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		March 31, 2023
☐	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 43,388,742 shares of common stock outstanding of the registrant as of May 2, 2023.

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	Page
Part I. Financial Information
Item 1. Financial Statements	3
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.	28
Item 3. Quantitative and Qualitative Disclosures About Market Risk.	51
Item 4. Controls and Procedures.	52
Part II. Other Information
Item 1. Legal Proceedings	53
Item 1A. Risk Factors	53
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	53
Item 6. Exhibits	55
Signatures	56

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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, 2022
Assets:
Real estate properties:
Land	181,949	$	177,527
Buildings and improvements		2,549,019
Construction in progress		3,352
		2,729,898
Less accumulated depreciation		(611,688)
Real estate properties, net		2,118,210
Mortgage and other notes receivable, net of reserve of 14,964 and 15,338, respectively		233,141
Cash and cash equivalents		19,291
Straight-line rent receivable		76,895
Assets held for sale, net		43,302
Other assets, net		16,585
Total Assets	2,533,230	$	2,507,424
Liabilities and Stockholders’ Equity:
Debt	1,176,014	$	1,147,511
Accounts payable and accrued expenses		25,905
Dividends payable		39,050
Deferred income		5,052
Total Liabilities		1,217,518
Commitments and contingencies
Redeemable noncontrolling interest		9,825
National Health Investors, Inc. Stockholders’ Equity:
Common stock, 0.01 par value, 100,000,000 shares authorized;
43,388,742 shares issued and outstanding		434
Capital in excess of par value		1,599,427
Retained earnings		2,331,190
Cumulative dividends		(2,660,826)
Total National Health Investors, Inc. Stockholders’ Equity		1,270,225
Noncontrolling interests		9,856
Total Equity		1,280,081
Total Liabilities and Equity	2,533,230	$	2,507,424

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, 2022 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
	March 31,
	2023		2022
	(unaudited)
Revenues:
Rental income	$	65,299	$	64,559
Resident fees and services	11,700		—
Interest income and other	5,389		6,768
	82,388		71,327
Expenses:
Depreciation	17,617		18,272
Interest	14,027		10,198
Senior housing operating expenses	9,799		—
Legal	122		1,827
Franchise, excise and other taxes	183		244
General and administrative	5,653		8,101
Taxes and insurance on leased properties	2,619		3,038
Loan and realty (gains) losses	(418)		24,528
	49,602		66,208
Gains on sales of real estate, net	1,397		2,981
Loss on early retirement of debt	—		(151)
Gains from equity method investment	—		297
Net income	34,183		8,246
Less: net loss attributable to noncontrolling interests	301		153
Net income attributable to common stockholders	$	34,484	$	8,399
Weighted average common shares outstanding:
Basic	43,388,742		45,850,686
Diluted	43,391,429		45,851,061
Earnings per common share:
Net income attributable to common stockholders - basic	$	0.79	$	0.18
Net income attributable to common stockholders - diluted	$	0.79	$	0.18

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)

	Three Months Ended
	March 31,
	2023		2022
	(unaudited)
Cash flows from operating activities:
Net income	$	34,183	$	8,246
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	17,617		18,272
Amortization of debt issuance costs, debt discounts and prepaids	1,048		1,087
Amortization of commitment fees and note receivable discounts	(148)		(120)
Amortization of lease incentives	299		252
Straight-line rent adjustments	(2,097)		(1,079)
Non-cash rental income	(2,500)		—
Non-cash interest income on mortgage and other notes receivable	(376)		(880)
Non-cash lease deposit liability recognized as rental income	—		(8,838)
Gains on sales of real estate, net	(1,397)		(2,981)
Gains from equity method investment	—		(297)
Loss on early retirement of debt	—		151
Loan and realty (gains) losses	(418)		24,528
Payment of lease incentive	(10,000)		—
Non-cash share-based compensation	2,105		5,083
Changes in operating assets and liabilities:
Other assets	(3,772)		(107)
Accounts payable and accrued expenses	(3,277)		(4,252)
Deferred income	(219)		(385)
Net cash provided by operating activities	31,048		38,680
Cash flows from investing activities:
Investments in mortgage and other notes receivable	(7,219)		(16,350)
Collections of mortgage and other notes receivable	7,211		988
Acquisitions of real estate	(38,081)		—
Proceeds from sales of real estate	10,201		13,170
Investments in existing real estate	(2,133)		(165)
Distributions from equity method investment	2,500		297
Net cash used in investing activities	(27,521)		(2,060)
Cash flows from financing activities:
Proceeds from revolving credit facility	192,000		85,000
Payments on revolving credit facility	(19,000)		—
Payments on term loans	(145,103)		(75,098)
Debt issuance costs	—		(4,535)
Distributions to noncontrolling interests	(363)		(271)
Dividends paid to stockholders	(39,050)		(41,266)
Taxes remitted on employee stock awards	—		(7)
Proceeds from noncontrolling interest	2,000		—
Net cash used in financing activities	(9,516)		(36,177)
(Decrease) increase in cash and cash equivalents and restricted cash	(5,989)		443
Cash and cash equivalents and restricted cash, beginning of period	21,516		39,485
Cash and cash equivalents and restricted cash, end of period	$	15,527	$	39,928

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)

	Three Months Ended
	March 31,
	2023		2022
	(unaudited)
Supplemental disclosure of cash flow information:
Interest paid, net of amounts capitalized	$	15,878	$	12,920
Supplemental disclosure of non-cash investing and financing activities:
Real estate acquired in exchange for mortgage notes receivable	$	14,200	$	—
Change in other assets related to sales of real estate	$	—	$	(33)
Change in accounts payable related to investments in real estate construction	$	20	$	—
Change in accounts payable related to renovations of existing real estate	$	—	$	(219)
Change in accounts payable related to distributions to noncontrolling interests	$	90	$	(28)
Reclassification of prepaid equity issuance costs to capital in excess of par value	$	275	$	—

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		Retained Earnings		Cumulative Dividends		Total National Health Investors, Inc. Stockholders’ Equity		Noncontrolling Interests		Total Equity
	Shares	Amount
Balances at December 31, 2022	43,388,742	$	434	$	1,599,427	$	2,331,190	$	(2,660,826)	$	1,270,225	$	9,856	$	1,280,081
Noncontrolling interest capital contribution	—	—		—		—		—		—		2,000		2,000
Distributions declared to noncontrolling interests	—	—		—		—		—		—		(273)		(273)
Net income, excluding a loss of $305 attributable to redeemable noncontrolling interest	—	—		—		34,484		—		34,484		4		34,488
Equity issuance costs	—	—		(275)		—		—		(275)		—		(275)
Share-based compensation	—	—		2,105		—		—		2,105		—		2,105
Dividends declared, $0.90 per common share	—	—		—		—		(39,050)		(39,050)		—		(39,050)
Balances at March 31, 2023	43,388,742	$	434	$	1,601,257	$	2,365,674	$	(2,699,876)	$	1,267,489	$	11,587	$	1,279,076
	Common Stock			Capital in Excess of Par Value		Retained Earnings		Cumulative Dividends		Total National Health Investors Stockholders’ Equity		Noncontrolling Interests		Total Equity
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
	Shares	Amount
Balances at December 31, 2021	45,850,599	$	459	$	1,591,182	$	2,416,713	$	(2,501,271)	$	1,507,083	$	9,900	$	1,516,983
Distributions declared to noncontrolling interests	—	—		—		—		—		—		(243)		(243)
Net income	—	—		—		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)
Balances at March 31, 2022	45,850,868	$	459	$	1,596,258	$	2,425,112	$	(2,542,536)	$	1,479,293	$	9,504	$	1,488,797

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

March 31, 2023

(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 and 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 real estate investments and leases, mortgages and other notes receivable in independent living facilities (“ILF”), assisted living facilities (“ALF”), entrance-fee communities (“EFC”), senior living campuses (“SLC”), skilled nursing facilities (“SNF”) and a hospital (“HOSP”). As of March 31, 2023, we had gross investments of approximately $2.4 billion in 164 health care real estate properties located in 31 states and leased pursuant primarily to triple-net leases to 25 tenants consisting of 98 senior housing communities, 65 SNFs and one HOSP, excluding ten properties classified as assets held for sale. Our portfolio of 14 mortgages along with other notes receivable totaled $234.9 million, excluding an allowance for expected credit losses of $15.0 million, as of March 31, 2023.

Our SHOP segment is comprised of two ventures that own the operations of ILFs. As of March 31, 2023, we had gross investments of approximately $339.1 million in 15 properties with a combined 1,734 units located in eight states that are operated on behalf of the Company by independent managers pursuant to the terms of separate management agreements that commenced April 1, 2022. The third-party managers, or related parties 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 United States 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, 2022, included in our Annual Report on Form 10-K for the year ended December 31, 2022 filed with the Securities and Exchange Commission (the “SEC”).

Principles of Consolidation

The condensed consolidated financial statements include the accounts of the Company, and 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 March 31, 2023, our consolidated total assets and liabilities include two consolidated ventures comprising our SHOP activities, each formed with a separate partner - Merrill Gardens, L.L.C. (“Merrill”) and DSHI NHI Holiday LLC (the “Discovery member”), a related party of Discovery Senior Living (“Discovery”). We consider both ventures to be VIEs as the members of each, as a group, lack the characteristics of a controlling financial interest. 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. Aggregate assets of the consolidated SHOP ventures that can be used only to settle obligations of each respective SHOP venture primarily include approximately $259.4 million of real estate properties, net, $5.0 million of cash and cash equivalents, $2.7 million of prepaid expenses and other, and $0.4 million of accounts receivable, net. 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 10 for further discussion of these ventures.

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We also consolidate two real estate partnerships formed with our partners, Discovery Senior Housing Investor XXIV, LLC, a related party of Discovery, and LCS Timber Ridge LLC (“LCS”), to invest in senior housing facilities. We consider both partnerships to be VIEs, as either the members, as a group, lack the characteristics of a controlling financial interest or the total equity at risk 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 partners for specified business decisions. Because of our control of these partnerships, we include their assets, liabilities, noncontrolling interests and operations in our condensed 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.

We structured our Timber Ridge OpCo, LLC (“Timber Ridge OpCo”) investment to be compliant with the provisions of the REIT Investment Diversification Empowerment Act of 2007 which permits us to receive rent payments through a triple-net lease between a property company and an operating company and allows us to receive distributions from the operating company to a taxable REIT subsidiary (“TRS”). Our TRS holds our equity interests in unconsolidated operating companies thus providing an organizational structure that allows the TRS to engage in a broad range of activities and share in revenues that are otherwise non-qualifying income under the REIT gross income tests.

At March 31, 2023, 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
2014	Senior Living Communities	Notes and straight-line receivable	$	91,523	$	94,023	Notes 3, 4
2016	Senior Living Management	Notes	$	24,500	$	24,500	—
2018	Bickford Senior Living	Notes and funding commitment	$	17,156	$	30,125	Notes 3, 4
2019	Encore Senior Living	Various1	$	44,780	$	55,726	Notes 3, 4
2020	Timber Ridge OpCo	Various2	$	3,287	$	8,287	Notes 6, 7
2020	Watermark Retirement	Notes and straight-line receivable	$	7,580	$	11,104	—
2021	Montecito Medical Real Estate	Notes and funding commitment	$	20,383	$	50,128	Note 4
2021	Vizion Health	Notes and straight-line receivable	$	19,330	$	21,330	—
2021	Navion Senior Solutions	Various3	$	9,351	$	13,926	—

1 Notes, straight-line rent receivables, and lease receivables

2 Loan commitment, equity method investment, straight-line rent receivables and unamortized lease incentive

3 Notes, loan commitments, straight-line rent receivables, and unamortized lease incentive

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 non-payment of 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 or borrowers 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 or borrowers into our condensed consolidated financial statements.

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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 March 31, 2023, the Merrill SHOP venture noncontrolling interest was classified in mezzanine equity, as discussed further in Note 10.

We consolidate the real estate partnerships formed with Discovery in June 2019 and LCS in January 2020, both of which invest in senior housing facilities. The noncontrolling interests associated with these two consolidated real estate partnerships and our Discovery member SHOP venture were classified in equity as of March 31, 2023.

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 Section 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):

	March 31,<br>2023		March 31,<br>2022
Beginning of period:
Cash and cash equivalents	$	19,291	$	37,412
Restricted cash (included in Other assets, net)	2,225		2,073
Cash, cash equivalents, and restricted cash	$	21,516	$	39,485
End of period:
Cash and cash equivalents	$	13,875	$	36,121
Restricted cash (included in Other assets, net)	1,652		3,807
Cash, cash equivalents, and restricted cash	$	15,527	$	39,928

Concentration of Credit Risks

Our credit risks primarily relate to cash and cash equivalents and investments in mortgage and other notes receivable. Cash and cash equivalents are primarily held in bank accounts and overnight investments. We maintain our bank deposit accounts with large financial institutions in amounts that may exceed federally insured limits. We have not experienced any losses in such accounts. Our mortgages and other notes receivable consist primarily of secured loans on facilities.

Our financial instruments, principally our investments in notes receivable, are subject to the possibility of loss of the carrying values as a result of the failure of other parties to perform according to their contractual obligations which may make the instruments less valuable. We obtain collateral in the form of mortgage liens and other protective rights for notes receivable and continually monitor these rights in order to reduce such possibilities of loss. We evaluate the need to provide for reserves for potential losses on our financial instruments based on management’s periodic review of our portfolio on an instrument-by-instrument basis.

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. If a property subsequently no longer meets the criteria to be classified as held for

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sale, it is reclassified as held and used and measured at the lower of i) its original carrying amount before the asset was classified as held for sale, adjusted for any depreciation expense not recognized while it was classified as held for sale, and ii) its fair value.

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 or 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 of the property exceeds the estimated fair value of the long-lived asset.

During the three months ended March 31, 2023 and 2022, we recognized impairment charges of approximately $0.3 million and $24.6 million, respectively, included in “Loan and realty (gains) 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. Under certain leases, we receive additional contingent rent, which is calculated on the increase in revenues of the tenant over a base year or base quarter. We recognize contingent rent annually or quarterly based on the actual revenues of the tenant once the target threshold has been achieved. Lease payments that depend on a factor directly related to future use of the property, such as an increase in annual revenues over a base year, are considered to be contingent rentals and are excluded from the schedule of minimum lease payments.

The Company reviews its operating lease receivables for collectability 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 collectability 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.

As of March 31, 2023, we had three tenants, including Bickford Senior Living (“Bickford”) on the cash basis of revenue recognition for their lease arrangements. Reference Note 3 for further discussion.

Resident Fees and Services - Resident fee revenue associated with our SHOP activities is recognized as the related performance obligations are satisfied and includes resident room charges, community fees and other resident charges.

Residency agreements are generally short term (30 days to one year), and entitle the resident to certain room and care services for a monthly fee billed in advance. Revenue for certain related services is billed monthly in arrears. The Company has elected the lessor practical expedient within Accounting Standards Codification (“ASC”) 842, Leases, not to separate the lease and nonlease components within our resident agreements as the timing and pattern of transfer to the resident are the same. The Company has determined that the nonlease component is the predominant component within the contract and will recognize revenue under ASC 606, Revenue Recognition from Contracts with Customers.

Interest Income from Mortgage and Other Notes Receivable

Interest income is recognized based on the interest rates and principal amounts outstanding on the notes receivable. We identify a mortgage loan as non-performing if a required payment is not received within 30 days of the date it is due and a borrower’s current financial condition indicates a probability it cannot pay its current contractual amounts. A non-performing loan is returned to accrual status at such time as the loan becomes contractually current and management believes all future principal and interest will be received according to the contractual loan terms. As of March 31, 2023, we have a mortgage note receivable and a mezzanine loan totaling an aggregate of $24.5 million with affiliates of one operator/borrower designated as non-performing.

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Income Taxes

We intend at all times to qualify as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”). 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 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 TRSs. TRSs are subject to federal, state, and local income taxes. Accordingly, a provision for income taxes has been made in the condensed 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 primarily 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 independent managers pursuant to the terms of separate management agreements. Reference Notes 5 and 15 for additional information.

Reclassifications

In prior years, the Company presented "Cumulative dividends in excess of net income" as a single line item on the Consolidated Balance Sheets and Consolidated Statements of Equity. Beginning January 1, 2023, the Company separated this line item into two components, "Retained earnings" and "Cumulative dividends," and reclassified prior year information to conform to the current period presentation.

Note 3. Investment Activity

Asset Acquisitions

Since January 1, 2023, we have completed the following real estate investments ($ in thousands):

Operator	Date	Properties	Asset Class	Land		Building and Improvements		Total
Silverado Senior Living	Q1 2023	2	ALF	$	3,894	$	33,599	$	37,493
Bickford	Q1 2023	1	ALF	1,746		15,542		17,288
				$	5,640	$	49,141	$	54,781

In February 2023, we acquired two memory care communities operated by Silverado Senior Living for approximately $37.5 million. The newly developed properties opened in 2022 and include a 60-unit community in Summerlin, Nevada and a 60-unit community in Frederick, Maryland. They are leased pursuant to 20-year leases with a first-year lease rate of 7.5% and annual escalators of 2.0%.

In February 2023, we also acquired a 64-unit assisted living and memory care community in Chesapeake, Virginia from Bickford. The acquisition price was $17.3 million, including the satisfaction of an outstanding construction note receivable of $14.2 million including interest, cash consideration of $0.5 million and approximately $0.1 million in closing costs. The acquisition price also included a reduction of $2.5 million in Bickford’s outstanding pandemic-related deferrals that has been recognized in “Rental income.” We added the community to an existing master lease with Bickford at an initial rate of 8.0%.

Asset Dispositions

During the three months ended March 31, 2023, we completed the following dispositions of real estate properties within our Real Estate Investments portfolio as described below ($ in thousands):

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Operator	Date	Properties1	Asset Class	Net Proceeds		Net Real Estate Investment		Gain		Impairment2
BAKA Enterprises, LLC3	Q1 2023	1	ALF	$	7,478	$	7,505	$	—	$	(27)
Bickford Senior Living	Q1 2023	1	ALF	2,553		1,421		1,132		—
				$	10,031	$	8,926	$	1,132	$	(27)

1 Assets were previously classified as “Assets held for sale” in the Consolidated Balance Sheet at December 31, 2022.

2 Impairments are included in “Loan and realty (gains) losses” in the Condensed Consolidated Statement of Income for the three months ended March 31, 2023.

3 Total impairment charges previously recognized on this property were $7.8 million.

Assets Held for Sale and Long-Lived Assets

The following is a summary of our assets held for sale ($ in thousands):

	As of	As of
	March 31, 2023	December 31, 2022
Number of properties	10	13
Real estate, net	$26,670	$43,302

Rental income associated with assets held for sale totaled $1.5 million and $1.0 million for the three months ended March 31, 2023 and 2022, respectively. During the first quarter of 2023, one property in our Real Estate Investments portfolio was classified as held for sale with a net real estate balance of $5.0 million and two properties, previously classified as held for sale with an aggregate net real estate balance of $12.3 million, were reclassified as held for use.

During the three months ended March 31, 2023, we recorded impairment charges of approximately $0.3 million on three properties which were sold or classified as held for sale related to our Real Estate Investments portfolio. The impairment charges are included in “Loan and realty (gains) 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).

Second Quarter 2023 Dispositions

During the second quarter of 2023, we sold three ALFs located in Oregon in two transactions for approximately $5.7 million in cash consideration, net of transaction costs and $0.6 million of seller financing on one of the transactions. The properties were classified in assets held for sale on the Condensed Consolidated Balance Sheet as of March 31, 2023 with an aggregate book value of $5.9 million. Prior impairment charges recognized on the properties totaled $3.7 million.

Tenant Concentration

The following table contains information regarding concentration in our Real Estate Investments portfolio for tenants or affiliates of tenants, that exceed 10% of total revenues for the three months ended March 31, 2023 and 2022, excluding $2.6 million for our corporate office, a credit loss reserve of $15.0 million and $339.1 million in assets for the SHOP segment ($ in thousands):

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	as of March 31, 2023					Revenues1
	Asset	Gross Real		Notes		Three Months Ended March 31,
	Class	Estate2		Receivable		2023			2022
Senior Living Communities, LLC (“Senior Living”)	EFC	$	573,631	$	50,200	$	12,833	16%	$	12,751	18%
National HealthCare Corporation (“NHC”)	SNF	133,770		—		9,807		12%	9,189		13%
Bickford	ALF	430,217		16,921		11,162		14%	7,038		10%
Holiday Retirement3	ILF	—		—		N/A		N/A	9,797		14%
All others, net	Various	1,311,316		167,785		34,267		41%	29,514		41%
Escrow funds received from tenants
for property operating expenses	Various	—		—		2,619		3%	3,038		4%
		$	2,448,934	$	234,906	70,688			71,327
Resident fees and services4						11,700		14%	N/A		—%
						$	82,388		$	71,327

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 include a lease deposit recognized as rental income in the three months ended March 31, 2022.

