UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)
☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended		June 30, 2022
☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from	_____________	to	_____________

Commission File Number 001-10822

National Health Investors Inc

(Exact name of registrant as specified in its charter)

Maryland		62-1470956
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
222 Robert Rose Drive
Murfreesboro	Tennessee	37129
(Address of principal executive offices)		(Zip Code)
(615)	890-9100
---	---
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each Class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value	NHI	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definition of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

There were 44,655,156 shares of common stock outstanding of the registrant as of August 1, 2022.

Table of Contents

	Page
Part I. Financial Information
Item 1. Financial Statements	3
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.	31
Item 3. Quantitative and Qualitative Disclosures About Market Risk.	58
Item 4. Controls and Procedures.	59
Part II. Other Information
Item 1. Legal Proceedings	60
Item 1A. Risk Factors	60
Item2.Unregistered Sales ofEquity Securities and Use of Proceeds	61
Item 6. Exhibits	62
Signatures	63

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

NATIONAL HEALTH INVESTORS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share amounts)

		December 31, 2021
Assets:
Real estate properties:
Land	178,787	$	186,658
Buildings and improvements		2,707,422
Construction in progress		468
		2,894,548
Less accumulated depreciation		(576,668)
Real estate properties, net		2,317,880
Mortgage and other notes receivable, net of reserve of 5,214 and 5,210, respectively		299,952
Cash and cash equivalents		37,412
Straight-line rent receivable		96,198
Assets held for sale, net		66,398
Other assets, net		21,036
Total Assets	2,587,291	$	2,838,876
Liabilities and Stockholders’ Equity:
Debt	1,104,495	$	1,242,883
Accounts payable and accrued expenses		23,181
Dividends payable		41,266
Lease deposit liabilities		8,838
Deferred income		5,725
Total Liabilities		1,321,893
Commitments and contingencies
Redeemable noncontrolling interests		—
National Health Investors, Inc. Stockholders’ Equity:
Common stock, 0.01 par value, 100,000,000 shares authorized
44,655,156 and 45,850,599 shares issued and outstanding, respectively		459
Capital in excess of par value		1,591,182
Cumulative dividends in excess of net income		(84,558)
Total National Health Investors, Inc. Stockholders’ Equity		1,507,083
Noncontrolling interests		9,900
Total Equity		1,516,983
Total Liabilities and Stockholders’ Equity	2,587,291	$	2,838,876

All values are in US Dollars.

The accompanying notes to condensed consolidated financial statements are an integral part of these condensed consolidated financial statements. The Condensed Consolidated Balance Sheet at December 31, 2021 was derived from the audited consolidated financial statements at that date.

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NATIONAL HEALTH INVESTORS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except share and per share amounts)

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
	(unaudited)				(unaudited)
Revenues:
Rental income	$	39,982	$	68,351	$	104,541	$	143,101
Resident fees and services	11,992		—		11,992		—
Interest income and other	7,925		5,979		14,694		12,114
	59,899		74,330		131,227		155,215
Expenses:
Depreciation	17,772		20,658		36,044		41,464
Interest	10,862		12,840		21,060		25,813
Senior housing operating expenses	9,113		—		9,113		—
Legal	339		(40)		2,166		90
Franchise, excise and other taxes	225		232		469		465
General and administrative	5,049		3,588		13,150		11,577
Taxes and insurance on leased properties	2,157		2,175		5,195		4,337
Loan and realty losses	4,094		1,221		28,622		1,171
	49,611		40,674		115,819		84,917
Gains on sales of real estate, net	10,521		6,484		13,502		6,484
Loss on operations transfer, net	(729)		—		(729)		—
Gain on note payoff	1,113		—		1,113		—
Loss on early retirement of debt	—		—		(151)		(451)
Gains (losses) from equity method investment	273		(909)		569		(1,718)
Net income	21,466		39,231		29,712		74,613
Less: net loss (income) attributable to noncontrolling interests	207		(48)		361		(100)
Net income attributable to common stockholders	$	21,673	$	39,183	$	30,073	$	74,513
Weighted average common shares outstanding:
Basic	45,708,238		45,850,599		45,779,433		45,577,843
Diluted	45,718,538		45,858,074		45,784,771		45,607,924
Earnings per common share:
Net income attributable to common stockholders - basic	$	0.47	$	0.85	$	0.66	$	1.63
Net income attributable to common stockholders - diluted	$	0.47	$	0.85	$	0.66	$	1.63

The accompanying notes to condensed consolidated financial statements are an integral part of these condensed consolidated financial statements.

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NATIONAL HEALTH INVESTORS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands)

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
	(unaudited)				(unaudited)
Net income	$	21,466	$	39,231	$	29,712	$	74,613
Other comprehensive income:
Increase in fair value of cash flow hedges	—		(76)		—		(82)
Reclassification for amounts recognized as interest expense	—		1,820		—		3,598
Total other comprehensive income	—		1,744		—		3,516
Comprehensive income	21,466		40,975		29,712		78,129
Comprehensive loss (income) attributable to noncontrolling interests	207		(48)		361		(100)
Comprehensive income attributable to common stockholders	$	21,673	$	40,927	$	30,073	$	78,029

The accompanying notes to condensed consolidated financial statements are an integral part of these condensed consolidated financial statements.

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NATIONAL HEALTH INVESTORS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

	Six Months Ended
	June 30,
	2022		2021
	(unaudited)
Cash flows from operating activities:
Net income	$	29,712	$	74,613
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	36,044		41,464
Amortization of debt issuance costs, debt discounts and prepaids	2,156		2,255
Amortization of commitment fees and note receivable discounts	(739)		(252)
Amortization of lease incentives	7,419		522
Straight-line rent adjustments	13,836		(8,391)
Non-cash interest income on mortgage and other notes receivable	(2,055)		(1,153)
Non-cash lease deposit liability recognized as rental income	(8,838)		—
Gains on sales of real estate, net	(13,502)		(6,484)
Gain on note payoff	(1,113)		—
(Gains) losses from equity method investment	(569)		1,718
Loss on operations transfer, net	729		—
Loss on early retirement of debt	151		451
Loan and realty losses	28,622		1,171
Payment of lease incentives	—		(1,042)
Non-cash share-based compensation	6,511		6,438
Changes in operating assets and liabilities:
Other assets	(2,563)		(2,691)
Accounts payable and accrued expenses	(276)		118
Deferred income	(77)		(225)
Net cash provided by operating activities	95,448		108,512
Cash flows from investing activities:
Investments in mortgage and other notes receivable	(24,366)		(42,836)
Collections of mortgage and other notes receivable	114,873		52,266
Acquisition of real estate	(4,876)		(46,817)
Proceeds from sales of real estate	108,893		43,871
Investments in renovations of existing real estate	(2,870)		(1,479)
Investments in equipment	—		(64)
Distribution from equity method investment	569		288
Net cash provided by investing activities	192,223		5,229
Cash flows from financing activities:
Proceeds from revolving credit facility	95,000		60,000
Payments on revolving credit facility	(95,000)		(333,000)
Payments on term loans	(135,192)		(125,185)
Proceeds from issuance of senior notes	—		396,784
Debt issuance costs	(4,598)		(5,018)
Proceeds from issuance of common shares, net	—		47,904
Distributions to noncontrolling interests	(522)		(402)
Convertible note redemption	—		(66,076)
Dividends paid to stockholders	(82,531)		(100,366)
Taxes remitted on employee stock awards	(14)		—
Proceeds from noncontrolling interests	11,738		—
Payments to repurchase shares of common stock	(69,977)		—
Net cash used in financing activities	(281,096)		(125,359)
Increase in cash and cash equivalents and restricted cash	6,575		(11,618)
Cash and cash equivalents and restricted cash, beginning of period	39,485		46,343
Cash and cash equivalents and restricted cash, end of period	$	46,060	$	34,725

The accompanying notes to condensed consolidated financial statements are an integral part of these condensed consolidated financial statements.

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NATIONAL HEALTH INVESTORS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

(in thousands)

	Six Months Ended
	June 30,
	2022		2021
	(unaudited)
Supplemental disclosure of cash flow information:
Interest paid, net of amounts capitalized	$	20,182	$	20,062
Supplemental disclosure of non-cash investing and financing activities:
Real estate acquired in exchange for mortgage notes receivable	$	9,071	$	—
Change in other assets related to sales of real estate	$	102	$	—
Change in accounts payable related to investments in real estate construction	$	—	$	888
Change in accounts payable related to renovations of existing real estate	$	67	$	—
Change in accounts payable related to distributions to noncontrolling interests	$	16	$	63
Operating equipment received in transfer of operations	$	1,287	$	—
Increase in accounts payable related to transfer of operations	$	300	$	—

The accompanying notes to condensed consolidated financial statements are an integral part of these condensed consolidated financial statements.

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NATIONAL HEALTH INVESTORS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(unaudited, in thousands, except share and per share amounts)

	Common Stock			Capital in Excess of Par Value		Cumulative Dividends in Excess of Net Income		Accumulated Other Comprehensive Loss		Total National Health Investors, Inc. Stockholders’ Equity		Noncontrolling Interests		Total Equity
	Shares	Amount
Balances at December 31, 2021	45,850,599	$	459	$	1,591,182	$	(84,558)	$	—	$	1,507,083	$	9,900	$	1,516,983
Noncontrolling interests distribution	—	—		—		—		—		—		(243)		(243)
Total comprehensive income (loss)	—	—		—		8,399		—		8,399		(153)		8,246
Taxes remitted on employee stock awards	—	—		(7)		—		—		(7)		—		(7)
Shares issued on stock options exercised	269	—		—		—		—		—		—		—
Share-based compensation	—	—		5,083		—		—		5,083		—		5,083
Dividends declared, $0.90 per common share	—	—		—		(41,265)		—		(41,265)		—		(41,265)
Activity for the three months ended March 31, 2022	269	—		5,076		(32,866)		—		(27,790)		(396)		(28,186)
Distributions declared to noncontrolling interests, excluding $24 attributable to redeemable noncontrolling interests	—	—		—		—		—		—		(243)		(243)
Total comprehensive income, excluding a loss of $227 attributable to redeemable noncontrolling interests	—	—		—		21,673		—		21,673		20		21,693
Taxes remitted on employee stock awards	—	—		(7)		—		—		(7)		—		(7)
Shares issued on stock options exercised	463	—		—		—		—		—		—		—
Repurchases of common stock	(1,196,175)	(12)		—		(69,965)		—		(69,977)		—		(69,977)
Share-based compensation	—	—		1,428		—		—		1,428		—		1,428
Dividends declared, $0.90 per common share	—	—		—		(40,190)		—		(40,190)		—		(40,190)
Activity for the three months ended June 30, 2022	(1,195,712)	(12)		1,421		(88,482)		—		(87,073)		(223)		(87,296)
Balances at June 30, 2022	44,655,156	$	447	$	1,597,679	$	(205,906)	$	—	$	1,392,220	$	9,281	$	1,401,501

The accompanying notes to condensed consolidated financial statements are an integral part of these condensed consolidated financial statements.

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NATIONAL HEALTH INVESTORS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(unaudited, in thousands, except share and per share amounts)

	Common Stock			Capital in Excess of Par Value		Cumulative Dividends in Excess of Net Income		Accumulated Other Comprehensive Loss		Total National Health Investors Stockholders’ Equity		Noncontrolling Interests		Total Equity
	Shares	Amount
Balances at December 31, 2020	45,185,992	$	452	$	1,540,946	$	(22,015)	$	(7,149)	$	1,512,234	$	10,711	$	1,522,945
Noncontrolling interests distribution	—	—		—		—		—		—		(233)		(233)
Total comprehensive income	—	—		—		35,332		1,772		37,104		52		37,156
Issuance of common stock, net	661,951	7		47,944		—		—		47,951		—		47,951
Shares issued on stock options exercised	2,656	—		—		—		—		—		—		—
Share-based compensation	—	—		5,446		—		—		5,446		—		5,446
Dividends declared, $1.025 per common share	—	—		—		(50,550)		—		(50,550)		—		(50,550)
Activity for the three months ended March 31, 2021	664,607	7		53,390		(15,218)		1,772		39,951		(181)		39,770
Noncontrolling interest conveyed in acquisition	—	—		—		—		—		—		(233)		(233)
Total comprehensive income	—	—		—		39,183		1,744		40,927		48		40,975
Equity component in redemption of convertible debt	—	—		(6,076)		—		—		(6,076)		—		(6,076)
Equity issuance cost	—	—		(47)		—		—		(47)		—		(47)
Share-based compensation	—	—		992		—		—		992		—		992
Dividends declared, $0.90 per common share	—	—		—		(41,266)		—		(41,266)		—		(41,266)
Activity for the three months ended June 30, 2021	—	—		(5,131)		(2,083)		1,744		(5,470)		(185)		(5,655)
Balances at June 30, 2021	45,850,599	$	459	$	1,589,205	$	(39,316)	$	(3,633)	$	1,546,715	$	10,345	$	1,557,060

The accompanying notes to condensed consolidated financial statements are an integral part of these condensed consolidated financial statements.

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NATIONAL HEALTH INVESTORS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2022

(unaudited)

Note 1. Organization and Nature of Business

National Health Investors, Inc. (“NHI,” “the Company,” “we,” “us,” or “our”), established in 1991 as a Maryland corporation, is a self-managed real estate investment trust (“REIT”) specializing in sale-leaseback, joint venture, mortgage and mezzanine financing of need-driven and discretionary senior housing and medical facility investments. We operate through two reportable segments: Real Estate Investments and Senior Housing Operating Portfolio (“SHOP”). Our Real Estate Investments segment consists of lease, mortgage and other note investments in independent living facilities, assisted living facilities, entrance-fee communities, senior living campuses, skilled nursing facilities and a hospital. As of June 30, 2022, we had investments of approximately $2.4 billion in 168 health care real estate properties located in 33 states and leased pursuant primarily to triple-net leases to 25 lessees consisting of 102 senior housing communities (“SHO”), 65 skilled nursing facilities and one hospital, excluding 13 properties classified as assets held for sale. Our portfolio of 13 mortgages along with other notes receivable totaled $209.5 million, excluding an allowance for expected credit losses of $5.2 million, as of June 30, 2022. Our SHOP segment is comprised of two ventures that own the operations of independent living facilities (“ILF”). As of June 30, 2022, we had investments of approximately $335.5 million in 15 properties with a combined 1,731 units located in eight states that are operated on behalf of the Company by two independent managers pursuant to the terms of separate management agreements that commenced April 1, 2022. The third-party managers, or related affiliates of the managers, own equity interests in the respective ventures.

Note 2. Basis of Presentation and Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial statements. In our opinion, the accompanying unaudited condensed consolidated financial statements reflect all adjustments consisting of normal recurring adjustments necessary for a fair presentation. Interim results of operations are not necessarily indicative of the results that may be achieved for a full year. The condensed consolidated financial statements and related notes do not include all information and footnotes required by GAAP for annual reports. These interim condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements and notes thereto as of and for the year ended December 31, 2021, included in our 2021 Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”).

Principles of Consolidation

The condensed consolidated financial statements include the accounts of the Company, its wholly owned subsidiaries, joint ventures and subsidiaries in which we have a controlling interest. We also consolidate certain entities when control of such entities can be achieved through means other than voting rights (“variable interest entities” or “VIEs”) if the Company is deemed to be the primary beneficiary of such entities. All material intercompany transactions and balances are eliminated in consolidation.

Effective April 1, 2022 and at June 30, 2022, our consolidated total assets and liabilities include two consolidated ventures comprising our SHOP activities formed with two separate partners - Merrill Gardens, L.L.C. (“Merrill”) and DSHI NHI Holiday LLC, a controlled affiliate of Discovery Senior Living. We consider both ventures to be VIEs as either the members, as a group, lack the characteristics of a controlling financial interest or there are disproportionate voting rights but substantially all of the activities are performed on behalf of the Company. We are deemed to be the primary beneficiary because we have the ability to control the activities that most significantly impact each VIE’s economic performance. The assets of the ventures primarily consist of real estate properties, cash and cash equivalents, and resident fees and services (accounts receivable). Their obligations primarily consist of operating expenses of the ILFs (accounts payable and accrued expenses) and capital expenditures for the properties. As of and for the three months ended June 30, 2022, our redeemable noncontrolling interests relate to these ventures. Assets of the consolidated SHOP ventures that can be used only to settle obligations of each respective SHOP venture include namely $262.2 million of real estate properties, net, and $11.6 million of cash and cash equivalents. Liabilities of the consolidated SHOP ventures for which creditors do not have recourse to the general credit of the Company are not material. Reference Notes 5 and 9 for further discussion of these new ventures.

We also consolidate two real estate partnerships formed with our partners, Discovery Senior Housing Investor XXIV, LLC,

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and LCS Timber Ridge LLC, to invest in senior housing facilities. We consider both partnerships ventures to be VIEs, based on our determination that the total equity at risk in each is insufficient to finance activities without additional subordinated financial support. NHI directs the activities that most significantly impact economic performance of these ventures, subject to limited protective rights extended to our JV partners for specified business decisions. Because of our control of these ventures, we include their assets, liabilities, noncontrolling interests and operations in our consolidated financial statements.

At June 30, 2022, we held interests in nine unconsolidated VIEs, and, because we lack either directly or through related parties the power to direct the activities that most significantly impact their economic performance, we have concluded that the Company is not the primary beneficiary. Accordingly, we account for our transactions with these entities and their subsidiaries at either amortized cost or net realizable value for straight-line rent receivables, excluding our investment accounted for under the equity method.

The Company’s unconsolidated VIEs are summarized below by date of initial involvement. For further discussion of the nature of the relationships, including the sources of exposure to these VIEs, see the notes to our condensed consolidated financial statements cross-referenced below ($ in thousands).

Date	Name	Source of Exposure	Carrying Amount		Maximum Exposure to Loss		Note Reference
2012	Bickford Senior Living	Notes and funding commitment	$	45,138	$	60,187	Notes 3, 4
2014	Senior Living Communities	Notes and straight-line receivable	$	87,851	$	94,188	Notes 3, 4
2016	Senior Living Management	Notes and straight-line receivable	$	26,724	$	26,724	—
2019	Encore Senior Living	Notes and straight-line receivable	$	28,353	$	52,729	Notes 3, 4
2020	Timber Ridge OpCo, LLC	Various2	$	(5,000)	$	5,000	Note 6
2020	Watermark Retirement	Notes and straight-line receivable	$	8,740	$	10,517	—
2021	Montecito Medical Real Estate	Notes and funding commitment	$	20,255	$	50,000	Note 4
2021	Vizion Health	Notes and straight-line receivable	$	20,340	$	22,724	—
2021	Navion Senior Solutions1	Various1	$	7,871	$	13,911	—

1 Notes, loan commitments, straight-line rents receivables, and unamortized lease incentives

2 Loan commitment, equity method investment and straight-line rents receivables

We are not obligated to provide support beyond our stated commitments to these tenants and borrowers whom we classify as VIEs, and accordingly, our maximum exposure to loss as a result of these relationships is limited to the amount of our commitments, as shown above and discussed in the notes. Economic loss on a lease, in excess of what is presented in the table above, if any, would be limited to that resulting from any period of arrearage and non-payment of monthly rent before we are able to take effective remedial action, as well as costs incurred in transitioning the lease to a new tenant. The potential extent of such loss would be dependent upon individual facts and circumstances, and is therefore not included in the table above.

In the future, NHI may be deemed the primary beneficiary of the operations if the tenants do not have adequate liquidity to accept the risks and rewards as the tenant and operator of the properties and might be required to consolidate the financial position and results of operations of the tenants into our consolidated financial statements.

We use the equity method of accounting when we own an interest in an entity whereby we can exert significant influence over but cannot control the entity’s operations. We discontinue equity method accounting if our investment in an entity (and net advances) is reduced to zero unless we have guaranteed obligations of the entity or are otherwise committed to provide further financial support for the entity. Reference Note 6 for further discussion of our equity method investment.

Noncontrolling Interests

Contingently redeemable noncontrolling interests are recorded at their initial carrying amounts upon issuance and are subsequently adjusted to reflect their share of gains or losses and distributions attributable to the noncontrolling interests. In periods where they are or will become probable of redemption, an adjustment to the redemption value of the noncontrolling interests is also recognized through Capital in excess of par value on the Company’s Consolidated Balance Sheets and included in our computation of earnings per share. As of June 30, 2022, these noncontrolling interests were classified as mezzanine equity, as discussed further in Note 9.

Additionally, we consolidate two real estate partnerships formed with our partners, Discovery Senior Housing Investor XXIV, LLC and LCS Timber Ridge LLC, to invest in senior housing facilities. As of June 30, 2022 and December 31, 2021, these

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noncontrolling interests are classified in equity.

Cash and Cash Equivalents and Restricted Cash

Cash equivalents consist of all highly liquid investments with an original maturity of three months or less. Restricted cash includes amounts required to be held on deposit or subject to an agreement (e.g., with a qualified intermediary subject to an Internal Revenue Code §1031 exchange agreement or in accordance with agency agreements governing our mortgages).

The following table sets forth our “Cash and cash equivalents and restricted cash” reported within the Company’s Condensed Consolidated Statements of Cash Flows ($ in thousands):

	June 30,<br>2022		June 30,<br>2021
Cash and cash equivalents	$	43,435	$	32,544
Restricted cash (included in Other assets, net)	2,625		2,181
	$	46,060	$	34,725

Assets Held for Sale

We consider properties to be assets held for sale when (1) management commits to a plan to sell the property; (2) it is unlikely that the disposal plan will be significantly modified or discontinued; (3) the property is available for immediate sale in its present condition; (4) actions required to complete the sale of the property have been initiated; (5) sale of the property is probable and we anticipate the completed sale will occur within one year; and (6) the property is actively being marketed for sale at a price that is reasonable given our estimate of current market value. Upon designation of a property as an asset held for sale, we record the property’s value at the lower of its carrying value or its estimated fair value, less estimated transaction costs. Depreciation and amortization of the property are discontinued.

Impairment of Long-Lived Assets

We evaluate the recoverability of the carrying amount of our long-lived assets when events or circumstances, including significant physical changes, significant adverse changes in general economic conditions and significant deterioration of the underlying cash flows of the long-lived assets, indicate that the carrying amount of the long-lived assets may not be recoverable. The need to recognize an impairment charge is based on estimated undiscounted future cash flows compared to the carrying amount. If recognition of an impairment charge is necessary, it is measured as the amount by which the carrying amount exceeds the estimated fair value of the long-lived asset.

During the three and six months ended June 30, 2022, we recognized impairment charges of approximately $4.1 million and $28.7 million, respectively, included in “Loan and realty losses” in our Condensed Consolidated Statements of Income. Reference Note 3 for more discussion.

Revenue Recognition

Rental Income - Our leases generally provide for rent escalators throughout the term of the lease. Base rental income is recognized using the straight-line method over the term of the lease to the extent that lease payments are considered collectible and the lease provides for specific contractual escalators. The Company reviews its operating lease receivables for collectibility on a regular basis, taking into consideration changes in factors such as the tenant’s payment history, the financial condition of the tenant, business conditions in which the tenant operates and economic conditions in the area where the property is located. In the event that collectibility with respect to any tenant is not probable, a direct write-off of the receivable is made as an adjustment to rental income and any future rental revenue is recognized only when the tenant makes a rental payment.

During the second quarter of 2022, we placed Bickford Senior Living (“Bickford”) on the cash basis of revenue recognition for lease purposes. We recorded write offs of $18.1 million of straight-line rents receivable and $7.1 million of lease incentives related to our Bickford master lease agreements during the three and six months ended June 30, 2022. Reference Note 3 for further discussion.

Resident Fees and Services - Resident fee revenue associated with our SHOP activities is recorded when services are rendered and includes resident room and care charges, community fees and other resident charges. Residency agreements are generally

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short term (30 days to one year), with resident fees billed monthly in advance. Revenue for certain related services is recognized as services are provided and billed monthly in arrears.

Accounting for Lease Modifications related to the Coronavirus Pandemic

In April 2020, the FASB issued a question-and-answer document (the “Lease Modification Q&A”) focused on the application of lease accounting guidance to lease concessions provided as a result of the coronavirus (“COVID-19”) pandemic. The Lease Modification Q&A clarifies that entities may elect not to evaluate whether lease-related relief provided to mitigate the economic effects of the COVID-19 pandemic is a lease modification under Accounting Standard Codification (“ASC”) 842, Leases (“ASC 842”). Instead, an entity that elects not to evaluate whether a concession directly related to the COVID-19 pandemic, which does not substantially increase either its rights as lessor or the obligations of the tenant, is a lease modification can decide whether or not to apply the modification guidance. An entity should apply the election consistently to leases with similar characteristics and similar circumstances. We have elected not to apply the modification guidance under ASC 842 and have accounted for qualified rent concessions as variable lease payments when applicable, and recorded as rental income when received. During the three and six months ended June 30, 2022, we provided $2.9 million and $10.7 million lease concessions, respectively, directly related to the COVID-19 pandemic, as discussed in more detail in Note 8.

Income Tax

We intend at all times to qualify as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended. Accordingly, we will generally not be subject to U.S. federal income tax, provided that we continue to qualify as a REIT and make distributions to stockholders at least equal to or in excess of 90% our taxable income. Certain activities that we undertake may be conducted by entities that have elected to be treated as taxable REIT subsidiaries (TRSs). TRSs are subject to federal, state, and local income taxes. Accordingly, a provision for income taxes has been made in the consolidated financial statements. A failure to qualify under the applicable REIT qualification rules and regulations would have a material adverse impact on our financial position, results of operations and cash flows.

Segments

We operate our business through two reportable segments: Real Estate Investments and SHOP. In our Real Estate Investments segment, we invest in i) senior housing and healthcare real estate and lease those properties to healthcare operating companies under triple-net leases that obligate tenants to pay all property-related expenses and ii) mortgage and other notes receivable throughout the United States. Our SHOP segment is comprised of the operations of 15 ILFs located throughout the United States that are operated on behalf of the Company by two independent managers pursuant to the terms of separate management agreements that commenced April 1, 2022. Reference Notes 5 and 14 for additional information.

Note 3. Investment Activity

Asset Acquisition

On April 29, 2022, we acquired a 53-unit assisted living facility located in Oshkosh, Wisconsin, from Encore Senior Living. The acquisition price was $13.3 million and included the full payment of an outstanding construction note receivable to us of $9.1 million, including interest. We have agreed to pay up to $0.8 million in additional cash consideration pending the results of an ongoing property tax appeal. As of June 30, 2022, no amount of this consideration is expected to be paid. We added the facility to an existing master lease for a term of 15 years at an initial lease rate of 7.25%, with an annual escalator of 2.5%.

Asset Dispositions

During the three and six months ended June 30, 2022, we completed the following real estate property dispositions within our Real Estate Investments reportable segment as described below ($ in thousands):

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Operator	Date	Properties	Asset Class	Net Proceeds		Net Real Estate Investment		Gain/(Impairment)2
Hospital Corporation of America	Q1 2022	1	MOB	$	4,868	$	1,904	$	2,964
Vitality Senior Living1	Q1 2022	1	SLC	8,302		8,285		17
Holiday1	Q2 2022	1	ILF	2,990		3,020		(30)
Chancellor Senior Living1	Q2 2022	2	ALF	7,305		7,357		(52)
Bickford1	Q2 2022	3	ALF	25,959		28,268		(2,309)
Comfort Care	Q2 2022	4	ALF	40,000		38,445		1,556
Helix Healthcare	Q2 2022	1	HOSP	19,500		10,535		8,965
				$	108,924	$	97,814	$	11,111

1 Total impairment charges recognized on these properties were $41.7 million, of which $4.8 million were recognized in the six months ended June 30, 2022.

2 Impairments are included in “Loan and realty losses” in Condensed Consolidated Statements of Income for the three and six months ended June 30, 2022.

