(Mark One)
|
|
[ x ]
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
For the quarterly period ended March 31, 2019
|
|
|
|
[ ]
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
For the transition period from _____________ to _____________
|
Maryland
|
|
62-1470956
|
(State or other jurisdiction of incorporation or organization)
|
|
(I.R.S. Employer Identification No.)
|
|
|
|
222 Robert Rose Drive, Murfreesboro, Tennessee
|
|
37129
|
(Address of principal executive offices)
|
|
(Zip Code)
|
(615) 890-9100
|
(Registrant’s telephone number, including area code)
|
Large accelerated filer [ x ]
|
|
Accelerated filer [ ]
|
Non-accelerated filer [ ]
|
|
Smaller reporting company [ ]
|
Emerging growth company [ ]
|
|
|
Title of each Class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
Common Stock, $0.01 par value
|
NHI
|
New York Stock Exchange
|
|
Page
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31,
2019 |
|
December 31,
2018 |
||||
|
(unaudited)
|
|
|
||||
Assets:
|
|
|
|
||||
Real estate properties:
|
|
|
|
||||
Land
|
$
|
207,380
|
|
|
$
|
202,196
|
|
Buildings and improvements
|
2,676,127
|
|
|
2,599,526
|
|
||
Construction in progress
|
19,810
|
|
|
16,643
|
|
||
|
2,903,317
|
|
|
2,818,365
|
|
||
Less accumulated depreciation
|
(468,562
|
)
|
|
(451,483
|
)
|
||
Real estate properties, net
|
2,434,755
|
|
|
2,366,882
|
|
||
Mortgage and other notes receivable, net
|
257,481
|
|
|
246,111
|
|
||
Cash and cash equivalents
|
5,177
|
|
|
4,659
|
|
||
Straight-line rent receivable
|
75,123
|
|
|
105,620
|
|
||
Assets held for sale, net
|
3,745
|
|
|
—
|
|
||
Other assets
|
29,987
|
|
|
27,298
|
|
||
Total Assets
|
$
|
2,806,268
|
|
|
$
|
2,750,570
|
|
|
|
|
|
||||
Liabilities and Stockholders’ Equity:
|
|
|
|
||||
Debt
|
$
|
1,287,205
|
|
|
$
|
1,281,675
|
|
Accounts payable and accrued expenses
|
22,532
|
|
|
19,890
|
|
||
Dividends payable
|
45,359
|
|
|
42,700
|
|
||
Lease deposit liabilities
|
10,638
|
|
|
10,638
|
|
||
Deferred income
|
24,550
|
|
|
5,954
|
|
||
Total Liabilities
|
1,390,284
|
|
|
1,360,857
|
|
||
|
|
|
|
||||
Commitments and Contingencies
|
|
|
|
||||
|
|
|
|
||||
Stockholders' Equity:
|
|
|
|
||||
Common stock, $.01 par value; 60,000,000 shares authorized;
|
|
|
|
||||
43,199,318 and 42,700,411 shares issued and outstanding
|
432
|
|
|
427
|
|
||
Capital in excess of par value
|
1,406,822
|
|
|
1,369,919
|
|
||
Cumulative net income in excess of dividends
|
8,388
|
|
|
18,068
|
|
||
Accumulated other comprehensive income
|
342
|
|
|
1,299
|
|
||
Total Stockholders' Equity
|
1,415,984
|
|
|
1,389,713
|
|
||
Total Liabilities and Stockholders’ Equity
|
$
|
2,806,268
|
|
|
$
|
2,750,570
|
|
|
Three Months Ended
|
||||||
|
March 31,
|
||||||
|
2019
|
|
2018
|
||||
|
(unaudited)
|
||||||
Revenues:
|
|
|
|
||||
Rental income
|
$
|
70,953
|
|
|
$
|
69,253
|
|
Interest income and other
|
5,154
|
|
|
3,493
|
|
||
|
76,107
|
|
|
72,746
|
|
||
Expenses:
|
|
|
|
||||
Depreciation
|
18,491
|
|
|
17,335
|
|
||
Interest
|
13,518
|
|
|
11,614
|
|
||
Legal
|
270
|
|
|
111
|
|
||
Franchise, excise and other taxes
|
545
|
|
|
346
|
|
||
General and administrative
|
4,014
|
|
|
4,170
|
|
||
Property taxes and insurance on leased properties
|
1,090
|
|
|
—
|
|
||
Loan and realty losses
|
2,500
|
|
|
—
|
|
||
|
40,428
|
|
|
33,576
|
|
||
|
|
|
|
||||
Income before loss on convertible note retirement
|
35,679
|
|
|
39,170
|
|
||
Loss on convertible note retirement
|
—
|
|
|
(738
|
)
|
||
Net income
|
$
|
35,679
|
|
|
$
|
38,432
|
|
|
|
|
|
||||
Weighted average common shares outstanding:
|
|
|
|
||||
Basic
|
42,825,824
|
|
|
41,532,154
|
|
||
Diluted
|
43,125,032
|
|
|
41,576,876
|
|
||
|
|
|
|
||||
Earnings per common share:
|
|
|
|
||||
Net income per common share - basic
|
$
|
.83
|
|
|
$
|
.93
|
|
Net income per common share - diluted
|
$
|
.83
|
|
|
$
|
.92
|
|
|
Three Months Ended
|
||||||
|
March 31,
|
||||||
|
2019
|
|
2018
|
||||
|
(unaudited)
|
||||||
|
|
|
|
||||
Net income
|
$
|
35,679
|
|
|
$
|
38,432
|
|
Other comprehensive income (loss):
|
|
|
|
||||
Increase (decrease) in fair value of cash flow hedges
|
(665
|
)
|
|
1,646
|
|
||
Reclassification for amounts recognized as interest expense
|
(292
|
)
|
|
276
|
|
||
Total other comprehensive income (loss)
|
(957
|
)
|
|
1,922
|
|
||
Comprehensive income
|
$
|
34,722
|
|
|
$
|
40,354
|
|
|
Three Months Ended
|
||||||
|
March 31,
|
||||||
|
2019
|
|
2018
|
||||
|
(
unaudited
)
|
||||||
Cash flows from operating activities:
|
|
|
|
||||
Net income
|
$
|
35,679
|
|
|
$
|
38,432
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation
|
18,491
|
|
|
17,335
|
|
||
Amortization of debt issuance costs and debt discounts
|
1,263
|
|
|
1,069
|
|
||
Amortization of commitment fees and note receivable discounts
|
(119
|
)
|
|
(552
|
)
|
||
Amortization of lease incentives
|
168
|
|
|
63
|
|
||
Straight-line rent income
|
(5,228
|
)
|
|
(5,962
|
)
|
||
Non-cash interest income on construction loans
|
(548
|
)
|
|
(436
|
)
|
||
Loss on convertible note retirement
|
—
|
|
|
738
|
|
||
Loan and realty losses
|
2,500
|
|
|
—
|
|
||
Payment of lease incentives
|
(1,250
|
)
|
|
—
|
|
||
Non-cash stock-based compensation
|
2,001
|
|
|
1,425