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

At March 31, 2023, the two states in which we had an investment concentration of 10% or more were South Carolina (11.8%) and Texas (10.5%).

Senior Living

As of March 31, 2023, we leased ten retirement communities to Senior Living. We recognized straight-line rent revenue of $(0.3) million and $0.1 million from Senior Living for the three months ended March 31, 2023 and 2022, respectively.

NHC Percentage Rent

Under the terms of our lease with NHC, rent escalates by 4% of the increase, if any, in each of the facility’s revenue over a base year and is referred to as percentage rent. The following table summarizes the percentage rent income from NHC ($ in thousands):

	Three Months Ended March 31,
		2023		2022
Current year		$	965	$	843
Prior year final certification1		630		(206)
Total percentage rent income		$	1,595	$	637

1 For purposes of the percentage rent calculation described in the master lease agreement, NHC’s annual revenue by facility for a given year is certified to NHI by March 31st of the following year.

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

Bickford Senior Living

As of March 31, 2023, we leased 39 facilities under four leases to Bickford. During the three months ended March 31, 2023, we did not provide any lease concessions to Bickford. Revenues from Bickford for the three months ended March 31, 2022, reflect the impact of pandemic-related rent concessions of approximately $5.5 million.

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During the first quarter of 2023, Bickford repaid $0.2 million of its outstanding pandemic-related deferrals in addition to the reduction in deferrals of $2.5 million in connection with the acquisition of the ALF located in Chesapeake, Virginia. As of March 31, 2023, Bickford’s outstanding pandemic-related deferrals were $20.1 million.

Cash Basis Operators

We placed Bickford on cash basis of revenue recognition during the second quarter of 2022, 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. Cash rent received from Bickford for the three months ended March 31, 2023 was $7.8 million, which excludes $2.5 million of rental income related to the reduction of pandemic-related rent deferrals in connection with the acquisition of the ALF located in Chesapeake, Virginia discussed above.

We placed two additional operators on the cash basis of accounting for their leases during 2022. Rental income associated with these tenants totaled $4.0 million for the three months ended March 31, 2023.

Tenant Purchase Options

Certain of our leases contain purchase options allowing tenants to acquire the leased properties. At March 31, 2023, we had tenant purchase options on three properties with an aggregate net investment of $59.7 million that will become exercisable between 2027 and 2028. Rental income from these properties with tenant purchase options was $1.8 million and $1.7 million for the three months ended March 31, 2023 and 2022, respectively.

We cannot reasonably estimate at this time the probability that any 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 March 31, 2023, are as follows ($ in thousands):

Remainder of 2023	$	171,434
2024	239,886
2025	243,414
2026	250,071
2027	208,445
2028	202,028
Thereafter	663,295
	$	1,978,573

Variable Lease Payments

Most of our existing leases contain annual escalators in rent payments. Some of our leases contain escalators that are determined annually based on a variable index or other factors that are 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):

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	Three Months Ended
	March 31,
	2023		2022
Lease payments based on fixed escalators, net of deferrals	$	58,937	$	59,508
Lease payments based on variable escalators	1,945		1,186
Straight-line rent income, net of write-offs	2,097		1,079
Escrow funds received from tenants for property operating expenses	2,619		3,038
Amortization of lease incentives	(299)		(252)
Rental income	$	65,299	$	64,559

Note 4. Mortgage and Other Notes Receivable

At March 31, 2023, our investments in mortgage notes receivable totaled $150.8 million secured by real estate and other assets of the borrowers (e.g., Uniform Commercial Code liens on personal property) related to 14 facilities and in other notes receivable totaled $84.1 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 $15.0 million at March 31, 2023. We have a mortgage note receivable of $10.0 million and a mezzanine loan of $14.5 million with affiliates of one operator/borrower designated as non-performing at March 31, 2023 and December 31, 2022. This operator/borrower is also one of the tenants converted to cash basis of accounting. Interest income recognized, representing cash received, from these non-performing loans was $0.4 million for both the three months ended March 31, 2023 and 2022. All other loans were on full accrual basis at March 31, 2023 and December 31, 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. As of March 31, 2023, 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 each of the three months ended March 31, 2023 and 2022, we received interest of $0.4 million.

The mezzanine loan and security agreement was modified in April 2022, so that the two real estate investments funded in the second quarter of 2022 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 mezzanine loan and security agreement bear interest at an annual rate of 9.5% and accrue an additional 2.5% in Deferred Interest. The Deferred Interest will be recognized as interest income upon receipt. 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.

Bickford Construction and Mortgage Loans

As of March 31, 2023, we had one fully funded construction loan of $14.7 million. The construction loan is secured by a first mortgage lien on substantially all of the related 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 agreement, including the borrower’s obligation for payment of insurance and taxes. NHI has a fair market value purchase option on the property upon 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.

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 for both the three months ended March 31, 2023 and 2022. We did not include this note receivable in the determination of the gain 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 March 31, 2023 and December 31, 2022. During the three months ended March 31, 2023, Bickford repaid $0.1 million of principal on this note receivable which is reflected in “Gains on sale of real estate, net” in the Condensed Consolidated Statement of Income.

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Senior Living

We have 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, 2025, availability under the revolver will reduce to $15.0 million. The revolver matures in December 2029 at the time of lease maturity. At March 31, 2023, the $17.5 million outstanding under the facility bears interest at 8.0% per annum.

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 table below have been calculated utilizing the most recent date for which data is available, December 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.

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 March 31, 2023, is presented below for the amortized cost, net by year of origination ($ in thousands):

	2023		2022		2021		2020		2019		Prior		Total
Mortgages
more than 1.5x	$	—	$	59,779	$	—	$	22,249	$	32,700	$	2,746	$	117,474
between 1.0x and 1.5x	—		—		—		—		—		14,700		14,700
less than 1.0x	—		—		—		2,221		6,423		—		8,644
	—		59,779		—		24,470		39,123		17,446		140,818
Mezzanine
more than 1.5x	—		—		18,170		—		—		—		18,170
between 1.0x and 1.5x	—		—		23,960		—		—		—		23,960
less than 1.0x	—		—		—		—		—		8,482		8,482
	—		—		42,130		—		—		8,482		50,612
Non-performing
less than 1.0x	—		—		—		—		—		24,500		24,500
	—		—		—		—		—		24,500		24,500
Revolver
more than 1.5x													1,476
between 1.0x and 1.5x													17,500
													18,976
									Credit loss reserve				(14,964)
													$	219,942

Due to the continuing challenges in financial markets and the potential impact on the collectability of our mortgages and other notes receivable, we forecasted a 20% increase in the probability of a default and a 20% increase in the amount of loss from a default on all loans, other than those designated as non-performing, resulting in an effective adjustment of 44%. The methodology

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for estimating the reserves for non-performing loans incorporates current conditions and forecasts of future economic conditions of these loans, including qualitative factors, which may differ from conditions existing in the historical period.

The allowance for expected credit losses is presented in the following table for the three months ended March 31, 2023 ($ in thousands):

Beginning balance at January 1, 2023	$	15,338
Provision for expected credit losses	(374)
Balance at March 31, 2023	$	14,964

Note 5. Senior Housing Operating Portfolio Formation Activities

Effective April 1, 2022 we transitioned the operations of 15 ILFs previously leased pursuant to a triple-net lease into two new ventures comprising our SHOP activities. 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 fee. The equity structure of these ventures is 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 March 31, 2023, the annual fixed preferred return was approximately $10.2 million. Additionally, the managers, or related parties of the managers, own common equity interests in their respective ventures. Each venture is discussed in more detail below.

Merrill 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 contingent distributions to the members 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. Given certain provisions of the operating agreement, including provisions related to a Company change in control, the noncontrolling interest associated with the venture was determined to be contingently redeemable, as discussed further in Note 10. At March 31, 2023, the Merrill SHOP venture noncontrolling interest was classified in mezzanine equity, as discussed further in Note 10.

Discovery Managed Portfolio

We transferred nine ILFs located in Arkansas, Georgia, Ohio, Oklahoma, New Jersey, and South Carolina into a consolidated venture with the Discovery member, a related party of Discovery. The Discovery member contributed $1.1 million in cash for its common equity interest in the venture. The operating agreement includes contingent distributions to the members based on the attainment of certain yields on investment calculated on an annual basis. The noncontrolling interest is included in “Equity” on the Condensed Consolidated Balance Sheet as of March 31, 2023 and December 31, 2022.

The properties are managed by separate related parties 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 agreements entitle the managers to a base management fee of 5% of net revenue.

Note 6. Equity Method Investment

Concurrently with the acquisition of a CCRC from LCS-Westminster Partnership III, LLP in January 2020, we invested $0.9 million in the operating company, Timber Ridge OpCo, representing a 25% equity interest. This investment is held by our TRS to be compliant with the provisions of the REIT Investment Diversification and Empowerment Act of 2007. 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 guaranteed or implied commitments to fund operations. In February 2023, we received $2.5 million from Timber Ridge Opco

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representing the Company’s proportionate share of the lease incentive earned, as discussed in Note 7, based on its equity interest in the entity. Our guaranteed and implied commitments are currently limited to the additional $5.0 million under the revolving credit facility and the $2.5 million lease incentive distribution received. As of March 31, 2023, 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 and the $2.5 million lease incentive distribution received are included in “Accounts payable and accrued expenses” in our Condensed Consolidated Balance Sheet as of March 31, 2023. Excess unrecognized equity method losses for both the three months ended March 31, 2023 and 2022 were $0.6 million. Cumulative unrecognized losses were $6.5 million through March 31, 2023. We recognized gains of approximately $0.3 million related to our investment in Timber Ridge OpCo for the three months ended March 31, 2022.

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, NHI-LCS JV I, LLC (“Timber Ridge PropCo”) acquired the Timber Ridge CCRC 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 liabilities under the guarantee. As a result of the subordination and resident loan assumption agreements, no liability has been recorded as of March 31, 2023. The balance secured by the Deed and Indenture was $13.2 million at March 31, 2023.

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Note 7. Other Assets

Other assets, net consist of the following ($ in thousands):

	March 31, 2023		December 31, 2022
SHOP accounts receivable, net of allowance of $566 and $375, and other	$	1,212	$	1,341
Real estate investments accounts receivable and prepaid expenses	6,805		3,621
Lease incentive payments, net	12,891		3,190
Regulatory escrows	6,208		6,208
Restricted cash	1,652		2,225
	$	28,768	$	16,585

In February 2023, Timber Ridge PropCo, the consolidated senior housing partnership with LCS that owns the Timber Ridge CCRC, paid a $10.0 million lease incentive earned by Timber Ridge OpCo. The lease incentive is being amortized on a straight-line basis through the remaining initial lease term ending January 2027.

Note 8. Debt

Debt consists of the following ($ in thousands):

	March 31,<br>2023		December 31,<br>2022
Revolving credit facility - unsecured	$	215,000	$	42,000
Bank term loan - unsecured	220,000		240,000
2031 Senior notes - unsecured, net of discount of $2,519 and $2,600	397,481		397,400
Private placement notes - unsecured	275,000		400,000
Fannie Mae term loans - secured, non-recourse	76,546		76,649
Unamortized loan costs	(8,013)		(8,538)
	$	1,176,014	$	1,147,511

Aggregate principal maturities of debt as of March 31, 2023 are as follows ($ in thousands):

Remainder of 2023	$	270,305
2024	75,425
2025	125,816
2026	215,000
2027	100,000
2028	—
Thereafter	400,000
	1,186,546
Less: discount	(2,519)
Less: unamortized loan costs	(8,013)
	$	1,176,014

Unsecured revolving credit facility and bank term loan

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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 one of the following (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 have a $220.0 million term loan, maturing in September 2023 (“2023 Term Loan”) whose covenants align with provisions in the 2022 Credit Agreement and to accrue interest on borrowings based on SOFR (plus a credit spread adjustment). We may also elect for the 2023 Term Loan to accrue interest at a base rate plus the applicable margin. During the three months ended March 31, 2023, we repaid $20.0 million of the 2023 Term Loan.

The revolving facility fee was 25 bps per annum and based on our current credit ratings, the facility presently provides for floating interest on the revolving credit facility and the 2023 Term Loan at SOFR CME Term Option one-month loan (plus a 10 bps spread adjustment) plus 105 bps and a blended 125 bps, respectively. At March 31, 2023, the SOFR CME Term Option one-month was 480 bps.

At March 31, 2023, we had $485.0 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 March 31, 2023, 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 chairperson of the Audit Committee of the Board of Directors 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.

2031 Senior Notes

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”). The 2031 Senior Notes were sold at an issue price of 99.196% of face value before the underwriters’ discount. Our net proceeds from the 2031 Senior Notes offering, after deducting underwriting discounts and expenses, were approximately $392.3 million. The 2031 Senior Notes are subject to affirmative and negative covenants, including financial covenants. As of March 31, 2023, we were in compliance with all affirmative and negative covenants, including financial covenants for our 2031 Senior Notes borrowings.

Private Placement Notes

In January 2023, we repaid the $125.0 million of the private placement notes due January 2023 primarily with proceeds from the revolving credit facility.

Our remaining unsecured private placement notes as of March 31, 2023, payable interest-only, are summarized below ($ in thousands):

Amount		Inception	Maturity	Fixed Rate
$	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%
$	275,000

Covenants pertaining to the private placement notes are generally conformed with those governing our credit facility, except for specific debt-coverage ratios that are more restrictive. Our unsecured private placement notes include a rate increase provision

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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 March 31, 2023, we had $60.1 million in Fannie Mae term-debt financing, that originated in March 2015, requiring interest-only payments at an annual rate of 3.79% with 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 $16.4 million at March 31, 2023. Collectively, these notes are secured by facilities having a net book value of $103.5 million at March 31, 2023.

Interest Expense

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

	Three Months Ended
	March 31,
	2023		2022
Interest expense on debt at contractual rates	$	13,440	$	9,558
Capitalized interest	(19)		(2)
Amortization of debt issuance costs, debt discount and other	606		642
Total interest expense	$	14,027	$	10,198

Note 9. 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 March 31, 2023, we had working capital, construction and mezzanine loan commitments to six operators or borrowers for an aggregate of $145.4 million, of which we had funded $93.7 million toward these commitments. As provided above, loans funded do not include the effects of discounts or commitment fees.

As of March 31, 2023, we had $23.2 million of development commitments for construction and renovation for seven properties of which we had funded $17.1 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 March 31, 2023, no amount of this consideration is expected to be paid. One of our consolidated real estate partnerships, NHI REIT of DSL PropCo, LLC, 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 March 31, 2023.

As of March 31, 2023, we had an aggregate of $15.9 million remaining contingent lease inducement commitments in six lease agreements which are generally based on the performance of facility operations and may or may not be met by the tenant. In the three months ended March 31, 2023, we funded $10.0 million to Timber Ridge OpCo based upon the achievement of all performance conditions as discussed in Note 7.

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 market adjustments as discussed in Note 4.

The liability for expected credit losses on our unfunded loans is reflected in “Accounts payable and accrued expenses” on the Condensed Consolidated Balance Sheets as of March 31, 2023 and December 31, 2022 is presented in the following table for the three months ended March 31, 2023 ($ in thousands):

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Beginning balance January 1, 2023	$	683
Provision for expected credit losses	(382)
Balance at March 31, 2023	$	301

The disposal transactions for three Bickford properties in the second quarter of 2022 included $2.4 million in contingent consideration representing cash placed in escrow 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. As of March 31, 2023, all the escrowed funds were used to fund negative cash flows for the properties.

COVID-19 Pandemic Contingencies

Repayments and other reductions of rent deferrals recognized in “Rental income” during the three months ended March 31, 2023 were $2.8 million, including the $2.5 million reduction in pandemic-related rent deferrals in connection with the acquisition of the ALF located in Chesapeake, Virginia discussed in Note 3. As of March 31, 2023, aggregate pandemic-related rent concessions granted to tenants that have been accounted for as variable lease payments totaled approximately $30.1 million, net of cumulative repayments and other reductions of $6.5 million and excluding any interest accrued.

Rent concessions granted for the three months ended March 31, 2022 totaled approximately $7.8 million, of which Bickford accounted for approximately $5.5 million.

Note 10. Redeemable Noncontrolling Interest

The interest held by Merrill in its SHOP venture was classified as a “Redeemable noncontrolling interest” in the mezzanine section between “Total liabilities” and “Stockholders’ equity” on our Condensed Consolidated Balance Sheets as of March 31, 2023 and December 31, 2022. Certain provisions within the operating agreement of the Merrill venture provide Merrill with put rights upon certain contingent events that are not solely within the control of the Company. Therefore, Merrill’s noncontrolling interest was determined to be contingently redeemable. The redeemable noncontrolling interest is not currently redeemable and we concluded a contingent redemption event is not probable to occur as of March 31, 2023. Consequently, the noncontrolling interest will not be subsequently remeasured to its redemption amount until such contingent event and the related redemption are probable to occur. We will continue to reflect the attribution of gains or losses to the redeemable noncontrolling interest each period.

The following table presents the change in “Redeemable noncontrolling interest” for the three months ended March 31, 2023 ($ in thousands):

	Three Months Ended
	March 31, 2023
Balance at January 1,	$	9,825
Net loss	(305)
Balance at March 31,	$	9,520

Note 11. Equity and Dividends

Share Repurchase Plan

On February 17, 2023, our Board of Directors authorized a revised stock repurchase program (the “Revised Repurchase Plan”) pursuant to which we may purchase up to $160.0 million in shares of our issued and outstanding common stock, par value $0.01 per share. The Revised Repurchase Plan is effective for a period of one year and does not require us to repurchase any specific number of shares. The Revised Repurchase Plan may be suspended or discontinued at any time. 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 (the “Exchange Act”) and shall be made in accordance with all applicable laws and regulations in effect. The timing and number of shares repurchased, if any, 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 months ended March 31, 2023, no common stock was repurchased. During 2022, cumulative repurchases through open market transactions were 2,468,354 shares of common stock for approximately $151.6 million. All shares received were constructively retired upon receipt, and reflected as a reduction to “Retained earnings” in the Condensed Consolidated Balance Sheet as of December 31, 2022.

In March 2023, we renewed our automatic “shelf” registration statement on Form S-3 and concurrently entered into a new equity distribution agreement whereby we can sell up to $500.0 million in common stock under an at-the-market (“ATM”) equity program. We incurred approximately $0.5 million in costs for these programs which was paid during the second quarter of 2023. Upon expiration of the prior registration statement and ATM equity program, approximately $0.3 million in equity issuance costs was reclassified from “Other Assets” into “Capital in Excess of Par Value” on the Condensed Consolidated Balance Sheet.

Dividends

The following table summarizes dividends declared by the Board of Directors or paid during the three months ended March 31, 2023 and 2022:

Three Months Ended March 31, 2023
Date of Declaration	Date of Record	Date Paid/Payable	Quarterly Dividend
November 6, 2022	December 30, 2022	January 27, 2023	$0.90
February 17, 2023	March 31, 2023	May 5, 2023	$0.90
Three Months Ended March 31, 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

On May 5, 2023, the Board of Directors declared a $0.90 per share dividend to common stockholders of record on June 30, 2023, payable on August 4, 2023.

Note 12. 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 three months ended March 31, 2023, we granted options to purchase 385,500 shares of common stock 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
	March 31,
	2023		2022
Non-cash share-based compensation expense	$	2,105	$	5,083

The weighted average fair value of options granted during the three months ended March 31, 2023 and 2022 was $10.56 and $11.81 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:

	2023	2022
Dividend yield	7.0%	7.1%
Expected volatility	39.7%	49.2%
Expected lives	2.9 years	2.9 years
Risk-free interest rate	4.65%	1.72%

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The following table summarizes our outstanding stock options:

	Number	Weighted Average
	of Shares	Exercise Price
Options outstanding, January 1, 2022	1,652,505	78.10
Options granted	693,000	53.41
Options exercised	(7,500)	53.41
Options forfeited	(23,000)	62.33
Options expired	(74,498)	77.93
Options outstanding, March 31, 2022	2,240,507	70.71
Exercisable at March 31, 2022	1,719,487	74.34
Options outstanding, January 1, 2023	2,216,175	70.97
Options granted	385,500	54.73
Options forfeited	(25,000)	74.67
Options expired	(60,002)	64.33
Options outstanding, March 31, 2023	2,516,673	68.61
Exercisable at March 31, 2023	2,132,828	71.21

All values are in US Dollars.

At March 31, 2023, there was no intrinsic value of stock options outstanding and exercisable. The aggregate intrinsic value of stock options exercised during the three months ended March 31, 2022 was $4.94 per share or less than $0.1 million.

