NHI

Image source: The Motley Fool. Tuesday, Aug. 11, 2026 at 8:30 a.m. ET President and Chief Executive Officer-Eric Mendelsohn Chief Investment Officer-Kevin Pascoe Chief Financial Officer-Todd Siefert Chief Accounting Officer-David Travis Operator: Good morning, and welcome to the NHI Second Quarter 2026 Earnings Webcast and Conference Call. [Operator Instructions] It is now my pleasure to turn the floor over to your host, Dana Hambly. The floor is yours. Dana Hambly: Thank you, and welcome to the National Health Investors Second Quarter 2026 Conference Call. On the call today are Eric Mendelsohn, President and CEO; Kevin Pascoe, Chief Investment Officer; Todd Siefert, Chief Financial Officer; and David Travis, Chief Accounting Officer. Yesterday, NHI released its second quarter results and conference call information in a press release after market close. Today's remarks may include forward-looking statements, which are subject to risks or uncertainties and are not guarantees of future performance. Investors are urged to carefully review NHI's filings with the Securities and Exchange Commission, including its Form 10-K for the year ended December 31, 2025, and Form 10-Q for the quarter ended June 30, 2026, for a discussion of these risks. Copies of these filings are available on the SEC's website at sec.gov or on NHI's website at nhireit.com. In addition, today's call may include certain non-GAAP financial measures, reconciliations of which are provided in NHI's earnings release, which has been furnished to the SEC on a Form 8-K. Listeners are encouraged to review those reconciliations provided in the earnings release together with all other information provided in that release. I'll now turn the call over to our CEO, Eric Mendelsohn. D. Mendelsohn: Good morning, and thank you for joining us today. The second quarter represented another important step in executing the strategy we outlined earlier this year. Our operating results were in line with our expectations. We completed the sale of the NHC portfolio on July 1. We further expanded our SHOP platform, and we continued investing in the people and infrastructure necessary to support our long-term growth. The completion of the NHC transaction marks one of the most significant corporate actions in NHI's history. Beyond increasing our private-pay senior housing focus, it substantially strengthens our balance sheet by reducing leverage to well below our long-term target range and provides strong liquidity to pursue future investments. We believe this financial flexibility creates a meaningful competitive advantage as acquisition opportunities accelerate. Our SHOP portfolio performed in line with our expectations for the quarter, and our outlook for the year is unchanged. Same-store results improved significantly from the first quarter, while the newer acquisitions and transition properties are collectively performing within our original investment assumptions. As SHOP becomes a larger percentage of our NOI, we believe these newer investments will increasingly define the company's organic growth profile. In the past year, we've increased our SHOP investment by 137% to approximately $850 million or 24% of the company's total. As the SHOP portfolio grows from a relatively small platform into a larger contributor, we are deliberately investing ahead of that growth in people, technology and processes to ensure we can continue expanding while maintaining disciplined execution. That includes evolving our leadership structure to support the company's next phase of growth, which is why we're excited to welcome Chris Maingot as our new Chief Operating Officer. Chris brings extensive operating and asset management experience that will further strengthen oversight of our growing SHOP portfolio. Just as importantly, his addition allows Kevin Pascoe to dedicate even greater attention to expanding operator relationships, sourcing investment opportunities and driving our acquisition strategy. Disciplined capital deployment remains one of our highest priorities. We believe this enhanced organizational structure positions NHI to execute more effectively through strong operating performance while increasing our capacity to source attractive investments. We also completed our planned CFO transition on July 1, with Todd Siefert assuming the role of Chief Financial Officer. Todd inherits a strong balance sheet with significant liquidity that positions us well to support our long-term growth strategy. His seamless transition ensures continuity of the financial discipline and capital allocation instincts that have long been cornerstones of NHI's success. We continue to believe that the industry backdrop provides powerful and sustained tailwinds for our company. Demand is accelerating as the aging population expands, while new construction remains historically low. Taken together, we believe NHI enters the second half of the year from a position of strength, and our focus remains unchanged, delivering strong operating performance across our expanding SHOP portfolio, pursuing disciplined external growth through thoughtful capital allocation, maintaining a conservative balance sheet and creating sustainable long-term value for our stockholders. While there's always more work to be done, the progress we've made this year reinforces our confidence in the company's strategic direction. We believe NHI is exceptionally well positioned to capitalize on one of the most attractive senior housing environments, and we're excited about the opportunities ahead. With that, I'll turn the call over to Kevin to discuss our business development and asset management activities. Kevin? Kevin Pascoe: Thank you, Eric. Beginning with business development. NHI has completed $237.2 million of year-to-date investments in private-pay senior housing at an average yield of 7.7%, including more than $212 million in SHOP investments. Our external growth strategy remains focused on private-pay senior housing across both SHOP and triple-net structures while maintaining the flexibility to transition selected assets to SHOP when and where we see greater long-term value creation. We continue to see an active investment environment and believe that our strong reputation as a reliable capital partner, enhanced liquidity and increased business development resources position NHI favorably to capitalize on our robust pipeline. We currently have approximately $127.3 million under signed letters of intent, primarily in SHOP with an estimated initial yield of 6.8% and 6.5% after maintenance CapEx. Beyond the signed LOIs, we are evaluating approximately $420 million of additional deals, excluding several larger portfolio transactions. While the pace of acquisitions can vary from quarter to quarter, our investment discipline does not. We believe the actions we've taken over the past several months have meaningfully increased our capacity to execute as opportunities arise, and we're confident we'll continue to deploy capital where the long-term risk-adjusted returns are most attractive. As a part of our ongoing asset management process, we continually evaluate every property to ensure it supports NHI's long-term strategy. While acquisitions naturally receive the most attention, dispositions are an equally important component of disciplined capital allocation. In addition to the NHC sale, we completed the disposition of 7 properties with 6 operators for net proceeds of $117.4 million in 2026. We noted last quarter that we are evaluating a range of strategic alternatives for our same-store SHOP portfolio. We have discussed a solution with our Board on a subset of same-store properties that we believe could provide a better use of our capital. As the negotiations are ongoing, we will provide more details as plans are finalized. Now turning to our operating performance. Total SHOP NOI increased by 188.5% compared to the second quarter of 2025, driven by the transition and acquisition of 27 properties. Collectively, SHOP NOI for the second quarter at $11 million was in line with our forecast. Same-store NOI on the 15 legacy Holiday properties, which represents less than 5% of total annualized NOI declined 6.3% year-over-year to $3.6 million. On a more positive note, when compared to the first quarter of 2026, same-store NOI increased by 18.9%. For the 26 properties that have been in the portfolio since the beginning of this year, NOI increased sequentially by approximately 7.6% from the first quarter of 2026 to the second quarter. Overall, our second quarter SHOP results were consistent with the outlook we established last quarter, and our full year expectations are unchanged. We remain encouraged by the performance of our newer SHOP investments. These communities continue to support our outlook for high-single to low-double digit NOI growth and reinforce our confidence in the long-term return profile of our acquisition strategy. While much of our attention has understandably focused on SHOP, our triple-net portfolio continues to provide a solid foundation for the business. Across our triple-net portfolio, operating fundamentals remain stable. We continue to experience full contractual rent collections as well as healthy occupancy and rent coverage throughout the portfolio. Cash lease revenue increased approximately 2.8% year-over-year, driven by $2.4 million in acquisitions as well as $2.3 million in contributions from percentage rent and annual escalators. This was partially offset by approximately $2.9 million from the transition of 7 properties to SHOP and property dispositions. EBITDARM coverage improved across our major asset classes. For the 12 months ended March 31, 2026, senior housing and SNF coverages were 1.62 and 2.66, respectively. This compares to 1.52 and 2.26, respectively, in the comparable prior year periods. Please note that we have removed the NHC assets and other assets held for sale from our EBITDARM coverage calculations. As previously discussed, we reset the Bickford leases to fair market value on April 1, which increased the base rent to $38.4 million from $35 million previously. In addition to Bickford's base rent, we received additional rent based on a revenue-driven formula that allows NHI to participate in the operating upside. During the quarter, we received approximately $1.3 million in additional rent, which included partial payments calculated prior to the April rent reset. Going forward, we continue to expect approximately $900,000 of quarterly additional rent under the new agreement. That concludes my remarks, and I'll now turn the call over to Todd to discuss our financial results. Todd? Todd Siefert: Thank you, Kevin, and hello, everyone. It's a privilege to be here today and report our second quarter results. I'll first provide details on our second quarter financial results, followed by a brief discussion on our balance sheet and liquidity. For the quarter ended June 30, 2026, our net income per share was $1.15, an increase of 45.6% from the prior year's second quarter. The increase was driven largely by a $22 million gain on the sale of real estate recorded during the quarter related to the disposition of 5 properties for net proceeds of approximately $98.5 million. Our NAREIT FFO and normalized FFO results per share for the second quarter compared to the prior-year period were flat and decreased 2.5%, respectively, to $1.19 per share. NAREIT FFO and normalized FFO for the second quarter of 2026 included $1.1 million in expenses related to the CFO transition and approximately $700,000 of noncash deferred income tax expenses. FAD for the second quarter compared to the prior-year period increased 5.8% to $61.6 million. FAD for the second quarter of 2026 included approximately $500,000 in cash expenses related to the CFO transition. As Kevin noted, our cash rental income increased by 2.8% compared to the prior-year second quarter, and our total SHOP NOI increased by 188.5%. Interest income from the mortgages and other notes declined by 16.1% due to the reduction in the principal amount of our notes receivable balance. General and administrative expenses for the second quarter increased 44% to $8.8 million compared to $6.1 million in the second quarter last year, as the company continues to ramp its SHOP growth strategy in terms of personnel in addition to onetime expenses related to the CFO transition. Interest expense for the second quarter increased 5.4% year-over-year due to higher average interest rates on the company's debt, coupled with a higher balance on our revolving credit facility compared to the prior-year period. Turning to our balance sheet and liquidity. Our net debt to adjusted EBITDA ratio at June 30 was 4.1x and well within our leverage policy of 3.5 to 4.5x. During the quarter, we retired the $125 million term loan due June 2026. We have a $100 million private placement note due in January 2027, which we expect to retire by the end of 2026 and have no other maturities until 2028. Our available liquidity on June 30 was approximately $792.4 million attributable to $262 million in excess revolver capacity, $500 million available under our recently refreshed ATM and cash on hand. In July, we completed the sale of the NHC portfolio for cash consideration of $560 million and expect to recognize a gain of approximately $541.6 million during the third quarter. Consistent with our capital allocation strategy, approximately $221 million of the proceeds was used to complete previously acquired replacement properties under reverse Section 1031 exchanges. The remaining proceeds of approximately $334 million are being held for future tax deferred reinvestment under Section 1031. This strategy is intended to preserve capital for reinvestment while deferring a substantial portion of the taxable gain associated with the NHC disposition. At this time, the company's 2026 taxable income and capital gains are not yet determinable. Let me now turn to our dividend. As we announced last night, our Board of Directors declared a $0.02 per share increase to our quarterly dividend to $0.94 per share for stockholders of record on September 30, 2026, and payable November 6, 2026. I'd like to conclude by thanking everyone here at the company, particularly John Spaid, who made the transition smooth and seamless. I especially want to thank Eric and our Board of Directors for the opportunity to serve as CFO. I fully believe we have a bright future ahead of us. Once again, thank you for joining our call today. That concludes our prepared remarks. With that, operator, please open the lines for questions. Operator: [Operator Instructions] And our first question this morning is coming from John Kilichowski from Wells Fargo. William John Kilichowski: My first one is on the opening remarks, you mentioned some potential plans around the same-store portfolio. I understand you can't say much about it, but I was hoping you can give us a little bit of color. You said a subset of the portfolio. Is that far less than half? Is it a sizable portion? Could it be greater than half? And then could you give us a time line on roughly when you think you could update us on this? D. Mendelsohn: John, this is Eric. Yes, I understand your curiosity and the sensitivity around talking about solutions as these are still operating businesses that have competitors and employees that will feel insecure if they think something is going to happen to their building. So we're very careful to keep our cards close to our chest until we're ready to make an announcement. But you've been around this business long enough to know that the asset management principles are you try and prune your losers and develop those buildings that can be developed into winners and of course, keep the winners. So it's going to be something along the lines you've seen in the past. And our goal as good stewards of capital is to make the transaction accretive or as close to accretive as possible. And the way we think about that is we look at the return of invested capital on the asset. And if it is lower than we want, then we compare it to, well, gee, if we sold something, could we pay off some debt. And would that be accretive if we sold something and we bought something else with it that had a better return, would that be accretive and have a gap in between. So there's a lot of variables in the plan and the timing is really this year. I want to get it done this year. William John Kilichowski: And then how about on just the management side, you've made a couple of exciting updates to the C-suite here. I'm curious, how will the business look different over the next 6 to 12 months given these changes? D. Mendelsohn: Sure. Great question. If you think about it a year ago, our SHOP exposure and assets were around 5% or 6% and now we're close to 25%. And we've told the Street that we'd like to get to 40% or 50%, and that's probably a 3-year plan. Hiring a COO does 2 things. It gives Kevin an opportunity to put the pedal to the metal on acquisitions. And I think that we have a good brand and a good opportunity to partner with operators that Kevin can exploit and use to grow our platform and ramp up our acquisitions. We talk about a run rate of 200 to 400 a year. I'd like to see that go to the 500 to 700 a year. And I think with Kevin focused on nothing but acquisitions, he can do that. The other part of that equation is hiring someone with deep operations experience who worked for an operator, who worked for Blackstone, brings a little bit of private equity mentality to our operating platform and can help us get better returns out of the assets that we own and motivate the managers to perform at their highest potential. Operator: Your next question is coming from Austin Wurschmidt from KeyBanc Capital Markets. Austin Wurschmidt: So last quarter, Eric or Kevin, you guys talked about several larger portfolios you were evaluating over $200 million in outstanding LOIs. And I was just hoping you could give an update as to where those deals stand. And then just wondering kind of where the primary focus is in terms of these larger portfolios versus more of the singles or doubles that are quoted within that $440 million future pipeline. Kevin Pascoe: Austin, this is Kevin. As I mentioned in my remarks, we still have several portfolios that are in play that are on the larger side. We just don't disclose those because it would amplify the number to probably an unreasonable measure, but pipeline remains active. And as I've talked about here with the team is we've got to be able to do it all. The singles and doubles are good relationship builders and add-ons. I think as we're looking at initial deals, generally, we're looking at small to midsized portfolios to kind of establish a relationship and then the singles are great bolt-ons to that opportunity. It's just really hard and in my opinion, a little inefficient to start with a single. But if it's the right operator, the right building, right geography, we'll do that. So we got to be able to have a tool for every job. And sometimes that is the real structure, sometimes that is the lease structure that we've also talked about. The SHOP mentality is really the focus still. But again, I think we need to be able to pick people that are doing the right things for seniors and be able to apply a structure that makes sense for our company with that individual group. So the answer is we got to do it all. Austin Wurschmidt: What's the pricing differential between the larger deals you're evaluating versus the single doubles? And just how confident are you and the team today that you can redeploy the remaining $334 million, I think it was of NHC proceeds using the 1031 exchange and avoid paying any type of special dividend? Kevin Pascoe: Sure. As it relates to the special, I'll have Eric or Todd answer that component. But as I mentioned, the pipeline is very active. I feel very good about where our position in the market, what we're looking at. That said, we're also remaining regimented about how we do our underwriting. It's not an asset aggregation strategy for us. It's making sure that we have -- we're finding the right opportunities and are building for the future. Eric or Todd, do you want to take the special? D. Mendelsohn: I feel -- again, if we're good stewards of capital, we'll do everything we can to avoid the special dividend. It's a headache for certain investors, and there's some tax implications to our investors. I know they'd rather not deal with. So we're going to do everything we can to avoid that special dividend and someone asked about a throwback dividend, which is not a reference to nostalgia, but it is the ability to borrow on future dividends to get coverage in the present. So we have a lot of tools in our toolbox. Austin Wurschmidt: And then sorry, just about the pricing differential between the larger deals versus the single doubles, and that's all for me. Kevin Pascoe: Yes. Sorry, Austin. This is Kevin again. That spread has closed pretty