# EDGAR Filing Document

**Accession Number:** 0000877860
**File Stem:** 0000877860-23-000016
**Filing Date:** 2023-2
**Character Count:** 43055
**Document Hash:** ec560b00dc4b25f4273e35f5ebd84efd
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0000877860-23-000016.hdr.sgml**: 20230221

**ACCESSION NUMBER**: 0000877860-23-000016

**CONFORMED SUBMISSION TYPE**: 8-K

**PUBLIC DOCUMENT COUNT**: 14

**CONFORMED PERIOD OF REPORT**: 20230221

**ITEM INFORMATION**: Results of Operations and Financial Condition

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20230221

**DATE AS OF CHANGE**: 20230221

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** NATIONAL HEALTH INVESTORS INC
- **CENTRAL INDEX KEY:** 0000877860
- **STANDARD INDUSTRIAL CLASSIFICATION:** REAL ESTATE INVESTMENT TRUSTS [6798]
- **IRS NUMBER:** 621470956
- **STATE OF INCORPORATION:** MD
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 8-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-10822
- **FILM NUMBER:** 23648357

**BUSINESS ADDRESS:**
- **STREET 1:** 222 ROBERT ROSE DRIVE
- **CITY:** MURFREESBORO
- **STATE:** TN
- **ZIP:** 37129
- **BUSINESS PHONE:** 6158909100

**MAIL ADDRESS:**
- **STREET 1:** 222 ROBERT ROSE DRIVE
- **CITY:** MURFREESBORO
- **STATE:** TN
- **ZIP:** 37129

?xml version="1.0" ? nhi-20230221

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 8-K** 

**CURRENT REPORT**

**Pursuant to Section 13 or 15(d) of the**

**Securities Exchange Act of 1934**

Date of Report (date of earliest event reported): February 21, 2023

**<u>National Health Investors Inc</u>**

(Exact name of Registrant as specified in its charter)

---

| | | |
|:---|:---|:---|
| <u>Maryland</u> | 001-10822 | <u>62-1470956</u> |
| (State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
| (State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |

---

222 Robert Rose Drive

<u>Murfreesboro, TN 37129</u> 

(Address of principal executive offices)

(615<u>) 890-9100</u> 

(Registrant's telephone number, including area code)

<u>Not Applicable</u>

(Former name, former address and former fiscal year,

if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

---

| | | |
|:---|:---|:---|
| Title of each Class | Trading Symbol(s) | Name of each exchange on which registered |
| Common Stock, $0.01 par value | NHI | New York Stock Exchange |

---

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

------

**Item 2.02. Results of Operations and Financial Condition.**

On February 21, 2023, National Health Investors, Inc. issued a press release announcing its earnings for the quarter ended December 31, 2022. A copy of the press release is filed as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated by reference herein.

**Item 8.01. Other Events**

On February 17, 2023, the Company's Board of Directors authorized a revised stock repurchase program (the "Revised Repurchase Plan") pursuant to which the Company may purchase up to $160.0 million in shares of the Company's issued and outstanding common stock, par value $0.01 per share. The Revised Repurchase Plan is effective for a period of one year and may be suspended or discontinued at any time. Shares may be repurchased from time-to-time in open market transactions at prevailing market prices, in privately negotiated transactions or by other means in accordance with the terms of Rule 10b-18 of the Securities Exchange Act of 1934 as amended (the "Exchange Act") and shall be made in accordance with all applicable laws and regulations in effect. The timing and number of shares repurchased, if any, will depend on a variety of factors, including price, general market and economic conditions, alternative investment opportunities and other corporate considerations.

The Revised Repurchase Plan replaces the plan approved by the Board in April 2022 for up to $240 million, which the Board of Directors terminated on February 17, 2023. Under that plan, NHI repurchased through open market transactions approximately 2.5 million shares of its common stock for an average price of $61.56 per share during 2022 with no repurchases during the fourth quarter.

**Forward-Looking Statements**

This Report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements involve risks and uncertainties and reflect the Company's judgment as of the date of this Report. These forward-looking statements include, without limitation, statements regarding the Company's plans with respect to stock repurchases, including the timing and manner of any purchases under the Revised Repurchase Plan. Actual events or results may differ from the Company's expectations. For example, the Revised Repurchase Plan may be suspended or discontinued at any time. The failure to meet expectations with respect to any of the foregoing matters may reduce the Company's stock price. Additional information concerning these and other risk factors affecting the Company can be found in the Company's public periodic filings with the Securities and Exchange Commission available at www.sec.gov. The Company disclaims any intent or obligation to update these forward-looking statements beyond the date of this Report.