As of March 31, 2023, unrecognized compensation expense totaling $3.5 million associated with unvested stock options is expected to be recognized over the following periods: remainder of 2023 - $2.3 million, 2024 - $1.1 million and 2025 - $0.1 million.

Amended and Restated 2019 Stock Incentive Plan

On February 17, 2023, the Board of Directors approved an Amended and Restated 2019 Stock Incentive Plan, which was approved by the Company’s stockholders on May 5, 2023. The Amended and Restated 2019 Stock Incentive Plan increases the number of shares of common stock authorized for issuance to 6,000,000 and adds the ability of the Company to award shares of restricted stock or restricted stock units subject to such conditions and restrictions as the Company may determine. In May 2023, 21,000 shares of restricted stock were issued to the named executive officers. The restricted stock will vest over five years, with 20% vesting on each anniversary of the date of grant. Effective with this amendment, shares available for future issuance as of May 5, 2023 totaled 4,035,836.

Note 13. 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 using the treasury stock method, to the extent dilutive.

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
	March 31,
	2023		2022
Net income attributable to common stockholders	$	34,484	$	8,399
BASIC:
Weighted average common shares outstanding	43,388,742		45,850,686
DILUTED:
Weighted average common shares outstanding	43,388,742		45,850,686
Stock options	2,687		375
Weighted average dilutive common shares outstanding	43,391,429		45,851,061
Net income attributable to common stockholders - basic	$	0.79	$	0.18
Net income attributable to common stockholders - diluted	$	0.79	$	0.18
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	728,524		481,068
Regular dividends declared per common share	$	0.90	$	0.90

Note 14. Fair Value of Financial Instruments

Carrying amounts and fair values of financial instruments that are not carried at fair value at March 31, 2023 and December 31, 2022 in the Condensed Consolidated Balance Sheets are as follows ($ in thousands):

	Carrying Amount				Fair Value Measurement
	March 31, 2023		December 31, 2022		March 31, 2023		December 31, 2022
Level 2
Variable rate debt	$	431,044	$	277,699	$	435,000	$	282,000
Fixed rate debt	$	744,970	$	869,812	$	664,993	$	773,994
Level 3
Mortgage and other notes receivable, net	$	219,942	$	233,141	$	218,959	$	227,611

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

Variable rate debt. Variable rate debt is classified as Level 2 and the fair values of our borrowings under our revolving credit facility and other variable rate debt are reasonably estimated at their notional amounts due to the predominance of floating interest rates, which generally reflect market conditions.

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 and are classified as Level 1.

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Note 15. Segment Reporting

We evaluate our business and make resource allocations on our two operating segments: Real Estate Investments and SHOP. Our Real Estate Investments segment includes leases, mortgages and other note investments in ILFs, ALFs, EFCs, SLCs, SNFs and a HOSP. Under the Real Estate Investments segment, we invest in senior 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 properties. The SHOP segment includes multi-tenant ILFs. The SHOP properties and related operations are controlled by the Company and are operated by property managers in exchange for a management fee. See Note 5 for further discussion.

We formed the SHOP segment effective April 1, 2022 upon termination of the triple-net lease for the legacy Holiday Retirement (“Holiday”) portfolio at which time the operations and properties of 15 ILFs were transferred into two separate ventures, as discussed further in Note 5. 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 SHOP segment. There is no impact to the prior year’s presentation.

Our chief operating decision maker evaluates performance based upon segment net operating income (“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 months ended March 31, 2023. Capital expenditures for the three months ended March 31, 2023 were approximately $55.8 million for the Real Estate Investments segment and $1.1 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 discussed in Note 2. The results of operations for all acquisitions described in Note 3 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 months ended March 31, 2023 is as follows ($ in thousands):

For the three months ended March 31, 2023:	Real Estate Investment		SHOP		Non-segment/Corporate		Total
Rental income	$	65,299	$	—	$	—	$	65,299
Resident fees and services	—		11,700		—		11,700
Interest income and other	5,308		—		81		5,389
Total revenues	70,607		11,700		81		82,388
Senior housing operating expenses	—		9,799		—		9,799
Taxes and insurance on leased properties	2,619		—		—		2,619
NOI	67,988		1,901		81		69,970
Depreciation	15,376		2,227		14		17,617
Interest	759		—		13,268		14,027
Legal	—		—		122		122
Franchise, excise and other taxes	—		—		183		183
General and administrative	—		—		5,653		5,653
Loan and realty gains	(418)		—		—		(418)
Gains on sales of real estate, net	(1,397)		—		—		(1,397)
Net income (loss)	$	53,668	$	(326)	$	(19,159)	$	34,183
Total assets	$	2,254,939	$	270,085	$	8,206	$	2,533,230

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

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 (“SEC”) “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.

Forward Looking Statements

This Quarterly Report on Form 10-Q and other materials we have filed or may file with the SEC, 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,” “should,” “believes,” “anticipates,” “expects,” “intends,” “estimates,” “plans,” “projects,” “likely” 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 may continue to have a material adverse effect on our business and results of operations;

*    We depend on the operating success of our tenants, managers and borrowers and if their financial condition or business prospects deteriorate, our financial condition and results of operations could be adversely affected;

*    We are exposed to the risk that our managers, 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;

*Two members of our Board of Directors are also members of the board of directors of National HealthCare Corporation (“NHC”), and their interests may differ from those of our stockholders;

*    We are exposed to risks related to governmental regulations and payors, principally Medicare and Medicaid, and the effect of changes to laws, regulations and reimbursement rates on our tenants’ and borrowers’ business;

*    We are exposed to the risk that the cash flows of our tenants, managers and borrowers may 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 tenants, managers and borrowers against future litigation;

*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 risks associated with our joint venture investment with Life Care Services for Timber Ridge, a continuing care retirement community (“CCRC”), associated with Type A benefits offered to the residents of the joint venture’s entrance fee community and related accounting requirements;

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*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;

*Adverse developments affecting the financial services industry, including events or concerns involving liquidity, defaults, or non-performance by financial institutions, could adversely affect our business, financial condition, results of operations, or our prospects;

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

*Breaches of, disruptions to, or other unauthorized interference with the privacy and security of Company information could cause us to 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 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 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 depend on our ability to retain our management team and other personnel and attract suitable replacements should any such personnel leave;

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

*Our ability to raise capital through equity sales is dependent, in part, on the market price of our common stock, and our failure to meet market expectations with respect to our business, or other factors we do not control, could negatively impact such market price and availability of equity capital.

*    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 rely on external sources of capital to fund future capital needs, and if we encounter difficulty in obtaining such capital, we may not be able to make future investments necessary to grow our business or meet maturing commitments;

*Inflation and increased interest rates may adversely affect our financial condition and results of operations;

*    We depend on the ability to continue to qualify for taxation as a real estate investment trust (“REIT”) for U.S. federal income tax purposes;

*There are no assurances of our ability to pay dividends in the future;

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

*Our ownership of and relationship with any taxable REIT subsidiary (“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;

*    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, 2022, “Business” and “Risk Factors” under Part I, Item 1 and Item 1A, respectively, 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 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. We caution readers not to place undue reliance on such forward-looking statements, which speak only as of their dates. We undertake no obligation to revise or update any of the forward-looking statements to reflect subsequent events or circumstances except to the extent required by applicable law.

Executive Overview

National Health Investors, Inc., established in 1991 as a Maryland corporation, is a self-managed 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 leases, mortgages and other notes receivable in independent living facilities, assisted living facilities, entrance-fee communities, senior living campuses, skilled nursing facilities and a 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 independent managers pursuant to the terms of separate management agreements. The third-party managers, or related parties of the managers, own equity interests in the respective ventures.

Real Estate Investment Portfolio

As of March 31, 2023, we had investments in real estate and mortgage and other notes receivable involving 178 facilities located in 31 states. These investments involve 105 senior housing properties, 72 skilled nursing facilities and one hospital, excluding ten 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 tenants, and $234.9 million aggregate carrying value of mortgages and other notes receivable, excluding an allowance for expected credit losses of $15.0 million, due from 13 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).

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Senior Housing – Need-Driven includes assisted living facilities (“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 ILFs 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 hospital (“HOSP”) 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 properties were transferred from a triple-net lease to two separate ventures comprising our SHOP segment. These ventures, in which NHI owns a majority interest, own the underlying independent living operations 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 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 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 March 31, 2023, our SHOP segment consisted of 15 ILFs with a combined 1,734 units located in eight states.

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The following tables summarize our portfolio, excluding $2.6 million for our corporate office, $26.7 million in assets held for sale and a credit loss reserve of $15.0 million, as of and for the three months ended March 31, 2023 ($ in thousands):

Real Estate Investments and SHOP
			Properties	Beds/Units	NOI1		% Total		Investment
Real Estate Properties
	Senior Housing - Need-Driven
		Assisted Living	71	3,882	$	15,585	22.3	%	$	762,406
		Senior Living Campus	9	1,229	4,797		6.9	%	234,019
		Total Senior Housing - Need-Driven	80	5,111	20,382		29.2	%	996,425
	Senior Housing - Discretionary
		Independent Living	7	903	2,085		3.0	%	107,778
		Entrance-Fee Communities	11	2,912	15,356		21.9	%	746,485
		Total Senior Housing - Discretionary	18	3,815	17,441		24.9	%	854,263
		Total Senior Housing	98	8,926	37,823		54.1	%	1,850,688
	Medical Facilities
		Skilled Nursing Facilities	65	8,584	21,247		30.4	%	557,996
		Hospitals	1	64	1,022		1.5	%	40,250
		Total Medical Facilities	66	8,648	22,269		31.9	%	598,246
	Current Year Disposals and Held for Sale				2,587		3.7	%
		Total Real Estate Properties	164	17,574	62,679		89.7	%	2,448,934
Mortgage and Other Notes Receivable
	Senior Housing - Need-Driven		6	472	1,544		2.2	%	73,055
	Senior Housing - Discretionary		1	247	593		0.8	%	32,700
	Skilled Nursing Facilities		7	731	854		1.3	%	45,062
	Other Notes Receivable		—	—	2,093		3.0	%	84,089
	Current Year Note Payoffs		—	—	225		0.3	%	—
		Total Mortgage and Other Notes Receivable	14	1,450	5,309		7.6	%	234,906
SHOP
	Independent Living		15	1,734	1,901		2.7	%	339,131
		Total	193	20,758	$	69,889	100	%	$	3,022,971
1Excludes Non-segment/Corporate NOI

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Portfolio Summary			Properties	NOI		% Portfolio		Investment
	Real Estate Properties		164	$	62,679	89.7	%	$	2,448,934
	Mortgage and Other Notes Receivable		14	5,309		7.6	%	234,906
	SHOP		15	1,901		2.7	%	339,131
		Total Portfolio	193	$	69,889	100.0	%	$	3,022,971
Portfolio by Operator Type
	Public		55	$	16,438	23.5	%	$	411,740
	National Chain (Privately Owned)		3	2,701		3.9	%	172,385
	Regional		117	45,567		65.2	%	2,068,352
	Small		3	470		0.7	%	31,363
Current Year Disposals and Held for Sale				2,587		3.7	%	—
Current Year Note Payoffs				225		0.3	%	—
		Total Real Estate Investments Portfolio	178	67,988		97.3	%	2,683,840
SHOP			15	1,901		2.7	%	339,131
		Total Portfolio	193	$	69,889	100.0	%	$	3,022,971

The following table summarizes the geographic concentration of NOI of our portfolio, excluding Non-segment/Corporate NOI, for the three months ended March 31, 2023 and 2022, respectively ($ in thousands).

	Three Months Ended March 31,
Location	2023		2022
South Carolina	$	8,336	$	8,836
Texas	7,902		6,963
Florida	7,068		5,944
Washington	3,524		3,904
Tennessee	4,655		4,018
All others	38,404		38,571
NOI	$	69,889	$	68,236

For the three months ended March 31, 2023, operators of facilities in our Real Estate Investments portfolio who provided 3% or more individually, and collectively 61% of our total revenues were (parent company, in alphabetical order): Bickford Senior Living (“Bickford”); Discovery Senior Living; Encore Senior Living; Health Services Management; Life Care Services; NHC; Senior Living Communities (“Senior Living”); and The Ensign Group.

As of March 31, 2023, our average effective annualized NOI for the Real Estate Investments reportable segment was $9,901 per bed for SNFs, $15,613 per unit for SLCs, $16,608 per unit for ALFs, $9,235 per unit for ILFs, $21,020 per unit for EFCs and $63,899 per bed for the HOSP. As of March 31, 2023, our average effective annualized NOI per unit for the SHOP reportable segment was $4,387.

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. These 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 Update

Repayments and other reductions of rent deferrals recognized in “Rental income” during the three months ended March 31, 2023 were $2.8 million, including the $2.5 million reduction in pandemic-related rent deferrals in connection with the acquisition of the ALF located in Chesapeake, Virginia discussed in Note 3 to the condensed consolidated financial statements. As of March 31, 2023, aggregate pandemic-related rent concessions granted to tenants that have been accounted for as variable lease payments totaled approximately $30.1 million, net of cumulative repayments and other reductions of $6.5 million and excluding any interest accrued.

Rent concessions granted for the three months ended March 31, 2022 totaled approximately $7.8 million, of which Bickford accounted for approximately $5.5 million.

See Part I. Item 1A “Risk Factors” in our most recent Annual Report on Form 10-K for the year ended December 31, 2022 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 Part II, 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, 2022.

Investment Highlights

Since January 1, 2023, we have completed the following real estate investments ($ in thousands):

Operator	Date	Properties	Asset Class	Land		Building and Improvements		Total
Silverado Senior Living	Q1 2023	2	ALF	$	3,894	$	33,599	$	37,493
Bickford	Q1 2023	1	ALF	1,746		15,542		17,288
				$	5,640	$	49,141	$	54,781

Reference Note 3 to the condensed consolidated financial statements for more detail on first quarter 2023 acquisitions.

Asset Dispositions

During the three months ended March 31, 2023, we completed the following dispositions of real estate property classified in assets held for sale within our Real Estate Investments portfolio as described below ($ in thousands):

Operator	Date	Properties1	Asset Class	Net Proceeds		Net Real Estate Investment		Gain		Impairment2
BAKA Enterprises, LLC3	Q1 2023	1	ALF	$	7,478	$	7,505	$	—	$	(27)
Bickford	Q1 2023	1	ALF	2,553		1,421		1,132		—
				$	10,031	$	8,926	$	1,132	$	(27)

1 Assets were previously classified as “Assets held for sale” in the Consolidated Balance Sheet at December 31, 2022.

2 Impairments are included in “Loan and realty (gains) losses” in the Condensed Consolidated Statement of Income for the three months ended March 31, 2023.

3 Total impairment charges recognized on this property in prior periods were $7.8 million.

Assets Held for Sale and Impairment of Long-Lived Assets

At March 31, 2023, ten properties in our Real Estate Investments portfolio, with an aggregate net real estate balance of $26.7 million, were classified as assets held for sale on our Condensed Consolidated Balance Sheet as of March 31, 2023. Rental income associated with the ten properties was $1.5 million and $1.0 million for the three months ended March 31, 2023 and 2022, respectively. During the first quarter of 2023, one property in our Real Estate Investments portfolio was classified as held for sale with a net real estate balance of $5.0 million and two properties, previously classified as held for sale with an aggregate net real estate balance of $12.3 million, were reclassified as held for use on our Condensed Consolidated Balance Sheet.

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During the three months ended March 31, 2023, we recorded impairment charges of approximately $0.3 million on three properties which were sold or classified as held for sale related to our Real Estate Investments portfolio. The impairment charges are included in “Loan and realty (gains) 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 three months ended March 31, 2023, 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 contain purchase options allowing tenants to acquire the leased properties. At March 31, 2023, we had tenant purchase options on three properties with an aggregate net investment of $59.7 million that will become exercisable between 2027 and 2028. Rental income from these properties with tenant purchase options was $1.8 million and $1.7 million for the three months ended March 31, 2023 and 2022, respectively.

We cannot reasonably estimate at this time the probability that any 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.

Second Quarter 2023 Dispositions

During the second quarter of 2023, we sold three ALFs located in Oregon in two transactions for approximately $5.7 million in cash consideration, net of transaction costs and a $0.6 million of seller financing on one of the transactions. The properties were classified in assets held for sale on the Condensed Consolidated Balance Sheet as of March 31, 2023 with an aggregate book value of $5.9 million. Prior impairment charges recognized on the properties totaled $3.7 million

Tenant Concentration

The following table contains information regarding concentration in our Real Estate Investments portfolio for tenants or affiliates of tenants, that exceed 10% of total revenues for the three months ended March 31, 2023 and 2022, excluding $2.6 million for our corporate office, a credit loss reserve of $15.0 million and $339.1 million in assets for the SHOP segment ($ in thousands):

	As of March 31, 2023					Revenues1
	Asset	Gross Real		Notes		Three Months Ended March 31,
	Class	Estate2		Receivable		2023			2022
Senior Living	EFC	$	573,631	$	50,200	$	12,833	16%	$	12,751	18%
NHC	SNF	133,770		—		9,807		12%	9,189		13%
Bickford	ALF	430,217		16,921		11,162		14%	7,038		10%
Holiday Retirement3	ILF	—		—		N/A		N/A	9,797		14%
All others, net	Various	1,311,316		167,785		34,267		41%	29,514		41%
Escrow funds received from tenants
for property operating expenses	Various	—		—		2,619		3%	3,038		4%
		$	2,448,934	$	234,906	70,688			71,327
Resident fees and services4						11,700		14%	N/A		—%
						$	82,388		$	71,327

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 include a lease deposit recognized as rental income in the three months ended March 31, 2022.

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

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Straight-line rent of $(0.3) million and $0.1 million and interest income of $1.0 million and $0.9 million were recognized from the Senior Living lease for the three months ended March 31, 2023 and 2022, respectively. No material straight-line rent was recognized for NHC for the three months ended March 31, 2023 and 2022. For NHC, rent escalations are based primarily on a percentage increase in revenue over a base year that does not give rise to non-cash, straight-line rental income. Straight-line rent of $0.5 million was recognized from the Bickford leases for the three months ended March 31, 2022. Interest income of $0.9 million and $1.2 million was recognized from the Bickford leases for the three months ended March 31, 2023 and 2022, respectively. For the three months ended March 31, 2022 the Holiday lease was on the cash basis of accounting. Reference Note 3 to the condensed consolidated financial statements.

Cash Basis Operators

We placed Bickford on cash basis of revenue recognition during the second quarter of 2022, 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. Cash rent received from Bickford for the three months ended March 31, 2023 was $7.8 million, which excludes $2.5 million of rental income related to the reduction of pandemic-related rent deferrals in connection with the acquisition of the ALF located in Chesapeake, Virginia discussed above.

We placed two additional operators on the cash basis of accounting for their leases during 2022. Rental income associated with these tenants totaled $4.0 million for the three months ended March 31, 2023.

Occupancy

The following table summarizes the average portfolio occupancy for Senior Living, 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	1Q22	2Q22	3Q22	4Q22	1Q23	March 2023
Senior Living Same-Store	9	81.7%	82.3%	83.3%	83.5%	83.5%	83.0%
Senior Living	10	81.8%	82.3%	83.2%	83.2%	82.7%	82.1%
Bickford Same-Store1	38	83.5%	83.8%	85.0%	83.6%	81.3%	81.2%
Bickford2	39	N/A	82.8%	84.6%	83.9%	81.6%	81.5%
SHOP	15	77.7%	76.5%	76.9%	75.8%	75.2%	75.2%

1All prior periods restated for the sale of an ALF in Iowa.

2Includes Chesapeake, Virginia building which opened in the second quarter of 2022. NHI exercised its purchase option in February 2023.

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 EFCs, 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

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receivable, and 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.

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

NHI Real Estate Investments Portfolio
By asset type	SHO	SNF	MEDICAL NON-SNF	TOTAL
Properties	96	68	1	165
4Q21	1.03x	2.61x	2.74x	1.60x
4Q21 Occupancy	80.4%	74.3%	69.4%	77.3%
4Q22	1.22x	2.47x	2.65x	1.70x
4Q22 Occupancy	84.8%	77.8%	76.5%	81.3%
Market served	Need Driven	Need Driven excl. Bickford	Discretionary	Discretionary excl. SLC	Medical	Medical excl. NHC
Properties	82	44	14	5	69	34
4Q21	0.85x	0.81x	1.26x	1.42x	2.62x	1.93x
4Q21 Occupancy	80.4%	79.8%	80.4%	81.8%	74.3%	66.5%
4Q22	1.11x	1.00x	1.34x	1.75x	2.48x	2.07x
4Q22 Occupancy	85.5%	86.5%	83.7%	85.3%	77.8%	70.5%
Major tenants	NHC1	SLC2	Bickford2
Properties	35	10	38
4Q21	3.61x	1.18x	0.90x
4Q21 Occupancy	80.6%	78.7%	81.3%
4Q22	3.07x	1.17x	1.26x
4Q21 Occupancy	83.8%	82.6%	84.0%

1 NHC Fixed Charge Coverage Ratio and displayed occupancies are on corporate-level. The occupancies are for the SNF portfolio only as can be seen in NHC’s public filings.