significantly over the last 6 months. It used to be at least 100 basis points. I'd say it's probably 25 to 50 and the whole market has shifted down over that period of time as well to at least 100 basis points. What I think a lot of news clipping used to say year 1 7. We're seeing some pressure on that number now, and it's probably closer to 6%, 6.5% on higher quality stuff, if not a little bit lower. And then you'll see even on your -- what I would consider maybe B type property, they're in the 7s now. So it's a very competitive market. That has continued to shrink, but also goes back to our underwriting and making sure that we're getting the best risk-adjusted returns for what we're buying. Operator: Your next question is coming from Farrell Granath from Bank of America. Farrell Granath: My question -- or my first question is on the same-store SHOP guidance. Just given the first 2 quarter performance and maintaining that 1% to 3%, can you just bridge what the expectation would be for the second half of the year with maintaining that guidance? Kevin Pascoe: Sorry, make sure I understand the question, bridge the gap on same-store performance, you're just talking about 1 half to second half. Farrell Granath: For the full year, 1% to 3% range for the same-store SHOP NOI growth relative to the same-store SHOP NOI, which were more in the negative range or below the midpoint of that guidance in the first half of the year. Kevin Pascoe: Yes. Well, I think if you look at the supplemental, you'll see we've had some growth quarter-over-quarter. We expect to see a similar result throughout the balance of the year. The change to that would be, as Eric alluded to, we have some solutions that we're executing on the portfolio, making sure that we're pruning as appropriate. And then there's other -- one of the other ones that has been a pressure point here is we have one building where there's a number of units offline. That project is underway, will be expected to be finished by the end of the year. But that by itself puts at least a percentage point of occupancy pressure here. So as you alluded to here, the second half of the year is back-end loaded. We do expect to see some additional growth. The big focus for us is really making sure that we get occupancy back to where we wanted to go. We had some good momentum going in -- up until the second quarter of last year, we've seen some exacerbated move-outs or rebuilding the pipeline. But you can also see that we're increasing the RevPOR quarter-over-quarter. So making sure that we're getting the quality move-ins, but we just need to get the volume to make sure that we're covering those move-outs. That said, again, we're covering the rack cost, the resident acquisition costs and making sure that the NOI is improving quarter-over-quarter. That's really the focus, and we expect to see more out of the third and fourth quarter. Farrell Granath: Great. And I guess also on that, how are you driving that occupancy growth? Are there different incentives on the individual property levels? Is there an overarching type of policy in order to be pretty much supporting that growth going forward? Kevin Pascoe: The key really is just making sure that we have the right people in place at the building and the management level. We've been working with our operating partners to make sure that's getting the appropriate focus. I think it is, but something we're going to stay on them about. And then each building will have a little bit different plan for what they're seeing in their marketplace. But there will be, for example, units that have been online or offline, so to speak, for an extended period of time. You have a concession for something where you get revenue off something that overlooks the dumpster or what have you, just making sure that there is a pricing program for where that unit is in the building and that they can sell it. That's the key that we've been working on with our operating partners. And I think that the plan is in place. It's the execution that we're focused on, and we'll be making sure we got our thumbs on them. Operator: Your next question is coming from Juan Sanabria from BMO. Juan Sanabria: Maybe just kind of a 2-part question to start. First, I guess, how should we think about the G&A run rate given the investments in the team? And I'm not sure if Chris is on, but -- and if he is just kind of curious on the strategic focus day 1 and/or if he's not on, Eric, how would you think about Chris' KPIs as he takes the helm as COO? D. Mendelsohn: Juan, good questions. G&A run rate, while, obviously, the CFO transition will not be a regularly recurring expense. So things of that nature will be normalized out in future budgets and guidance. The strategic focus for Chris as the new COO, his first 100 days is to get his arms around the portfolio to focus on some issues we have with SHOP, and that's why he's not here today. He's out visiting buildings. He has worked with some of our asset managers that we have onboarded in the past 2 years. So in their case, this is say hello to the new boss, the same as the old boss. And they'll be implementing a lot of new systems and new methodologies that Chris brings with him from his days as an operator. Dana Hambly: Juan, it's Dana. On the cash G&A component, the guidance is unchanged. It's going to be up kind of low teens year-over-year. Juan Sanabria: And then just on the triple-net portfolio, you made an allusion to maybe having further transitions to SHOP. So just maybe hoping you could size that or talk about the types of communities or portfolios. And maybe if you can comment if that includes Bickford or latest trends there. Kevin Pascoe: Sure. Juan, this is Kevin. I would tell you that our focus is more external and we're doing SHOP right now. That said, that's not excluding anything that's in the portfolio. There are a couple of opportunities. There are a couple of operators that we would love to do additional business with, and we're working on that as we speak. A big part of it is what is their bench strength, what is their capability in the back office, making sure that they have the SOX compliant components and a few other pieces in order to get to where we can have that relationship. So that's been a fair amount of the conversation now, making sure that they have the back office and the bench strength. Most of our operators give us all the reporting that we want. It's that next level that we really got to scrutinize if we're going to go to the SHOP relationship. So as I mentioned, there's a few Bickford, I think we got to make sure we keep an eye on where their performance is, what are the opportunities. As your point is, I'm assuming based on coverage that there is some value that's locked up in that lease, and we would tend to agree. So it's something we'll continue to evaluate. But we got to make sure that the relationship is a fit all the way around, and it's not purely -- we have to take into other considerations, not just the economics. Operator: Your next question is coming from Rich Anderson with Cantor Fitzgerald. Richard Anderson: So Eric, you said 3-year plan to get to 40 to 50 SHOP. I have to admit, I would have been expecting 3 months based on what we're hearing. So like to what degree is that sort of setting a beatable target? It sure seems that way based on all the activity you guys are talking about. What would -- why would it take so long to get from 24 to 40 with everything that's going on today? D. Mendelsohn: I agree, Rich. As part of my internal wiring is to underpromise and overdeliver. So if you were to press me on that, I would say, yes, of course, I think we can do better as well and do it faster, just as we have gotten to this point faster. But the market is tricky, and I can't give you certainty on that. Richard Anderson: Sure. Do you think of 50 is the efficient frontier for NHI? Or is that like step one in the process and then evaluate if you want to become almost a pureplay-ish type of SHOP? Or will there always be a net lease component? To Kevin's point, you're looking around for triple-net assets as well. So I'm wondering what you think of as the optimal level of operating exposure for the company longer term? D. Mendelsohn: Yes, that's a great question and something that we noodle quite a bit here at the office. Part of the issue is when we get to 50%, we would need to have a solid component of our portfolio that is strongly SOX compliant. And if that were the case, we could grow with smaller, less compliant operators who probably don't have the back-office sophistication, and that would give us the flexibility to add on to that number. So ask me again when we get there. Richard Anderson: Okay. Let's try to remember that. And last quarter, I asked the question about what would be considered success after the NHC sale and redeploying and you said I would consider success in 6 months. Do you have a change to that answer today based again on everything that's going on and leverage profile, all the good things that are happening at the company? D. Mendelsohn: Slightly different. I would add to that. I would consider it success if we don't pay a special dividend because we're able to reinvest all of the 1031 proceeds. And then to your point, if we're able to reinvest all that money into SHOP or senior housing within the same year, I think that would be great. And the total success would be if we were to add enough accretive acquisitions on top of the redeployment to get us to our 5% or better FAD growth. Richard Anderson: Okay. Last question for me. And Kevin, you said the emphasis is really on external growth for SHOP, but you did mention conversions. What -- how do you do that? If you've got rent coverage, what's to incentivize an operator to move to SHOP? I'd say very little. But I guess if the lease expires and different conversation, you fall becomes more in your court. Is that the way to think about the SHOP conversion story for NHI that it will be sort of a trickling effect based on lease expirations? Or is there a way to get to that opportunity sooner than that? Kevin Pascoe: Sure. Yes, sure. This is Kevin again. There's absolutely a way to get there sooner. I think the lease expiration is one avenue. But the other way would be if there's an ask, if you will, from the operating partner. It could be that they want to access that value and there might be a payment associated with buying out the lease coverage. It might be that they want to do an expansion or have some other capital needs, and this gives us an opportunity where we're the capital provider rather than layer on more lease payment, do we go ahead and do a conversion. There's so -- and it might be that they want off a guarantee. I mean there might -- there are other ways that we can have that conversation. So we just have to evaluate what we're willing to give in order to get that cash flow. But I think when we think about where hotspots are for operating partners, it generally is around CapEx or kind of locked up value, if you will. So there's avenues to get at it, and then it's just a negotiation on what is that valuation or what are we trading in order to have that relationship. Operator: Your next question is coming from Omotayo Okusanya from Deutsche Bank. Omotayo Okusanya: First of all, I just wanted to ask -- all the best to John. I'm pretty sure he has listened to the call, and it's definitely been a pleasure working with him all these years. The question I had was around SHOP. Kevin, could you talk a little bit just around, again, some of the stuff you bought this quarter, some of the stuff you're kind of targeting in general, kind of what kind of vintage you're looking for newer, older assets, generally kind of where occupancy is? And I ask that in the vein of what was mentioned earlier around kind of a same-store NOI growth profile of kind of high-single digits to low-double digits that you're targeting. I'm just looking at that relative to a lot of your peers that kind of are in the kind of low- to mid-teens. I'm just trying to size up the 2 things of why your target is maybe a couple of hundred bps lower versus what some of your peers are currently putting up. Kevin Pascoe: Sure. Happy to. I think the one thing to keep in mind here as we think about portfolio construction is making sure that we have a solid base. So if you look at our yields, they are a little bit better than what I would say is kind of the marketed yields. And a lot of -- if you're going in at a lower yield, generally, you're expecting more growth. What we've been buying is, I would call it, light value add where it's high 80s, low 90s. We expect a couple of percentage points of occupancy increase. We expect some -- or at least we're underwriting moderate rate increases and then maybe there's some expense efficiencies. So if you're able to get those, you should be at least on that low end of what I quoted, which is that 8% to 10% type growth year-over-year. We think that there is an avenue for growth beyond that. But given that they're almost stable, we're not promising a big growth. But what I do think, though, is if you have a solid base, then one of the prior questions were how do you add with some of the onesie, twosies. Those are the ones where I think you have a little more flexibility to go out and get some of that additional growth. So how do we have a solid base with an operating partner to make sure we're getting solid growth profile, but then add some of those opportunistic investments once you have the relationship where you want it, so we can get additional growth over time. So as I think about portfolio construction, that's really been the baseline for us right now is make sure we do it right. We have a solid portfolio and then we can go grab some of the growth stuff over time. Omotayo Okusanya: That makes perfect sense. On the SHOP side, again, some quarter-over-quarter improvement in NOI and NOI margins, maybe on a year-over-year basis, still some challenges. But just curious about the quarter-over-quarter change. Is any of that kind of more seasonality as you kind of are in the summer season? Or was there like some fundamental improvements there that gets you encouraged that things are ultimately moving in the right direction with the SHOP portfolio with the same-store portfolio? Kevin Pascoe: Sure. I would just -- what we focus on internally is lead volumes, tours, closes, making sure that we're getting -- recovering our out. As I mentioned earlier, we haven't for the last quarter or 2. And some of that is based on some building units that we went offline. Again, that's about a percentage point. But there's some other extenuating circumstances where we've had an increased number of deaths for a few months that put some pressure on it. So again, it's getting focused on making sure that we're closing those leads and getting the move-ins. But as you already noted, the NOI is increasing. We're getting quality leads. We're getting better pricing. We got to supercharge that and make sure we're getting the additional move-ins because you can't cut your way to profitability. But making sure we have the right incentive packages, we're not just giving away units, but getting accretive move-ins. That's a big focus for our operating partners right now. And as you can see, I think they're doing that. We just got to do more of it. Dana Hambly: Tayo, it's Dana. I just -- I think Farrell asked the question earlier. I want to make sure we answer it. If you look at our guidance for the year on the same-store, it would imply growth in the second half of the year of kind of that 8% to 9% range. Operator: [Operator Instructions] And we have a follow-up question from Juan Sanabria from BMO. Juan Sanabria: Just a question on the balance sheet. You've reduced leverage post NHC. You obviously have some gains to redeploy to avoid tax implications. But curious on how we should think about funding of over and above redeploying the NHC capital with your reduced leverage target and kind of how you think about the sweet spot for leverage if your preference would be to continue to use equity to delever as some of your peers have done? Todd Siefert: Yes. This is Todd. Thanks, Juan. Yes, I mean, obviously, if the equity is there and we've got accretive deals that we can obviously show to investors of what that growth story looks like, then we would certainly look to access the equity markets. But we do have capacity from a debt capacity perspective and still be well within the range that we put out there for 3.5 to 4.5x going forward. So that's kind of how we think about it, at least I think about it. Operator: And there are no further questions in queue at this time. I would now like to pass the floor back to Eric Mendelsohn for closing remarks. D. Mendelsohn: Thanks, everyone, for joining us early this morning, and we look forward to seeing you at NAREIT or other senior housing conferences. Operator: Thank you. This does conclude today's conference call. You may disconnect at this time, and have a wonderful day. Thank you once again for your participation. 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This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. NHI (NHI) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Completed the landmark sale of the NHC portfolio on July 1, significantly strengthening the balance sheet and reducing leverage below the long-term target range. Increased SHOP investment by 137% over the past year to approximately $850 million, representing 24% of the total portfolio as the company pivots toward private-pay senior housing. Evolved the leadership structure by appointing Chris Maingot as COO to oversee the growing SHOP platform, allowing the CIO to focus exclusively on accelerating acquisition volume. Attributed SHOP performance to the successful transition and acquisition of 27 properties, with newer investments performing in line with original underwriting assumptions. Maintained a disciplined capital allocation approach, balancing aggressive SHOP growth with a stable triple-net foundation that continues to deliver full contractual rent collections. Benefited from favorable market dynamics characterized by accelerating demand from an aging population and historically low levels of new senior housing construction. Targeting a long-term SHOP portfolio composition of 40% to 50% of total NOI, representing a strategic shift expected to unfold over the next three years. Aims to increase the annual acquisition run rate from the current $200-$400 million range to a target of $500-$700 million through dedicated business development resources. Anticipates second-half same-store SHOP NOI growth of approximately 8% to 9% to meet full-year guidance, driven by occupancy recovery and RevPOR improvements. Prioritizing the redeployment of $334 million in NHC proceeds via Section 1031 exchanges to defer taxable gains and avoid a special dividend requirement. Evaluating strategic alternatives for a subset of the same-store SHOP portfolio to prune underperforming assets and improve overall return on invested capital by year-end 2026. Recorded a $22 million gain on real estate sales in Q2, with an additional $541.6 million gain expected in Q3 following the NHC portfolio closing. Incurred $1.1 million in one-time expenses related to the CFO transition, contributing to a 44% year-over-year increase in G&A expenses. Reset Bickford leases to fair market value on April 1, increasing base rent to $38.4 million and establishing a revenue-driven formula for additional rent participation. Identified occupancy pressure in the same-store portfolio due to specific units being offline for renovation, impacting total occupancy by approximately one percentage point. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management explained that they are evaluating a subset of properties where the return on invested capital is lower than desired compared to debt repayment or reinvestment alternatives. The goal is to execute these transactions by the end of 2026 while ensuring they remain as close to accretive as possible. Management noted that the pricing spread between large portfolios and single-asset deals has compressed from 100 basis points to approximately 25-50 basis points. Yields for high-quality assets have shifted downward to the 6% to 6.5% range, reflecting a highly competitive investment environment. Conversions are evaluated based on operator 'bench strength' and their ability to handle sophisticated SOX-compliant reporting and back-office requirements. Management looks for specific triggers such as lease expirations, operator requests for capital for expansions, or desires to exit lease guarantees. Management expressed confidence in their ability to avoid a special dividend by utilizing 1031 exchanges and other 'tools in the toolbox' like throwback dividends. Success is defined by reinvesting all NHC proceeds into accretive senior housing assets within the current calendar year.