**Item 9.01. Financial Statements and Exhibits.**

Exhibit Index

---

| | |
|:---|:---|
| **Number** | **Exhibit** |
| 99.1 | <u>[Fourth Quarter](item991-q42022earningsrele.htm)[Earnings Press Release, dated](item991-q42022earningsrele.htm)[February](item991-q42022earningsrele.htm)[21](item991-q42022earningsrele.htm)[, 202](item991-q42022earningsrele.htm)[3](item991-q42022earningsrele.htm)</u> |
| 104 | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) |

---

SIGNATURES

Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

National Health Investors, Inc.

By: <u>/s/ John L. Spaid</u>

Name: John L. Spaid

Title: Chief Financial Officer

Date: February 21, 2023

## Exhibit 99.1

<u>Exhibit 99.1</u>

![nhilogo_blue-or17a.jpg](nhilogo_blue-or17a.jpg)

Contact: John L. Spaid, Chief Financial Officer

Phone: (615) 890-9100

NHI Announces Fourth Quarter 2022 Results

MURFREESBORO, Tenn. – (February 21, 2023) National Health Investors, Inc. (NYSE:NHI) announced today its results for the three months and year ended December 31, 2022.

**Financial Results and Recent Events**

• Net income attributable to common stockholders per diluted common share for the three months ended December 31, 2022 was $0.04, compared to $0.14, during the same period in the prior year. Net income attributable to common stockholders per diluted common share for the year ended December 31, 2022 was $1.48, compared to $2.44 during the same period in the prior year.

• National Association of Real Estate Investment Trusts ("NAREIT") FFO per diluted common share for the three months ended December 31, 2022 was $0.74, compared to $1.07 during the same period in the prior year. NAREIT FFO per diluted common share for the year ended December 31, 2022 was $3.55, compared to $4.62 during the same period in the prior year.

• Normalized FFO per diluted common share for the three months ended December 31, 2022 was $0.85, compared to $1.06 during the same period in the prior year. Normalized FFO for the 2022 quarter included a credit loss reserve of $8.7 million or $0.20 per share. Normalized FFO per diluted common share for the year ended December 31, 2022 was $4.30, compared to $4.60 during the same period in the prior year.

• Normalized FAD for the three months ended December 31, 2022 was $44.7 million, compared to $45.9 million, during the same period in the prior year. Normalized FAD for the year ended December 31, 2022 was $201.0 million, compared to $209.5 million during the same period in the prior year.

***•*** In November 2022, the Company acquired a 60-unit assisted living facility located in Virginia Beach, VA, from Bickford Senior Living ("Bickford"). The acquisition price was $17.2 million, which included the cancellation of an outstanding construction note receivable of $14.0 million. The acquisition price also included a reduction in lieu of cash payment of $3.0 million in Bickford's outstanding pandemic-related rent deferrals that was recognized in rental income based on the fair value of the real estate assets received.

*•* In November 2022, the Company funded a $42.5 million senior loan to refinance a portfolio of skilled nursing facilities located in Texas. The loan was made to affiliates of Capital Funding Group and the facilities are leased by subsidiaries of The Ensign Group. The five-year loan agreement has an annual interest rate of 7.25% and two one-year extensions.

• Results for the three months ended December 31, 2022 compared to the same period in the prior year were impacted by the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*•* Rental income recognized from the Company's tenants, including the effects of straight-line lease revenue and property taxes and insurance on leased properties, decreased $7.2 million primarily as a result of write offs in the fourth quarter of 2022 of approximately $7.9 million of straight-line rents receivable related to placing two tenants on the cash basis for revenue recognition, net of new investments and dispositions since the end of the fourth quarter of 2021;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Interest income and other was approximately $3.6 million lower primarily due to paydowns on loans, net of new and existing loan fundings since the end of the fourth quarter of 2021;

------

NHI Reports Fourth Quarter 2022 Results

February 21, 2023

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The new SHOP activities contributed NOI of approximately $1.9 million comprised of revenues from resident fees and related services of $11.8 million and operating expenses of $9.8 million;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Interest expense was approximately $0.2 million higher, as a result of increased borrowings on the unsecured credit facility;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• General and administrative expenses were approximately $1.6 million higher primarily due to increased compensation and benefits expenses attributable largely to personnel growth;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Gains on the sales of real estate assets decreased $6.1 million compared to the same period in the prior year. No real estate assets were sold in the three months ended December 31, 2022. For the three months ended December 31, 2021, the Company sold three properties generating gains on sales of real estate of $6.1 million;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*•* Loan and realty losses were $22.0 million for the three months ended December 31, 2022, representing a decrease of $6.5 million. This amount consisted of an increase in the credit loss reserve of $8.7 million because two loans totaling an aggregate $24.5 million with affiliates of one operator/borrower were designated as non-performing. This operator/borrower is also one of the tenants converted to cash basis of accounting. Real estate impairments totaled $13.3 million in the quarter.