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Other assets
|
2,961
|
|
|
(3,876
|
)
|
||
Accounts payable and accrued expenses
|
1,597
|
|
|
585
|
|
||
Deferred income
|
16,322
|
|
|
56
|
|
||
Net cash provided by operating activities
|
73,837
|
|
|
48,877
|
|
||
|
|
|
|
||||
Cash flows from investing activities:
|
|
|
|
||||
Investments in mortgage and other notes receivable
|
(11,002
|
)
|
|
(5,905
|
)
|
||
Collections of mortgage and other notes receivable
|
300
|
|
|
2,535
|
|
||
Investments in real estate
|
(50,122
|
)
|
|
(14,404
|
)
|
||
Investments in renovations of existing real estate
|
(4,215
|
)
|
|
(1,812
|
)
|
||
Net cash used in investing activities
|
(65,039
|
)
|
|
(19,586
|
)
|
||
|
|
|
|
||||
Cash flows from financing activities:
|
|
|
|
||||
Proceeds from revolving credit facility
|
95,000
|
|
|
56,000
|
|
||
Payments on revolving credit facility
|
(90,000
|
)
|
|
(15,000
|
)
|
||
Payments on term loans
|
(296
|
)
|
|
(285
|
)
|
||
Debt issuance costs
|
(67
|
)
|
|
—
|
|
||
Taxes remitted on employee stock awards
|
(1,006
|
)
|
|
—
|
|
||
Proceeds from issuance of common shares, net
|
35,913
|
|
|
(56
|
)
|
||
Convertible note redemption
|
—
|
|
|
(29,958
|
)
|
||
Dividends paid to stockholders
|
(42,700
|
)
|
|
(39,456
|
)
|
||
Net cash used in financing activities
|
(3,156
|
)
|
|
(28,755
|
)
|
||
|
|
|
|
||||
Increase in cash and cash equivalents and restricted cash
|
5,642
|
|
|
536
|
|
||
Cash and cash equivalents and restricted cash, beginning of period
|
9,912
|
|
|
8,075
|
|
||
Cash and cash equivalents and restricted cash, end of period
|
$
|
15,554
|
|
|
$
|
8,611
|
|
|
Three Months Ended
|
||||||
|
March 31,
|
||||||
|
2019
|
|
2018
|
||||
|
(unaudited)
|
||||||
Supplemental disclosure of cash flow information:
|
|
|
|
||||
Interest paid, net of amounts capitalized
|
$
|
11,901
|
|
|
$
|
9,904
|
|
Supplemental disclosure of non-cash investing and financing activities:
|
|
|
|
||||
Change in accounts payable related to investments in real estate construction
|
$
|
(1,048
|
)
|
|
$
|
290
|
|
Change in accounts payable related to investments in real estate acquisition
|
$
|
1,178
|
|
|
$
|
—
|
|
Change in straight-line rent receivable related to investments in real estate
|
$
|
38,000
|
|
|
$
|
—
|
|
Change in other assets related to investments in real estate
|
$
|
176
|
|
|
$
|
—
|
|
Tenant investment in leased asset
|
$
|
—
|
|
|
$
|
1,275
|
|
|
Common Stock
|
|
Capital in Excess of Par Value
|
|
Cumulative Net Income in Excess of Dividends
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
Total Stockholders’ Equity
|
|||||||||||||
|
Shares
|
|
Amount
|
|
|
|
|
|||||||||||||||
Balances at December 31, 2018
|
42,700,411
|
|
|
$
|
427
|
|
|
$
|
1,369,919
|
|
|
$
|
18,068
|
|
|
$
|
1,299
|
|
|
$
|
1,389,713
|
|
Total comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
35,679
|
|
|
(957
|
)
|
|
34,722
|
|
|||||
Issuance of common stock, net
|
462,925
|
|
|
5
|
|
|
35,908
|
|
|
—
|
|
|
—
|
|
|
35,913
|
|
|||||
Taxes paid on employee stock awards
|
—
|
|
|
—
|
|
|
(1,006
|
)
|
|
—
|
|
|
—
|
|
|
(1,006
|
)
|
|||||
Shares issued on stock options exercised
|
35,982
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
2,001
|
|
|
—
|
|
|
—
|
|
|
2,001
|
|
|||||
Dividends declared, $1.05 per common share
|
—
|
|
|
—
|
|
|
—
|
|
|
(45,359
|
)
|
|
—
|
|
|
(45,359
|
)
|
|||||
Balances at March 31, 2019
|
43,199,318
|
|
|
$
|
432
|
|
|
$
|
1,406,822
|
|
|
$
|
8,388
|
|
|
$
|
342
|
|
|
$
|
1,415,984
|
|
|
Common Stock
|
|
Capital in Excess of Par Value
|
|
Cumulative Net Income in Excess of Dividends
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
Total Stockholders’ Equity
|
|||||||||||||
|
Shares
|
|
Amount
|
|
|
|
|
|||||||||||||||
Balances at December 31, 2017
|
41,532,154
|
|
|
$
|
415
|
|
|
$
|
1,289,919
|
|
|
$
|
32,605
|
|
|
$
|
(822
|
)
|
|
$
|
1,322,117
|
|
Cumulative effect of change in accounting principle
|
—
|
|
|
—
|
|
|
—
|
|
|
(235
|
)
|
|
235
|
|
|
—
|
|
|||||
Total comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
38,432
|
|
|
1,922
|
|
|
40,354
|
|
|||||
Equity component in redemption of convertible notes
|
—
|
|
|
—
|
|
|
(2,427
|
)
|
|
—
|
|
|
—
|
|
|
(2,427
|
)
|
|||||
Equity offerring costs
|
—
|
|
|
—
|
|
|
(56
|
)
|
|
—
|
|
|
—
|
|
|
(56
|
)
|
|||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
1,425
|
|
|
—
|
|
|
—
|
|
|
1,425
|
|
|||||
Dividends declared, $1.00 per common share
|
—
|
|
|
—
|
|
|
—
|
|
|
(41,532
|
)
|
|
—
|
|
|
(41,532
|
)
|
|||||
Balances at March 31, 2018
|
41,532,154
|
|
|
$
|
415
|
|
|
$
|
1,288,861
|
|
|
$
|
29,270
|
|
|
$
|
1,335
|
|
|
$
|
1,319,881
|
|
Date
|
Name
|
Source of Exposure
|
Carrying Amount
|
Maximum Exposure to Loss
|
Note Reference
|
||||
2012
|
Bickford Senior Living
|
Various
1
|
$
|
59,943,000
|
|
$
|
80,228,000
|
|
Notes 2, 3
|
2014
|
Senior Living Communities
|
Notes and straight-line receivable
|
$
|
46,678,000
|
|
$
|
58,921,000
|
|
Notes 2, 3
|
2015
|
Timber Ridge, LCS affiliate
|
Notes receivable
|
$
|
58,765,000
|
|
$
|
59,790,000
|
|
Note 3
|
2016
|
Senior Living Management
|
Notes and straight-line receivable
|
$
|
26,632,000
|
|
$
|
26,632,000
|
|
Note 3
|
2017
|
Evolve Senior Living
|
Note receivable
|
$
|
9,933,000
|
|
$
|
9,933,000
|
|
—
