, and general and administrative expenses, including severance and the accelerated amortization of stock-based compensation upon the termination our former Executive Vice President, Asset Management in 2025.

Previous wording

Rental income increased approximately $5.9 million, or 5.4%, for the year ended December 31, 2024 compared to the same period in 2023 due mainly to the following:

Current wording

Rental income increased approximately $6.8 million, or 5.9%, for the year ended December 31, 2025 compared to the same period in 2024 due mainly to the following:

Previous wording

•Income on properties acquired during 2024 and 2023 increased rental income by approximately $11.0 million; partially offset by

Current wording

•Income on properties acquired during 2025 and 2024 increased rental income by approximately $5.4 million;

Previous wording

Other operating interest decreased approximately $2.9 million, or 70.7%, for the year ended December 31, 2024 compared to the same period in 2023 due mainly to the following:

Current wording

Other operating interest decreased approximately $1.4 million, or 112.8%, for the year ended December 31, 2025 compared to the same period in 2024 due mainly to the following:

Previous wording

•An increase in interest totaling $0.1 million due to a new note entered into during 2024.

Current wording

•An increase in interest of approximately $0.4 million from interest on a new note entered into during 2024, as well as interest on a financing and sales-type leases.

Previous wording

Property operating expenses increased approximately $2.1 million, or 10.2%, for the year ended December 31, 2024 compared to the same period in 2023 due mainly to the following:

Current wording

Property operating expenses increased approximately $0.8 million, or 3.5%, for the year ended December 31, 2025 compared to the same period in 2024 due mainly to the following:

Previous wording

•Property operating expenses on properties acquired during 2024 and 2023 resulted in an increase of approximately $1.7 million;

Current wording

•Property operating expenses on properties acquired during 2025 and 2024 resulted in an increase of approximately $0.4 million;

Previous wording

•Property insurance expense increased approximately $0.2 million; and

Current wording

•Landscaping expenses, including snow plow expenses, (on a same store basis) increased approximately $0.2 million; and

Previous wording

•Depreciation and amortization related to properties acquired during 2024 and 2023 accounted for an increase of approximately $5.0 million;

Current wording

•Depreciation and amortization related to properties acquired during 2025 and 2024 accounted for an increase of approximately $1.8 million;

Previous wording

•Depreciation and amortization on the properties classified as held for sale during 2023 and 2024 resulted in a decrease of approximately $1.6 million; and

Current wording

•Properties that were sold or classified as held for sale during 2024 and 2025 resulted in a decrease of approximately $0.4 million;

Previous wording

•Real estate intangible assets acquired prior to 2023 that became fully depreciated resulted in a decrease of approximately $3.5 million; and

Current wording

•Real estate intangible assets acquired prior to 2024 that became fully depreciated resulted in a decrease of approximately $1.9 million;

Previous wording

Interest expense increased approximately $5.9 million, or 33.2%, for the year ended December 31, 2024 compared to the same period in 2023. Contractual interest due under the Credit Facility increased $5.5 million due to a pricing grid increase on hedged debt in the fourth quarter of 2024 due to increased leverage ratio, a higher weighted average balance on the Revolving Credit Facility, along with a rise in interest rates during 2024 as compared to 2023. See Note 5 – Debt, net to the Consolidated Financial Statements. Also, capitalized interest decreased by $0.4 million in 2024 compared to 2023.

Current wording

Interest expense increased approximately $3.3 million, or 13.8%, for the year ended December 31, 2025 compared to the same period in 2024. Contractual interest due under the Credit Facility increased $3.4 million due to: (i) a pricing grid increase on hedged debt in the fourth quarter of 2024 due to increased leverage ratio, and (ii) a higher weighted average balance on the Revolving Credit Facility in 2025 compared to 2024. See Note 5 – Debt, net to the Consolidated Financial Statements. Also, a mortgage note payable on a property was repaid during 2024, which results in a decrease to interest expense of $0.1 million in 2025 compared to 2024.

Previous wording

Interest and other income decreased approximately $0.3 million for the year ended December 31, 2024 compared to the same period in 2023. Interest and other income for 2024 included an undistributed allowance for tenant improvements totaling $0.3 million for a lease that expired and $0.2 million of earnest money on a terminated contract on a property held for sale. Interest and other income for 2023 included a net casualty gain relating to a property totaling $0.7 million.

Current wording

Interest and other income decreased approximately $0.5 million for the year ended December 31, 2025 compared to the same period in 2024. Interest and other income for 2024 included an undistributed allowance for tenant improvements totaling $0.3 million for a lease that expired and $0.2 million of earnest money on a terminated contract for a property held for sale.