Holiday Retirement

In April 2022, we sold an independent living facility located in Washington for approximately $3.2 million in cash consideration, and incurred $0.3 million of transaction costs. The property was previously classified as assets held for sale on the Condensed Consolidated Balance Sheet. Total prior impairment charges recognized on this property totaled $0.9 million.

Chancellor Senior Living

In April 2022, we sold two assisted living facilities located in Texas for approximately $7.8 million in cash consideration, and incurred $0.5 million of transaction costs. The properties were previously classified as assets held for sale on the Condensed Consolidated Balance Sheet. Total prior impairment charges recognized on these properties totaled $7.7 million.

Bickford

In May 2022, we sold three assisted living facilities located in Kansas and Missouri for approximately $26.4 million in cash consideration and $2.4 million in contingent consideration, and incurred $0.4 million of transaction costs. The properties were previously classified as assets held for sale on the Condensed Consolidated Balance Sheet. Total impairment charges recognized in “Loan and realty losses” in the Consolidated Statements of Income on these properties totaled $22.2 million, of which $2.3 million and $4.6 million was recognized for the three and six months ended June 30, 2022, respectively. The contingent consideration represents cash placed in escrow that will be returned to the buyers to the extent the sold properties generate negative monthly cash flows over the twelve months following from the dates of sale. After the twelve-month period, any remaining funds not distributed will be paid to the Company. We have assessed that it was not probable that any of the escrowed funds would be received by the Company. To the extent this assessment changes, or funds are ultimately received, we will recognize the amount as a gain on the sale of real estate.

Comfort Care

In May 2022, we sold four assisted living facilities located in Michigan for approximately $40.0 million in cash consideration, resulting in a gain of approximately $1.6 million. The properties were previously classified as assets held for sale on the Condensed Consolidated Balance Sheet. Rental income was $0.5 million and $1.2 million for the three and six months ended June 30, 2022, respectively, and $0.8 million and $1.6 million for the three and six months ended June 30, 2021, respectively. Prior pandemic-related rent deferrals of $0.8 million that were accounted for as variable lease payments were forgiven as a result of the sale.

Helix Healthcare

In June 2022, we sold a hospital located in California, pursuant to a purchase option, for approximately $19.5 million in cash consideration, resulting in a gain of approximately $9.0 million. The property was previously classified as assets held for sale on the Condensed Consolidated Balance Sheet. Rental income was $0.5 million and $1.0 million the three and six months ended June 30, 2022 and June 30, 2021, respectively.

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Assets Held for Sale and Long-Lived Assets

At June 30, 2022, 13 properties in our Real Estate Investments reportable segment, with an aggregate net real estate balance of $56.7 million, were classified as assets held for sale on our Condensed Consolidated Balance Sheet as of June 30, 2022, including four properties that were transferred into assets held for sale during the second quarter of 2022. Rental income associated with the 13 properties was $1.0 million for both the three and six months ended June 30, 2022 and $1.6 million and $3.4 million for the three and six months ended June 30, 2021, respectively.

During the three and six months ended June 30, 2022, we recorded impairment charges of $4.1 million and $28.7 million respectively, related to our Real Estate Investments reportable segment. The impairment charges are included in “Loan and realty losses” in the Condensed Consolidated Statements of Income.

We reduce the carrying value of impaired properties to their estimated fair value or, with respect to the properties classified as held for sale, to estimated fair value less costs to sell. To estimate the fair values of the properties, we utilized a market approach which considered binding agreements for sales (Level 1 inputs), non-binding offers to purchase from unrelated third parties and/or broker quotes of estimated values (Level 3 inputs), and/or independent third-party valuations (Level 1 and 3 inputs).

Third Quarter 2022 Dispositions

Discovery

In July 2022, we sold an assisted living facility located in Indiana for approximately $8.5 million in cash consideration, and incurred $0.3 million of transaction costs. The property was classified in assets held for sale on the Condensed Consolidated Balance Sheet as of June 30, 2022. Prior impairment charges recognized on the property totaled $8.4 million.

Tenant Concentration

The following table contains information regarding tenant concentration, excluding $2.6 million for our corporate office, $335.5 million for SHOP, and a credit loss reserve of $5.2 million, based on the percentage of revenues for the six months ended June 30, 2022 and 2021, related to tenants or affiliates of tenants, that exceed 10% of total revenue ($ in thousands):

	as of June 30, 2022					Revenues1
	Asset	Real		Notes		Six Months Ended June 30,
	Class	Estate2		Receivable		2022			2021
Senior Living Communities	EFC	$	573,631	$	46,364	$	25,549	19%	$	25,420	16%
National HealthCare Corporation (“NHC”)	SNF	171,530		—		18,597		14%	18,844		12%
Holiday Retirement (“Holiday”)3	ILF	—		—		16,680		13%	19,188		12%
Bickford Senior Living4	ALF	412,304		44,850		N/A		N/A	16,893		11%
All others, net	Various	1,370,360		118,277		53,214		41%	70,533		46%
Escrow funds received from tenants
for property operating expenses	Various	—		—		5,195		4%	4,337		3%
		$	2,527,825	$	209,491	119,235			155,215
Resident fees and services5						11,992		9%	—		—%
						$	131,227		$	155,215

1 Includes interest income on notes receivable and rental income from properties classified as held for sale.

2 Amounts include any properties classified as held for sale.

3 Revenues for the six months ended June 30, 2022 include an $8.8 million lease deposit recognized in the first quarter of 2022 and $6.9 million in escrow cash received in the second quarter of 2022. Reference Note 8 for more discussion.

4 Below 10% for the six months ended June 30, 2022, as such revenues are included in All others, net.

5 There is no tenant concentration in resident fees and services because these agreements are with individual residents.

At June 30, 2022, the two states in which we had an investment concentration of 10% or more were South Carolina (12.0%) and Texas (12.3%).

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Two of our board members, including our chairman, are also members of NHC’s board of directors.

Senior Living Communities

As of June 30, 2022, we leased ten retirement communities to Senior Living Communities, LLC (“Senior Living”). We recognized straight-line rent revenue of $0.2 million and $1.2 million from Senior Living for the three and six months ended June 30, 2022 and 2021, respectively.

Holiday Transition

On April 1, 2022, we disposed of one property classified in assets held for sale and transitioned one assisted living community in Florida to our existing real estate partnership with Discovery Senior Living. The transitioned property was added to the partnership’s in-place master lease. In addition, we terminated the master lease and transitioned the remaining 15 independent living facilities into two separate partnership ventures that own the underlying independent living operations and in which NHI has majority interests. Reference Note 5 for more discussion of the ventures.

Bickford Senior Living

As of June 30, 2022, we leased 37 facilities, excluding one facility classified as assets held for sale, under four leases to Bickford. Revenues from Bickford reflect the impact of pandemic-related rent concessions of approximately $5.5 million for the six months ended June 30, 2022 and $6.5 million and $10.3 million for the three and six months ended June 30, 2021, respectively.

During the second quarter of 2022, we wrote off approximately $18.1 million of straight-line rents receivable and $7.1 million of lease incentives, that were included in “Other assets” on the Condensed Consolidated Balance Sheet, to rental income upon converting Bickford to the cash basis of accounting. These write offs were the result of a change in our evaluation of collectability of future rent payments due under its four master lease agreements based upon information we obtained from Bickford regarding its financial condition that raised substantial doubt as to its ability to continue as a going concern.

In addition to the three properties sold that are discussed above, we completed various restructuring activities in the Bickford leased property portfolio during the first and second quarters of 2022. In March 2022, we transferred one assisted living facility located in Pennsylvania from the Bickford portfolio to a new operator that is leased pursuant to a ten-year triple net lease and wrote off approximately $0.7 million in a straight-line rent receivable, reducing rental income. In the second quarter of 2022, we restructured and amended, three of Bickford’s master lease agreements covering 26 properties and reached agreement on the repayment terms of the $26.0 million in outstanding pandemic-related deferrals. Significant terms of these agreements are as follows:

• Extends the maturity dates of the modified leases to 2033 and 2035. The remaining master lease agreement covering 11 properties with an original maturity in 2023 was previously extended to 2028.

• Reduces the combined rent for the portfolio to approximately $28.3 million per year through April 1, 2024, subject to a nominal annual increase, at which time the rent will be reset to a fair market value, not less than 8.0% of our initial gross investment.

• Requires monthly payments beginning October 1, 2022 through December 31, 2024 based on a percentage of Bickford’s monthly revenues exceeding an established threshold. The deferrals may be reduced by up to $6.0 million upon Bickford achieving certain performance targets and the sale or transition of certain properties to new operators.

Tenant Purchase Options

Certain of our leases contain purchase options allowing tenants to acquire the leased properties. At June 30, 2022, we had tenant purchase options on 10 properties with an aggregate net investment of $90.6 million that will become exercisable between 2025 and 2028. Rental income from these properties with tenant purchase options was $2.7 million and $5.3 million for the three and six months ended June 30, 2022 respectively, and $2.6 million and $5.3 million for the three and six months ended June 30, 2021, respectively.

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We cannot reasonably estimate at this time the probability that any other purchase options will be exercised in the future. Consideration to be received from the exercise of any tenant purchase option is expected to exceed our net investment in the leased property or properties.

Future Minimum Base Rent

Future minimum lease payments to be received by us under our operating leases at June 30, 2022, are as follows ($ in thousands):

Remainder of 2022	$	169,619
2023	222,412
2024	211,973
2025	208,559
2026	211,604
2027	173,915
Thereafter	619,332
	$	1,817,414

Variable Lease Payments

Most of our existing leases contain annual escalators in rent payments. For financial statement purposes, rental income is recognized on a straight-line basis over the term of the lease where the lease contains fixed escalators. Some of our leases contain escalators that are determined annually based on a variable index or other factor that is indeterminable at the inception of the lease. The table below indicates the revenue recognized as a result of fixed and variable lease escalators ($ in thousands):

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
Lease payments based on fixed escalators, net of deferrals	$	58,648	$	61,394	$	118,115	$	128,982
Lease payments based on variable escalators	1,258		894		2,486		1,913
Straight-line rent income	(14,915)		4,150		(13,836)		8,391
Escrow funds received from tenants for property operating expenses	2,157		2,175		5,195		4,337
Amortization of lease incentives	(7,166)		(262)		(7,419)		(522)
Rental income	$	39,982	$	68,351	$	104,541	$	143,101

Note 4. Mortgage and Other Notes Receivable

At June 30, 2022, our investments in mortgage notes receivable totaled $124.2 million secured by real estate and other assets of the borrower (e.g., UCC liens on personal property) related to 13 facilities and other notes receivable totaling $85.3 million, substantially all of which are guaranteed by significant parties to the notes or by cross-collateralization of properties with the same owner. These balances exclude a credit loss reserve of $5.2 million at June 30, 2022. All our notes were on full accrual basis at June 30, 2022.

Mortgage and Other Notes Receivable

Life-Care Services - Sagewood

In the second quarter of 2022, we received repayment of a $111.3 million mortgage note receivable along with all accrued interest and a prepayment fee of $1.1 million which is reflected in “Gain on note payoff” on the Condensed Consolidated Statements of Income for the three and six months ended June 30, 2022. Interest income was $3.1 million and $5.2 million for the three and six months ended June 30, 2022, respectively, and $2.5 million and $5.7 million, for the three and six months ended June 30, 2021, respectively.

Encore Senior Living

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In January 2022, we entered into an agreement to fund a $28.5 million development loan with Encore Senior Living to construct a 108-unit assisted living and memory care community in Fitchburg, Wisconsin. The four-year loan agreement has an annual interest rate of 8.5% and two one-year extensions. We have a purchase option on the property once it has stabilized. The total amount funded on the note was $5.2 million as of June 30, 2022.

Montecito Medical Real Estate

We have a $50.0 million mezzanine loan and security agreement with Montecito Medical Real Estate for a fund that invests in medical real estate, including medical office buildings, throughout the United States. During the second quarter of 2022, we funded $4.5 million on two real estate investments. The loan agreement was modified in the second quarter so that these two real estate investments accrue interest at an annual rate of 7.5% that is paid monthly in arrears and 4.5% per year in interest to be paid upon certain future events including repayments, sales of fund investments, and refinancings (the “Deferred Interest”). Prior borrowings under the loan agreement bear interest at an annual rate of 9.5% and accrue an additional 2.5% in Deferred Interest. Funds drawn in accordance with this agreement are required to be repaid on a per-investment basis five years from deployment of the funds for the applicable investment and includes two one-year extensions. As of June 30, 2022, we have funded $20.3 million of our commitment that was used to acquire nine medical office buildings for a combined purchase price of approximately $86.7 million. For the three and six months ended June 30, 2022, we received interest of $0.5 million and $0.9 million, respectively. For the six months ended June 30, 2022, we received principal of $0.3 million.

Bickford construction and mortgage loans

As part of the June 2021 sale of six properties to Bickford, we executed a $13.0 million second mortgage as a component of the purchase price consideration. This second mortgage note receivable bears interest at a 10% annual rate and matures in April 2026. Interest income was $0.3 million and $0.7 million, respectively, for the three and six months ended June 30, 2022. We did not include this note receivable in the determination of the gain to be recognized upon sale of the portfolio. Therefore, this note receivable is not reflected in “Mortgage and other notes receivable, net” in the Condensed Consolidated Balance Sheets as of June 30, 2022 and December 31, 2021.

As of June 30, 2022, we had two fully funded construction loans of $28.7 million and one $14.2 million construction loan with $12.2 million funded to Bickford. The construction loans are secured by first mortgage liens on substantially all real and personal property as well as a pledge of any and all leases or agreements which may grant a right of use to the property. Usual and customary covenants extend to the agreements, including the borrower’s obligation for payment of insurance and taxes. NHI has a fair market value purchase option on the properties at stabilization of the underlying operations. On certain development projects, Bickford, as borrower, is entitled to up to $2.0 million per project in incentives based on the achievement of predetermined operational milestones and, if funded, will increase NHI's future purchase price and eventual NHI lease payment.

We also have a mortgage loan of $4.0 million to Bickford due February 2025, bearing interest at 7%, that amortizes on a twenty-five-year basis.

Senior Living Communities

We provided a $20.0 million revolving line of credit to Senior Living whose borrowings under the revolver are to be used for working capital needs and to finance construction projects within its portfolio, including building additional units. Beginning January 1, 2023, availability under the revolver reduces to $15.0 million. The revolver matures in December 2029 at the time of lease maturity. At June 30, 2022, the $13.7 million outstanding under the facility bears interest at 8.98% per annum, the prevailing 10-year U.S. Treasury rate plus 6%.

The Company also has a mortgage loan of $32.7 million with Senior Living that originated in July 2019 for the acquisition of a 248-unit continuing care retirement community (“CCRC”) in Columbia, South Carolina. The mortgage loan is for a term of five years with two one-year extensions and carries an interest rate of 7.25%. Additionally, the loan conveys to NHI a purchase option at a stated minimum price of $38.3 million, subject to adjustment for market conditions.

Credit Loss Reserve

Our principal measures of credit quality, except for construction mortgages, are debt service coverage for amortizing loans and interest or fixed charge coverage for non-amortizing loans, collectively referred to as “Coverage”. A Coverage ratio provides a measure of the borrower’s ability to make scheduled principal and interest payments. The Coverage ratios presented in the

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following table have been calculated utilizing the most recent date for which data is available, March 31, 2022, using EBITDARM (earnings before interest, taxes, depreciation, amortization, rent and management fees) and the requisite debt service, interest service or fixed charges, as defined in the applicable loan agreement. We categorize Coverage into three levels: (i) more than 1.5x, (ii) between 1.0x and 1.5x, and (iii) less than 1.0x. We update the calculation of Coverage on a quarterly basis. Coverage is not a meaningful credit quality indicator for construction mortgages as either these developments are not generating any operating income, or they have insufficient operating income as occupancy levels necessary to stabilize the properties have not yet been achieved. We measure credit quality for these mortgages by considering the construction and stabilization timeline and the financial condition of the borrower as well as economic and market conditions. As of June 30, 2022, we did not have any construction loans that we considered underperforming.

We consider the guidance in ASC 310-20 when determining whether a modification, extension or renewal constitutes a current period origination. The credit quality indicator as of June 30, 2022, is presented below for the amortized cost, net by year of origination of ($ in thousands):

	2022		2021		2020		2019		2018		Prior		Total
Mortgages
more than 1.5x	$	4,965	$	—	$	33,364	$	—	$	28,700	$	4,183	$	71,212
between 1.0x and 1.5x	—		—		—		32,700		—		—		32,700
less than 1.0x	—		—		3,906		6,422		—		10,000		20,328
	4,965		—		37,270		39,122		28,700		14,183		124,240
Mezzanine
more than 1.5x	—		23,189		—		—		—		9,511		32,700
between 1.0x and 1.5x	—		20,415		—		—		—		—		20,415
less than 1.0x	—		—		—		—		—		14,500		14,500
No coverage available	—		—		—		750		—		—		750
	—		43,604		—		750		—		24,011		68,365
Revolver
more than 1.5x													3,223
between 1.0x and 1.5x													13,663
less than 1.0x													—
													16,886
									Credit loss reserve				(5,214)
													$	204,277

Due to the economic uncertainty created by the COVID-19 pandemic and the potential impact on the collectability of our mortgages and other notes receivable, we forecasted at the beginning of the pandemic a 20% increase in the probability of a default and a 20% increase in the amount of loss from a default resulting in an effective adjustment of 44%.

The allowance for expected credit losses is presented in the following table for the six months ended June 30, 2022 ($ in thousands):

Beginning balance January 1, 2022	$	5,210
Provision for expected credit losses	4
Balance June 30, 2022	$	5,214

Note 5. Senior Housing Operating Portfolio Formation Activities

Concurrently with the settlement of the outstanding litigation with Welltower discussed more fully in Note 8, we terminated the master lease with a Welltower-controlled subsidiary for the legacy Holiday properties effective April 1, 2022 and transitioned the operations of 15 ILFs from the Welltower-controlled tenant into two new ventures. These new ventures, consolidated by the Company, are structured to comply with REIT requirements and utilize the TRS for activities that would otherwise be non-qualifying for REIT purposes. The properties in each venture are operated by a property manager in exchange for a management

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fee. The equity structure of these ventures are comprised of 65% and 35% preferred and common equity interests, respectively. The Company owns 100% of the preferred equity interests in these ventures and an aggregate blended common equity interest of 89%. As of June 30, 2022, the annual fixed preferred return was approximately $10.2 million. Additionally, the managers, or affiliates of the managers, own common equity interests in their respective ventures. Given certain provisions of the operating agreements, including provisions related to a Company change in control, the noncontrolling interests associated with the ventures were determined to be contingently redeemable, as discussed further in Note 9. Each venture is discussed in more detail below.

Merrill Gardens Managed Portfolio

We transferred six ILFs located in California and Washington into a consolidated venture with Merrill. Merrill contributed $10.6 million in cash for its common equity interest in the venture. The operating agreement includes additional contingent distributions to the partners based on the attainment of certain yields on investment calculated on an annual basis.

The properties are managed by Merrill pursuant to a management agreement with an initial term through March 2032 that automatically renews on a year-to-year basis thereafter unless terminated by either party with notice. The management agreement entitles Merrill to a base management fee of 5% of net revenue and a real estate services fee of 5% of real estate costs incurred during any calendar year that exceed $1,000 times the number of units at each facility.

Discovery Managed Portfolio

We transferred nine ILFs located in Arkansas, Georgia, Ohio, Oklahoma, New Jersey, and South Carolina into a consolidated venture with DSHI NHI Holiday LLC (the “Discovery member”), a controlled affiliate of Discovery. The Discovery member contributed $1.1 million in cash for its common equity interest in the venture. The operating agreement includes additional contingent distributions to the partners based on the attainment of certain yields on investment calculated on an annual basis.

The properties are managed by separate controlled affiliates of Discovery pursuant to management agreements with an initial term through March 2032 that automatically renews on a year-to-year basis thereafter unless terminated by either party with notice. The management agreement entitles the managers to a base management fee of 5% of net revenue.

Note 6. Equity Method Investment

Our initial $0.9 million investment in the operating company, Timber Ridge OpCo, held by our TRS arose in conjunction with the acquisition of a CCRC from LCS-Westminster Partnership III, LLP in January 2020. We structured our arrangement with our JV partner, LCS Timber Ridge LLC, to be compliant with the provisions of the REIT Investment Diversification and Empowerment Act of 2007 (“RIDEA”). Accordingly, the TRS holds our 25% equity interest in Timber Ridge OpCo, which permits the TRS to engage in activities and share in cash flows that would otherwise be non-qualifying income under the REIT gross income test. As part of our investment, we provided Timber Ridge OpCo a revolving credit facility of up to $5.0 million of which no funds have been drawn.

We account for our investment in Timber Ridge OpCo under the equity method and decrease the carrying value of our investment for losses in the entity and distributions to NHI for cumulative amounts up to and including our basis plus any commitments to fund operations. Our commitments are currently limited to the additional $5.0 million under the revolving credit facility. As of June 30, 2022, we have recognized our share of Timber Ridge OpCo’s operating losses in excess of our initial investment. These cumulative losses of $5.0 million in excess of our original basis are included in “Accounts payable and accrued expenses” in our Condensed Consolidated Balance Sheets as of June 30, 2022 and December 31, 2021. Excess unrecognized equity method losses for the three and six months ended June 30, 2022 were $0.9 million and $1.6 million, respectively. Cumulative unrecognized losses were $2.6 million through June 30, 2022. We recognized gains of approximately $0.3 million and $0.6 million, representing cash distributions received for the three and six months ended June 30, 2022, and losses of approximately $0.9 million and $1.7 million related to our investment in Timber Ridge OpCo for the three and six months ended June 30, 2021, respectively.

The Timber Ridge property is subject to early resident mortgages secured by a Deed of Trust and Indenture of Trust (the “Deed and Indenture”). As part of our acquisition, Timber Ridge PropCo acquired the Timber Ridge property and a subordination agreement was entered into pursuant to which the trustee acknowledged and confirmed that the security interests created under the Deed and Indenture were subordinate to any security interests granted in connection with the loan made by NHI to Timber Ridge PropCo. In addition, by terms of the resident loan assumption agreement, during the term of the lease (seven years with two renewal options), Timber Ridge OpCo is to indemnify Timber Ridge PropCo for any repayment by Timber Ridge PropCo of these

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liabilities under the guarantee. As a result of the subordination and resident loan assumption agreements, no liability has been recorded as of June 30, 2022. The balance secured by the Deed and Indenture was $15.2 million at June 30, 2022.

Note 7. Debt

Debt consists of the following ($ in thousands):

	June 30,<br>2022		December 31,<br>2021
Revolving credit facility - unsecured	$	—	$	—
Bank term loans - unsecured	240,000		375,000
Senior notes - unsecured, net of discount of $2,760 and $2,921	397,240		397,079
Private placement term loans - unsecured	400,000		400,000
Fannie Mae term loans - secured, non-recourse	76,845		77,038
Unamortized loan costs	(9,590)		(6,234)
	$	1,104,495	$	1,242,883

Aggregate principal maturities of debt as of June 30, 2022 are as follows ($ in thousands):

Remainder of 2022	$	196
2023	415,408
2024	75,425
2025	125,816
2026	—
2027	100,000
Thereafter	400,000
	1,116,845
Less: discount	(2,760)
Less: unamortized loan costs	(9,590)
	$	1,104,495

Unsecured revolving credit facility and bank term loans

On March 31, 2022, we entered into a new unsecured revolving credit agreement (the “2022 Credit Agreement”) providing us with a $700.0 million unsecured revolving credit facility, replacing our previous $550.0 million unsecured revolver. The 2022 Credit Agreement matures in March 2026, but may be extended at our option, subject to the satisfaction of certain conditions, for two additional six-month periods. Borrowings under the 2022 Credit Agreement bear interest, at our election, at either (i) Term Secured Overnight Financing Rate (“SOFR”) (plus a credit spread adjustment) plus a margin ranging from 0.725% to 1.40%, (ii) Daily SOFR (plus a credit spread adjustment) plus a margin ranging from 0.725% to 1.40% or (iii) the base rate plus a margin ranging from 0.00% to 0.40%. In each election, the actual margin is determined according to our credit ratings. The base rate means, for any day, a fluctuating rate per annum equal to the highest of (i) the Agent’s prime rate, (ii) the federal funds rate on such day plus 0.50% or (iii) the adjusted Term SOFR for a one-month tenor in effect on such day plus 1.0%.

In addition, the 2022 Credit Agreement requires a facility fee equal to 0.125% to 0.30%, based on our rating. We incurred $4.5 million of deferred costs in connection with the 2022 Credit Agreement which are included as a component of “Debt” on the Condensed Consolidated Balance Sheet as of June 30, 2022.

Concurrently with the execution of the 2022 Credit Agreement, we amended our $300.0 million term loan (“2018 Term Loan”) maturing in September 2023. The amendment modifies the existing covenants to align with provisions in the 2022 Credit Agreement and to accrue interest on borrowings based on SOFR (plus a credit spread adjustment) that were previously based on LIBOR, with no change to the existing applicable interest rate margins. We may also elect for the 2018 Term Loan to accrue

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interest at a base rate plus the applicable margin. During the second quarter of 2022, we repaid $60.0 million of the 2018 Term Loan.

In March 2022, we repaid a $75.0 million term loan maturing August 2022 with proceeds from the revolving credit facility. The term loan bore interest at a rate of 30-day LIBOR (with a 50 basis point floor) plus 185 basis points (“bps”), based on our current leverage ratios. Upon repayment, we expensed approximately $0.2 million of unamortized loan costs associated with this loan which is included in “Loss on early retirement of debt” in our Condensed Consolidated Statement of Income for the six months ended June 30, 2022.

The revolving facility fee was 25 bps per annum during the first quarter of 2022 and based on our current credit ratings, the facility provided for floating interest on the revolver and the term loans at SOFR CME Term Option 1 Month Loan plus 105 bps. At June 30, 2022, the SOFR CME Term Option one month was 179 bps.

At June 30, 2022, we had $700.0 million available to draw on the revolving portion of our credit facility, subject to usual and customary covenants. Among other stipulations, the unsecured credit facility agreement requires that we maintain certain financial ratios within limits set by our creditors. At June 30, 2022, we were in compliance with these ratios.

Pinnacle Bank is a participating member of our banking group. A member of NHI’s Board of Directors and chairman of our audit committee is also the chairman of Pinnacle Financial Partners, Inc., the holding company for Pinnacle Bank. NHI’s local banking transactions are conducted primarily through Pinnacle Bank.

Senior Notes 2031

In January 2021, we issued $400.0 million aggregate principal amount of 3.00% senior notes that mature on February 1, 2031 and pay interest semi-annually (the “2031 Senior Notes”). We used a portion of the net proceeds from the 2031 Senior Notes offering to repay a $100.0 million term loan and recognized a loss on early retirement of debt of $0.5 million for the three and six months ended June 30, 2021, representing the unamortized loan costs expensed upon early repayment of the term loan.

The 2031 Senior Notes are subject to affirmative and negative covenants, including financial covenants. As of June 30, 2022, we were in compliance with all affirmative and negative covenants, including financial covenants for our 2031 Senior Notes borrowings.

Private Placement Term Loans

Our unsecured private placement term loans, payable interest-only, are summarized below ($ in thousands):

Amount		Inception	Maturity	Fixed Rate
$	125,000	January 2015	January 2023	3.99%
50,000		November 2015	November 2023	3.99%
75,000		September 2016	September 2024	3.93%
50,000		November 2015	November 2025	4.33%
100,000		January 2015	January 2027	4.51%
$	400,000

Covenants pertaining to the private placement term loans are generally conformed with those governing our credit facility, except for specific debt-coverage ratios that are more restrictive. Our unsecured private placement term loan agreements include a rate increase provision that is effective if any rating agency lowers our credit rating on our senior unsecured debt below investment grade and our compliance leverage increases to 50% or more.

