National Health Investors, Inc.

Greetings and welcome to the National Health Investors' second quarter 2022 conference call. During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question and answer session. At that time, if you have a question, please press the one followed by the four on your telephone. Should you require operator assistance at any time, please press star zero. As a reminder, this conference is being recorded today, Tuesday, August 9, 2022. I would now like to turn the conference over to Dana Hambly. Please go ahead.

Thank you, and welcome to the National Health Investors Conference call to review the company's results for the second quarter of 2022. 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 the notice of the accessibility of this conference call on a listen-only basis, were released after the market closed yesterday 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 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-Q for the quarter ended June 30, 2022. Copies of these filings are available on the SEC's website at sec.gov or on NHI's website at nhiread.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. and I'll turn the call over to our CEO, Eric Mendelsohn.

Hello and thanks for joining us today. As we communicated on our last quarterly conference call, the portfolio optimization we commenced just over a year ago is largely complete and we are now starting to see some of the benefits. The Bickford lease was reset on April 1st and we're happy to see that their EBITDARM coverage for the second quarter was 1.3 times and that occupancy improved through the quarter, including another 100 basis point monthly increase in July. We know that we're not out of the woods yet as Bickford, like the rest of the industry, continues to deal with elevated operating costs, so we will continue to monitor this relationship closely. That said, our Bickford dispositions and rent restructuring put their company in much better operational and financial health. With our significant deferral balance outstanding and the fair market value reset of the lease in two years, we're providing all the resources necessary to accelerate the recovery and we're pleased with the early outcomes. While our portfolio is in better shape and siloed, There are other components in the Bickford organization unrelated to NHI's portfolio that still need attention and as a result, and with an abundance of caution, we have put them on a cash accounting basis. John will cover more of the details in his comments. We're encouraged by the quarter of our new shop operations, which contributed over $3 million of NOI, excluding non-recurring transition costs, which is in line with our forecast for the year. Recall that these properties have transitioned operators twice in less than 12 months, and we had limited visibility in the months leading up to our shop transition due to our litigation with Welltower, which was settled effective April 1st of this quarter. This is difficult on residents and employees, so we've been impressed with the diligence of our partners, Merrill Gardens and Discovery, in coordination with NHI's internal operations team in stabilizing these properties. We know this will be a lengthy recovery and see significant upside for internal growth. As we gain more confidence in this platform, we see SHOP as another avenue for long-term external growth as well. In addition to the Bickford and Schopp transactions, we've completed many other optimization efforts, which has touched well over half the properties in our portfolio. Since announcing our intention to sell between $250 and $400 million in assets, we've completed over $356 million, including $288.2 million in senior housing sales that had EBITDARM coverage of just 0.5 times. We're starting to see the fruits of this labor. While it is a lagging measure, we're encouraged by the direction that EBITDARM coverage is moving. Our senior housing coverage improved to 1.11 times in the first quarter of 2022 versus 0.98 times in the fourth quarter of 2021, and total company coverage improved to 1.68 times from 1.54 times over the same timeframe. See our progress report which was published along with this 10Q. The balance sheet is in great shape as we reduced debt by over $330 million in the last 12 months and leverage for the quarter at 4.0 times is at the low end of our targeted range. We've repurchased $70 million under the share buyback program and still have an excess of $250 million of incremental capital to deploy without the need for issuing additional equity. I'll now turn the call over to John to discuss our financial results and guidance in more detail. John.