**Subsequent Investment Activity**

In February 2023, NHI acquired two memory care communities for approximately $37.5 million. The communities are operated by Silverado Senior Living ("Silverado") which is a new relationship for NHI. The newly developed properties that opened in 2022 include a 60-unit community in Summerlin, NV and a 60-unit community in Frederick, MD. NHI is leasing the properties to Silverado pursuant to a 20-year master lease with a first-year lease rate of 7.5% and annual escalators of 2%.

In February 2023, NHI acquired a 60-unit assisted living and memory care community in Chesapeake, VA from Bickford for $17.3 million. The acquisition was primarily funded with the satisfaction of a $14.2 million construction loan due from Bickford. The community was added to an existing master lease with Bickford at an initial cash lease yield of 8.0%. As part of the transaction, NHI agreed to a $2.5 million reduction in lieu of cash payment to Bickford's outstanding pandemic-related deferral balance. The community opened in May 2022. EBITDARM coverages for the property for the trailing six-, three-, and one-month periods ended December 2022, were 1.62x, 2.06x, and 2.23x, respectively.

Eric Mendelsohn, NHI President and CEO, stated, "We are excited by the progress we made in 2022 even as the operating environment remains challenging. Our portfolio optimization is largely complete following the disposition of 39 underperforming properties with low single-digit yields for $340 million, the restructuring of several tenant leases including the Bickford lease, and the transitioning of 15 properties into our newly formed SHOP portfolio. Our need driven senior housing EBITDARM coverage has significantly improved as a result, and we believe we are in a great position to return to growth."

Mr. Mendelsohn continued, "We have several organic growth drivers including collections on our pandemic-related deferral balances, rent resets on restructured leases and transitioned properties, and meaningful upside in the SHOP assets as transition issues subside and industry fundamentals begin to improve. Our balance sheet is in excellent shape which positions us for accretive acquisitions to drive our external growth as well. We announced $101.5 million in investments in 2022 and have already announced $54.8 million in investments in 2023. We also have the ability to buy back our stock."

Mr. Mendelsohn concluded, "The last few years have unquestionably been the most difficult for our industry, so I am proud of the resilience and creativity of our team. Despite the many challenges, we achieved full year FAD 2022 guidance and, as the headwinds are starting to subside, we think we have better visibility so we again have introduced full year guidance for 2023. We thank all of our stakeholders for the trust placed in NHI and look forward to reporting on our progress this year."

**Balance Sheet and Liquidity**

As of December 31, 2022, the Company had $1.1 billion in net debt including $42 million outstanding on its $700 million revolving credit facility. In January 2023, NHI repaid a $125 million private placement note primarily with proceeds from the revolving credit facility. At January 31, 2023, NHI had $202.0 million outstanding under the $700 million revolving credit facility and approximately $26.4 million in cash and cash equivalents. The Company has approximately $415.7 million available under the ATM program.

NHI continues to maintain a strong financial profile and reported that net debt to adjusted EBITDA was 4.7x which is within the Company's target range of 4.0x – 5.0x. NHI is in compliance with all debt covenants and has investment grade credit ratings from

------

NHI Reports Fourth Quarter 2022 Results

February 21, 2023

Moody's, S&P Global, and Fitch Ratings. During the fourth quarter of 2022, Moody's revised its rating outlook on NHI to "stable" from "negative".

*Share Repurchase Plan*

On February 17, 2023, the Company's Board of Directors approved a stock repurchase plan ("2023 plan") for up to $160 million of the Company's common stock. The plan is effective for a period of one year. Shares may be repurchased from time-to-time in open market transactions at prevailing market prices, in privately negotiated transactions or by other means in accordance with the terms of Rule 10b-18 of the Securities Exchange Act of 1934 as amended and shall be made in accordance with all applicable laws and regulations in effect. The timing and number of shares repurchased, if any, will depend on a variety of factors, including price, general market and economic conditions, alternative investment opportunities and other corporate considerations. The stock repurchase plan does not obligate the Company to repurchase any specific number of shares and may be suspended or discontinued at any time.

The 2023 plan replaces the plan approved by the Board in April 2022 for up to $240 million. Under that plan, NHI repurchased through open market transactions approximately 2.5 million shares of its common stock for an average price of $61.56 per share during 2022 with no repurchases during the fourth quarter.

**Occupancy**

The following table summarizes the average portfolio occupancy for Senior Living Communities ("SLC"), Bickford and SHOP for the periods indicated, excluding development properties in operation less than 24 months, notes receivable, and properties transitioned to new tenants or disposed.

