National Health Investors, Inc.

Greetings and welcome to the NHI fourth quarter 2023 earnings call. At the start of the presentation, all lines 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. If at any time during the conference, you need to reach an operator, please press star zero. As a reminder, today's call is being recorded Wednesday, February 21st, 2024. I will now let the conference over to Dana Handley. Please go ahead.

Thank you, and welcome to the National Health Investors Conference Call to review results for the fourth quarter of 2023. On the call today are Eric Mendelson, President and CEO, Kevin Pascoe, Chief Investment Officer, John Spade, Chief Financial Officer, and David Travis, Chief Accounting Officer. The results, as well as notice of the accessibility of this conference call, were released after the market closed yesterday in a press release that's been covered by the financial media. 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-K for the year ended December 31, 2023. 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 furnished on Form 8-K 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 our CEO, Eric Mendelsohn.

Hello, and thanks to everyone for joining us today. We had another good quarter, capping a strong finish to the year with fourth quarter results exceeding our expectations. For the full year, our NAE REIT FFO, normalized FFO, and FAD were above the midpoint of both our original and improved November guidance. Similar to the third quarter results, we experienced stable cash collections, over $2 million in deferral repayments, and no unexpected rent concessions. The TripleMet Senior Housing Portfolio continues to benefit from improved industry fundamentals as EBITDARM coverage has now increased for seven consecutive periods with notable improvement at Bickford and our other need-driven operators. The Senior Housing Portfolio, or SHOP, also contributed to the better than expected quarterly results with NOI increasing 48% over the fourth quarter of 2022 and over 24% sequentially. While shop is still a relatively small piece of our overall business, we're excited by improving trends and continue to believe in the significant upside potential that can drive our organic growth profile. Specifically, we expect shop NOI to grow in the range of 25 to 30 percent in 2024. From a portfolio repositioning standpoint, there is much less to discuss this quarter. We structured the discovery leases, which were in line with the negotiations described in our November press release and guidance. We're making good progress on the Bickford rent reset with an expected increase in cash rent this year, and our other cash basis tenants are current on their monthly base rent. We believe our portfolio is in much better shape and positions NHI for strong organic growth in the foreseeable future. We're also positioned for external growth with our fortress-like balance sheet. Our leverage profile is one of the lowest of the healthcare REITs and in the top quartile when measured against all REITs. Given this low leverage, we have over $150 million in capacity to deploy capital without the need to issue equity while staying at or below five times net debt to adjusted EBITDA. I commented during our last call that seller and lender expectations were still 100 basis points behind the changes in everyone's cost of capital and that they should be more realistic about the higher for longer rate environments. Hire for longer certainly appears to be the prevailing environment, and we're starting to see sellers and borrowers adjust to this reality. There is an obvious cost of capital disparity with some of our larger peers, but they cannot be the solution for all of the growing illiquidity in the senior housing industry. We continue to advise customers to carefully choose a partner that will work with them towards their success in the long run. We believe this is starting to resonate, which makes us more optimistic now about the pipeline. So we expect our investment activity to accelerate this year. Turning to our guidance for 2024, the midpoint of our FAD guidance represents 2.6% growth over 2023. With less noise from dispositions and rent concessions, as well as more experience with shop, We believe we have much better visibility this year compared to the last two. Also, our guidance does not include any investments, which we expect will improve conservative as the pipeline for accretive deals grows. Our guidance represents the third year since the pandemic where we have provided full year guidance and the 2024 result represents the second year in a row where our FAD achieved the top end of our guidance. Before turning the call over to Kevin, I'll conclude by saying that we accomplished a great deal in 2023 and we're now in a strong position as we return to growth in 2024. Our multi-pronged organic growth opportunity is as strong as ever, be it shop, deferral repayments, rent resets, or elevated escalators due to higher inflation. The investment and lending environments are very favorable for well-capitalized, low-levered capital providers like NHI, and the industry supply-demand balance seems finally to be tilting in our favor. In sum, NHI is poised to capitalize on opportunities and what we expect to be many years of exceptional growth. I'll now turn the call to Kevin to provide more details on our operations. Kevin.