Previous wording

Cash flows provided by operating activities for the years ended December 31, 2024, 2023 and 2022 were approximately $58.9 million, $61.4 million, and $60.3 million, respectively. Cash flows provided by operating activities for the years ended December 31, 2024, 2023 and 2022 were generally provided by contractual rents and interest on notes receivables, net of property operating expenses not reimbursed by the tenants and general and administrative expenses.

Current wording

Cash flows provided by operating activities for the years ended December 31, 2025, 2024 and 2023 were approximately $56.4 million, $58.9 million, and $61.4 million, respectively. Cash flows provided by operating activities for the years ended December 31, 2025, 2024 and 2023 were generally provided by contractual rents and interest on notes receivables, net of property operating expenses not reimbursed by the tenants, general and administrative expenses, and interest expense.

Previous wording

Cash flows used in investing activities for the years ended December 31, 2024, 2023 and 2022 were approximately $92.7 million, $113.7 million, and $113.8 million, respectively. During 2024, the Company invested in nine real estate properties for cash consideration of approximately $72.4 million, and sold two properties and a land parcel, for net proceeds of approximately $2.3 million. During 2023, the Company invested in 19 real estate properties and one land parcel for an aggregate cash consideration of approximately $98.9 million. During 2022, the Company invested in 18 real estate properties for an aggregate cash consideration of approximately $96.7 million. In addition, during 2024, 2023 and 2022, the Company funded notes receivable of approximately $3.1 million, $2.0 million, and $9.7 million, respectively, and received payments in 2024, 2023 and 2022 on notes receivable of approximately $5.1 million, $3.9 million, and $3.0 million, respectively. Also, during 2023, the Company received insurance proceeds from a casualty loss of approximately $2.3 million, and the Company funded capital expenditures, including tenant improvements, during 2024, 2023 and 2022 totaling approximately $24.6 million, $19.0 million, and $10.4 million, respectively.

Current wording

•During 2025, the Company invested in three real estate properties for cash consideration of approximately $64.6 million, and received net proceeds of approximately $32.2 million in the aggregate during 2025 for the sale of four properties, which excludes net proceeds of approximately $0.7 million received subsequent to December 31, 2025 for a fifth property sold in 2025. During 2024, the Company invested in nine real estate properties for an aggregate cash consideration of approximately $72.4 million, and sold two properties and a land parcel, for net proceeds of approximately $2.3 million. During 2023, the Company invested in 19 real estate properties and a land parcel for an aggregate cash consideration of approximately $98.9 million.

Previous wording

Cash flows provided by financing activities for the years ended December 31, 2024, 2023 and 2022 were approximately $33.5 million, $44.9 million, and $62.7 million, respectively. During 2024, 2023 and 2022, the Company paid dividends totaling approximately $51.7 million, $48.1 million and $44.5 million, respectively. During 2024, 2023 and 2022, the Company completed equity offerings under its at-the-market program, resulting in net proceeds, net of underwriters' discount and offering costs, of approximately $7.3 million, $44.0 million and $20.2 million, respectively. During 2024 and 2023, the Company borrowed, on a net basis, approximately $162.0 million and $50.0 million, respectively, and in 2022, the Company repaid, on a net basis, approximately $12.0 million respectively, on its Revolving Credit Facility. During 2024, the Company amended its Credit Facility to increase its Revolver limit and extend maturity, and repaid $75.0 million in Term Loans under its Credit Facility and incurred $3.4 million in additional debt issuance costs. In 2022, the Company amended its Credit Facility and borrowed $150.0 million in Term Loans under its Credit Facility and incurred $0.8 million in additional debt issuance costs, and repaid $50.0 million in Term Loans under its Credit Facility. During 2024, 2023 and 2022, the Company had mortgage note repayments totaling approximately $4.8 million, $0.1 million and $0.1 million, respectively. During 2024 and 2023, the Company withheld shares and paid taxes totaling approximately $0.8 million and $1.0 million upon the vesting of stock-based awards for certain employees.

Current wording

•During 2025, 2024 and 2023, the Company borrowed, on a net basis, $46.0 million, $162.0 million, and $50.0 million, respectively, on its Revolving Credit Facility.