|
2018
|
Sagewood, LCS affiliate
|
Notes receivable
|
$
|
91,013,000
|
|
$
|
178,283,000
|
|
Note 3
|
|
March 31,
2019 |
|
March 31,
2018 |
||||
Cash and cash equivalents
|
$
|
5,177
|
|
|
$
|
3,230
|
|
Restricted cash
|
10,377
|
|
|
5,381
|
|
||
|
$
|
15,554
|
|
|
$
|
8,611
|
|
Operator
|
|
Date
|
|
Properties
|
|
Asset Class
|
|
Amount
|
||
Wingate Healthcare
|
|
January 2019
|
|
1
|
|
SHO
|
|
$
|
52,200
|
|
Holiday Retirement
|
|
January 2019
|
|
1
|
|
SHO
|
|
38,000
|
|
|
|
|
|
|
|
|
|
|
$
|
90,200
|
|
|
Lease Expiration
|
|
|||||||||||||
|
June 2023
|
September 2027
|
May 2031
|
April 2033
|
Total
|
||||||||||
Number of Properties
|
13
|
|
4
|
|
28
|
|
5
|
|
50
|
|
|||||
2019 Contractual Rent
|
$
|
11,468
|
|
$
|
1,576
|
|
$
|
30,765
|
|
$
|
4,826
|
|
$
|
48,635
|
|
2019 Straight Line Rent
|
358
|
|
195
|
|
3,937
|
|
843
|
|
5,333
|
|
|||||
|
$
|
11,826
|
|
$
|
1,771
|
|
$
|
34,702
|
|
$
|
5,669
|
|
$
|
53,968
|
|
|
Three Months Ended
|
||||||
|
March 31,
|
||||||
|
2019
|
|
2018
|
||||
Current year
|
$
|
877
|
|
|
$
|
853
|
|
Prior year final certification
1
|
334
|
|
|
285
|
|
||
Total percentage rent income
|
$
|
1,211
|
|
|
$
|
1,138
|
|
Asset
|
Number of
|
Lease
|
1st Option
|
Option
|
Contractual
|
||
Type
|
Properties
|
Expiration
|
Open Year
|
Basis
|
Rent
|
||
MOB
|
1
|
February 2025
|
Open
|
i
|
$
|
302
|
|
SHO
|
4
|
September 2027
|
Open
|
iv
|
$
|
1,560
|
|
HOSP
|
1
|
September 2027
|
2020
|
ii
|
$
|
2,673
|
|
SHO
|
8
|
December 2024
|
2020
|
ii
|
$
|
6,027
|
|
HOSP
|
1
|
March 2025
|
2020
|
iv
|
$
|
1,900
|
|
SHO
|
2
|
May 2031
|
2021
|
iv
|
$
|
4,892
|
|
HOSP
|
1
|
June 2022
|
2022
|
i
|
$
|
3,460
|
|
SNF
|
7
|
August 2028
|
2025
|
iii
|
$
|
3,732
|
|
SNF
|
1
|
September 2028
|
2028
|
iii
|
$
|
463
|
|
|
March 31,
2019 |
||
2019
|
$
|
192,261
|
|
2020
|
256,991
|
|
|
2021
|
257,610
|
|
|
2022
|
259,674
|
|
|
2023
|
253,653
|
|
|
Thereafter
|
1,719,019
|
|
|
|
$
|
2,939,208
|
|
Commencement
|
|
Rate
|
|
Maturity
|
|
Commitment
|
|
Drawn
|
|
Location
|
||||
July 2016
|
|
9%
|
|
5 years
|
|
$
|
14,000,000
|
|
|
$
|
(13,047,000
|
)
|
|
Illinois
|
January 2017
|
|
9%
|
|
5 years
|
|
14,000,000
|
|
|
(13,191,000
|
)
|
|
Michigan
|
||
January 2018
|
|
9%
|
|
5 years
|
|
14,000,000
|
|
|
(6,134,000
|
)
|
|
Virginia
|
||
July 2018
|
|
9%
|
|
5 years
|
|
14,700,000
|
|
|
(4,042,000
|
)
|
|
Michigan
|
||
|
|
|
|
|
|
$
|
56,700,000
|
|
|
$
|
(36,414,000
|
)
|
|
|
|
March 31,
2019 |
|
December 31,
2018 |
||||
Accounts receivable and other assets
|
$
|
2,864
|
|
|
$
|
6,381
|
|
Regulatory escrows
|
8,208
|
|
|
8,208
|
|
||
Unamortized lease incentive payments
|
8,538
|
|
|
7,456
|
|
||
Restricted cash
|
10,377
|
|
|
5,253
|
|
||
|
$
|
29,987
|
|
|
$
|
27,298
|
|
|
March 31,
2019 |
|
December 31,
2018 |
||||
Revolving credit facility - unsecured
|
$
|
89,000
|
|
|
$
|
84,000
|
|
Bank term loans - unsecured
|
550,000
|
|
|
550,000
|
|
||
Private placement term loans - unsecured
|
400,000
|
|
|
400,000
|
|
||
HUD mortgage loans (net of discount of $1,299 and $1,320)
|
42,717
|
|
|
42,906
|
|
||
Fannie Mae term loans - secured, non-recourse
|
95,958
|
|
|
96,044
|
|
||
Convertible senior notes - unsecured (net of discount of $1,199 and $1,391)
|
118,802
|
|
|
118,609
|
|
||
Unamortized loan costs
|
(9,272
|
)
|
|
(9,884
|
)
|
||
|
$
|
1,287,205
|
|
|
$
|
1,281,675
|
|
Twelve months ended March 31,
|
|
||
2020
|
$
|
1,196
|
|
2021
|
1,244
|
|
|
2022
|
121,291
|
|
|
2023
|
465,340
|
|
|
2024
|
351,390
|
|
|
Thereafter
|
358,513
|
|
|
|
1,298,974
|
|
|
Less: discount
|
(2,497
|
)
|
|
Less: unamortized loan costs
|
(9,272
|
)
|
|
|
$
|
1,287,205
|
|
Amount
|
|
Inception
|
|
Maturity
|
|
Fixed Rate
|
||
|
|
|
|
|
|
|
||
$
|
125,000
|
|
|
January 2015
|
|
January 2023
|
|
3.99%
|
50,000
|
|
|
November 2015
|
|
November 2023
|
|
3.99%
|
|
75,000
|
|
|
September 2016
|
|
September 2024
|
|
3.93%
|
|
50,000
|
|
|
November 2015
|
|
November 2025
|
|
4.33%
|
|
100,000
|
|
|
January 2015
|
|
January 2027
|
|
4.51%
|
|
$
|
400,000
|
|
|
|
|
|
|
|
Date Entered
|
|
Maturity Date
|
|
Fixed Rate
|
|
Rate Index
|
|
Notional Amount
|
|
Fair Value
|
||||
May 2012
|
|
April 2019
|
|
2.84%
|
|
1-month LIBOR
|
|
$
|
40,000,000
|
|
|
$
|
31
|
|
June 2013
|
|
June 2020
|
|
3.41%
|
|
1-month LIBOR
|
|
$
|
80,000,000
|
|
|
$
|
230
|
|
March 2014
|
|
June 2020
|
|
3.46%
|
|
1-month LIBOR
|
|
$
|
130,000,000
|
|
|
$
|
298
|
|
March 2019
|
|
December 2021
|
|
3.46%
|
|
1-month LIBOR
|
|
$
|
100,000,000
|
|
|
$
|
(92
|
)
|
March 2019
|
|
December 2021
|
|
3.47%
|
|
1-month LIBOR
|
|
$
|
100,000,000
|
|
|
$
|
(127
|
)
|
|
Three Months Ended
|
||||||
|
March 31,
|
||||||
|
2019
|
|
2018
|
||||
Interest expense on debt at contractual rates
|
$
|
13,074
|
|
|
$
|
10,527
|
|
Losses reclassified from accumulated other
|
|
|
|
||||
comprehensive income (loss) into interest expense
|
(292
|
)
|
|
276
|
|
||
Capitalized interest
|
(157
|
)
|
|
(24
|
)
|
||
Amortization of debt issuance costs and debt discount
|
893
|
|
|
835
|
|
||
Total interest expense
|
$
|
13,518
|
|
|
$
|
11,614
|
|
|
Asset Class
|
|
Type
|
|
Total
|
|
Funded
|
|
Remaining
|
||||||
Loan Commitments:
|
|
|
|
|
|
|
|
|
|
||||||
LCS Sagewood Note A
|
SHO
|
|
Construction
|
|
$
|
118,800,000
|
|
|
$
|