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | Properties | Jan-23 | Dec-22 | Nov-22 | Oct-22 | Sep-22 | Aug-22 | Jul-22 | Jun-22 |
| SLC | 9 | 84.0% | 83.9% | 83.6% | 83.1% | 83.0% | 83.5% | 83.4% | 82.1% |
| Bickford<sup>1</sup> | 39 | 81.7% | 82.9% | 83.7% | 83.7% | 84.5% | 84.5% | 85.0% | 83.9% |
| SHOP<sup>2</sup> | 15 | 75.4% | 75.5% | 75.8% | 76.0% | 76.6% | 76.9% | 77.2% | 76.2% |

---

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | Properties | May-22 | Apr-22 | Mar-22 | Feb-22 | Jan-22 | Dec-21 | Nov-21 | Oct-21 |
| SLC | 9 | 82.4% | 82.3% | 81.8% | 81.7% | 81.7% | 81.7% | 81.9% | 81.5% |
| Bickford<sup>1</sup> | 39 | 83.0% | 82.5% | 82.5% | 82.3% | 83.6% | 83.7% | 84.3% | 83.6% |
| SHOP<sup>2</sup> | 15 | 76.2% | 77.2% | 76.8% | 77.6% | 78.6% | 79.5% | 81.3% | 81.2% |

---

<sup>1</sup>Prior periods restated to reflect the removal of one property that was transitioned to a new operator in March 2022 and the addition of one property in November 2022.

<sup>2</sup>These properties were leased pursuant to a triple-net master lease prior to Q2 2022.

**Assets Held for Sale & Impairments of Real Estate**

At December 31, 2022, thirteen properties in NHI's Real Estate Investments reportable segment, with an aggregate net real estate balance of $43.3 million, were classified as assets held for sale on our Condensed Consolidated Balance Sheet, including four properties that were transferred into assets held for sale during the fourth quarter of 2022. Rental income associated with the thirteen properties was $1.0 million and $2.1 million for the three months and year ended December 31, 2022, respectively, and $0.5 million and $5.6 million for the three months and year ended December 31, 2021, respectively.

During the three months and year ended December 31, 2022, NHI recorded impairment charges of $13.3 million and $51.6 million, respectively related to NHI's Real Estate Investments reportable segment. The impairment charges are included in "*Loan and realty losses*" in the Condensed Consolidated Statements of Income.

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NHI Reports Fourth Quarter 2022 Results

February 21, 2023

**2023 Guidance**

The Company's guidance range for the full year 2023, with underlying assumptions and timing of certain transactions, is set forth below:

---

| | | |
|:---|:---|:---|
| | 2023 Guidance Range | 2023 Guidance Range |
| (*in millions except per share amounts*) | Low | High |
| Net income attributable to common stockholders | $107.5 | $110.4 |
| Adjustments to NAREIT Funds From Operations (FFO) and Normalized FFO (NFFO) |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Depreciation (net)<sup>1</sup> | 77.3 | 77.3 |
| &nbsp;&nbsp;&nbsp;&nbsp;Gains on sales (net) and impairments of real estate | (0.4) | (0.6) |
| &nbsp;&nbsp;&nbsp;&nbsp; NAREIT FFO and NFFO | 184.4 | 187.1 |
| Adjustments to Funds Available for Distribution (FAD) |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Straight-line revenue (net)<sup>1</sup> and lease incentive amortizations | (6.9) | (6.9) |
| &nbsp;&nbsp;&nbsp;&nbsp;Equity method investment adjustments | (1.4) | (1.4) |
| &nbsp;&nbsp;&nbsp;&nbsp;Equity method investment non-refundable fees received | 1.0 | 1.4 |
| &nbsp;&nbsp;&nbsp;&nbsp;Non-cash stock-based compensation | 7.9 | 7.6 |
| SHOP<sup>1</sup> and equity method investment recurring capital expenditures | (2.5) | (2.5) |
| Other | 2.8 | 2.6 |
| &nbsp;&nbsp;&nbsp;&nbsp; Normalized FAD | $185.3 | $187.9 |
| Weighted average diluted common shares (millions) | 43.5 | 43.5 |
| NAREIT FFO per diluted common share | $4.24 | $4.30 |
| NFFO per diluted common share | $4.24 | $4.30 |
| <sup>1</sup>Net of amounts attributable to non-controlling interests |  |  |

---

NHI's 2023 annual guidance includes the following assumptions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Continued rent concessions, asset dispositions and loan repayments throughout 2023;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Approximately $55.0 million in investment funding for recently announced Q1 investments and fulfillment of existing commitments; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• No incremental benefit from unidentified acquisitions or repayment of outstanding deferral balances.

In addition to the assumptions listed above, NHI's guidance range is based on several other assumptions, many of which are outside the Company's control and all of which are subject to change. The guidance range may change if actual results vary from these assumptions.

**Investor Conference Call and Webcast**

NHI will host a conference call on Wednesday, February 22, 2023, at 12:00 p.m. ET, to discuss fourth quarter results. The number to call for this interactive teleconference is (800) 926-9197, with the confirmation number 22024854. The live broadcast of NHI's fourth quarter conference call will be available online at <u>www.nhireit.com</u>. The online replay will follow shortly after the call and remain available for one year.