Previous wording

On November 2, 2022, the Company filed an automatic shelf registration statement on Form S-3 with the SEC. The registration statement was for an indeterminate number of securities and is effective for three years. On February 18, 2025, the Company filed Post-Effective Amendment No. 1 to its automatic registration statement on Form S-3 because the Company expected that it would no longer qualify as a well-known seasoned issuer (as such term is defined under Rule 415 of the Securities Act of 1933, as amended) upon the filing of its Annual Report on Form 10-K for the year ended December 31, 2024. Post-Effective Amendment No. 1 included disclosure required for registrants other than a well-known seasoned issuer and made certain other amendments. Under this registration statement, the Company has the capacity to offer and sell from time to time various types of securities, including common stock, preferred stock, depository shares, rights, debt securities, warrants and units. Promptly after filing of its Annual Report on Form 10-K for the year ended December 31, 2024, the Company intends to file a new non-automatic shelf registration statement on Form S-3.

Current wording

On February 19, 2025, the Company filed a new non-automatic shelf registration statement on Form S-3 with the Securities and Exchange Commission which became effective on March 14, 2025. The registration statement is for $500.0 million of securities and is effective for three years. Under this registration statement, the Company has the capacity to offer and sell from time to time various types of securities, including common stock, preferred stock, depository shares, rights, debt securities, warrants and units.

Previous wording

The Company has an at-the-market offering program ("ATM Program"), with Piper Sandler & Co., Piper Sandler Financial Products II Inc., Evercore Group L.L.C., Fifth Third Securities, Inc., Huntington Securities, Inc., Janney Montgomery Scott LLC, KeyBanc Capital Markets Inc., Regions Securities LLC, Truist Bank, and Truist Securities, Inc. in their capacities as Sales Agents, Forward Purchasers and/or Forward Sellers (each, an “Agent”, and, collectively, the “Agents”). On February 18, 2025, the Company amended the ATM Program to remove/add Agents, reduce the aggregate sales price from $500.0 million to $300.0 million, and add forward sale capabilities. Under the amended ATM Program, the Company may issue and sell shares of its common stock, having an aggregate gross sales price of up to $300.0 million, exclusive of shares of Common Stock sold under its prior agreements with our Agents. The shares of common stock may be sold from time to time through or to one or more of the Agents, as may be determined by the Company in its sole discretion, subject to the terms and conditions of the agreement and applicable law. As of December 31, 2024, the Company had a $500.0 million ATM program, of which approximately $426.3 million remained available to be issued.

Current wording

Under the ATM Program, the Company may issue and sell shares of its common stock, having an aggregate gross sales price of up to $300.0 million, exclusive of shares of common stock sold under its prior agreements with our Agents. The shares of common stock may be sold from time to time through or to one or more of the Agents, as may be determined by the Company in its sole discretion, subject to the terms and conditions of the third amended and restated sales agency agreement and applicable law. In addition, the Company may enter into one or more forward sales agreements under the ATM Program. As of December 31, 2025, the Company had $300.0 million remaining that may be issued under the ATM Program. See Note 7 – Stockholders' Equity to the Consolidated Financial Statements for more detail on the ATM Program.

Previous wording

As of December 31, 2024, the Company held approximately $2.9 million in security deposits, included in other liabilities, on the Consolidated Statement of Operations, for the benefit of the Company in the event the obligated tenant fails to perform under the terms of its respective lease. Generally, the Company may, at its discretion and upon notification to the tenant, draw upon the security deposits if there are any defaults under the leases.

Current wording

As of December 31, 2025, the Company held approximately $2.6 million in security deposits, included in other liabilities, on the Consolidated Balance Sheet, for the benefit of the Company in the event the obligated tenant fails to perform under the terms of its respective lease. Generally, the Company may, at its discretion and upon notification to the tenant, draw upon the security deposits if there are any defaults under the leases.

Previous wording

The Company's third amended and restated credit agreement, as amended (the "Credit Facility") provides for a $400.0 million revolving credit facility (the "Revolving Credit Facility") and $275.0 million in term loans (the "Term Loans"), as well as an accordion feature which allows borrowings up to a total of $875.0 million, including the ability to add and fund additional term loans. The Company has entered into interest rate swaps to fix the interest rates on the Term Loans and the portion of the Revolver balance that was used to repay a Term Loan. Note 5 – Debt, net to the Consolidated Financial Statements provides more details on the Credit Facility and Note 6 – Derivative Financial Instruments provides more detail on interest rate swaps entered into on the Term Loans. At December 31, 2024, the Company had borrowing capacity remaining under the Revolving Credit Facility of approximately $188.0 million.

Current wording

The Company's third amended and restated credit agreement, as amended (the "Credit Facility") provides for a $400.0 million revolving credit facility (the "Revolving Credit Facility") and $275.0 million in term loans (the "Term Loans"), as well as an accordion feature which allows borrowings up to a total of $875.0 million, including the ability to add and fund additional term loans. The Company has entered into interest rate swaps to fix the interest rates on the Term Loans and the portion of the Revolver balance that was used to repay a Term Loan. Note 5 – Debt, net and Note 6 – Derivative Financial Instruments to the Consolidated Financial Statements provide more detail on the Company's debt and interest rate swaps. At December 31, 2025, the Company had borrowing capacity remaining under the Revolving Credit Facility of approximately $142.0 million.

