MURFREESBORO, Tenn.--(BUSINESS WIRE)--National Health Investors, Inc. (NYSE:NHI) announced today its normalized Funds From Operations (“FFO”) and net income for the three months and six months ended June 30, 2011.
Financial Results
Normalized FFO for the three months ended June 30, 2011, was $20,180,000, or $0.73 per basic and diluted common share, compared with $19,255,000, or $0.70 per basic and diluted common share, for the same period in 2010. Normalized FFO for the three months ended June 30, 2011 excludes $8,655,000 in gains on sales of marketable securities and a $988,000 decline in the fair value of an interest rate swap agreement. Normalized FFO for the three months ended June 30, 2010 excludes $573,000 in recoveries of previous write-downs and other adjustments of $40,000.
FFO, as defined by the National Association of Real Estate Investment Trusts (“NAREIT”), for the three months ended June 30, 2011, was $27,847,000, or $1.00 per basic and diluted common share, compared with $19,868,000, or $0.72 per basic and diluted common share, respectively, for the same period in 2010. Net income for the three months ended June 30, 2011, was $25,117,000, or $0.90 per basic and diluted common share, compared with net income of $19,189,000, or $0.69 per basic and diluted common share, for the same period in 2010.
Normalized FFO for the six months ended June 30, 2011, was $38,257,000, or $1.38 per basic and diluted common share, compared with $36,429,000, or $1.32 per basic and diluted common share, for the same period in 2010. Normalized FFO for the six months ended June 30, 2011 excludes $8,809,000 in gains on sales of marketable securities and a $266,000 increase in the fair value of an interest rate swap agreement. Beginning with the three months ended June 30, 2011, the Company has included in its definition of normalized FFO the change in the fair value of an interest rate swap agreement, a non-cash adjustment. Accordingly, the normalized FFO per basic and diluted common share for the three months ended March 31, 2011 is now $0.65 rather than $0.70 per basic and diluted common share, as previously reported. Normalized FFO for the six months ended June 30, 2010 excludes $1,520,000 in collections of past due rent, $573,000 in recoveries of previous write-downs and other adjustments of $250,000.
FFO for the six months ended June 30, 2011, was $47,332,000, or $1.71 and $1.70 per basic and diluted common share, respectively, compared with $38,272,000, or $1.38 per basic and diluted common share, for the same period in 2010. Net income for the six months ended June 30, 2011, was $44,210,000, or $1.59 per basic and diluted common share, compared with net income of $35,132,000, or $1.27 per basic and diluted common share, for the same period in 2010.
2011 Guidance
The Company’s guidance range for the full year 2011 for net income per diluted share and Normalized FFO per share is set forth and reconciled below:
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Full-Year
2011 Range |
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Low - High |
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| Net income per diluted share |
$2.82 - $2.87 |
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| Plus: Real estate depreciation | 0.41 - 0.46 | |||
| Less: gain on sale of marketable securities | (0.32) - (0.32) | |||
| Less: gain on sale of real estate | (0.08) - (0.08) | |||
| Normalized FFO per diluted share | $2.83 - $2.93 | |||
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’s guidance may change if actual results vary from these assumptions.
Investor Conference Call and Webcast
NHI will host a conference call on Thursday, August 4, 2011, at 9 a.m. ET, to discuss second quarter results. The number to call for this interactive teleconference is (212) 231-2900 with the confirmation number, 21532182. 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 acute psychiatric hospital, an acute care hospital and a transitional rehabilitation center. 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.
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Reconciliation of Funds From Operations and Normalized Funds From Operations (1)(2) |
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| (in thousands, except share and per share amounts) | |||||||||||||||||||||
| Three months ended | Six Months Ended | ||||||||||||||||||||
| June 30, | June 30, | ||||||||||||||||||||
| 2011 | 2010 | 2011 | 2010 | ||||||||||||||||||
| Net income | $ | 25,117 | $ | 19,189 | $ | 44,210 | $ | 35,132 | |||||||||||||
| Elimination of certain items in net income: | |||||||||||||||||||||
| Real estate depreciation | 2,730 | 2,617 | 5,421 | 5,013 | |||||||||||||||||
| Real estate depreciation in discontinued operations | - | 66 | - | 131 | |||||||||||||||||
| Net gain on sale of real estate | - | (2,004 | ) | (2,299 | ) | (2,004 | ) | ||||||||||||||
| Funds from operations | $ | 27,847 | $ | 19,868 | $ | 47,332 | $ | 38,272 | |||||||||||||
| Collection and recognition of past due rent | - | - | - | (1,520 | ) | ||||||||||||||||