This article first appeared on GuruFocus. Net Income per Share: $1.15, an increase of 45.6% from the prior year's second quarter. NAREIT FFO per Share: $1.19, flat compared to the prior year period. Normalized FFO per Share: $1.19, a decrease of 2.5% year-over-year. FAD (Funds Available for Distribution): $61.6 million, an increase of 5.8% from the prior year period. Total SHOP NOI: $11 million, an increase of 188.5% compared to the second quarter of 2025. Same-Store SHOP NOI (15 legacy Holiday properties): Declined 6.3% year-over-year to $3.6 million, but increased 18.9% sequentially from the first quarter of 2026. Cash Lease Revenue: Increased approximately 2.8% year-over-year. Interest Income (mortgages and other notes): Declined 16.1% due to a reduction in principal amounts of notes receivable. General and Administrative Expenses: Increased 44% to $8.8 million, compared to $6.1 million in the prior year period. Interest Expense: Increased 5.4% year-over-year due to higher average interest rates and a higher balance on the revolving credit facility. Net Debt to Adjusted EBITDA: 4.1 times at June 30, within the company's leverage policy of 3.5 to 4.5 times. Available Liquidity: Approximately $792.4 million at June 30. Year-to-Date Investments: $237.2 million in private pay senior housing at an average yield of 7.7%, including more than $212 million in SHOP investments. Dispositions: Completed the disposition of seven properties with six operators for net proceeds of $117.4 million in 2026. Dividend: Declared a $0.02 per share increase to the quarterly dividend to $0.94 per share. Warning! GuruFocus has detected 3 Warning Signs with NHI. Is NHI fairly valued? Test your thesis with our free DCF calculator. Release Date: August 11, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Completed the sale of the NHC portfolio, significantly strengthening the balance sheet by reducing leverage to well below the long-term target range and providing strong liquidity for future investments. Expanded the SHOP platform by 137% year-over-year to approximately $850 million, representing 24% of total company investment, with newer acquisitions performing within original investment assumptions. Reported strong triple-net portfolio fundamentals with full contractual rent collections, healthy occupancy, and improved EBITDARM coverage (senior housing at 1.62 and SNF at 2.66). Increased the quarterly dividend by $0.02 per share to $0.94, reflecting confidence in the company's financial position and future cash flows. Maintained a robust investment pipeline with approximately $127.3 million under signed LOIs and an additional $420 million in deals being evaluated, positioning the company for continued external growth. Successfully completed the CFO transition and hired a new COO, enhancing organizational structure to support the growing SHOP portfolio and increase acquisition capacity. Same-store SHOP NOI on the 15 legacy Holiday properties declined 6.3% year-over-year, although it improved sequentially by 18.9% from the first quarter. Normalized FFO per share decreased 2.5% year-over-year, impacted by expenses related to the CFO transition and non-cash deferred income tax expenses. General and administrative expenses increased 44% year-over-year due to ramping up the SHOP growth strategy and one-time CFO transition costs. Interest expense increased 5.4% year-over-year due to higher average interest rates and a higher balance on the revolving credit facility. The company faces pressure to redeploy approximately $334 million of NHC sale proceeds under Section 1031 to avoid a special dividend, with a competitive acquisition market potentially limiting attractive opportunities. Occupancy growth in the SHOP portfolio has been challenged by increased move-outs and units taken offline, requiring focused efforts to rebuild the sales pipeline and drive volume. Q: Can you provide more color on the potential plans for the same-store SHOP portfolio, including the size of the subset and a timeline for an update?A: Eric Mendelsohn (President and CEO) acknowledged the sensitivity of the discussion, as these are operating businesses with employees and competitors. He stated the goal is to make any transaction accretive by comparing the return on invested capital against alternatives like paying down debt or reinvesting in higher-return assets. He emphasized the plan is to execute this within the year, keeping details confidential until an announcement is ready. Q: How will the business change over the next 6-12 months given the recent C-suite additions, and what is the target for SHOP portfolio growth?A: Eric Mendelsohn (President and CEO) explained that hiring a COO allows Kevin Pascoe to focus solely on acquisitions, with a goal to increase the annual investment run rate from $200-$400 million to $500-$700 million. The new COO, Chris Maingot, brings deep operational experience to improve asset performance. The company aims to grow SHOP from ~25% of assets to 40-50% over a three-year plan, though Mendelsohn noted this target is conservative and could be achieved faster. Q: What is the status of the larger portfolio deals previously mentioned, and what is the pricing differential between large portfolios and single/double assets?A: Kevin Pascoe (Chief Investment Officer) stated that several larger portfolios remain in play but are not disclosed to avoid inflating pipeline numbers. He noted the pricing spread between large and small deals has narrowed from 100 basis points to 25-50 basis points. Overall market yields have compressed, with high-quality assets now trading around 6.5% and B-type properties in the 7% range, reflecting a highly competitive market. Q: How confident are you in redeploying the remaining $334 million of NHC proceeds via 1031 exchanges to avoid a special dividend?A: Eric Mendelsohn (President and CEO) stated the company will do everything possible to avoid a special dividend, citing the tax implications for investors. He mentioned having multiple tools available, including the ability to borrow on future dividends for current coverage, and emphasized disciplined capital allocation to reinvest proceeds accretively. Q: Can you bridge the gap between first-half same-store SHOP NOI performance and the full-year 1%-3% guidance?A: Kevin Pascoe (Chief Investment Officer) explained that second-half growth is expected to be back-end loaded, with sequential NOI improvements continuing. He cited one building with units offline as a temporary pressure point, expected to be resolved by year-end. Dana Hambly (SVP Finance) clarified that the guidance implies 8%-9% NOI growth in the second half of the year, driven by occupancy recovery and improved pricing. Q: What is the expected G&A run rate given the investments in the team, and what are the strategic priorities for the new COO?A: Dana Hambly (SVP Finance) confirmed the full-year G&A guidance remains unchanged, with low-teens growth year-over-year, excluding one-time CFO transition costs. Eric Mendelsohn (President and CEO) stated Chris Maingot's first 100 days will focus on understanding the SHOP portfolio and implementing new systems and methodologies from his operator background, working closely with existing asset managers. Q: Are there further opportunities to transition triple-net properties to SHOP, and does this include Bickford?A: Kevin Pascoe (Chief Investment Officer) said the primary focus for SHOP growth is external, but there are a few internal opportunities with operators who have the necessary back-office capabilities and bench strength. Regarding Bickford, he acknowledged potential value locked in the lease but emphasized the need to evaluate the full relationship fit, not just economics, before considering a transition. Q: Why would it take three years to reach 40-50% SHOP exposure, and is that the optimal level for the company?A: Eric Mendelsohn (President and CEO) admitted the three-year target is conservative and could be achieved faster. He noted that reaching 50% SHOP would require a solid base of SOX-compliant operators, which would then allow growth with smaller, less sophisticated operators. He deferred on whether 50% is the final frontier, suggesting the company will reassess when it reaches that level. Q: What is the strategy for SHOP acquisitions in terms of asset vintage, occupancy, and expected NOI growth versus peers?A: Kevin Pascoe (Chief Investment Officer) explained the company targets "light value-add" assets with occupancy in the high 80s to low 90s, underwriting a few percentage points of occupancy growth and moderate rate increases. This approach supports 8%-10% NOI growth, slightly below peers targeting low-to-mid teens, but provides a solid, stable base. He noted the company can add more opportunistic, higher-growth investments once relationships with operators are established. Q: How should we think about funding future investments beyond redeploying NHC proceeds, given the reduced leverage?A: Todd Siefert (Chief Financial Officer) stated the company would consider accessing equity markets if accretive deals are available and the growth story can be demonstrated to investors. However, there is also capacity to use debt while remaining within the 3.5x-4.5x leverage policy, providing flexibility in funding future acquisitions. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Interested in National Health Investors, Inc.? Here are five stocks we like better. NHI completed its $560 million sale of the NHC portfolio, expecting to recognize an approximately $541.6 million gain in the third quarter. The transaction reduced leverage below its long-term target and provided roughly $334 million for future tax-deferred reinvestment. Second-quarter normalized FFO per share fell 2.5% to $1.19, while funds available for distribution rose 5.8% to $61.6 million. The board also increased the quarterly dividend by $0.02 to $0.94 per share. SHOP investment grew 137% year over year to about $850 million, with management targeting 8%–9% same-store NOI growth in the second half of the year. NHI plans to increase SHOP exposure to 40%–50% of its portfolio over roughly three years while pursuing additional acquisitions. National Health Investors (NYSE:NHI) reported second-quarter results that management said were in line with expectations, alongside the completion of a major portfolio sale and continued expansion of its seniors housing operating portfolio, or SHOP. President and CEO Eric Mendelsohn said the company completed the sale of its NHC portfolio on July 1, an action he described as one of the most significant in NHI’s history. The transaction increased the company’s focus on private-pay senior housing, reduced leverage below its long-term target range and added liquidity for future investments, according to management. → SoundHound AI Sends a Loud Signal After Its Q2 Earnings Beat NHI sold the NHC portfolio for $560 million in cash and expects to record an approximately $541.6 million gain during the third quarter. Chief Financial Officer Todd Siefert said about $221 million of the proceeds was used to complete previously acquired replacement properties through reverse Section 1031 exchanges, while roughly $334 million is being held for future tax-deferred reinvestment under Section 1031. For the quarter ended June 30, NHI reported net income of $1.15 per share, up 45.6% from the prior-year period. The increase was driven largely by a $22 million gain on the sale of real estate related to the sale of five properties for approximately $98.5 million in net proceeds. → 3 Dividend Champion Utilities for a Market That Can't Sit Still NAREIT funds from operations per share was flat year over year at $1.19, while normalized FFO per share declined 2.5% to $1.19. The quarter included $1.1 million of expenses associated with the company’s CFO transition and about $700,000 of non-cash deferred income tax expense, Siefert said. Funds available for distribution increased 5.8% year over year to $61.6 million. Cash rental income rose 2.8%, while total SHOP net operating income increased 188.5% from the second quarter of 2025, primarily due to the transition and acquisition of 27 properties. → Is Wingstop's Growth Story Losing Steam? General and administrative expense increased 44% to $8.8 million as NHI added personnel to support its SHOP growth strategy and incurred one-time CFO transition costs. Interest expense rose 5.4% as a result of higher average interest rates and a higher revolver balance compared with the prior-year quarter. NHI has increased its SHOP investment by 137% over the past year to approximately $850 million, representing 24% of the company’s total investments. Mendelsohn said the company is investing in personnel, technology and processes as the platform becomes a larger contributor to net operating income. The company hired Chris Maingot as chief operating officer, a move intended to strengthen operating and asset-management oversight of the growing SHOP portfolio. Mendelsohn said the appointment will also allow Chief Investment Officer Kevin Pascoe to focus more heavily on operator relationships, investment sourcing and acquisitions. SHOP NOI totaled $11 million in the second quarter, in line with NHI’s forecast. Same-store NOI from 15 legacy Holiday properties declined 6.3% year over year to $3.6 million, though it increased 18.9% sequentially from the first quarter. For 26 properties owned since the beginning of 2026, NOI increased about 7.6% sequentially. Pascoe said NHI’s full-year SHOP outlook was unchanged and that newer investments continue to support expectations for high-single-digit to low-double-digit NOI growth. Dana Hambly, senior vice president of finance and investor relations, said the company’s same-store SHOP guidance implies 8% to 9% growth in the second half of the year. Management attributed the expected improvement to occupancy initiatives, pricing efforts and the return of certain units to service. Pascoe noted that one property with units offline has created about a percentage point of occupancy pressure, with the related project expected to be completed by year-end. Year to date, NHI completed $237.2 million in private-pay senior housing investments at an average yield of 7.7%, including more than $212 million of SHOP investments. The company has about $127.3 million of signed letters of intent, primarily in SHOP, at an estimated initial yield of 6.8% and a 6.5% yield after maintenance capital expenditures. Pascoe said NHI is also evaluating roughly $420 million of additional potential transactions, excluding several larger portfolio opportunities. He said the company remains focused on SHOP but intends to retain flexibility to use either SHOP or triple-net lease structures depending on the operator, property and expected risk-adjusted returns. Management said acquisition pricing has become more competitive. Pascoe said the spread between larger portfolio transactions and smaller single-property or two-property deals had narrowed to roughly 25 to 50 basis points from at least 100 basis points six months earlier. Higher-quality opportunities were being priced closer to 6.5% initial yields, he said. NHI also disposed of seven properties with six operators for net proceeds of $117.4 million during 2026, in addition to the NHC sale. The company is evaluating strategic alternatives for a subset of its same-store SHOP properties. Mendelsohn said the goal is to finalize a plan this year and pursue a transaction that is accretive or as close to accretive as possible. NHI’s net debt-to-adjusted EBITDA ratio stood at 4.1 times as of June 30, within its stated leverage policy range of 3.5 to 4.5 times. During the quarter, the company retired a $125 million term loan due in June 2026. It has a $100 million private placement note due in January 2027 that it expects to retire by year-end, with no other debt maturities until 2028. Available liquidity was approximately $792.4 million at quarter-end, including $262 million of excess revolver capacity, $500 million available under its refreshed at-the-market equity program and cash on hand. The board increased NHI’s quarterly dividend by $0.02 per share to $0.94 per share. The dividend is payable Nov. 6 to stockholders of record as of Sept. 30. Looking ahead, Mendelsohn said NHI aims to increase SHOP exposure to 40% to 50% of its portfolio over roughly three years, while acknowledging the company could potentially move faster. Management said it will seek to redeploy its Section 1031 proceeds to avoid a special dividend and pursue additional acquisitions that support long-term FAD growth. National Health Investors, Inc (NYSE: NHI) is a specialized real estate investment trust (REIT) focused on owning and financing high-quality healthcare and senior housing facilities in the United States. The company's portfolio encompasses a diverse range of properties, including skilled nursing centers, assisted living and memory care communities, behavioral health facilities, dialysis clinics, and medical office buildings. NHI typically enters into long-term net-lease agreements with experienced healthcare operators, providing stable and predictable rental income streams while enabling its tenants to concentrate on delivering quality care. Since its founding in 1991 and initial public offering later that year, National Health Investors has pursued a disciplined growth strategy centered on strategic acquisitions, joint ventures, and selective development. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "National Health Investors Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