2 There are no longer any significant PPP funds included in any of the coverages above. SLC operates nine discretionary CCRC properties and one need driven assisted living community. Bickford proforma coverage at the restructured lease amount would be 1.39x for fourth quarter 2022.

Coverage ratios may include amounts provided by state and federal government programs to support businesses, including health care providers, that have been impacted by the COVID-19 pandemic. These funds were largely distributed in 2020 and 2021 and as such do not substantially impact the reported coverage ratios.

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. 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 we monitor economic and financial conditions. The metrics presented in the tables above give no effect to the presence of these security deposits.

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Real Estate and Mortgage Write-downs

In addition to inflation risk and increased interest rates 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 months ended March 31, 2023 reflect impairment charges of our long-lived assets of approximately $0.3 million as a result of economic and financial 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 as of March 31, 2023, that would require assessment for impairment.

We have established a reserve for estimated credit losses of $15.0 million and a liability of $0.3 million for estimated credit losses on unfunded loan commitments as of March 31, 2023. 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, net of reserves, 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. Refer to Note. 3 in the condensed consolidated financial statements for more information.

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Results of Operations

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

	Three Months Ended
	March 31,				Period Change
	2023		2022			%
Revenues:
Rental income
SNFs leased to National HealthCare	$	10,115	$	8,337		21.3	%
SHOs leased to Bickford Senior Living	9,276		5,309		3,967	74.7	%
SHOs leased to Discovery Senior Living	2,162		1,127		1,035	91.8	%
SHOs leased to Chancellor Health Care	1,969		544		1,425	NM
SHOs leased to Holiday Retirement	—		8,705		(8,705)	(100.0)	%
Other new and existing leases	34,474		32,318		2,156	6.7	%
Current year disposals and assets held for sale	2,587		4,102		(1,515)	(36.9)	%
	60,583		60,442		141	0.2	%
Straight-line rent adjustments, new and existing leases	2,097		1,079		1,018	94.3	%
Escrow funds received from tenants for taxes and insurance	2,619		3,038		(419)	(13.8)	%
Total Rental Income	65,299		64,559		740	1.1	%
Resident fees and services	11,700		—		11,700	NM
Interest income and other
Encore Senior Living mortgage loan	868		523		345	66.0	%
Loan payoffs	225		2,813		(2,588)	(92.0)	%
Other new and existing mortgages and notes	4,215		3,379		836	24.7	%
Total Interest Income from Mortgage and Other Notes	5,308		6,715		(1,407)	(21.0)	%
Other income	81		53		28	52.8	%
Total Revenues	82,388		71,327		11,061	15.5	%
Expenses:
Depreciation
SHOs leased to Holiday	—		2,326		(2,326)	(100.0)	%
ALFs leased to Encore	650		267		383	NM
Current year disposals and assets held for sale	45		1,194		(1,149)	(96.2)	%
Other new and existing assets	16,922		14,485		2,437	16.8	%
Total Depreciation	17,617		18,272		(655)	(3.6)	%
Interest	14,027		10,198		3,829	37.5	%
Senior housing operating expenses	9,799		—		9,799	NM
Non-cash share-based compensation expense	2,105		5,083		(2,978)	(58.6)	%
Taxes and insurance on leased properties	2,619		3,038		(419)	(13.8)	%
Loan and realty (gains) losses	(418)		24,528		(24,946)	NM
Legal	122		1,827		(1,705)	(93.3)	%
Other expenses	3,731		3,262		469	14.4	%
Total Expenses	49,602		66,208		(16,606)	(25.1)	%
Income before investment and other gains and losses	32,786		5,119		27,667	NM
Gains on sales of real estate, net	1,397		2,981		(1,584)	(53.1)	%
Gains from equity method investment	—		297		(297)	(100.0)	%
Loss on early retirement of debt	—		(151)		151	(100.0)	%
Net income	34,183		8,246		25,937	NM
Less: net loss attributable to noncontrolling interests	301		153		148	96.7	%
Net income attributable to common stockholders	$	34,484	$	8,399		NM
NM - not meaningful

All values are in US Dollars.

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Financial highlights of the three months ended March 31, 2023, compared to the same period of 2022 were as follows:

•Rental income recognized from our tenants increased $0.7 million, or 1.1%, primarily from a reduction in pandemic-related rent concessions granted of approximately $7.8 million, an increase of straight-line rent of $1.0 million, and new investments funded since March 2022. Offsetting these increases was recognition in the first quarter of 2022 of the Holiday lease deposit of $8.8 million.

•Funds received for reimbursement of property operating expenses totaled $2.6 million for the three months ended March 31, 2023, compared to $3.0 million for the three months ended March 31, 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 primarily due to property dispositions since March 2022, resulting in 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 mortgages and other notes decreased $1.4 million, or 21.0%, primarily due to paydowns on loans, net of new and existing loan fundings.

•Interest expense increased $3.8 million, or 37.5%, primarily as the result of increased interest rates and borrowings on the unsecured revolving credit facility, offset by partial repayments of term loans.

•Non-cash share-based compensation expense decreased $3.0 million in the first quarter of 2023, due to the reduced number of stock options granted in the first quarter of 2023 compared to the prior year’s grants.

•Loan and realty gains were $0.4 million associated with a decrease of the credit loss reserve of $0.8 million offset by real estate impairment charges on three properties in the first quarter of 2023 as described under the heading “Assets Held for Sale and Long-Lived Assets” in Note 3 to the condensed consolidated financial statements. During the first quarter of 2022, three real estate properties were impaired for a total of $24.6 million and an increase in the credit loss reserve of approximately $0.1 million.

•Legal costs decreased $1.7 million primarily related to the Welltower, Inc. litigation and transition activities for the legacy Holiday portfolio that occurred in the prior year.

•Gains on sales of real estate, net were $1.4 million primarily associated with the disposition of one property in the first quarter of 2023 included in the assets disposition table under the heading “Assets Dispositions” in Note 3 to the condensed consolidated financial statements. During the first quarter of 2022, we disposed of a medical office building resulting in a gain of approximately $3.0 million.

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Liquidity and Capital Resources

At March 31, 2023, we had $485.0 million available to draw on our revolving credit facility, $13.9 million in unrestricted cash and cash equivalents, and the potential to access $500.0 million through the issuance of common stock under the Company’s at-the-market (“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, operating expenses for SHOP 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):

	Three Months Ended March 31,				One Year Change
	2023		2022			%
Cash and cash equivalents and restricted cash, January 1	$	21,516	$	39,485		(45.5)	%
Net cash provided by operating activities	31,048		38,680		(7,632)	(19.7)	%
Net cash used in investing activities	(27,521)		(2,060)		(25,461)	NM
Net cash used in financing activities	(9,516)		(36,177)		26,661	(73.7)	%
Cash and cash equivalents and restricted cash, March 31	$	15,527	$	39,928		(61.1)	%

All values are in US Dollars.

Operating Activities – Net cash provided by operating activities for the three months ended March 31, 2023, which includes new investments completed, 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 the disposition of 24 senior housing properties for net proceeds of approximately $165.8 million since March 2022, offset by reduced pandemic-related rent concessions granted by approximately $7.8 million.

Investing Activities – Net cash used in investing activities for the three months ended March 31, 2023 was comprised primarily of approximately $47.4 million of investments in mortgage and other notes and renovations and acquisitions of real estate, offset by the proceeds from the sales of real estate of approximately $10.2 million and the collection of principal on mortgage and other notes receivable of approximately $7.2 million.

Financing Activities – Net cash used in financing activities for the three months ended March 31, 2023 differs from the same period in 2022 primarily as a result of an approximately $18.0 million increase in net borrowings, an increase of $2.0 million in contributions from noncontrolling interests, a decrease in debt issuance cost of $4.5 million and a decrease in dividend payments approximately of $2.2 million over the same period in 2022.

Debt Obligations

As of March 31, 2023, we had outstanding debt of $1.2 billion. Reference Note 8 to the condensed consolidated financial statements for additional information about our outstanding indebtedness. Also, reference Part I, 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 one of the following (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-

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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.

We have a $220.0 million term loan, maturing in September 2023 (“2023 Term Loan”) whose covenants align with provisions in the 2022 Credit Agreement and interest accrues on borrowings based on SOFR (plus a credit spread adjustment). We may also elect for the 2023 Term Loan to accrue interest at a base rate plus the applicable margin. For the three months ended March 31, 2023, we repaid $20.0 million of the 2023 Term Loan.

As of March 31, 2023, the revolver and term loan bore interest at a rate of one-month Term SOFR (plus a 10 basis points (“bps”) spread adjustment) plus 105 bps and 125 bps, based on our debt ratings, or 5.95% and 6.15%, respectively. The facility fee was 25 bps per annum. At April 30, 2023, $201.0 million amount was outstanding under the revolving facility.

In January 2023, we repaid the $125.0 million of the private placement notes due January 2023 primarily with proceeds from the revolving credit facility.

The current SOFR spreads and facility fee for our revolving credit facility and the 2023 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 March 31, 2023, 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.

2031 Senior Notes - 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”). The 2031 Senior Notes are subject to affirmative and negative covenants, including financial covenants. As of March 31, 2023, we were in compliance with all affirmative and negative covenants, including financial covenants for our 2031 Senior Notes borrowings.

Debt Maturities - Reference Note 8 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 13, 2022 which affirmed the rating and revised the outlook to “Stable” 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 reaffirmed its rating most recently on April 10, 2023 and S&P Global reaffirmed its rating on November 14, 2022. Our unsecured private placement term loan agreements include a rate increase provision that is effective if any rating agency lowers our credit rating 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.

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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 4.6x for the three months ended March 31, 2023 (see our discussion under the heading Adjusted EBITDA below 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 4.6x for the three months ended March 31, 2023 ($ in thousands):

Consolidated Total Debt	$	1,176,014
Less: cash and cash equivalents	(13,875)
Consolidated Net Debt	$	1,162,139
Adjusted EBITDA	$	62,190
Annualizing adjustment	186,570
Annualized impact of recent investments, disposals and payoffs	2,086
	$	250,846
Consolidated Net Debt to Annualized Adjusted EBITDA	4.6x

Supplemental Guarantor Financial Information

The Company’s $920.0 million bank credit facility, unsecured private placement notes with an aggregate principal amount of $275.0 million, and 2031 Senior Notes with an aggregate principal amount of $400.0 million 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 or controlled by, 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
	March 31, 2023
Real estate properties, net	$	1,839,729
Other assets, net	325,856
Note receivable due from non-guarantor subsidiary	81,395
Totals assets	$	2,246,980
Debt	$	1,099,949
Other liabilities	65,782
Total liabilities	$	1,165,731
Redeemable noncontrolling interest	$	9,520
Noncontrolling interests	$	1,023

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	Three Months Ended
	March 31, 2023
Revenues	$	73,379
Interest revenue on note due from non-guarantor subsidiary	1,148
Expenses	44,700
Gains on sales of real estate	1,397
Net income	$	31,224
Net income attributable to NHI and the subsidiary guarantors	$	31,524

Equity

At March 31, 2023 we had 43,388,742 shares of common stock outstanding with a market value of $2.2 billion. Equity on our Condensed Consolidated Balance Sheet totaled $1.3 billion at March 31, 2023.

Share Repurchase Plan - On February 17, 2023, our Board of Directors authorized a revised stock repurchase program (the “Revised Repurchase Plan”) pursuant to which we may purchase up to $160.0 million in shares of our issued and outstanding common stock. The Revised Repurchase Plan is effective for a period of one year and does not require us to repurchase any specific number of shares. The Revised Repurchase Plan may be suspended or discontinued at any time. 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 Exchange Act and shall be made in accordance with all applicable laws and regulations in effect. The timing and number of shares repurchased, if any, will depend on a variety of factors, including price, general market and economic conditions, alternative investment opportunities and other corporate considerations.

During the three months ended March 31, 2023, no common stock was repurchased. During 2022, cumulative repurchases through open market transactions were 2,468,354 shares of common stock for approximately $151.6 million. All shares received were constructively retired upon receipt, and reflected as a reduction to “Retained earnings” in the Condensed Consolidated Balance Sheet as of December 31, 2022.

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 2023 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, 2023 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 Internal Revenue Code Section 857(b)(8).

The following table summarizes dividends declared by the Board of Directors or paid during the three months ended March 31, 2023 and 2022:

Three Months Ended March 31, 2023
Date of Declaration	Date of Record	Date Paid/Payable	Quarterly Dividend
November 6, 2022	December 30, 2022	January 27, 2023	$0.90
February 17, 2023	March 31, 2023	May 5, 2023	$0.90

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Three Months Ended March 31, 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

On May 5, 2023, the Board of Directors declared a $0.90 per share dividend to common stockholders of record on June 30, 2023, payable on August 4, 2023.

Shelf Registration Statement - We have an automatic shelf registration statement on file with the SEC 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 in March 2026.

Material Cash Requirements

We had approximately $14.6 million in corporate cash and cash equivalents on hand and $499.0 million in availability under our unsecured revolving credit facility as of April 30, 2023. Our expected material cash requirements for the twelve months ended March 31, 2024 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 discussion 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.

During the first quarter of 2023, we worked with our primary treasury management bank to mitigate our uninsured deposit risk for our cash and cash equivalents through the use of multiple demand deposit and money market accounts that are managed by our primary treasury management bank.

Contractual Obligations and Contingent Liabilities

As of March 31, 2023, 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	$	1,278,488	$	316,402	$	246,046	$	318,559	$	397,481
Loan commitments	51,740		21,995		29,745		—		—
Development commitments	6,088		6,088		—		—		—
	$	1,336,316	$	344,485	$	275,791	$	318,559	$	397,481

1 Interest is calculated based on the weighted average interest rate of outstanding debt balances as of March 31, 2023. The calculation also includes a facility fee of 0.20%.

Commitments and Contingencies

The following tables summarize information as of March 31, 2023 related to our outstanding commitments and contingencies which are more fully described in the notes to the condensed consolidated financial statements ($ in thousands):

	Asset Class	Type	Total		Funded		Remaining
Loan Commitments:
Bickford Senior Living	SHO	Construction	$	14,700	$	(14,700)	$	—
Encore Senior Living	SHO	Construction	50,725		(39,754)		10,971
Senior Living Communities	SHO	Revolving Credit	20,000		(17,500)		2,500
Timber Ridge OpCo	SHO	Working Capital	5,000		—		5,000
Watermark Retirement	SHO	Working Capital	5,000		(1,476)		3,524
Montecito Medical Real Estate	MOB	Mezzanine Loan	50,000		(20,255)		29,745
			$	145,425	$	(93,685)	$	51,740

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See Note 9 to our condensed consolidated financial statements for further details about 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 $0.3 million as of March 31, 2023 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
Watermark Retirement	SHO	Renovation	6,500		(6,500)		—
Navion	SHO	Renovation	3,500		(1,075)		2,425
Other	SHO	Various	4,150		(1,442)		2,708
SHOP	ILF	Renovation	1,500		(635)		865
			$	23,165	$	(17,077)	$	6,088

In addition to the commitments listed above, one of our consolidated real estate partnerships, NHI REIT of DSL PropCo, LLC, 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 March 31, 2023.

	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		(2,700)		2,150
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	$	(12,700)	$	15,900

Litigation

Our facilities are subject to claims and suits in the ordinary course of business. Our managers, tenants 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. 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.

FFO & FAD

The supplemental performance measures described below 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 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 activities as determined by GAAP as a measure of liquidity, and are not necessarily indicative of cash available to fund cash needs.

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Funds From Operations - FFO

Our FFO per diluted common share for the three months ended March 31, 2023 increased $0.11 or 10.5% over the same period in 2022 due primarily to a reduction of pandemic-related rent concessions since March 2022. 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. Diluted FFO assumes the exercise of stock options and other potentially dilutive securities.

Our Normalized FFO per diluted common share for the three months ended March 31, 2023 increased $0.01 or 0.9% over the same period in 2022. 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 three months ended March 31, 2023 decreased $4.9 million or 9.36% over the same period in 2022 due primarily to an increase in interest expense, an increase in payroll and benefits expenses and property dispositions completed since March 2022. 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 and amortization of debt issuance costs. 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 investment such as straight-line lease expense and amortization of purchase accounting adjustments.

Normalized FAD is an important supplemental performance measure for a REIT and a useful measure of liquidity as an indicator of the ability to distribute dividends to stockholders. 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.

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
	March 31,
	2023		2022
Net income attributable to common stockholders	$	34,484	$	8,399
Elimination of certain non-cash items in net income:
Real estate depreciation	17,518		18,272
Real estate depreciation related to noncontrolling interests	(396)		(210)
Gains on sales of real estate, net	(1,397)		(2,981)
Impairments of real estate	338		24,604
NAREIT FFO attributable to common stockholders	50,547		48,084
Loss on early retirement of debt	—		151
Non-cash write-offs of straight-line receivable and lease incentives	—		2,139
Non-cash rental income	(2,500)		—
Normalized FFO attributable to common stockholders	48,047		50,374
Straight-line lease revenue, net	(2,097)		(3,219)
Straight-line lease revenue, net, related to noncontrolling interests	24		22
Non-real estate depreciation	98		—
Non-real estate depreciation related to noncontrolling interest	(9)		—
Amortization of lease incentives	299		252
Amortization of lease incentive related to noncontrolling interests	(53)		—
Amortization of original issue discount	80		80
Amortization of debt issuance costs	526		562
Amortization related to equity method investment	(291)		(236)
Straight-line lease expense related to equity method investment	(4)		(8)
Note receivable credit loss benefit	(756)		(76)
Non-cash share-based compensation	2,105		5,083
Equity method investment capital expenditures	(105)		(105)
Equity method investment non-refundable fees received	239		(60)
Senior housing portfolio recurring capital expenditures	(407)		—
SHOP recurring capital expenditures related to noncontrolling interests	43		—
Normalized FAD attributable to common stockholders	$	47,739	$	52,669
BASIC
Weighted average common shares outstanding	43,388,742		45,850,686
NAREIT FFO attributable to common stockholders per share	$	1.16	$	1.05
Normalized FFO attributable to common stockholders per share	$	1.11	$	1.10
DILUTED
Weighted average common shares outstanding	43,391,429		45,851,061
NAREIT FFO attributable to common stockholders per share	$	1.16	$	1.05
Normalized FFO attributable to common stockholders per share	$	1.11	$	1.10

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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 investment 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
	March 31,
	2023		2022
Net income	$	34,183	$	8,246
Interest expense	14,027		10,198
Franchise, excise and other taxes	183		244
Depreciation	17,617		18,272
NHI’s share of EBITDA adjustments for unconsolidated entities	495		678
Note receivable credit loss benefit	(756)		(76)
Gains on sales of real estate, net	(1,397)		(2,981)
Loss on early retirement of debt	—		151
Impairment of real estate	338		24,604
Non-cash write-off of straight-line rents receivable and lease amortization	—		2,139
Non-cash rental income	(2,500)		—
Adjusted EBITDA	$	62,190	$	61,475
Interest expense at contractual rates	$	13,440	$	9,558
Principal payments	103		98
Fixed Charges	$	13,543	$	9,656
Fixed Charge Coverage	4.6x		6.4x

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.

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

	Three Months Ended
	March 31
NOI Reconciliations:	2023		2022
Net income	$	34,183	$	8,246
Gains from equity method investment	—		(297)
Loss on early retirement of debt	—		151
Gains on sales of real estate, net	(1,397)		(2,981)
Loan and realty (gains) losses	(418)		24,528
General and administrative	5,653		8,101
Franchise, excise and other taxes	183		244
Legal	122		1,827
Interest	14,027		10,198
Depreciation	17,617		18,272
Consolidated net operating income (NOI)	$	69,970	$	68,289
NOI by segment:
Real Estate Investments	$	67,988	$	68,236
SHOP	1,901		—
Non-Segment/Corporate	81		53
Total NOI	$	69,970	$	68,289

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

Interest Rate Risk

At March 31, 2023, we were exposed to market risks related to fluctuations in interest rates on approximately $435.0 million of variable-rate indebtedness and on our mortgage and other notes receivable. The unused portion ($485.0 million at March 31, 2023) 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 March 31, 2023, net interest expense would increase or decrease annually by approximately $2.2 million or $0.05 per common share on a diluted basis.