Fannie Mae Term Loans

As of June 30, 2022, we had $60.1 million Fannie Mae term-debt financing, originating March 2015, consisting of interest-only payments at an annual rate of 3.79% and a 10-year maturity. The mortgages are non-recourse and secured by eleven properties leased to Bickford. In a December 2017 acquisition, we assumed additional Fannie Mae debt that amortizes through 2025 when a balloon payment will be due, is subject to prepayment penalties until 2024, bears interest at a nominal rate of 4.6%, and has a remaining balance of $16.7 million at June 30, 2022. Collectively, these notes are secured by facilities having a net book value of $106.1 million at June 30, 2022.

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Interest Expense and Rate Swap Agreements

The following table summarizes interest expense ($ in thousands):

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
Interest expense on debt at contractual rates	$	10,262	$	10,368	$	19,819	$	20,821
Losses reclassified from accumulated other
comprehensive income into interest expense	—		1,820		—		3,598
Capitalized interest	(9)		(17)		(10)		(34)
Amortization of debt issuance costs, debt discount and other	609		669		1,251		1,428
Total interest expense	$	10,862	$	12,840	$	21,060	$	25,813

On December 31, 2021, our $400.0 million interest rate swap agreements matured that were in place to hedge against fluctuations in variable interest rates applicable to our bank loans.

Note 8. Commitments, Contingencies and Uncertainties

In the normal course of business, we enter into a variety of commitments, typically consisting of funding revolving credit arrangements, construction and mezzanine loans to our operators to conduct expansions and acquisitions for their own account, and commitments for the funding of construction for expansion or renovation to our existing properties under lease. In our leasing operations, we offer to our tenants and to sellers of newly acquired properties a variety of inducements that originate contractually as contingencies but which may become commitments upon the satisfaction of the contingent event. Contingent payments earned will be included in the respective lease bases when funded.

As of June 30, 2022, we had working capital, construction and mezzanine loan commitments to five operators for $144.9 million, of which we had funded $75.7 million toward these commitments.

As of June 30, 2022, we had $34.0 million of development commitments for construction and renovation for eleven properties of which we had funded $24.0 million toward these commitments. In addition to these commitments, we have agreed to pay up to $0.8 million in additional cash consideration pending the results of an ongoing property tax appeal related to a property acquired in the second quarter of 2022. As of June 30, 2022, no amount of this consideration is expected to be paid as discussed in Note 3. Discovery PropCo has committed to fund up to $2.0 million toward the purchase of condominium units located at one of the facilities of which $1.0 million had been funded as of June30, 2022.

As of June 30, 2022, we had $28.6 million of contingent lease inducement commitments in seven lease agreements which are generally based on the performance of facility operations and may or may not be met by the tenant. At June 30, 2022, we had funded $1.5 million toward these commitments.

As provided above, loans funded do not include the effects of discounts or commitment fees.

The credit loss liability for unfunded loan commitments is estimated using the same methodology as for our funded mortgage and other notes receivable based on the estimated amount that we expect to fund. We applied the same COVID-19 pandemic adjustments as discussed in Note 4.

The liability for expected credit losses on our unfunded loans reflected in “Accounts payable and accrued expenses” on the Condensed Consolidated Balance Sheets as of June 30, 2022 and December 31, 2021 is presented in the following table for the six months ended June 30, 2022 ($ in thousands):

Beginning balance January 1, 2022	$	955
Provision for expected credit losses	(127)
Balance at June 30, 2022	$	828

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COVID-19 Pandemic Contingencies

Since the World Health Organization declared COVID-19 a pandemic on March 11, 2020, the continually evolving pandemic has resulted in a widespread health crisis adversely affecting governments, businesses, and financial markets. The COVID-19 pandemic and related health and safety measures continue to impact the operations of many of the Company’s tenants, operators and borrowers. The federal government has provided economic assistance and other forms of assistance which mitigated to some extent the negative financial impact of the pandemic for certain of our tenants and operators who are eligible.

When applicable, we have accounted for rent concessions as variable lease payments, recorded as rental income when received, in accordance with the FASB's Lease Modification Q&A. Reference Note 2 for further discussion. We will evaluate any rent deferral requests as a result of the COVID-19 pandemic on a tenant-by-tenant basis. The extent of future concessions we make as a result of the COVID-19 pandemic, which could have a material impact on our future operating results, cannot be reasonably or reliably projected by us at this time.

As of June 30, 2022, aggregate pandemic-related rent concessions granted to tenants that have been accounted for as variable lease payments totaled approximately $44.0 million, net of cumulative repayments of $0.3 million and excluding any interest accrued. Of this total, net rent deferrals that are contractually agreed to be repaid are $38.0 million. During the three and six months ended June 30, 2022, we granted pandemic-related rent deferrals of $2.9 million to three tenants and $9.2 million to seven tenants, respectively. In addition, we granted rent abatements in the first quarter of 2022 to Bickford of approximately $1.5 million. Repayments of rent deferrals during the three and six months ended June 30, 2022 totaled $0.1 million and $0.2 million, respectively.

We anticipate that some tenants may need additional rent deferrals to assist them with the ongoing impact of the pandemic. The timing and amount of any additional deferrals cannot yet be determined.

Rent deferrals granted for the three and six months ended June 30, 2021 totaled approximately $9.9 million and $14.1 million, respectively, of which Bickford accounted for approximately $6.5 million and $10.3 million, respectively.

Litigation

Our facilities are subject to claims and suits in the ordinary course of business. Our lessees and borrowers have indemnified, and are obligated to continue to indemnify us, against all liabilities arising from the operation of the facilities, and are further obligated to indemnify us against environmental or title problems affecting the real estate underlying such facilities. In addition, such claims may include, among other things professional liability and general liability claims, as well as regulatory proceedings related to our SHOP segment where we are the holder of the applicable healthcare license. While there may be lawsuits pending against us and certain of the owners and/or lessees of the facilities, management believes that the ultimate resolution of all such pending proceedings will have no direct material adverse effect on our financial condition, results of operations or cash flows.

Welltower, Inc.

In June 2021, Welltower announced that it would acquire certain assets from the senior housing portfolio of Holiday, a privately held senior living management company, that included 17 senior living facilities governed by a master lease originally executed between a Holiday subsidiary and NHI in 2013. We received no rent due under the master lease from the tenant for these facilities since this change in tenant ownership occurred in late July 2021.

On December 20, 2021, NHI and its subsidiaries NHI-REIT of Next House, LLC, Myrtle Beach Retirement Resident LLC, and Voorhees Retirement Residence LLC filed suit against Welltower, Inc., Welltower Victory II TRS LLC, and Well Churchill Leasehold Owner LLC (collectively the "Defendants") in the Delaware Court of Chancery (Case No. 2021-1097-MTZ). In the litigation, we contended that the Defendants repeatedly failed to honor their legal obligations to NHI. In particular, we asserted that the Defendants acquired assets from a third party, Holiday, that included leases to NHI senior living facilities and fraudulently induced NHI to consent to the assignment of the leases, and then immediately failed to pay rent or provide a promised security agreement that was intended to secure against their default, all as part of an effort to pressure NHI to agree to new conditions outside the assignment agreement or force a sale of the properties to the Defendants. The lawsuit further asserted that the Defendants owed unpaid contractual rent.

In connection with a memorandum of understanding between the parties dated March 4, 2022, NHI applied the remaining approximately $8.8 million lease deposit to past due rents in the first quarter of 2022. Also, as provided by the memorandum of understanding, Welltower transferred approximately $6.9 million to an escrow account to be released upon satisfactory transition

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of the facility operations and mutual dismissal of the lawsuit. NHI and certain of its subsidiaries entered into a settlement agreement dated March 31, 2022 with Defendants formalizing the terms to settle the lawsuit.

NHI and certain of its subsidiaries terminated the master lease with Well Churchill Leasehold Owner, LLC as successor in interest to NHI Master Tenant LLC, effective April 1, 2022, upon completion of the transition of the properties subject to the master lease, as follows: (i) one property was sold to a third party, (ii) one property was transitioned to an existing operator relationship and leased pursuant to an existing master lease, and (iii) the remaining 15 properties were transitioned into two new SHOP partnership ventures. See Note 5 for more information on these new ventures.

Also effective April 1, 2022, the parties agreed to dismiss the lawsuit and mutually release all claims related to or arising out of the litigation and the $6.9 million in escrowed funds were released to NHI and recognized as rental income during the three months ended June 30, 2022. We recognized approximately $0.7 million as a “Loss on operations transfer, net” on the Condensed Consolidated Statements of Income for the three and six months ended June 30, 2022. This net loss represents the amount of net working capital deficit assumed by NHI in connection with the transfer of operations following the termination of the master lease. The net working capital assumed by NHI on April 1, 2022 was comprised primarily of facility furniture, fixtures and equipment, net resident accounts receivable, accounts payable and other accrued liabilities.

Note 9. Redeemable Noncontrolling Interests

Interests held by Merrill and DSHI NHI Holiday LLC, a controlled affiliate of Discovery, in the SHOP ventures are noncontrolling interests. Certain provisions within the operating agreements of the ventures provide the noncontrolling interest holders with put rights upon certain contingent events that are not solely within the control of the Company. Therefore, these noncontrolling interests were determined to be contingently redeemable and are presented as “Redeemable noncontrolling interests” in the mezzanine section between Total liabilities and Stockholders equity on our Condensed Consolidated Balance Sheet at June 30, 2022.

At inception, the Company recorded noncontrolling interests of $11.7 million, representing the initial carrying amount of the noncontrolling interest holders’ ownership interests in the ventures. The redeemable noncontrolling interests are not currently redeemable and we concluded a contingent redemption event is not probable to occur as of June 30, 2022. Consequently, the noncontrolling interests will not be subsequently remeasured to its redemption amount until such contingency event and the related redemption are probable to occur. We will continue to reflect the attribution of gains or losses to the redeemable noncontrolling interests each quarter.

The following table presents the change in Redeemable noncontrolling interests for the three months ended June 30, 2022 ($ in thousands):

	Three Months Ended
	June 30, 2022
Balance at March 31,	$	—
Initial carrying amount	11,738
Net loss	(227)
Distributions	(24)
Balance at June 30,	$	11,487

Note 10. Equity and Dividends

Share Repurchase Plan

On April 15, 2022, the Company’s Board of Directors approved a stock repurchase plan (the “2022 Repurchase Plan”) for up to $240.0 million of the Company’s common stock. The plan is effective for a period of one year. Shares may be repurchased from time-to-time in open market transactions at prevailing market prices, in privately negotiated transactions or by other means in accordance with the terms of Rule 10b-18 of the Securities Exchange Act of 1934 as amended and shall be made in accordance with all applicable laws and regulations in effect. The timing and number of shares repurchased will depend on a variety of factors, including price, general market and economic conditions, alternative investment opportunities and other corporate considerations.

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During the three and six months ended June 30, 2022, we repurchased through open market transactions 1,196,175 shares of our common stock for an average price of $58.52 per share, including commissions. All shares received were constructively retired upon receipt, and the excess of the purchase price over the par value per share was recorded to “Cumulative dividends in excess of net income” in the Condensed Consolidated Balance Sheet.

As of June 30, 2022, we had approximately $170.4 million remaining under the 2022 Repurchase Plan.

Dividends

The following table summarizes dividends declared by the Board of Directors or paid during the six months ended June 30, 2022 and 2021:

Six Months Ended June 30, 2022
Date of Declaration	Date of Record	Date Paid/Payable	Quarterly Dividend
November 5, 2021	December 31, 2021	January 31, 2022	$0.90
February 16, 2022	March 31, 2022	May 6, 2022	$0.90
May 6, 2022	June 30, 2022	August 5, 2022	$0.90
Six Months Ended June 30, 2021
---	---	---	---
Date of Declaration	Date of Record	Date Paid/Payable	Quarterly Dividend
December 15, 2020	December 31, 2020	January 29, 2021	$1.1025
March 12, 2021	March 31, 2021	May 7, 2021	$1.1025
June 3, 2021	June 30, 2021	August 6, 2021	$0.90

On August 5, 2022, the Board of Directors declared a $0.90 per share dividend to common stockholders of record on September 30, 2022, payable on November 4, 2022.

Note 11. Share-Based Compensation

The Company’s outstanding stock incentive awards have been granted under two incentive plans – the 2012 Stock Incentive Plan (“2012 Plan”) and the 2019 Stock Incentive Plan (“2019 Plan”). During the six months ended June 30, 2022, we granted options to purchase 718,000 shares of common stock under the 2019 Plan. As of June 30, 2022, shares available for future grants totaled 1,422,336 under the 2019 Plan. The following is a summary of share-based compensation expense, net of any forfeitures, included in “General and administrative expenses” in the Condensed Consolidated Statements of Income ($ in thousands):

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
Non-cash share-based compensation expense	$	1,428	$	992	$	6,511	$	6,438

The weighted average fair value of options granted during the six months ended June 30, 2022 and 2021 was $11.92 and $14.54 per option, respectively. The fair value of each grant is estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions:

	2022	2021
Dividend yield	7.0%	6.7%
Expected volatility	49.3%	48.1%
Expected lives	2.9 years	2.9 years
Risk-free interest rate	1.75%	0.33%

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The following table summarizes our outstanding stock options:

	Number	Weighted Average
	of Shares	Exercise Price
Options outstanding, January 1, 2021	1,033,838	83.54
Options granted	652,000	69.20
Options exercised	(20,000)	60.52
Options outstanding, June 30, 2021	1,665,838	78.20
Exercisable at June 30, 2021	1,183,324	79.25
Options outstanding, January 1, 2022	1,652,505	78.10
Options granted	718,000	53.62
Options exercised	(10,000)	53.41
Options forfeited	(23,000)	62.33
Options expired	(74,498)	77.93
Options outstanding, June 30, 2022	2,263,007	70.63
Exercisable at June 30, 2022	1,726,987	74.18

All values are in US Dollars.

At June 30, 2022, the aggregate intrinsic value of stock options outstanding and exercisable was $4.9 million and $2.4 million, respectively. The aggregate intrinsic value of stock options exercised during the six months ended June 30, 2022 and 2021 was $4.94 per share or less than $0.1 million; and $9.27 per share or $0.2 million, respectively.

As of June 30, 2022, unrecognized compensation expense totaling $3.8 million associated with unvested stock options is expected to be recognized over the following periods: remainder of 2022 - $2.1 million, 2023 - $1.5 million and 2024 - $0.2 million.

Note 12. Earnings Per Common Share

The weighted average number of common shares outstanding during the reporting period is used to calculate basic earnings per common share. Diluted earnings per common share assume the exercise of stock options and the conversion of our convertible debt prior to its retirement using the treasury stock method, to the extent dilutive. Dilution resulting from the conversion option within our convertible debt that was repaid in April 2021 was determined by computing an average of incremental shares included in the three months ended March 31, 2021 diluted EPS computation.

The following table summarizes the average number of common shares and the net income used in the calculation of basic and diluted earnings per common share ($ in thousands, except share and per share amounts):

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	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
Net income attributable to common stockholders	$	21,673	$	39,183	$	30,073	$	74,513
BASIC:
Weighted average common shares outstanding	45,708,238		45,850,599		45,779,433		45,577,843
DILUTED:
Weighted average common shares outstanding	45,708,238		45,850,599		45,779,433		45,577,843
Stock options	10,300		7,475		5,338		9,174
Convertible senior notes	—		—		—		20,907
Weighted average dilutive common shares outstanding	45,718,538		45,858,074		45,784,771		45,607,924
Net income attributable to common stockholders - basic	$	0.47	$	0.85	$	0.66	$	1.63
Net income attributable to common stockholders - diluted	$	0.47	$	0.85	$	0.66	$	1.63
Incremental anti-dilutive shares excluded:
Net share effect of stock options with an exercise price in excess of the average market price for our common shares	503,862		290,998		488,187		248,223
Regular dividends declared per common share	$	0.90	$	0.90	$	1.80	$	2.0025

Note 13. Fair Value of Financial Instruments

Carrying amounts and fair values of financial instruments that are not carried at fair value at June 30, 2022 and December 31, 2021 in the Condensed Consolidated Balance Sheets are as follows ($ in thousands):

	Carrying Amount				Fair Value Measurement
	June 30, 2022		December 31, 2021		June 30, 2022		December 31, 2021
Level 2
Variable rate debt	$	235,021	$	373,682	$	240,000	$	375,000
Fixed rate debt	$	869,474	$	869,201	$	802,456	$	858,124
Level 3
Mortgage and other notes receivable, net	$	204,277	$	299,952	$	203,856	$	314,821

Fixed rate debt. Fixed rate debt is classified as Level 2 and its value is based on quoted prices for similar instruments or calculated utilizing model derived valuations in which significant inputs are observable in active markets.

Mortgage and other notes receivable. The fair value of mortgage and other notes receivable is based on credit risk and discount rates that are not observable in the marketplace and therefore represents a Level 3 measurement.

Carrying amounts of cash and cash equivalents and restricted cash, accounts receivable and accounts payable approximate fair value due to their short-term nature. The fair values of our borrowings under our revolving credit facility and other variable rate debt are reasonably estimated at their notional amounts at June 30, 2022 and December 31, 2021, due to the predominance of floating interest rates, which generally reflect market conditions.

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Note 14. Segment Reporting

We evaluate our business and make resource allocations on our two operating segments: Real Estate Investments and SHOP. Our Real Estate Investments includes lease, mortgage and other note investments in independent living facilities, assisted living facilities, entrance-fee communities, senior living campuses, skilled nursing facilities and a hospital. Under the Real Estate Investment segment, we invest in seniors housing and health care real estate through acquisition and financing of primarily single- tenant properties. Properties acquired are primarily leased under triple-net leases, and we are not involved in the management of the property. SHOP includes multi-tenant independent living facilities. The SHOP properties and related operations are controlled by the Company and are operated by property managers in exchange for a management fee (reference Note 5).

We formed the SHOP segment effective April 1, 2022 upon termination of the triple-net lease for the legacy Holiday portfolio at which time the operations and properties of 15 ILFs were transferred into two separate ventures, as discussed further in Notes 5 and 8. The results associated with the prior triple-net lease structure for these properties are included in the Real Estate Investments segment and the results from operating these SHOP properties after the transition are included in our new SHOP segment. There is no impact to prior year’s presentation.

Our chief operating decision maker evaluates performance based upon segment NOI. We define NOI as total revenues, less tenant reimbursements and property operating expenses. We use NOI to make decisions about resource allocations and to assess the property level performance of our properties. There were no intersegment transactions for the three and six months ended June 30, 2022. Capital expenditures for the six months ended June 30, 2022 were approximately $7.0 million for the Real Estate Investments segment and $0.7 million for the SHOP segment.

Non-segment revenue consists mainly of other income. Non-segment assets consist of corporate assets including cash, deferred loan expenses and corporate offices and equipment among others. Non-property specific revenues and expenses are not allocated to individual segments in determining NOI.

The accounting policies of the segments are the same as those described in the summary of significant accounting policies (see Note 2). The results of operations for all acquisitions described in Notes 3 and 4 are included in our consolidated results of operations from the acquisition dates and are components of the appropriate segments.

Summary information for the reportable segments during the three and six months ended June 30, 2022 is as follows ($ in thousands):

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For the three months ended June 30, 2022:	Real Estate Investment		SHOP		Non-segment/Corporate		Total
Rental income	$	39,982	$	—	$	—	$	39,982
Resident fees and services	—		11,992		—		11,992
Interest income and other	7,825		—		100		7,925
Total revenues	47,807		11,992		100		59,899
Senior housing operating expenses	—		9,113		—		9,113
Taxes and insurance on leased properties	2,157		—		—		2,157
NOI	45,650		2,879		100		48,629
Depreciation	15,638		2,116		18		17,772
Interest	771		—		10,091		10,862
Legal	—		—		339		339
Franchise, excise and other taxes	—		—		225		225
General and administrative	—		—		5,049		5,049
Loan and realty losses	4,094		—		—		4,094
Gains on sales of real estate, net	(10,521)		—		—		(10,521)
Loss on operations transfer, net	729		—		—		729
Gain on note payoff	(1,113)		—		—		(1,113)
Gains from equity method investment	(273)		—		—		(273)
Net Income	$	36,325	$	763	$	(15,622)	$	21,466
Total assets	$	2,277,599	$	277,155	$	32,537	$	2,587,291
For the six months ended June 30, 2022:	Real Estate Investment		SHOP		Non-segment/Corporate		Total
---	---	---	---	---	---	---	---	---
Rental income	$	104,541	$	—	$	—	$	104,541
Resident fees and services	—		11,992		—		11,992
Interest income and other	14,542		—		152		14,694
Total revenues	119,083		11,992		152		131,227
Senior housing operating expenses	—		9,113		—		9,113
Taxes and insurance on leased properties	5,195		—		—		5,195
NOI	113,888		2,879		152		116,919
Depreciation	33,892		2,116		36		36,044
Interest	1,534		—		19,526		21,060
Legal	—		—		2,166		2,166
Franchise, excise and other taxes	—		—		469		469
General and administrative	—		—		13,150		13,150
Loan and realty losses	28,622		—		—		28,622
Gains on sales of real estate, net	(13,502)		—		—		(13,502)
Loss on operations transfer, net	729		—		—		729
Gain on note payoff	(1,113)		—		—		(1,113)
Loss on early retirement of debt	—		—		151		151
Gains from equity method investment	(569)		—		—		(569)
Net Income	$	64,295	$	763	$	(35,346)	$	29,712

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Forward Looking Statements

References throughout this document to “NHI” or the “Company” include National Health Investors, Inc., and its consolidated subsidiaries. In accordance with the Securities and Exchange Commission’s “Plain English” guidelines, this Quarterly Report on Form 10-Q has been written in the first person. In this document, the words “we”, “our”, “ours” and “us” refer only to National Health Investors, Inc. and its consolidated subsidiaries and not any other person. Unless the context indicates otherwise, references herein to “the Company” include all of our consolidated subsidiaries.

This Quarterly Report on Form 10-Q and other materials we have filed or may file with the Securities and Exchange Commission, as well as information included in oral statements made, or to be made, by our senior management contain certain “forward-looking” statements as that term is defined by the Private Securities Litigation Reform Act of 1995. All statements regarding our expected future financial position, results of operations, cash flows, funds from operations, continued performance improvements, ability to service and refinance our debt obligations, ability to finance growth opportunities, and similar statements including, without limitation, those containing words such as “may,” “will,” “believes,” “anticipates,” “expects,” “intends,” “estimates,” “plans,” and other similar expressions, are forward-looking statements.

Forward-looking statements involve known and unknown risks and uncertainties that may cause our actual results in future periods to differ materially from those projected or contemplated in the forward-looking statements as a result of factors including, but not limited to, the following:

*    Actual or perceived risks associated with public health epidemics or outbreaks, such as the coronavirus (“COVID-19”), have had and are expected to continue to have a material adverse effect on our business and results of operations;

*    We depend on the operating success of our tenants and borrowers for collection of our lease and note payments;

*    We are exposed to the risk that our tenants and borrowers may become subject to bankruptcy or insolvency proceedings;

*    Certain tenants in our portfolio account for a significant percentage of the rent we expect to generate from our portfolio, and the failure of any of these tenants to meet their obligations to us could materially and adversely affect our business, financial condition and results of operations and our ability to make distributions to our stockholders;

*    We are exposed to risks related to governmental regulations and payors, principally Medicare and Medicaid, and the effect that changes to government regulation or reimbursement rates would have on our tenants’ and borrowers’ business;

*    We are exposed to the risk that the cash flows of our tenants and borrowers would be adversely affected by increased liability claims and liability insurance costs;

*    We are exposed to the risk that we may not be fully indemnified by our lessees and borrowers against future litigation;

*    We are subject to risks of damage from catastrophic weather and other natural or man-made disasters and the physical effects of climate change;

*    We depend on the success of property development and construction activities, which may fail to achieve the operating results we expect;

*    We are exposed to the risk that the illiquidity of real estate investments could impede our ability to respond to adverse changes in the performance of our properties;

*    We are exposed to risks associated with our investments in unconsolidated entities, including our lack of sole decision-making authority and our reliance on the financial condition of other interests;

*    We are subject to additional risks related to healthcare operations associated with our investments in unconsolidated entities, which could have a material adverse effect on our results of operations;

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*    We are subject to risks associated with our joint venture investment with Life Care Services for Timber Ridge, an entrance fee CCRC, associated with Type A benefits offered to the residents of the joint venture's entrance fee community and related accounting requirements;

*We may be exposed to operational risks with respect to our Senior Housing Operating Portfolio (“SHOP”) structured communities;.

*    If our efforts to maintain the privacy and security of Company information are not successful, we could incur substantial costs and reputational damage, and could become subject to litigation and enforcement actions;

*    We are exposed to risks related to environmental laws and the costs associated with liabilities related to hazardous substances;

*    We depend on the success of our future acquisitions and investments;

*    We depend on our ability to reinvest cash in real estate investments in a timely manner and on acceptable terms;

*    Competition for acquisitions may result in increased prices for properties;

*    We are exposed to the risk that our assets may be subject to impairment charges;

*    We may need to refinance existing debt or incur additional debt in the future, which may not be available on terms acceptable to us;

*    We have covenants related to our indebtedness that impose certain operational limitations and a breach of those covenants could materially adversely affect our financial condition and results of operations;

*    Downgrades in our credit ratings could have a material adverse effect on our cost and availability of capital;

*    We depend on revenues derived mainly from fixed rate investments in real estate assets, while a portion of our debt used to finance those investments bears interest at variable rates;

*    We depend on the ability to continue to qualify for taxation as a REIT for U.S. federal income tax purposes;

*We depend on our key personnel whose continued service is not guaranteed and our ability to identify, recruit and retain skilled personnel;

*Our ownership of and relationship with any TRSs that we have formed or will form will be limited and a failure to comply with the limits would jeopardize our REIT status and may result in the application of a 100% excise tax;

*    Complying with REIT requirements may cause us to forego otherwise attractive acquisition opportunities or liquidate otherwise attractive investments, which could materially hinder our performance;

*    Legislative, regulatory, or administrative changes could adversely affect us or our security holders;

*    We have ownership limits in our charter with respect to our common stock and other classes of capital stock which may delay, defer or prevent a transaction or a change of control that might involve a premium price for our common stock or might otherwise be in the best interests of our stockholders; and

*    We are subject to certain provisions of Maryland law and our charter and bylaws that could hinder, delay or prevent a change in control transaction, even if the transaction involves a premium price for our common stock or our stockholders believe such transaction to be otherwise in their best interests.

See the notes to the annual audited consolidated financial statements in our most recent Annual Report on Form 10-K for the year ended December 31, 2021, “Business” and “Risk Factors” under Part I, Item 1 and Item 1A therein and “Risk Factors” under Part II, Item 1A of this Quarterly Report on Form 10-Q for a further discussion of these and of various governmental regulations and other operating factors relating to the healthcare industry and the risk factors inherent in them. You should carefully consider these risks before making any investment decisions in the Company. These risks and uncertainties are not the only ones facing the

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Company. There may be additional risks that we do not presently know of and or that we currently deem immaterial. If any of the risks actually occur, our business, financial condition, results of operations, or cash flows could be materially and adversely affected. In that case, the trading price of our shares of stock could decline and you may lose part or all of your investment. Given these risks and uncertainties, we can give no assurance that these forward-looking statements will, in fact, occur and, therefore, caution investors not to place undue reliance on them.

Executive Overview

National Health Investors, Inc., established in 1991 as a Maryland corporation, is a self-managed real estate investment trust (“REIT”) specializing in sale leaseback, joint venture, mortgage and mezzanine financing of need-driven and discretionary senior housing and medical facility investments. We operate through two reportable business segments: Real Estate Investments and SHOP. Our Real Estate Investments segment consists of real estate investments and mortgage and other notes receivables in independent living facilities, assisted living facilities, entrance-fee communities, senior living campuses, skilled nursing facilities and a specialty hospital. We fund our real estate investments primarily through: (1) operating cash flow, (2) debt offerings, including bank lines of credit and term debt, both unsecured and secured, and (3) the sale of equity securities. Our SHOP segment is comprised of the operations of 15 independent living facilities (“ILFs”) that provide residential living and other services for residents located throughout the United States that are operated on behalf of the Company by two independent managers pursuant to the terms of separate management agreements. The third-party managers, or related affiliates of the managers, own equity interests in the respective ventures.