MURFREESBORO, Tenn., Aug. 10, 2026 /PRNewswire/ -- National Health Investors, Inc. (NYSE: NHI) announced today its results for the quarter ended June 30, 2026. CEO Comments "We continued to expand our Senior Housing Operating Portfolio ("SHOP") with second quarter invested capital of $854.8 million, a 137% increase from the prior year period," said Eric Mendelsohn, NHI's President and CEO. "Our total SHOP NOI for the second quarter increased by approximately 188% year-over-year driven by our recent acquisitions while the same-store SHOP results were ahead of expectations." "We also completed the sale of the NHC portfolio, one of the largest transactions in the Company's history, reducing balance sheet leverage to well below our target range and providing significant financial flexibility to pursue additional private-pay senior housing investments. In addition, we recently appointed a Chief Operating Officer to further strengthen our asset management and business development capabilities as we navigate the current operating environment and position the Company to capitalize on the long-term demographic tailwinds supporting our industry. With a strengthened balance sheet, substantial liquidity, and a growing SHOP portfolio, we believe NHI is well positioned to execute on attractive investment opportunities and create long-term value for stockholders," concluded Mr. Mendelsohn. Second Quarter Highlights Net income attributable to common stockholders per diluted share for the quarter ended June 30, 2026 increased 45.6% to $1.15 per share compared to $0.79 per share for the same period in the prior year. Net income attributable to common stockholders per diluted share for the six months ended June 30, 2026 increased 28.7% to $1.97 per share compared to $1.53 per share for the same period in the prior year. Net income attributable to common stockholders for the three and six months ended June 30, 2026 included gains on dispositions of real estate properties of $22.0 million and $24.6 million, respectively. In the six months ended June 30, 2026, the Company disposed of five real estate properties in the Real Estate Investments segment for aggregate net proceeds of $98.5 million. The Company did not have any dispositions of real estate properties in the prior year period. National Association of Real Estate Investment Trusts ("NAREIT") Funds from Operations ("FFO") per diluted share for each of the quarters ended June 30, 2026 and 2025 was $1.19 per share. NAREIT FFO per diluted share for the six months ended June 30, 2026 increased 3.4% to $2.42 per share compared to $2.34 per share for the same period in the prior year. NAREIT FFO for the three and six months ended June 30, 2025 included proxy contest and related expenses of $1.3 million and $1.6 million, respectively, related to the Company's response to a proxy campaign associated with the Company's 2025 annual stockholders meeting. Additionally, NAREIT FFO for the six months ended June 30, 2025 included $1.2 million of transaction costs related to an acquisition in the SHOP segment that did not materialize. Normalized FFO per diluted share for the quarter ended June 30, 2026 decreased 2.5% to $1.19 per share compared to $1.22 per share for the same period in the prior year. Normalized FFO per diluted share for the six months ended June 30, 2026 increased 2.1% to $2.42 per share compared to $2.37 per share for the same period in the prior year. Normalized FFO for the three and six months ended June 30, 2025 included $1.5 million and $1.9 million, respectively, of gains from an equity method investment. Both the quarter and six months ended June 30, 2026 included $1.1 million of compensation costs related to the CFO transition and $0.7 million of deferred income tax expense. Normalized FFO for the six months ended June 30, 2025 included the transaction costs described above. Normalized Funds Available for Distribution ("FAD") for the quarter ended June 30, 2026 increased $5.7 million to $61.6 million compared to $56.0 million for the same period in the prior year. Normalized FAD for the six months ended June 30, 2026 increased $12.1 million to $124.1 million compared to $112.0 million for the same period in the prior year. These increases primarily resulted from the net impact of the Company's acquisitions activity. In addition, the Company had $0.5 million in compensation costs in the quarter and six months ended June 30, 2026 related to the CFO transition. Quarterly Financial Results Results for the quarter ended June 30, 2026 compared to the same period in the prior year were impacted by the following: Rental income increased $1.1 million, or 1.6%, which primarily included a $3.0 million increase from 11 properties acquired since April 1, 2025, partially offset by a $1.9 million decrease from seven properties transitioned to the SHOP segment in August 2025. Resident fees and services, less senior housing operating expenses, increased $7.2 million which included a $4.7 million increase from acquisitions of 20 properties since April 1, 2025 and a $2.7 million increase from the seven transitioned properties discussed above. Interest income from mortgage and other notes receivable decreased $1.0 million, or 16.1%, primarily due to a net reduction in the principal amounts of mortgage and other notes receivable outstanding in the current period compared to the prior year period. Depreciation and amortization increased $5.6 million, or 28.3%, primarily due to a $5.4 million increase from acquisitions activity since April 1, 2025. Interest expense increased $0.8 million, or 5.4%, primarily due to a $4.7 million increase from the 2033 Senior Notes issued in September 2025, partially offset by repayments of the bank term loan and a private placement note and also partially offset by the impact of lower interest rates on the Company's variable rate debt. Legal expense decreased $0.7 million, or 59.4%, primarily due to costs incurred in the prior year period related to the transitioning of seven properties into the SHOP segment in August 2025. General and administrative expenses increased $2.7 million, or 44.0%, primarily due to higher compensation costs and costs incurred in the current period related to the Company's CFO transition. Proxy contest and related expenses of $1.3 million for the quarter ended June 30, 2025 consisted of proxy advisory costs related to the response to a proxy campaign associated with the Company's 2025 annual meeting of stockholders. Loan and realty gains, net, of $1.4 million for the quarter ended June 30, 2025 included a $1.8 million reduction in the Company's credit loss reserves as a result of a non-performing loan repayment received in the period. Gains on dispositions of real estate properties of $22.0 million for the quarter ended June 30, 2026 primarily related to the sale of four properties in the Real Estate Investments segment. Gains from equity method investment of $1.5 million for the quarter ended June 30, 2025 related to cash distributions received from this investment. Income tax expense of $0.7 million for the quarter ended June 30, 2026 consisted of deferred income tax expense primarily resulting from the changes in the operations and investments within the Company's TRS during the period. National HealthCare Corporation ("NHC") Leased Portfolio Disposition In April 2026, the Company executed a purchase and sale agreement with NHC/Op, L.P., a wholly owned subsidiary of NHC, and certain of its affiliates (collectively, the "NHC Purchaser") related to the sale of a portfolio of 35 properties in the Real Estate Investments segment that were leased to NHC. These properties consisted of 32 SNFs and three ILFs which were initially acquired by the Company in 1991. As of June 30, 2026, these properties were classified as assets held for sale and had an aggregate net carrying value of $13.6 million. The Company completed the sale of this portfolio on July 1, 2026 for cash consideration of $560.0 million and expects to recognize a gain of approximately $541.6 million on the sale. Contemporaneously with the closing of the sale of the NHC leased portfolio, the Company executed a partial master lease termination and partial assignment and assumption of the master lease agreement terminating the master lease agreement with NHC with respect to all properties, except four subleased properties located in Florida. The Company assigned to the NHC Purchaser, and the NHC Purchaser assumed from the Company, the master lease for the subleased properties. In July 2026, the Company recognized a reversal of deferred income of $0.5 million related to the lease termination as part of the gain on the sale of these properties. Other Portfolio Activity In April 2026, the Company amended the four master lease agreements with Bickford Senior Living ("Bickford") increasing the combined annual base rent for the portfolio of 37 properties to $38.4 million with annual rent escalators ranging between 2.0% and 3.0%. As a result of these amendments, Bickford is also required to pay contingent rent based on a percentage of the combined monthly revenues for all of the properties leased to Bickford that exceeds a base amount. In May 2026, the Company acquired a portfolio of seven senior housing properties located in Colorado with a combined total of 532 units. The total purchase price was $106.9 million, including closing costs. The properties were acquired pursuant to a Section 1031 reverse exchange transaction which was completed on July 1, 2026 when the NHC properties were sold. The properties are included in the SHOP segment and managed by Generations, LLC. In June 2026, the Company acquired two senior housing properties located in Georgia. The total purchase price was $17.5 million, including closing costs. The properties were acquired pursuant to a Section 1031 reverse exchange transaction which was completed on July 1, 2026 when the NHC properties were sold. The properties are included in the Real Estate Investments segment and leased pursuant to a triple-net lease with an initial annual lease rate of 8.0% and annual rent escalators of 2.0%. In the quarter ended June 30, 2026, the Company completed dispositions of four properties for aggregate net proceeds of $91.8 million. The aggregate net carrying amounts of these properties was $70.0 million. The Company recognized an aggregate gain of $21.8 million on the sale of these properties. The Company received a $5.5 million mortgage note from an affiliate of the buyer related to one of these properties as part of the consideration. These properties were included in the Real Estate Investments segment. In addition to the sale of the NHC properties previously discussed, the Company completed the sale of two properties located in Texas for $19.0 million in cash consideration. These properties were included in the Real Estate Investments segment and classified as assets held for sale as of June 30, 2026. Recent Pipeline Developments The Company currently has approximately $127.3 million of investment opportunities under signed Letters of Intent ("LOI") primarily in the SHOP segment with an average initial NOI yield of approximately 6.8%. The Company expects to utilize the proceeds from the Section 1031 exchange transaction initiated by the NHC portfolio sale for these opportunities. In addition to the signed LOIs, the Company is currently evaluating a pipeline of approximately $420 million of investments which include SHOP, sale-leasebacks and loans with purchase options primarily for senior housing properties. The pipeline excludes portfolio deals. Balance Sheet and Liquidity As of June 30, 2026, the Company had $1.2 billion of consolidated net debt, including $438.0 million outstanding on its $700.0 million revolving credit facility. During the quarter ended June 30, 2026, the Company repaid the remaining $125.0 million outstanding on its bank term loan upon maturity. The Company continues to maintain a strong financial profile with a consolidated net debt to adjusted EBITDA ratio of 4.1x, which is currently well within the Company's target range of 3.5x to 4.5x. The Company is in compliance with all debt covenants and has investment grade credit ratings from Moody's, S&P Global and Fitch Ratings. ATM Equity Program Concurrently with the renewal of its shelf registration statement in March 2026, the Company entered into a new equity distribution agreement whereby the Company can sell up to $500.0 million in common stock under its ATM equity program. During the quarter ended June 30, 2026, the Company settled the remaining $44.9 million of ATM forward equity sales agreements that were outstanding under the previous ATM equity program. As of June 30, 2026, the Company had $500.0 million available under its ATM equity program. Dividend On August 7, 2026, the Board of Directors declared an increase in the quarterly cash dividend to $0.94 per share from $0.92 per share. The dividend is payable on November 6, 2026 to common stockholders of record as of September 30, 2026. 2026 Full-Year Guidance The Company's 2026 full-year guidance range, including information on the underlying assumptions and timing of certain transactions, is set forth below (in millions, except per share amounts): The Company's 2026 full-year guidance includes the following assumptions: $180 million in unidentified new investments; Approximately $665 million in expected proceeds from dispositions resulting in a gain ranging between $565.9 million - $566.3 million; Continued fulfillment of existing commitments; Same Store SHOP NOI growth on 15 properties ranging between 1% - 3% year over year; and Total SHOP NOI on 42 properties, before the assumption for unidentified new SHOP investments, ranging between $44.1 million - $45.1 million. In addition to the assumptions listed above, the Company'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 Company's guidance range may change if actual results vary from these assumptions. Investor Conference Call and Webcast The Company will host a conference call on Tuesday, August 11, 2026, at 8:30 a.m. ET, to discuss its second quarter 2026 results. The number to call for this interactive teleconference is (888) 506-0062, with the confirmation number 813991. The live broadcast of the Company's second quarter conference call will be available online at www.nhireit.com. The online replay will follow shortly after the call and remain available for one year. About National Health Investors, Inc. National Health Investors, Inc. (NYSE: NHI), established in 1991 as a Maryland corporation, is a self-managed real estate investment trust ("REIT"). The Company owns, leases, operates and finances the development of high-quality real estate properties in the United States, focusing on senior housing communities and medical facilities. The Company operates through two reportable segments, Real Estate Investments and SHOP. The Company's real estate property investments include independent living facilities, assisted living facilities, entrance fee communities, senior living campuses, skilled nursing facilities and hospitals. For more information, visit www.nhireit.com. Notes to the Reconciliations of FFO, Normalized FFO, Normalized FAD and NOI The supplemental performance measures described below may not be comparable to similarly titled measures used by other REITs. Consequently, funds from operations ("FFO"), Normalized FFO, Normalized FAD and NOI, as presented herein, may not provide a meaningful measure of the Company's performance as compared to that of other REITs. Since other REITs may not use a similar definition of these performance measures, caution should be exercised when comparing FFO, Normalized FFO, Normalized FAD and NOI, as presented herein, to that of other REITs. These performance measures do not represent cash generated from operating activities in accordance with GAAP as they exclude the changes in operating assets and liabilities, and therefore should not be considered an alternative to net income as an indication of performance or as an alternative to net cash flows from operating activities, as determined in accordance with GAAP as a measure of liquidity, and are not necessarily indicative of cash available to fund cash needs. Funds From Operations - FFO FFO and Normalized FFO are important supplemental performance measures for REITs. These performance measures are useful in that the historical cost accounting convention under GAAP requires real estate assets, other than land, to be depreciated over their estimated useful lives implying that the realizable values of real estate assets diminish predictably over time. Since real estate asset values typically rise and fall with market conditions, presentations of operating results of REITs using the historical cost accounting convention could be considered less informative to investors and should be supplemented with a measure such as FFO. FFO was designed by the REIT industry as a supplemental performance measure to address this issue. The Company defines FFO, or NAREIT FFO, as net income attributable to common stockholders excluding gains on dispositions of real estate properties, impairments of real estate properties and real estate depreciation and amortization expense. These exclusions are adjusted to remove the impact of amounts that are attributable to noncontrolling interests and holders of participating securities. 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, and therefore caution should be exercised when comparing the Company's FFO to that of other REITs. 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 periods to similar prior periods. These adjustments may include, but are not limited to including, impairments of non-real estate assets, gains or losses on non-real estate assets and liabilities and recoveries of previous write-downs on mortgage and other notes receivable. Funds Available for Distribution - FAD Normalized FAD is also an important supplemental performance measure for REITs. It is a useful measure of liquidity and serves as an indicator of the Company's ability to distribute dividends to its stockholders each period. GAAP requires a lessor to recognize contractual lease payments as income on a straight-line basis over the expected term of the lease. This straight-line rent adjustment has the effect of reporting rental income that is significantly more or less than the contractual cash flows received pursuant to the terms of the lease agreements. GAAP also requires any discount or premium related to indebtedness and debt issuance costs to be amortized as non-cash adjustments to earnings. Normalized FAD includes adjustments for these types of non-cash items of a recurring nature typical to REITs and is further adjusted to reflect the cash outflows for recurring capital expenditures. Certain other costs that fluctuate that are not related to the recurring business are also excluded from Normalized FAD. The Company defines Normalized FAD as Normalized FFO excluding straight-line rent revenue adjustments, amortization of lease incentives, non-real estate depreciation and amortization expense and amortization of debt issuance costs and discounts. The Company also adjusts Normalized FAD for the net change in its credit loss reserves, share-based compensation expense, SHOP capital expenditures, deferred income tax expense, as well as certain non-cash items related to the Company's equity method investment, such as straight-line lease expense and amortization of purchase accounting adjustments. The Company removes the impact of the above adjustments that are attributable to noncontrolling interests and holders of participating securities. Normalized FAD for the six months ended June 30, 2025 included an adjustment for transaction costs incurred related to a large transaction in the SHOP segment that did not materialize. Net Operating Income - NOI NOI is a non-GAAP supplemental financial measure used to evaluate the operating performance of real estate assets. The Company defines NOI as total revenues, less tenant reimbursements of property operating expenses and senior housing operating expenses. The Company believes NOI provides investors relevant and useful information to investors as it measures the operating performance of real estate assets at the property level on an unleveraged basis. The Company uses NOI in making decisions on resource allocations to its operating segments. Same Store The Company defines Same Store as real estate properties owned, consolidated and operational for the full period in both comparative periods and that are not otherwise excluded; provided, however, that the Company may include selected properties that otherwise meet the Same Store criteria if they are included in substantially all of, but not a full, period for one or both of the comparative periods, and in management's judgment such inclusion provides a more meaningful presentation of the Company's segment performance. Newly acquired properties, recently developed or redeveloped properties and properties undergoing an operator transition will be included in Same Store after five full quarters from the date of acquisition, transition or being placed into service. SHOP properties and properties with triple-net leases that have undergone operator or business model transitions will be included in Same Store once operating under consistent operating structures for the full period in both periods presented. Properties are excluded from Same Store if they are: (i) sold, classified as assets held for sale or properties whose operations were classified as discontinued operations in accordance with GAAP; (ii) impacted by significant disruptive events such as flood or fire; (iii) those properties that are currently undergoing a significant disruptive redevelopment; or (iv) those properties that are scheduled to undergo operator or business model transitions, or have transitioned operators or business models after the start of the prior comparison period. Forward-Looking Statements 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 expected future financial positions, 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 rental income, continued qualification as a REIT, plans and objectives of management for future operations, continued performance improvements, ability to service and refinance debt obligations, ability to finance growth opportunities, and similar statements including, without limitation, those containing words such as "may", "will", "should", "believes", "anticipates", "expects", "intends", "estimates", "plans", "projects", "target", "likely" and other similar expressions are forward-looking statements. Forward-looking statements involve known and unknown risks and uncertainties that may cause the actual results in future periods to differ materially from those projected or contemplated in the forward-looking statements. Such risks and uncertainties include those risks and uncertainties which are described under the heading "Risk Factors" in Item 1A of the Company's Annual Report on Form 10-K for the year ended December 31, 2025 and the Company's the Quarterly Report on Form 10-Q for the quarter ended June 30, 2026. Many of these factors are beyond the control of the Company and its management. The Company assumes no obligation to update any 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 the Company in its periodic reports filed with the Securities and Exchange Commission ("SEC"), including the risk factors and other information in the above referenced Annual Report on Form 10-K and Quarterly Report on Form 10-Q. Copies of these filings are available at no cost on the SEC's website at https://www.sec.gov or on the Company's website at www.nhireit.com. Contact: Todd M. Siefert, Chief Financial OfficerPhone: (615) 890-9100 View original content to download multimedia:https://www.prnewswire.com/news-releases/nhi-announces-second-quarter-2026-results-302847286.html