(77,118,000
|
)
|
|
$
|
41,682,000
|
|
LCS Sagewood Note B
|
SHO
|
|
Construction
|
|
61,200,000
|
|
|
(15,612,000
|
)
|
|
45,588,000
|
|
|||
LCS Timber Ridge Note A
|
SHO
|
|
Construction
|
|
60,000,000
|
|
|
(58,975,000
|
)
|
|
1,025,000
|
|
|||
Bickford Senior Living
|
SHO
|
|
Construction
|
|
56,700,000
|
|
|
(36,415,000
|
)
|
|
20,285,000
|
|
|||
Senior Living Communities
|
SHO
|
|
Revolving Credit
|
|
15,000,000
|
|
|
(2,758,000
|
)
|
|
12,242,000
|
|
|||
|
|
|
|
|
$
|
311,700,000
|
|
|
$
|
(190,878,000
|
)
|
|
$
|
120,822,000
|
|
|
Asset Class
|
|
Type
|
|
Total
|
|
Funded
|
|
Remaining
|
||||||
Development Commitments:
|
|
|
|
|
|
|
|
|
|
||||||
Ignite Medical Resorts
|
SNF
|
|
Construction
|
|
$
|
25,350,000
|
|
|
$
|
(6,621,000
|
)
|
|
$
|
18,729,000
|
|
Woodland Village
|
SHO
|
|
Renovation
|
|
7,450,000
|
|
|
(7,268,000
|
)
|
|
182,000
|
|
|||
Senior Living Communities
|
SHO
|
|
Renovation
|
|
6,830,000
|
|
|
(5,808,000
|
)
|
|
1,022,000
|
|
|||
Senior Living Communities
|
SHO
|
|
Renovation
|
|
3,100,000
|
|
|
—
|
|
|
3,100,000
|
|
|||
Bickford Senior Living
|
SHO
|
|
Renovation
|
|
1,750,000
|
|
|
(1,750,000
|
)
|
|
—
|
|
|||
Navion Senior Solutions
|
SHO
|
|
Construction
|
|
650,000
|
|
|
—
|
|
|
650,000
|
|
|||
Discovery Senior Living
|
SHO
|
|
Renovation
|
|
500,000
|
|
|
(302,000
|
)
|
|
198,000
|
|
|||
|
|
|
|
|
$
|
45,630,000
|
|
|
$
|
(21,749,000
|
)
|
|
$
|
23,881,000
|
|
|
Asset Class
|
|
Type
|
|
Total
|
|
Funded
|
|
Remaining
|
||||||
Contingencies:
|
|
|
|
|
|
|
|
|
|
||||||
Bickford Senior Living
|
SHO
|
|
Lease Inducement
|
|
$
|
10,000,000
|
|
|
$
|
(8,750,000
|
)
|
|
$
|
1,250,000
|
|
Bickford Senior Living
|
SHO
|
|
Incentive Loan Draws
|
|
8,000,000
|
|
|
(250,000
|
)
|
|
7,750,000
|
|
|||
Wingate Healthcare
|
SHO
|
|
Lease Inducement
|
|
5,000,000
|
|
|
—
|
|
|
5,000,000
|
|
|||
Navion Senior Solutions
|
SHO
|
|
Lease Inducement
|
|
4,850,000
|
|
|
—
|
|
|
4,850,000
|
|
|||
Ignite Medical Resorts
|
SNF
|
|
Lease Inducement
|
|
2,000,000
|
|
|
—
|
|
|
2,000,000
|
|
|||
|
|
|
|
|
$
|
29,850,000
|
|
|
$
|
(9,000,000
|
)
|
|
$
|
20,850,000
|
|
|
2019
|
|
2018
|
Dividend yield
|
5.5%
|
|
6.5%
|
Expected volatility
|
18.6%
|
|
19.4%
|
Expected lives
|
2.9 years
|
|
2.9 years
|
Risk-free interest rate
|
2.50%
|
|
2.39%
|
|
Three Months Ended
|
||||
|
March 31,
|
||||
|
2019
|
|
2018
|
||
Options outstanding January 1,
|
920,346
|
|
|
859,182
|
|
Options granted under 2012 Plan
|
602,000
|
|
|
560,000
|
|
Options exercised under 2012 Plan
|
(352,830
|
)
|
|
—
|
|
Options forfeited under 2012 Plan
|
—
|
|
|
(15,000
|
)
|
Options outstanding, December 31,
|
1,169,516
|
|
|
1,404,182
|
|
|
|
|
|
||
Exercisable at December 31,
|
678,997
|
|
|
949,160
|
|
|
Three Months Ended
|
||||||
|
March 31,
|
||||||
|
2019
|
|
2018
|
||||
Net income
|
$
|
35,679
|
|
|
$
|
38,432
|
|
|
|
|
|
||||
BASIC:
|
|
|
|
||||
Weighted average common shares outstanding
|
42,825,824
|
|
|
41,532,154
|
|
||
|
|
|
|
||||
DILUTED:
|
|
|
|
||||
Weighted average common shares outstanding
|
42,825,824
|
|
|
41,532,154
|
|
||
Stock options
|
75,695
|
|
|
44,722
|
|
||
Convertible subordinated debentures
|
223,513
|
|
|
—
|
|
||
Weighted average dilutive common shares outstanding
|
43,125,032
|
|
|
41,576,876
|
|
||
|
|
|
|
||||
Net income per common share - basic
|
$
|
.83
|
|
|
$
|
.93
|
|
Net income per common share - diluted
|
$
|
.83
|
|
|
$
|
.92
|
|
|
|
|
|
||||
Incremental anti-dilutive shares excluded:
|
|
|
|
||||
Net share effect of stock options with an exercise price in excess of the average market price for our common shares
|
17,415
|
|
|
118,639
|
|
||
|
|
|
|
||||
Regular dividends declared per common share
|
$
|
1.05
|
|
|
$
|
1.00
|
|
|
|
|
Fair Value Measurement
|
||||||
|
Balance Sheet Classification
|
|
March 31,
2019 |
|
December 31,
2018 |
||||
Level 2
|
|
|
|
|
|
||||
Interest rate swap asset
|
Other assets
|
|
$
|
559
|
|
|
$
|
1,297
|
|
Interest rate swap liability
|
Accounts payable and accrued expenses
|
|
$
|
(219
|
)
|
|
$
|
—
|
|
|
Carrying Amount
|
|
Fair Value Measurement
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Level 2
|
|
|
|
|
|
|
|
||||||||
Variable rate debt
|
$
|
633,401
|
|
|
$
|
628,010
|
|
|
$
|
639,000
|
|
|
$
|
634,000
|
|
Fixed rate debt
|
$
|
653,804
|
|
|
$
|
653,665
|
|
|
$
|
653,455
|
|
|
$
|
644,745
|
|
|
|
|
|
|
|
|
|
||||||||
Level 3
|
|
|
|
|
|
|
|
||||||||
Mortgage and other notes receivable
|
$
|
257,481
|
|
|
$
|
246,111
|
|
|
$
|
260,119
|
|
|
$
|
244,206
|
|
*
|
We depend on the operating success of our tenants and borrowers for collection of our lease and note payments;
|
*
|
We depend on the success of property development and construction activities, which may fail to achieve the operating results we expect;
|
*
|
We are exposed to the risk that our tenants and borrowers may become subject to bankruptcy or insolvency proceedings;
|
*
|
Certain tenants in our portfolio account for a significant percentage of the rent we expect to generate from our portfolio, and the failure of any of these tenants to meet their obligations to us could materially and adversely affect our business, financial condition and results of operations and our ability to make distributions to our stockholders.