**About National Health Investors** 

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NHI Reports Fourth Quarter 2022 Results

February 21, 2023

Incorporated in 1991, National Health Investors, Inc. (NYSE: NHI) is a real estate investment trust specializing in sale, leasebacks, joint-ventures, senior housing operating partnerships, and mortgage and mezzanine financing of need-driven and discretionary senior housing and medical investments. NHI's portfolio consists of independent living, assisted living and memory care communities, entrance-fee retirement communities, skilled nursing facilities, and specialty hospitals. For more information, visit <u>www.nhireit.com</u>.

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NHI Reports Fourth Quarter 2022 Results

February 21, 2023

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| | | | | |
|:---|:---|:---|:---|:---|
| **Reconciliation of FFO, Normalized FFO and Normalized FAD** | **Reconciliation of FFO, Normalized FFO and Normalized FAD** | **Reconciliation of FFO, Normalized FFO and Normalized FAD** | **Reconciliation of FFO, Normalized FFO and Normalized FAD** | **Reconciliation of FFO, Normalized FFO and Normalized FAD** |
| *($ in thousands, except share and per share amounts)* |  |  |  |  |
|  | Three Months Ended | Three Months Ended | Year Ended | Year Ended |
|  | December 31, | December 31, | December 31, | December 31, |
|  | 2022 | 2021 | 2022 | 2021 |
| Net income attributable to common stockholders | $1861 | $6477 | $66403 | $111804 |
| Elimination of certain non-cash items in net income: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Real estate depreciation | 17223 | 19299 | 70734 | 80798 |
| &nbsp;&nbsp;&nbsp;Real estate depreciation related to noncontrolling interests | (395) | (210) | (1393) | (839) |
| &nbsp;&nbsp;&nbsp;Gains on sales of real estate, net |  | (6072) | (28342) | (32498) |
| &nbsp;&nbsp;&nbsp;Impairments of real estate | 13284 | 29355 | 51555 | 51817 |
| NAREIT FFO attributable to common stockholders | 31973 | 48849 | 158957 | 211082 |
| &nbsp;&nbsp;&nbsp;(Gain) loss on operations transfer, net |  |  | 710 |  |
| &nbsp;&nbsp;&nbsp;Portfolio transition costs, net of noncontrolling interests | 97 |  | 426 |  |
| &nbsp;&nbsp;&nbsp;Gain on note receivable payoff |  |  | (1113) |  |
| &nbsp;&nbsp;&nbsp;Loss on early retirement of debt |  | 1462 | 151 | 1912 |
| &nbsp;&nbsp;&nbsp;Non-cash write-offs of straight-line receivable and lease incentives | 7950 | 1144 | 36353 | 709 |
| &nbsp;&nbsp;&nbsp;Non-cash rental income | (3000) |  | (3000) |  |
| &nbsp;&nbsp;&nbsp;Recognition of unamortized note receivable commitment fees |  |  |  | (375) |
| &nbsp;&nbsp;&nbsp;Lease termination fee |  | (2464) |  | (2464) |
| &nbsp;&nbsp;&nbsp;Litigation settlement |  | (350) |  | (616) |
| Normalized FFO attributable to common stockholders | 37020 | 48641 | 192484 | 210248 |
| &nbsp;&nbsp;&nbsp;Straight-line lease revenue, net | (2628) | (3558) | (12563) | (15312) |
| &nbsp;&nbsp;&nbsp;Straight-line lease revenue, net, related to noncontrolling interests | 32 | 25 | 124 | 91 |
| &nbsp;&nbsp;&nbsp;Straight-line lease expense related to equity method investment | (4) | (9) | (16) | 46 |
| &nbsp;&nbsp;Non-real estate depreciation | 80 |  | 146 |  |
| &nbsp;&nbsp;Non-real estate depreciation related to noncontrolling interest | (6) |  | (16) |  |
| &nbsp;&nbsp;&nbsp;Amortization of lease incentives | 78 | 252 | 446 | 1026 |
| &nbsp;&nbsp;&nbsp;Amortization of original issue discount | 80 | 80 | 322 | 295 |
| &nbsp;&nbsp;&nbsp;Amortization of debt issuance costs | 535 | 554 | 2155 | 2404 |
| &nbsp;&nbsp;&nbsp;Amortization related to equity method investment | (275) | (216) | (847) | 1109 |
| &nbsp;&nbsp;&nbsp;Note receivable credit loss expense | 8676 | (185) | 10356 | 949 |
| &nbsp;&nbsp;&nbsp;Non-cash share-based compensation | 1037 | 989 | 8613 | 8415 |
| &nbsp;&nbsp;&nbsp;Equity method investment capital expenditures | (105) | (105) | (420) | (420) |
| &nbsp;&nbsp;&nbsp;Equity method investment non-refundable fees received | 322 | (557) | 1206 | 622 |
| &nbsp;&nbsp;Equity method investment distributions |  |  | (569) |  |
| &nbsp;&nbsp;Senior housing portfolio recurring capital expenditures | (130) |  | (390) |  |
| Normalized FAD attributable to common stockholders | $44712 | $45911 | $201031 | $209473 |
| <u>BASIC</u> |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Weighted average common shares outstanding | 43388742 | 45850599 | 44774708 | 45714221 |
| &nbsp;&nbsp;&nbsp;&nbsp;NAREIT FFO attributable to common stockholders per share | $0.74 | $1.07 | $3.55 | $4.62 |
| &nbsp;&nbsp;&nbsp;&nbsp;Normalized FFO attributable to common stockholders per share | $0.85 | $1.06 | $4.30 | $4.60 |
| <u>DILUTED</u> |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Weighted average common shares outstanding | 43392787 | 45850718 | 44794236 | 45729497 |
| &nbsp;&nbsp;&nbsp;&nbsp;NAREIT FFO attributable to common stockholders per share | $0.74 | $1.07 | $3.55 | $4.62 |
| &nbsp;&nbsp;&nbsp;&nbsp;Normalized FFO attributable to common stockholders per share | $0.85 | $1.06 | $4.30 | $4.60 |

