National Health Investors, Inc. — Second Quarter 2026 Earnings Summary

Financial Performance

• Net income attributable to common stockholders per diluted share for the quarter ended June 30, 2026, increased 45.6% to $1.15, compared to $0.79 in the prior year period.
• Net income attributable to common stockholders per diluted share for the six months ended June 30, 2026, increased 28.7% to $1.97, compared to $1.53 in the prior year period.
• Net income for the quarter included $22.0 million in gains on dispositions of real estate properties; for the six months, it included $24.6 million in such gains.
• NAREIT Funds From Operations (FFO) per diluted share was $1.19 for the quarter (unchanged from prior year) and increased 3.4% to $2.42 for the six months, compared to $2.34 in the prior year.
• Normalized FFO per diluted share decreased 2.5% to $1.19 for the quarter, compared to $1.22 in the prior year; it increased 2.1% to $2.42 for the six months, compared to $2.37 in the prior year.
• Normalized Funds Available for Distribution (FAD) increased $5.7 million to $61.6 million for the quarter and $12.1 million to $124.1 million for the six months, compared to prior year periods.
• Rental income increased $1.1 million (1.6%) to $71.39 million for the quarter, driven by acquisitions offset by property transitions.
• Resident fees and services, less senior housing operating expenses, increased $7.2 million for the quarter; on a same-store basis, this metric declined $0.2 million.
• Depreciation and amortization increased $5.6 million (28.3%) to $25.55 million for the quarter, primarily due to acquisitions.
• Interest expense increased $0.8 million (5.4%) to $15.81 million for the quarter, driven by the 2033 Senior Notes issued in September 2025.
• General and administrative expenses increased $2.7 million (44.0%) to $8.82 million for the quarter due to higher compensation and CFO transition costs.
• Total revenues for the quarter were $121.32 million, compared to $90.66 million in the prior year period.

Guidance and Future Outlook

• 2026 Full-Year Net Income Guidance: $703.0 million to $705.2 million.
• 2026 Full-Year NAREIT FFO Guidance: $232.3 million to $234.9 million ($4.74 to $4.79 per diluted share).
• 2026 Full-Year Normalized FFO Guidance: $232.3 million to $234.9 million ($4.74 to $4.79 per diluted share).
• 2026 Full-Year FAD Guidance: $240.6 million to $243.7 million.
• Guidance assumptions include $180 million in unidentified new investments and approximately $665 million in expected proceeds from dispositions resulting in a gain of $565.9 million to $566.3 million.
• Same Store SHOP NOI growth is projected at 1% to 3% year-over-year for 15 properties.
• Total SHOP NOI (before unidentified new investments) is projected at $44.1 million to $45.1 million for 42 properties.
• The Company expects to utilize proceeds from the Section 1031 exchange transaction initiated by the NHC portfolio sale for new investment opportunities.

Business Segments and Product Lines

• Senior Housing Operating Portfolio (SHOP) invested capital increased 137% year-over-year to $854.8 million in the second quarter.
• Total SHOP NOI increased approximately 188% year-over-year, driven by recent acquisitions; same-store SHOP results were ahead of expectations.
• SHOP segment NOI for the quarter was $11.02 million, compared to $3.82 million in the prior year.
• Real Estate Investments segment NOI for the quarter was $73.80 million, compared to $73.53 million in the prior year.
• Acquired a portfolio of seven senior housing properties in Colorado (532 units) for $106.9 million in May 2026, included in the SHOP segment.
• Acquired two senior housing properties in Georgia for $17.5 million in June 2026, included in the Real Estate Investments segment with an initial annual lease rate of 8.0%.
• Amended master lease agreements with Bickford Senior Living for 37 properties, increasing combined annual base rent to $38.4 million with 2.0% to 3.0% annual escalators and contingent rent provisions.
• Completed dispositions of four properties in the Real Estate Investments segment for aggregate net proceeds of $91.8 million, recognizing a $21.8 million gain.
• Completed the sale of the NHC leased portfolio (35 properties) on July 1, 2026, for $560.0 million, expecting a gain of approximately $541.6 million.
• Sold two properties in Texas for $19.0 million in cash consideration.

Market and Competitive Landscape

• The Company maintains investment grade credit ratings from Moody's, S&P Global, and Fitch Ratings.
• Current pipeline includes approximately $127.3 million of investment opportunities under signed Letters of Intent (LOI) in the SHOP segment with an average initial NOI yield of approximately 6.8%.
• The Company is evaluating an additional pipeline of approximately $420 million of investments, including SHOP, sale-leasebacks, and loans with purchase options.
• The Company navigates the current operating environment while positioning itself to capitalize on long-term demographic tailwinds supporting the senior housing industry.

Risks and Challenges

• Forward-looking statements involve known and unknown risks and uncertainties that may cause actual results to differ materially from projections, including factors described in the Company's 10-K and 10-Q filings.
• Guidance is subject to change based on assumptions outside the Company's control, including timing of transactions, unidentified investments, and market conditions.
• The Company incurred $1.1 million in compensation costs related to the CFO transition in the current quarter and six-month period.
• Prior year results included $1.3 million in proxy contest expenses and $1.2 million in transaction costs for a SHOP acquisition that did not materialize.

Management Commentary and Tone

• CEO Eric Mendelsohn stated the Company is "well positioned to execute on attractive investment opportunities and create long-term value for stockholders."
• Management highlighted the completion of the NHC portfolio sale as one of the largest transactions in the Company's history, reducing balance sheet leverage to well below the target range.
• The Company appointed a new Chief Operating Officer to strengthen asset management and business development capabilities.
• Management expressed confidence in the Company's strengthened balance sheet, substantial liquidity, and growing SHOP portfolio.

Other Key Points

• Consolidated net debt was $1.2 billion as of June 30, 2026, including $438.0 million outstanding on a $700.0 million revolving credit facility.
• The consolidated net debt to adjusted EBITDA ratio is 4.1x, within the target range of 3.5x to 4.5x.
• The Company repaid the remaining $125.0 million outstanding on its bank term loan upon maturity during the quarter.
• The Board of Directors declared an increase in the quarterly cash dividend to $0.94 per share from $0.92 per share, payable on November 6, 2026.
• The Company has $500.0 million available under its renewed ATM equity program.
• The Company settled the remaining $44.9 million of ATM forward equity sales agreements from the previous program during the quarter.
• The NHC portfolio sale included a partial master lease termination and assignment of subleased properties in Florida, resulting in a $0.5 million reversal of deferred income.
• The Company disposed of five real estate properties in the Real Estate Investments segment for the six months ended June 30, 2026, for aggregate net proceeds of $98.5 million.