|
*
|
We are exposed to the risk that the illiquidity of real estate investments could impede our ability to respond to adverse changes in the performance of our properties;
|
*
|
We are exposed to risks related to governmental regulations and payors, principally Medicare and Medicaid, and the effect that lower reimbursement rates would have on our tenants’ and borrowers’ business;
|
*
|
Legislative, regulatory, or administrative changes could adversely affect us or our security holders.
|
*
|
We are exposed to the risk that the cash flows of our tenants and borrowers would be adversely affected by increased liability claims and liability insurance costs;
|
*
|
We are exposed to risks related to environmental laws and the costs associated with liabilities related to hazardous substances;
|
*
|
We are exposed to the risk that we may not be fully indemnified by our lessees and borrowers against future litigation;
|
*
|
We depend on the success of our future acquisitions and investments;
|
*
|
We depend on our ability to reinvest cash in real estate investments in a timely manner and on acceptable terms;
|
*
|
We may need to refinance existing debt or incur additional debt in the future, which may not be available on terms acceptable to us;
|
*
|
We have covenants related to our indebtedness which impose certain operational limitations and a breach of those covenants could materially adversely affect our financial condition and results of operations;
|
*
|
When interest rates increase, our common stock may decline in price;
|
*
|
We depend on revenues derived mainly from fixed rate investments in real estate assets, while a portion of our debt capital used to finance those investments bears interest at variable rates;
|
*
|
We are exposed to the risk that our assets may be subject to impairment charges;
|
*
|
We depend on the ability to continue to qualify for taxation as a Real Estate Investment Trust;
|
*
|
Complying with REIT requirements may cause us to forego otherwise attractive acquisition opportunities or liquidate otherwise attractive investments, which could materially hinder our performance;
|
*
|
We have ownership limits in our charter with respect to our common stock and other classes of capital stock which may delay, defer or prevent a transaction or a change of control that might involve a premium price for our common stock or might otherwise be in the best interests of our stockholders;
|
*
|
We are subject to certain provisions of Maryland law and our charter and bylaws that could hinder, delay or prevent a change in control transaction, even if the transaction involves a premium price for our common stock or our stockholders believe such transaction to be otherwise in their best interests.
|
*
|
If our efforts to maintain the privacy and security of Company information are not successful, we could incur substantial costs and reputational damage, and could become subject to litigation and enforcement actions.
|
|
|
|
Properties
|
|
|
Beds/Sq. Ft.*
|
|
|
Revenue
|
|
%
|
|
Investment
|
|||||
Real Estate Properties
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Senior Housing - Need-Driven
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
Assisted Living
|
91
|
|
|
4,800
|
|
|
$
|
19,499
|
|
|
25.6
|
%
|
|
$
|
847,677
|
|
|
|
Senior Living Campus
|
11
|
|
|
1,625
|
|
|
4,071
|
|
|
5.4
|
%
|
|
211,911
|
|
||
|
|
Total Senior Housing - Need-Driven
|
102
|
|
|
6,425
|
|
|
23,570
|
|
|
31.0
|
%
|
|
1,059,588
|
|
||
|
Senior Housing - Discretionary
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
Independent Living
|
31
|
|
|
3,644
|
|
|
11,372
|
|
|
14.9
|
%
|
|
592,691
|
|
||
|
|
Entrance-Fee Communities
|
10
|
|
|
2,306
|
|
|
12,782
|
|
|
16.8
|
%
|
|
604,270
|
|
||
|
|
Total Senior Housing - Discretionary
|
41
|
|
|
5,950
|
|
|
24,154
|
|
|
31.7
|
%
|
|
1,196,961
|
|
||
|
|
Total Senior Housing
|
143
|
|
|
12,375
|
|
|
47,724
|
|
|
62.7
|
%
|
|
2,256,549
|
|
||
|
Medical Facilities
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
Skilled Nursing Facilities
|
72
|
|
|
9,433
|
|
|
20,020
|
|
|
26.3
|
%
|
|
577,840
|
|
||
|
|
Hospitals
|
3
|
|
|
207
|
|
|
1,998
|
|
|
2.6
|
%
|
|
55,971
|
|
||
|
|
Medical Office Buildings
|
2
|
|
|
88,517
|
|
*
|
167
|
|
|
0.2
|
%
|
|
10,486
|
|
||
|
|
Total Medical Facilities
|
77
|
|
|
|
|
22,185
|
|
|
29.1
|
%
|
|
644,297
|
|
|||
|
|
Total Real Estate Properties
|
220
|
|
|
|
|
$
|
69,909
|
|
|
91.8
|
%
|
|
$
|
2,900,846
|
|
|
|
|
Current Year Disposals and Held for Sale
|
|
|
|
|
(46
|
)
|
|
|
|
|
||||||
|
|
Escrow Funds Received From Tenants
|
|
|
|
|
1,090
|
|
|
|
|
|
||||||
|
|
Total Rental Income
|
|
|
|
|
$
|
70,953
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Mortgage and Other Notes Receivable
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Senior Housing - Need-Driven
|
6
|
|
|
372
|
|
|
$
|
1,196
|
|
|
1.6
|
%
|
|
$
|
56,348
|
|
|
|
Senior Housing - Discretionary
|
2
|
|
|
857
|
|
|
2,713
|
|
|
3.5
|
%
|
|
149,778
|
|
|||
|
Medical Facilities
|
4
|
|
|
270
|
|
|
168
|
|
|
0.2
|
%
|
|
7,437
|
|
|||
|
Other Notes Receivable
|
—
|
|
|
—
|
|
|
1,041
|
|
|
1.4
|
%
|
|
43,918
|
|
|||
|
|
Total Mortgage and Other Notes Receivable
|
12
|
|
|
1,499
|
|
|
$
|
5,118
|
|
|
6.7
|
%
|
|
$
|
257,481
|
|
|
|
Other Income
|
|
|
|
|
36
|
|
|
|
|
|
||||||
|
|
Total Revenue
|
|
|
|
|
|
$
|
76,107
|
|
|
|
|
|
|
|
Portfolio Summary
|
Properties
|
|
|
|
|
Revenue
|
|
%
|
|
Investment
|
|||||||
|
Real Estate Properties
|
220
|
|
|
|
|
$
|
69,909
|
|
|
93.2
|
%
|
|
$
|
2,900,846
|
|
|
|
Mortgage and Other Notes Receivable
|
12
|
|
|
|
|
5,118
|
|
|
6.8
|
%
|
|
257,481
|
|
|||
|
|
Total Portfolio
|
232
|
|
|
|
|
$
|
75,027
|
|
|
100.0
|
%
|
|
$
|
3,158,327