Image source: The Motley Fool. Tuesday, May 5, 2026 at 10:00 a.m. ET President and Chief Executive Officer — Eric Mendelsohn Chief Investment Officer — Kevin Pascoe Chief Financial Officer — John Spaid Chief Accounting Officer — David Travis Operator: Good day, everyone. Welcome to the NHI First Quarter 2026 Earnings Webcast and Conference Call. [Operator Instructions] It is now my pleasure to turn the floor over to your host, Dana Hambly. The floor is yours. Dana Hambly: Thank you, and welcome to the National Health Investors conference call to review results for the first quarter of 2026. On the call today are Eric Mendelsohn, President and CEO; Kevin Pascoe, Chief Investment Officer; John Spaid, Chief Financial Officer; and David Travis, Chief Accounting Officer. The results as well as notice of the accessibility of this conference call were released after the market closed yesterday in a press release that's been covered by the financial media. Any statements in this conference call which are not historical facts are forward-looking statements. NHI cautions investors that any forward-looking statement may involve risks or uncertainties and are not guarantees of future performance. All forward-looking statements represent NHI's judgment as of the date of this conference call. Investors are urged to carefully review various disclosures made by NHI and its periodic reports filed with the Securities and Exchange Commission, including the risk factors and other information disclosed in NHI's Form 10-K for the year ended December 31, 2025, and Form 10-Q for the quarter ended March 31, 2026. Copies of these filings are available on the SEC's website at sec.gov or on NHI's website at nhireit.com. In addition, certain terms used in this call are non-GAAP financial measures, reconciliations of which are provided in NHI's earnings release and related tables and schedules, which have been furnished on Form 8-K to the SEC. Listeners are encouraged to review those reconciliations provided in the earnings release together with all other information provided in that release. I'll now turn the call over to our CEO, Eric Mendelsohn. D. Mendelsohn: Good morning, and thank you for joining us today. NHI delivered a solid start to 2026 with first quarter results exceeding our internal expectations across NAREIT FFO, normalized FFO and FAD. These results reflect continued momentum across the portfolio and the benefits of the investments we've made over the past year, particularly within our SHOP portfolio, which continues to scale rapidly and contribute meaningful growth. At the same time, we're updating our full year guidance, which I want to address upfront. The primary driver of this change is the recently announced agreement to sell the NHC portfolio for $560 million. This transaction advances our capital recycling strategy, increases our concentration in private pay senior housing and enhances our balance sheet, providing significant liquidity to reinvest into higher growth opportunities. While we believe this is the right strategic decision for the long-term, the timing of the transaction and redeployment of capital creates near-term earnings pressure, as reflected in our updated guidance. From an operating standpoint, we continue to make progress expanding our SHOP platform. Invested capital through the first quarter increased more than 100% over the past year. Recent acquisitions and transition properties are performing well and in aggregate, are tracking ahead of our initial expectations. We also announced $107 million acquisition for 7 properties in Colorado last night. On a pro forma basis and including the pending NHC and other asset sales, our SHOP investment increases to approximately 24% of our total portfolio and over 15% of annualized NOI. We have now closed on investments of over $212 million in 2026. We expect to defer a significant portion of capital gains associated with the pending NHC asset sale, which has a basis of less than $15 million. Based on our active pipeline and other tax planning strategies, we expect to further mitigate these gains. While we have good overall SHOP momentum, the legacy Holiday same-store performance continues to be below our expectations. As a result, we've adjusted our full year same-store SHOP NOI growth to a range of 1% to 3%. This impacts our FFO per share guidance by less than 1%. The 11 non-same-store properties that we transitioned and acquired since the first quarter of last year contributed $4.3 million to NOI, representing 5.2% sequential growth from the fourth quarter of 2025. We believe these assets are more indicative of the underlying organic SHOP growth potential. The broader strategic outlook for NHI remains very compelling. We are confident that the steps we are taking today are the right ones to strengthen the company and enhance our long-term growth profile. We are actively reshaping the portfolio to increase our exposure to private pay senior housing, where we see the most attractive risk-adjusted returns. The pending NHC leased portfolio disposition accelerates that shift to approximately 80% of annualized NOI. Overall, the senior housing industry fundamentals present significant organic and external tailwinds. Demand is accelerating and new supply is stagnating. We are working on several initiatives to improve internal growth, and we continue to add depth to our asset management platform through experienced new hires and investments in technology to increase scale advantages. The pipeline is robust, and we remain disciplined in our underwriting and capital allocation. The capital recycling positions the pro forma balance sheet with leverage at less than 3x net debt to adjusted EBITDA, giving us substantial flexibility to pursue accretive acquisitions. Taken together, we believe these factors position NHI to deliver solid long-term FFO per share growth and create sustained value for stockholders. Before I turn the call over to Kevin, I want to say a few words about John Spaid, who recently announced that he will be starting his well-earned retirement on July 1. John joined NHI as employee #13 in 2016, answering my call to bring greater financial acumen in managing NHI's balance sheet and capital market relationships. His leadership has NHI well positioned with an excellent balance sheet and ample access to capital that should fuel our long-term growth strategy. On behalf of the entire NHI community and all of our stakeholders, I congratulate John on a great career and wish he and his wife many years of great golf, travel, fine dining and good living. Thank you, John. I'll now turn the call over to Kevin to discuss our business development and asset management activities. Kevin? Kevin Pascoe: Thank you, Eric. Beginning with business development. NHI is off to a strong start with announced year-to-date SHOP investments of $212.4 million. This includes a 7-property portfolio of assisted and independent living assets in Colorado, which we closed on May 1. The portfolio has 532 units, occupancy in the high 80% range and RevPOR of approximately $5,300. We expect an initial NOI yield for the first year of approximately 8.3% and 7.8% after routine CapEx. Properties are transitioning management to Generations, which is an existing lessee of ours in Colorado, and we have been looking for opportunities to grow with since our initial investment in 2025. We currently have $20.3 million under signed letters of intent and are evaluating an active pipeline valued at $560 million. We are also in discussions on multiple larger portfolio opportunities and have over $200 million in outstanding LOIs. This pipeline continues to give us confidence that we can meet or exceed last year's investment total. Our external growth strategy remains focused on private pay senior housing assets across both SHOP and triple net structures while maintaining flexibility for future SHOP transitions. Though pricing has tightened over the past year, deal volume has accelerated, and we believe we are well positioned given our excellent reputation in the industry, strong access to capital and ability to execute. As a part of our ongoing portfolio management efforts, we completed the disposition of 4 properties with 4 operators for net proceeds of approximately $53.4 million. In addition to the pending NHC transaction, we have 3 other properties under contract for disposition, representing approximately $58 million of expected net proceeds. Turning to our operating performance. Total SHOP NOI increased by 188.1% compared to the first quarter of 2025, driven by the transition and acquisition of 20 properties. Same-store NOI on the 15 legacy Holiday properties declined 2.4% year-over-year to $3 million and represents less than 4% of the company's annualized NOI. The first quarter NOI was in line with our expectations, but occupancy declined throughout the quarter, prompting the change to the full year growth outlook. While the financial impact is limited, we are not satisfied with the performance and are evaluating a range of strategic alternatives for these assets, and we'll provide further detail as decisions are finalized. The non-same-store portfolio, including the Colorado acquisition, now includes 27 properties. The estimated annualized NOI of approximately $33 million represents 73% of total SHOP NOI. As Eric noted, the non-same-store properties generated solid growth from the fourth quarter and our updated guidance reflects an increased contribution relative to our initial forecast. For these newer assets and future acquisitions, we continue to expect near-term NOI growth in the high single-digit to low double-digit range, supporting projected rates of return in the low to mid-teens. Across the triple net portfolio, we continue to see stable performance with no rent concessions and generally steady occupancy and EBITDARM coverage. Cash lease revenue increased approximately 7.7% year-over-year, driven primarily by acquisitions, NHC percentage rent and the annual percentage rent true-up as well as annual escalators. This was partially offset by the transition of 7 properties to SHOP on August 1. EBITDARM coverage improved across our major asset classes. For the 12 months ended December 31, 2025, senior housing and medical coverages, excluding NHC, were 1.61 and 2.53, respectively. Regarding Bickford, we reset the leases to fair market value on April 1. The new structure includes base rent of $38.4 million, which is approximately $3.2 million above the prior base rent and annual escalators of 2% to 3%. In addition, we will receive conditional rent based on a revenue-driven formula similar to the structure previously used for deferral collections. The pro forma EBITDARM coverage on the new base rent at December 31 was 1.55x. Given this elevated coverage, we expect total cash collections from Bickford, including base and conditional rent, to increase modestly under the new lease. The conditional rent component extends through the life of the lease and allows NHI to participate in the potential upside as performance continues to improve. That concludes my remarks, and I'll now turn the call over to John to discuss our financial results and guidance. John? John Spaid: Thank you, Kevin, and hello, everyone. This morning, I'll provide details on our first quarter results and update you on our financial outlook for 2026. I'll be using average diluted common shares for all per share results. For the quarter ended March 31, 2026, our net income per share was $0.82, an increase of 10.8% from the prior year's first quarter. Contributing to our strong Q1 performance was the accretive growth attributable to the $413 million in new investments the company placed in service since the beginning of the second quarter last year. Also contributing to the quarter was an above expectation prior year NHC percentage revenue rent true-up and a larger-than-expected improvement in first quarter NHC percentage revenue rent, which resulted in a $1.3 million higher cash rent for the quarter compared to our February guidance expectations. Also recall that in the prior year first quarter, we recognized $1.2 million in transaction expenses and $0.3 million for proxy contest expenses. Our NAREIT FFO and normalized FFO results per share for the first quarter compared to the prior year period increased 7.9% and 7%, respectively, to $1.23 per share. FAD for the first quarter compared to the prior year period increased 11.6% to $62.5 million. Interest expense for the first quarter was up 4.9% year-over-year due to higher average interest rates on the company's debt. Cash G&A for the first quarter was up 31% to $5.6 million compared to $4.3 million in the first quarter last year as the company continues to ramp its SHOP growth strategy. Weighted average common diluted shares were up 5.8% to 48.5 million shares as a result of the company's greater use of equity in lieu of debt to fund new investments over the last year. During the quarter, we closed on new investments totaling $105.5 million. And subsequent to the quarter's end, we announced an additional investment for $106.9 million in 7 senior housing SHOP properties with an existing operator. At March 31, 2026, we had remaining escrowed forward equity proceeds of approximately $44.2 million available to us in exchange for the future delivery of 643,000 common shares at an average price of $68.81 per share. We ended the quarter with $24.9 million in cash on our balance sheet and $391 million in revolver capacity. During the first quarter, we renewed our shelf registration statement on file with the SEC and concurrently entered into new equity ATM distribution agreements, bringing our ATM capacity back up to $500 million. Our balance sheet ended the first quarter in great shape. Our net debt to adjusted EBITDA was 4x for the quarter and at the midpoint of our 3.5x to 4.5x leverage policy. Our available liquidity, excluding the proceeds from future dispositions, was approximately $960 million attributable to the cash on the balance sheet, excess revolver, forward equity and additional ATM capacity. We have 2 debt maturities in 2026 and 2027 totaling $225 million and no other maturities until our revolver facility matures in 2028. Let me now turn to our dividend and guidance. As we announced last night, our Board of Directors declared a $0.92 per share dividend for stockholders of record June 30, 2026, and payable August 7, 2026. The company expects to offset the expected gains due to our announced dispositions, utilizing IRC Section 1031 like-kind exchanges, including reverse 1031 exchanges to the greatest extent possible. At this time, the company's final year-end 2026 taxable income and capital gains are not yet determinable and may not be fully determinable until the fourth quarter. Last night, we updated our 2026 full year guidance. We expect GAAP net income at the midpoint to be $14.37 per share, reflecting the significant gain associated with the pending NHC lease portfolio disposition. We expect NAREIT FFO and NFFO per share at the midpoint to be $4.77 per share or up 2.6% and down 2.9% compared to 2025, respectively. We expect total FAD at the midpoint to grow 4.1% to $242.2 million. Our full year 2026 guidance includes $180 million in additional future investments and an average NOI yield of 7.8%, comprised approximately 60% in SHOP investments, which we believe is a conservative assumption for the remainder of the year. The guidance includes $392 million in new announced and unidentified 2026 investments at an average NOI yield of 8%. The guidance includes the impacts associated with our recently completed and expected dispositions for 6 properties as well as the 35-property NHC portfolio. Our 2026 guidance reflects the settlement of our remaining forward equity and the retirement of our upcoming debt maturities using proceeds from our revolver. However, we expect our capital market activity to adjust as required to meet the company's liquidity needs due to the changes in the timing and the amount of our investments and dispositions. I'd like to conclude by thanking everyone I've worked with during my 10 years at NHI. I especially want to thank Eric and our Board of Directors for the opportunity to serve as CFO and for their trust. I'm very proud to be leaving the company with a balance sheet in solid shape and well positioned to support the company's future. Once again, thank you for joining the call today. That concludes our prepared remarks. So with that, operator, please open the lines for questions. Operator: [Operator Instructions] Your first question is coming from Farrell Granath with Bank of America. Farrell Granath: This is Farrell Granath. I first wanted to ask about the $560 million incremental pipeline that you're expecting going forward. I know when this initially was announced, we had received color that it was to be paying down debt. And then based on some of your comments, it seems that you're receiving or are able to be underwriting or looking over more deals. Can you give us a little bit more color on the percentage or breakdown of SHOP versus leased or leased with the revenue participation within that $560 million? And if that has actually started to increase after the announcement of -- or likelihood of being able to close deals after the announcement of the NHC lease? Kevin Pascoe: Sure. This is Kevin. I would say our pipeline has been pretty consistent. It is fairly robust right now, predominantly senior housing, which isn't a big change. That's what we've been looking at this whole time. And I think we just have to be open with the structure that we use and mindful of the property or the underlying asset, their ability to have growth and then making sure that we make an assessment, is that appropriate for a lease or a SHOP transaction. I think we want to do more SHOP, and that's going to be an emphasis for us. So there might be a way for us to do -- if it is a lease, maybe there's a way to do a transition into the future, but we're remaining flexible on structure at the moment and just making sure that we understand the underlying fundamentals of the property and what kind of growth profile we can get. Farrell Granath: And I also wanted to ask about the legacy Holiday assets. I know you had commented that they haven't been performing within expectation. What is driving that underperformance? Is it simply from fl,u seasonality? Or is it from other comments that we have heard in prior quarters, due to transition in