NHI Reports 10.4% Increase in First Quarter Normalized FFO

NHI Reports 10.4% Increase in First Quarter Normalized FFO

MURFREESBORO, Tenn.--(BUSINESS WIRE)-- National Health Investors, Inc. (NYS: NHI) announced today its normalized Funds From Operations ("FFO"), its normalized Funds Available for Distribution ("FAD") and net income attributable to common stockholders for the three months ended March 31, 2013.

Year-To-Date Highlights

  • Increased first quarter Normalized FFO 10.4% over same quarter in 2012

  • Declared a 13.1% increase in the upcoming second quarter dividend over the same quarter in 2012

  • Increased Normalized FFO guidance for fiscal 2013 to a range of $3.42 to $3.50 per diluted common share

  • Closed a $26.3 million acquisition and leaseback of 2 properties in Texas

  • Announced a settlement resulting in a $37.1 million acquisition and $15 million note payoff


Financial Results

Normalized FFO for the three months ended March 31, 2013, was $23,595,000, or $0.85 per diluted common share, compared with $21,375,000, or $0.77 per diluted common share, for the same period in 2012, an increase of 10.4%. Normalized FAD for the three months ended March 31, 2013, was $24,405,000 or $0.87 per diluted common share, compared with $22,085,000 or $0.79 per diluted common share for the same period in 2012, an increase of 10.5%. Normalized FFO and Normalized FAD for the three months ended March 31, 2013 excludes the effect of a $4,037,000 loan impairment.

FFO, as defined by the National Association of Real Estate Investment Trusts ("NAREIT"), for the three months ended March 31, 2013, was $19,558,000, or $0.70 per diluted common share, compared with $21,375,000, or $0.77 per diluted common share, for the same period in 2012. Net income attributable to common stockholders for the three months ended March 31, 2013, was $15,743,000, or $0.56 per diluted common share, compared with $18,350,000, or $0.66 per diluted common share, for the same period in 2012.

The reconciliation of net income attributable to common stockholders to our FFO, Normalized FFO, FAD and Normalized FAD is included as tables to this press release and in supplemental data furnished on Form 8-K and is filed in our Form 10-Q with the Securities and Exchange Commission.

2013 Guidance -

The Company currently forecasts Normalized FFO for 2013 from $3.42 to $3.50 per diluted common share. The Company's guidance range for the full year 2013 for Normalized FFO per share, with underlying assumptions and timing of certain transactions, is set forth and reconciled below:

Full-Year 2013 Range

Low

High

Net income per diluted share attributable to common stockholders

$

2.71

$

2.76

Plus: Real estate depreciation

.57

.60

Plus: Loan impairment

.14

.14

Normalized FFO per diluted common share

$

3.42

$

3.50

The Company's guidance range reflects the existence of volatile economic conditions, but does not assume any material deterioration in tenant credit quality and/or performance of its portfolio. The guidance is based on a number of assumptions, many of which are outside the Company's control and all of which are subject to change. The low end of our guidance range assumes a baseline from the fourth quarter 2012, the transactions completed to date in the second quarter of 2013, the timing for terming out debt on our credit facility and assuming 3% growth from our Bickford joint venture. On the top end of that range, we are adding in assumptions for investment activity and a 6% growth from our Bickford joint venture. The Company expects to make additional investments in health care real estate during 2013 that meet its underwriting criteria and where the spreads over its cost of capital generates sufficient returns to its shareholders. These new investments are expected to be funded by the Company's liquid investments and by short-term and long-term debt financing. The Company's guidance may change if actual results vary from these assumptions.

Investor Conference Call and Webcast

NHI will host a conference call on Monday, May 6, 2013, at 1 p.m. ET, to discuss first quarter results. The number to call for this interactive teleconference is (212) 231-2907 with the confirmation number, 21656133. The live broadcast of NHI's quarterly conference call will be available online at www.nhireit.com. The online replay will follow shortly after the call and continue for approximately 90 days.

National Health Investors, Inc. is a healthcare real estate investment trust that specializes in the financing of healthcare real estate by purchase and leaseback transactions, RIDEA transactions, and mortgage loans. NHI's investments involve skilled nursing facilities, assisted living facilities, independent living facilities, medical office buildings, and hospitals. The common stock of the company trades on the New York Stock Exchange with the symbol NHI. Additional information about NHI, including its most recent press releases, may be obtained on NHI's web site at www.nhireit.com.

Statements in this press release that are not historical facts are forward-looking statements. NHI cautions investors that any forward-looking statements may involve risks and uncertainties and are not guarantees of future performance. All forward-looking statements represent NHI's judgment as of the date of this release.Investors are urged to carefully review and consider the various disclosures made by NHI in its periodic reports filed with the Securities and Exchange Commission, including the risk factors and other information disclosed in NHI's Annual Report on Form 10-K for the most recently ended fiscal year. Copies of these filings are available at no cost on the SEC's web site atwww.sec.govor on NHI's web site atwww.nhireit.com.