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. We currently have no derivative financial instruments but 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):

	March 31, 2023						December 31, 2022
	Balance1		% of total		Rate2		Balance1		% of total		Rate2
Fixed rate:
Private placement term loans - unsecured	$	275,000	23.2	%	4.22	%	$	400,000	34.5	%	4.15	%
2031 Senior notes - unsecured	400,000		33.7	%	3.00	%	400,000		34.5	%	3.00	%
Fannie Mae term loans - secured, non-recourse	76,546		6.5	%	3.96	%	76,649		6.6	%	3.96	%
Variable rate:
Bank term loan - unsecured	220,000		18.5	%	6.15	%	240,000		20.8	%	5.71	%
Revolving credit facility - unsecured	215,000		18.1	%	5.95	%	42,000		3.6	%	5.51	%
	$	1,186,546	100.0	%	4.47	%	$	1,158,649	100.0	%	3.91	%
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 March 31, 2023 ($ in thousands):

	Balance		Fair Value1		FV reflecting change in interest rates
Fixed rate:					-50 bps		+50 bps
Private placement term loans - unsecured	$	275,000	$	263,648	$	266,604	$	260,735
2031 Senior notes	400,000		328,539		340,210		317,304
Fannie Mae term loans	76,546		72,806		73,529		72,091
1 The change in fair value of our fixed rate debt was due primarily to the overall change in interest rates.

At March 31, 2023, the fair value of our mortgage and other notes receivable, discounted for estimated changes in the risk-free rate, was approximately $219.0 million. A 50 basis-point increase in market rates would decrease the estimated fair value of our mortgage and other loans by approximately $2.2 million, while a 50 bps decrease in such rates would increase their estimated fair value by approximately $3.5 million.

Inflation Risk

Our real estate leases generally provide for annual increases in contractual rent due based on a fixed amount or percentage or based on increases in the Consumer Price Index (“CPI”). Leases with increases based on CPI may contain a minimum increase or a cap on the maximum annual increase. Substantially all of our leases require the tenant to pay all operating expenses for the property, whether paid directly by the tenant or reimbursed to us. We believe that inflationary increases will be at least partially offset by the contractual rent increases and expense reimbursements described above.

Item 4. Controls and Procedures.

Evaluation of Disclosure Control and Procedures. As of March 31, 2023, 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 Exchange Act, 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 March 31, 2023.

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 three months ended March 31, 2023, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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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. 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.

Item 1A. Risk Factors.

During the three months ended March 31, 2023, there have been no material changes from the risk factors previously disclosed in Part I, Item 1A of National Health Investors, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2022, except as amended and supplemented by the additional risk factors below.

Inflation and increased interest rates may adversely affect our financial condition and results of operations.

Although inflation has not materially impacted our operations in the recent past, inflation is at a 40-year high and beginning in March of 2022, the Federal Reserve began raising the federal funds rate in an effort to curb inflation. The Federal Reserve’s action, coupled with other macroeconomic factors, may trigger a recession in the United States and/or globally. Increased inflation and interest rates could have an adverse impact on our variable rate debt, our ability to borrow money, and general and administrative expenses, as these costs could increase at a rate higher than our rental and other revenue. Increases in the costs of owning and operating our properties due to inflation could reduce our net operating income and the value of an investment in us to the extent such increases are not reimbursed or paid by our tenants. If we are materially impacted by increasing inflation because, for example, inflationary increases in costs are not sufficiently offset by the contractual rent increases and operating expense reimbursement provisions or escalations in the leases with our tenants, our results of operations could be adversely affected. In addition, due to rising interest rates, we may experience restrictions in our liquidity based on certain financial covenant requirements, our inability to refinance maturing debt in part or in full as it comes due and higher debt service costs and reduced yields relative to cost of debt. If we are unable to find alternative credit arrangements or other funding in a high interest environment, our financial results may be negatively impacted.

Adverse developments affecting the financial services industry, including events or concerns involving liquidity, defaults, or non-performance by financial institutions, could adversely affect our business, financial condition, results of operations, or our prospects.

The funds in our accounts are held in banks or other financial institutions. Our cash held in non-interest bearing and interest-bearing accounts may periodically exceed any applicable Federal Deposit Insurance Corporation (“FDIC”) insurance limits. Should events, including limited liquidity, defaults, non-performance or other adverse developments occur with respect to the banks or other financial institutions that hold our funds, or that affect financial institutions or the financial services industry generally, or concerns or rumors about any events of these kinds or other similar risks, our liquidity may be adversely affected. For example, on March 10, 2023, the FDIC announced that Silicon Valley Bank had been closed by the California Department of Financial Protection and Innovation. Although we did not have any funds in Silicon Valley Bank or other institutions that have been closed, we cannot guarantee that the banks or other financial institutions that hold our funds will not experience similar issues.

In addition, investor concerns regarding the U.S. or international financial systems could result in less favorable commercial financing terms, including higher interest rates or costs and tighter financial and operating covenants, or systemic limitations on access to credit and liquidity sources, thereby making it more difficult for us to acquire financing on terms favorable to us in connection with a potential business combination, or at all, and could have material adverse impacts on our liquidity, our business, financial condition or results of operations, and our prospects.

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

On February 17, 2023, our Board of Directors authorized a revised stock repurchase program (the “Revised Repurchase Plan”) pursuant to which we may purchase up to $160.0 million in shares of our issued and outstanding common stock. The Revised

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Repurchase Plan is effective for a period of one year and does not require us to repurchase any specific number of shares. The Revised Repurchase Plan may be suspended or discontinued at any time. 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 Exchange Act and shall be made in accordance with all applicable laws and regulations in effect. The timing and number of shares repurchased, if any, will depend on a variety of factors, including price, general market and economic conditions, alternative investment opportunities and other corporate considerations. During the three months ended March 31, 2023, no common stock was repurchased.

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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	Amended and Restated Bylaws as approved February 17, 2023, as amended April27, 2023 (filed herewith)
3.6	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)
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:	May 9, 2023	/s/ D. Eric Mendelsohn
		D. Eric Mendelsohn
		President, Chief Executive Officer and Director
		(duly authorized officer)
Date:	May 9, 2023	/s/ John L. Spaid
		John L. Spaid
		Chief Financial Officer
		(Principal Financial Officer)

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Document

AMENDED AND RESTATED

BYLAWS

OF

NATIONAL HEALTH INVESTORS, INC.

As adopted February 17, 2023

And as amended April 27, 2023

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AMENDED AND RESTATED BYLAWS

OF

NATIONAL HEALTH INVESTORS, INC.

TABLE OF CONTENTS

	Page
ARTICLE I MEETINGS OF STOCKHOLDERS	1
1.01. PLACE; REMOTE COMMUNICATION	1
1.02. ANNUAL MEETING	1
1.03. SPECIAL MEETINGS	1
1.04. NOTICE	2
1.05. SCOPE OF NOTICE	2
1.06. QUORUM	2
1.07. VOTING	2
1.08. PROXIES	3
1.09. CONDUCT OF MEETINGS	3
1.10. TABULATION OF VOTES	4
1.11. INFORMAL ACTION BY STOCKHOLDERS	5
1.12. VOTING BY BALLOT	5
1.13. ADVANCE NOTICE OF STOCKHOLDER NOMINATIONS AND PROPOSALS	5
ARTICLE II DIRECTORS	15
2.01. GENERAL POWERS	15
2.02. OUTSIDE ACTIVITIES	15
2.03. OUTSIDE MANAGEMENT	16
2.04. NUMBER, TENURE, QUALIFICATION, NOMINATION AND ELECTION	16
2.05. ANNUAL AND REGULAR MEETINGS	18
2.06. SPECIAL MEETINGS	18
2.07. NOTICE	18
2.08. QUORUM	18
2.09. VOTING	19
2.10. CONDUCT OF MEETINGS	19
2.11. RESIGNATIONS	19
2.12. VACANCIES	19
2.13. INFORMAL ACTION BY DIRECTORS	20
2.14. COMPENSATION	20
2.15. RELIANCE	20
2.16. RATIFICATION	20
2.17. EMERGENCY PROVISIONS	21
ARTICLE III COMMITTEES	21

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3.01. NUMBER, TENURE AND QUALIFICATION	21
3.02. DELEGATION OF POWER	21
3.03. QUORUM AND VOTING	21
3.04. CONDUCT OF MEETINGS	21
3.05. INFORMAL ACTION BY COMMITTEES	22
ARTICLE IV OFFICERS	22
4.01. ENUMERATION; POWER AND DUTIES	22
4.02. ELECTION OR APPOINTMENT; TERM	22
4.03. REMOVAL	23
4.04. RESIGNATION	23
4.05. VACANCIES	23
4.06. CHAIRPERSON OF THE BOARD	23
4.07. CHIEF EXECUTIVE OFFICER	23
4.08. PRESIDENT	24
4.09. VICE PRESIDENTS	24
4.10. SECRETARY	24
4.11. TREASURER	24
4.12. ASSISTANT SECRETARIES AND ASSISTANT TREASURERS	25
4.13. COMPENSATION	25
ARTICLE V SHARES OF STOCK	25
5.01. CERTIFICATES OF STOCK	25
5.02. STOCK LEDGER	26
5.03. RECORDING TRANSFERS OF STOCK	26
5.04. LOST CERTIFICATE	26
5.05. CLOSING OF TRANSFER BOOKS OR FIXING OF RECORD DATE	27
ARTICLE VI DIVIDENDS AND DISTRIBUTIONS	27
6.01. DECLARATION	27
6.02. CONTINGENCIES	27
ARTICLE VII INDEMNIFICATION	28
7.01. INDEMNIFICATION OF OFFICERS	28
7.02. ADVANCEMENT OF EXPENSES	28
7.03. NON-EXCLUSIVITY OF INDEMNIFICATION RIGHTS	28
7.04. INSURANCE	28
ARTICLE VIII NOTICES	29
8.01. NOTICES	29
8.02. SECRETARY TO GIVE NOTICE	29
8.03. WAIVER OF NOTICE	29
ARTICLE IX MISCELLANEOUS	30
9.01. BOOKS AND RECORDS	30
9.02. INSPECTION OF BYLAWS AND CORPORATE RECORDS	30
9.03. CONTRACTS	30

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9.04. CHECKS, DRAFTS, ETC	30
9.05. DEPOSITS	30
9.06. FISCAL YEAR	30
9.07. CONFLICT WITH APPLICABLE LAW	31
9.08. INVALID OR UNENFORCEABLE	31
ARTICLE X AMENDMENT OF BYLAWS	31
10.01. BY DIRECTORS	31
10.02. BY STOCKHOLDERS	31
10.03. EXCEPTION FOR INDEMNIFICATION	31

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ARTICLE I

MEETINGS OF STOCKHOLDERS

1.01. PLACE; REMOTE COMMUNICATION.

1.01.1 Meetings of the holders (the “Stockholders”) of the issued and outstanding capital stock (the “Stock”) of National Health Investors, Inc. (the “Corporation”) shall be held at any place, either within or without the State of Maryland, as shall be fixed by the Board of Directors. The Board of Directors may determine, in its discretion, that any meeting of the Stockholders may be held partially or solely by remote communication in accordance with Section 1.01.2 hereof, without designating a place for a physical assembly of the Stockholders.

1.01.2 The Board of Directors may authorize Stockholders not physically present at any meeting of Stockholders to participate in the meeting by remote communication, videoconference, teleconference, or other available technology, subject to any guidelines and procedures adopted by the Board of Directors, so long as all persons participating in the meeting can hear each other at the same time, and participation in a meeting in accordance herewith and therewith shall constitute presence in person at such meeting for all purposes. At a meeting in which Stockholders can participate by remote communication, the Corporation shall implement reasonable measures to: (a) verify that each person deemed present and permitted to vote at the meeting by remote communication is a Stockholder or proxy holder; and (b) allow Stockholders and proxy holders participating by remote communication to either read or hear the proceedings as they take place and to participate in the meeting and vote on matters submitted to the Stockholders. The Corporation shall maintain a record of the vote or other action taken by Stockholders or proxy holders at the meeting by remote communication.

1.02.    ANNUAL MEETING. An annual meeting of the Stockholders for the election of directors of the Corporation (the “Directors”) and the transaction of any business within the powers of the Corporation shall be held each year on the date and at the time as shall be designated by the Board of Directors. The Corporation may postpone, reschedule, or cancel any annual meeting of Stockholders previously scheduled.

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1.03.    SPECIAL MEETINGS. The Chairperson of the Board (if any), the President or a majority of the Board of Directors may call special meetings of the Stockholders. Special meetings of the Stockholders shall also be called by the Secretary upon the written request of the holders of Shares entitled to cast not less than 25% of all the votes entitled to be cast at such meeting. Such request shall state the purpose or purposes of such meeting and the matters proposed to be acted on thereat. The date, time, place (if any) and record date for any such special meeting, including a meeting called at the request of Stockholders, shall be established by the Board of Directors or Officer calling the same. The Corporation may postpone, reschedule, or cancel any special meeting of Stockholders previously scheduled by the Board of Directors.

1.04.    NOTICE. Not less than ten (10) nor more than ninety (90) days before the date of each meeting of Stockholders, notice of such meeting shall be given in writing or by electronic transmission, in accordance with Section 8.01, to each Stockholder entitled to vote or entitled to notice by statute, stating the time and date of the meeting, the place of the meeting (if any), if remote communication is authorized for the meeting, the information required for Stockholders and proxy holders to participate, be considered present, and vote at the meeting, and, in the case of a special meeting or as otherwise may be required by statute, the purpose or purposes for which the meeting is called.

1.05.    SCOPE OF MEETING. No business shall be transacted at a special meeting of Stockholders except as specifically designated in the notice for such meeting. Subject to the requirements of Section 1.13, any business of the Corporation may be transacted at the annual meeting without being specifically designated in the notice, except such business as is required by statute to be stated in such notice.

1.06.    QUORUM. At each meeting of Stockholders for the transaction of any business, a quorum must be present to approve any matter that properly comes before such meeting. At any meeting of Stockholders, the presence in person or by proxy of Stockholders entitled to cast a majority of all the votes entitled to be cast at the meeting shall constitute a quorum; but this Section shall not affect any requirement under any statute or the Articles of Incorporation of the Corporation (the “Articles”) for the vote necessary for the adoption of any measure. If, however,

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a quorum is not present at any meeting of the Stockholders, the Stockholders present in person or by proxy shall have the power to adjourn the meeting from time to time without notice other than announcement at the meeting until a quorum is present and the meeting so adjourned may be reconvened without further notice. At any reconvened meeting at which a quorum is present, any business may be transacted that might have been transacted at the meeting as originally notified. The Stockholders present at a meeting which has been duly called and convened and at which a quorum has been established may continue to transact business until adjournment, notwithstanding the withdrawal from the meeting of enough Stockholders to leave less than a quorum.

1.07.    VOTING. A majority of the votes cast at a meeting of Stockholders duly called and at which a quorum is present shall be sufficient to take or authorize action upon any matter which may properly come before the meeting, unless more than a majority of the votes cast is specifically required by statute, the Articles or these Bylaws. Unless otherwise provided in the Articles, each outstanding share of Stock (a “Share”), regardless of class or series, shall be entitled to one vote upon each matter submitted to a vote at a meeting of Stockholders. Shares of its own Stock directly or indirectly owned by the Corporation shall not be voted in any meeting and shall not be counted in determining the total number of outstanding Shares entitled to vote at any given time, but Shares of its own Stock held by it in a fiduciary capacity may be voted and shall be counted in determining the total number of outstanding Shares at any given time.

1.08.    PROXIES. A Stockholder may vote the Shares owned of record by him or her, either in person or by proxy executed in writing by the Stockholder or by his or her duly authorized attorney in fact. Any such proxy or evidence of authorization of such proxy shall be filed with the Secretary of the Corporation before or at the meeting. Any copy, communication by electronic transmission, or other reliable written reproduction may be substituted for the Stockholder’s original written proxy for any purpose for which the original proxy could have been used if such copy, communication by electronic transmission, or other reproduction is a complete reproduction of the entire original written proxy. No proxy shall be valid after eleven (11) months from the date of its execution, unless otherwise provided in the proxy. A proxy shall be revocable unless the proxy states that the proxy is irrevocable and is coupled with an

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interest sufficient to support an irrevocable power. Any Stockholder directly or indirectly soliciting proxies from other Stockholders must use a proxy card color other than white, which shall be reserved for the exclusive use of the Board of Directors.

1.09.    CONDUCT OF MEETINGS. The Chairperson of the Board (if any) or, in the absence of the Chairperson of the Board, the President or any Vice President or, in the absence of the Chairperson of the Board, the President and all Vice Presidents (if any), a presiding officer elected at the meeting, shall preside over meetings of the Stockholders (the “Presiding Officer”). The Secretary of the Corporation or, in the absence of the Secretary, any Assistant Secretary, or, in the absence of the Secretary and all Assistant Secretaries (if any), the person appointed by the Presiding Officer of the meeting shall act as secretary of such meeting. The Board of Directors may determine the rules and regulations for the conduct of meetings of the Stockholders as it shall deem appropriate. Except as otherwise determined by the Board of Directors, the Presiding Officer shall have the right and authority to convene and (for any or no reason) to conclude, recess and/or adjourn a meeting, to prescribe such rules, regulations and procedures and to do all such acts, as, in the judgment of such Presiding Officer, are necessary, appropriate or convenient for the proper conduct of the meeting. Such rules, regulations or procedures, whether adopted by the Board of Directors or the Presiding Officer of the meeting, may include, without limitation, the following: (a) the establishment of an agenda for the meeting; (b) rules and procedures for maintaining order at the meeting and the safety of those present at the meeting; (c) limitations on attendance at or participation in the meeting to Stockholders of record of the Corporation, their duly authorized and constituted proxies or such other persons as the Presiding Officer shall determine; (d) restrictions on entry to the meeting after the time fixed for the commencement thereof; (e) limitations on the time allotted to questions or comments by participants; (f) the determination of when the polls shall open and close for any given matter to be voted on at the meeting; (g) removal of any Stockholders or any other individual who refuses to comply with meeting rules, regulations or procedures; (h) determining whether any Stockholder or any proxy may be excluded from any Stockholders’ meeting based upon any determination by the Presiding Officer in his or her sole discretion that any such person has unduly disrupted or is likely to disrupt the proceedings thereat and specifying the circumstances in which any person may make a statement or ask questions at any Stockholders’ meetings; (i) restrictions on the use of audio

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and video recording devices, cell phones and other electronic devices; (j) rules, regulations and procedures for compliance with any federal, state or local laws or regulations, including those concerning safety, health or security; (k) procedures (if any) requiring attendees to provide the Corporation advance notice of their intent to attend the meeting; and (l) rules, regulations or procedures regarding the participation by means of remote communication, if any, of Stockholders and proxies not physically present at a meeting. The Presiding Officer of a Stockholder meeting, in addition to making any other determinations that may be appropriate to the conduct of the meeting, shall determine and declare to the meeting that a matter or business was not properly brought before the meeting or is not a proper matter for Stockholder action under applicable law, and, if the Presiding Officer should so determine, the Presiding Officer shall so declare to the meeting and any such matter of business not properly brought before the meeting shall not be transacted or considered. Polls for all matters before the meeting will be deemed to be closed upon final adjournment of the meeting.

1.10.    TABULATION OF VOTES. The Board of Directors or the Presiding Officer of the meeting may appoint, before or at the meeting, one or more inspectors for the meeting (or any adjournment or postponement thereof) and any successor to the inspector. Except as otherwise provided by the Presiding Officer of the meeting, the inspectors, if any, shall (a) determine the number of Shares represented at the meeting, in person or by proxy, and the existence of a quorum, (b) determine the validity and effect of proxies, (c) receive and tabulate all votes, ballots or consents, (d) report such tabulation to the Presiding Officer of the meeting, (e) hear and determine all challenges and questions arising in connection with the right to vote or the validity of any proxies of ballots, (f) perform such tasks as may be required by applicable law and (g) do such acts as are proper to fairly conduct the election or vote. Each such report shall be in writing and signed by the inspector or by a majority of the inspectors if there is more than one inspector acting at such meeting. If there is more than one inspector, the report of a majority of the inspectors shall be the report of the inspectors. No Director or candidate for election as a Director shall act as inspector of an election of Directors. Inspectors need not be Stockholders. The report of the inspector or inspectors on the number of Shares represented at the meeting and the results of the voting shall be prima facie evidence thereof. Upon request of the Presiding Officer or any Stockholder entitled to vote thereat, the inspectors shall make a report in writing

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of any challenge, request or matter determined by them and shall execute a certificate of any fact found by them.