staff or other items? Kevin Pascoe: There is some modest seasonality. That said, they did hit our projections for the first quarter. The issue that we run into really is relegated to just a handful of properties and some census loss at those, which made us kind of reset expectations for growth. We have a couple of others that we're doing some extensive CapEx projects that ran into some delays, that are going to delay kind of the lease-up there. So we wanted to make sure we were resetting expectations for something that we felt very confident in versus trying to adjust later in the year. I still think our forecast is very manageable, but frankly, disappointing. But like I said, the problem is fairly isolated. And again, as we've talked about in prior calls, we're just talking about a very small portfolio, which is what's moving the percentage here probably more than it should. It affected our -- it's less than 4% for us. Operator: Your next question is coming from Juan Sanabria with BMO Capital Markets. Juan Sanabria: Maybe a question for John, and congratulations on your upcoming retirement. But just wanted to, on the guidance, delve a little deeper into the driver. So how much of the decrease in FAD per share was as a result of the NHC sale? And just to confirm, you're only assuming you reinvest an incremental $180 million and nothing over and above that. Is that correct? John Spaid: Well, it depends on your definition of reinvestment, Juan -- this is John. So there's a lot of moving parts. First, the proceeds. The proceeds are going to -- initially, there's going to be well over $200 million that will reduce debt. Those $200 million are tied to reverse 1031 exchanges that we've already set up. There'll be a portion of those proceeds that we will have to set aside, we can't touch for a period of time with intermediaries and 1031s. Those proceeds will be reinvested at the rate that the intermediaries can provide us. So there's some drag there. We've already been making investments ahead of our original guidance. This investment we announced today was ahead of the original guidance. The $180 million in additional guidance increases our guidance that we gave to you for the total amount that we thought we'd be able to invest this year. We still think that's a very conservative number. So it's a little bit of -- yes, NHC transaction in a variety of different ways did pull down our guidance. However, we've had some outperformance on investments that have offset some of that. But the net effect has -- of the NHC transaction was to pull down our guidance. I hope that helps. Juan Sanabria: It does. And then can I just -- on the NHC transaction, have you had any third-parties reach out looking at potentially topping the bid by NHC to repurchase the assets? D. Mendelsohn: Juan, this is Eric. I'll take that question. If a third-party reaches out in writing, then we will issue a press release about that. Until then, we're not ready to disclose anything. Operator: Your next question is coming from Austin Wurschmidt with KeyBanc Capital Markets. Austin Wurschmidt: Eric or Kevin, in the prepared remarks, I think you indicated you have over $200 million in outstanding LOIs for multiple larger portfolios. I guess given the reluctance to give too much detail on larger portfolio opportunities, just given the difficulty predicting whether you'll transact, I guess, how far along are you in negotiating these deals? How competitive is the process? And should we view your willingness to openly discuss these deals as maybe having a higher probability of closing? Kevin Pascoe: Sure. This is Kevin. I would tell you that we're willing to talk about them because we feel like there is ample opportunity out there, whether we end up landing these deals or some other ones that are in the pipeline. I also don't feel like our pipeline number we gave is indicative. I also don't want to give a bit of a head fake by quoting ridiculously large number. We're reviewing a large amount of opportunities, which generally, when we describe it, did not include $100-plus million portfolio deals that we're looking at. So we wanted to try and give a little bit of flavor for what the pipeline does look like. That said, I feel like we have a solid chance at landing these, which is why we're willing to talk about them, but nothing is for certain until it's closed. Austin Wurschmidt: And just to be clear, these portfolio deals are outside of the $560 million that you put in the release last night, correct? Kevin Pascoe: That's right. Austin Wurschmidt: And then just one more. Recognizing that the same-store shop pool is small, and this was sort of structured with a group of underperforming assets several years ago coming out of the COVID period. But how does this group of assets compare to the assets you've recently acquired and are underwriting today, just to give confidence in maybe the future performance versus what you've seen happen within the same-store pool in the last couple of years? Kevin Pascoe: Sure. This is Kevin again. What we're looking at now is generally newer assets, generally has some element of health care associated with it versus the independent. That said, I don't want to make it such that independent is a negative. I think having some sort of continuum or a combination is helpful, though, and that's generally what we're looking at more now is where you have an ILAL or ILAL memory or some combination thereof. We feel like there's better pricing power on that side and be able to add the element of care and create a bit of a continuum. So generally, it's going to be newer and have the continuum, I'd say that. And then really, what we're looking at is more of a -- when we look at the growth profile, we're not looking at deep value adds. I would characterize the Holiday transition as more of a turnaround. That's not really where we've been playing in the sandbox right now. So it's just a little bit different profile. Austin Wurschmidt: And then just last follow-up there is just have you changed your underwriting at all to drive some additional success in landing these recent deals within SHOP? And that's all for me. Kevin Pascoe: Sure. I would suggest to you that the market is very competitive. So we're trying to meet the market and make sure that we're making good decisions based on data and that we understand the markets that we're going into and what our operators' competencies are as they manage these assets and finding the right fit between the 2. So I think our underwriting has evolved over time, and I feel confident in our ability to execute here. Operator: Your next question is coming from Rich Anderson with Cantor Fitzgerald. Richard Anderson: So I think I heard a number, 24% SHOP. Is that pro forma for the NHC sale? And I'm curious what that number would be after deployment of the proceeds, where we're looking at when all the dust settles from the transaction? Kevin Pascoe: Sure. Rich, this is Kevin. That is a pro forma after NHC. And then what the mix looks like is still to be determined. It just depends on what level of SHOP versus triple net we redeploy the capital into. But I think it's safe to say that looking into the future, that SHOP percentage is going to continue to increase. Richard Anderson: Curious as to why it's only 15% of NOI, like you would think that those numbers would be flipped given the growth profile. This is just the Holiday impact that's causing that lower percentage of NOI? Kevin Pascoe: Yes. I mean I think that those properties in aggregate have been a drag. We're working to make sure we manage that as good stewards of the company, but really focusing on the new SHOP, which we talked about has good -- a much better growth profile to it. Richard Anderson: Okay. When you think about the duration of this is like a, call it a one step back, 2 steps forward type of strategy around the sale rather than the release of the NHC portfolio. So I can appreciate that, but I think it all comes down to how long before you sort of get back to square one. So given all of these comments around pipeline and so on, I mean, what would be a success in your mind to sort of getting back and then surpassing the previous range of guidance and truly presenting this as the right strategy to take? Is this 1 year worth of time, 2 years, 5 years? I think what would be measurable as success in your mind? D. Mendelsohn: Rich, this is Eric. I agree it's -- it is kind of a 2 steps forward, one step back event. But we're excited about the opportunity of focusing on senior housing, having less legacy issues with NHC. What I would consider a success is if we can meet or exceed our original guidance. Keep in mind that we've already 1031ed over $200 million worth of transactions this year. So in my mind, we're almost halfway through that $560 million gain. And if we can redeploy the rest of that, call it, 200 -- $360 million in the next 6 months, then I would consider that a win, especially if it's senior housing and even more especially if it's SHOP. Richard Anderson: John, congrats to you. Good luck. Operator: [Operator Instructions] Your next question is coming from Omatayu Okusana with Deutsche Bank. Omotayo Okusanya: John, a big congratulations. It has been a pleasure working with you, and thanks for always shooting straight and telling it like it is. I always kind of appreciated that about you [Technical Difficulty]. First question from my end, the proceeds from NHC, I mean, is there any chance at all whether with the 1031 rules or anything of that nature where you may have to ultimately deploy that as a special dividend? Or can that scenario kind of [indiscernible] or like is that kind of a [Technical Difficulty]? John Spaid: Yes, this is John. We're looking at that. We are obviously planning in case we do need to declare a special dividend towards the end of the year. As you know, REITs have 2 options here. We can actually pay the tax on the capital gain if we so chose. Typically, REITs don't do that. They would prefer to return the capital back to shareholders unless they can find a better use for the capital and can defer it. And so there are short time frames under these 1031 arrangements. Our average cost of capital, let's say, is 4.6%, 4.7% in that range. So initially, the lost NOI doesn't completely result in a one-for-one reduction in FAD. So we're looking at reducing debt, saving interest expense and then making smart redeployment of that capital. And insofar as we do have to declare a special dividend, the components of that dividend may include a portion of stock. So stay tuned. As I said in my prepared remarks, it's not determinable at this point, and it's going to depend on a lot of factors that we really -- won't really know until we get to the fourth quarter. Omotayo Okusanya: Got you. That's helpful. And then if I could just ask a quick question about Bickford. With the new lease structure now, I would kind of expect you don't collect any "rent deferrals" anymore with the way the new structure is set up. I also wanted to understand a little bit about the slight occupancy dip in the reported metrics, what was kind of going on there? Kevin Pascoe: Tayo, this is Kevin. As for the occupancy dip, it's -- when we look at seasonality and their trends over the last few years, this is within the normal range. So nothing that we're concerned about here. And sorry, could you restate your first question for me, please? Omotayo Okusanya: And then the first question was around the rent deferrals, again, that you've kind of been collecting. But the way the new lease has been structured April 1, does that kind of disappear and it's all kind of being built into the new lease rate? Kevin Pascoe: Yes, I would characterize it as being built into the new rent. We just have a new rent structure where we will get the contingent rent through the rest of the lease versus when the way it currently was structured is there would have been a balloon payment. So now we would extend the period in which we have the contingent rent eligible for probably another 5-plus years. And then we can participate in the revenue growth at the operator level. Operator: You do have a follow-up question coming from Juan Sanabria with BMO Capital Markets. Juan Sanabria: Just a quick question on the SHOP pipeline. What kind of yields can we expect on incremental investments? You talked about increased competition. So just curious on the pricing you're seeing in today's market? Kevin Pascoe: Juan, this is Kevin. I would say that we've done very well on the last few deals that we've closed in terms of our initial yields. The market has definitely tightened, and I would not tell you to forecast, that's where the market is today. And what we see is the same as what you see is year 1 yields tend to be in kind of that 7% type range, plus or minus. Some of that's going to be based on vintage of asset market. If you -- if it's a bigger portfolio, it might be a bit lower where you think you might get some better rents or some better growth. But I think that's kind of what we're seeing right now. Our expectation is to try and do something better than that, but we're -- we have to be able to meet the market. Juan Sanabria: And then just kind of going back to one of the earlier questions. I guess the question in the forefront of people's minds is, is the Holiday situation in the kind of the back and forth on expectations there unique to those assets? And what lessons have you learned that you don't think that would be replicated in what you're purchasing or have purchased more recently? Just what are you looking for today that's different? I recognize Holiday was IL only and now it's more of an acuity mix, AL, IL, memory care mix. But if you could just expand on those points, I think that would be helpful. D. Mendelsohn: Juan, this is Eric. You've heard me say this before, the Holiday buildings were a science experiment. When Holiday was sold to Atria, we decided to kick off our SHOP portfolio with that as our first basis. And I would tell you that the new product that we're looking at is not 40 years old, not in need of constant CapEx and not in very tertiary markets. We're looking at mostly senior housing that has assisted living or memory care or some health care component. We're looking at newer buildings. We're looking at operators that have good local infrastructure and good practices in marketing and SEO and SEM marketing that keep the buildings full and keep the margins high. So more to come on what we're doing with the Holiday portfolio, but I'm going to be pointing to the not same-store portfolio going forward because we're getting the kind of performance that we're looking for out of those newer buildings. Juan Sanabria: And just one final one for me. It looks like some of the Florida assets tied to NHC are closing later or are being kind of carved off in some fashion. Could you just talk a little bit about that change, I believe, and why that's taking place? D. Mendelsohn: Sure. That is a sublease. NHC is not running those buildings. They're run by [ Solaris ]. And we are -- for legal reasons, we're just assigning that lease back to NHC. So we keep the sublease intact. It's a technicality of Florida licensing that requires us to do that. But the timing and the closing won't be affected. Operator: There are no further questions in queue at this time. I would now like to turn the floor back over to Eric Mendelsohn for any closing remarks. D. Mendelsohn: Thank you, everyone, for your time and attention today, and we look forward to catching up with you in person at one of the conferences soon. Operator: Thank you, everyone. This does conclude today's conference call. You may disconnect your phone lines at this time, and have a wonderful day. Thank you for your participation. Before you buy stock in National Health Investors, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and National Health Investors wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. 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Image source: The Motley Fool. Tuesday, May 6, 2025 at 10 a.m. ET President & Chief Executive Officer — Eric Mendelsohn Chief Investment Officer — Kevin Pascoe Chief Financial Officer — John Spaid Chief Accounting Officer — David Travis Vice President, Finance and Investor Relations — Dana Hambly Need a quote from a Motley Fool analyst? Email [email protected] Operator: Greetings. Welcome to National Health Investors First Quarter 2025 Earnings Webcast and Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note, this conference is being recorded. I will now turn the conference over to your host, Dana Hambly, Vice President, Finance and Investor Relations. You may begin. Dana Hambly: Thank you, and welcome to the National Health Investors conference call to review results for the first quarter of 2025. On the call today are Eric Mendelsohn, President and CEO; Kevin Pascoe, Chief Investment Officer; John Spaid, Chief Financial Officer; and David Travis, Chief Accounting Officer. The results, as well as notice of the accessibility of this conference call were released after the market closed yesterday in a press release that's been covered by the financial media. Any statements in this conference call which are not historical facts are forward-looking statements. NHI cautions investors that any forward-looking statement may involve risks or uncertainties and are not guarantees of future performance. All forward-looking statements represent NHI's judgment as of the date of this conference call. Investors are urged to carefully review various disclosures made by NHI and its periodic reports filed with the Securities and Exchange Commission, including the risk factors and other information disclosed in NHI's Form 10-K for the year ended December 31, 2024 and Form 10-Q for the quarter ended March 31, 2025. Copies of these filings are available on the SEC website at sec.gov or on NHI's website at nhireit.com. In addition, certain terms used in this call are non-GAAP financial measures, reconciliations of which are provided in NHI's earnings release and related tables and schedules which have been furnished on Form 8-K to the SEC. Listeners are encouraged to review those reconciliations provided in the earnings release together with all other information provided in that release. I'll now turn the call over to our CEO, Eric Mendelsohn. Eric Mendelsohn: Hello and thanks to everyone for joining today. We're off to a great start in 2025 with first quarter results that exceeded our expectations driven by a faster pace of acquisitions and upside to our cash rent collections from better-than-expected deferral payments and the NHC percentage rent. As a result of the strong start and building momentum, we're raising our normalized FFO guidance midpoint by $0.08 per share to $4.71 representing year-over-year growth of 6.1%. We've announced investments of $174.9 million so far this year and we're far from done as the number of sellers seems to be growing. We have an active pipeline of approximately $264 million that Kevin and his team are working on right now and the funnel of other opportunities is many times larger than that. The pipeline includes multiple SHOP deals and excludes larger portfolios. On the topic of large portfolios, you'll notice that we recorded a $1.2 million charge in transaction costs for the quarter. These costs were related to a large SHOP portfolio to which we allocated significant resources. Ultimately, this was not the right deal for our shareholders and we will not pursue growth for growth's sake. We are, however, keenly focused on growing our SHOP portfolio and we're excited about the many opportunities that we're seeing. Last quarter, we talked for the first time about growing SHOP through internal conversions. We're making great progress on transitioning a portfolio of six properties currently leased to Discovery to a new RIDEA partnership. We see good NOI upside to this portfolio and we’ll plan to share more details