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| 8-K - FORM 8-K, ITEM 2.02, RESULTS OF OPERATIONS AND FINANCIAL CONDITIONS - NATIONAL HEALTH INVESTORS INC | f8kearnings4q11.htm |
Exhibit 99
Contact: Roger R. Hopkins, Chief Accounting Officer
Phone: (615) 890-9100
NHI Reports 7.1% Increase in Fourth Quarter Normalized FFO
MURFREESBORO, Tenn. – (February 15, 2012) National Health Investors, Inc. (NYSE:NHI) announced today its normalized Funds From Operations (“FFO”), its normalized Funds Available for Distribution (“FAD”) and net income for the three months and year ended December 31, 2011.
2011 Highlights
·
Funded and made commitments totaling $100.4 million in leaseback transactions and mortgage loans involving health care real estate
·
Closed on a new four-year $200 million bank credit facility, expandable to $300 million, to fund new health care real estate investments at an interest rate of LIBOR plus 150 basis points
·
Increased regular quarterly dividend from $0.615 to $0.65 per outstanding common share.
Financial Results
Normalized FFO for the three months ended December 31, 2011, was $21,448,000, or $0.77 per basic and diluted common share, compared with $20,031,000, or $0.72 per basic and diluted common share, for the same period in 2010. Normalized FAD for the three months ended December 31, 2011 was $20,908,000, or $0.75 per basic and diluted common share, compared with $19,468,000, or $0.70 per basic and diluted common share for the same period in 2010. Normalized FFO and normalized FAD for the three months ended December 31, 2011 excludes the $275,000 decrease in the fair value of an interest rate swap agreement and other adjustments of $135,000.
FFO, as defined by the National Association of Real Estate Investment Trusts, for the three months ended December 31, 2011, was $21,038,000, or $0.76 per basic and diluted common share, compared with $19,653,000, or $0.71 per basic and diluted common share, for the same period in 2010. FAD, a supplemental measure of NHI’s cash flow, for the three months ended December 31, 2011 was $20,498,000, or $0.74 per basic and diluted common share, compared with $19,090,000, or $0.69 per basic and diluted common share for the same period in 2010. Net income for the three months ended December 31, 2011, was $18,114,000, or $0.65 per basic and diluted common share, compared with net income of $16,955,000, or $0.61 per basic and diluted common share, for the same period in 2010.
Normalized FFO for the year ended December 31, 2011, was $80,176,000, or $2.89 and $2.88 per basic and diluted common share, respectively, compared with $76,483,000, or $2.76 per basic and diluted common share, for the same period in 2010. Normalized FAD for the year ended December 31, 2011 was $80,419,000, or $2.90 and $2.89 per basic and diluted common share, respectively, compared to $76,381,000, or $2.76 and $2.75 per basic and diluted common share, respectively, for the same period in 2010. Normalized FFO and normalized FAD for the year ended December 31, 2011 excludes $9,899,000 in gains and recoveries on the sale of a portion of NHI’s investment in marketable securities, a $1,197,000 decrease in the fair value and settlement of an interest rate swap agreement and other adjustments of $36,000.
FFO for the year ended December 31, 2011, was $88,842,000, or $3.21 and $3.20 per basic and diluted common share, respectively, compared with $77,950,000, or $2.82 and $2.81 per basic and diluted common share, respectively, for the same period in 2010. FAD for the year ended December 31, 2011 was $89,085,000, or $3.21 per basic and diluted common share, compared to $77,848,000, or $2.81 per
basic and diluted common share for the same period in 2010. Net income for the year ended December 31, 2011, was $81,132,000, or $2.93 and $2.92 per basic and diluted common share, respectively, compared with net income of $69,421,000, or $2.51 and $2.50 per basic and diluted common share, respectively, for the same period in 2010.
2012 Guidance
The Company currently forecasts an increase in normalized FFO for 2012 from $3.02 to $3.10 compared with 2011. The Company’s guidance range for the full year 2012 for EPS and Normalized FFO per share, with underlying assumptions and timing of certain transactions, is set forth and reconciled below:
| Full-Year 2012 Range |
| Low – High |
Net income per diluted share | $2.58 - $2.63 |
Plus: Real estate depreciation | 0.44 - 0.47 |
Normalized FFO per diluted share | $3.02 - $3.10 |
The Company’s guidance range reflects the existence of volatile economic conditions, but does not assume any material deterioration in tenant credit quality and/or performance of its portfolio. The guidance is based on a number of assumptions, many of which are outside the Company’s control and all of which are subject to change. The Company expects to make new investments in health care real estate during 2012 that meets its underwriting criteria and where the spreads over its cost of capital generates sufficient returns to its shareholders. These new investments are expected to be funded by the Company’s liquid investments and by short-term and long-term debt financing. The Company’s guidance may change if actual results vary from these assumptions.