Real Estate Investment Portfolio

As of June 30, 2022, we had investments in real estate and mortgage and other notes receivable involving 181 facilities located in 33 states. These investments involve 112 senior housing properties, 68 skilled nursing facilities and one hospital, excluding 13 properties classified as assets held for sale. These investments consisted of properties with an original cost of approximately $2.4 billion, rented under primarily triple-net leases to 25 lessees, and $209.5 million aggregate carrying value of mortgage and other notes receivable, excluding an allowance for expected credit losses of $5.2 million, due from ten borrowers.

We classify all of the properties in our Real Estate Investments portfolio as either senior housing or medical properties. Because our leases represent different underlying revenue sources and result in differing risk profiles, we further classify our senior housing communities as either need-driven (assisted living and memory care communities and senior living campuses) or discretionary (independent living and entrance-fee communities).

Senior Housing – Need-Driven includes assisted living and memory care communities (“ALF”) and senior living campuses (“SLC”) which primarily attract private payment for services from residents who require assistance with activities of daily living. Need-driven properties are subject to regulatory oversight.

Senior Housing – Discretionary includes ILF and entrance-fee communities (“EFC”) which primarily attract private payment for services from residents who are making the lifestyle choice of living in an age-restricted multi-family community that offers social programs, meals, housekeeping and in some cases access to healthcare services. Discretionary properties are subject to limited regulatory oversight. There is a correlation between demand for this type of community and the strength of the housing market.

Medical Facilities within our portfolio receive payment primarily from Medicare, Medicaid and health insurance. These properties include skilled nursing facilities (“SNF”) and a specialty hospital that attract patients who have a need for acute or complex medical attention, preventative medicine, or rehabilitation services. Medical properties are subject to state and federal regulatory oversight and, in the case of hospitals, Joint Commission accreditation.

Senior Housing Operating Portfolio Structure

Effective April 1, 2022, 15 senior housing ILFs previously part of the legacy Holiday Retirement (“Holiday”) properties were transferred from a triple-net lease to two separate ventures comprising our SHOP portfolio, which represents a new reportable segment. These ventures own the underlying independent living operations in which NHI has majority interests and are structured to comply with REIT requirements that utilize the TRS for activities that would otherwise be non-qualifying for REIT purposes. These properties are operated by two third-party property managers that manage our communities in exchange for the receipt of a management fee, and as such, we are not directly exposed to the credit risk of the property managers in the same manner or to the same extent as we are to our triple-net tenants. However, we rely on the property managers’ personnel, expertise, technical

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resources and information systems, proprietary information, good faith and judgment to manage our communities efficiently and effectively. We also rely on the property managers to set appropriate resident fees and otherwise operate our communities in

compliance with the terms of our management agreements and all applicable laws and regulations. As of June 30, 2022, our SHOP portfolio consisted of 15 ILFs with a combined 1,731 units located in eight states. The following tables summarizes our portfolio, excluding $2.6 million for our corporate office and a credit loss reserve of $5.2 million, as of and for the six months ended June 30, 2022 ($ in thousands):

Real Estate Investments and SHOP Portfolio
			Properties	Beds/Units	NOI		% Total		Investment
Real Estate Properties
	Senior Housing - Need-Driven
		Assisted Living	74	3,975	$	(2,890)	(2.5)	%	$	744,859
		Senior Living Campus	10	1,359	6,410		5.5	%	245,989
		Total Senior Housing - Need-Driven	84	5,334	3,520		3.0	%	990,848
	Senior Housing - Discretionary
		Independent Living	7	862	20,145		17.3	%	107,236
		Entrance-Fee Communities	11	2,707	30,847		26.4	%	745,944
		Total Senior Housing - Discretionary	18	3,569	50,992		43.7	%	853,180
		Total Senior Housing	102	8,903	54,512		46.7	%	1,844,028
	Medical Facilities
		Skilled Nursing Facilities	65	8,653	39,114		33.5	%	557,996
		Hospitals	1	64	2,046		1.8	%	40,250
		Total Medical Facilities	66	8717	41,160		35.3	%	598,246
	Current Year Disposals and Held for Sale				3,677
		Total Real Estate Properties	168	17,620	99,349		82.0	%	2,442,274
Mortgage and Other Notes Receivable
	Senior Housing - Need-Driven		9	620	3,541		3.1	%	87,358
	Senior Housing - Discretionary		1	248	1,185		1.0	%	32,700
	Skilled Nursing Facilities		3	180	192		0.2	%	4,183
	Other Notes Receivable		—	—	4,139		3.5	%	85,251
	Current Year Note Payoffs				5,482
		Total Mortgage and Other Notes Receivable	13	1,048	14,539		7.8	%	209,492
SHOP
	Independent Living		15	1,731	2,879				335,477
		Total	196	20,399	$	116,767			$	2,987,243

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Portfolio Summary			Properties	NOI		% Portfolio		Investment
	Real Estate Properties		168	$	99,349	85.0	%	$	2,442,274
	Mortgage and Other Notes Receivable		13	14,539		12.5	%	209,492
	SHOP		15	2,879		2.5	%	335,477
		Total Portfolio	196	$	116,767	100.0	%	$	2,987,243
Portfolio by Operator Type
	Public		55	$	29,874	28.5	%	$	411,740
	National Chain (Privately Owned)		1	21,366		20.4	%	134,892
	Regional		112	49,999		47.8	%	1,960,434
	Small		13	3,490		3.3	%	144,700
Current Year Disposals and Held for Sale				3,677
Current Year Note Payoffs				5,482
		Total Real Estate Investments Portfolio	181	113,888		100.0	%	2,651,766
SHOP			15	2,879				335,477
		Total Portfolio	196	$	116,767			$	2,987,243

The following table summarizes the geographic concentration of NOI of our portfolio for the six months ended June 30, 2022 and 2021, respectively ($ in thousands).

	Six Months Ended June 30,
Location	2022		2021
South Carolina	$	17,432	$	17,209
Texas	14,021		13,867
Florida	13,903		14,843
Washington	7,228		9,029
California	5,400		8,084
All others	58,783		87,846
NOI	$	116,767	$	150,878

For the six months ended June 30, 2022, operators of facilities in our Real Estate Investments portfolio who provided 3% or more and collectively 73% of our total revenues were (parent company, in alphabetical order): Chancellor Health Care; Discovery Senior Living; Health Services Management; Life Care Services; National HealthCare Corporation; Senior Living Communities; The Ensign Group; and Watermark Retirement Communities.

As of June 30, 2022, our average effective annualized NOI for the Real Estate Investments reportable segment was $9,147 per bed for SNFs $10,646 per unit for SLCs, $5,577 per unit for ALFs, excluding the non-cash write off of Bickford’s straight-line rents receivable and lease incentives discussed below in “Tenant Concentration”, $9,625 per unit for ILFs, $22,793 per unit for EFCs and $63,899 per bed for hospitals. As of June 30, 2022, our average effective annualized NOI per unit for the SHOP reportable segment was $6,652.

Substantially all of our revenues and sources of cash flows from operations are rents paid under operating leases for real estate, revenues under resident agreements and interest earned on mortgages and notes receivable. Theses revenues represent a primary source of liquidity to fund our distributions to stockholders and depend upon the performance of the operators. Operating difficulties experienced by our operators and managers could have a material adverse effect on their ability to meet their financial and other contractual obligations to us, as well as on our results of operations. We monitor operator performance through periodic reviews of operating results for each facility, covenant compliance and property inspections, among other activities.

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COVID-19 Pandemic

Since the World Health Organization declared coronavirus disease 2019 a pandemic on March 11, 2020, the continually evolving pandemic has resulted in a widespread health crisis adversely affecting governments, businesses, and financial markets. The COVID-19 pandemic and related health and safety measures continue to impact the operations of many of the Company’s tenants, operators and borrowers. The federal government has provided economic assistance and other forms of assistance which mitigated to some extent the negative financial impact of the pandemic for certain of our tenants and operators who are eligible.

Revenues from our SHOP ventures and the revenues for our borrowers and tenants of our leased properties are dependent on occupancy. With the reduction in COVID-19 cases and their severity, most of the protective measures put in place have been eliminated or reduced significantly, allowing a greater focus on new admissions and related marketing efforts. Future occupancy rates may be adversely affected by the COVID-19 pandemic, including the possibility of new COVID variants, increased resident move-outs, re-implementation of restrictions on new resident move-ins, and the possibility of potential residents foregoing or delaying a move.

Operating expenses of our SHOP ventures and those of our tenants of our leased properties may also be negatively impacted as a result of the additional enhanced health and safety precautions implemented in response to the COVID-19 pandemic. A decrease in occupancy or increase in costs could have a material adverse effect on our results of operations and on the ability of our tenants of our leased properties and borrowers to meet their financial and other contractual obligations to us, including the payments of rent, interest and principal.

When applicable, we have accounted for rent concessions as variable lease payments, recorded as rental income when received, in accordance with the FASB's Lease Modification Q&A. Reference Note 2 for further discussion. We will evaluate any rent deferral requests as a result of the COVID-19 pandemic on a tenant-by-tenant basis. The extent of future concessions we make as a result of the COVID-19 pandemic, which could have a material impact on our future operating results, cannot be reasonably or reliably projected by us at this time.

As of June 30, 2022, aggregate pandemic-related rent concessions granted to tenants that have been accounted for as variable lease payments totaled approximately $44.0 million, net of cumulative repayments of $0.3 million and excluding any interest accrued. Of this total, net rent deferrals that are contractually agreed to be repaid are $38.0 million.

We anticipate that some tenants may need additional rent deferrals to assist them with the ongoing impact of the pandemic. The timing and amount of any additional deferrals cannot yet be determined. Reference Note 3 to condensed consolidated financial statements for more discussion on the Bickford lease restructure and agreement to repay outstanding pandemic-related rent deferrals.

See “Item 1A. Risk Factors” in our most recent Annual Report on Form 10-K for further information regarding the risks presented by the COVID-19 pandemic.

Critical Accounting Policies and Estimates

There have been no significant changes to our critical accounting policies and estimates from the information provided in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” included in our Annual Report on Form 10-K for the year ended December 31, 2021 other than the following items resulting from our SHOP transition.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company, its wholly owned subsidiaries and subsidiaries in which we have a controlling interest. We also consolidate certain entities when control of such entities can be achieved through means other than voting rights if the Company is deemed to be the primary beneficiary of such entities. We make judgments about which entities are variable interest entities (“VIEs”) based on an assessment of whether (i) the total equity investment at risk is insufficient to finance that entity’s activities without additional subordinated financial support, (ii) as a group, the holders of the equity investment at risk do not have a controlling financial interest, or (iii) the equity investors have voting rights that are not proportional to their economic interests, and substantially all of the entity’s activities either involve, or are conducted on behalf of, an investor that has disproportionately few voting rights. Additionally, we make judgments with respect to our level of influence or control of an entity and whether we are the primary beneficiary of a VIE. These considerations include, but are not limited to, our power to direct the activities that most significantly impact the entity's economic performance, the obligation to absorb losses

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or the right to receive benefits of the VIE that could be significant to the entity, and our ability and the rights of other investors to participate in policy making decisions, replace the manager and/or liquidate the entity. Our ability to correctly determine the primary beneficiary of a VIE at inception of our involvement impacts the presentation of these entities in our consolidated financial statements.

Recent Events

•On April 1, 2022, we received $6.9 million in previously escrowed funds upon settlement and dismissal of the Welltower litigation related to the master lease for the legacy Holiday portfolio.

•Effective April 1, 2022 we formed our new SHOP segment by transferring 15 of the legacy Holiday independent living facilities into two separate ventures that own the underlying independent living operations.

•During second quarter of 2022, we converted Bickford to the cash basis of accounting for its four master lease agreements, and wrote off approximately $18.1 million of straight-line rents receivable and $7.1 million of lease incentives to rental income.

•In April 2022, we acquired a 53-unit assisted living facility located in Oshkosh, Wisconsin, for approximately $13.3 million in a purchase leaseback with Encore Senior Living.

•During the six months ended June 30, 2022, we disposed of one medical office building, one senior living community, nine assisted living facilities, one independent living facility and one hospital from our Real Estate Investments segment for net proceeds of $108.9 million.

•In the second quarter of 2022, we received repayment of a $111.3 million mortgage note receivable.

Since January 1, 2022, we have completed or announced the following real estate or note investments:

Encore Senior Living

On April 29, 2022, we acquired a 53-unit assisted living facility located in Oshkosh, Wisconsin, from Encore Senior Living. The acquisition price was $13.3 million and included the full payment of an outstanding construction note receivable to us of $9.1 million, including interest. We have agreed to pay up to $0.8 million in additional cash consideration pending the results of an ongoing property tax appeal. As of June 30, 2022, no amount of this consideration is expected to be paid. We added the facility to an existing master lease for a term of 15 years at an initial lease rate of 7.25%, with an annual escalator of 2.5%.

In January 2022, we entered into an agreement to fund a $28.5 million development loan with Encore Senior Living to construct a 108-unit assisted living and memory care community in Fitchburg, Wisconsin. The four-year loan agreement has an annual interest rate of 8.5% and two one-year extensions. We have a purchase option on the property once it has stabilized.

Asset Dispositions

During the six months ended June 30, 2022, we completed the following real estate dispositions as described below ($ in thousands):

Operator	Date	Properties	Asset Class	Net Proceeds		Net Real Estate Investment		Gain/(Impairment)2
Hospital Corporation of America	Q1 2022	1	MOB	$	4,868	$	1,904	$	2,964
Vitality Senior Living1	Q1 2022	1	SLC	8,302		8,285		17
Holiday1	Q2 2022	1	ILF	2,990		3,020		(30)
Chancellor Senior Living1	Q2 2022	2	ALF	7,305		7,357		(52)
Bickford1	Q2 2022	3	ALF	25,959		28,268		(2,309)
Comfort Care	Q2 2022	4	ALF	40,000		38,445		1,556
Helix Healthcare	Q2 2022	1	HOSP	19,500		10,535		8,965
				$	108,924	$	97,814	$	11,111

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1 Total impairment charges recognized on these properties were $41.7 million, of which $4.8 million were recognized in the six months ended June 30, 2022.

2 Impairments are included in “Loan and realty losses” in Condensed Consolidated Statements of Income for the three and six months ended June 30, 2022.

Reference Note 3 to the condensed consolidated financial statements for more detail on dispositions.

Notes Receivable Repayment

In the second quarter of 2022, we received repayment of a $111.3 million mortgage note receivable along with all accrued interest and a prepayment fee of approximately $1.1 million which is reflected in “Gain on note payoff” in the Condensed Consolidated Statements of Income for three and six months ended June 30, 2022. Interest income was $3.1 million and $5.2 million for the three and six months ended June 30, 2022, respectively, and $2.5 million and $5.7 million, for the three and six months ended June 30, 2021, respectively.

Third Quarter 2022 Disposal Activity

Discovery

In July 2022, we sold an assisted living facility located in Indiana for approximately $8.5 million in cash consideration, and incurred $0.3 million of transaction costs. The property was classified in assets held for sale on the Condensed Consolidated Balance Sheet as of June 30, 2022. Prior impairment charges recognized on the property totaled $8.4 million.

Assets Held for Sale and Impairment of Long-Lived Assets

At June 30, 2022, 13 properties in our Real Estate Investments reportable segment, with an aggregate net real estate balance of $56.7 million, were classified as assets held for sale on our Condensed Consolidated Balance Sheet as of June 30, 2022, including four properties that were transferred to assets held for sale during the second quarter of 2022. Rental income associated with the 13 properties was $1.0 million for both the three months and six months ended June 30, 2022 and $1.6 million and $3.4 million for the three months and six months ended June 30, 2021, respectively.

During the three and six months ended June 30, 2022, we recorded impairment charges of $4.1 million and $28.7 million respectively, related to our Real Estate Investments reportable segment. The impairment charges are included in “Loan and realty losses” in the Condensed Consolidated Statements of Income.

Other

Our leases for real estate properties are typically structured as “triple-net leases” on single-tenant properties having an initial leasehold term of 10 to 15 years with one or more five-year renewal options. As such, there may be reporting periods in which we experience few, if any, lease renewals or expirations. During the six months ended June 30, 2022, we did not have any significant renewing or expiring leases. Most of our existing leases contain annual escalators in rent payments. For financial statement purposes, rental income is recognized on a straight-line basis over the term of the lease.

Certain of our leases for real estate properties contain purchase options allowing tenants to acquire the leased properties. At June 30, 2022, we had tenant purchase options on 10 properties with an aggregate net investment of $90.6 million that will become exercisable between 2025 and 2028. Rental income from these properties with tenant purchase options was $5.3 million and $5.3 million for the six months ended June 30, 2022 and 2021, respectively.

We cannot reasonably estimate at this time the probability that any other purchase options will be exercised in the future. Consideration to be received from the exercise of any tenant purchase option is expected to exceed our net investment in the leased property or properties.

Tenant Concentration

As discussed in Note 3 to the condensed consolidated financial statements, we have three tenants (including their affiliated entities, which are the legal tenants), excluding $2.6 million for our corporate office, $335.5 million for SHOP, and a credit loss reserve of $5.2 million, from whom we individually derive at least 10% of our total revenues as follows ($ in thousands):

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	As of June 30, 2022					Revenues1
	Asset	Real		Notes		Six Months Ended June 30,
	Class	Estate2		Receivable		2022			2021
Senior Living Communities	EFC	$	573,631	$	46,364	$	25,549	19%	$	25,420	16%
National HealthCare Corporation (“NHC”)	SNF	171,530		—		18,597		14%	18,844		12%
Holiday3	ILF	—		—		16,680		13%	19,188		12%
Bickford Senior Living4	ALF	412,304		44,850		N/A		N/A	16,893		11%
All others, net	Various	1,370,360		118,277		53,214		41%	70,533		46%
Escrow funds received from tenants
for property operating expenses	Various	—		—		5,195		4%	4,337		3%
		$	2,527,825	$	209,491	$	119,235		155,215
Resident fees and services5						11,992		9%	—		—%
						$	131,227		$	155,215

1 Includes interest income on notes receivable and rental income from properties classified as held for sale.

2 Amounts include any properties classified as held for sale.

3 Revenues for the six months ended June 30, 2022 include an $8.8 million lease deposit recognized in the first quarter of 2022 and $6.9 million in escrow cash received in the second quarter of 2022. Reference Note 8 in the condensed consolidated financial statements for more discussion.

4 Below 10% for the six months ended June 30, 2022, as such revenues are included in All others, net.

5 There is no tenant concentration in resident fees and services because these agreements are with individual residents.

Straight-line rent of $0.2 million and $1.2 million and interest income of $1.8 million and $1.6 million was recognized from the Senior Living Communities lease for the six months ended June 30, 2022 and 2021, respectively. In addition to the lease deposit of $8.8 million and the $6.9 million in escrow cash received, straight-line rent of $1.0 million and $3.0 million was recognized from the Holiday lease for the six months ended June 30, 2022 and 2021, respectively. For NHC, rent escalations are based on a percentage increase in revenue over a base year and do not give rise to non-cash, straight-line rental income. Straight-line rent of $1.0 million and interest income of $1.6 million was recognized from the Bickford leases for the six months ended June 30, 2021, respectively. During second quarter of 2022, we converted Bickford to the cash basis of accounting for its four master lease agreements, and wrote off approximately $18.1 million of straight-line rents receivable to rental income and $7.1 million of lease incentives.

Holiday Transition

On April 1, 2022, we disposed of one property classified in assets held for sale as discussed above and transitioned one assisted living community in Florida to our existing real estate partnership with Discovery Senior Living. The transitioned property was added to the partnership’s in-place master lease. In addition, we terminated and transitioned the remaining 15 independent living facilities into two separate partnership ventures that own the underlying independent living operations and in which NHI has majority interests. Reference Note 5 to the condensed consolidated financial statements for more discussion of the ventures.

Bickford Senior Living

As of June 30, 2022, we leased 37 facilities, excluding one facility classified as assets held for sale, under four leases to Bickford. Revenues from Bickford reflect the impact of pandemic-related rent concessions of approximately $5.5 million for the six months ended June 30, 2022 and $6.5 million and $10.3 million for the three and six months ended June 30, 2021, respectively.

During the second quarter of 2022, we wrote off approximately $18.1 million of straight-line rents receivable and $7.1 million of lease incentives, that were included in “Other assets” on the Condensed Consolidated Balance Sheet, to rental income upon converting Bickford to the cash basis of accounting. These write offs were the result of a change in our evaluation of collectability of future rent payments due under its four master lease agreements based upon information we obtained from Bickford regarding its financial condition that raised substantial doubt as to its ability to continue as a going concern.

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In addition to the three properties sold that are discussed above, we completed various restructuring activities in the Bickford leased property portfolio during the first and second quarters of 2022. In March 2022, we transferred one assisted living facility located in Pennsylvania from the Bickford portfolio to a new operator that is leased pursuant to a ten-year triple net lease and wrote off approximately $0.7 million in a straight-line rent receivable, reducing rental income. In the second quarter of 2022, we restructured and amended, three of Bickford’s master lease agreements covering 26 properties and reached agreement on the repayment terms of the $26.0 million in outstanding pandemic-related deferrals. Significant terms of these agreements are as follows:

• Extends the maturity dates of the modified leases to 2033 and 2035. The remaining master lease agreement covering 11 properties with an original maturity in 2023 was previously extended to 2028.

• Reduces the combined rent for the portfolio to approximately $28.3 million per year through April 1, 2024, subject to a nominal annual increase, at which time the rent will be reset to a fair market value, not less than 8.0% of our initial gross investment.

• Requires monthly payments beginning October 1, 2022 through December 31, 2024 based on a percentage of Bickford’s monthly revenues exceeding an established threshold. The deferrals may be reduced by up to $6.0 million upon Bickford achieving certain performance targets and the sale or transition of certain properties to new operators.

The following table summarizes the average portfolio occupancy for Senior Living Communities, Bickford and SHOP for the periods indicated, excluding development properties in operation less than 24 months, notes receivable, and properties transitioned to new tenants or disposed.

	Properties	2Q21	3Q21	4Q21	1Q22	2Q22	June 2022	July 2022
Senior Living Communities	9	78.5%	80.4%	81.7%	81.7%	82.3%	82.1%	83.4%
Bickford1	38	78.9%	81.8%	83.5%	82.3%	82.7%	83.5%	84.5%
SHOP2	15	77.7%	79.8%	80.6%	77.7%	76.5%	76.2%	77.1%

1Prior periods restated to reflect the removal of one property that was transitioned to a new operator in March 2022.

2These properties were leased pursuant to a triple-net master lease prior to Q2 2022.

Tenant Monitoring

Our operators report to us the results of their operations on a periodic basis, which we in turn subject to further analysis as a means of monitoring potential concerns within our portfolio. We have identified EBITDARM (earnings before interest, taxes, depreciation, amortization, rent and management fees) as a primary performance measure for our tenants, based on results they have reported to us. We believe EBITDARM is useful in our most fundamental analyses, as it is a property-level measure of our operators’ success, by eliminating the effects of the operator’s method of acquiring the use of its assets (interest and rent), its non-cash expenses (depreciation and amortization), expenses that are dependent on its level of success (income taxes), and also excluding the effect of the operator’s payment of its management fees, as typically those fees are contractually subordinate to our lease payment. For operators of our entrance-fee communities, our calculation of EBITDARM includes other cash flow adjustments typical of the industry which may include, but are not limited to, net cash flows from entrance fees; amortization of deferred entrance fees; adjustments for tenant rent obligations, and management fee true-ups. The eliminations and adjustments reflect covenants in our leases and provide a comparable basis for assessing our various relationships.

We believe that EBITDARM is a useful way to analyze the cash potential of a group of assets. From EBITDARM we calculate a coverage ratio (EBITDARM/cash rent), measuring the ability of the operator to meet its monthly obligation. In addition to EBITDARM and the coverage ratio, we rely on a careful balance sheet analysis and other analytical procedures to help us identify potential areas of concern relative to our operators’ ability to generate sufficient liquidity to meet their obligations, including their obligation to continue to pay the amount due to us. Typical among our operators is a varying lag in reporting to us the results of their operations. Across our portfolio, however, our operators report their results, typically within either 30 or 45 days and at the latest, within 90 days of month’s end. For computational purposes, we exclude mortgages and other notes receivable, development and lease-up properties that have been in operation less than 24 months. For stabilized acquisitions in the portfolio less than 24 months and renewing leases with changes in scheduled rent, we include pro forma cash rent. Same-store portfolio coverage excludes properties that have transitioned operators in the past 24 months or assets subsequently sold except as noted.

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The results of our coverage ratio analysis are presented below on a trailing twelve-month basis, as of March 31, 2022 and 2021 (the most recent periods available).

NHI Real Estate Investments Portfolio
By asset type	SHO	SNF	MEDICAL NON-SNF	TOTAL
Properties	98	74	1	173
1Q21	1.17x	2.91x	2.52x	1.80x
1Q22	1.11x	2.67x	2.69x	1.68x
Market served	Need Driven	Need Driven excl. Bickford	Discretionary	Discretionary excl. SLC	Medical	Medical excl. NHC
Properties	84	46	14	5	75	33
1Q21	1.01x	0.91x	1.38x	1.53x	2.89x	2.16x
1Q22	0.89x	0.87x	1.39x	1.81x	2.67x	1.98x
Major tenants	NHC1	SLC2	Bickford2
Properties	42	10	38
1Q21	3.79x	1.30x	1.13x
1Q22	3.51x	1.22x	0.92x
NHI Real Estate Investments Same-Store Portfolio3
By asset type	SHO	SNF	MEDICAL NON-SNF	TOTAL
Properties	95	73	0	168
1Q21	1.18x	2.93x	N/A	1.81x
1Q22	1.13x	2.67x	N/A	1.68x
Market served	Need Driven	Need Driven excl. Bickford	Discretionary	Discretionary excl. SLC	Medical	Medical excl. NHC
Properties	82	44	13	4	73	31
1Q21	1.02x	0.92x	1.41x	1.68x	2.93x	2.14x
1Q22	0.90x	0.89x	1.43x	2.02x	2.67x	1.91x
Major tenants	NHC1	SLC2	Bickford2
Properties	42	10	38
1Q21	3.79x	1.30x	1.13x
1Q22	3.51x	1.22x	0.92x

1 NHC based on corporate-level Fixed Charge Coverage Ratio and includes 3 independent living facilities.

2 Excluding PPP funds received from the first quarter 2021, SLC and Bickford coverage was 1.11x and 0.97x, respectively. Bickford proforma coverage at the restructured lease amount would be 1.31x for first quarter 2022.

3 Excludes properties that have transitioned operators in past 24 months and includes properties classified as held for sale.

These results include any amounts received and recognized by the operators from the HHS CARES Act Provider Relief Fund and funds received under the Paycheck Protection Program if the loan has been forgiven. Our operators may not consistently account for any COVID-19 pandemic relief funds received which can impact comparability among operators and across periods.