Previous wording

At December 31, 2024, the Company was obligated, as the lessee, under four non-prepaid ground leases accounted for as operating leases with expiration dates through 2076, including renewal options, and two non-prepaid ground leases accounted for as a financing lease with an expiration date through 2109, including renewal options. Any rental increases related to the Company's ground leases are generally either stated or based on the Consumer Price Index. At December 31, 2024, the Company's aggregate obligation under these ground leases was approximately $8.7 million. See Note 3 – Real Estate Leases to the Consolidated Financial Statements.

Current wording

At December 31, 2025, the Company was obligated, as the lessee, under four non-prepaid ground leases accounted for as operating leases with expiration dates through 2076, including renewal options, and two non-prepaid ground leases accounted for as a financing lease with an expiration date through 2109, including renewal options. Any rental increases related to the Company's ground leases are generally either stated or based on the Consumer Price Index. At December 31, 2025, the Company's aggregate obligation under these ground leases was approximately $8.5 million. See Note 3 – Real Estate Leases to the Consolidated Financial Statements.

Previous wording

The Company also has seven properties under definitive purchase agreements, to be acquired after completion and occupancy, for an aggregate expected purchase price of approximately $169.5 million. The Company's expected returns on these investments are approximately 9.1% to 9.75%. The Company anticipates closing on one of these properties in the first quarter of 2025 with the remainder throughout 2025, 2026 and 2027; however, the Company cannot provide assurance as to the timing of when, or whether, these transactions will actually close.

Current wording

The Company has five properties under definitive purchase agreements, to be acquired after completion and occupancy, for an aggregate expected purchase price of approximately $122.5 million. The Company's expected returns on these investments are approximately 9.1% to 9.75%. The Company anticipates closing on one of these properties in the first quarter of 2026 with the remainder throughout 2026 and 2027; however, the Company cannot provide assurance as to the timing of when, or whether, these transactions will actually close.

Previous wording

The Company anticipates funding these investments with cash from operations, through proceeds from its Credit Facility or from net proceeds from additional debt or equity offerings.

Current wording

The Company anticipates funding these investments with cash from operations, from net proceeds from equity or debt issuances, from our Credit Facility, or from asset sales.

Previous wording

The Company may provide tenant improvement allowances in new or renewal leases for the purpose of refurbishing or renovating tenant space. The Company may also assume tenant improvement obligations included in leases acquired in its real estate acquisitions. As of December 31, 2024, the Company had approximately $26.5 million in commitments for tenant improvements. Four of these projects, with remaining obligations totaling $11.1 million as of December 31, 2024, represent redevelopment projects of the buildings into different healthcare uses backed by long term leases.

Current wording

The Company may provide tenant improvement allowances in new or renewal leases for the purpose of refurbishing or renovating tenant space. The Company may also assume tenant improvement obligations included in leases acquired in its real estate acquisitions. As of December 31, 2025, the Company had approximately $28.8 million in commitments for tenant improvements. Three of these projects, with remaining obligations totaling approximately $8.0 million as of December 31, 2025, represent redevelopment projects of the buildings into different healthcare uses backed by long term leases.

Previous wording

The Company has entered into contracts with various vendors for various capital improvement projects related to its portfolio. As of December 31, 2024, the Company had approximately $2.0 million in commitments for capital improvement projects; four of these projects totaling $0.3 million, represent redevelopment projects of the buildings into different healthcare uses backed by long-term leases.

Current wording

The Company has entered into contracts with various vendors for various capital improvement projects related to its portfolio. As of December 31, 2025, the Company had approximately $2.0 million in commitments for capital improvement projects; three of these projects totaling approximately $0.9 million, represent redevelopment projects of the buildings into different healthcare uses backed by long-term leases.

Previous wording

The Company has two notes with a tenant with unfunded commitments remaining totaling approximately $6.0 million at December 31, 2024. See Note 10 – Other Assets, net to the Consolidated Financial Statements.

Current wording

The Company has one revolving credit facility with a tenant with an unfunded commitment remaining totaling approximately $5.8 million at December 31, 2025. See Note 10 – Other Assets, net to the Consolidated Financial Statements.

Previous wording

The Company is required to pay dividends to its stockholders at least equal to 90% of its taxable income in order to maintain its qualification as a REIT.