1.11.    INFORMAL ACTION BY STOCKHOLDERS. An action required or permitted to be taken at a meeting of Stockholders may be taken without a meeting if a consent in writing or by electronic transmission, setting forth such action, is provided by each Stockholder entitled to vote on the subject matter thereof and filed with the records of Stockholders meetings, and any other Stockholders entitled to notice of a meeting of Stockholders (but not to vote thereat) have waived in writing any rights which they may have to dissent from such action, and such consents and waivers are filed with the minutes of proceedings of the Stockholders. Such consents and waivers may be signed by different Stockholders on separate counterparts.

1.12.    VOTING BY BALLOT. Voting on any question or in any election may be viva voce unless the Presiding Officer shall order or any Stockholder shall demand that voting be by ballot.

1.13.    ADVANCE NOTICE OF STOCKHOLDER NOMINATIONS AND PROPOSALS.

1.13.1 Nominations of individuals for election to the Board of Directors or the proposal of other business to be considered by the Stockholders may be made at an annual meeting of Stockholders only (a) pursuant to the Corporation’s notice of meeting (or any supplement thereto) with respect to such annual meeting given by or at the direction of the Board of Directors (or any duly authorized committee thereof), (b) if otherwise properly brought before such annual meeting by or at the direction of the Board of Directors (or any duly authorized committee thereof) or (c) by any Stockholder of the Corporation who is a Stockholder of record on the date of the giving of notice by the Stockholder as provided for in this Section 1.13 through the date of such annual meeting, who is entitled to vote at the meeting in the election of each individual so nominated or on any such other business and who has complied with the procedures and other requirements set forth in this Section 1.13. For the avoidance of doubt, compliance with the foregoing clause (c) shall be the exclusive means for a Stockholder to make nominations or to propose any other business at an annual meeting of Stockholders (other than a proposal included in the Corporation’s proxy materials pursuant to and in compliance with Rule

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14a-8 under the Securities Exchange Act of 1934, as amended (such act, and the rules and regulations promulgated thereunder, the “Exchange Act”)).

1.13.2 In addition to any other applicable requirements for nominations or other business to be properly brought before an annual meeting by a Stockholder pursuant to clause (c) of Section 1.13.1 above, the Stockholder must have given timely notice thereof in writing to the Secretary of the Corporation and any such other business must otherwise be a proper matter for action by the Stockholders. To be timely, a Stockholder’s notice shall set forth all information required under this Section 1.13 and shall be delivered to, or mailed and received at, the principal executive offices of the Corporation by, (a) with respect to nominations of individuals for election to the Board of Directors only, at the annual meeting of Stockholders occurring in 2023, not less than sixty (60) days nor more than one hundred and fifty (150) days prior to the anniversary of the last annual meeting of Stockholders, and (b) with respect to any nomination or other business to be properly brought before an annual meeting of Stockholders for each succeeding annual meeting of Stockholders beginning in 2024, not less than ninety (90) days nor more than one hundred and twenty (120) days prior to the anniversary of the last annual meeting of Stockholders; provided, however, that if the date of the annual meeting is more than thirty (30) days before or sixty (60) days after such anniversary date, or if no annual meeting was held in the preceding year, a Stockholder’s notice must be delivered or mailed and received by no earlier than one hundred and twenty (120) days prior to such annual meeting and no later than the later of ninety (90) days prior to such annual meeting or the tenth (10th) day following the date on which public disclosure of the date of the annual meeting is first made by the Corporation. The adjournment, recess, postponement or rescheduling of an annual meeting (or the public disclosure thereof) shall not commence a new time period or an extension of the time for the giving of a Stockholder’s notice as described in this Section 1.13.

1.13.3 To be in proper written form, the notice of any Stockholder giving notice under this Section 1.13 (each, a “Noticing Party”) must set forth:

(a) as to each person whom such Noticing Party proposes to nominate for election or reelection as a Director (each, a “Proposed Nominee”), if any (i) the name, age, business address and residence address of such Proposed Nominee; (ii) the principal occupation and employment of such Proposed Nominee; (iii) a written questionnaire with respect to the background and qualification of such Proposed Nominee, completed by

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such Proposed Nominee in the form required by the Corporation (which form such Noticing Party shall request in writing from the Secretary prior to submitting notice and which the Secretary shall provide to such Noticing Party within ten (10) days after receiving such request); (iv) a written representation and agreement completed by such Proposed Nominee in the form required by the Corporation (which form such Noticing Party shall request in writing from the Secretary prior to submitting notice and which the Secretary shall provide to such Noticing Party within ten (10) days after receiving such request) providing that such Proposed Nominee: (A) is not and will not become a party to any agreement, arrangement or understanding with, and has not given any commitment or assurance to, any person or entity as to how such Proposed Nominee, if elected as a Director of the Corporation, will act or vote on any issue or question (a “Voting Commitment”) that has not been disclosed to the Corporation or any Voting Commitment that could limit or interfere with such Proposed Nominee’s ability to comply, if elected as a Director of the Corporation, with such Proposed Nominee’s fiduciary duties under applicable law; (B) is not and will not become a party to any agreement, arrangement or understanding with any person or entity other than the Corporation with respect to any direct or indirect compensation, reimbursement or indemnification in connection with service or action as a Director or nominee that has not been disclosed to the Corporation; (C) will, if elected as a Director of the Corporation, comply with all applicable rules of the New York Stock Exchange or other securities exchange upon which the Corporation’s securities are listed, the Articles, these Bylaws and all applicable publicly disclosed corporate governance, ethics, conflict of interest, confidentiality and stock ownership and trading policies and other guidelines and policies of the Corporation generally applicable to Directors, and all applicable fiduciary duties under state law; (D) consents to being named as a nominee in a proxy statement and form of proxy for the meeting and to serving a full term as a Director of the Corporation, if elected; and (E) will provide facts, statements and other information in all communications with the Corporation and its Stockholders that are or will be true and correct in all material respects and that do not and will not omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which they are made, not misleading; (v) a description of all direct and indirect compensation and other material monetary agreements, arrangements and understandings, written or oral, during the past three (3) years, and any other material relationships, between or among such Proposed Nominee, on the one hand, and such Noticing Party or any Stockholder Associated

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Person (as defined below), on the other hand, including, without limitation, all information that would be required to be disclosed pursuant to Item 404 promulgated under Regulation S-K as if such Noticing Party and any Stockholder Associated Person were the “registrant” for purposes of such rule and the Proposed Nominee were a Director or executive officer of such registrant; and (vi) all other information relating to such Proposed Nominee or such Proposed Nominee’s associates that would be required to be disclosed in a proxy statement or other filing required to be made by such Noticing Party or any Stockholder Associated Person in connection with the solicitation of proxies for the election of Directors in a contested election or otherwise required pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder (collectively, the “Proxy Rules”);

(b) as to any other business that such Noticing Party proposes to bring before the meeting: (i) a reasonably brief description of the business desired to be brought before the meeting and the reasons for conducting such business at the meeting; (ii) the text of the proposal or business (including the complete text of any resolutions proposed for consideration and, in the event that such business includes a proposal to amend the Articles or these Bylaws, the language of the proposed amendment); and (iii) all other information relating to such business that would be required to be disclosed in a proxy statement or other filing required to be made by such Noticing Party or any Stockholder Associated Person in connection with the solicitation of proxies in support of such proposed business by such Noticing Party or any Stockholder Associated Person pursuant to the Proxy Rules;

(c) as to such Noticing Party, any Proposed Nominee, and any other Stockholder Associated Persons: (i) the name and address of such Noticing Party, any Proposed Nominee, and any other Stockholder Associated Person (including, as applicable, as they appear on the Corporation’s books and records); (ii) the class, series and number of Shares of each class or series of Stock (if any) of the Corporation that are, directly or indirectly, owned beneficially and/or of record by such Noticing Party, any Proposed Nominee, or any other Stockholder Associated Person and the date or dates such Shares were acquired and the investment intent of such acquisition; (iii) the name of each nominee holder for, and number of, any securities of the Corporation owned beneficially but not of record by such Noticing Party, any Proposed Nominee, or any

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other Stockholder Associated Person and any pledge by such Noticing Party, any Proposed Nominee, or any other Stockholder Associated Person with respect to any of such securities; (iv) any Short Interest (as defined below) held by or involving such Noticing Party, any Proposed Nominee, or any other Stockholder Associated Person; (v) a complete and accurate description of all agreements, arrangements or understandings, written or oral, (including any derivative or short positions, profit interests, hedging transactions, options, warrants, convertible securities, stock appreciation or similar rights and borrowed or loaned shares) that have been entered into by, or on behalf of, such Noticing Party, any Proposed Nominee, or any other Stockholder Associated Person, the effect or intent of which is to mitigate loss, manage risk or benefit from changes in the price of any securities of the Corporation, or maintain, increase or decrease the voting power of such Noticing Party, any Proposed Nominee, or any other Stockholder Associated Person with respect to securities of the Corporation, whether or not such instrument or right shall be subject to settlement in underlying Shares of Stock of the Corporation (any of the foregoing, a “Derivative Instrument”); (vi) any substantial interest, direct or indirect (including any existing or prospective commercial, business or contractual relationship with the Corporation), by security holdings or otherwise, of such Noticing Party, any Proposed Nominee, or any other Stockholder Associated Person in the Corporation or any affiliate thereof, other than an interest arising from the ownership of securities of the Corporation where such Noticing Party, any Proposed Nominee, or any other Stockholder Associated Person receives no extra or special benefit not shared on a pro rata basis by all other holders of the same class or series; (vii) a complete and accurate description of all agreements, arrangements or understandings, written or oral, (A) between or among such Noticing Party and any of the Stockholder Associated Persons or (B) between or among such Noticing Party or any Stockholder Associated Person and any other person or entity (naming each such person or entity) or any Proposed Nominee, including, without limitation, (x) any proxy, contract, arrangement, understanding or relationship pursuant to which such Noticing Party or any Stockholder Associated Person has a right to vote any security of the Corporation, (y) any understanding, written or oral, that such Noticing Party or any Stockholder Associated Person may have reached with any Stockholder of the Corporation (including the name of such Stockholder) with respect to how such Stockholder will vote such Stockholder’s Shares in the Corporation at any meeting of the Corporation’s Stockholders or take other action in support of any Proposed Nominee or other business, or other action to be taken,

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by such Noticing Party or any Stockholder Associated Person and (z) any other agreements that would be required to be disclosed by such Noticing Party, any Proposed Nominee, any other Stockholder Associated Person or any other person or entity pursuant to Item 5 or Item 6 of a Schedule 13D pursuant to Section 13 of the Exchange Act and the rules and regulations promulgated thereunder (regardless of whether the requirement to file a Schedule 13D is applicable to such Noticing Party, any Proposed Nominee, any other Stockholder Associated Person or any other person or entity); (viii) any rights to dividends on the Shares of the Corporation owned beneficially by such Noticing Party, any Proposed Nominee, or any other Stockholder Associated Person that are separated or separable from the underlying Shares of the Corporation; (ix) any proportionate interest in Shares of the Corporation or Derivative Instruments held, directly or indirectly, by a general or limited partnership, limited liability company or similar entity in which such Noticing Party, any Proposed Nominee, or any other Stockholder Associated Person is (A) a general partner or, directly or indirectly, beneficially owns an interest in a general partner of such general or limited partnership or (B) the manager, managing member or, directly or indirectly, beneficially owns an interest in the manager or managing member of such limited liability company or similar entity; (x) any significant equity interests or any Derivative Instruments or Short Interests in any principal competitor of the Corporation held by such Noticing Party, any Proposed Nominee, or any other Stockholder Associated Person; (xi) any direct or indirect interest of such Noticing Party, any Proposed Nominee, or any other Stockholder Associated Person in any contract with the Corporation, any affiliate of the Corporation or any principal competitor of the Corporation (including, without limitation, any employment agreement, collective bargaining agreement or consulting agreement); (xii) a description of any material interest of such Noticing Party, any Proposed Nominee, or any other Stockholder Associated Person in the business proposed by such Noticing Party, if any, or the election of any Proposed Nominee; (xiii) a complete and accurate description of any performance-related fees (other than an asset-based fee) to which such Noticing Party, any Proposed Nominee, or any other Stockholder Associated Person may be entitled as a result of any increase or decrease in the value of the Corporation’s securities or any Derivative Instruments, including, without limitation, any such interests held by members of any Proposed Nominee’s or any other Stockholder Associated Person’s immediate family sharing the same household; and (xiv) all other information relating to such Noticing Party or any Stockholder Associated Person, or such Noticing Party’s or any Stockholder

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Associated Person’s associates, that would be required to be disclosed in a proxy statement or other filing in connection with the solicitation of proxies in support of the business proposed by such Noticing Party, if any, or for the election of any Proposed Nominee in a contested election or otherwise pursuant to the Proxy Rules;

(d) a representation that such Noticing Party (or a Qualified Representative (as defined below) of such Noticing Party) intends to appear in person at the meeting to bring such business before the meeting or nominate any Proposed Nominees, as applicable, and an acknowledgment that, if such Noticing Party (or a Qualified Representative (as defined below) of such Noticing Party) does not appear to present such business or Proposed Nominees, as applicable, at such meeting, the Corporation need not present such business or Proposed Nominees for a vote at such meeting, notwithstanding that proxies in respect of such vote may have been received by the Corporation;

(e) a complete and accurate description of any pending or, to such Noticing Party’s knowledge, threatened legal proceeding in which such Noticing Party, any Proposed Nominee or any other Stockholder Associated Person is a party or participant involving the Corporation or, to such Noticing Party’s knowledge, any Officer, affiliate or associate of the Corporation;

(f) a representation from such Noticing Party as to whether such Noticing Party or any Stockholder Associated Person intends or is part of a group that intends (i) to deliver a proxy statement and/or form of proxy to a number of holders of the Corporation’s voting shares reasonably believed by such Noticing Party to be sufficient to approve or adopt the business to be proposed or elect the Proposed Nominees, as applicable, (ii) to engage in a solicitation (within the meaning of Exchange Act Rule 14a-1(l)) with respect to the nomination or other business, as applicable, and if so, the name of each participant (as defined in Item 4 of Schedule 14A under the Exchange Act) in such solicitation, and/or (iii) to solicit proxies in support of Director nominees other than the Corporation’s Director nominees in accordance with Rule 14a-19 under the Exchange Act (including Rule 14a-19(a)(2) and Rule 14a-19(a)(3)); and

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(g) a description of any agreement, arrangement or understanding, written or oral, the effect or intent of which is to increase or decrease the voting power of such Noticing Party or any Stockholder Associated Person with respect to any Shares of the Stock of the Corporation, without regard to whether such agreement, arrangement or understanding is required to be reported on a Schedule 13D in accordance with the Exchange Act.

In addition to the information required above, the Corporation may require any Noticing Party to furnish such other information as the Corporation may reasonably require to determine the eligibility or suitability of a Proposed Nominee to serve as a Director of the Corporation or that could be material to a reasonable Stockholder’s understanding of the independence, or lack thereof, of such Proposed Nominee, under the listing standards of New York Stock Exchange or other securities exchange upon which the Corporation’s securities are listed, any applicable rules of the Securities and Exchange Commission, any publicly disclosed standards used by the Board of Directors in selecting nominees for election as a Director and for determining and disclosing the independence of the Corporation’s Directors, including those applicable to a Director’s service on any of the committees of the Board of Directors, or the requirements of any other laws or regulations applicable to the Corporation. If requested by the Corporation, any supplemental information required under this paragraph shall be provided by a Noticing Party within ten (10) days after it has been requested by the Corporation.

1.13.4 Only such business shall be conducted at a special meeting of Stockholders as shall have been brought before the meeting pursuant to the Corporation’s notice of meeting (or any supplement thereto). Nominations of persons for election to the Board of Directors may be made at a special meeting of Stockholders at which Directors are to be elected pursuant to the Corporation’s notice of meeting (or any supplement thereto) (a) by or at the direction of the Board of Directors (or any duly authorized committee thereof) or (b) provided that one or more Directors are to be elected at such meeting pursuant to the Corporation’s notice of meeting, by any Stockholder of the Corporation who (i) is a Stockholder of record on the date of the giving of the notice provided for in this Section 1.13.4 through the date of such special meeting, (ii) is entitled to vote at such special meeting and upon such election and (iii) complies with all applicable procedures and other requirements set forth in Section 1.13. In addition to any other applicable requirements, for Director nominations to be properly brought before a special meeting by a Stockholder pursuant to the foregoing clause (b), such Stockholder must have given

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timely notice thereof in proper written form to the Secretary. To be timely, such notice must be received by the Secretary at the principal executive offices of the Corporation not more than one hundred and twenty (120) days prior to such special meeting and not less than the later of (A) ninety (90) days prior to such special meeting and (B) the tenth (10th) day following the day on which public disclosure of the date of the meeting is first made by the Corporation. In no event shall an adjournment, recess, postponement or rescheduling of a special meeting (or the public disclosure thereof) commence a new time period (or extend any time period) for the giving of a Stockholder’s notice as described above. To be in proper written form, such notice shall include all information required pursuant to Section 1.13.3 above.

1.13.5 Notwithstanding anything to the contrary in these Bylaws, unless otherwise required by applicable law, if any Noticing Party or any Stockholder Associated Person (a) provides notice pursuant to Rule 14a-19(b) promulgated under the Exchange Act and (b) subsequently fails to comply with the requirements of Rule 14a-19(a)(2) or Rule 14a-19(a)(3) promulgated under the Exchange Act (or fails to timely provide documentation reasonably satisfactory to the Corporation that such Noticing Party or Stockholder Associated Person has met the requirements of Rule 14a-19(a)(3) promulgated under the Exchange Act in accordance with the following sentence), then such nomination shall be disregarded and no vote on such nominee proposed by such Noticing Party or Stockholder Associated Person shall occur, notwithstanding that the nomination is set forth in the notice of meeting or other proxy materials and notwithstanding that proxies or votes in respect of the election of such Proposed Nominee may have been received by the Corporation (which proxies and votes shall be disregarded). Upon request by the Corporation, any Noticing Party or any Stockholder Associated Person that has provided notice pursuant to Rule 14a-19(b) promulgated under the Exchange Act shall deliver to the Corporation, no later than five (5) business days prior to the applicable meeting, documentation reasonably satisfactory to the Corporation demonstrating that it has met the requirements of Rule 14a-19(a)(3) promulgated under the Exchange Act.

1.13.6 In the event that the notice or any other information or communications provided by any Noticing Party, Stockholder Associated Person or Proposed Nominee as required by this Section 1.13 shall not be true, correct and complete in all material respects (including omitting a material fact necessary to make the statements made, in light of the circumstances under which they were made, not misleading), such notice or other information may be deemed not to have been provided in accordance with this Section 1.13. Any such

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Noticing Party, Stockholder Associated Person or Proposed Nominee shall (a) notify the Corporation of any inaccuracy or change (within two business days of becoming aware of such inaccuracy or change) in any such information and (b) promptly update and supplement the information previously provided to the Corporation pursuant to this Section 1.13, if necessary, so that the information provided or required to be provided shall be true and correct (and not misleading) as of the record date for the meeting and as of the date that is ten (10) business days prior to the meeting or any adjournment, recess, postponement or rescheduling thereof, and such update and supplement shall be delivered to the Secretary at the principal executive offices of the Corporation. Upon written request of the Secretary on behalf of the Board of Directors (or a duly authorized committee thereof), any Noticing Party, Stockholder Associated Person or Proposed Nominee shall provide, within five (5) business days after delivery of such request (or such other period as may be specified in such request), (i) written verification, reasonably satisfactory to the Board of Directors, any committee thereof or any authorized Officer of the Corporation, to demonstrate the accuracy of any information submitted by such Noticing Party, Stockholder Associated Person or Proposed Nominee pursuant to this Section 1.13 and (ii) a written affirmation of any information submitted by such Noticing Party, Stockholder Associated Person or Proposed Nominee pursuant to this Section 1.13 as of an earlier date. If a Noticing Party, Stockholder Associated Person or Proposed Nominee fails to provide such written verification or affirmation within such period, the information as to which written verification or affirmation was requested may be deemed not to have been provided in accordance with this Section 1.13.