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Fluctuations in portfolio coverage are a result of market and economic trends, local market competition, and regulatory factors as well as the operational success of our tenants. We use the results of individual leases to inform our decision making with respect to specific tenants, but trends described above by property type and operator bear analysis. Our senior housing portfolio shows a decline brought about primarily by a softening in occupancy and rising expenses, including wage pressures. Additionally, the COVID-19 pandemic in the U.S. has further softened coverage for these operators as well as across our portfolio. For many of the affected operators, as is typical of our portfolio in general, NHI has security deposits in place and/or corporate guarantees should actual cash rental shortfalls eventually materialize. In certain instances, our operators may increase their security deposits with us in an amount equal to the coverage shortfall, and, upon subsequent compliance with the required lease coverage ratio, the operator would then be entitled to a full refund. The sufficiency of credit enhancements (e.g. tenant deposits and guarantees) as a protection against economic downturn will be a focus as the economic effects of the COVID-19 pandemic continue. The metrics presented in the tables above give no effect to the presence of these security deposits. Because of the recent disposals of the Florida medical office building and the behavioral hospital, we combined the medical office building (“MOB”) and Hospital categories previously presented into the “Medical Non-SNF” category. Each MOB’s coverage is driven by the underlying performance of its on-campus hospital as the tenant or guarantor under the lease. As a result, it is typical for MOB operations to have large fluctuations in coverage resulting from hospital operations.

Real Estate and Mortgage Write-downs

In addition to the impact of the COVID-19 pandemic, our borrowers and tenants experience periods of significant financial pressures and difficulties similar to those encountered by other health care providers. Our condensed consolidated financial statements for the three and six months ended June 30, 2022 reflect impairment charges of our long-lived assets of approximately $4.1 million and $28.7 million as a result of the COVID-19 pandemic and other factors. We reduced the carrying value of any impaired properties to estimated fair values, or with respect to the properties classified as held for sale, to estimated fair value less costs to sell. We have no significant intangible assets currently recorded on our Condensed Consolidated Balance Sheet that would require assessment for impairment.

We have established a reserve for estimated credit losses of $5.2 million and a liability of $0.8 million for estimated credit losses on unfunded loan commitments as of June 30, 2022. We evaluate the reserves for estimated credit losses on a quarterly basis and make adjustments based on current circumstances as considered necessary.

We believe that the carrying amounts of our real estate properties are recoverable and that mortgage and other notes receivable are realizable and supported by the value of the underlying collateral. However, it is possible that future events could require us to make additional significant adjustments to these carrying amounts.

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Results of Operations

The significant items affecting revenues and expenses are described below ($ in thousands):

	Three Months Ended
	June 30,				Period Change
	2022		2021			%
Revenues:
Rental income
SHOs leased to Bickford Senior Living	$	(108)	$	4,326		NM
SHOs leased to Chancellor Health Care	—		2,111		(2,111)	(100.0)	%
Other new and existing leases	50,495		47,301		3,194	6.8	%
Current year disposals and assets held for sale	2,353		8,288		(5,935)	(71.6)	%
	52,740		62,026		(9,286)	(15.0)	%
Straight-line rent adjustments, new and existing leases	(14,915)		4,150		(19,065)	(459.4)	%
Escrow funds received from tenants for taxes and insurance	2,157		2,175		(18)	(0.8)	%
Total Rental Income	39,982		68,351		(28,369)	(41.5)	%
Resident fees and services	11,992		—		11,992	NM
Interest income and other
Montecito Medical Real Estate loan	490		16		474	NM
Encore Senior Living mortgage loan	604		199		405	NM
Bickford loans	1,306		1,019		287	28.2	%
Loan payoffs	3,219		2,719		500	18.4	%
Other new and existing mortgages and notes	2,207		1,966		241	12.3	%
Total Interest Income from Mortgage and Other Notes	7,826		5,919		1,907	32.2	%
Other income	99		60		39	65.0	%
Total Revenues	59,899		74,330		(14,431)	(19.4)	%
Expenses:
Depreciation
SHOs leased to Senior Living Communities	3,594		3,853		(259)	(6.7)	%
ALFs leased to Chancellor	684		885		(201)	(22.7)	%
SHOs leased to Discovery	1,364		1,086		278	25.6	%
Current year disposals and assets held for sale	232		3,082		(2,850)	(92.5)	%
Other new and existing assets	11,898		11,752		146	1.2	%
Total Depreciation	17,772		20,658		(2,886)	(14.0)	%
Interest	10,862		12,840		(1,978)	(15.4)	%
Senior housing operating expenses	9,113		—		9,113	NM
Loan and realty losses	4,094		1,221		2,873	NM
Taxes and insurance on leased properties	2,157		2,175		(18)	(0.8)	%
Other expenses	5,613		3,780		1,833	48.5	%
Total Expenses	49,611		40,674		8,937	22.0	%
Gains (losses) from equity method investment	273		(909)		1,182	NM
Gains on sales of real estate, net	10,521		6,484		4,037	62.3	%
Loss on operations transfer, net	(729)		—		(729)	NM
Gain on note payoff	1,113		—		1,113	NM
Net income	21,466		39,231		(17,765)	(45.3)	%
Less: net loss (income) attributable to noncontrolling interests	207		(48)		255	NM
Net income attributable to common stockholders	$	21,673	$	39,183		(44.7)	%
NM - not meaningful

All values are in US Dollars.

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Financial highlights of the three months ended June 30, 2022, compared to the same period of 2021 were as follows:

•Rental income recognized from our tenants decreased $28.4 million, or 41.5%, as a result of $5.7 million from properties disposed since April 1, 2021 offset by a reduction of rent concessions of approximately $7.0 million accounted for as either variable lease payments or as modified leases and by the recognition of the Holiday escrow deposit and new investments funded since June 2021. Included in rental income for the three months ended June 30, 2022 are write offs of $18.1 million of straight-line rents receivable and $7.1 million of lease incentives related to our Bickford master lease agreements. Reference Note 3 for further discussion.

•Funds received for reimbursement of property operating expenses totaled $2.2 million for the three months ended June 30, 2022, and are reflected as a component of rental income. These property operating expenses are recognized in operating expenses in the line item “Taxes and insurance on leased properties.” The decrease in the reimbursement income and corresponding property expenses is the result of decreased amounts received from tenants and expenses paid on their behalf.

•Resident fees and services and Senior housing operating expenses include revenues and expenses from our SHOP activities which commenced on April 1, 2022. See Note 5 to the condensed consolidated financial statements.

•Interest income from mortgage and other notes increased $1.9 million, or 32.2%, primarily due to new and existing loan fundings, net of paydowns on loans.

•Interest expense decreased $2.0 million, or 15.4%, as a result of the expiration of our interest rate swap agreements on December 31, 2021 and the repayments of indebtedness, including the payoffs of the convertible bond that matured in April 2021 and $250.0 million on term loans.

•Loan and realty losses increased $2.9 million primarily as a result of impairment charges on four real estate properties of $4.1 million in the second quarter of 2022 as described under the heading “Assets Held for Sale and Long-Lived Assets” in Note 3 to the condensed consolidated financial statements.

•Gains on sales of real estate, net were $10.5 million associated with the disposition of 11 properties in the second quarter of 2022 as described under the heading “Assets Dispositions” in Note 3 to the condensed consolidated financial statements. During the second quarter of 2021, we sold seven properties generating gains on sales of real estate totaling $6.5 million.

•Loss on operations transfer, net represents the net impact upon terminating the master lease with Well Churchill Leasehold Owner, LLC, a subsidiary of Welltower, Inc., on April 1, 2022. See Note 8 to the condensed consolidated financial statements.

•Gain on note payoff of $1.1 million reflects the prepayment fee from the early repayment of a $111.3 million mortgage note receivable in the second quarter of 2022. See Note 4 to the condensed consolidated financial statements.

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The significant items affecting revenues and expenses are described below (in thousands):

	Six Months Ended
	June 30,				Period Change
	2022		2021			%
Revenues:
Rental income
HOSP leased to Vizion Health	$	1,718	$	323		NM
ALFs leased to Bickford Senior Living	5,067		12,544		(7,477)	(59.6)	%
SHOs leased to Discovery Senior Living	3,033		4,756		(1,723)	(36.2)	%
ALFs leased to Chancellor Health Care	724		4,206		(3,482)	(82.8)	%
Other new and existing leases	96,944		92,911		4,033	4.3	%
Current year disposals and assets held for sale	5,696		15,633		(9,937)	(63.6)	%
	113,182		130,373		(17,191)	(13.2)	%
Straight-line rent adjustments, new and existing leases	(13,836)		8,391		(22,227)	(264.9)	%
Escrow funds received from tenants for taxes and insurance	5,195		4,337		858	19.8	%
Total Rental Income	104,541		143,101		(38,560)	(26.9)	%
Resident fees and services	11,992		—		11,992	NM
Interest income and other
Bickford loans	2,551		1,781		770	43.2	%
Vizion Health loan	846		161		685	NM
Montecito Medical Real Estate loan	876		16		860	NM
Loan payoffs	5,482		5,701		(219)	(3.8)	%
Other new and existing mortgages and notes	4,786		4,319		467	10.8	%
Total Interest Income from Mortgage and Other Notes	14,541		11,978		2,563	21.4	%
Other income	153		136		17	NM
Total Revenues	131,227		155,215		(23,988)	(15.5)	%
Expenses:
Depreciation
ALFs leased to Chancellor	1,218		1,772		(554)	(31.3)	%
HOSP leased to Vizion Health	521		87		434	NM
ALFs leased to Bickford	5,605		6,171		(566)	(9.2)	%
Current year disposals and assets held for sale	1,090		5,236		(4,146)	(79.2)	%
Other new and existing assets	27,610		28,198		(588)	(2.1)	%
Total Depreciation	36,044		41,464		(5,420)	(13.1)	%
Interest	21,060		25,813		(4,753)	(18.4)	%
Senior housing operating expenses	9,113		—		9,113	NM
Legal	2,166		90		2,076	NM
Loan and realty losses	28,622		1,171		27,451	NM
Taxes and insurance on leased properties	5,195		4,337		858	19.8	%
Other expenses	13,619		12,042		1,577	13.1	%
Total Expenses	115,819		84,917		30,902	36.4	%
Income before investment and other gains and losses	15,408		70,298		(54,890)	(78.1)	%
Gains (losses) from equity method investment	569		(1,718)		2,287	NM
Gains on sales of real estate, net	13,502		6,484		7,018	NM
Loss on operations transfer, net	(729)		—		(729)	NM
Gain on note payoff	1,113		—		1,113	NM
Loss on early retirement of debt	(151)		(451)		300	(66.5)	%
Net income	29,712		74,613		(44,901)	(60.2)	%
Less: net loss (income) attributable to noncontrolling interest	361		(100)		461	NM
Net income attributable to common stockholders	$	30,073	$	74,513		(59.6)	%
NM - not meaningful

All values are in US Dollars.

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Financial highlights of the six months ended June 30, 2022, compared to the same period in 2021 were as follows:

•Rental income recognized from our tenants decreased $38.6 million, or 26.9%, as a result of additional rent concessions of approximately $23.1 million accounted for as either variable lease payments or as modified leases since June 2021 and property dispositions of approximately $9.9 million, net of new investments funded since June 2021. Included in rental income for the six months ended June 30, 2022 are write offs of $18.8 million of straight-line rents receivable and $7.3 million of lease incentives related to our Bickford master lease agreements. Reference Note 3 for further discussion.

•Resident fees and services and Senior housing operating expenses include revenues and expenses from our SHOP activities which commenced on April 1, 2022. See Note 5 to the condensed consolidated financial statements.

•Interest income from mortgage and other notes increased $2.6 million, or 21.4%, primarily due to new and existing loan fundings, net of paydowns on loans.

•Interest expense decreased $4.8 million, or 18.4%, as a result of the convertible bond that matured in April 2021 and a net decrease in the borrowings on the unsecured credit facility.

•Legal cost increased $2.1 million primarily related to the Welltower litigation and transition activities for the legacy Holiday portfolio.

•Loan and realty losses increased $27.5 million primarily as a result of impairment charges on 11 real estate properties of $28.7 million in the six months ended June 30, 2022 as described under the heading “Assets Held for Sale and Long-Lived Assets” in Note 3 to the condensed consolidated financial statements.

•Gains on sales of real estate, net increased $7.0 million, for the six months ended June 30, 2022 as compared to the same period in the prior year. For the six months ended June 30, 2022, we recorded $13.5 million in gains from dispositions of real estate assets as described under “Asset Dispositions” in Note 3 to the condensed consolidated financial statements. For the six months ended June 30, 2021, we sold seven properties generating gains on sales of real estate totaling $6.5 million.

•Loss on operations transfer, net includes the amount of net working capital liabilities assumed upon terminating the master lease with Well Churchill Leasehold Owner, LLC, a subsidiary of Welltower, Inc., on April 1, 2022. See Note 8 to the condensed consolidated financial statements.

•Gain on note payoff of $1.1 million reflects the prepayment fee from the early repayment of a $111.3 million mortgage note receivable in the second quarter of 2022. See Note 4 to the condensed consolidated financial statements.

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Liquidity and Capital Resources

At June 30, 2022, we had $700.0 million available to draw on our revolving credit facility, $43.4 million in unrestricted cash and cash equivalents, and the potential to access the remaining $417.4 million through the issuance of common stock under the Company’s $500.0 million ATM equity program. In addition, the Company maintains an effective automatic shelf registration statement through which capital could be raised via the issuance of debt and or equity securities.

Sources and Uses of Funds

Our primary sources of cash include rent payments, receipts from residents, principal and interest payments on mortgage and other notes receivable, proceeds from the sales of real property, net proceeds from offerings of equity securities and borrowings from our loans and revolving credit facility. Our primary uses of cash include debt service payments (both principal and interest), new investments in real estate and notes receivable, dividend distributions to our stockholders and general corporate overhead.

These sources and uses of cash are reflected in our Condensed Consolidated Statements of Cash Flows as summarized below ($ in thousands):

	Six Months Ended June 30,				One Year Change
	2022		2021			%
Cash and cash equivalents and restricted cash, January 1	$	39,485	$	46,343		(14.8)	%
Net cash provided by operating activities	95,448		108,512		(13,064)	(12.0)	%
Net cash provided by investing activities	192,223		5,229		186,994	NM
Net cash used in financing activities	(281,096)		(125,359)		(155,737)	NM
Cash and cash equivalents and restricted cash, June 30	$	46,060	$	34,725		32.6	%

All values are in US Dollars.

Operating Activities – Net cash provided by operating activities for the six months ended June 30, 2022, which includes new investments completed, the creation of the SHOP ventures, lease payment collections arising from escalators on existing leases and interest payments on new real estate and note investments completed, was impacted by approximately $10.7 million in additional pandemic-related rent concessions granted for the six months ended June 30, 2022 and properties disposed since July 1, 2021.

Investing Activities – Net cash provided by investing activities for the six months ended June 30, 2022 was comprised primarily of approximately $32.1 million of investments in mortgage and other notes and renovations of real estate, offset by the proceeds from the sales of real estate of approximately $108.9 million and the collection of principal on mortgage and other notes receivable of approximately $114.9 million.

Financing Activities – Net cash used in financing activities for the six months ended June 30, 2022 differs from the same period in 2021 primarily as a result of an approximately $133.8 million decrease in net borrowings, inclusive of a $400.0 million senior note offering in the first quarter of 2021, an approximately $47.9 million decrease in proceeds from issuance of common shares and dividend payments which decreased approximately $17.8 million over the same period in 2021 and the repurchase of common stock of approximately $70.0 million.

Debt Obligations

As of June 30, 2022, we had outstanding debt of $1.1 billion. Reference Note 7 to the condensed consolidated financial statements for additional information about our outstanding indebtedness. Also, reference “Item 3. Quantitative and Qualitative Disclosures About Market Risk” for more details on our indebtedness and the impact of interest rate risk.

Unsecured Bank Credit Facility - On March 31, 2022, we entered into a new unsecured revolving credit agreement (the “2022 Credit Agreement”) providing us with a $700.0 million unsecured revolving credit facility, replacing our previous $550.0 million unsecured revolver. The 2022 Credit Agreement matures in March 2026, but may be extended at our option, subject to the satisfaction of certain conditions, for two additional six-month periods. Borrowings under the 2022 Credit Agreement bear interest, at our election, at either (i) Term Secured Overnight Financing Rate (“SOFR”) (plus a credit spread adjustment) plus a margin ranging from 0.725% to 1.40%, (ii) daily SOFR (plus a credit spread adjustment) plus a margin ranging from 0.725% to 1.40% or (iii) the base rate plus a margin ranging from 0.00% to 0.40%. In each election, the actual margin is determined according to our credit ratings. The base rate means, for any day, a fluctuating rate per annum equal to the highest of (i) the administrative agent’s prime rate, (ii) the federal funds rate on such day plus 0.50% or (iii) the adjusted Term SOFR for a one-

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month tenor in effect on such day plus 1.0%. We incurred $4.5 million of deferred costs in connection with the 2022 Credit Agreement.

Concurrently with the execution of the 2022 Credit Agreement, we amended our $300.0 million term loan (“2018 Term Loan”) maturing in September 2023. The amendment modifies the existing covenants to align with provisions in the 2022 Credit Agreement and to accrue interest on borrowings based on SOFR (plus a credit spread adjustment) that were previously based on LIBOR, with no change to the existing applicable interest rate margins. We may also elect for the 2018 Term Loan to accrue interest at a base rate plus the applicable margin. During the second quarter of 2022, we repaid $60.0 million of the 2018 Term Loan.

In March 2022, we repaid a $75.0 million term loan maturing August 2022 with proceeds from the revolving credit facility. The term loan bore interest at a rate of 30-day LIBOR plus 135 basis points (“bps”), based on our credit ratings. Upon repayment, we expensed approximately $0.2 million of unamortized loan costs associated with this loan which is included in “Loss on early retirement of debt” in our Condensed Consolidated Statement of Income for the six months ended June 30, 2022.

As of June 30, 2022, the revolver and term loan bore interest at a rate of one-month Term SOFR (plus a 10 bps spread adjustment) plus 105 bps and 125 bps, based on our debt ratings, or 2.836% and 3.04%, respectively. The facility fee was 25 bps per annum. At July 31, 2022, no amount was outstanding under the revolving facility.

The current SOFR spreads and facility fee for our unsecured revolving credit facility and $240.0 million term loan reflect our ratings compliance based on the applicable margin for SOFR loans at a debt rating of BBB-/Baa3 in the Interest Rate Schedule provided below in summary format:

Interest Rate Schedule

	SOFR Spread
Debt Ratings	Revolver	Revolver Facility Fee	$300m Term Loan
A+/A1	0.725%	0.125%	0.75%
A/A2	0.725%	0.125%	0.80%
A-/A3	0.725%	0.125%	0.85%
BBB+/Baa1	0.775%	0.150%	0.90%
BBB/Baa2	0.850%	0.200%	1.00%
BBB-/Baa3	1.050%	0.250%	1.25%
Lower than BBB-/Baa3	1.400%	0.300%	1.65%

Beyond the applicable ratios detailed above, if our credit rating from at least two credit rating agencies is downgraded below “BBB-/Baa3”, the debt under our credit agreements will be subject to defined increases in interest rates and fees.

The 2022 Credit Agreement requires that we calculate specified financial statement metrics and meet or exceed a variety of financial ratios, which are usual and customary in nature. These ratios are calculated quarterly and as of June 30, 2022, were within required limits. The calculation of our leverage ratio involves intermediate determinations of our “total indebtedness” and of our “total asset value,” as defined in the 2022 Credit Agreement.

Senior Notes Offering - In January 2021, we issued $400.0 million aggregate principal amount of 3.00% senior notes that mature on February 1, 2031 and pay interest semi-annually (the “2031 Senior Notes”). We remain in compliance with all debt covenants under the unsecured bank credit facility, 2031 Senior Notes and other debt agreements.

Debt Maturities - Reference Note 7 to the condensed consolidated financial statements for more information on our debt maturities.

Credit Ratings - Moody's Investors Services (“Moody's”) announced on November 5, 2020 that it assigned an investment grade issuer credit rating and a senior unsecured debt rating of ‘Baa3’ with a “Negative” outlook to the Company. Moody’s released a credit opinion on October 31, 2021 which affirmed the rating and outlook for the Company. Both Fitch and S&P Global announced in November 2019 a public issuer credit rating of BBB- with an outlook of “Stable.” Fitch confirmed its rating most recently on December 9, 2021 and S&P Global confirmed its rating on November 16, 2021. Our unsecured private placement term loan agreements include a rate increase provision that is effective if any rating agency lowers our credit rating

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below investment grade and our compliance leverage increases to 50% or more. Any reduction in outlook or downgrade in our credit ratings from the rating agencies could negatively impact our costs of borrowings.

Debt Metrics - We believe that our fixed charge coverage ratio, which is the ratio of Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization, including amounts in discontinued operations, excluding real estate asset impairments and gains on dispositions) to fixed charges (interest expense at contractual rates net of capitalized interest and principal payments on debt), and the ratio of consolidated net debt to Adjusted EBITDA are meaningful measures of our ability to service our debt. We use these two measures as a useful basis to compare the strength of our balance sheet with those in our peer group. We also believe our balance sheet gives us a competitive advantage when accessing debt markets.

We calculate our fixed charge coverage ratio as approximately 6.6x for the six months ended June 30, 2022 (see our discussion under the heading Adjusted EBITDA including a reconciliation to our net income). Giving effect to significant acquisitions, financings, disposals and payoffs on an annualized basis, our consolidated net debt to Annualized Adjusted EBITDA ratio is approximately 4.0x for the three months ended June 30, 2022 ($ in thousands):

Consolidated Total Debt	$	1,104,495
Less: cash and cash equivalents	(43,435)
Consolidated Net Debt	$	1,061,060
Adjusted EBITDA	$	69,435
Annualizing Adjustment	208,305
Annualized impact of recent investments, disposals and payoffs	(11,792)
	$	265,948
Consolidated Net Debt to Annualized Adjusted EBITDA	4.0x

Supplemental Guarantor Financial Information

The Company’s $940.0 million bank credit facility, unsecured private placement term loans due January 2023 through January 2027 with an aggregate principal amount of $400.0 million, and 2031 Senior Notes are fully and unconditionally guaranteed on a senior unsecured basis by each of the Company’s subsidiaries, except for certain excluded subsidiaries (“Guarantors”). The Guarantors are either owned, controlled or are affiliates of the Company.

The following tables present summarized financial information for the Company and the Guarantors, on a combined basis after eliminating (i) intercompany transactions and balances among the guarantor entities and (ii) equity in earnings from, and any investments in, any subsidiary that is a non-guarantor ($ in thousands):

	As of
	June 30, 2022
Real estate properties, net	$	1,854,503
Other assets, net	366,508
Note receivable due from non-guarantor subsidiary	81,383
Totals assets	$	2,302,394
Debt	$	1,028,103
Other liabilities	67,099
Total liabilities	$	1,095,202
Redeemable noncontrolling interests	$	11,487
Noncontrolling interest	$	111

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	Six Months Ended
	June 30, 2022
Revenues	$	114,161
Interest income on note due from non-guarantor subsidiary	2,310
Expenses	106,103
Gains from equity method investee	569
Gains on sales of real estate	13,502
Loss on early retirement of debt	(151)
Other income	—
Net income	$	24,287
Net income attributable to NHI and the subsidiary guarantors	$	25,031

Equity

At June 30, 2022 we had 44,655,156 shares of common stock outstanding with a market value of $2.7 billion. Equity on our Condensed Consolidated Balance Sheet totaled $1.4 billion.

Share Repurchase Plan - On April 15, 2022, the Company’s Board of Directors approved a stock repurchase plan for up to $240.0 million of the Company’s common stock (the “2022 Repurchase Plan”). The plan is effective for a period of one year. Shares may be repurchased from time-to-time in open market transactions at prevailing market prices, in privately negotiated transactions or by other means in accordance with the terms of Rule 10b-18 of the Securities Exchange Act of 1934 as amended and shall be made in accordance with all applicable laws and regulations in effect. The timing and number of shares repurchased will depend on a variety of factors, including price, general market and economic conditions, alternative investment opportunities and other corporate considerations. The stock repurchase plan does not obligate the Company to repurchase any specific number of shares and may be suspended or discontinued at any time.

During the three months ended June 30, 2022, we repurchased through the open market transactions 1,196,175 shares of common stock for an average price of $58.52 per share, including commissions. All shares received were constructively retired upon receipt, and the excess of the purchase price over the par value per share was recorded to “Retained Earnings” in the Condensed Consolidated Balance Sheet.

As of June 30, 2022, we had approximately $170.4 million remaining under the 2022 Repurchase Plan.

Dividends - Our Board of Directors approves a regular quarterly dividend which is reflective of expected taxable income on a recurring basis. Taxable income is determined in accordance with the Internal Revenue Code and differs from net income for financial statements purposes determined in accordance with U.S. generally accepted accounting principles. Our Board of Directors has historically directed the Company toward maintaining a strong balance sheet. Therefore, we consider the competing interests of short and long-term debt (interest rates, maturities and other terms) versus the higher cost of new equity, and we accept some level of risk associated with leveraging our investments. We intend to continue to make new investments that meet our underwriting criteria and where the spreads over our cost of equity and debt capital on a leverage neutral basis will generate sufficient returns to our stockholders. We do not expect to utilize borrowings to satisfy the payment of dividends and project that cash flows from operations for the full year 2022 will be adequate to fund dividends at the current rate.

We intend to comply with REIT dividend requirements that we distribute at least 90% of our annual taxable income for the year ending December 31, 2022 and thereafter. Historically, the Company has distributed at least 100% of annual taxable income. Dividends declared for the fourth quarter of each fiscal year are paid by the end of the following January and are, with some exceptions, treated for tax purposes as having been paid in the fiscal year just ended as provided in IRS Code Sec. 857(b)(8).

The following table summarizes dividends declared by the Board of Directors or paid during the six months ended June 30, 2022 and 2021:

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Six Months Ended June 30, 2022
Date of Declaration	Date of Record	Date Paid/Payable	Quarterly Dividend
November 5, 2021	December 31, 2021	January 31, 2022	$0.90
February 16, 2022	March 31, 2022	May 6, 2022	$0.90
May 6, 2022	June 30, 2022	August 5, 2022	$0.90
Six Months Ended June 30, 2021
---	---	---	---
Date of Declaration	Date of Record	Date Paid/Payable	Quarterly Dividend
December 15, 2020	December 31, 2020	January 29, 2021	$1.1025
March 12, 2021	March 31, 2021	May 7, 2021	$1.1025
June 3, 2021	June 30, 2021	August 6, 2021	$0.90

On August 5, 2022, the Board of Directors declared a $0.90 per share dividend to common stockholders of record on September 30, 2022, payable on November 4, 2022.

Shelf Registration Statement - We have an automatic shelf registration statement on file with the Securities and Exchange Commission that allows the Company to offer and sell to the public an unspecified amount of common stock, preferred stock, debt securities, warrants and or units at prices and on terms to be announced when and if such securities are offered. The details of any future offerings, along with the use of proceeds from any securities offered, will be described in a prospectus supplement or other offering materials, at the time of offering. Our shelf registration statement expires March 2023.

Material Cash Requirements

We had approximately $51.0 million in corporate cash and cash equivalents on hand and $700.0 million in availability under our unsecured revolving credit facility as of July 31, 2022. Our expected material cash requirements for the twelve months ended June 30, 2023 and thereafter consist of long-term debt maturities; interest on long-term debt; and contractually obligated expenditures. We expect to meet our short-term liquidity needs largely through cash generated from operations and borrowings under our revolving credit facility, refer to Unsecured Bank Credit Facility above, and sales from real estate investments, although we may choose to seek alternative sources of liquidity. Should we have additional liquidity needs, we believe that we could access long-term financing in the debt and equity capital markets.

Contractual Obligations and Contingent Liabilities

As of June 30, 2022, our contractual payment obligations were as follows ($ in thousands):

	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years
Debt, including interest1	$	1,190,993	$	165,265	$	454,071	$	174,417	$	397,240
Development commitments	10,051		10,051		—		—		—
Loan commitments	69,190		39,445		29,745		—		—
	$	1,270,234	$	214,761	$	483,816	$	174,417	$	397,240

1 Interest is calculated based on the weighted average interest rate of outstanding debt balances as of June 30, 2022. The calculation also includes a facility fee of 0.20%.