Investor Conference Call and Webcast
NHI will host a conference call on Thursday, February 16, 2012, at 9 a.m. ET, to discuss fourth quarter results. The number to call for this interactive teleconference is (212) 231-2933 with the confirmation number, 21576957. The live broadcast of NHI’s quarterly conference call will be available online at www.nhireit.com. The online replay will follow shortly after the call and continue for approximately 90 days.
National Health Investors, Inc. is a healthcare real estate investment trust that specializes in the financing of healthcare real estate by purchase and leaseback transactions and by mortgage loans. NHI’s investments involve skilled nursing facilities, assisted living facilities, independent living facilities, medical office buildings, an hospitals. The common stock of the company trades on the New York Stock Exchange with the symbol NHI. Additional information about NHI, including its most recent press releases, may be obtained on NHI's web site at www.nhireit.com.
Statements in this press release that are not historical facts are forward-looking statements. NHI cautions investors that any forward-looking statements may involve risks and uncertainties and are not guarantees of future performance. All forward-looking statements represent NHI's judgment as of the date of this release. Investors are urged to carefully review and consider the various disclosures made by NHI in its periodic reports filed with the Securities and Exchange Commission, including the risk factors and other information disclosed in NHI’s Annual Report on Form 10-K for the most recently ended fiscal year. Copies of these filings are available at no cost on the SEC's web site at http://www.sec.gov or on NHI’s web site at http://www.nhireit.com .
-MORE-
NHI Reports 7.1% Increase in Fourth Quarter Normalized FFO
Page 2
February 15, 2012
Reconciliation of Funds From Operations and Normalized Funds From Operations (1)(2)(3) |
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(in thousands, except share and per share amounts) |
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| Three months ended |
| Year Ended | |||||||
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| December 31, |
| December 31, | |||||||
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| 2011 |
| 2010 |
| 2011 |
| 2010 | |||
Net income | $ 18,114 |
| $ 16,955 |
| $ 81,132 |
| $ 69,421 | ||||
Elimination of certain items in net income: |
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| Real estate depreciation | 2,924 |
| 2,643 |
| 11,019 |
| 10,261 | |||
| Real estate depreciation in discontinued operations | - |
| 55 |
| 39 |
| 272 | |||
| Net gain on sale of real estate | - |
| - |
| (3,348) |
| (2,004) | |||
Funds from operations | $ 21,038 |
| $ 19,653 |
| $ 88,842 |
| $ 77,950 | ||||
| Collection and recognition of past due rent | - |
| - |
| - |
| (1,520) | |||
| Recoveries of previous write-downs | - |
| - |
| (99) |
| (573) | |||
| Expenses related to abandoned capital offering | - |
| 378 |
| - |
| 378 | |||
| Gains on sales of marketable securities | - |
| - |
| (9,899) |
| - | |||
| Change in fair value and settlement of interest rate swap agreement(3) | 275 |
| - |
| 1,197 |
| - | |||
| Other items | 135 |
| - |
| 135 |
| 248 | |||
Normalized funds from operations | $ 21,448 |
| $ 20,031 |
| $ 80,176 |
| $ 76,483 | ||||
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BASIC |
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| Weighted average common shares outstanding | 27,741,961 |
| 27,686,217 |
| 27,719,096 |
| 27,664,482 | |||
| FFO per common share | $ .76 |
| $ .71 |
| $ 3.21 |
| $ 2.82 | |||
| Normalized FFO per common share | $ .77 |
| $ .72 |
| $ 2.89 |
| $ 2.76 | |||
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DILUTED |
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| Weighted average common shares outstanding | 27,784,915 |
| 27,783,517 |
| 27,792,592 |
| 27,732,959 | |||
| FFO per common share | $ .76 |
| $ .71 |
| $ 3.20 |
| $ 2.81 | |||
| Normalized FFO per common share | $ .77 |
| $ .72 |
| $ 2.88 |
| $ 2.76 | |||