---

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NHI Reports Fourth Quarter 2022 Results

February 21, 2023

The following table reconciles NOI to net income, the most directly comparable GAAP metric (*$ in thousands*):

---

| | | | | |
|:---|:---|:---|:---|:---|
| | Three Months Ended | Three Months Ended | Year Ended | Year Ended |
| | December 31, | December 31, | December 31, | December 31, |
| NOI Reconciliations: | 2022 | 2021 | 2022 | 2021 |
| Net income | $1558 | $6505 | $65501 | $111967 |
| Losses (gains) from equity method investment |  |  | (569) | 1545 |
| Interest income and other |  | (350) |  | (350) |
| Loss on early retirement of debt |  | 1462 | 151 | 1912 |
| Gain on note payoff |  |  | (1113) |  |
| (Gain) loss on operations transfer, net |  |  | 710 |  |
| Gains on sales of real estate, net |  | (6072) | (28342) | (32498) |
| Loan and realty losses | 21960 | 28441 | 61911 | 52766 |
| General and administrative | 4875 | 3202 | 22768 | 18431 |
| Franchise, excise and other taxes | 150 | 79 | 844 | 788 |
| Legal | 300 | 701 | 2555 | 908 |
| Interest | 12445 | 12282 | 44917 | 50810 |
| Depreciation | 17303 | 19299 | 70880 | 80798 |
| Consolidated net operating income (NOI) | $58591 | $65549 | $240213 | $287077 |
| NOI by segment: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Real Estate Investments | $56550 | $62977 | $232295 | $283945 |
| &nbsp;&nbsp;&nbsp;&nbsp;SHOP | 1949 |  | 7603 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Non-Segment/Corporate | 92 | 2572 | 315 | 3132 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total NOI | $58591 | $65549 | $240213 | $287077 |

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*See Notes to Reconciliation of FFO, Normalized FFO, Normalized FAD and NOI.*

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NHI Reports Fourth Quarter 2022 Results

February 21, 2023

<u>Notes to Reconciliation of FFO, Normalized FFO, Normalized FAD and NOI</u>

These supplemental performance measures may not be comparable to similarly titled measures used by other REITs. Consequently, our Funds From Operations ("FFO"), Normalized FFO and Normalized Funds Available for Distribution ("FAD") may not provide a meaningful measure of our performance as compared to that of other REITs. Since other REITs may not use our definition of these performance measures, caution should be exercised when comparing our FFO, Normalized FFO and Normalized FAD to that of other REITs. These financial performance measures do not represent cash generated from operating activities in accordance with generally accepted accounting principles ("GAAP") (these measures do not include changes in operating assets and liabilities) and therefore should not be considered an alternative to net earnings as an indication of performance, or to net cash flow from operating activities as determined by GAAP as a measure of liquidity, and are not necessarily indicative of cash available to fund cash needs.

*Funds From Operations - FFO*

FFO, as defined by NAREIT and applied by us, is net income (computed in accordance with GAAP), excluding gains (or losses) from sales of real estate property, plus real estate depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures, if any. The Company's computation of FFO may not be comparable to FFO reported by other REITs that do not define the term in accordance with the current NAREIT definition or have a different interpretation of the current NAREIT definition from that of the Company; therefore, caution should be exercised when comparing our Company's FFO to that of other REITs. Diluted FFO assumes the exercise of stock options and other potentially dilutive securities. Normalized FFO excludes from FFO certain items which, due to their infrequent or unpredictable nature, may create some difficulty in comparing FFO for the current period to similar prior periods, and may include, but are not limited to, impairment of non-real estate assets, gains and losses attributable to the acquisition and disposition of assets and liabilities, and recoveries of previous write-downs.