1.13.7 No person shall be eligible for election as a Director of the Corporation unless the person is nominated by a Stockholder in accordance with the procedures set forth in this Section 1.13 or the person is nominated by the Board of Directors, and no business shall be conducted at a meeting of Stockholders of the Corporation except business brought by a Stockholder in accordance with the procedures set forth in this Section 1.13 or by the Board of Directors. The number of nominees a Stockholder may nominate for election at a meeting may not exceed the number of Directors to be elected at such meeting by the class of Stockholders for which such noticing Stockholder is entitled to vote, and no Stockholder shall be entitled to make additional or substitute nominations following the expiration of the time periods set forth in Section 1.13.2 or Section 1.13.4, as applicable. Except as otherwise provided by law, the Presiding Officer of a meeting shall have the power and the duty to determine whether a nomination or any business proposed to be brought before the meeting has been made in

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accordance with the procedures and other requirements set forth in these Bylaws, and, if the Presiding Officer of the meeting determines that any proposed nomination or business was not properly brought before the meeting, the Presiding Officer shall declare to the meeting that such nomination shall be disregarded or such business shall not be transacted, and no vote shall be taken with respect to such nomination or proposed business, in each case, notwithstanding that proxies with respect to such vote may have been received by the Corporation. For the avoidance of doubt, unless required by applicable law, a nomination for Director by a Stockholder giving notice under this Section 1.13 is not properly brought before a meeting of the Stockholders in accordance with these Bylaws if the Board of Directors or the Presiding Officer determines that (a) such Noticing Party, Stockholder Associated Person or Proposed Nominee has breached any of its agreements, representations or warranties set forth in the notice given by such Stockholder or otherwise submitted pursuant to this Section 1.13, (b) any of the information in such Stockholder’s notice or otherwise submitted by such Noticing Party, Stockholder Associated Person or Proposed Nominee was not, when provided, true, correct and complete in all material respects, or (c) any such Noticing Party, Stockholder Associated Person or Proposed Nominee otherwise fails to comply with its obligations pursuant to these Bylaws. Notwithstanding the foregoing provisions of this Section 1.13, unless otherwise required by law, if the Noticing Party (or a Qualified Representative of the Noticing Party) proposing a nominee for Director or business to be conducted at a meeting does not appear at the meeting of Stockholders of the Corporation to present such nomination or propose such business, such proposed nomination shall be disregarded or such proposed business shall not be transacted, as applicable, and no vote shall be taken with respect to such nomination or proposed business, notwithstanding that proxies with respect to such vote may have been received by the Corporation.

As a condition to serving on the Board of Directors, each Proposed Nominee shall submit to interviews with the Board of Directors or a committee thereof, if requested by the Board of Directors, and each Proposed Nominee shall make himself or herself available for any such interviews on or prior to the later of (i) ten (10) days following any reasonable request therefor from the Board of Directors (or any committee thereof) and (ii) the thirtieth (30th) day prior to such Proposed Nominee’s election to the Board of Directors.

1.13.8 In addition to complying with the foregoing provisions of this Section 1.13, a Stockholder shall also comply with all applicable requirements of state law and the Exchange Act with respect to the matters set forth in this Section 1.13. Nothing in this Section

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1.13 shall be deemed to affect any rights of (a) Stockholders to request inclusion of proposals in the Corporation’s proxy statement pursuant to Rule 14a-8 under the Exchange Act or (b) Stockholders to request inclusion of nominees in the Corporation’s proxy statement pursuant to the Proxy Rules. Except as otherwise required by law, nothing in this Section 1.13 shall obligate the Corporation or the Board of Directors to include in any proxy statement or other Stockholder communication distributed on behalf of the Corporation or the Board of Directors information with respect to any nominee for Director or any proposal submitted by a Stockholder.

1.13.9 For purposes of these Bylaws, (a) “affiliate” and “associate” each shall have the respective meanings set forth in Rule 12b-2 under the Exchange Act; (b) “beneficial owner” or “beneficially owned” shall have the meaning set forth for such terms in Section 13(d) of the Exchange Act; (c) “public disclosure” shall mean disclosure in a press release reported by a national news service or in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act; (d) a “Qualified Representative” of a Noticing Party means (i) a duly authorized Officer, manager or partner of such Noticing Party or (ii) a person authorized by a writing executed by such Noticing Party (or a reliable reproduction or electronic transmission of the writing) delivered by such Noticing Party to the Corporation prior to the making of any nomination or proposal at a Stockholder meeting stating that such person is authorized to act for such Noticing Party as proxy at the meeting of Stockholders, which writing or electronic transmission, or a reliable reproduction of the writing or electronic transmission, must be produced at the meeting of Stockholders; (e) “Short Interest” shall mean any agreement, arrangement, understanding, relationship or otherwise, including, without limitation, any repurchase or similar so-called “stock borrowing” agreement or arrangement, involving any Noticing Party or any Stockholder Associated Person of any Noticing Party directly or indirectly, the purpose or effect of which is to mitigate loss to, reduce the economic risk (of ownership or otherwise) of any class or series of Shares of the Corporation by, manage the risk of share price changes for, or increase or decrease the voting power of, such Noticing Party or any Stockholder Associated Person of any Noticing Party with respect to any class or series of Shares of the Corporation, or which provides, directly or indirectly, the opportunity to profit or share in any profit derived from any decrease in the price or value of any class or series of Shares of the Corporation; and (f) “Stockholder Associated Person” shall mean, with respect to any Noticing Party, (i) any member of the immediate family of such Noticing Party sharing the same household, (ii) any person who is a member of a “group” (as such term is used in Rule 13d-5 under the Exchange Act (or any

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successor provision at law)) with or otherwise acting in concert with such Noticing Party or Stockholder Associated Person with respect to the Stock of the Corporation, (iii) any beneficial owner of Shares of Stock of the Corporation owned of record by such Noticing Party or Stockholder Associated Person (other than a Stockholder that is a depository), (iv) any affiliate or associate of such Noticing Party or any Stockholder Associated Person, and (v) any Proposed Nominee.

ARTICLE II

DIRECTORS

2.01.    GENERAL POWERS. The business and affairs of the Corporation shall be managed by its Board of Directors, except as conferred on or reserved to the Stockholders by law, the Articles, or these Bylaws.

2.02.    OUTSIDE ACTIVITIES. The Board of Directors and its members are required to spend only such time managing the business and affairs of the Corporation as is necessary to carry out their duties in accordance with Section 2-405.1 of the Maryland General Corporation Law. The Board of Directors, each Director, and the agents, Officers and employees of the Corporation or the agents of the Board of Directors or of any Director may engage with or for others in business activities of the types conducted by the Corporation; none of them has an obligation to notify or present to the Corporation or each other any investment opportunity that may come to such person’s attention even though such investment might be within the scope of the Corporation’s purposes or various investment objectives. Any interest (including any interest described in Section 2-419(a) of the Maryland General Corporation Law) that a Director has in any investment opportunity presented to the Corporation must be disclosed by such Director to the Board of Directors (and, if voting thereon, to the Stockholders or to any committee of the Board of Directors) within ten (10) days after the later of the date upon which such Director becomes aware of such interest or the date upon which the Director becomes aware that the Corporation is considering such investment opportunity; provided, that if the date upon which the Corporation, its Board of Directors (or a committee thereof) or its Stockholders is scheduled to take action on such investment opportunity is less than ten (10) days after the Director first

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becomes aware of the interest or that the Corporation is considering such investment opportunity, the Director shall make such required disclosures as early as practicable before the scheduled action. If such interest comes to the interested Director’s attention after a vote to take such investment opportunity, the voting body shall reconsider such investment opportunity if not already consummated or implemented.

2.03.    OUTSIDE MANAGEMENT. The Board of Directors may delegate some or all of the duties of management of the assets and the administration of the Corporation’s day-to-day business operations to one or more advisors pursuant to a written contract or contracts (each, an “Advisory Agreement”), approved by the Board of Directors. The terms of any such Advisory Agreement shall be such terms as are approved by the Board of Directors.

2.04.    NUMBER, TENURE, QUALIFICATION, NOMINATION AND ELECTION.

2.04.1  The number of Directors of the Corporation shall be that number set forth in the Articles, unless a majority of the Board of Directors establishes some other number not less than three (3) nor more than nine (9); provided, that no decrease in the number of Directors shall have the effect of shortening the term of any incumbent Director. The Board of Directors shall be divided into such classes as are set forth in the Articles, with the number of Directors of each class being as equal as practicable. Each Director shall hold office for the term for which he or she is elected and until his or her successor is duly elected and qualifies, or until his or her earlier resignation or removal. At least a majority of the Directors shall at all times (except temporarily pending the filling of a vacancy as hereinafter provided) be persons who meet the requirements of an “independent director” under the rules of the New York Stock Exchange or other national securities exchange on which the Shares of the Corporation are then listed (“Independent Directors”).

2.04.2  Except as provided in Section 6.3 of the Articles and Section 2.12 hereof, each Director shall be elected by the vote of a majority of the votes cast with respect to the Director’s election at any meeting for the election of Directors at which a quorum is present, subject to the rights of the holders of any series of preferred stock to elect Directors in accordance with the terms thereof. For purposes of this paragraph, a majority of the votes cast

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means that the number of votes cast “for” a Director nominee must exceed the number of votes cast “against.” The votes cast shall exclude abstentions and broker non-votes with respect to that Director’s election. Notwithstanding the foregoing, in the event of a contested election of Directors, Directors shall be elected by the vote of a plurality of the votes cast at any meeting for the election of Directors at which a quorum is present. For purposes of these Bylaws, a contested election shall mean any election of Directors in which the number of nominees exceeds the number of Directors to be elected as of the deadline for the notice of Director nominations for such meeting pursuant to Section 1.13 of these Bylaws. If the Directors are to be elected by a plurality of the votes cast pursuant to the provisions of this Section 2.04.2, Stockholders shall not be permitted to vote “against” any one or more of the nominees for Director but shall only be permitted to vote “for” one or more nominees or withhold their votes with respect to one or more nominees. The Articles do not authorize Stockholders to cumulate their votes in any election of Directors of the Corporation.

If, in any election of Directors of the Corporation which is not a contested election, an incumbent Director is not elected due to a failure to receive a majority of the votes cast as described above and his or her successor is not otherwise elected and qualified, the Director shall promptly tender his or her resignation to the Board of Directors, subject to acceptance thereof by the Board of Directors, for consideration by the Nominating and Corporate Governance Committee of the Board of Directors. The Nominating and Corporate Governance Committee shall consider the resignation and make a recommendation to the Board of Directors as to whether to accept or reject the tendered resignation, or whether other action should be taken. The Board of Directors shall act on the tendered resignation, taking into account the Nominating and Corporate Governance Committee’s recommendation, and publicly disclose (by a press release, a filing with the Securities and Exchange Commission or other broadly disseminated means of communication (a “Public Announcement”)) its decision regarding the tendered resignation and the rationale behind the decision within ninety (90) days from the date of the certification of the election results. The Nominating and Corporate Governance Committee in making its recommendation, and the Board of Directors in making its decision, may each consider any factors or other information that it considers appropriate and relevant. Any Director who failed to be re-elected by receiving a majority of the votes cast by Stockholders at a meeting for the election of Directors at which a quorum is present shall not participate in either the Nominating and Corporate Governance Committee’s or Board of Directors’ consideration or other action

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regarding whether to accept the resignation. However, if each member of the Nominating and Corporate Governance Committee failed to receive a majority of the votes cast at the same election, then the Independent Directors who did not fail to receive a majority of the votes cast shall appoint a committee amongst themselves to consider the resignations and recommend to the Board of Directors whether to accept them.

If an incumbent Director resignation pursuant to the foregoing paragraph is not accepted by the Board of Directors, such Director shall continue to serve until the next annual meeting and until his or her successor is duly elected, or his or her earlier resignation or removal. If a Director’s resignation is accepted by the Board of Directors, or if a nominee for Director is not elected and the nominee is not an incumbent Director, then the Board of Directors, in its sole discretion, may fill any resulting vacancy pursuant to the provisions of Section 6.3 of the Articles and Section 2.12 hereof or may decrease the size of the Board of Directors pursuant to the provisions of Section 2.04.1 hereof.

2.05.    ANNUAL AND REGULAR MEETINGS. An annual meeting of the Board of Directors may be held immediately after and at the same place as the annual meeting of Stockholders, or at such other time and place, either within or without the State of Maryland, as is determined by the Board of Directors, and no other notice shall be necessary. The Board of Directors may provide the time and place, either within or without the State of Maryland, for the holding of regular meetings of the Board of Directors without other notice. Any annual or other regular meeting of the Board of Directors may be held partially or solely by remote communication without designating a place for a physical assembly of the Board of Directors.

2.06.    SPECIAL MEETINGS. Special meetings of the Board of Directors may be called by or at the request of the Chairperson of the Board (if any), the President or a majority of the Directors then in office. The person or persons authorized to call special meetings of the Board of Directors may fix any place, either within or without the State of Maryland, as the place for holding any special meeting of the Board of Directors called by them. The Board of Directors may provide the time and place, either within or without the State of Maryland, for the holding of special meetings of the Board of Directors without other notice. Any special meeting of the Board of Directors may be held partially or solely by remote communication without designating a place for a physical assembly of the Board of Directors.

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2.07.    NOTICE. Notice of any special meeting to be provided herein shall be given in writing or by electronic transmission, in accordance with Section 8.01, to each Director at his or her business or residence or his or her business or personal e-mail address at least twenty-four (24) hours, or by mail at least five (5) days, prior to the meeting. Neither the business to be transacted at, nor the purpose of, any annual, regular or special meeting of the Board of Directors need be specified in the notice, unless specifically required by statute or these Bylaws.

2.08.    QUORUM. A majority of the Directors then in office shall constitute a quorum for transaction of business at any meeting of the Board of Directors; provided, however, that a quorum for transaction of business with respect to any matter in which any Director (or affiliate of such Director) has any interest shall consist of a majority of the Directors then in office excluding the Directors with an interest (or whose affiliate has an interest) in such matter. The Directors present at a meeting which has been duly called and at which a quorum has been established may continue to transact business until adjournment, notwithstanding the withdrawal from the meeting of enough Directors to leave fewer than required to establish a quorum. The Directors at a meeting in which a quorum is not present may adjourn the meeting until a time and place as may be determined by a majority vote of the Directors present at that meeting, and no further notice need be given other than by announcement at said meeting which shall be so adjourned.

2.09.    VOTING. Except as otherwise required by law or by the Articles, the act of a majority of Directors present at a meeting at which a quorum is present shall constitute the act of the Board of Directors, unless a greater proportion is required by statute, the Articles, or these Bylaws, and if enough Directors have withdrawn from a meeting to leave fewer than required to establish a quorum, but the meeting is not adjourned, the act of a majority of that number of Directors necessary to constitute a quorum at such meeting shall constitute the act of the Board of Directors unless a greater proportion is required by statute, the Articles, or these Bylaws; provided, that in any event, no act relating to any matter in which any Director (or affiliate of such Director) has any interest shall be the act of the Board unless a majority of the Directors on the Board without any such interest vote for such act.

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2.10.    CONDUCT OF MEETINGS. All meetings of the Board of Directors shall be called to order and presided over by the Chairperson of the Board (if any), or in the absence of the Chairperson of the Board, by the President (if a member of the Board of Directors), or, in the absence of the Chairperson of the Board and the President, by a member of the Board of Directors selected by the members present. The Secretary of the Corporation shall act as secretary at all meetings of the Board of Directors or, in the absence at any meeting of the Secretary, any Assistant Secretary, or, in the absence of the Secretary and all Assistant Secretaries (if any), the person appointed by the presiding officer of the meeting, shall act as secretary of such meeting. Members of the Board of Directors not physically present at a meeting of the Board of Directors may participate in the meeting by conference telephone or similar communications equipment by remote communication, videoconference, teleconference, or other available technology if all Directors participating in the meeting can hear each other at the same time, and participation in a meeting in accordance herewith shall constitute presence in person at such meeting for all purposes.

2.11.    RESIGNATIONS. Any Director may resign from the Board of Directors or any committee thereof at any time. Such resignation shall be made in writing and shall take effect at the time specified therein, or if no time be specified, at the time of the receipt of notice of such resignation by the President or the Secretary. The acceptance of a resignation shall not be necessary to make it effective unless otherwise stated in the resignation or as otherwise provided in these Bylaws, including Section 2.04.2 hereof.

2.12.    VACANCIES. A vacancy which arises through the death, resignation or removal of a Director or as a result of an increase by the Board of Directors in the number of Directors may be filled pursuant to the provisions of Section 6.3 of the Articles by a vote of the entire Board of Directors, and a Director so elected by the Board of Directors to fill a vacancy shall serve until the next annual meeting of Stockholders and until his or her successor shall be duly elected and qualified. At the annual meeting of Stockholders, a Director shall be elected to fill the vacancy for the remainder of the present term of office of the class to which the Director is elected.

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2.13.    INFORMAL ACTION BY DIRECTORS. Any action required or permitted to be taken at any meeting of the Board of Directors may be taken without a meeting, if a consent to such action in writing or by electronic transmission is given by each Director and such consent is filed with the minutes of the Board of Directors. Consents may be signed by different Directors on separate counterparts.

2.14.    COMPENSATION. Compensation for services and reimbursement for expenses incurred in connection with attendance at each meeting of the Board of Directors, or of any committee thereof, may be allowed to any Director by resolution of the Board of Directors. A Director shall not be precluded from serving the Corporation in any other capacity and receiving compensation for services in that capacity.

2.15.    RELIANCE. Each Director and Officer of the Corporation shall, in the performance of his or her duties with respect to the Corporation, be entitled to rely on any information, opinion, report or statement, including any financial statement or other financial data, prepared or presented by an Officer or employee of the Corporation whom the Director or Officer reasonably believes to be reliable and competent in the matters presented; by a lawyer, certified public accountant or other person, as to a matter which the Director or Officer reasonably believes to be within the person’s professional or expert competence; or, with respect to a Director, by a committee of the Board of Directors on which the Director does not serve, as to a matter within its designated authority, if the Director reasonably believes the committee to merit confidence.

2.16.    RATIFICATION. The Board of Directors or the Stockholders may ratify and make binding on the Corporation any action or inaction by the Corporation or its Officers to the extent that the Board of Directors or the Stockholders could have originally authorized the matter. Moreover, any action or inaction questioned in any Stockholders’ derivative proceeding or any other proceeding on the ground of lack of authority, defective or irregular execution, adverse interest of a Director, Officer or Stockholder, non-disclosure, miscomputation, the application of improper principles or practices of accounting or otherwise, may be ratified, before or after judgment, by the Board of Directors or by the Stockholders, and, if so ratified,

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shall have the same force and effect as if the questioned action or inaction had been originally duly authorized, and such ratification shall be binding upon the Corporation and its Stockholders and shall constitute a bar to any claim or execution of any judgment in respect of such questioned action or inaction.

2.17.    EMERGENCY PROVISIONS. Notwithstanding any other provision in the Articles or these Bylaws, this Section 2.17 shall apply during the existence of any catastrophe, or other similar emergency condition, as a result of which a quorum of the Board of Directors under Article II of these Bylaws cannot readily be obtained (an “Emergency”). During any Emergency, unless otherwise provided by the Board of Directors, (a) a meeting of the Board of Directors or a committee thereof may be called by any Director or Officer by any means feasible under the circumstances; (b) notice of any meeting of the Board of Directors during such an Emergency may be given less than twenty four (24) hours prior to the meeting to as many Directors and by such means as may be feasible at the time, including publication, television or radio; and (c) the number of Directors necessary to constitute a quorum shall be one-third (1/3) of the entire Board of Directors.

ARTICLE III

COMMITTEES

3.01.    NUMBER, TENURE AND QUALIFICATION. The Board of Directors may appoint from among its members an Executive Committee and other committees, composed of one or more Directors, to serve at the pleasure of the Board of Directors. Subject to the provisions hereof, the Board of Directors shall have the power at any time to change the membership or size of any committee (including the removal of any member of such committee), to fill any vacancy, to designate an alternate member to replace any absent or disqualified member or to dissolve any such committee.

3.02.    DELEGATION OF POWER. The Board of Directors may delegate to these committees any of the powers of the Board of Directors to manage the business and affairs of the

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Corporation, except those powers which the Board of Directors is specifically prohibited from delegating pursuant to Section 2-411 of the Maryland General Corporation Law.

3.03.    QUORUM AND VOTING. A majority of the members of any committee shall constitute a quorum for the transaction of business by such committee, and the act of a majority of the committee members at a meeting at which a quorum is present shall constitute the act of the committee, except that no act relating to any matter in which any Director (or affiliate of such Director) who is not an Independent Director has any interest shall be the act of any committee unless a majority of the Independent Directors on the committee vote for such act.

3.04.    CONDUCT OF MEETINGS. Each committee shall designate a presiding officer of such committee, and if not present at a particular meeting, the committee members present shall select a presiding officer for such meeting. Members of any committee not physically present at a meeting of such committee may participate in the meeting by conference telephone or similar communications equipment by remote communication, videoconference, teleconference, or other available technology if all Directors participating in the meeting can hear each other at the same time, and participation in a meeting in accordance herewith shall constitute presence in person at such meeting for all purposes. Each committee shall keep minutes of its meetings, and report the results of any proceedings at the next succeeding annual or regular meeting of the Board of Directors.