Current wording

The Company is required to pay dividends to its stockholders at least equal to 90% of its taxable income in order to maintain its qualification as a REIT. The ability of the Company to pay dividends is dependent upon its ability to generate cash flows and to make accretive new investments.

Previous wording

During 2024, 2023 and 2022, the Company paid cash dividends in the amounts of $1.845 per share, $1.805 per share and $1.765 per share, respectively.

Current wording

During 2025, 2024 and 2023, the Company paid cash dividends in the amounts of $1.885 per share, $1.845 per share and $1.805 per share, respectively.

Previous wording

On February 13, 2025, the Company’s Board of Directors declared a quarterly common stock dividend in the amount of $0.4675 per share. The dividend is payable on March 5, 2025 to stockholders of record on February 24, 2025.

Current wording

On February 12, 2026, the Company’s Board of Directors declared a quarterly common stock dividend in the amount of $0.4775 per share. The dividend is payable on March 4, 2026 to stockholders of record on February 23, 2026.

Previous wording

Inc. (“NAREIT”). NAREIT defines FFO as the most commonly accepted and reported measure of a REIT’s operating performance equal to net income (calculated in accordance with GAAP), excluding gains or losses from the sale of certain real estate assets, gains and losses from change in control, impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity, plus depreciation and amortization related to real estate properties, and after adjustments for unconsolidated partnerships and joint ventures. NAREIT also provides REITs with an option to exclude gains, losses and impairments of assets that are incidental to the main business of the REIT from the calculation of FFO.

Current wording

FFO is an operating performance measure adopted by the National Association of Real Estate Investment Trusts, Inc. (“NAREIT”). NAREIT defines FFO as the most commonly accepted and reported measure of a REIT’s operating performance equal to net income (calculated in accordance with GAAP), excluding gains or losses from the sale of certain real estate assets, gains and losses from change in control, impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity, plus depreciation and amortization related to real estate properties, and after adjustments for unconsolidated partnerships and joint ventures. NAREIT also provides REITs with an option to exclude gains, losses and impairments of assets that are incidental to the main business of the REIT from the calculation of FFO.

Previous wording

(1) During the second quarter of 2024, the Company recorded an $11.0 million credit loss reserve on notes receivable with a geriatric inpatient behavioral hospital tenant where collectibility was not reasonably assured. The Company's notes receivable are considered incidental to the Company's main business.

Current wording

(1) During 2025 and 2024, the Company recorded credit loss reserves on its notes receivable with a geriatric inpatient behavioral hospital borrower/tenant totaling approximately $8.7 million and $11.0 million, respectively, where collectibility was not reasonably assured. The Company's notes receivable are considered incidental to the Company's main business, as such, the reserves are added back to FFO.

Previous wording

(2)Non-cash accelerated amortization of stock-based compensation totaling $11.8 million was recorded in 2023 upon the passing of the Company's former CEO.

Current wording

(2)During 2025, the Company recorded severance and transition-related charges totaling approximately $5.9 million, including non-cash accelerated amortization of stock-based compensation of approximately $4.6 million. Also, non-cash accelerated amortization of stock-based compensation totaling $11.8 million was recorded in 2023 upon the passing of the Company's former CEO.

Previous wording

The acquisition date fair values of the tangible and intangible assets and acquired liabilities are estimated based on information obtained from multiple sources as a result of pre-acquisition due diligence, tax records, and other sources, including third-party valuations. Based on these estimates, we recognize the acquired assets and liabilities based on their estimated fair values. We expense transaction costs associated with business combinations in the period incurred. The fair value of tangible property assets acquired considers the value of the property as if vacant determined by a combination of comparable sales, replacement cost, income valuation approach and other relevant data. The determination of fair value involves the use of significant judgment and estimation. We value land based on various inputs, which may include internal analysis of recently acquired properties, existing comparable properties within our portfolio, or third party appraisals or valuations based on comparable sales.

Current wording

The acquisition date fair values of the tangible and intangible assets and acquired liabilities are estimated based on information obtained from multiple sources as a result of pre-acquisition due diligence, tax records, and other sources, including third-party valuations. Based on these estimates, we recognize the acquired assets and liabilities based on their estimated fair values. We expense transaction costs associated with business combinations in the period incurred. The fair value of tangible property assets acquired considers the value of the property as if vacant and determined by a combination of comparable sales, replacement cost, income valuation approach and other relevant data. The determination of fair value involves the use of significant judgment and estimation. We value land based on various inputs, which may include internal analysis of recently acquired properties, existing comparable properties within our portfolio, or third party appraisals or valuations based on comparable sales.