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Portfolio by Operator Type
|
|
|
|
|
|
|
|
|
|
||||||||
|
Public
|
74
|
|
|
|
|
$
|
18,800
|
|
|
25.1
|
%
|
|
$
|
538,428
|
|
|
|
National Chain (Privately-Owned)
|
28
|
|
|
|
|
12,643
|
|
|
16.9
|
%
|
|
681,156
|
|
|||
|
Regional
|
126
|
|
|
|
|
42,685
|
|
|
56.9
|
%
|
|
1,886,355
|
|
|||
|
Small
|
4
|
|
|
|
|
899
|
|
|
1.1
|
%
|
|
52,388
|
|
|||
|
|
Total Portfolio
|
232
|
|
|
|
|
$
|
75,027
|
|
|
100.0
|
%
|
|
$
|
3,158,327
|
|
2018
|
|
2017
|
||||
$
|
4.00
|
|
|
$
|
3.80
|
|
Consolidated Total Debt
|
$
|
1,287,205
|
|
Less: cash and cash equivalents
|
(5,177
|
)
|
|
Consolidated Net Debt
|
$
|
1,282,028
|
|
|
|
||
Adjusted EBITDA
|
$
|
68,233
|
|
Annualizing Adjustment
|
204,699
|
|
|
Annualized impact of recent investments
|
5,953
|
|
|
|
$
|
278,885
|
|
|
|
||
Consolidated Net Debt to Annualized Adjusted EBITDA
|
4.6
|
x
|
|
|
|
|
|
Rental Income
|
|
|
|
|||||||||
|
|
|
Investment
|
|
Three Months Ended March 31,
|
|
|
Lease
|
|||||||||
|
Asset Class
|
|
Amount
|
|
2019
|
|
|
2018
|
|
|
Renewal
|
||||||
Senior Living Communities
|
EFC
|
|
$
|
597,000
|
|
|
$
|
11,532
|
|
17%
|
|
$
|
11,449
|
|
17%
|
|
2029
|
Holiday Retirement
|
ILF
|
|
531,378
|
|
|
9,930
|
|
14%
|
|
10,954
|
|
16%
|
|
2035
|
|||
Bickford Senior Living
|
ALF
|
|
525,576
|
|
|
13,244
|
|
19%
|
|
11,445
|
|
17%
|
|
Various
|
|||
National HealthCare Corporation
|
SNF
|
|
171,297
|
|
|
9,748
|
|
14%
|
|
9,674
|
|
14%
|
|
2026
|
|||
All others
|
Various
|
|
1,075,595
|
|
|
25,409
|
|
36%
|
|
25,731
|
|
36%
|
|
Various
|
|||
|
|
|
$
|
2,900,846
|
|
|
$
|
69,863
|
|
|
|
$
|
69,253
|
|
|
|
|
|
|
Date
|
|
Properties
|
|
Asset Class
|
|
Amount
|
||
Wingate Healthcare
|
|
January 2019
|
|
1
|
|
SHO
|
|
$
|
52,200
|
|
Holiday Retirement
|
|
January 2019
|
|
1
|
|
SHO
|
|
38,000
|
|
|
Comfort Care Senior Living
|
|
April 2019
|
|
1
|
|
SHO
|
|
10,800
|
|
|
|
|
|
|
|
|
|
|
$
|
101,000
|
|
|
Three Months Ended
|
|
|
|
|
||||||||||
|
March 31,
|
|
Period Change
|
||||||||||||
|
2019
|
|
2018
|
|
$
|
|
%
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
||||||||
Rental income
|
|
|
|
|
|
|
|
||||||||
ALFs leased to Bickford Senior Living
|
$
|
11,873
|
|
|
$
|
10,275
|
|
|
$
|
1,598
|
|
|
15.6
|
%
|
|
SLC leased to Wingate Healthcare
|
804
|
|
|
—
|
|
|
804
|
|
|
NM
|
|
||||
SNFs leased to Ensign Group
|
5,842
|
|
|
5,103
|
|
|
739
|
|
|
14.5
|
%
|
||||
SHOs leased to Senior Living Communities
|
10,474
|
|
|
10,090
|
|
|
384
|
|
|
3.8
|
%
|
||||
SHOs leased to SH Regency Leasing
|
—
|
|
|
1,262
|
|
|
(1,262
|
)
|
|
NM
|
|
||||
ILFs leased to an affiliate of Holiday Retirement
|
8,300
|
|
|
9,424
|
|
|
(1,124
|
)
|
|
(11.9
|
)%
|
||||
ALFs leased to The LaSalle Group
|
—
|
|
|
1,094
|
|
|
(1,094
|
)
|
|
NM
|
|
||||
Other new and existing leases
|
27,342
|
|
|
26,043
|
|
|
1,299
|
|
|
5.0
|
%
|
||||
|
64,635
|
|
|
63,291
|
|
|
1,344
|
|
|
2.1
|
%
|
||||
Straight-line rent adjustments, new and existing leases
|
5,228
|
|
|
5,962
|
|
|
(734
|
)
|
|
(12.3
|
)%
|
||||
Escrow funds received from tenants
|
1,090
|
|
|
—
|
|
|
1,090
|
|
|
NM
|
|
||||
Total Rental Income
|
70,953
|
|
|
69,253
|
|
|
1,700
|
|
|
2.5
|
%
|
||||
Interest income and other
|
|
|
|
|
|
|
|
||||||||
Life Care Services mortgages and construction loans
|
2,622
|
|
|
913
|
|
|
1,709
|
|
|
NM
|
|
||||
Bickford construction loans
|
785
|
|
|
425
|
|
|
360
|
|
|
84.7
|
%
|
||||
Other existing mortgages and notes
|
1,711
|
|
|
2,122
|
|
|
(411
|
)
|
|
(19.4
|
)%
|
||||
Total Interest Income from Mortgage and Other Notes
|
5,118
|
|
|
3,460
|
|
|
1,658
|
|
|
47.9
|
%
|
||||
Other income
|
36
|
|
|
33
|
|
|
3
|
|
|
9.1
|
%
|
||||
Total Revenues
|
76,107
|
|
|
72,746
|
|
|
3,361
|
|
|
4.6
|
%
|
||||
Expenses:
|
|
|
|
|
|
|
|
||||||||
Depreciation
|
|
|
|
|
|
|
|
||||||||
ALFs leased to Bickford Senior Living
|
3,649
|
|
|
3,107
|
|
|
542
|
|
|
17.4
|
%
|
||||
SNFs leased to Ensign Group
|
1,851
|
|
|
1,555
|
|
|
296
|
|
|
19.0
|
%
|
||||
SHOs leased to Senior Living Communities
|
3,760
|
|
|
3,580
|
|
|
180
|
|
|
5.0
|
%
|
||||
Other new and existing assets
|
9,231
|
|
|
9,093
|
|
|
138
|
|
2
|
|
1.5
|
%
|
|||
Total Depreciation
|
18,491
|
|
|
17,335
|
|
|
1,156
|
|
3
|
|
6.7
|
%
|
|||
Interest
|
13,518
|
|
|
11,614
|
|
|
1,904
|
|
|
16.4
|
%
|
||||
Payroll and related compensation expenses
|
1,202
|
|
|
1,799
|
|
|
(597
|
)
|
|
(33.2
|
)%
|
||||
Non-cash stock-based compensation expense
|
2,001
|
|
|
1,425
|
|
|
576
|
|
|
40.4
|
%
|
||||
Loan and realty losses
|
2,500
|
|
|
—
|
|
|
2,500
|
|
|
NM
|
|
||||
Property taxes and insurance on leased properties
|
1,090
|
|
|
—
|
|
|
1,090
|
|
|
NM
|
|
||||
Other expenses
|
1,626
|
|
|
1,403
|
|
|
223
|
|
|
15.9
|
%
|
||||
Total Expenses
|
40,428
|
|
|
33,576
|
|
|
6,852
|
|
|
20.4
|
%
|
||||
Income before investment and other gains and losses
|
35,679
|
|
|
39,170
|
|
|
(3,491
|
)
|
|
(8.9
|
)%
|
||||
Loss on convertible note retirement
|
—
|
|
|
(738
|
)
|
|
738
|
|
|
NM
|
|
||||
Net income
|
$
|
35,679
|
|
|
$
|
38,432
|
|
|
$
|
(2,753
|
)
|
|
(7.2
|
)%
|
|
|
|
|
|
|
|
|
|
||||||||
NM - not meaningful
|
|
|
|
|
|
|
|
•
|
The rental income increase of
$1,344,000
includes the impact of $155,644,000 of new investments in 2018 and
$90,200,000
so far in
2019
. This impact was partially offset by a
$1,124,000
decline in rental income received from affiliates of Holiday Retirement as a result of the lease amendment described in Note 2. The increase in rental income was also offset by a
$1,262,000
decline in rental income from SH Regency Leasing and a
$1,094,000
decline in rental income received from The LaSalle Group, both of which resulted in transitions to new tenants described herein under the heading
Tenant Transitioning
.
