National Health Investors, Inc.

Greetings and welcome to the NHI fourth quarter 2025 earnings webcast and conference call. At this time all participants are on a listen-only mode and a question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference please press star zero on your telephone keypad. And please note, this conference is being recorded. I will now turn the conference over to your host, Mr. Dana Hambly, VP of Finance and Investor Relations. Sir, the floor is yours.

Thank you, and welcome to the National Health Investors Conference call to review the results for the fourth quarter of 2025. On the call today are Eric Mendelsohn, President and CEO of 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 statement 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, 2025. 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 NACA's earnings release and related tables and schedules, which have been furnished on Form 8K to 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.

Good morning, and thanks to everyone for joining us today. We completed the year with a solid fourth quarter that generated normalized FFO per share growth of 8.9% compared to last year. The SHOP platform is central to our investment thesis and was a core contributor to the quarter as total NOI increased by 125% year over year and 48% sequentially. Cash rental income from our triple net portfolio increased by approximately 7% primarily due to acquisitions, while interest income declined by 19% in the fourth quarter due to loan payoffs and paydowns. Reflecting on the full year results, we delivered growth in normalized FFO per share of 10.6% and total FAD growth of 13.7%. This exceeded the midpoints of our initial 2025 guidance by approximately 6% and 5% respectively. Shop NOI increased by approximately 57% compared to 2024 with 7.6% same-store growth and $6 million from transitions and acquisitions. Our cash rental revenue increased by approximately 10% year-over-year with contributions both internally and externally. We announced investments of 392 million in 2025, which was well above our initial guidance of 225 million and was our most active year since 2016. This included investments of 218 million in the fourth quarter alone, setting the company up nicely for strong acquisition growth in 2026. In fact, we've already closed on one deal this year for 105.5 million, our largest shop acquisition to date, and we have an active pipeline of over $488 million with an additional $111 million under signed letters of intent. The industry tailwinds for senior housing have never been more favorable, and there's little evidence to suggest that this will change in the next several years. According to NCMAP, there were fewer than 25,000 units under construction in the fourth quarter, which represents just 2.2% of total inventory and the lowest level since 2012. This shows no signs of reversing as new unit starts are less than 1% of inventory, the lowest level since NCHMAP started reporting this information in 2008. Meanwhile, demand is accelerating as the first baby boomers turn 80 this year. NHI is well-positioned to capitalize on this long-term generational growth. We continue to methodically invest in our shop capabilities as we significantly expand our presence in private pay, senior housing operations, where we see the greatest risk adjusted returns. We're adding to talent rapidly. We currently have 35 employees, which is a 46% increase from our average employee count in 2022 when we established our shop platform. Including the recent February acquisition, we've increased our shop investment by 106% in the last 12 months to approximately $740 million. This has increased our annualized shop NOI contribution to 12% of total annualized NOI from 4.5% at the end of 2024. As outlined in our guidance, we expect that 70% of our investment activity this year will be allocated to shop, which coupled with strong organic growth, should continue to drive shop NOI contribution exponentially higher. Similar to our approach in the TripleNet portfolio, we are targeting shop investments at need-driven senior living communities in secondary suburban markets where we have a better understanding of the local dynamics that most impact operations. We are seeking partners that have demonstrated an ability to deliver outstanding resident satisfaction, which we believe is achieved by attracting and retaining mission-driven employees. Frankly, we've been overwhelmed by the interest in partnering with NHI, which creates a larger talent pool for us and lowers new investments. From a financial standpoint, our target markets tend to see fewer buyers than the primary markets. allowing NHI to find stabilized properties at attractive yields in the 7% to 8% range. We expect near-term NOI growth in the first few years in the high single-digit to low double-digit range, which produces strong rates of return in the low to mid-teens. NHI's financial strength is very conducive to supporting growth and bolstered by our Fortress balance sheet. Our leverage is less than four times net debt to adjusted EBITDA, and we have plenty of dry powder. Our demonstrated ability to access attractive debt and equity capital creates a real competitive advantage for NHI in maintaining and growing the pipeline as market participants can be confident in our ability to finance deals quickly and with limited closing risk. Regarding our 2026 outlook, We issued guidance last night that included normalized FFO per share growth of 1.2% at the midpoint. This is clearly not where we view the core growth rate of the company. Recall that in 2025, results benefited from several items that we do not view as recurring, which John will address in more detail. When adjusting for these items, we estimate that our normalized growth rate is in the 5% to 6% range, The midpoint of our 2026 NFFO per share guidance implies a two-year CAGR of approximately 6%. Further, this year's guidance includes approximately 111 million of dispositions of non-strategic assets. While we are continually reviewing the portfolio, the early year timing and unusually large size of the dispositions impact this year's growth by an incremental and estimated 1.5%. From a big picture perspective, NHI is in a great position to drive exceptional long-term FFO for share growth and create sustained value for shareholders. We are investing in the people and resources necessary to scale our future growth, particularly in shop, with estimated NOI growth of over 105% in 2026 before consideration for new investments. Our financial strength gives us flexibility to pursue significant external growth, and the senior housing industry fundamentals have never been more attractive. In short, we're as enthusiastic as we've ever been. Before I turn the call over to Kevin, I want to welcome our newest board member. We announced this week that Lily Donahue has joined the NHI Board of Directors. As many of you know, Lily served as the CEO of Holiday Retirement from 2016 to 2022, overseeing a portfolio of more than 300 independent living communities in 46 states. She brings an extensive and diverse set of skills to the NHI board, and her deep experience in senior living operations obviously makes her a great fit for us in these early stages of our growing shop platform. I'll now turn the call over to Kevin. Kevin.