| Recoveries of previous write-downs | - | (573 | ) | - | (573 | ) | |||||||||||||||
| Gains on sales of marketable securities | (8,655 | ) | - | (8,809 | ) | - | |||||||||||||||
| Change in fair value of interest rate swap agreement(3) | 988 | - | (266 | ) | - | ||||||||||||||||
| Other items | - | (40 | ) | - | 250 | ||||||||||||||||
| Normalized funds from operations | $ | 20,180 | $ | 19,255 | $ | 38,257 | $ | 36,429 | |||||||||||||
| Weighted average common shares outstanding | |||||||||||||||||||||
| Basic | 27,708,136 | 27,665,629 | 27,702,432 | 27,649,003 | |||||||||||||||||
| Diluted | 27,799,616 | 27,729,034 | 27,797,863 | 27,705,257 | |||||||||||||||||
| Funds from operations per share: | |||||||||||||||||||||
| Basic | $ | 1.00 | $ | 0.72 | $ | 1.71 | $ | 1.38 | |||||||||||||
| Diluted | $ | 1.00 | $ | 0.72 | $ | 1.70 | $ | 1.38 | |||||||||||||
| Normalized FFO per share: | |||||||||||||||||||||
| Basic | $ | 0.73 | $ | 0.70 | $ | 1.38 | $ | 1.32 | |||||||||||||
| Diluted | $ | 0.73 | $ | 0.70 | $ | 1.38 | $ | 1.32 | |||||||||||||
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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. |
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(2) Normalized FFO excludes from FFO certain items which, due to their infrequent or unpredictable nature, may create some difficulty in comparing funds from operations for the current period to similar prior periods. |
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(3) Beginning with the three months ended June 30, 2011, the Company has included in its definition of normalized FFO the change in the fair value of an interest rate swap agreement, a non-cash adjustment. Accordingly, the normalized FFO per basic and diluted common share for the three months ended March 31, 2011 is now $0.65 rather than $0.70 per basic and diluted common share, as previously reported. |
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| Condensed Statements of Income | ||||||||||||||||
| (in thousands, except share and per share amounts) | ||||||||||||||||
| Three months ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| Revenues: | (unaudited) | (unaudited) | ||||||||||||||
| Rental income | $ | 18,646 | $ | 17,500 | $ | 37,667 | $ | 35,687 | ||||||||
| Mortgage interest income | 1,634 | 1,602 | 3,230 | 3,597 | ||||||||||||
| 20,280 | 19,102 | 40,897 | 39,284 | |||||||||||||
| Expenses: | ||||||||||||||||
| Depreciation | 2,947 | 2,786 | 5,832 | 5,309 | ||||||||||||
| Legal expense | 141 | 174 | 329 | 455 | ||||||||||||
| Franchise, excise and other taxes | 198 | 252 | 556 | 530 | ||||||||||||
| General and administrative | 1,289 | 1,331 | 5,063 | 5,137 | ||||||||||||
| Loan and realty losses (recoveries) | - | (573 | ) | - | (573 | ) | ||||||||||
| 4,575 | 3,970 | 11,780 | 10,858 | |||||||||||||
| Income before non-operating income | 15,705 | 15,132 | 29,117 | 28,426 | ||||||||||||
| Non-operating income (investment interest and other) | 9,790 | 1,285 | 11,202 | 2,717 | ||||||||||||
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Interest expense and amortization of loan costs, net of change in fair value of interest rate swap agreement |
(1,589 | ) | (474 | ) | (848 | ) | (702 | ) | ||||||||
| Income from continuing operations | 23,906 | 15,943 | 39,471 | 30,441 | ||||||||||||
| Income from discontinued operations | 1,211 | 1,242 | 2,440 | 2,687 | ||||||||||||
| Net gain on sale of real estate | - | 2,004 | 2,299 | 2,004 | ||||||||||||
| Income from discontinued operations | 1,211 | 3,246 | 4,739 | 4,691 | ||||||||||||
| Net income | $ | 25,117 | $ | 19,189 | $ | 44,210 | $ | 35,132 | ||||||||
| Weighted average common shares outstanding: | ||||||||||||||||
| Basic | 27,708,136 | 27,665,629 | 27,702,432 | 27,649,003 | ||||||||||||
| Diluted | 27,799,616 | 27,729,034 | 27,797,863 | 27,705,257 | ||||||||||||
| Earnings per share: | ||||||||||||||||
| Basic: | ||||||||||||||||
| Income from continuing operations | $ | 0.86 | $ | 0.57 | $ | 1.42 | $ | 1.10 | ||||||||
| Discontinued operations | 0.04 | 0.12 | 0.17 | 0.17 | ||||||||||||
| Net income available to common stockholders | $ | 0.90 | $ | 0.69 | $ | 1.59 | $ | 1.27 | ||||||||
| Diluted: | ||||||||||||||||
| Income from continuing operations | $ | 0.86 | $ | 0.57 | $ | 1.42 | $ | 1.10 | ||||||||
| Discontinued operations | 0.04 | 0.12 | 0.17 | 0.17 | ||||||||||||
| Net income available to common stockholders | $ | 0.90 | $ | 0.69 | $ | 1.59 | $ | 1.27 | ||||||||
| Dividend declared per common share | $ | 0.615 | $ | 0.575 | $ | 1.23 | $ | 1.15 | ||||||||
| Selected Balance Sheet Data | ||||||||
| (in thousands) | ||||||||
| June 30, 2011 | December 31, 2010 | |||||||
| Real estate properties, net | $ | 337,302 | $ | 327,654 | ||||
| Mortgages receivable, net | 76,516 | 75,465 | ||||||
| Investment in preferred stock, at cost | 38,132 | 38,132 | ||||||
| Cash and cash equivalents | 21,901 | 2,664 | ||||||
| Marketable securities | 10,372 | 22,476 | ||||||
| Assets held for sale, net | 29,381 | 36,853 | ||||||
| Debt | 48,750 | 37,765 | ||||||
| Stockholders' equity | 447,420 | 442,500 | ||||||