as the conversion progresses. We're taking extra time to ensure that this transition goes smoothly as this can serve as our template for future additions of assisted living communities into the RIDEA structure. We've been positioning the company for this opportunity through our portfolio optimization and are thrilled to be on the front-end of this long-term value creating opportunity for our shareholders. In our existing SHOP operation, the first quarter result experienced typical seasonality. Our belief in the trajectory is unchanged and we're therefore maintaining our outlook for 12% to 15% NOI growth this year and continued strong performance in later years. As I mentioned at the start, our cash rent collections exceeded expectations in large part due to the pace of acquisitions. We've acquired approximately $131 million in real estate year-to-date with three new partners including Generations, Juniper Communities and Agemark. We've long admired all three of these companies and are already exploring additional avenues to grow these relationships. The balance sheet continues to be in great shape and very supportive of funding this significant investment pipeline. As John will detail in his comments, we are including $155 million in incremental investments in our guidance on top of the investments already announced, reflecting our high conviction in the near-term outlook. I think it's safe to say that given the fast start and good visibility on the pipeline, we're optimistic we can surpass last year's investment total of $237.5 million. Last quarter, I said that we were pleased with the execution in 2024 and very optimistic that 2025 would be an even more productive year. That is proving to be consistent with our mantra to “under promise and over deliver”. I'll now turn the call to Kevin to provide more details on our operations. Kevin? Kevin Pascoe: Thank you, Eric. We are unquestionably seeing the pace of deal flow accelerate. We are actively pursuing a $264 million pipeline which consists of real estate and SHOP deals primarily in senior housing. We are also evaluating some larger deals with nine figure valuations that are not included in the pipeline. The current market seems to show no dearth of sellers while the buyer pool is somewhat limited. We have a competitive cost of capital and solid access to debt and equity capital, which is why we are seeing so much activity right now and we expect that 2025 investments will be materially higher than 2024. Turning to asset management, as Eric mentioned, we are making good progress on converting a six property portfolio to RIDEA with a new operating partner. We greatly appreciate Discovery's cooperation in this matter and we'll continue to work with them to grow our SHOP portfolio. The need driven operators again had positive coverage trends with EBITDARM at 1.41 times. Bickford's coverage adjusted for the April 2024 rent reset was 1.66 times, while the other need driven tenants coverage improved sequentially by 1 basis point to 1.23 times. Deferral repayments of $2 million were a bit ahead of our expectations as we received approximately $1.4 million in unscheduled repayments, including approximately $1.3 million from Bickford and $120,000 from two other operators. As we discussed last quarter, the legacy SLM portfolio has been largely repositioned. Last week, we received $2.5 million in partial repayment of a loan on four properties. While certainly not happy with SLM's circumstances, I am pleased with our team's quick response to limit any disruption to the residents of these properties and to recapture a significant amount of the lost NOI. Our entrance fee and skilled nursing portfolios continue to show great performance. The discretionary senior housing portfolio, which includes our entrance fee portfolio had healthy coverage at 1.67 times. The SNF portfolio reported solid coverage at 3.06 times, which improved sequentially from 3.05 times. Recall that the SNF coverage is largely driven by NHC which is calculated using a corporate level fixed charge coverage ratio as opposed to a facility level EBITDARM. We have received several questions about the potential impact of Medicaid cuts to our portfolio. While it's too early to know, we have added additional disclosure to our supplemental on Page 22 that details our annualized SNF cash revenue by state. As you can see, the majority of our revenue is in states that never expanded Medicaid under the ACA. In addition to our strong SNF coverage and tenant credit, we believe our geographic exposure can mitigate the impact of potential cuts. Lastly, in SHOP NOI for the quarter increased 4.9% year-over-year to $3.1 million, resident fees increased by 5.2% year-over-year, driven by occupancy improvement of 390 basis points to 89.2%. The margin declined 10 basis points to 22.1% compared to the prior year period. We did expect occupancy and NOI to show some seasonality with a dip in the first quarter compared to the fourth quarter. We are broadly seeing fundamentals trend in the right direction, including April's preliminary occupancy, which is up approximately 40 basis points from March, so we are maintaining our 12% to 15% NOI growth target for the year. I'll now turn the call over to John to discuss our financial results and guidance. John? John Spaid: Thank you, Kevin and hello everyone. For the quarter ended March 31, 2025, our net income for diluted common share was $0.74, up 4.2% from the prior year. Our NAREIT FFO results for diluted common share for the quarter ended March 31, 2025 compared to the prior year period increased 3.6% to $1.14. Our normalized FFO results for diluted common share for the quarter ended March 31 increased 2.7% to $1.15 compared to the prior year period. In the first quarter, we recognized $1.2 million in transaction costs, which is approximately $0.03 per share, which Eric mentioned in his comments impacting net income, NAREIT FFO and normalized FFO. FAD for the quarter ended March 31 compared to the prior year period increased 9.9% to $56 million. Sequentially compared to the fourth quarter cash rent for the first quarter from our Real Estate Investment segment increased $2.6 million. The increase was attributable to several items. First, our cash rents increased approximately $900,000 from acquisitions closed during the fourth quarter of 2024 and the first quarter of this year. Second, we received $1.2 million in percentage revenue rents from the annual NHC percentage revenue certification. The $1.2 million in NHC percentage revenue rents were offset by $100,000 in lower NHC base rents attributable to the declining lease termination consideration associated with a disposal of seven Northeast skilled nursing assets. Recall that in 2022 we increased the $30.8 million base rent in our master NHC lease for the consideration NHC agreed to pay us for the early termination of a separate seven property NHC lease. The termination of that lease added additional rents owed the company to the master lease for the lease termination consideration. The company then disposed of the seven Northeast assets in 2022 and received $43.7 million in net proceeds. Third, we received approximately $200,000 in additional rents from transition properties, including properties formerly leased to SLM. And fourth, we received approximately $700,000 in additional rent attributable to annual rent increases. Those increases were partially offset by lower deferred rent repayments of approximately $300,000. NOI from our SHOP segment for the quarter ended March 31 increased 4.9% to $3.1 million compared to the prior year period. The year-over-year SHOP common shareholder FAD contribution was up 12.6% to $2.8 million after adjusting for routine capital expenditures and non-controlling interests. In the first quarter, the company completed approximately $76 million in three separate real estate property acquisitions, including the conversion of the non-performing SLM mortgage loan to a fee simple lease arrangement. For more details, please see Note 3 in the Form 10-Q ended March 31, 2025 filed last night. Subsequent to the end of the quarter, we’ve announced two additional new investments totaling $91.5 million at an average yield of 8.3%. Year to date, we now have made investments of approximately $174.9 million at an average initial yield of 8.2% or approximately $118 million in investments greater than the first six months of last year. During the first quarter, we activated our ATM and sold on a forward basis approximately 208,000 common shares and an average price before fees was $75.52 per share. During the first quarter, we settled the remaining 960,000 common shares from the August 2024 forward offering and adjusted forward price of $68.21 per share after fees for proceeds of approximately $65.5 million. At March 31, 2025, we had total escrowed forward equity proceeds of approximately $68.9 million available to us in exchange for the future delivery of 931,000 common shares at an average price of $74 per share. We also ended the quarter with $135 million in cash on our balance sheet. Subsequent to the first quarter, we retired $60.1 million in secured debt and extended our $200 million term loan for six months to December 16, 2025. Our balance sheet ended the first quarter in great shape. Our net debt to adjusted EBITDA ratio is 4.1x for the quarter, well within our stated 4x to 5x leverage policy. We ended the quarter with approximately $409 million in available ATM capacity and we had $253 million of availability on our revolver in addition to the remaining escrowed forward equity proceeds and cash on our balance sheet. For 2025, we continue to be focused on the company’s liquidity to meet both our pipeline and maturing debt needs. We have an additional right to extend our $200 million term loan for another six months into 2026, which we intend to do sometime toward the end of the third quarter and we will retire our other maturing debt totaling $65.6 million through the end of the year. We are monitoring long-term bond rates and continue to expect to tap the public bond market in 2025 to further improve our liquidity. Let me now turn to our dividend and guidance. As we announced last night, our Board of Directors declared a $0.90 per share dividend for shareholders of record June 30, 2025 and payable on August 1, 2025. Last night we also increased our full year 2025 guidance for all our per share metrics. Our updated full year guidance for NAREIT FFO and normalized FFO per diluted common share at the midpoints is $4.67 and $4.71 or 2.6% and 6.1% increases respectively over 2024. Compared to the February guidance, we increased NAREIT FFO and normalized FFO by $0.04 and $0.08 respectively. Our guidance for FAD at the midpoint is $225.1 million, up from the February guidance of $221.7 million and represents a 10.2% increase over 2024. Our guidance this year includes the impacts from escrowed forward equity proceeds during the year. Our guidance includes unchanged SHOP NOI growth in the range of 12% to 15% over 2024 as well as the continued collection and deferred rents and the fulfillment of our existing commitments. I’d like to take a moment to discuss the NHC master lease agreement in the context of what’s included in our guidance based upon the information which can be found in Note 3 of our March 31, 2025 10-Q and the 10th Amendment to the NHC master lease agreement filed as an 8-K September 8, 2022. Our guidance includes the base rent as scheduled in the 10th Amendment plus the percentage revenue rent we received from NHC in two parts. The first part is 2024 rent owed us based upon the certified 2024 revenues on our facilities. The second part is the estimated percentage revenue that will be paid to us using last year’s actual revenues until we receive certified revenue numbers in the first quarter next year. As I just mentioned, the base rent does include the additional payments owed us for the Northeast seven lease termination consideration. Altogether, our guidance assumes total rent to be paid to the company before the certification of this year’s certified portfolio cash revenues to be approximately $39.7 million. Because our confidence in our pipeline has led us to raise significant forward equity, we are updating our future unidentified investment guidance for the remainder of the year. Our updated 2025 guidance includes $155 million in additional new unidentified investments at an average yield of 8.2%. The timing of these investments is assumed to be weighted more heavily in the third and fourth quarters of this year. In the future, we may discontinue giving guidance for unidentified investments should we discontinue obtaining equity on a forward basis. Our guidance currently does not include the impacts from any SHOP conversion activities, but does include the impacts from the recently announced Discovery lease amendment as further discussed in Note 3 of the 10-Q. Finally, guidance continues to include assumptions for additional costs and concessions related to normal asset management, transitions, dispositions, and loan repayments. Once again, thank you for joining our call today. That concludes our prepared remarks. So with that operator, please open the lines for questions. Operator: Thank you. At this time we will be conducting a question-and-answer session. [Operator Instructions] And the first question today is coming from Rich Anderson from Wedbush. Rich, your line is live. Rich Anderson: Thanks. Good morning. So maybe I’ll go right for the jugular here. On NHC, can you give any update generally on the process? Whether or not you need some clarity on Medicaid before you can really kind of dive in? And relate it to all that what the latest perspective that you could share is relative to land and buildings and having the right board bench in place to do it right? Eric Mendelsohn: Hey Rich, this is Eric. And according to Hogan, our attorneys, we have to be careful what we say about land and buildings because they’re definitely monitoring this call. But the process with the NHC lease as written in the lease is they have to give us notice of renewal six months before the end of the term, which is the end of 2026. We’re having dialogue with them in the meantime, trying to see if we can come to some sort of early agreement. Obviously that Medicaid issue and the provider tax issue is a cloud and makes the future a little fuzzy there. So that’s something we’ll have to navigate around. And then just for the activists listening, we do have an independent director’s related party committee of the Board and we have retained Blueprint Advisors, a skilled nursing advisory SHOP to help us determine what is market, what is a fair deal for shareholders. And then the related party committee will also help us determine the right strategy and help us create shareholder value based on the lease renewal. Rich Anderson: Okay. Thanks for that. Second question is on SHOP. It’s sort of small but growing based on what you’re talking about in terms of internal conversions. But what caused it to be so dramatically low for the first quarter? I know you’ve reiterated guidance, but was there something in there one time-ish, because even any of your peers are not sort of in the mid-single digits during this quarter. We’re not seeing that anyplace else but here. So maybe you can just comment on that. Kevin Pascoe: Hey Rich, this is Kevin. Actually, yes, we did have one-time expense in there that held it back a tiny bit. At the end of the day though, we had planned on some seasonality and had projected it to be relatively flat for the first quarter, which is where it came in. We do tend to see some excess move outs in the winter months, so not terribly surprised. We’d like to see it have done a little bit better. But at the end of the day we still had year-over-year growth. We’re seeing good leading indicators. So we’re still very positive on our guidance that we put out there. Rich Anderson: Okay. And Kevin, just so I have you a last one for me, what’s left to do with SLM in terms of the mezz loans? Kevin Pascoe: SLM is largely wrapped up from my perspective. We got a $2.5 million payment at the end of April as they sell additional facilities, there’s some likelihood that we’ll get some additional payment. But those – the timing of those is not determinable at the moment. So the buildings have been re-tenanted, they’re doing better and improving, happy with our tenants there. And then as I mentioned, we got one payment looking for some additional payments, but we’ll report more as we get those in. Rich Anderson: Okay. Great. Thanks very much. I’ll yield. Kevin Pascoe: Thank you. Operator: Thank you. The next question is coming from Juan Sanabria from BMO Capital Markets. Juan, your line is live. Juan Sanabria: Hi. Good morning. Just a question on Discovery on the triple net transitions, should we expect that process to be seamless? Any sort of blip in rents collected or straight line rent write-offs or deferred CapEx that we should be thinking of as part of that? And if you could just square like why you’re happy to continue the relationship on SHOP, but are looking to transition to triple net assets? Kevin Pascoe: Hey Juan, this is Kevin again. As it relates to the transition, I think with any transition to a new operator there’s going to be a little bit of noise. So while as I mentioned on the call or the comments, we’re very thankful for Discovery’s cooperation here. There’s going to be a handoff. There’s going to be probably some noise in there. We’ve accounted for that as we think about it in our projections as we look at this opportunity. In terms of the buildings, they’ve been maintained. I do believe we’re going to have some revenue producing type CapEx that will invest in the community. So you’ll see that from us like we also did on the other SHOP portfolio. The last question I want to clarify, when you said about continuing to invest in SHOP, do you mean with Discovery or can you clarify? Discovery’s done a good job on the SHOP portfolio that we have. We’ve seen occupancies improve. We’re starting to see the incentives that we had put out there to get occupancy up come off. We should see RPUs increase. At the end of the day it took a little bit more time than we would have liked on the SHOP portfolio. That’s a global comment really for the whole 15 to get in the right direction. But we’re moving and we feel good about that. So we want to support the things that have gone well. There’s an ability I think for us to move some more independent – larger independent buildings into that relationship and support the things that have gone well. And then on the other piece, it’s going to be our election to move in a different direction and find a new home for those properties. But it’s not a relationship that we just want to cast aside. We’re still going to continue to invest in it. John Spaid: Juan, before you ask another question, this is John. Let me add some additional color here on your question. First, the Discovery lease arrangements have some credit enhancements. So we’re in the process of determining the complete process of working through the operating transfers, which will also involve working capital and things like that. We’re very comfortable at the FAD line with what we have in guidance this year and don’t expect any disruption there as a result of this transition. We also want to make – mention that when a lease does become apparent that it’s not going to go to term. We have straight line receivables on our balance sheet, and you can find more information about that in Note 3 in the 10-Q. So that – those receivables, we’ll have to deal with in accordance with how we’ve done that in the past. So I just want to mention of those two things. Juan Sanabria: Okay. Great. Thanks. And then going back to NHC. I guess, how should we think about the percent rent benefit that you had in the first quarter and what that means to that tenant’s profitability? And how you see how that