OMEGA HEALTHCARE INVESTORS INC Fair Value Disclosure
NOTE 16 - FINANCIAL INSTRUMENTS
The net carrying amount of cash and cash equivalents, restricted cash, contractual receivables, other assets and accrued expenses and other liabilities reported in the Consolidated Balance Sheets approximates fair value because of the short maturity of these instruments (Level 1).
At December 31, 2025 and 2024, the net carrying amounts and fair values of other financial instruments were as follows:
December 31, 2025 | December 31, 2024 | ||||||||||
Carrying | | Fair | | Carrying | | Fair | |||||
Amount | | Value | | Amount | | Value | |||||
(in thousands) | |||||||||||
Assets: | |||||||||||
Investments in direct financing leases – net | $ | — | $ | — | | $ | 9,453 | $ | 9,453 | ||
Real estate loans receivable – net |
| 1,380,949 | 1,412,106 | 1,428,298 | 1,447,262 | ||||||
Non-real estate loans receivable – net |
| 330,322 | 331,970 | 332,274 | 340,025 | ||||||
Total | $ | 1,711,271 | $ | 1,744,076 | $ | 1,770,025 | $ | 1,796,740 | |||
Liabilities: |
| |
| |
| |
| | |||
Revolving Credit Facility | $ | 242,000 | $ | 242,000 | | $ | — | $ | — | ||
2026 Mortgage Loan |
| — | — | 243,310 | 247,063 | ||||||
2026 Term Loan | — | — | 427,044 | 428,500 | |||||||
OP Term Loan |
| — | — | 49,966 | 50,000 | ||||||
2028 Term Loan |
| 298,118 | 300,000 | — | — | ||||||
4.50% notes due 2025 – net |
| — | — | 399,968 | 399,856 | ||||||
5.25% notes due 2026 – net |
| — | — | 599,259 | 600,714 | ||||||
4.50% notes due 2027 – net |
| 698,231 | 702,303 | 696,766 | 691,040 | ||||||
4.75% notes due 2028 – net |
| 547,941 | 554,307 | 546,933 | 542,553 | ||||||
3.63% notes due 2029 – net | 495,517 | 484,105 | 494,308 | 461,180 | |||||||
5.20% notes due 2030 – net | 590,190 | 610,608 | — | — | |||||||
3.38% notes due 2031 – net | 690,752 | 653,527 | 688,962 | 620,809 | |||||||
3.25% notes due 2033 – net | 693,262 | 622,272 | 692,343 | 585,389 | |||||||
Total | $ | 4,256,011 | $ | 4,169,122 | $ | 4,838,859 | $ | 4,627,104 | |||
Fair value estimates are subjective in nature and are dependent on a number of important assumptions, including estimates of future cash flows, risks, discount rates and relevant comparable market information associated with each financial instrument (see Note 2 – Summary of Significant Accounting Policies). The use of different market assumptions and estimation methodologies may have a material effect on the reported estimated fair value amounts.
The following methods and assumptions were used in estimating fair value disclosures for financial instruments.
| ● | Real estate loans receivable: The fair value of the real estate loans receivable are estimated using a discounted cash flow analysis, using current interest rates being offered for similar loans to borrowers with similar credit ratings (Level 3). |
| ● | Non-real estate loans receivable: Non-real estate loans receivable are primarily comprised of notes receivable. The fair values of notes receivable are estimated using a discounted cash flow analysis, using current interest rates being offered for similar loans to borrowers with similar credit ratings (Level 3). |
| ● | Revolving Credit Facility, OP Term Loan, 2026 Term Loan and 2028 Term Loan: The carrying amount of these approximate fair value because the borrowings are interest rate adjusted. Differences between carrying value and the fair value in the table above are due to the inclusion of deferred financing costs in the carrying value. |
| ● | 2026 Mortgage Loan: The 2026 Mortgage Loan was recorded at fair market value in July 2024, as of the date we assumed it as part of our acquisition of the remaining 51% interest in the Cindat Joint Venture. The fair market value was determined by discounting the remaining contractual cash flows using a current market interest rate of comparable debt instruments. Differences between carrying value and the fair value in the table above are due to the inclusion of deferred financing costs in the carrying value. |
| ● | Senior notes: The fair value of the senior unsecured notes payable was estimated based on publicly available trading prices (Level 1). |
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 9, 2026 | Showing above |
| 2024 | Feb 13, 2025 | |
| 2023 | Feb 12, 2024 | |
| 2022 | Feb 14, 2023 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.