|
•
|
The increase in rental income included a
$734,000
decrease in straight-line rent adjustments. Generally accepted accounting principles require rental income to be recognized on a straight-line basis over the term of the lease to give effect to scheduled rent escalators that are determinable at lease inception. Future increases in rental income depend on our ability to make new investments which meet our underwriting criteria.
|
•
|
Interest income from mortgage and other notes increased
$1,658,000
primarily due to interest income received on loans to Bickford Senior Living and Life Care Services.
|
•
|
Depreciation expense increased
$1,156,000
primarily due to new real estate investments completed in
2018
and
2019
.
|
•
|
Interest expense, including amortization of debt discount and issuance costs, increased
$1,904,000
primarily as a result of both an increase in 30-day LIBOR, which is the benchmark for our revolving debt, and the September 2018 conversion of $300,000,000 of debt initially drawn on our revolving facility into a five-year term loan.
|
•
|
Non-cash stock-based compensation expense increased due primarily to fluctuations in the valuation assumptions used in the Black-Scholes pricing model.
|
•
|
Payroll and related compensation expenses decreased
$597,000
due primarily to the timing and amount of incentive compensation related to achieving certain company goals.
|
•
|
Loan and realty losses of $2,500,000 represent a writedown related to two facilities classified as held for sale with an estimated net realizable value of
$3,745,000
at March 31, 2019.
|
•
|
Escrow funds received from tenants totaling
$1,090,000
were used to pay property taxes and insurance which is a typical structure of a triple-net lease.
Narrow-Scope Improvements for Lessors under ASU 2018-20
requires these items of revenue and expense be included in our condensed consolidated financial statements.
|
|
Three Months Ended March 31,
|
|
One Year Change
|
|||||||||||
|
2019
|
|
2018
|
|
$
|
|
%
|
|||||||
Cash and cash equivalents and restricted cash, January 1
|
$
|
9,912
|
|
|
$
|
8,075
|
|
|
$
|
1,837
|
|
|
22.7
|
%
|
Net cash provided by operating activities
|
73,837
|
|
|
48,877
|
|
|
24,960
|
|
|
51.1
|
%
|
|||
Net cash used in investing activities
|
(65,039
|
)
|
|
(19,586
|
)
|
|
(45,453
|
)
|
|
232.1
|
%
|
|||
Net cash used in financing activities
|
(3,156
|
)
|
|
(28,755
|
)
|
|
25,599
|
|
|
(89.0
|
)%
|
|||
Cash and cash equivalents and restricted cash, December 31
|
$
|
15,554
|
|
|
$
|
8,611
|
|
|
$
|
6,943
|
|
|
80.6
|
%
|
|
|
LIBOR Margin
|
|
||
Level
|
Leverage Ratio
|
Revolver
|
$300m Term Loan
|
$250m Term Loan
|
Facility Fee
|
1
|
< 0.35
|
1.10%
|
1.20%
|
1.25%
|
0.15%
|
2
|
≥ 0.35 & < 0.40
|
1.15%
|
1.25%
|
1.30%
|
0.20%
|
3
|
≥ 0.40 & < 0.45
|
1.20%
|
1.30%
|
1.35%
|
0.20%
|
4
|
≥ 0.45 & < 0.50
|
1.25%
|
1.40%
|
1.45%
|
0.25%
|
Date Entered
|
|
Maturity Date
|
|
Fixed Rate
|
|
Rate Index
|
|
Notional Amount
|
|
Fair Value
|
||||
May 2012
|
|
April 2019
|
|
2.84%
|
|
1-month LIBOR
|
|
$
|
40,000,000
|
|
|
$
|
31
|
|
June 2013
|
|
June 2020
|
|
3.41%
|
|
1-month LIBOR
|
|
$
|
80,000,000
|
|
|
$
|
230
|
|
March 2014
|
|
June 2020
|
|
3.46%
|
|
1-month LIBOR
|
|
$
|
130,000,000
|
|
|
$
|
298
|
|
March 2019
|
|
December 2021
|
|
3.46%
|
|
1-month LIBOR
|
|
$
|
100,000,000
|
|
|
$
|
(92
|
)
|
March 2019
|
|
December 2021
|
|
3.47%
|
|
1-month LIBOR
|
|
$
|
100,000,000
|
|
|
$
|
(127
|
)
|
|
Asset Class
|
|
Type
|
|
Total
|
|
Funded
|
|
Remaining
|
||||||
Loan Commitments:
|
|
|
|
|
|
|
|
|
|
||||||
LCS Sagewood Note A
|
SHO
|
|
Construction
|
|
$
|
118,800,000
|
|
|
$
|
(77,118,000
|
)
|
|
$
|
41,682,000
|
|
LCS Sagewood Note B
|
SHO
|
|
Construction
|
|
61,200,000
|
|
|
(15,612,000
|
)
|
|
45,588,000
|
|
|||
LCS Timber Ridge Note A
|
SHO
|
|
Construction
|
|
60,000,000
|
|
|
(58,975,000
|
)
|
|
1,025,000
|
|
|||
Bickford Senior Living
|
SHO
|
|
Construction
|
|
56,700,000
|
|
|
(36,415,000
|
)
|
|
20,285,000
|
|
|||
Senior Living Communities
|
SHO
|
|
Revolving Credit
|
|
15,000,000
|
|
|
(2,758,000
|
)
|
|
12,242,000
|
|
|||
|
|
|
|
|
$
|
311,700,000
|
|
|
$
|
(190,878,000
|
)
|
|
$
|
120,822,000
|
|
|
Asset Class
|
|
Type
|
|
Total
|
|
Funded
|
|
Remaining
|
||||||
Development Commitments:
|
|
|
|
|
|
|
|
|
|
||||||
Ignite Medical Resorts
|
SNF
|
|
Construction
|
|
$
|
25,350,000
|
|
|
$
|
(6,621,000
|
)
|
|
$
|
18,729,000
|
|
Woodland Village
|
SHO
|
|
Renovation
|
|
7,450,000
|
|
|
(7,268,000
|
)
|
|
182,000
|
|
|||
Senior Living Communities
|
SHO
|
|
Renovation
|
|
6,830,000
|
|
|
(5,808,000
|
)
|
|
1,022,000
|
|
|||
Senior Living Communities
|
SHO
|
|
Renovation
|
|
3,100,000
|
|
|
—
|
|
|
3,100,000
|
|
|||
Bickford Senior Living
|
SHO
|
|
Renovation
|
|
1,750,000
|
|
|
(1,750,000
|
)
|
|
—
|
|
|||
Navion Senior Solutions
|
SHO
|
|
Construction
|
|
650,000
|
|
|
—
|
|
|
650,000
|
|
|||
Discovery Senior Living
|
SHO
|
|
Renovation
|
|
500,000
|