Reconciliation of Funds From Operations and Normalized Funds From Operations(1)(2)

(in thousands, except share and per share amounts)

Three Months Ended

March 31,

2013

2012

Net income attributable to common stockholders

$

15,743

$

18,350

Elimination of certain non-cash items in net income:

Real estate depreciation in continuing operations

3,883

2,924

Real estate depreciation related to noncontrolling interest

(68

)

Real estate depreciation in discontinued operations

101

Funds from operations

$

19,558

$

21,375

Loan impairment

4,037

Normalized FFO

$

23,595

$

21,375

BASIC

Weighted average common shares outstanding

27,876,176

27,776,104

FFO per common share

$

0.70

$

0.77

Normalized FFO per common share

$

0.85

$

0.77

DILUTED

Weighted average common shares outstanding

27,911,584

27,803,222

FFO per common share

$

0.70

$

0.77

Normalized FFO per common share

$

0.85

$

0.77

(1)Management believes that funds from operations (FFO) is an important supplemental measure of operating performance for a real estate investment trust. Because the historical cost accounting convention used for real estate assets requires straight-line depreciation (except on land), such accounting presentation implies that the value of real estate assets diminishes predictably over time. Since real estate values instead have historically risen and fallen with market conditions, presentations of operating results for a real estate investment trust that uses historical cost accounting for depreciation could be less informative, and should be supplemented with a measure such as FFO. The term FFO was designed by the real estate investment trust industry to address this issue. Our measure may not be comparable to similarly titled measures used by other REITs. Consequently, our funds from operations may not provide a meaningful measure of our performance as compared to that of other REITs. Since other REITs may not use our definition of FFO, caution should be exercised when comparing our Company's FFO to that of other REITs. FFO does not represent cash generated from operating activities in accordance with GAAP (funds from operations does not include changes in operating assets and liabilities) and therefore should not be considered an alternative to net earnings as an indication of operating performance, or to net cash flow from operating activities as determined by GAAP in the United States, as a measure of liquidity and is not necessarily indicative of cash available to fund cash needs.

(2)Normalized FFO excludes from FFO certain items which, due to their infrequent or unpredictable nature, may create some difficulty in comparing FFO for the current period to similar prior periods, and may include, but are not limited to, impairment of assets, gains and losses attributable to the acquisition and disposition of assets and liabilities, recoveries of previous write-downs, and changes in the fair value of interest rate swap agreements.

Reconciliation of Funds Available for Distribution and Normalized Funds Available for Distribution(1)(2)

(in thousands, except share and per share amounts)

Three Months Ended

March 31,

2013

2012

Net income attributable to common stockholders

$

15,743

$

18,350

Elimination of certain non-cash items in net income:

Depreciation in continuing operations

4,415

3,264

Depreciation related to noncontrolling interest

(87

)

Depreciation in discontinued operations

101

Straight-line lease revenue, net

(1,283

)

(1,063

)

Non-cash stock based compensation

1,580

1,433

Funds available for distribution

$

20,368

$

22,085

Loan impairment

4,037

Normalized FAD

$

24,405

$

22,085

BASIC

Weighted average common shares outstanding

27,876,176

27,776,104

FAD per common share

$

0.73

$

0.80

Normalized FAD per common share

$

0.88

$

0.80

DILUTED

Weighted average common shares outstanding

27,911,584

27,803,222

FAD per common share

$

0.73

$

0.79

Normalized FAD per common share

$

0.87

$

0.79

(1)Management believes that FAD and normalized FAD are important supplemental measures of a REIT's net earnings available to common stockholders. Since other REITs may not use our definition of FAD; caution should be exercised when comparing our Company's FAD to that of other REITs. FAD in and of itself does not represent cash generated from operating activities in accordance with GAAP (FAD does not include changes in operating assets and liabilities) and therefore should not be considered an alternative to net earnings as an indication of operating performance, or to net cash flow from operating activities as determined by GAAP as a measure of liquidity, and is not necessarily indicative of cash available to fund cash needs.

(2)Normalized FAD excludes from FAD certain items which, due to their infrequent or unpredictable nature, may create some difficulty in comparing FAD for the current period to similar prior periods, and may include, but are not limited to, impairment of assets, gains and losses attributable to the acquisition and disposition of assets and liabilities, recoveries of previous write-downs, and changes in the fair value of interest rate swap agreements.

Condensed Statements of Income

(in thousands, except share and per share amounts)

Three Months Ended

March 31,

2013

2012

(unaudited)

Revenues:

Rental income

$

25,050

$

21,296

Mortgage interest income

1,969

1,702

Investment income and other

1,052

1,060

28,071

24,058

Expenses:

Depreciation

4,415

3,264

Interest expense

1,123

575

Legal expense

277

91

Franchise, excise and other taxes

144

125

General and administrative

3,089

2,786

Loan impairment

4,037

13,085

6,841

Income before unconsolidated entity, discontinued operations

and noncontrolling interest

14,986

17,217

Income from unconsolidated entity

22

Income from continuing operations

15,008

17,217

Income from discontinued operations

915

1,133

Net income

15,923

18,350

Net income attributable to noncontrolling interest

(180

)

Net income attributable to common stockholders

$

15,743

$

18,350

Weighted average common shares outstanding:

Basic

27,876,176

27,776,104

Diluted

27,911,584

27,803,222

Earnings per common share:

Basic:

Income from continuing operations attributable to common stockholders

$

0.53

$

0.62

Discontinued operations

0.03

0.04

Net income attributable to common stockholders

$

0.56

$

0.66

Diluted:

Income from continuing operations attributable to common stockholders

$

0.53

$

0.62

Discontinued operations

0.03

0.04

Net income attributable to common stockholders

$

0.56

$

0.66

Regular dividends declared per common share

$

0.695

$

0.65

Selected Balance Sheet Data

(in thousands)

March 31, 2013

December 31, 2012

(unaudited)

Real estate properties, net

$

533,285

$

535,390

Mortgages receivable, net

80,059

84,250

Investment in preferred stock, at cost

38,132

38,132

Cash and cash equivalents

6,050

9,172

Marketable securities

14,845

12,884

Assets held for sale, net

1,611

1,611

Debt

203,250

203,250

National Health Investors Stockholders' equity

457,507

457,182



National Health Investors, Inc.
Roger R. Hopkins, Chief Accounting Officer, 615-890-9100

KEYWORDS: United States North America Tennessee

INDUSTRY KEYWORDS:

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