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| (1) Management believes that funds from operations (FFO) is an important supplemental measure of operating performance for a real estate investment trust. Because the historical cost accounting convention used for real estate assets requires straight-line depreciation (except on land), such accounting presentation implies that the value of real estate assets diminishes predictably over time. Since real estate values instead have historically risen and fallen with market conditions, presentations of operating results for a real estate investment trust that uses historical cost accounting for depreciation could be less informative, and should be supplemented with a measure such as FFO. The term FFO was designed by the real estate investment trust industry to address this issue. Our measure may not be comparable to similarly titled measures used by other REITs. Consequently, our funds from operations may not provide a meaningful measure of our performance as compared to that of other REITs. Since other REITs may not use our definition of FFO, caution should be exercised when comparing our Company’s FFO to that of other REITs. FFO does not represent cash generated from operating activities in accordance with GAAP (funds from operations does not include changes in operating assets and liabilities) and therefore should not be considered an alternative to net earnings as an indication of operating performance, or to net cash flow from operating activities as determined by GAAP in the United States, as a measure of liquidity and is not necessarily indicative of cash available to fund cash needs. | ||||||||||
| (2) Normalized FFO excludes from FFO certain items which, due to their infrequent or unpredictable nature, may create some difficulty in comparing FFO for the current period to similar prior periods, and may include, but are not limited to, impairment of assets, gains and losses attributable to the acquisition and disposition of assets and liabilities, and recoveries of previous write-downs. | ||||||||||
| (3) The Company has included in its definition of normalized FFO the change in the fair value and settlement of an interest rate swap agreement. Accordingly, the normalized FFO per basic and diluted common share for the three months ended March 31, 2011 was $0.65 rather than $0.70 per basic and diluted common share, as previously reported. | ||||||||||
NHI Reports 7.1% Increase in Fourth Quarter Normalized FFO
Page 3
February 15, 2012
Reconciliation of Funds Available for Distribution and Normalized Available for Distribution (1)(2)(3) (in thousands, except share and per share amounts) | ||||||||
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| Three months ended |
| Year Ended | ||||
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| December 31, |
| December 31, | ||||
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| 2011 |
| 2010 |
| 2011 |
| 2010 |
Net income | $ 18,114 |
| $ 16,955 |
| $ 81,132 |
| $ 69,421 | |
Elimination of certain items in net income: |
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| Depreciation in continuing operations | 3,225 |
| 2,827 |
| 11,953 |
| 10,919 |
| Depreciation in discontinued operations | - |
| 54 |
| 39 |
| 284 |
| Net gain on sales of real estate | - |
| - |
| (3,348) |
| (2,004) |
| Straight-line rental income | (1,016) |
| (910) |
| (3,778) |
| (3,140) |
| Non-cash stock based compensation | 175 |
| 164 |
| 3,087 |
| 2,368 |
Funds from operations | $ 20,498 |
| $ 19,090 |
| $ 89,085 |
| $ 77,848 | |
| Collection and recognition of past due rent | - |
| - |
| - |
| (1,520) |
| Recoveries of previous write-downs | - |
| - |
| (99) |
| (573) |
| Expenses related to abandoned capital offering | - |
| 378 |
| - |
| 378 |
| Gains and recoveries on sales of marketable securities | - |
| - |
| (9,899) |
| - |
| Change in fair value and settlement of interest rate swap agreement(3) | 275 |
| - |
| 1,197 |
| - |
| Other items | 135 |
| - |
| 135 |
| 248 |
Normalized funds from operations | $ 20,908 |
| $ 19,468 |
| $ 80,419 |
| $ 76,381 | |
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BASIC |
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| Weighted average common shares outstanding | 27,741,961 |
| 27,686,217 |
| 27,719,096 |
| 27,664,482 |
| FFO per common share | $ .74 |
| $ .69 |
| $ 3.21 |
| $ 2.81 |
| Normalized FFO per common share | $ .75 |
| $ .70 |
| $ 2.90 |
| $ 2.76 |
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DILUTED |
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| Weighted average common shares outstanding | 27,784,915 |
| 27,783,517 |
| 27,792,592 |
| 27,732,959 |
| FFO per common share | $ .74 |
| $ .69 |
| $ 3.21 |
| $ 2.81 |
| Normalized FFO per common share | $ .75 |
| $ .70 |
| $ 2.89 |
| $ 2.75 |
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| (1) Management believes that FAD and normalized FAD are important supplemental measures of a REIT’s cash flow for shareholders and investors. Since other REITs may not use our definition of FAD; caution should be exercised when comparing our Company’s FAD to that of other REITs. FAD in and of itself does not represent cash generated from operating activities in accordance with GAAP (FAD does not include changes in operating assets and liabilities) and therefore should not be considered an alternative to net earnings as an indication of operating performance, or to net cash flow from operating activities as determined by GAAP as a measure of liquidity, and is not necessarily indicative of cash available to fund cash needs. | |||||||