Commitments and Contingencies

The following tables summarize information as of June 30, 2022 related to our outstanding commitments and contingencies which are more fully described in the notes to the condensed consolidated financial statements ($ in thousands):

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	Asset Class	Type	Total		Funded		Remaining
Loan Commitments:
Bickford Senior Living	SHO	Construction	$	14,200	$	(12,244)	$	1,956
Encore Senior Living	SHO	Construction	50,700		(26,324)		24,376
Senior Living Communities	SHO	Revolving Credit	20,000		(13,664)		6,336
Timber Ridge OpCo	SHO	Working Capital	5,000		—		5,000
Watermark Retirement	SHO	Working Capital	5,000		(3,223)		1,777
Montecito Medical Real Estate	MOB	Mezzanine Loan	50,000		(20,255)		29,745
			$	144,900	$	(75,710)	$	69,190

See Note 8 to our condensed consolidated financial statements for further details of our loan commitments. As provided above, loans funded do not include the effects of discounts or commitment fees.

The credit loss liability for unfunded loan commitments was $0.8 million as of June 30, 2022 and is estimated using the same methodology as for our funded mortgage and other notes receivable based on the estimated amount that we expect to fund.

	Asset Class	Type	Total		Funded		Remaining
Development Commitments:
Woodland Village	SHO	Renovation	$	7,515	$	(7,425)	$	90
Senior Living Communities	SHO	Renovation	9,930		(9,930)		—
Watermark Retirement	SHO	Renovation	6,500		(4,436)		2,064
Navion	SHO	Renovation	3,650		(960)		2,690
Other	SHO	Various	4,950		(1,243)		3,707
SHOP	ILF	Renovation	1,500		—		1,500
			$	34,045	$	(23,994)	$	10,051

As part of the formation of the SHOP ventures and reflected in the table above, we agreed to fund improvements on one of the ILFs up to $1.5 million, of which no amount had been funded as of June 30, 2022.

In addition to the commitments listed above, we have agreed to pay up to $0.8 million in additional cash consideration pending the results of an ongoing property tax appeal related to a property acquired in the second quarter of 2022. As of June 30, 2022, no amount of this consideration is expected to be paid as discussed in Note 3 in the condensed consolidated financial statements. Discovery PropCo has committed to Discovery to fund up to $2.0 million toward the purchase of condominium units located at one of the facilities, of which $1.0 million has been funded as of June 30, 2022.

	Asset Class	Total		Funded		Remaining
Contingencies (Lease Inducements):
Timber Ridge OpCo	SHO	$	10,000	$	—	$	10,000
Wingate Healthcare	SHO	5,000		—		5,000
Navion Senior Solutions	SHO	4,850		(1,500)		3,350
Discovery Senior Living	SHO	4,000		—		4,000
Ignite Medical Resorts	SNF	2,000		—		2,000
Sante Partners	SHO	2,000		—		2,000
IntegraCare	SHO	750		—		750
		$	28,600	$	(1,500)	$	27,100

We adjust rental income for the amortization of lease inducements paid to our tenants. Amortization of lease inducement payments against revenues was $7.2 million and $7.4 million for the three and six months ended June 30, 2022, respectively, which includes the write off of $7.1 million of lease incentives related to Bickford as discussed in more detail in Note 3 to the condensed consolidated financial statements. Amortization of lease inducement payments against revenues was $0.3 million and $0.5 million for the three and six months ended June 30, 2021, respectively.

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Litigation

Our facilities are subject to claims and suits in the ordinary course of business. Our lessees and borrowers have indemnified, and are obligated to continue to indemnify us, against all liabilities arising from the operation of the facilities, and are further obligated to indemnify us against environmental or title problems affecting the real estate underlying such facilities. In addition, such claims may include, among other things professional liability and general liability claims, as well as regulatory proceedings relate to our SHOP segment where we are the holder of the applicable healthcare license. While there may be lawsuits pending against us and certain of the owners and/or lessees of the facilities, management believes that the ultimate resolution of all such pending proceedings will have no direct material adverse effect on our financial condition, results of operations or cash flows.

Welltower, Inc.

In June 2021, Welltower announced that it would acquire certain assets from the senior housing portfolio of Holiday, a privately held senior living management company, that included 17 senior living facilities governed by a master lease originally executed between a Holiday subsidiary and NHI in 2013. We received no rent due under the master lease from the tenant for these facilities since this change in tenant ownership occurred in late July 2021.

On December 20, 2021, NHI and its subsidiaries NHI-REIT of Next House, LLC, Myrtle Beach Retirement Resident LLC, and Voorhees Retirement Residence LLC filed suit against Welltower, Inc., Welltower Victory II TRS LLC, and Well Churchill Leasehold Owner LLC (collectively the "Defendants") in the Delaware Court of Chancery (Case No. 2021-1097-MTZ). In the litigation, we contended that the Defendants repeatedly failed to honor their legal obligations to NHI. In particular, we asserted that the Defendants acquired assets from a third party, Holiday, that included leases to NHI senior living facilities and fraudulently induced NHI to consent to the assignment of the leases, and then immediately failed to pay rent or provide a promised security agreement that was intended to secure against their default, all as part of an effort to pressure NHI to agree to new conditions outside the assignment agreement or force a sale of the properties to the Defendants. The lawsuit further asserted that the Defendants owed unpaid contractual rent.

In connection with a memorandum of understanding between the parties dated March 4, 2022, NHI applied the remaining approximately $8.8 million lease deposit to past due rents in the first quarter of 2022. Also, as provided by the memorandum of understanding, Welltower transferred approximately $6.9 million to an escrow account to be released upon satisfactory transition of the facility operations and mutual dismissal of the lawsuit. NHI and certain of its subsidiaries entered into a settlement agreement dated March 31, 2022 with Defendants formalizing the terms to settle the lawsuit.

NHI and certain of its subsidiaries terminated the master lease with Well Churchill Leasehold Owner, LLC as successor in interest to NHI Master Tenant LLC, effective April 1, 2022, upon completion of the transition of the properties subject to the master lease, as follows: (i) one property was sold to a third party, (ii) one property was transitioned to an existing operator relationship and leased pursuant to an existing master lease, and (iii) the remaining 15 properties were transitioned into two new SHOP partnership ventures. See Note 5 to the condensed consolidated financial statements for more information on these new ventures.

Also effective April 1, 2022, the parties agreed to dismiss the lawsuit and mutually release all claims related to or arising out of the litigation and the $6.9 million in escrowed funds were released to NHI and recognized in rental income during the three months ended June 30, 2022. We recognized approximately $0.7 million as a “Loss on operations transfer, net” on the Condensed Consolidated Statements of Income for the three and six months ended June 30, 2022. This net loss represents the amount of net working capital liabilities comprised primarily of facility furniture, fixtures and equipment, net resident accounts receivable, accounts payable and other accrued liabilities assumed at transition.

FFO & FAD

These supplemental performance measures may not be comparable to similarly titled measures used by other REITs. Consequently, our Funds From Operations (“FFO”), Normalized FFO and Normalized Funds Available for Distribution (“FAD”) 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 these measures, caution should be exercised when comparing our FFO, Normalized FFO and Normalized FAD to that of other REITs. These measures do not represent cash generated from operating activities in accordance with generally accepted accounting principles (“GAAP”) (these measures do not include changes in operating assets and liabilities) and therefore should not be considered an alternative to net earnings as an indication of performance, or to net cash flow from operating

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activities as determined by GAAP as a measure of liquidity, and are not necessarily indicative of cash available to fund cash needs.

Funds From Operations - FFO

Our FFO per diluted common share for the six months ended June 30, 2022 decreased $0.63 or 26.4% over the same period in 2021 due primarily to the write offs of Bickford’s straight-line rents receivable and unamortized lease incentives totaling approximately $25.4 million, the effects of the COVID-19 pandemic and increased legal fees of $1.7 million for the Welltower litigation and transition activities for the legacy Holiday portfolio, partially offset by the recognition of the Holiday lease deposit of $8.8 million and escrow of $6.9 million in rental income, reduced interest expense and new investments completed since June 2021. FFO, as defined by the National Association of Real Estate Investment Trusts (“NAREIT”) and applied by us, is net income (computed in accordance with GAAP), excluding gains (or losses) from sales of real estate property, impairments of real estate, and real estate depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures, if any. The Company’s computation of FFO may not be comparable to FFO reported by other REITs that do not define the term in accordance with the current NAREIT definition or have a different interpretation of the current NAREIT definition from that of the Company; therefore, caution should be exercised when comparing our Company’s FFO to that of other REITs. Diluted FFO assumes the exercise of stock options and other potentially dilutive securities.

Our Normalized FFO per diluted common share for the six months ended June 30, 2022 decreased $0.03 or 1.3% over the same period in the same period in 2021. 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 non-real estate assets, gains and losses attributable to the acquisition and disposition of non-real estate assets and liabilities, and recoveries of previous write-downs.

FFO and Normalized FFO are important supplemental measures of operating performance for a REIT. Because the historical cost accounting convention used for real estate assets requires 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 REIT 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 REIT industry to address this issue.

Funds Available for Distribution - FAD

Our Normalized FAD for the six months ended June 30, 2022 decreased $3.4 million or 3.06% over the same period in 2021 due primarily to the effects of the COVID-19 pandemic and increased legal fees of $1.7 million for the Welltower litigation and transition activities for the legacy Holiday portfolio, partially offset by the recognition of the Holiday lease deposit of $8.8 million and escrow of $6.9 million in rental income, reduced interest expense and new investments completed since June 2021. In addition to the adjustments included in the calculation of Normalized FFO, Normalized FAD excludes the impact of any straight-line lease revenue, amortization of the original issue discount on our senior unsecured notes, amortization of debt issuance costs, non-cash share based compensation, as well as certain non-cash items related to our equity method investment.

Normalized FAD is an important supplemental performance measure for a REIT. GAAP requires a lessor to recognize contractual lease payments into income on a straight-line basis over the expected term of the lease. This straight-line adjustment has the effect of reporting lease income that is significantly more or less than the contractual cash flows received pursuant to the terms of the lease agreement. GAAP also requires any discount or premium related to indebtedness and debt issuance costs to be amortized as non-cash adjustments to earnings. We also adjust Normalized FAD for the net change in our allowance for expected credit losses, non-cash share based compensation as well as certain non-cash items related to our equity method investments such as straight-line lease expense and amortization of purchase accounting adjustments. Normalized FAD is an important supplemental measure of liquidity for a REIT as a useful indicator of the ability to distribute dividends to stockholders.

The following table reconciles net income, the most directly comparable GAAP metric, to FFO, Normalized FFO and Normalized FAD and is presented for both basic and diluted weighted average common shares ($ in thousands, except share and per share amounts):

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	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
Net income attributable to common stockholders	$	21,673	$	39,183	$	30,073	$	74,513
Elimination of certain non-cash items in net income:
Depreciation	17,772		20,658		36,044		41,464
Depreciation related to noncontrolling interests	(388)		(210)		(598)		(420)
Gains on sales of real estate, net	(10,521)		(6,484)		(13,502)		(6,484)
Impairments of real estate	4,141		—		28,745		—
NAREIT FFO attributable to common stockholders	32,677		53,147		80,762		109,073
Loss on operations transfer, net	729		—		729		—
Portfolio transition costs, net of noncontrolling interests	329		—		329		—
Gain on note payoff	(1,113)		—		(1,113)		—
Loss on early retirement of debt	—		—		151		451
Non-cash write-offs of straight-line receivable and lease incentives	25,208		—		27,681		—
Normalized FFO attributable to common stockholders	57,830		53,147		108,539		109,524
Straight-line lease revenue, net	(3,185)		(4,150)		(6,543)		(8,391)
Straight-line lease revenue, net, related to noncontrolling interests	35		21		57		45
Amortization of lease incentives	58		262		117		522
Amortization of original issue discount	80		80		161		134
Amortization of debt issuance costs	529		588		1,091		1,294
Amortization related to equity method investment	(169)		520		(407)		1,056
Straight-line lease expense related to equity method investment	(2)		21		(10)		45
Note receivable credit loss expense	(47)		1,221		(123)		1,171
Non-cash share-based compensation	1,428		992		6,511		6,438
Equity method investment capital expenditures	(105)		(105)		(210)		(210)
Equity method investment non-refundable fees received	230		242		467		761
Equity method investment distributions	(273)		—		(569)		—
Senior housing portfolio recurring capital expenditures	(130)		—		(130)		—
Normalized FAD attributable to common stockholders	$	56,279	$	52,839	$	108,951	$	112,389
BASIC
Weighted average common shares outstanding	45,708,238		45,850,599		45,779,433		45,577,843
NAREIT FFO attributable to common stockholders per share	$	0.71	$	1.16	$	1.76	$	2.39
Normalized FFO attributable to common stockholders per share	$	1.27	$	1.16	$	2.37	$	2.40
DILUTED
Weighted average common shares outstanding	45,718,538		45,858,074		45,784,771		45,607,924
NAREIT FFO attributable to common stockholders per share	$	0.71	$	1.16	$	1.76	$	2.39
Normalized FFO attributable to common stockholders per share	$	1.26	$	1.16	$	2.37	$	2.40

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Adjusted EBITDA

We consider Adjusted EBITDA to be an important supplemental measure because it provides information which we use to evaluate our performance and serves as an indication of our ability to service debt. We define Adjusted EBITDA as consolidated earnings before interest, taxes, depreciation and amortization, excluding real estate asset impairments and gains on dispositions and certain items which, due to their infrequent or unpredictable nature, may create some difficulty in comparing Adjusted EBITDA for the current period to similar prior periods. These items include, but are not limited to, impairment of non-real estate assets, gains and losses attributable to the acquisition and disposition of assets and liabilities, and recoveries of previous write-downs. Adjusted EBITDA also includes our proportionate share of unconsolidated equity method investments presented on a similar basis. Since others may not use our definition of Adjusted EBITDA, caution should be exercised when comparing our Adjusted EBITDA to that of other companies.

The following table reconciles net income, the most directly comparable GAAP metric, to Adjusted EBITDA ($ in thousands):

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
Net income	$	21,466	$	39,231	$	29,712	$	74,613
Interest expense	10,862		12,840		21,060		25,813
Franchise, excise and other taxes	225		232		469		465
Depreciation	17,772		20,658		36,044		41,464
NHI’s share of EBITDA adjustments for unconsolidated entities	713		798		1,287		1,486
Note receivable credit loss expense	(47)		1,221		(123)		1,171
Gains on sales of real estate, net	(10,521)		(6,484)		(13,502)		(6,484)
Loss on operations transfer, net	729		—		729		—
Gain on note payoff	(1,113)		—		(1,113)		—
Loss on early retirement of debt	—		—		151		451
Impairment of real estate	4,141		—		28,745		—
Non-cash write-off of straight-line rents receivable and lease amortization	25,208		—		27,681		—
Adjusted EBITDA	$	69,435	$	68,496	$	131,140	$	138,979
Interest expense at contractual rates	$	10,262	$	10,368	$	19,819	$	20,821
Interest rate swap payments, net	—		1,820		—		3,598
Principal payments	193		91		193		185
Fixed Charges	$	10,455	$	12,279	$	20,012	$	24,604
Fixed Charge Coverage	6.6x		5.6x		6.6x		5.6x

For all periods presented, EBITDA reflects GAAP interest expense, which excludes amounts capitalized during the period.

Net Operating Income

Net operating income (“NOI”) is a U.S. non-GAAP supplemental financial measure used to evaluate the operating performance of real estate. We define NOI as total revenues, less tenant reimbursements and property operating expenses. We believe NOI provides investors relevant and useful information as it measures the operating performance of our properties at the property level on an unleveraged basis. We use NOI to make decisions about resource allocations and to assess the property level performance of our properties.

The following table reconciles NOI to net income, the most directly comparable GAAP metric ($ in thousands):

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	Three Months Ended				Six Months Ended
	June 30				June 30
NOI Reconciliations:	2022		2021		2022		2021
Net income	$	21,466	$	39,231	$	29,712	$	74,613
(Gains) losses from equity method investment	(273)		909		(569)		1,718
Loss on early retirement of debt	—		—		151		451
Gain on note payoff	(1,113)		—		(1,113)		—
Loss on operations transfer, net	729		—		729		—
Gains on sales of real estate, net	(10,521)		(6,484)		(13,502)		(6,484)
Loan and realty losses	4,094		1,221		28,622		1,171
General and administrative	5,049		3,588		13,150		11,577
Franchise, excise and other taxes	225		232		469		465
Legal	339		(40)		2,166		90
Interest	10,862		12,840		21,060		25,813
Depreciation	17,772		20,658		36,044		41,464
Consolidated net operating income (NOI)	$	48,629	$	72,155	$	116,919	$	150,878
NOI by segment:
Real Estate Investments	$	45,650	$	72,094	$	113,888	$	150,740
SHOP	2,879		—		2,879		—
Non-Segment/Corporate	100		61		152		138
Total NOI	$	48,629	$	72,155	$	116,919	$	150,878

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

Interest Rate Risk

At June 30, 2022, we were exposed to market risks related to fluctuations in interest rates on approximately $240.0 million of variable-rate indebtedness and on our mortgage and other notes receivable. The unused portion ($700.0 million at June 30, 2022) of our revolving credit facility, should it be drawn upon, is subject to variable rates.

Interest rate fluctuations will generally not affect our future earnings or cash flows on our fixed rate debt and loans receivable unless such instruments mature or are otherwise terminated. However, interest rate changes will affect the fair value of our fixed rate instruments. Conversely, changes in interest rates on variable rate debt and investments would change our future earnings and cash flows, but not significantly affect the fair value of those instruments. Assuming a 50 basis-point increase or decrease in the interest rate related to variable-rate debt, and assuming no change in the outstanding balance as of June 30, 2022, net interest expense would increase or decrease annually by approximately $1.2 million or $0.03 per common share on a diluted basis.

Our derivative financial instruments matured on December 31, 2021. We have historically used derivative financial instruments in the normal course of business to mitigate interest rate risk. We do not use derivative financial instruments for speculative purposes. Derivatives are included in the Condensed Consolidated Balance Sheets at their fair value. We may engage in hedging strategies to manage our exposure to market risks in the future, depending on an analysis of the interest rate environment and the costs and risks of such strategies.

The following table sets forth certain information with respect to our debt ($ in thousands):

	June 30, 2022						December 31, 2021
	Balance1		% of total		Rate2		Balance1		% of total		Rate2
Fixed rate:
Private placement term loans - unsecured	$	400,000	35.8	%	4.15	%	$	400,000	31.9	%	4.15	%
Senior notes - unsecured	400,000		35.8	%	3.00	%	400,000		31.9	%	3.00	%
Fannie Mae term loans - secured, non-recourse	76,845		6.9	%	3.97	%	77,038		6.2	%	3.97	%
Variable rate:
Bank term loans - unsecured	240,000		21.5	%	3.04	%	375,000		30.0	%	1.41	%
Revolving credit facility - unsecured	—		—	%	—	%	—		—	%
	$	1,116,845	100.0	%	3.49	%	$	1,252,038	100.0	%	2.95	%
1 Differs from carrying amount due to unamortized discounts and loan costs.
2 Total is weighted average rate

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To highlight the sensitivity of our fixed rate debt to changes in interest rates, the following summary shows the effects on fair value (“FV”) assuming a parallel shift of 50 bps in market interest rates for a contract with similar maturities as of June 30, 2022 ($ in thousands):

	Balance		Fair Value1		FV reflecting change in interest rates
Fixed rate:					-50 bps		+50 bps
Private placement term loans - unsecured	$	400,000	$	391,459	$	395,732	$	387,256
Senior notes	400,000		337,157		350,178		324,665
Fannie Mae loans	76,845		73,841		74,828		72,868
1 The change in fair value of our fixed rate debt was due primarily to the overall change in interest rates.

At June 30, 2022, the fair value of our mortgage and other notes receivable, discounted for estimated changes in the risk-free rate, was approximately $203.9 million. A 50 basis-point increase in market rates would decrease the estimated fair value of our mortgage and other loans by approximately $2.6 million, while a 50 basis point decrease in such rates would increase their estimated fair value by approximately $3.1 million.

Item 4. Controls and Procedures.

Evaluation of Disclosure Control and Procedures. As of June 30, 2022, an evaluation was performed under the supervision and with the participation of our management, including the Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of the design and operation of management’s disclosure controls and procedures (as defined in rules 13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934) to ensure information required to be disclosed in our filings under the Securities and Exchange Act of 1934, is (i) recorded, processed, summarized, and reported within the time periods specified in the SEC rules and forms; and (ii) accumulated and communicated to our management, including our CEO and our CFO, as appropriate, to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can only provide reasonable assurance of achieving desired control objectives, and management is necessarily required to apply its judgment when evaluating the cost-benefit relationship of potential controls and procedures. Based upon the evaluation, the CEO and CFO concluded that the design and operation of these disclosure controls and procedures were effective as of June 30, 2022.

There were no significant changes in our internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Changes in Internal Control over Financial Reporting. There were no changes in our internal control over financial reporting identified in management’s evaluation during the six months ended June 30, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting other than described below.

During the second quarter of 2022, the Company implemented expanded procedures to ensure timely and accurate compilation of the SHOP activities, including controls over revenue recognition and related operating costs and review and monitoring of the third-party managers’ internal controls and related information technology systems. We have also expanded our internal controls to encompass reporting of segment information.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings.

Our health care facilities are subject to claims and suits in the ordinary course of business. Our lessees and borrowers have indemnified, and are obligated to continue to indemnify us, against all liabilities arising from the operation of the facilities, and are further obligated to indemnify us against environmental or title problems affecting the real estate underlying such facilities. In addition, such claims may include, among other things professional liability and general liability claims, as well as regulatory proceedings related to our SHOP segment where we are the holder of the applicable healthcare license. While there may be lawsuits pending against us and certain of the owners and/or lessees of our facilities, management believes that the ultimate resolution of all such pending proceedings will have no direct material adverse effect on our financial condition, results of operations or cash flows.

Welltower, Inc.

In June 2021, Welltower announced that it would acquire certain assets from the senior housing portfolio of Holiday, a privately held senior living management company that included 17 senior living facilities governed by a master lease originally executed between a Holiday subsidiary and NHI in 2013. We received no rent due under the master lease from the tenant for these facilities since this change in tenant ownership occurred in late July 2021.

On December 20, 2021, NHI and its subsidiaries NHI-REIT of Next House, LLC, Myrtle Beach Retirement Resident LLC, and Voorhees Retirement Residence LLC filed suit against Welltower, Inc., Welltower Victory II TRS LLC, and Well Churchill Leasehold Owner LLC (collectively the "Defendants") in the Delaware Court of Chancery (Case No. 2021-1097-MTZ). In the litigation, we contended that the Defendants failed repeatedly to honor their legal obligations to NHI. In particular, we asserted that the Defendants acquired assets from a third party, Holiday, that included leases to NHI senior living facilities and fraudulently induced NHI to consent to the assignment of the leases, and then immediately failed to pay rent or provide a promised security agreement that was intended to secure against their default, all as part of an effort to pressure NHI to agree to new conditions outside the assignment agreement or force a sale of the properties to the Defendants. The lawsuit further asserted that the Defendants owed unpaid contractual rent.

In connection with a memorandum of understanding between the parties dated March 4, 2022, NHI applied the remaining approximately $8.8 million lease deposit to past due rents in the first quarter of 2022. Also, as provided by the memorandum of understanding, Welltower transferred approximately $6.9 million to an escrow account to be released upon satisfactory transition of the facility operations and mutual dismissal of the lawsuit. NHI and certain of its subsidiaries entered into a settlement agreement dated March 31, 2022 with Defendants formalizing the terms to settle the lawsuit.

NHI and certain of its subsidiaries terminated the master lease with Well Churchill Leasehold Owner, LLC as successor in interest to NHI Master Tenant LLC, effective April 1, 2022, upon completion of the transition of the properties subject to the master lease, as follows: (i) one property was sold to a third party, (ii) one property was transitioned to an existing operator relationship and leased pursuant to an existing master lease, and (iii) the remaining 15 properties were transitioned into two new SHOP partnership ventures. See Note 5 to the condensed consolidated financial statements for more information on these new ventures.

Also effective April 1, 2022, the parties agreed to dismiss the lawsuit and mutually release all claims related to or arising out of the litigation and the $6.9 million in escrowed funds were released to NHI and recognized as rental income during the three months ended June 30, 2022.

Item 1A. Risk Factors.

There have been no material changes from the risk factors previously disclosed in that Annual Report on Form 10-K, except as amended and supplemented by the additional risk factor below. The risks described in our Annual Report on Form 10-K and the additional risk factor below are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition or future results. The Company believes the following additional risk factor has become more important given the Company’s expansion into the SHOP segment.

We depend on our ability to retain our management team and other personnel and attract suitable replacements should any such personnel leave.

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The management and governance of the Company depends on the services of certain key personnel, including senior management. The departure of any key personnel could have an adverse effect on the Company and adversely impact our financial condition and results of operations. Our senior management team possesses substantial experience and expertise and has strong business relationships with our tenants and operators and other members of the business communities and industries in which we operate. As a result, the loss of these personnel could jeopardize our relationships and operations. We cannot predict the impact that any such departures could have on our ability to achieve our objectives. Furthermore, such a loss could be negatively perceived in the capital markets. Other than Mr. Mendelsohn, our Chief Executive Officer, we do not have employment agreements with any of our management team. In addition, we do not have key man insurance on any of our key employees. Our ability to retain and motivate our management team and other personnel and attract suitable replacements should any such personnel leave, could have a significant impact on our financial condition and results of operations.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

On April 15, 2022, the Company’s Board of Directors approved a stock repurchase plan (the “2022 Repurchase Plan”), which is scheduled to expire on April 15, 2023. Under this plan, we may repurchase shares of the Company’s common stock, par value $0.01 per share, with an aggregate gross purchase price of up to $240.0 million. We repurchased 1,196,175 shares under the stock repurchase plan during the three and six months ended June 30, 2022. No repurchases of the Company’s common stock were completed during the three and six months ended June 30, 2021. As of June 30, 2022, we had approximately $170.4 million available under this plan.

Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plan ( in thousands)
April 1, 2022-April 30, 2022	—	$	—	—
May 1, 2022- May 31, 2022	465,507	59.70		465,507	212,209
June 1, 2022- June 30, 2022	730,668	57.28		730,668	170,357
Total	1,196,175	$	58.52

All values are in US Dollars.

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Item 6. Exhibits.