FFO and Normalized FFO are important supplemental measures of operating performance for a REIT. Because the historical cost accounting convention used for real estate assets requires depreciation (except on land), such accounting presentation implies that the value of real estate assets diminishes predictably over time. Since real estate values instead have historically risen and fallen with market conditions, presentations of operating results for a REIT that uses historical cost accounting for depreciation could be less informative, and should be supplemented with a measure such as FFO. The term FFO was designed by the REIT industry to address this issue.

*Funds Available for Distribution - FAD*

In addition to the adjustments included in the calculation of Normalized FFO, Normalized FAD excludes the impact of any straight-line rent revenue, amortization of the original issue discount on our senior unsecured notes, amortization of debt issuance costs, non-cash stock based compensation, as well as certain non-cash items related to our equity method investment.

Normalized FAD is an important supplemental performance measure for a REIT. GAAP requires a lessor to recognize contractual lease payments into income on a straight-line basis over the expected term of the lease. This straight-line adjustment has the effect of reporting lease income that is significantly more or less than the contractual cash flows received pursuant to the terms of the lease agreement. GAAP also requires any discount or premium related to indebtedness and debt issuance costs to be amortized as non-cash adjustments to earnings. The Company also adjusts Normalized FAD for the net change in the allowance for expected credit losses, non-cash stock based compensation, senior housing portfolio capital expenditures as well as certain non-cash items related to equity method investments such as straight-line lease expense and amortization of purchase accounting adjustments. Normalized FAD is an important supplemental measure of liquidity for a REIT as a useful indicator of the ability to distribute dividends to stockholders.

*Net Operating Income*

Net operating income ("NOI") is a U.S. non-GAAP supplemental financial measure used to evaluate the operating performance of real estate. NOI is defined as total revenues, less tenant reimbursements and property operating expenses. The Company believes NOI provides investors relevant and useful information as it measures the operating performance of our properties at the property level on an unleveraged basis. The Company uses NOI to make decisions about resource allocations and to assess the property level performance of our properties.

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NHI Reports Fourth Quarter 2022 Results

February 21, 2023

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| | | | | |
|:---|:---|:---|:---|:---|
| **Consolidated Statements of Income** | | | | |
| *(in thousands, except share and per share amounts)* |  |  |  |  |
|  | **Three Months Ended** | **Three Months Ended** | **Year Ended** | **Year Ended** |
|  | **December 31,** | **December 31,** | **December 31,** | **December 31,** |
|  | **2022** | **2021** | **2022** | **2021** |
|  | *(unaudited)* | *(unaudited)* |  |  |
| Revenues: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Rental income | $53764 | $60907 | $217700 | $271049 |
| &nbsp;&nbsp;&nbsp;&nbsp;Resident fees and services | 11791 |  | 35796 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest income and other | 5114 | 8761 | 24698 | 27666 |
|  | 70669 | 69668 | 278194 | 298715 |
| Expenses: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Depreciation | 17303 | 19299 | 70880 | 80798 |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest | 12445 | 12282 | 44917 | 50810 |
| &nbsp;&nbsp;&nbsp;&nbsp;Senior housing operating expenses | 9842 |  | 28193 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Legal | 300 | 701 | 2555 | 908 |
| &nbsp;&nbsp;&nbsp;&nbsp;Franchise, excise and other taxes | 150 | 79 | 844 | 788 |
| &nbsp;&nbsp;&nbsp;&nbsp;General and administrative | 4875 | 3202 | 22768 | 18431 |
| &nbsp;&nbsp;&nbsp;&nbsp;Taxes and insurance on leased properties | 2236 | 4119 | 9788 | 11638 |
| &nbsp;&nbsp;&nbsp;&nbsp;Loan and realty losses | 21960 | 28441 | 61911 | 52766 |
|  | 69111 | 68123 | 241856 | 216139 |
| &nbsp;&nbsp;&nbsp;&nbsp;(Losses) gains from equity method investment |  |  | 569 | (1545) |
| &nbsp;&nbsp;&nbsp;&nbsp;Gain (loss) on operations transfer, net |  |  | (710) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Gain on note receivable payoff |  |  | 1113 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Loss on early retirement of debt |  | (1462) | (151) | (1912) |
| &nbsp;&nbsp;&nbsp;&nbsp;Gains on sales of real estate, net |  | 6072 | 28342 | 32498 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other income |  | 350 |  | 350 |
| Net income | 1558 | 6505 | 65501 | 111967 |
| &nbsp;&nbsp;&nbsp;&nbsp;Less: net loss (income) attributable to noncontrolling interests | 303 | (28) | 902 | (163) |
| Net income attributable to common stockholders | $1861 | $6477 | $66403 | $111804 |
| Weighted average common shares outstanding: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Basic | 43388742 | 45850599 | 44774708 | 45714221 |
| &nbsp;&nbsp;&nbsp;Diluted | 43392787 | 45850718 | 44794236 | 45729497 |
| Earnings per common share: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Net income attributable to common stockholders - basic | $0.04 | $0.14 | $1.48 | $2.45 |
| &nbsp;&nbsp;&nbsp;Net income attributable to common stockholders - diluted | $0.04 | $0.14 | $1.48 | $2.44 |