business is performing and kind of what the upside could be if you took those assets to market? Kevin Pascoe: This is Kevin, again. The percentage rent, and I’ll speak a little bit for John was largely factored into our numbers already, so minor positive increase there. But we had decent line of sight into what that was going to be. So that was already kind of taken care of. The fact of the matter is the buildings continue to improve. We’ve been happy with performance coming out of COVID, took a little bit of time for them to get there from improving their NOI perspective. But I think it’s going in the right direction. So time so far has been to our benefit. Rents continue to go up. We’re seeing that improve. The market’s still pretty good from a valuation standpoint, and we’re working with Blueprint to make sure we have good line of sight into that. But we’ve got really good comps on what the portfolio should be worth. So we’re making sure that we have all those pieces of information that we can and factor that into our negotiations with them. Juan Sanabria: And just last one for me, just on the SHOP portfolio and the reiteration of guidance, how should we think about the moving pieces to get there. Is it, because RevPar is kind of yet to move. Occupancy was down kind of sequentially. So I guess, how do you give us comfort that you can hit that mid-teens same-store NOI growth? Kevin Pascoe: I think the things to focus on here are going to be the incentives rolling off and continued occupancy at that 90% plus level. That would make sure that we’re not doing additional heavy incentives to keep that occupancy. That’s what we’re expecting out of the portfolio. We are starting to see them roll off a bit. We did see a little bit of softness on occupancy which we anticipated in the first quarter. So the expense line is something I think that can always be worked on. But it’s really revenue. It’s – can we continue to perform on maintaining and improving occupancy and getting those incentives out? And that’s something that we’ll – I think we’re expecting to see throughout the year and we had planned on a flat first quarter and then improving from there. We’re starting to see positive KPIs. One other thing to point out too is just the recurring CapEx. We’ve invested a ton into these communities. We should see that level out over time. It was down a little bit in the first quarter. A little bit of that is timing and that we’ll continue to invest in the buildings throughout the year. But you should see that total investment come down over time as well, which would help the [indiscernible] Juan Sanabria: Thank you. Thanks. Operator: Thank you. The next question will be from Farrell Granath from Bank of America. Farrell, your line is live. Farrell Granath: Thank you for taking my question. My first one is on the large SHOP portfolio that did not close or fell out of pipeline. I’m curious if you could give a few more details at what part of the process there may have been questions about and were there any lessons learned coming out of it? Kevin Pascoe: Well, sure. This is Kevin. I think well where we ended with was we had a property under LOI. We got in figuring out what the actual NOI run rate is, what growth look like, is this going to be an accretive transaction for NHI and ultimately what does the growth prospects look like? We came to the determination that it was likely not going to be a fit for a few reasons, one of which was just structure and how it rolled into our organization. At the end of the day it was probably just not the right time. I think it’s a good portfolio. Maybe it comes back around. But for now, we’re happy to continue to pursue what pipeline we have. It’s rather robust. So rather than commit resources to something that was going to drag out and may not completely satisfy investor expectations, we decided to continue to move off of it and really pursue the pipeline we have otherwise. Farrell Granath: Okay. Thank you. And also, in the $155 million unidentified new investments, can you give a sense of the mix between either property investments or debt financing and if you have a certain target on each bucket? John Spaid: Yes. The way we approach our unidentified investment bucket is we have a combination of a little bit of loans as well as mostly fee simple. As you can see by the execution we’ve had through the date of this call, it’s been mostly fee simple. We think that’s going to continue. But when we make our assumptions on unidentified investments, we’re sort of mindful that it might be a mixture. And so the rates will be a little different. But you can see the average yield that we’re assuming in guidance is still 8.2%, which is completely in line with especially the most recent closings that we had subsequent to the third quarter. So, that’s basically how I can help you with that question. Farrell Granath: Okay. Thank you. And one last one for me is, with the Discovery leases or the triple net conversions, is there any sense on timing of when that NOI would be transitioned? Kevin Pascoe: This is Kevin. We're targeting the third quarter, that's still subject to legal review and licensure applications. And there's some timing aspects in there, but at the end of the day, that's the goal we're working on. Farrell Granath: Okay, thank you so much. Operator: Thank you. [Operator Instructions] The next question is coming from Omotayo Okusanya from Deutsche Bank. Omotayo, your line is live. Omotayo Okusanya: Hi. Yes, good morning, everyone. First of all, congrats on just the overall solid execution. Two questions on SHOP. Again, I know you guys talked a little bit about seasonality being the issue for the weaker things to NOI this quarter, but I guess when I'm looking at your supplemental and your disclosure there, it really looks like the main issue was RevPOR growth, which again was again 70 bps year-over-year. And Kevin, you had mentioned incentives in the prior, so that makes sense. But I'm just curious, again, you already have occupancy so close to 90%, why the continued use of such heavy incentives, especially in this quarter in particular, which just seems like RevPOR growth was just really low. Kevin Pascoe: Sure. This is Kevin. Tayo, the fact of the matter is not all the buildings are at 90%. There are still a subset that need to get there and we're still having to use some incentives. And the other thing that we're fighting is the average length of stay we're seeing that. We've seen that come down from when it was a holiday portfolio. Back then it was 33 months, now it's closer to two years. So you're having that turnover. We want to make sure that we're steady at that occupancy. So there's a little bit of incentive usage just to make sure we're holding on before we just completely let it go. At the end of the day though, again, we're very focused on it. We're not wanting to continue the incentives. It's something that's a focus for both of our operating partners, but we want to make sure that they're steady and we don't want to lose additional occupancy and wanting to maintain occupancy through the winter as much as possible. Omotayo Okusanya: That makes sense. And then SLM and the SHOP conversion. Again, what's the ultimate target in regards to – again, right now you're getting $0.5 million in rents or so per month. But is the idea here the NOI of this portfolio can be $10 million or is it kind of somewhere we can kind of bogey kind of what the upside is from the conversion? Eric Mendelsohn: Sorry if I misheard you, I think you said SLM but we're talking about Discovery, correct? Omotayo Okusanya: Discovery. Discovery. I'm sorry, sorry, Discovery. Wrong before. Eric Mendelsohn: Yes. So I would maybe rephrase it a little bit differently is we've seen good growth, well, we see good growth potential anyway out of the portfolio and thinking that over time it can be a double-digit NOI grower. So could it get to $9 million or $10 million someday? I think that's possible. The fact of the matter though is we need to see more steady continued growth. We think that we can get that focus out of the RIDEA relationship and continuing to invest in some additional CapEx that will be ROI producing. That's really the focus to make sure we're getting the right year-over-year growth out of it. John Spaid: Hey Tayo, this is John. Let me also mention that, when we look at that portfolio and the return on invested capital, which can be derived from the information in all our filings, it's just over 3%, so our underwriting still continues to tell us we should be able to do better. And so there is potentially kind of the upside that you might be talking about getting back to a more normalized return on invested capital on those assets. And we publish what our ROIC is, and so we're very focused on making sure we're efficiently using capital wherever it's deployed. Omotayo Okusanya: That makes sense. One more from me, if you could indulge me. Any update on PACS at all. Again, I know it's a much smaller tenant to you guys, but curious if you're hearing anything? Kevin Pascoe: This is Kevin. Again, we don't have anything additional to share. What you've seen from their public disclosure is what we have as well. We were in regular contact, the buildings continue to pay rent as agreed, and their underlying performance is doing fine. But in terms of where they're at, I don't know any more than you do. Omotayo Okusanya: Awesome. Thank you. Operator: Thank you. The next question will be from Austin Wurschmidt from KeyBanc Capital Markets. Austin, your line is live. Austin Wurschmidt: Thanks. Good morning, everyone. You referenced a couple times that deal flow is accelerating. Just curious what you think is driving the uptick in the activity, whether it's a market phenomenon or something NHI specific. And just give us a sense how deep the pipeline is as we think about the ability to backfill the existing pipeline? Kevin Pascoe: This is Kevin. I think a lot of it's just sellers coming to the realization that this is the market now. Cap rates have kind of flattened out. We're seeing a lot more activity. Rates are high and there was a glimmer of hope, I think people had, that they were going to come down, but that's kind of been diminished, I think for the rest of the year. So buyers are just looking to recycle – sorry, sellers are looking to recycle capital. As I mentioned, it's somewhat limited buyer pool. We're not seeing – they're getting multiple LOIs on properties, but we're right in the mix, particularly now with our SHOP product, if you will, that's available where we can be more competitive on higher quality properties, where we can get focus on certain operators that we might not have had before. So I think it's just made us a lot more competitive and the market's just ripe for us. We're very focused on senior housing. That's the biggest part of the pipeline. Most of it being real estate investment and whether it's SHOP or lease, there probably a little bit of debt will do. We've seen that play out well for us where we'll get purchase options if we put the first mortgages out. But that's probably a second choice for us right now. But it's pretty deep. We've talked about 264 in terms of our pipeline, but the total funnel that we're looking at right now is probably three or four times that number. So it's definitely a good time for us. Austin Wurschmidt: Do you think that the pace of acquisitions could increase? I mean, you referenced you freed up additional resources with no longer pursuing the large portfolio deal. And between that and just I guess the network effect of bringing in new operators, do you think that pace could pick up at some point towards the back half of this year? Kevin Pascoe: I think it can. We just want to be selective on where we're investing. We're not going to chase it, like Eric said. We also have to be mindful about growing our team out, which we're actively doing. So I think you'll definitely see more investment from us, the pace of which will be kind of dictated in terms of how much we like the opportunity. We have the ability to stretch and do a little bit more. But we want to make sure it's thoughtful and going to be accretive for the company, not only now but into the future. Austin Wurschmidt: And then just the last one for me is you referenced cap rates flattening out. I mean, do you attribute to that kind of occupancy being back towards maybe even above in some cases pre-pandemic levels and just the growth profile changing or other factors that you think are driving that? Kevin Pascoe: I think it's a couple things. One, as I mentioned, debt is still pretty expensive. So a typical buyer is going to have if they go too far down on the cap rate, they're going to have negative leverage. So I think that's going to push up cap rates. And then there is an element to your thought of performance stabilizing a bit. We are seeing more stabilized type properties when you're looking at growth in the kind of mid to high single-digits versus some of the double-digit numbers that's been posted. So that's also what we're sifting through, making sure that we have the right growth profile and initial yields on the properties. But I think in my opinion it's two of the factors anyway that are going to cause that. Austin Wurschmidt: That's helpful. Thanks for the time. Operator: Thank you. And the next question is a follow up from Juan Sanabria from BMO Capital Markets. Juan, your line is live. Juan Sanabria: Hi, thank you. Just curious on the bond stuff, John, that you talked about tapping the bond market later in the year, kind of what the range of size raises and how you see your cost today to think about kind of relative to guidance? John Spaid: Sure. Well, as you noticed, we're utilizing quite a bit of equity. One of the things that we do is we look at the relative incremental cost of our equity compared to our long-term bond cost. And so we've been saying for some time now that, the bond cost, the long-term debt cost is pretty close to the same cost as our equity. In the previous quarter, we're always going to be ready but during our open windows, there is quite a bit of cross currents related to the tariffs that just made the issuance for us maybe a little less efficient than we would have liked. We're a relatively smaller REIT. We're also BBB-, BAA3. And so I think there's just – we're just having to be very mindful about, we've got to pick our window properly. And so the minimum is $300 million to be indexed which will give us the greatest liquidity on our bond. We need to, we will get into longer dated maturities here and that's why I mentioned it in my prepared remarks this year. But we're prepared to sort of weave with the market on the long-term debt issuance and that's why I'm so focused on talking about our liquidity as we're growing here. Juan Sanabria: So where would you cost a 10-year debt? What would the spread be? The treasury? Kevin Pascoe: Well, that's a great question. It kind of blew out on us. I would call it 40 basis points in the first quarter to over 200 basis points. That's not historically ever been our expectation, we would be sub-200. So we'll just see how the market starts to talk to us here in the coming quarters. Juan Sanabria: Thanks. And a couple other quick follow ups on the NHC related proxy battle. Just curious on the cost we should be expecting. John Spaid: So hey Juan, this is John again. We put a number in our guidance. That number was right at $1.8 million. That's our current expectation. And as you noted – as you noticed in our first quarter results, there was an add-back of approximately $264,000 at the normalized FFO line. So you can see that note mentioned in our guidance. Juan Sanabria: Great. And just sorry for one last one for me, on the SHOP side on the occupancy dip sequentially. Recognizing some of that was planned and seasonal. So was the issue on the move outs and if it's move outs was that – or debt related or was there some element of financial move outs as part of that? Kevin Pascoe: Predominantly it's going to be a move out due to higher level of care or debt, I think we saw those that passed away accelerate a bit which again is normal seasonality. Haven't really seen a huge spike in financial. There's always some in the portfolio but it's definitely the higher level of care or passing away. Juan Sanabria: Thank you. Operator: Thank you. There were no other questions in queue at this time. I would now like to hand the call back to Eric Mendelsohn for closing remarks. Eric Mendelsohn: Thanks everyone for attending today and your interest. We will look forward to seeing you at NAREIT. Operator: Thank you. This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation. Before you buy stock in National Health Investors, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and National Health Investors wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $496,473!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,216,605!* Now, it’s worth noting Stock Advisor’s total average return is 968% — a market-crushing outperformance compared to 202% for the S&P 500. 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MURFREESBORO, Tenn., May 4, 2026 /PRNewswire/ -- National Health Investors, Inc. (NYSE: NHI) announced today that it will pay its second quarter dividend of $0.92 per common share on August 7, 2026, to stockholders of record as of June 30, 2026. About National Health Investors, Inc. National Health Investors, Inc. (NYSE: NHI), established in 1991 as a Maryland corporation, is a self-managed real estate investment trust ("REIT"). The Company owns, leases, operates and finances the development of high-quality real estate properties, focusing on senior housing communities and medical facilities. The Company operates through two reportable segments: Real Estate Investments and SHOP. The Company's investments in real estate properties include independent living facilities, assisted living facilities, entrance-fee communities, senior living campuses, skilled nursing facilities and hospitals. For more information, visit www.nhireit.com. Forward-Looking Statements 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 expected future financial positions, 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 REIT, plans and objectives of management for future operations, continued performance improvements, ability to service and refinance debt obligations, ability to finance growth opportunities, and similar statements including, without limitation, those containing words such as "may", "will", "should", "believes", "anticipates", "expects", "intends", "estimates", "plans", "projects", "target", "likely" and other similar expressions are forward-looking statements. Forward-looking statements involve known and unknown risks and uncertainties that may cause the actual results in future periods to differ materially from those projected or contemplated in the forward-looking statements. Such risks and uncertainties include those risks and uncertainties which are described under the heading "Risk Factors" in Item 1A in the Company's Annual Report on Form 10-K for the year ended December 31, 2025 and Quarterly Report on Form 10-Q for the quarter ended March 31, 2026. Many of these factors are beyond the control of the Company and its management. The Company assumes no obligation to update any 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 the Company in its periodic reports filed with the Securities and Exchange Commission, including the risk factors and other information in the above referenced Annual Report on Form 10-K and Quarterly Report on Form 10-Q. Copies of these filings are available at no cost on the SEC's web site at https://www.sec.gov or on the Company's website at www.nhireit.com. Contact: Dana Hambly, Senior Vice President, Finance Phone: (615) 890-9100 View original content to download multimedia:https://www.prnewswire.com/news-releases/nhi-announces-the-second-quarter-2026-dividend-302761526.html