Exhibit No.	Description
3.1	Articles of Incorporation (incorporated by reference to Exhibit 3.1 to Form S-3 Registration Statement No. 333-192322)
3.2	Articles of Amendment to Articles of Incorporation of National Health Investors, Inc. dated as of June 8, 1994, (incorporated by reference to Exhibit 3.2 to the Registration Statement on Form S-3 Registration Statement No. 333-194653 of National Health Investors, Inc.)
3.3	Amendment to Articles of Incorporation (incorporated by reference to Exhibit A to the Company’s Definitive Proxy Statement filed March 21, 2009)
3.4	Amendment to Articles of Incorporation approved by shareholders on May 2, 2014 (incorporated by reference to Exhibit 3.3 to the Company’s Form 10-Q filed August 4, 2014)
3.5	Restated Bylaws (incorporated by reference to Exhibit 3.3 to the Company’s Form 10-K filed February 15, 2013)
3.6	Amendment No. 1 to Restated Bylaws dated February 14, 2014 (incorporated by reference to Exhibit 3.3 to the Company’s Form 10-K filed February 14, 2014)
3.7	Amendment to Articles of Incorporation approved by shareholders on May 6, 2020 (incorporated by reference to Exhibit 3.6 to the Company’s Form 10-Q filed August 10, 2020)
4.1	Form of Common Stock Certificate (incorporated by reference to Exhibit 39 to Form S-11 Registration Statement No. 33-41863, filed in paper - hyperlink is not required pursuant to Rule 105 of Regulation S-T)
4.2	Indenture, dated as of March 25, 2014, between National Health Investors, Inc. and The Bank of New York Mellon Trust Company, N.A., as Trustee (incorporated by reference to Exhibit 4.1 to the Company’s Form 8-K filed March 31, 2014)
4.3	First Supplemental Indenture, dated as of March 25, 2014, to the Indenture, dated as of March 25, 2014, between National Health Investors, Inc. and The Bank of New York Mellon Trust Company, N.A., as Trustee (incorporated by reference to Exhibit 4.2 to the Company’s Form 8-K filed March 31, 2014)
4.4	Indenture dated as of January 26, 2021, among National Health Investors, Inc. and Regions Bank, as trustee(incorporated by reference to Exhibit 4.1 to Form 8-K dated January 26, 2021)
4.5	First Supplemental Indenture dated as of January 26, 2021, among National Health Investors, Inc. Regions Bank, as trustee, and the subsidiary guarantors set forth therein(incorporated by reference to Exhibit 4.2 to Form 8-K dated January 26, 2021)
4.6	Second Supplemental Indenture, dated as of March 31, 2022, among National Health Investors, Inc., Regions Bank, as trustee, and the subsidiary guarantors set forth therein (incorporated by reference to Exhibit 4.6 to the Company’s Form 10-Q filed May 9, 2022)
10.1	First Amendment dated August 15, 2016 to Note Purchase Agreement dated November 3, 2015 (filed herewith)
10.2	Second Amendment dated September 30, 2016 to Note Purchase Agreement dated November 3, 2015 (filed herewith)
10.3	Fourth Amendment dated June 29, 2022 to Note Purchase Agreement dated November 3, 2015 (filed herewith)
10.4	Sixth Amendment dated June 29, 2022 to Note Purchase Agreement dated January 13, 2015 (filed herewith)
31.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith)
31.2	Certification of Principal Financial Officer pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith)
32	Certification of Chief Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith)
101.INS	XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH	Inline XBRL Taxonomy Extension Schema Document
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		NATIONAL HEALTH INVESTORS, INC.
		(Registrant)
Date:	August 8, 2022	/s/ D. Eric Mendelsohn
		D. Eric Mendelsohn
		President, Chief Executive Officer and Director
		(duly authorized officer)
Date:	August 8, 2022	/s/ John L. Spaid
		John L. Spaid
		Chief Financial Officer
		(Principal Financial Officer)

63

Document

NATIONAL HEALTH INVESTORS, INC.

Senior Notes Issuable in Series

$50,000,000 3.99% Series 2015-1 Tranche A Senior Note due November 3, 2023

$50,000,000 4.33% Series 2015-1 Tranche B Senior Notes due November 3, 2025

______________

FIRST AMENDMENT TO

NOTE PURCHASE AGREEMENT DATED NOVEMBER 3, 2015

______________

Dated August 15, 2016

1184649:2:NASHVILLE

National Health Investors, Inc.

222 Robert Rose Drive

Murfreesboro, TN 37129

$50,000,000 3.99% Series 2015-1 Tranche A Senior Notes due 2023

$50,000,000 4.33% Series 2015-1 Tranche B Senior Notes due 2025

August 15, 2016

To Each of the Purchasers Listed on

Schedule B Attached to the

Note Purchase Agreement:

Ladies and Gentlemen:

NATIONAL HEALTH INVESTORS, INC., a Maryland corporation (together with any successor thereto that becomes a party pursuant to the terms of the Note Purchase Agreement (as defined below), the “Company”) agrees with each of the Purchasers party hereto as follows:

STATEMENT OF PURPOSE:

The Company and Purchasers are parties to the Note Purchase Agreement dated as of November 3, 2015 (as amended hereby and as may be further amended, restated, supplemented or otherwise modified from time to time, the “Note Agreement”).

The Company has requested that the Purchasers agree to amend the Note Agreement in certain respects as more specifically set forth herein (this “Amendment”).

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

1.Capitalized Terms. All capitalized undefined terms used in this Amendment (including, without limitation, in the introductory paragraph and the statement of purpose hereto) shall have the meanings assigned thereto in the Note Agreement.

2.Amendments to Note Agreement.

(a)Section 10.2(f) of the Note Agreement is hereby amended and restated to read in its entirety as follows:

“(f) Investments by the Company or any Subsidiary in any Health Care Facilities (including, for the avoidance of doubt, investments in any Excluded Subsidiary that owns or operates Health Care Facilities as its primary business); provided that, prior to and after giving effect to any such Investment and any Indebtedness incurred in connection therewith, (i) no Default will exist and (ii) the Borrower shall be in compliance, on a Pro Forma Basis, with each financial covenant contained in Section 9.12 hereof; provided further that, prior to the consummation of any such Investment involving aggregate consideration with respect thereto in excess of $25,000,000, the Borrower shall deliver to each holder of a Note a certification, together with financial and other information in detail reasonably requested by the Administrative Agent, (A) certifying that no Default will exist and (B) demonstrating such compliance;”

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(b)Schedule A (Defined Terms) of the Note Agreement is hereby amended by adding the following new definitions in proper alphabetical order:

“Shoreline Acquisition” means that certain purchase by Senior Living NHI Purchaser, or its assignee, pursuant to the Shoreline Acquisition Agreement, of a continuing care retirement community consisting of approximately 250 independent and assisted living apartment units and 50 skilled nursing beds located at 88 Notch Hill Road, North Branford, Connecticut, and commonly known as “Evergreen Woods”.”

“Shoreline Acquisition Agreement” means the Purchase Agreement (including all schedules and exhibits thereto), dated as of August 3, 2016, by and among Shoreline Life Care, LLC and Senior Living NHI Purchaser.”

“Shoreline Acquisition Agreement Documents” means, collectively, the Shoreline Acquisition Agreement and all other material documents entered into by any Loan Party in connection with the Shoreline Acquisition.”

“Shoreline Mortgage Lien” means the Lien pursuant to that certain Open-End Mortgage Deed in favor of Bank of New York Mellon Trust Company, N.A., as Successor Trustee to First Interstate Bank of Des Moines, N.A. in the amount of $70,000,000.00 dated and recorded July 25, 1991, as amended, on Real Property acquired in the Shoreline Acquisition.”.

(c)Schedule A (Defined Terms) of the Note Agreement is hereby amended by amending and restating the definition of “Material Credit Facility” to read in its entirety as follows:

“Material Credit Facility” means, as to the Company and its Subsidiaries, (a) the Credit Agreement, including any renewals, extensions, amendments, supplements, restatements, replacements or refinancing thereof; (b) the Existing Note Agreement, including any renewals, extensions, amendments, supplements, restatements, replacements or refinancing thereof; and (c) any other agreement or series of related agreements creating, evidencing or governing Indebtedness in an aggregate principal amount of $50,000,000 or more incurred after the Closing Date by the Company or any of its Subsidiaries pursuant to Section 10.3(b) or Section 10.3(i) (but excluding (A) Indebtedness incurred after the Closing Date owed to the U.S. Department of Housing and Urban Development (“HUD”), Fannie Mae or a HUD or Fannie Mae qualified lender, in each case, of a type similar to the Indebtedness listed as items 4, 5, 6, 7, 8, 9, 10, 11, 12, 13 and 16 on Schedule 10.3 and (B) the Indebtedness in respect of the Shoreline Mortgage Lien).”.

3.Conditions to Effectiveness. Upon the satisfaction of each of the following conditions, this Amendment shall be deemed to be effective (the date of such satisfaction, the “Amendment Effective Date”):

(a)Executed Amendment. This Amendment shall have been duly authorized, executed and delivered by the Company and the Required Holders.

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(b)No Default or Event of Default. No Default or Event of Default shall exist under the Note Agreement or any other document entered into in connection with the Note Agreement as of the Amendment Effective Date or would result after giving effect to the transactions contemplated by this Amendment.

(c)Prudential Amendment. The Purchasers shall have received a fully-executed copy of an amendment to the Existing Note Agreement with respect to the Shoreline Acquisition, in form and substance satisfactory to the Purchasers, certified as true, correct and complete as of the Amendment Effective Date by a Responsible Officer of the Company.

(d)Wells Fargo Amendment. The Purchasers shall have received a fully-executed copy of an amendment to the Credit Agreement with respect to the Shoreline Acquisition, in form and substance satisfactory to the Purchasers, certified as true, correct and complete as of the Amendment Effective Date by a Responsible Officer of the Company.

(e)Shoreline Acquisition Agreement Documents. The Purchasers shall have received fully executed copies of the Shoreline Acquisition Agreement Documents, in form and substance satisfactory to the Purchasers, certified as true, correct and complete as of the Amendment Effective Date by a Responsible Officer of the Company.1

(f)Other Documents. The Purchasers shall have received copies of all other documents, certificates and instruments reasonably requested thereby with respect to the transactions contemplated by this Amendment.

4.Effect of this Amendment. Except as expressly provided herein, the Note Agreement and the other documents executed in connection therewith shall remain unmodified and in full force and effect. Except as expressly set forth herein, this Amendment shall not be deemed (a) to be a waiver of, consent to, or modification or amendment of, any other term or condition of the Note Agreement or any other document executed in connection therewith, (b) to prejudice any other right or rights which the Purchasers may now have or may have in the future under or in connection with the Note Agreement or the other documents executed in connection therewith or any of the instruments or agreements referred to therein, as the same may be amended, restated, supplemented or otherwise modified from time to time, (c) to be a commitment or any other undertaking or expression of any willingness to engage in any further discussion with the Company or any other Person with respect to any waiver, amendment, modification or any other change to the Note Agreement or the documents executed in connection therewith or any rights or remedies arising in favor of the Purchasers, or any of them, under or with respect to any such documents or (d) to be a waiver of, consent to, or modification or amendment of, any other term or condition of any other agreement by and among the parties, on the one hand, and the Purchasers, on the other hand. References in the Note Agreement to “this Agreement” (and indirect references such as “hereunder”, “hereby”, “herein”, and “hereof”) and in any document executed in connection therewith shall be deemed to be references to the Note Agreement as modified hereby.

5.Representations and Warranties/No Default. By its execution hereof, the Company hereby certifies, represents and warrants to the Purchasers that:

(a)each of the representations and warranties set forth in the Note Agreement and the other documents executed in connection therewith is true and correct in all material respects as of the date hereof (except to the extent that (i) any such representation or warranty that is qualified by materiality or by reference to Material Adverse Effect, in which case such representation or warranty is true and correct in all respects as of the date hereof or (ii) any such

1

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representation or warranty relates only to an earlier date, in which case such representation or warranty shall remain true and correct as of such earlier date) and that no Default or Event of Default has occurred or is continuing or would result after giving effect to this Amendment and the transactions contemplated hereby;

(b)it has the right, power and authority and has taken all necessary corporate and other action to authorize the execution, delivery and performance of this Amendment, the Shoreline Acquisition Agreement Documents and each other document executed in connection herewith to which it is a party in accordance with their respective terms and the transactions contemplated hereby; and

(c)this Amendment and each other document executed in connection herewith has been duly executed and delivered by an duly authorized officer of the Company, and each such document constitutes the legal, valid and binding obligation of the Company, enforceable in accordance with its terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or similar state or federal debtor relief laws from time to time in effect which affect the enforcement of creditors’ rights in general and the availability of equitable remedies.

6.Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY, CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

7.Counterparts. This Amendment may be executed by one or more of the parties hereto in any number of separate counterparts and all of said counterparts taken together shall be deemed to constitute one and the same instrument.

8.Electronic Transmission. A facsimile, telecopy, pdf or other reproduction of this Amendment may be executed by one or more parties hereto, and an executed copy of this Amendment may be delivered by one or more parties hereto by facsimile or similar instantaneous electronic transmission device pursuant to which the signature of or on behalf of such party can be seen, and such execution and delivery shall be considered valid, binding and effective for all purposes. At the request of any party hereto, all parties hereto agree to execute an original of this Amendment as well as any facsimile, telecopy, pdf or other reproduction hereof.

[Signature Pages Follow]

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of the date and year first above written.

COMPANY:

NATIONAL HEALTH INVESTORS, INC., a Maryland corporation

By:     /s/ Eric Mendelsohn             Eric Mendelsohn, President and Chief Executive Officer

PURCHASERS:

AMERICAN GENERAL LIFE INSURANCE COMPANY

THE UNITED STATES LIFE INSURANCE COMPANY IN THE CITY OF NEW YORK

THE VARIABLE ANNUITY LIFE

INSURANCE COMPANY AMERICAN HOME ASSURANCE

COMPANY

LEXINGTON INSURANCE COMPANY NATIONAL UNION FIRE INSURANCE

COMPANY OF PITTSBURGH, PA UNITED GUARANTY RESIDENTIAL

INSURANCE COMPANY

UNITED GUARANTY MORTGAGE INDEMNITY COMPANY

By: AIG Asset Management (U.S.) LLC, Investment Adviser

By:     /s/ Bryan W. Eells

Name: Bryan W. Eells

Title:     Vice President

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Document

NATIONAL HEALTH INVESTORS, INC.

Senior Notes Issuable in Series

$50,000,000 3.99% Series 2015-1 Tranche A Senior Notes due 2023

$50,000,000 4.33% Series 2015-1 Tranche B Senior Notes due 2025

SECOND AMENDMENT TO

NOTE PURCHASE AGREEMENT DATED NOVEMBER 3, 2015

Dated September 30, 2016

1181809:3:NASHVILLE

SECOND AMENDMENT TO NOTE PURCHASE AGREEMENT

This Second Amendment to Note Purchase Agreement (this “Amendment”) is dated as of September 30, 2016, and effective in accordance with Section 4 below, by and among NATIONAL HEALTH INVESTORS, INC., a Maryland corporation (together with any successor thereto that becomes a party hereto pursuant to Section 10.4 of the Note Purchase Agreement, the “Company”), and each of the Purchasers.

RECITALS:

A.Company and the Purchasers are parties to the Note Purchase Agreement dated as of November 3, 2015, as amended by First Amendment to Note Purchase Agreement dated as of August 15, 2016 (as so amended, and as may be further amended, restated, supplemented or otherwise modified from time to time, the “Note Agreement”);

B.The Company is contemplating the issue and sale of additional senior notes issued in series in the aggregate principal amount of $75,000,000 pursuant to that certain Supplement to Note Purchase Agreement of even date herewith (the “Supplement”), but to be entered into after the effectiveness of this Amendment, and guaranteed by the Subsidiary Guarantors and Limited Guarantors as provided in the Supplement.

C.In connection with the Supplement, the parties hereto have agreed to amend the Note Agreement in certain respects as more specifically set forth herein;

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1.Capitalized Terms. All capitalized terms used in this Amendment but not otherwise defined herein shall have the meanings assigned thereto in the Note Agreement or in the Supplement.

2.Amendments to Note Agreement. Effective as of the Second Amendment Effective Date:

(a)Section 1.1 of the Note Agreement is hereby amended by amending and restating clause (c) thereof to read as follows:

“(c)    the aggregate principal amount of all Notes of additional Series    of    Notes    that    may    be    issued    hereunder    is

$75,000,000;”

(b)Section 1.1 of the Note Agreement is hereby amended by amending and restating clause (g) thereof to read as follows:

“(g) a closing fee of 10 basis points shall be payable to the purchasers of any additional Series of Notes as a condition to and on the date of issuance of such Notes, which for the

Series 2016-1 Notes (as defined in a Supplement to this Agreement entered into in connection with the issuance of such Notes) shall be equal to $75,000;

(c)Section 9 of the Note Agreement is hereby amended by amending and restating the introductory paragraph thereof to read as follows:

“So long as any of the Notes are outstanding, the Company shall, and shall (except in the case of the covenants set forth in Sections 9.1, 9.2, 9.3, 9.11, 9.16 and 9.20) cause each Subsidiary to, unless otherwise consented to by the Required Holders:”

(d)A new Section 9.20 is hereby added to the Note Agreement, reading as

follows:

“Section 9.20. Credit Rating. The Company covenants and agrees that:

(a)at all times from and after the date of Closing, the Company shall (at its own expense) maintain a credit rating for the Series 2015-1 Notes from an NRSRO satisfactory to the Required Holders and shall provide such NRSRO with all relevant financial information as may be necessary to maintain such credit rating;

(b)at all times from and after the date on which the Series 2016-1 Notes are issued, the Company shall (at its own expense) maintain a credit rating for the Series 2016-1 Notes from an NRSRO satisfactory to the Required Holders and shall provide such NRSRO with all relevant financial information as may be necessary to maintain such credit rating; and

(c)the Company shall provide the holders of the Notes with an annual confirmation (on or before the anniversary date of the Closing in each year) of each such credit rating.”

3.Letter Agreement of November 3, 2015. The Letter Agreement, dated November 3, 2015, among the Company, the Purchasers, the Subsidiary Guarantors and the Limited Guarantors, is hereby null, void and of no force or effect.

4.Conditions to Effectiveness. Upon the satisfaction of each of the following conditions, this Amendment shall be deemed to be effective (the date of such satisfaction, the “Second Amendment Effective Date”):

(a)Executed Amendment. This Amendment shall have been duly authorized, executed and delivered by the Company, the Subsidiary Guarantors, the Limited Guarantors and each of the Purchasers.

(b)No Default or Event of Default. No Default or Event of Default shall exist under the Note Agreement or any other document entered into in connection with the Note

Agreement as of the Second Amendment Effective Date or would result after giving effect to the transactions contemplated by this Amendment.

(c)Consents and Amendments. To the extent that any approval or consent is required under the Existing Note Agreement and/or the Credit Agreement for the execution, delivery and performance of the transactions contemplated by this Amendment or the Supplement, the Company shall have delivered to the Purchasers evidence of such written approval or consent from the requisite holders of the Indebtedness under the Existing Note Agreement and the Credit Agreement.

(d)Other Documents. The Purchasers shall have received copies of all other documents, certificates and instruments reasonably requested thereby with respect to the transactions contemplated by this Amendment.

5.Effect of this Amendment. Except as expressly provided herein, the Note Agreement and the other documents executed in connection therewith shall remain unmodified and in full force and effect. Except as expressly set forth herein, this Amendment shall not be deemed (a) to be a waiver of, consent to, or modification or amendment of, any other term or condition of the Note Agreement or any other document executed in connection therewith, (b) to prejudice any other right or rights which a party may now have or may have in the future under or in connection with the Note Agreement, the other documents executed in connection therewith or any of the instruments or agreements referred to therein, as the same may be amended, restated, supplemented or otherwise modified from time to time, (c) to be a commitment or any other undertaking or expression of any willingness to engage in any further discussion with any party with respect to any waiver, amendment, modification or any other change to the Note Agreement or the documents executed in connection therewith or any rights or remedies arising in favor of the Purchasers, or any of them, under or with respect to any such documents, or (d) to be a waiver of, consent to, or modification or amendment of, any other term or condition of any other agreement by and among the parties, on the one hand, and the Purchasers on the other hand. References in the Note Agreement to “this Agreement” (and indirect references such as “hereunder”, “hereby”, “herein”, and “hereof”) and in any document executed in connection therewith shall be deemed to be references to the Note Agreement as modified hereby.

6.Representations and Warranties/No Default. By its execution hereof, the Company hereby certifies, represents and warrants to the Purchasers that:

(a)each of the representations and warranties set forth in the Note Agreement and the other documents executed in connection therewith is true and correct in all material respects as of the date hereof (except to the extent that (i) any such representation or warranty that is qualified by materiality or by reference to Material Adverse Effect, in which case such representation or warranty is true and correct in all respects as of the date hereof or (ii) any such representation or warranty relates only to an earlier date, in which case such representation or warranty shall remain true and correct as of such earlier date) and that no Default or Event of Default has occurred or is continuing or would result after giving effect to this Amendment and the transactions contemplated hereby;

(b)it has the right, power and authority and has taken all necessary corporate and other action to authorize the execution, delivery and performance of this Amendment and each other document executed in connection herewith to which it is a party in accordance with their respective terms and the transactions contemplated hereby; and

(c)this Amendment and each other document executed in connection herewith has been duly executed and delivered by an duly authorized officer of the Company, and each such document constitutes the legal, valid and binding obligation of the Company, enforceable in accordance with its terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or similar state or federal debtor relief laws from time to time in effect which affect the enforcement of creditors’ rights in general and the availability of equitable remedies.

7.Ratification and Confirmation of Guaranty Agreements. By executing below, each of the Subsidiary Guarantors and Limited Guarantors acknowledges this Amendment, agrees to its terms and conditions (including the issuance of the Series 2016-1 Notes in the aggregate principal amount of $75,000,000 pursuant to a Supplement), and confirms that all terms, conditions and covenants contained in (a) the Guaranty Agreement dated as of November 3, 2015, and (b) the Limited Guaranty dated as of November 3, 2015, relating to the Note Agreement and each of the Notes issued thereunder (including any additional Series of Notes), are hereby ratified and confirmed, remain in full force and effect and are legal, valid and binding obligations of the undersigned enforceable against the undersigned in accordance with their terms.

8.Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY, CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

9.Counterparts. This Amendment may be executed by one or more of the parties hereto in any number of separate counterparts and all of said counterparts taken together shall be deemed to constitute one and the same instrument.

10.Electronic Transmission. A facsimile, telecopy, pdf or other reproduction of this Amendment may be executed by one or more parties hereto, and an executed copy of this Amendment may be delivered by one or more parties hereto by facsimile or similar instantaneous electronic transmission device pursuant to which the signature of or on behalf of such party can be seen, and such execution and delivery shall be considered valid, binding and effective for all purposes. At the request of any party hereto, all parties hereto agree to execute an original of this Amendment as well as any facsimile, telecopy, pdf or other reproduction hereof.

[Signature Pages Follow]

*    *    *    *    *

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of the date and year first above written.

COMPANY:

NATIONAL HEALTH INVESTORS

By: /s/ Eric Mendelsohn

Name: Eric Mendelsohn

Title: President & Chief Executive Officer

(Signature Page to Second Amendment to Note Purchase Agreement)

SUBSIDIARY GUARANTORS:

NHI/REIT, INC.

By: /s/Eric Mendelsohn

Name: Eric Mendelsohn Title: President

FLORIDA HOLDINGS IV, LL

By: NHI/REIT, Inc., its Sole Member

By: /s/Eric Mendelsohn

Name: Eric Mendelsohn Title: President

(Signature Page to Second Amendment to Note Purchase Agreement)

NHI REIT OF ALABAMA, L.P.

NHI-REIT OF ARIZONA, LIMITED PARTNERSHIP

NHI-REIT OF CALIFORNIA, LP NHI/REIT OF FLORIDA, L.P. NHI-REIT OF GEORGIA, L.P. NHI-REIT OF IDAHO, L.P.

NHI-REIT OF MISSOURI, LP NHI-REIT OF NEW JERSEY, L.P.

NHI-REIT OF SOUTH CAROLINA, L.P. NHI-REIT OF VIRGINIA, L.P.

By: /s/Eric Mendelsohn

Name: Eric Mendelsohn

Title: President

(Signature Page to Second Amendment to Note Purchase Agreement)

NHI/ANDERSON, LLC NHI/LAURENS, LLC

TEXAS NHI INVESTORS, LLC NHI-REIT OF OREGON, LLC NHI-REIT OF FLORIDA, LLC NHI-REIT OF MINNESOTA, LLC NHI-REIT OF TENNESSEE, LLC NHI SELAH PROPERTIES, LLC NHI-REIT OF WISCONSIN, LLC NHI-REIT OF OHIO, LLC

NHI-REIT OF NORTHEAST, LLC NHI-REIT OF WASHINGTON, LLC NID-REIT OF MARYLAND, LLC NHI-REIT OF SEASIDE, LLC

NHI-REIT OF NEXT HOUSE, LLC NHI-REIT OF AXEL, LLC

NHI-REIT OF MICHIGAN, LLC NHI-REIT OF BICKFORD, LLC NHI-SS TRS, LLC

NHI PROPCO, LLC

NHI-REIT OF EVERGREEN, LLC

By: National Health Investors, Inc., the Sole Member of each limited liability company

By: /s/Eric Mendelsohn

Name: Eric Mendelsohn

Title: President and Chief Executive Officer

MYRTLE BEACH RETIREMENT RESIDENCE, LLC

VOORHEES RETIREMENT RESIDENCE, LLC

By: NHI-REIT of Next House, LLC, the Sole Member of each limited liability company

By: National Health Investors, Inc., Sole Member

By: /s/Eric Mendelsohn

Name: Eric Mendelsohn

Title: President and Chief Executive Officer

(Signature Page to Second Amendment to Note Purchase Agreement)

LIMITED GUARANTORS: NHI-BICKFORD RE, LLC

By: /s/Eric Mendelsohn

Name: Eric Mendelsohn

Title: President

WABASH BICKFORD COTTAGE, L.L.C.

By: NHI BICKFORD RE, LLC, its Sole Member

By: /s/Eric Mendelsohn

Name: Eric Mendelsohn

Title: President

(Signature Page to Second Amendment to Note Purchase Agreement)

BICKFORD MASTER II, L.L.C.

By: Sycamore Street LLC, its Managing Member

By: /s/ Michael D. Eby

Name: Michael D. Eby

Title: Co-President

BICKFORD OF CROWN POINT, l.,LC BICKFORD OF GREENWOOD, LLC BICKFORD OF CARMEL, LLC WABASH BICKFORD COTTAGE OPCO, LLC

BICKFORD MASTER I, L.L.C. BICKFORD OF TINLEY PARK, LLC BICKFORD OF SPOTSYLVANIA, LLC BICKFORD OF CHESTERFIELD, LLC BICKFORD OF LANCASTER, LLC BICKFORD OF AURORA, LLC BICKFORD OF SUFFOLK, LLC

By: BICKFORD MASTER II, L.L.C., the Sole

Member of each limited liability company

By: Sycamore Street LLC, its Managing Member

By: /s/Michael D. Eby

Name: Michael D. Eby

Title: Co-President

(Signature Page to Second Amendment to Note Purchase Agreement)

I

PURCHASERS;

AMERICAN GENERAL LIFE INSURANCE COMPANY

THE UNITED STATES LIFE INSURANCE COMPANY IN THE CITY OF NEW YORK

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

AMERICAN HOME ASSURANCE COMPANY LEXINGTON INSURANCE COMPANY NATIONAL UNION FIRE INSURANCE

COMPANY OF PITTSBURGH, PA UNITED GUARANTY RESIDENTIAL

INSURANCE COMPANY UNITED GUARANTY MORTGAGE

INDEMNITY COMPANY

By: AIG Asset Management (U.S.) LLC, Investment Adviser

By: /s/Bryan W. Eells

Name: Bryan W. Eells

Title: Vice President

(Signature Page to Second Amendment to Note Purchase Agreement)

Document

Execution Version

NATIONAL HEALTH INVESTORS, INC.

Senior Notes Issuable in Series

$50,000,000 3.99% Series 2015-1 Tranche A Senior Notes due 2023 $50,000,000 4.33% Series 2015-1 Tranche B Senior Notes due 2025

$75,000,000 3.93% Series 2016-1 Senior Notes due 2024

FOURTH AMENDMENT TO

NOTE PURCHASE AGREEMENT DATED NOVEMBER 3, 2015

Dated June 29, 2022

FOURTH AMENDMENT TO NOTE PURCHASE AGREEMENT

This Fourth Amendment to Note Purchase Agreement (this “Amendment”) is dated as of June 29, 2022, and effective in accordance with Section 3 below, by and among NATIONAL HEALTH INVESTORS, INC., a Maryland corporation (together with any successor thereto that becomes a party hereto pursuant to Section 10.4 of the Note Purchase Agreement, the “Company”), and each of the Purchasers party hereto.