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NHI Reports Fourth Quarter 2022 Results

February 21, 2023

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| | | |
|:---|:---|:---|
| **Selected Balance Sheet Data** | | |
| *($ in thousands)* |  |  |
|  | December 31, 2022 | December 31, 2021 |
| Real estate properties, net | $2118210 | $2317880 |
| Mortgage and other notes receivable, net | $233141 | $299952 |
| Cash and cash equivalents | $19291 | $37412 |
| Straight-line rent receivable | $76895 | $96198 |
| Assets held for sale, net | $43302 | $66398 |
| Other assets | $16585 | $21036 |
| Debt | $1147511 | $1242883 |
| National Health Investors Stockholders' Equity | $1270225 | $1507083 |

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*This press release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements regarding the Company's, tenants', operators', borrowers' or managers' expected future financial position, results of operations, cash flows, funds from operations, dividend and dividend plans, financing opportunities and plans, capital market transactions, business strategy, budgets, projected costs, operating metrics, capital expenditures, competitive positions, acquisitions, investment opportunities, dispositions, acquisition integration, growth opportunities, expected lease income, continued qualification as a real estate investment trust ("REIT"), plans and objectives of management for future operations, continued performance improvements, ability to service and refinance our debt obligations, ability to finance growth opportunities, and similar statements including, without limitation, those containing words such as "may", "will", "believes", "anticipates", "expects", "intends", "estimates", "plans", and other similar expressions are forward-looking statements. Forward-looking statements involve known and unknown risks and uncertainties that may cause our actual results in future periods to differ materially from those projected or contemplated in the forward-looking statements. Such risks and uncertainties include, among other things; the impact of COVID-19 on our tenants, borrowers, economy and the Company; our ability to retain our management team and other personnel and attract suitable replacements should any such personnel leave; the operating success of our tenants and borrowers for collection of our lease and interest income; the success of property development and construction activities, which may fail to achieve the operating results we expect; the risk that our tenants and borrowers may become subject to bankruptcy or insolvency proceedings; risks related to the concentration of a significant percentage of our portfolio to a small number of tenants*; *risks related to governmental regulations and payors, principally Medicare and Medicaid, and the effect that lower reimbursement rates would have on our tenants' and borrowers' business; the risk that the cash flows of our tenants and borrowers would be adversely affected by increased liability claims and liability insurance costs; risks related to environmental laws and the costs associated with liabilities related to hazardous substances;the risk of damage from catastrophic weather and other natural or man-made disasters and the physical effects of climate change; the risk that we may not be fully indemnified by our lessees and borrowers against future litigation; the success of our future acquisitions and investments; our ability to reinvest cash in real estate investments in a timely manner and on acceptable terms; the potential need to incur more debt in the future, which may not be available on terms acceptable to us; our ability to meet covenants related to our indebtedness which impose certain operational limitations and a breach of those covenants could materially adversely affect our financial condition and results of operations; the risk that the illiquidity of real estate investments could impede our ability to respond to adverse changes in the performance of our properties; risks associated with our investments in unconsolidated entities, including our lack of sole decision-making authority and our reliance on the financial condition of other interests;operational risks with respect to our senior housing operating portfolio ("SHOP") structured communities;our dependence on revenues derived mainly from fixed rate investments in real estate assets, while a portion of our debt bears interest at variable rates; the risk that our assets may be subject to impairment charges; risks related to our ability to maintain the privacy and security of Company information; and our dependence on the ability to continue to qualify for taxation as a real estate investment trust. Many of these factors are beyond the control of the Company and its management. The Company assumes no obligation to update any of the foregoing or any other forward looking statements, except as required by law, and these statements speak only as of the date on which they are made. Investors are urged to carefully review and consider the various disclosures made by NHI in its periodic reports filed with the Securities and Exchange Commission, including the risk factors and other information disclosed in NHI's Annual Report on Form 10-K for the most recently ended fiscal year and quarterly report on Form 10-Q for the most recently ended quarter. Copies of these filings are available at no cost on the SEC's web site at <u>https://www.sec.gov</u> or on NHI's web site at <u>https://www.nhireit.com.</u>*

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