National Health Investors, Inc.

Greetings and welcome to the National Health Investors Third Quarter 2020 earnings call. During the presentation, all participants will be in a listen-only mode. Afterwards, we'll conduct a question-and-answer session. If you have a question, please press the 1 followed by the 4 on your telephone. If at any time during the conference you need to reach an operator, please press star 0. As a reminder, this call is being recorded Tuesday, November 10, 2020. I would now like to turn the conference over to Mr. Dana Hambly. Please go ahead, sir.

Thank you. Welcome, everyone, to the National Health Investors Conference call to review the company's results for the third quarter of 2020. On the call with me today are Eric Mendelsohn, President and CEO, Kevin Pascoe, Chief Investment Officer, John Spaid, Executive Vice President and Chief Financial Officer, and David Travis, Chief Accounting Officer. The results as well as notice of the accessibility of this conference call on a listen-only basis over the internet were released yesterday after market close in a press release that's been covered by the financial media. As a reminder, any statements in this conference call which are not historical facts are forward-looking statements. NHI cautions investors that any forward-looking statements may involve risk 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-Q for the quarter ended September 30, 2020. Copies of these filings are available on the SEC's website at sec.gov. or on NHI's website at nhireet.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 filed on Form 8K with 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 Eric Mendelsohn.

Thank you, Dana. Hello, and thanks for joining us today. We hope that everyone is staying healthy and positive in these most interesting of times. I want to express my deep gratitude and admiration to all our operating partners and their heroic employees that knowingly put themselves in harm's way every day as they work to care for our country's most vulnerable population. Thank you. To date, our operators have held up relatively well as occupancy declines generally slowed in the third quarter, aided by a pickup and move-ins and the leveling off of COVID-related expenses. We collected nearly 97% of rent in the quarter and nearly 98% in October. In the third quarter and for the year to date, we reported AFFO per share growth of 1.5% and 4.5% respectively. It should also be noted that we were tracking on the lower end of the range for the first nine months of 2020 in terms of our numbers formerly known as guidance. We think this is a testament to the stability of the triple net lease strategy, the needs driven nature of the properties we invest in, as well as the underlying strength of our operating partners Depending on the timing and effectiveness of the vaccine, we expect the impact of the pandemic to be more uneven across our property types as winter approaches. Thus far, our interest fee communities and skilled nursing properties, which together generate over 50% of our revenue, have been quite resilient. However, our freestanding assisted living Memory Care and Independent Living Operators are experiencing greater challenges as COVID cases are spiking in many parts of the country, which is slowing the pace of move-ins while move-outs are accelerating in what is typically a seasonally weak period. We are very encouraged that the HHS has included assisted living operators as eligible participants in the Provider Relief Fund. which will help with the financial hardships inflicted by the pandemic. While we are hopeful that more federal assistance is on the way, we cannot solely rely on this to resolve all the issues. As disclosed in our press release and our 10Q, we've reached an agreement in principle with Bickford for assistance in these difficult times. This includes deferring up to $3 million of November rent. They have additional deferrals of $750,000 available for each of December and January, all of which, if exercised, will accrue interest at an 8% rate with repayment expected over 12 months beginning June 2021. We are also continuing to work with prospective lenders and Bickford on a previously disclosed sale of nine properties which we estimate will improve Bickford's annual cash flow by approximately $3 million. Bickford has applied for grants under Phase II and III of the Provider Relief Fund, which we expect that they will receive before year-end, which will also improve their financial position. These measures will improve Bickford financially and create a long-term solution, but we will continue to work with them closely over the coming months and take further measures if needed. As the pandemic unfolded, we expected that there would be deferrals as we head into 2021. We have other tools at our disposal as well, including the use of deposits and other reserves and some personal and corporate guarantees. We are willing on a tenant by tenant basis to help our operators bridge the gap to a more stable operating environment within certain commercial norms. That said, we believe these challenges presented are temporary, so we're hesitant to make longer-term decisions that would have a more permanent impact on our future cash flow. While we certainly did not anticipate the pandemic, our board and senior management have been disciplined in adhering to our conservative Financial Metrics, which puts us in a strong position to weather this storm and to take advantage of growth opportunities as they emerge. Our big picture outlook has not changed. We continue to see tremendous opportunities for growth in senior housing and skilled nursing real estate and will be opportunistic with our capital deployment to help drive shareholder value. With that, I'll turn the call over to John. John.