RECITALS:

A.Company and the Purchasers are parties to the Note Purchase Agreement dated as of November 3, 2015, as amended by First Amendment to Note Purchase Agreement dated as of August 15, 2016, the Second Amendment to Note Purchase Agreement dated as of September 30, 2016, and the Third Amendment to Note Purchase Agreement dated as of August 8, 2017 and supplemented by the Supplement to Note Purchase Agreement dated as of September 30, 2016 (as so amended and supplemented, and as may be further amended, restated, supplemented or otherwise modified from time to time, the “Note Agreement”);

B.The Company has requested that the Purchasers agree to amend the Note Agreement in certain respects as more specifically set forth herein.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1.Capitalized Terms. All capitalized terms used in this Amendment but not otherwise defined herein shall have the meanings assigned thereto in the Note Agreement.

2.Amendments to Note Agreement. Effective as of the Fourth Amendment Effective Date:

(a)Section 9.12 of the Note Agreement is hereby amended by amending and restating clause (c) thereof to read as follows:

“(c) Minimum Consolidated Tangible Net Worth. The Company shall not permit the Consolidated Tangible Net Worth at any time to be less than $1,570,000,000.”

(b)Schedule A of the Note Agreement is hereby amended by amending and restating the definition of “Consolidated Tangible Net Worth” as follows:

““Consolidated Tangible Net Worth” means, on any date, the sum of total equity minus Intangible Assets plus accumulated depreciation and amortization and redeemable noncontrolling interests, as all such amounts would appear on a Consolidated balance sheet of the Company and its Subsidiaries prepared as of such date in accordance with GAAP consistently applied.”

(c)Schedule A of the Note Agreement is hereby amended by adding the following defined terms in the appropriate alphabetical order:

“Consolidated” means, when used with reference to financial statements or financial statement items of the Company and its

Subsidiaries or any other Person, such statements or items on a consolidated basis in accordance with the consolidation principles of GAAP.

“Intangible Assets” means assets of a Person and its Subsidiaries that are classified as intangible assets under GAAP, but excluding interests in real estate that are classified as intangible assets in accordance with GAAP.

3.Conditions to Effectiveness. Upon the satisfaction of each of the following conditions, this Amendment shall be deemed to be effective (the date of such satisfaction, the “Fourth Amendment Effective Date”):

(a)Executed Amendment. This Amendment shall have been duly authorized, executed and delivered by the Company, the Subsidiary Guarantors, and such Purchasers constituting the Required Holders.

(b)No Default or Event of Default. No Default or Event of Default shall exist under the Note Agreement or any other document entered into in connection with the Note Agreement as of the Fourth Amendment Effective Date or would result after giving effect to the transactions contemplated by this Amendment.

(c)Other Documents. The Purchasers shall have received copies of all other documents, certificates and instruments reasonably requested thereby with respect to the transactions contemplated by this Amendment.

4.Effect of this Amendment. Except as expressly provided herein, the Note Agreement and the other documents executed in connection therewith shall remain unmodified and in full force and effect. Except as expressly set forth herein, this Amendment shall not be deemed (a) to be a waiver of, consent to, or modification or amendment of, any other term or condition of the Note Agreement or any other document executed in connection therewith, (b) to prejudice any other right or rights which a party may now have or may have in the future under or in connection with the Note Agreement, the other documents executed in connection therewith or any of the instruments or agreements referred to therein, as the same may be amended, restated, supplemented or otherwise modified from time to time, (c) to be a commitment or any other undertaking or expression of any willingness to engage in any further discussion with any party with respect to any waiver, amendment, modification or any other change to the Note Agreement or the documents executed in connection therewith or any rights or remedies arising in favor of the Purchasers, or any of them, under or with respect to any such documents, or (d) to be a waiver of, consent to, or modification or amendment of, any other term or condition of any other agreement by and among the parties, on the one hand, and the Purchasers on the other hand. References in the Note Agreement to “this Agreement” (and indirect references such as “hereunder”, “hereby”, “herein”, and “hereof”) and in any document executed in connection therewith shall be deemed to be references to the Note Agreement as modified hereby.

5.Representations and Warranties/No Default. By its execution hereof, the Company hereby certifies, represents and warrants to the Purchasers that:

(a)each of the representations and warranties set forth in the Note Agreement and the other documents executed in connection therewith is true and correct in all material respects as of the date hereof (except to the extent that (i) any such representation or warranty that is qualified by materiality or by reference to Material

Adverse Effect, in which case such representation or warranty is true and correct in all respects as of the date hereof or (ii) any such representation or warranty relates only to an earlier date, in which case such representation or warranty shall remain true and correct as of such earlier date) and that no Default or Event of Default has occurred or is continuing or would result after giving effect to this Amendment and the transactions contemplated hereby;

(b)it has the right, power and authority and has taken all necessary corporate and other action to authorize the execution, delivery and performance of this Amendment and each other document executed in connection herewith to which it is a party in accordance with their respective terms and the transactions contemplated hereby;

(c)this Amendment and each other document executed in connection herewith has been duly executed and delivered by an duly authorized officer of the Company, and each such document constitutes the legal, valid and binding obligation of the Company, enforceable in accordance with its terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or similar state or federal debtor relief laws from time to time in effect which affect the enforcement of creditors’ rights in general and the availability of equitable remedies; and

(d)the Subsidiaries that are signatories to this Amendment as Subsidiary Guarantors constitute all of the Subsidiaries that are required to guaranty the Obligations pursuant to the terms of the Note Agreement.

6.Ratification and Confirmation of Guaranty Agreements. By executing below, each of the Subsidiary Guarantors acknowledges this Amendment, agrees to its terms and conditions, and confirms that all terms, conditions and covenants contained in the Guaranty Agreement applicable to such Subsidiary Guarantor, are hereby ratified and confirmed, remain in full force and effect and are legal, valid and binding obligations of the undersigned enforceable against the undersigned in accordance with their terms.

7.Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY, CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

8.Counterparts. This Amendment may be executed by one or more of the parties hereto in any number of separate counterparts and all of said counterparts taken together shall be deemed to constitute one and the same instrument.

9.No Novation. This Amendment is not intended by the parties to be, and shall not be construed to be, a novation of the Note Agreement or an accord and satisfaction in regard thereto.

10.Entire Understanding. This Amendment sets forth the entire understanding of the parties with respect to the matters set forth herein, and shall supersede any prior negotiations or agreements, whether written or oral, with respect thereto.

11.Successors; Enforceability. The terms and provisions of this Amendment shall be binding upon the Company, the Subsidiary Guarantors and the Purchasers and their respective successors and assigns, and shall inure to the benefit of the Company, the Subsidiary Guarantors and the Purchasers and the successors and assigns of the Purchasers.

12.Electronic Transmission. A facsimile, telecopy, pdf or other reproduction of this Amendment may be executed by one or more parties hereto, and an executed copy of this

Amendment may be delivered by one or more parties hereto by facsimile or similar instantaneous electronic transmission device pursuant to which the signature of or on behalf of such party can be seen, and such execution and delivery shall be considered valid, binding and effective for all purposes. At the request of any party hereto, all parties hereto agree to execute an original of this Amendment as well as any facsimile, telecopy, pdf or other reproduction hereof.

[Signature Pages Follow]

* * * * *

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of the date and year first above written.

COMPANY:

NATIONAL HEALTH INVESTORS INC.

By:___/s/John L. Spaid__________________

Name: John L. Spaid

Title: Chief Financial Officer

(Signature Page to Fourth Amendment to Note Purchase Agreement)

For purposes of Section 6 of the Fourth Amendment:

SUBSIDIARY GUARANTORS:

NHI/REIT, INC.

By:    /s/ Kristin S. Gaines

Name: Kristin S. Gaines

Title: Secretary

FLORIDA HOLDINGS IV, LLC

By: NHI/REIT, Inc., its Sole Member

By:    /s/ Kristin S. Gaines__

Name: Kristin S. Gaines

Title: Secretary

NHI REIT OF ALABAMA, L.P.

NHI-REIT OF ARIZONA, LIMITED PARTNERSHIP

NHI-REIT OF CALIFORNIA, LP

NHI/REIT OF FLORIDA, L.P.

NHI-REIT OF GEORGIA, L.P.

NHI-REIT OF IDAHO, L.P.

NHI-REIT OF MISSOURI, LP

NHI-REIT OF SOUTH CAROLINA, L.P.

NHI-REIT OF VIRGINIA, L.P.

By: NHI/REIT, Inc., the Sole General Partner of each limited partnership

By:    /s/ Kristin S. Gaines

Name: Kristin S. Gaines

Title: Secretary

(Signature Page to Fourth Amendment to Note Purchase Agreement)

NHI/ANDERSON, LLC

NHI/LAURENS, LLC

TEXAS NHI INVESTORS, LLC

NHI-REIT OF OREGON, LLC

NHI-REIT OF FLORIDA, LLC

NHI-REIT OF MINNESOTA, LLC

NHI-REIT OF TENNESSEE, LLC

NHI SELAH PROPERTIES, LLC

NHI-REIT OF WISCONSIN, LLC

NHI-REIT OF OHIO, LLC

NHI-REIT OF NORTHEAST, LLC

NHI-REIT OF WASHINGTON, LLC

NHI-REIT OF MARYLAND, LLC

NHI-REIT OF SEASIDE, LLC

NHI-REIT OF NEXT HOUSE, LLC

MYRTLE BEACH RETIREMENT RESIDENCE, LLC

VOORHEES RETIREMENT RESIDENCE, LLC

NHI-REIT OF AXEL, LLC

NHI-REIT OF MICHIGAN, LLC

NHI-REIT OF BICKFORD, LLC

NHI REIT OF NORTH CAROLINA, LLC

NHI-REIT of TX-IL, LLC

NHI-BICKFORD RE, LLC

NHI-SS TRS, LLC

NHI-REIT OF INDIANA, LLC

NHI-REIT OF COLORADO, LLC

NHI-REIT OF DSL PROPCO, LLC

NHI-REIT OF OKLAHOMA, LLC

NHI PROPCO MEMBER, LLC

NHI-REIT OF DSL PROPCO II, LLC

NHI-DISCOVERY I TRS, LLC

NHI-MERRILL I TRS, LLC

By:    /s/ Kristin S. Gaines

Name: Kristin S. Gaines

Title: Secretary

(Signature Page to Fourth Amendment to Note Purchase Agreement)

PURCHASERS:

THE UNITED STATES LIFE INSURANCE

COMPANY IN THE CITY OF NEW YORK

AMERICAN HOME ASSURANCE COMPANY

NATIONAL UNION FIRE INSURANCE

COMPANY OF PITTSBURGH, PA

By: AIG Asset Management (U.S.) LLC,

Investment Adviser

By:___/s/ Bryan W. Eells________________

Name: Bryan W. Eells

Title: Senior Vice President

(Signature Page to Fourth Amendment to Note Purchase Agreement)

PURCHASERS:

AMERICAN GENERAL LIFE INSURANCE COMPANY

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

By: Blackstone ISG-I Advisors L.L.C., pursuant to powers of attorney now and hereafter granted to it

By: Blackstone Real Estate Special Situations Advisors L.L.C., pursuant to powers of attorney now and hereafter granted to it

By:__/s/ Michael Wiebolt___________________

Name: Michael Wiebolt

Title: Authorized Signatory

(Signature Page to Fourth Amendment to Note Purchase Agreement)

Document

Execution Version

SIXTH AMENDMENT TO

NOTE PURCHASE AGREEMENT

THIS FIFTH AMENDMENT TO NOTE PURCHASE AGREEMENT (this “Amendment”), is made and entered into as of June 29, 2022, by and among National Health Investors, Inc., a Maryland corporation, (the “Company”), The Prudential Insurance Company of America and the other holders of Notes (as defined in the Note Agreement defined below) that are signatories hereto (together with their successors and assigns, the “Noteholders”).

W I T N E S S E T H:

WHEREAS, the Company and the Noteholders are parties to a certain Note Purchase Agreement, dated as of January 13, 2015 (as amended, restated, supplemented or otherwise modified from time to time, the “Note Agreement”; capitalized terms used herein and not otherwise defined shall have the meanings assigned to such terms in the Note Agreement), pursuant to which the Noteholders have purchased Notes from the Company;

WHEREAS, the Company has requested that the Noteholders amend certain provisions of the Note Agreement, and subject to the terms and conditions hereof, the Noteholders are willing to do so;

NOW, THEREFORE, for good and valuable consideration, the sufficiency and receipt of all of which are acknowledged, the Company and the Noteholders agree as follows:

1.Amendments.

(a)Section 9.12 of the Note Agreement is hereby amended by amending and restating clause (c) thereof to read as follows::

(c)    Minimum Consolidated Tangible Net Worth. The Company shall not permit the Consolidated Tangible Net Worth at any time to be less than $1,570,000,000.

(b)    Schedule A of the Note Agreement is hereby amended by:

i. adding the following definitions in the appropriate alphabetical order:

“Consolidated” means, when used with reference to financial statements or financial statement items of the Company and its Subsidiaries or any other Person, such statements or items on a consolidated basis in accordance with the consolidation principles of GAAP.

“Intangible Assets” means assets of a Person and its Subsidiaries that are classified as intangible assets under GAAP, but excluding interests in real estate that are classified as intangible assets in accordance with GAAP.

; and

ii. replacing the defined term for “Consolidated Tangible Net Worth” in its entirety with the following:

“Consolidated Tangible Net Worth” means, on any date, the sum of total equity minus Intangible Assets plus accumulated depreciation and amortization and redeemable noncontrolling interests, as all such amounts would appear on a Consolidated balance sheet of the Company and its Subsidiaries prepared as of such date in accordance with GAAP consistently applied.

2.    Conditions to Effectiveness of this Amendment. Notwithstanding any other provision of this Amendment and without affecting in any manner the rights of the holders of the Notes hereunder, it is understood and agreed that this Amendment shall not become effective, and the Company shall have no rights under this Amendment, until the Noteholders shall have received (i) reimbursement or payment of its costs and expenses incurred in connection with this Amendment or the Note Agreement (including reasonable fees, charges and disbursements of King & Spalding LLP, counsel to the Noteholders), and (ii) each of the following documents:

(a)     executed counterparts to this Amendment from the Company, each of the Guarantors (as defined below) and the Noteholders constituting the Required Holders;

(b)    a duly executed amendment to the AIG Purchase Agreement, certified as true, correct and complete by a Responsible Officer of the Company and each in form and substance reasonably satisfactory to the Noteholders party hereto;

(c)    copies of all other documents, certificates and instruments reasonably requested thereby with respect to the transactions contemplated by this Amendment.

3.Representations and Warranties. To induce the Noteholders to enter into this Amendment, each Credit Party hereby represents and warrants to the Noteholders that:

(a)    Each Credit Party (a) is duly organized or formed and validly existing under the Applicable Law of the jurisdiction of its incorporation or organization, (b) has all requisite power and authority and all requisite governmental licenses, authorizations, consents and approvals to (i) own its assets and carry on its business and (ii) execute, deliver, and perform its obligations under this Amendment and consummate the transactions contemplated hereby, and (c) is duly qualified and is licensed and in good standing under the Applicable Law of each jurisdiction where its ownership, lease or operation of properties or the conduct of its business requires such qualification or licenses, except in each case referred to in clause (b)(i) or (c), to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect;

(b)    The execution, delivery and performance by each Credit Party of this Amendment, have been duly authorized by all necessary corporate or other organizational action, and do not and will not (a) contravene the terms of any of such Person’s Organization Documents; (b) conflict with or result in any breach or contravention of, or the creation of any Lien under, (i) any Contractual Obligation to which such Person is a party or (ii) any order, injunction, writ or decree of any Governmental Authority or any arbitral award to which such Person or its property is subject; or (c) violate any law;

(c)    No approval, consent, exemption, authorization, or other action by, or notice to, or filing with, any Governmental Authority or any other Person is necessary or required in connection with the execution, delivery or performance by, or enforcement against, any Credit Party of this Amendment or the consummation of the transactions contemplated hereby;

(d)    This Amendment has been duly executed and delivered by each Credit Party that is party hereto. This Amendment constitutes a legal, valid and binding obligation of such

Credit Party, enforceable against each Credit Party that is party hereto in accordance with its terms, except as enforceability may be limited by bankruptcy laws and general principles of equity; and

(e)    After giving effect to this Amendment, the representations and warranties set forth in Sections 5.1 through 5.12, 5.14 through 5.20, 5.22 through 5.24 and 5.27 of the Note Agreement are true and correct in all material respects as of the date hereof (except to the extent that (i) any such representation or warranty that is qualified by materiality or by reference to Material Adverse Effect, in which case such representation or warranty is true and correct in all respects as of the date hereof or (ii) any such representation or warranty relates only to an earlier date, in which case such representation or warranty shall remain true and correct as of such earlier date) , and no Default or Event of Default has occurred and is continuing as of the date hereof.

4.Reaffirmations of Guaranty. Each Subsidiary Guarantor and Limited Guarantor (each a “Guarantor” and collectively, the “Guarantors”) consents to the execution and delivery by the Company of this Amendment and jointly and severally ratify and confirm the terms of the applicable Guaranty Agreement, with respect to the Indebtedness now or hereafter outstanding under the Note Agreement as amended hereby and all promissory notes issued thereunder. Each Guarantor acknowledges that, notwithstanding anything to the contrary contained herein or in any other document evidencing any indebtedness of the Company to the Noteholders or any other obligation of the Company, or any actions now or hereafter taken by the Noteholders with respect to any obligation of the Company, the applicable Guaranty Agreement, (i) is and shall continue to be a primary obligation of such Guarantor, (ii) is and shall continue to be an absolute, unconditional, joint and several, continuing and irrevocable guaranty of payment, and (iii) is and shall continue to be in full force and effect in accordance with its terms. Nothing contained herein to the contrary shall release, discharge, modify, change or affect the original liability of the Guarantors under the applicable Guaranty Agreement.

5.Effect of Amendment. Except as set forth expressly herein, all terms of the Note Agreement, as amended hereby, and the other Note Documents shall be and remain in full force and effect and shall constitute the legal, valid, binding and enforceable obligations of the Company to all holders of the Notes. The execution, delivery and effectiveness of this Amendment shall not, except as expressly provided herein, operate as a waiver of any right, power or remedy of the holders of the Notes under the Note Agreement, nor constitute a waiver of any provision of the Note Agreement. From and after the date hereof, all references to the Note Agreement shall mean the Note Agreement as modified by this Amendment. This Amendment shall constitute a Note Document for all purposes of the Note Agreement.

6.Governing Law. This Amendment shall be governed by, and construed in accordance with, the internal laws of the State of New York and all applicable federal laws of the United States of America.

7.No Novation. This Amendment is not intended by the parties to be, and shall not be construed to be, a novation of the Note Agreement or an accord and satisfaction in regard thereto.

8.Costs and Expenses.    The Company agrees to pay on demand all costs and expenses of the Noteholders in connection with the preparation, execution and delivery of this Amendment, including, without limitation, the reasonable fees and out of pocket expenses of outside counsel for the Noteholders with respect thereto.

9.Counterparts. This Amendment may be executed by one or more of the parties hereto in any number of separate counterparts, each of which shall be deemed an original and all of which, taken together, shall be deemed to constitute one and the same instrument. Delivery of an executed counterpart of this Amendment by facsimile transmission or by electronic mail in pdf form shall be as effective as delivery of a manually executed counterpart hereof. This Amendment may be executed using Electronic Signatures and shall be considered an original, and shall have the same legal effect, validity and enforceability as a paper record. For the avoidance of doubt, the authorization under this paragraph may include, without limitation, use or acceptance by the Noteholders of a manually signed paper hereof which has been converted into electronic form (such as scanned into .pdf format), or an electronically signed communication converted into another format, for transmission, delivery and/or retention. For purposes hereof, “Electronic Signature” shall have the meaning assigned to it by 15 USC §7006, as it may be amended from time to time. Upon the reasonable request of the Required Holders, any Electronic Signature of any other party hereto shall, as promptly as practicable, be followed by a manually executed counterpart thereof.

10.Binding Nature. This Amendment shall be binding upon and inure to the benefit of the parties hereto, any other holders of Notes from time to time and their respective successors, successors-in-titles, and assigns.

11.Entire Understanding. This Amendment sets forth the entire understanding of the parties with respect to the matters set forth herein, and shall supersede any prior negotiations or agreements, whether written or oral, with respect thereto.

12.Successors; Enforceability. The terms and provisions of this Amendment shall be binding upon the Company, the Guarantors and the Noteholders and their respective successors and assigns, and shall inure to the benefit of the Company, the Guarantors and the Noteholders and the successors and assigns of the Noteholders.

13.Severability. Any provision in this Amendment that is held to be inoperative, unenforceable, or invalid in any jurisdiction shall, as to that jurisdiction, be inoperative, unenforceable, or invalid without affecting the remaining provisions in that jurisdiction or the operation, enforceability, or validity of that provision in any other jurisdiction, and to this end the provisions of this Amendment are declared to be severable.

[signature pages follow]

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed, under seal in the case of the Company and the Guarantors, by their respective authorized officers as of the day and year first above written.

COMPANY:

NATIONAL HEALTH INVESTORS, INC.

By:    /s/John L. Spaid

Name: John L. Spaid

Title: Chief Financial Officer

For the purposes of Section 4 of this Amendment:

SUBSIDIARY GUARANTORS:

NHI/REIT, INC.

By:    /s/ Kristi S. Gaines

Name: Kristin S. Gaines

Title: Secretary

FLORIDA HOLDINGS IV, LLC

By: NHI/REIT, Inc., its Sole Member

By:    /s/ Kristi S. Gaines

Name: Kristin S. Gaines

Title: Secretary

[Signature Page to Sixth Amendment to Note Purchase Agreement]

5

NHI REIT OF ALABAMA, L.P.

NHI-REIT OF ARIZONA, LIMITED PARTNERSHIP

NHI-REIT OF CALIFORNIA, LP

NHI/REIT OF FLORIDA, L.P.

NHI-REIT OF GEORGIA, L.P.

NHI-REIT OF IDAHO, L.P.

NHI-REIT OF MISSOURI, LP

NHI-REIT OF SOUTH CAROLINA, L.P.

NHI-REIT OF VIRGINIA, L.P.

By: NHI/REIT, Inc., the Sole General Partner of each limited partnership

By:    /s/ Kristi S. Gaines

Name: Kristin S. Gaines

Title: Secretary

NHI/ANDERSON, LLC

NHI/LAURENS, LLC

TEXAS NHI INVESTORS, LLC

NHI-REIT OF OREGON, LLC

NHI-REIT OF FLORIDA, LLC

NHI-REIT OF MINNESOTA, LLC

NHI-REIT OF TENNESSEE, LLC

NHI SELAH PROPERTIES, LLC

NHI-REIT OF WISCONSIN, LLC

NHI-REIT OF OHIO, LLC

NHI-REIT OF NORTHEAST, LLC

NHI-REIT OF WASHINGTON, LLC

NHI-REIT OF MARYLAND, LLC

NHI-REIT OF SEASIDE, LLC

NHI-REIT OF NEXT HOUSE, LLC

MYRTLE BEACH RETIREMENT RESIDENCE, LLC

VOORHEES RETIREMENT RESIDENCE, LLC

NHI-REIT OF AXEL, LLC

NHI-REIT OF MICHIGAN, LLC

NHI-REIT OF BICKFORD, LLC

NHI REIT OF NORTH CAROLINA, LLC

NHI-REIT of TX-IL, LLC

NHI-BICKFORD RE, LLC

NHI-SS TRS, LLC

NHI-REIT OF INDIANA, LLC

NHI-REIT OF COLORADO, LLC

NHI-REIT OF DSL PROPCO, LLC

NHI-REIT OF OKLAHOMA, LLC

NHI PROPCO MEMBER, LLC

NHI-REIT OF DSL PROPCO II, LLC

NHI-DISCOVERY I TRS, LLC

NHI-MERRILL I TRS, LLC

By:    /s/ Kristi S. Gaines

Name: Kristin S. Gaines

Title: Secretary

NOTEHOLDERS:

THE PRUDENTIAL INSURANCE COMPANY

OF AMERICA

By: PGIM, Inc., as Investment Manager

By: /s/ Ben Turnipseed____________________

Vice President

FARMERS INSURANCE EXCHANGE

By:    Prudential Private Placement Investors,

L.P. (as Investment Advisor)

By:    Prudential Private Placement Investors, Inc.

(as its General Partner)

By: __/s/ Ben Turnipseed_____________________

Vice President

MID CENTURY INSURANCE COMPANY

By:    Prudential Private Placement Investors,

L.P. (as Investment Advisor)

By:    Prudential Private Placement Investors, Inc.

(as its General Partner)

By: __/s/ Ben Turnipseed_____________________

Vice President

[Signature Page to Sixth Amendment to Note Purchase Agreement]

8

FARMERS NEW WORLD LIFE INSURANCE

COMPANY

By:    Prudential Private Placement Investors,

L.P. (as Investment Advisor)

By:    Prudential Private Placement Investors, Inc.

(as its General Partner)

By: _/s/ Ben Turnipseed______________________

Vice President

PRUDENTIAL ANNUITIES LIFE

ASSURANCE CORPORATION

By:    PGIM, Inc., as investment manager

By: /s/ Ben Turnipseed_______________________

Vice President

PICA HARTFORD LIFE & ANNUITY

COMFORT TRUST

By:    The Prudential Insurance Company of America, as Grantor

By:    PGIM, Inc., as Investment Manager

By:__/s/ Ben Turnipseed_____________________

Vice President

PRUCO LIFE INSURANCE COMPANY

By:    PGIM, Inc., as Investment Manager

By: _/s/ Ben Turnipseed__________________________________

Vice President

THE PRUDENTIAL LIFE INSURANCE

COMPANY, LTD.

By:    Prudential Investment Management Japan,

Co., Ltd., as Investment Manager

By:    PGIM, Inc.,

as Sub-Adviser

By: /s/ Ben Turnipseed_____________________________

Vice President

PRUDENTIAL RETIREMENT GUARANTEED

COST BUSINESS TRUST

By:    PGIM, Inc.,

as investment manager

By:__/s/ Ben Turnipseed____________________________

Vice President

THE INDEPENDENT ORDER OF FORESTERS

By:    Prudential Private Placement Investors,

L.P. (as Investment Advisor)

By:    Prudential Private Placement Investors, Inc.

(as its General Partner)

By:     /s/ Ben Turnipseed________________________

Vice President

THE GIBRALTAR LIFE INSURANCE CO.,

LTD.

By:    Prudential Investment Management Japan

Co., Ltd., as Investment Manager

By:    PGIM, Inc.,

as Sub-Adviser

By: ___/s/ Ben Turnipseed______________

Vice President

[Signature Page to Sixth Amendment to Note Purchase Agreement]

11

Document

Exhibit 31.1

CERTIFICATION PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, D. Eric Mendelsohn, certify that:

1.I have reviewed this quarterly report on Form 10-Q of the registrant, National Health Investors, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions) :

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	August 8, 2022	/s/ D. Eric Mendelsohn
		D. Eric Mendelsohn
		President, Chief Executive Officer and Director
		(Principal Executive Officer)

Document

Exhibit 31.2

CERTIFICATION PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, John L. Spaid, certify that:

1.I have reviewed this quarterly report on Form 10-Q of the registrant, National Health Investors, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions) :

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	August 8, 2022	/s/ John L. Spaid
		John L. Spaid
		Chief Financial Officer
		(Principal Financial Officer)

Document

Exhibit 32

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

The undersigned hereby certify, pursuant to 18 U.S.C. Section 1350, as added by Section 906 of the Sarbanes-Oxley Act of 2002, that, to the undersigned's best knowledge and belief, the quarterly report on Form 10-Q for National Health Investors, Inc. ("Issuer") for the quarter ended June 30, 2022 as filed with the Securities and Exchange Commission on the date hereof (the "Report"):

(a)The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(b)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Issuer.

Date:	August 8, 2022	/s/ D. Eric Mendelsohn
		D. Eric Mendelsohn
		President, Chief Executive Officer and Director
		(Principal Executive Officer)
Date:	August 8, 2022	/s/ John L. Spaid
		John L. Spaid
		Chief Financial Officer
		(Principal Financial Officer)