|
|
(302,000
|
)
|
|
198,000
|
|
|||
|
|
|
|
|
$
|
45,630,000
|
|
|
$
|
(21,749,000
|
)
|
|
$
|
23,881,000
|
|
|
Asset Class
|
|
Type
|
|
Total
|
|
Funded
|
|
Remaining
|
||||||
Contingencies:
|
|
|
|
|
|
|
|
|
|
||||||
Bickford Senior Living
|
SHO
|
|
Lease Inducement
|
|
$
|
10,000,000
|
|
|
$
|
(8,750,000
|
)
|
|
$
|
1,250,000
|
|
Bickford Senior Living
|
SHO
|
|
Incentive Loan Draws
|
|
8,000,000
|
|
|
(250,000
|
)
|
|
7,750,000
|
|
|||
Wingate Healthcare
|
SHO
|
|
Lease Inducement
|
|
5,000,000
|
|
|
—
|
|
|
5,000,000
|
|
|||
Navion Senior Solutions
|
SHO
|
|
Lease Inducement
|
|
4,850,000
|
|
|
—
|
|
|
4,850,000
|
|
|||
Ignite Medical Resorts
|
SNF
|
|
Lease Inducement
|
|
2,000,000
|
|
|
—
|
|
|
2,000,000
|
|
|||
|
|
|
|
|
$
|
29,850,000
|
|
|
$
|
(9,000,000
|
)
|
|
$
|
20,850,000
|
|
|
Three Months Ended
|
||||||
|
March 31,
|
||||||
|
2019
|
|
2018
|
||||
Net income
|
$
|
35,679
|
|
|
$
|
38,432
|
|
Interest expense
|
13,518
|
|
|
11,614
|
|
||
Franchise, excise and other taxes
|
545
|
|
|
346
|
|
||
Depreciation
|
18,491
|
|
|
17,335
|
|
||
Loss on convertible note retirement
|
—
|
|
|
738
|
|
||
Recognition of unamortized note receivable commitment fees
|
—
|
|
|
(515
|
)
|
||
Adjusted EBITDA
|
$
|
68,233
|
|
|
$
|
67,950
|
|
|
|
|
|
||||
Interest expense at contractual rates
|
$
|
13,074
|
|
|
$
|
10,527
|
|
Principal payments
|
296
|
|
|
285
|
|
||
Fixed Charges
|
$
|
13,370
|
|
|
$
|
10,812
|
|
|
|
|
|
||||
Fixed Charge Coverage
|
5.1x
|
|
|
6.3x
|
|
Exhibit No.
|
Description
|
3.1
|
Articles of Incorporation (incorporated by reference to Exhibit 3.1 to Form S-11 Registration Statement No. 33-41863, filed in paper - hyperlink is not required pursuant to Rule 105 of Regulation S-T)
|
3.2
|
Amendment to Articles of Incorporation
(incorporated by reference to Exhibit A to the Company’s Definitive Proxy Statement filed March 21, 2009)
|
3.3
|
Amendment to Articles of Incorporation approved by shareholders on May 2, 2014
(incorporated by reference to Exhibit 3.3 to the Company’s Form 10-Q filed August 4, 2014)
|
3.4
|
Restated Bylaws
(incorporated by reference to Exhibit 3.3 to the Company’s Form 10-K filed February 15, 2013)
|
3.5
|
Amendment No. 1 to Restated Bylaws dated February 14, 2014
(incorporated by reference to Exhibit 3.3 to the Company’s Form 10-K filed February 14, 2014)
|
4.1
|
Form of Common Stock Certificate (incorporated by reference to Exhibit 39 to Form S-11 Registration Statement No. 33-41863, f
iled in paper - hyperlink is not required pursuant to Rule 105 of Regulation S-T
)
|
4.2
|
Indenture, dated as of March 25, 2014, between National Health Investors, Inc. and The Bank of New York Mellon Trust Company, N.A., as Trustee
(incorporated by reference to Exhibit 4.1 to the Company’s Form 8-K filed March 31, 2014)
|
4.3
|
First Supplemental Indenture, dated as of March 25, 2014, to the Indenture, dated as of March 25, 2014, between National Health Investors, Inc. and The Bank of New York Mellon Trust Company, N.A., as Trustee
(incorporated by reference to Exhibit 4.2 to the Company’s Form 8-K filed March 31, 20143)
|
10.1
|
Amended and Restated Employment Agreement dated as of February 15, 2019, by and between the Company and D. Eric Mendelsohn
(incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed February 22, 2019)
|
31.1
|
|
31.2
|
|
32
|
|
101.INS
|
XBRL Instance Document
|
101.SCH
|
XBRL Taxonomy Extension Schema Document
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
NATIONAL HEALTH INVESTORS, INC.
|
|
|
(Registrant)
|
|
||
|
||
Date:
|
May 6, 2019
|
/s/ D. Eric Mendelsohn
|
|
|
D. Eric Mendelsohn
|
|
|
President and Chief Executive Officer
|
|
|
(duly authorized officer)
|
|
||
|
||
|
||
Date:
|
May 6, 2019
|
/s/ Roger R. Hopkins
|
|
|
Roger R. Hopkins
|
|
|
Chief Accounting Officer
|
|
|
(Principal Financial Officer and Principal Accounting Officer)
|
1.
|
I have reviewed this quarterly report on Form 10-Q of the registrant, National Health Investors, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
May 6, 2019
|
/s/ D. Eric Mendelsohn
|
|
|
D. Eric Mendelsohn
|
|
|
President and Chief Executive Officer
|
|
|
|
1.
|
I have reviewed this quarterly report on Form 10-Q of the registrant, National Health Investors, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions) :
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
May 6, 2019
|
/s/ Roger R. Hopkins
|
|
|
Roger R. Hopkins
|
|
|
Chief Accounting Officer
|
|
|
(Principal Financial Officer and Principal Accounting Officer)
|
(a)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(b)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Issuer.
|
Date:
|
May 6, 2019
|
/s/ D. Eric Mendelsohn
|
|
|
D. Eric Mendelsohn
|
|
|
President and Chief Executive Officer,
|
|
|
|
|
||
|
||
|
||
Date:
|
May 6, 2019
|
/s/ Roger R. Hopkins
|
|
|
Roger R. Hopkins
|
|
|
Chief Accounting Officer
|
|
|
(Principal Financial Officer and Principal Accounting Officer)
|