| (2) Normalized FAD excludes from FAD certain items which, due to their infrequent or unpredictable nature, may create some difficulty in comparing FAD for the current period to similar prior periods, and may include, but is not limited to, gains on the sale of marketable securities and changes in the fair value of interest rate swap agreements. | |||||||
| (3) The 2010 calculation of FAD has been adjusted to include non-real estate depreciation to conform to the 2011 presentation. The impact to FAD per basic and diluted common share was $0.01 for the three months ended December 31, 2010, and $0.02 and $0.03, respectively, for the year ended December 31, 2010. | |||||||
NHI Reports 7.1% Increase in Fourth Quarter Normalized FFO
Page 4
February 15, 2012
Condensed Statements of Income |
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(in thousands, except share and per share amounts) |
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| Three months ended |
| Year Ended | ||||
| December 31, |
| December 31, | ||||
| 2011 |
| 2010 |
| 2011 |
| 2010 |
Revenues: | (unaudited) |
| (unaudited) | ||||
Rental income | $ 19,791 |
| $ 17,934 |
| $ 76,050 |
| $ 71,289 |
Mortgage interest income | 1,733 |
| 1,576 |
| 6,652 |
| 6,743 |
| 21,524 |
| 19,510 |
| 82,702 |
| 78,032 |
Expenses: |
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Depreciation | 3,225 |
| 2,827 |
| 11,953 |
| 10,919 |
Legal expense | 111 |
| 611 |
| 559 |
| 1,152 |
Franchise, excise and other taxes | 211 |
| 43 |
| 952 |
| 637 |
General and administrative | 1,201 |
| 1,299 |
| 7,473 |
| 7,696 |
Loan and realty losses (recoveries) | - |
| - |
| (99) |
| (573) |
| 4,748 |
| 4,780 |
| 20,838 |
| 19,831 |
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Income before non-operating income | 16,776 |
| 14,730 |
| 61,864 |
| 58,201 |
Non-operating income (investment interest and other) | 1,346 |
| 1,233 |
| 14,744 |
| 5,191 |
Interest expense | (1,219) |
| (379) |
| (3,848) |
| (1,552) |
Income from continuing operations | 16,903 |
| 15,584 |
| 72,760 |
| 61,840 |
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Income from discontinued operations | 1,211 |
| 1,371 |
| 5,024 |
| 5,577 |
Net gain on sale of real estate | - |
| - |
| 3,348 |
| 2,004 |
Income from discontinued operations | 1,211 |
| 1,371 |
| 8,372 |
| 7,581 |
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Net income | $ 18,114 |
| $ 16,955 |
| $ 81,132 |
| $ 69,421 |
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Weighted average common shares outstanding: |
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Basic | 27,741,961 |
| 27,686,217 |
| 27,719,096 |
| 27,664,482 |
Diluted | 27,784,915 |
| 27,783,517 |
| 27,792,592 |
| 27,732,959 |
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Earnings per share: |
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Basic: |
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Income from continuing operations | $ 0.61 |
| $ 0.56 |
| $ 2.63 |
| $ 2.24 |
Discontinued operations | 0.04 |
| 0.05 |
| 0.30 |
| 0.27 |
Net income available to common stockholders | $ 0.65 |
| $ 0.61 |
| $ 2.93 |
| $ 2.51 |
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Diluted: |
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Income from continuing operations | $ 0.61 |
| $ 0.56 |
| $ 2.62 |
| $ 2.23 |
Discontinued operations | 0.04 |
| 0.05 |
| 0.30 |
| 0.27 |
Net income available to common stockholders | $ 0.65 |
| $ 0.61 |
| $ 2.92 |
| $ 2.50 |
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Dividend declared per common share | $ 0.87 |
| $ 0.605 |
| $ 2.715 |
| $ 2.36 |
NHI Reports 7.1% Increase in Fourth Quarter Normalized FFO
Page 5
February 15, 2012
Selected Balance Sheet Data |
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(in thousands) |
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| December 31, 2011 |
| December 31, 2010 |
Real estate properties, net | $ 394,795 |
| $ 327,654 |
Mortgages receivable, net | 78,672 |
| 75,465 |
Investment in preferred stock, at cost | 38,132 |
| 38,132 |
Cash and cash equivalents | 15,886 |
| 2,664 |
Marketable securities | 11,364 |
| 22,476 |
Assets held for sale, net | 29,381 |
| 36,853 |
Borrowings under revolving credit facility | 97,300 |
| 37,765 |
Stockholders' equity | 443,485 |
| 442,500 |