3.05.    INFORMAL ACTION BY COMMITTEES. Any action required or permitted to be taken at any meeting of a committee of the Board of Directors may be taken without a meeting, if a consent to such action in writing or by electronic transmission is given by each member of the committee and such consent is filed with the minutes of proceedings of such committee. Consents may be signed by different members on separate counterparts.

ARTICLE IV

OFFICERS

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4.01.    ENUMERATION; POWER AND DUTIES. The officers of the Corporation (the “Officers”) shall include a President, a Treasurer and a Secretary, and may also include a Chairperson of the Board (provided the Board of Directors may designate the Chairperson of the Board position to be non-executive, in which case such Chairperson would not be an Officer of the Corporation), Chief Executive Officer, one or more Vice Presidents, Assistant Treasurers, Assistant Secretaries and other Officers as the Board of Directors may from time to time elect or appoint. The powers and duties of the Officers of the Corporation shall be as provided in these Bylaws or otherwise as provided from time to time by resolution of the Board of Directors or by direction of an Officer authorized by the Board of Directors to prescribe the duties of other Officers. In the absence of such delegation of powers and duties, the respective Officers shall have the powers and shall discharge the duties customarily and usually held and performed by like officers of corporations similar in organization and business purposes to the Corporation subject to the control of the Board of Directors.

4.02.    ELECTION OR APPOINTMENT; TERM. The President, Treasurer and Secretary of the Corporation shall be elected annually by the Board of Directors. The Board of Directors may elect or appoint such other Officers as it determines at any time, except that the President or Chief Executive Officer may from time to time appoint one or more Vice Presidents, Assistant Treasurer and Assistant Secretaries or other Officers. Each Officer shall hold office for the term determined by the Board of Directors and until his or her successor is duly elected and qualifies or until his or her earlier death, resignation, disqualification or removal in the manner hereinafter provided, or until the office to which he or she is elected (if other than that of President, Treasurer or Secretary) is terminated by the Board of Directors. Any two or more offices, except President and Vice President, may be held by the same person. Election or appointment of an Officer or agent shall not of itself create contract rights between the Corporation and such Officer or agent.

4.03.    REMOVAL. Any Officer or agent elected or appointed by the Board of Directors may be removed by the Board of Directors whenever in its judgment the best interests of the Corporation would be served thereby, but such removal shall be without prejudice to the contract rights, if any, of the person so removed. The fact that a person is elected or appointed to an

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office, whether or not for a specified term, shall not by itself create any contract rights or constitute any undertaking or evidence of any employment obligation of the Corporation to that person.

4.04.    RESIGNATION. Any Officer of the Corporation may resign at any time by delivering his or her resignation in writing to the Board of Directors, the Chairperson of the Board, the President, the Chief Executive Officer or the Secretary. Any resignation shall take effect immediately upon its receipt or at such later time specified in the resignation. The acceptance of a resignation shall not be necessary to make it effective unless otherwise stated in the resignation. Such resignation shall be without prejudice to the contract rights, if any, of the Corporation.

4.05.    VACANCIES. A vacancy in any office may be filled by the Board of Directors for the unexpired portion of the term.

4.06.    CHAIRPERSON OF THE BOARD. The Board of Directors may designate from among its members a Chairperson who shall not, solely by reason of these Bylaws, be an Officer of the Corporation. The Board of Directors may designate the Chairperson of the Board as an executive or non-executive Chairperson. The Chairperson of the Board may sign and execute all authorized deeds, mortgages, bonds, contracts or other instruments in the name of the Corporation except in cases where the execution thereof shall be expressly delegated by the Board of Directors or by these Bylaws to some other Officer or agent of the Corporation or shall be required by law to be otherwise signed or executed.

4.07.    CHIEF EXECUTIVE OFFICER. The Board of Directors may elect or appoint a Chief Executive Officer. The Chief Executive Officer shall have general responsibility for implementation of the policies of the Corporation, as determined by the Board of Directors, and for the management of the business and affairs of the Corporation. The Chief Executive Officer may sign and execute any deed, mortgage, bond, contract or other instruments on behalf of the Corporation except in cases where the execution thereof shall be expressly delegated by the Board of Directors or by these Bylaws to some other Officer or agent of the Corporation or shall be required by law to be otherwise signed or executed. In general, the Chief Executive Officer

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shall perform all duties incident to the office of Chief Executive Officer and such other duties as may be prescribed by the Board of Directors from time to time.

4.08.    PRESIDENT. Unless the Board of Directors shall otherwise determine in favor of the Chairperson of the Board, the Chief Executive Officer or any other Officer of the Corporation, the President shall be the chief executive officer and general manager of the Corporation and shall have active, general supervision and executive management over the business and affairs of the Corporation. The President may sign and execute any deed, mortgage, bond, contract or other instruments on behalf of the Corporation except in cases where the execution thereof shall be expressly delegated by the Board of Directors or by these Bylaws to some other Officer or agent of the Corporation or shall be required by law to be otherwise signed or executed. In general, the President shall perform all duties incident to the office of President and such other duties as may be prescribed by the Board of Directors from time to time.

4.09.    VICE PRESIDENTS. In the absence of the President or in the event of a vacancy in such office, the Vice President (or in the event there be more than one Vice President, the Vice Presidents in the order designated at the time of their election, or in the absence of any designation, then in the order of their election) shall perform the duties of the President and when so acting shall have all the powers of and be subject to all the restrictions upon the President. Every Vice President shall perform such other duties as from time to time may be assigned to him or her by the President or the Board of Directors.

4.10.    SECRETARY. The Secretary shall (a) keep the minutes of the proceedings of the Stockholders and the Board of Directors; (b) see that all notices are duly given in accordance with the provisions of these Bylaws or as required by law; (c) be custodian of the corporate records of the Corporation; (d) unless a transfer agent is appointed, keep a register of the post office address of each Stockholder that shall be furnished to the Secretary by such Stockholder and have general charge of the stock ledger of the Corporation (the “Stock Ledger”); (e) when authorized by the Board of Directors or the President, attest to or witness all documents requiring the same; (f) perform all duties as from time to time may be assigned to him or her by the

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President or by the Board of Directors; and (g) perform all the duties generally incident to the office of secretary of a corporation.

4.11.    TREASURER. The Treasurer shall have the custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation and shall deposit all moneys and other valuable effects in the name and to the credit of the Corporation in such depositories as may be designated by the Board of Directors. The Treasurer shall disburse the funds of the Corporation as may be ordered by the Board of Directors, the President or the Chief Executive Officer, taking proper vouchers for such disbursements, and shall render to the President and the Board of Directors an account of all his or her transactions as Treasurer and of the financial condition of the Corporation at any time. In general, the Treasurer shall perform all duties incident to the office of Treasurer and such other duties as may be prescribed by the Board of Directors from time to time. The Board of Directors may engage a custodian to perform some or all of the duties of the Treasurer, and if a custodian is so engaged then the Treasurer shall be relieved of the responsibilities set forth herein to the extent delegated to such custodian and, unless the Board of Directors otherwise determines, shall have general supervision over the activities of such custodian. The custodian shall not be an Officer of the Corporation.

4.12.    ASSISTANT SECRETARIES AND ASSISTANT TREASURERS. Assistant Secretaries and Assistant Treasurers (if any) (a) shall have the power to perform and shall perform all the duties of the Secretary and the Treasurer, respectively, in such respective Officer’s absence and (b) shall perform such duties as shall be assigned to him or her by the Secretary or the Treasurer, respectively, or by the President or the Board of Directors.

4.13.    COMPENSATION. The compensation, if any, of the Officers shall be fixed from time to time by or under the authority of the Board of Directors. No Officer shall be prevented from receiving such compensation, if any, by reason of the fact that he or she is also a Director of the Corporation.

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ARTICLE V

SHARES OF STOCK

5.01.    CERTIFICATES OF STOCK. Except as may be otherwise provided by the Board of Directors or required by the Articles, Stockholders of the Corporation are not entitled to certificates representing the Shares held by them. In the event that the Corporation issues Shares represented by certificates, such certificates shall be in such form as prescribed by the Board of Directors or a duly authorized Officer, shall contain the statements and information required by the Maryland General Corporation Law and shall be signed by the Officers of the Corporation in the manner permitted by the Maryland General Corporation Law. In the event that the Corporation issues Shares without certificates, on request by a Stockholder, the Corporation shall provide to such record holder a written statement of the information required by the Maryland General Corporation Law to be included on stock certificates. There shall be no differences in the rights and obligations of Stockholders based on whether or not their Shares are represented by certificates.

5.02.    STOCK LEDGER. The Corporation shall maintain at its principal office in Murfreesboro, Tennessee (or any subsequent address selected by the Board of Directors) or at the office of its counsel, accountants or transfer agent, an original or duplicate Stock Ledger containing the names and addresses of all the Stockholders and the number of Shares of each class or series held by each Stockholder.

5.03.    RECORDING TRANSFERS OF STOCK. All transfers of Shares shall be made on the books of the Corporation, by the holder of the Shares, in person or by such holder’s attorney, in such manner as the Board of Directors or any Officer of the Corporation may prescribe and, if such Shares are certificated, upon surrender of certificates duly endorsed. The issuance of a new certificate upon the transfer of certificated Shares is subject to the determination of either the Board of Directors or any Officer of the Corporation that such Shares shall no longer be represented by certificates. Upon the transfer of uncertificated Shares, to the extent then required by the Maryland General Corporation Law, the Corporation shall provide to

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record holders of such Shares a written statement of the information required by the Maryland General Corporation Law to be included on stock certificates.

The Corporation shall be entitled to treat the holder of record of any Share as the holder in fact thereof and, accordingly, shall not be bound to recognize any equitable or other claim to or interest in such Share or on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise expressly provided by the laws of the State of Maryland. Nothing herein shall impose upon the Corporation, the Board of Directors or Officers or their agents and representatives a duty, or limit their rights, to inquire as to the actual ownership of Shares.

Notwithstanding the foregoing, transfers of Shares of any class or series of Stock will be subject in all respects to the Articles and all of the terms and conditions contained therein.

5.04.    LOST CERTIFICATE. The Board of Directors or any Officer may direct a new certificate to be issued in the place of any certificate theretofore issued by the Corporation alleged to have been stolen, lost or destroyed upon the making of an affidavit of that fact by the person claiming the certificate of Stock to be stolen, lost, destroyed or mutilated; provided, however, if such Shares have ceased to be certificated, no new certificate shall be issued unless (a) requested in writing by such Stockholder and (b) any of the Board of Directors, the Chairperson of the Board, the President or the Chief Executive Officer has determined such certificates may be issued. Unless otherwise determined by the Board of Directors or an Officer, as a condition precedent to the issuance of a new certificate or certificates, the owner of such stolen, lost, destroyed or mutilated certificate or his or her legal representative shall give a bond, with sufficient surety, to the Corporation to indemnify it against any loss or claim which may arise with respect to the certificate alleged to have been lost, stolen, or destroyed or the issuance of such new certificate or certificates.

5.05.    CLOSING OF TRANSFER BOOKS OR FIXING OF RECORD DATE.

5.05.1  The Board of Directors may fix, in advance, a date as the record date for the purpose of determining Stockholders entitled to notice of, or to vote at, any meeting of Stockholders, or Stockholders entitled to receive payment of any dividend or the allotment of any

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rights, or in order to make a determination of Stockholders for any other proper purpose. Such date, in any case, shall be not more than ninety (90) days, and in case of a meeting of Stockholders not less than ten (10) days, prior to the date on which the meeting or particular action requiring such determination of Stockholders is to be held or taken.

5.05.2  When a determination of Stockholders entitled to vote at any meeting of Stockholders has been made as provided in this Section, such determination shall apply to any adjournment or postponement thereof, except where the Board of Directors fixes a new record date for the adjourned or postponed meeting, and provided, however, that the Board of Directors must fix a new record date if the meeting is adjourned or postponed more than one hundred and twenty (120) days after the record date fixed for the original meeting of Stockholders.

ARTICLE VI

DIVIDENDS AND DISTRIBUTIONS

6.01.    DECLARATION. Dividends and other distributions upon the Stock may be authorized by the Board of Directors as set forth in the applicable provisions of the Articles and any applicable law. Dividends and other distributions upon the Stock may be paid in cash, property or Stock of the Corporation, subject to the provisions of law and of the Articles.

6.02.    CONTINGENCIES. Before payment of any dividends or other distributions upon the Stock, there may be set aside (but there is no duty to set aside) out of any funds of the Corporation available for dividends or other distributions such sum or sums as the Board of Directors may from time to time, in its absolute discretion, think proper as a reserve fund to meet contingencies, for equalizing dividends or other distributions, for repairing or maintaining any property of the Corporation or for such other purpose as the Board of Directors shall determine to be in the best interest of the Corporation, and the Board of Directors may modify or abolish any such reserve in the manner in which it was created.

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ARTICLE VII

INDEMNIFICATION

7.01.    INDEMNIFICATION OF OFFICERS. Unless the Directors otherwise determine prospectively in the case of any one or more specified Officers, any person elected or appointed by the Directors as an Officer of the Corporation shall be entitled to indemnification by the Corporation on account of matters resulting in his or her capacity as an Officer to the full extent permitted by the Articles.

7.02.    ADVANCEMENT OF EXPENSES. Reasonable expenses incurred by a Director or an Officer who is a party to a proceeding may be paid or reimbursed by the Corporation in advance of the final disposition of the proceeding to the fullest extent permitted under the Maryland General Corporation Law upon receipt by the Corporation of (a) a written affirmation by the Director or the Officer of such person’s good faith belief that the standard of conduct necessary for indemnification by the Corporation as authorized in the Articles or these Bylaws, or under Maryland law, has been met; and (b) a written undertaking by or on behalf of the Director or the Officer to repay the amount if it shall ultimately be determined that the standard of conduct has not been met.

7.03.    NON-EXCLUSIVITY OF INDEMNIFICATION RIGHTS. The rights to indemnification and advancement of expenses set forth in the Articles or in these Bylaws are in addition to all rights which any indemnified person may be entitled as a matter of law, by a resolution of the Stockholders or Board of Directors, under any other agreement with the Corporation, or otherwise, and shall inure to the benefit of the heirs and personal representatives of each indemnified person.

7.04.    INSURANCE. The Corporation shall have power to purchase and maintain insurance on behalf of any person entitled to indemnification or whom the Corporation may indemnify under ARTICLE TWELFTH of the Articles or under Maryland law against any liability, whether or not the Corporation would have the power to indemnify him or her against such liability.

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ARTICLE VIII

NOTICES

8.01.    NOTICES. Whenever notice is required to be given pursuant to these Bylaws, it may be communicated in person (including by personal delivery); by facsimile, e-mail or other form of wire or wireless communication; or by private carrier or mail, by depositing the same in the U.S. mail, with postage thereon paid, addressed, if to the Corporation, at the principal office of the Corporation, 222 Robert Rose Drive, Murfreesboro, Tennessee 37129 (or any subsequent address selected by the Board of Directors notice of which is given to the Stockholders), attention President, or if to a Stockholder, Director or Officer, at the address of such person as it appears on the books of the Corporation, or in the case of electronic transmission to any address or number of the Stockholder, Director or Officer at which the Stockholder, Director or Officer receives electronic transmissions. Unless otherwise specified, (a) notice sent by mail shall be deemed to be given when deposited in the U.S. mail, and (b) notice sent by electronic transmission shall be deemed to be given when transmitted to the Stockholder, Director or Officer. The Corporation may give a single notice to all Stockholders who share an address, which single notice shall be effective as to any Stockholder at such address, unless the Corporation has received a request from a Stockholder at such address in writing or by electronic transmission that a single notice not be given.

8.02.    SECRETARY TO GIVE NOTICE. All notices required by law or these Bylaws to be given by the Corporation shall be given by the Secretary of the Corporation. If the Secretary and Assistant Secretary are absent or refuse or neglect to act, the notice may be given by any person directed to do so by the President or, with respect to any meeting called pursuant to these Bylaws upon the request of any Stockholders or Directors, by any person directed to do so by the Stockholders or Directors upon whose request the meeting is called.

8.03.    WAIVER OF NOTICE. Whenever any notice is required to be given pursuant to the Articles or Bylaws of the Corporation or pursuant to applicable law, a waiver thereof in writing or by electronic transmission by the person or persons entitled to such notice, whether

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before or after the time stated therein, shall be deemed equivalent to the giving of such notice. Such waiver shall be filed with the records of the meeting. Neither the business to be transacted at nor the purpose of any meeting need be set forth in the waiver of notice, unless specifically required by statute. A person’s participation or attendance at a meeting in person or by proxy shall constitute a waiver of notice of such meeting, except where such person attends a meeting for the express purpose of objecting to the transaction of any business on the grounds that the meeting is not lawfully called or convened.

ARTICLE IX

MISCELLANEOUS

9.01.    BOOKS AND RECORDS. The Corporation shall keep correct and complete books and records of its accounts and transactions and minutes of the proceedings of its Stockholders and Board of Directors and of any executive or other committee when exercising any of the powers or authority of the Board of Directors. The books and records of the Corporation may be in written form or in any other form that can be converted within a reasonable time into written form for visual inspection.

9.02.    INSPECTION OF BYLAWS AND CORPORATE RECORDS. To the extent required under Section 2-512 of the Maryland General Corporation Law, these Bylaws, the minutes of proceedings of the Stockholders, the annual statements of affairs and any Stockholders’ or voting trust agreements on record shall be open to inspection during usual business hours upon demand made in writing or by electronic transmission on the Corporation by any Stockholder, holder of a voting trust certificate or any agent thereof.

9.03.    CONTRACTS. In addition to the provisions of these Bylaws relating to the authority of any specified Officer, the Board of Directors may authorize any Officer or Officers, or agent or agents, to enter into any contract or to execute and deliver any instrument in the name of and on behalf of the Corporation, and such authority may be general or confined to specific instances. Any agreement, deed, mortgage, lease or other document shall be valid and binding

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upon the Corporation when duly authorized or ratified, generally or specifically, by action of the Board of Directors and executed by an authorized person.

9.04.    CHECKS, DRAFTS, ETC. All checks, drafts or other orders for the payment of money, notes or other evidences of indebtedness issued in the name of the Corporation shall be signed by such Officers or agents of the Corporation and in such manner as shall from time to time be determined by resolution of the Board of Directors.

9.05.    DEPOSITS. All funds of the Corporation not otherwise employed shall be deposited or invested from time to time to the credit of the Corporation as the Board of Directors, the President, the Treasurer, the Chief Executive Officer, the Chief Financial Officer or any other Officer designed by the Board of Directors may select.

9.06.    FISCAL YEAR. The Board of Directors shall have the power, from time to time, to fix the fiscal year of the Corporation by a duly adopted resolution, and, in the absence of such resolution, the fiscal year shall be the period ending December 31.

9.07.    CONFLICT WITH APPLICABLE LAW OR ARTICLES. Unless the context requires otherwise, the general provisions, rules of construction, and definitions of the Maryland General Corporation Law shall govern the construction of these Bylaws. These Bylaws are adopted subject to any applicable law and the Articles. Whenever these Bylaws may conflict with any applicable law or the Articles, such conflict shall be resolved in favor of such law or the Articles.

9.08.    INVALID OR UNENFORCEABLE. If any one or more of the provisions of these Bylaws, or the applicability of any provision to a specific situation, shall be held invalid or unenforceable, the provision shall be modified to the minimum extent necessary to make it or its application valid and enforceable, and the validity and enforceability of all other provisions of these Bylaws and all other applications of any provision shall not be affected thereby.

ARTICLE X

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AMENDMENT OF BYLAWS

10.01.   BY DIRECTORS. To the fullest extent permitted by the Maryland General Corporation Law, the Board of Directors shall have the power, at any annual or regular meeting, or at any special meeting if notice thereof be included in the notice of such special meeting, to amend, alter or repeal any Bylaws of the Corporation or to make new Bylaws.

10.02.   BY STOCKHOLDERS. The Stockholders shall have the power, at any annual meeting, or at any special meeting if notice thereof be included in the notice of such special meeting, with the approval of holders of at least a majority of the votes cast at such meeting, to amend, alter or repeal any Bylaws of the Corporation and to make new Bylaws.

10.03.   EXCEPTION FOR INDEMNIFICATION. Notwithstanding the foregoing, no amendment or repeal of any Articles provision, Bylaws provision or provision of any resolution of the Board of Directors or other contractual obligation of the Corporation affording indemnification by the Corporation to any person shall be effective so as to deprive such person from the right to indemnification on account of all matters occurring or arising prior to such amendment or repeal without the consent of such indemnified person.

35570897.1

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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:	May 9, 2023	/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:	May 9, 2023	/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 March 31, 2023 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:	May 9, 2023	/s/ D. Eric Mendelsohn
		D. Eric Mendelsohn
		President, Chief Executive Officer and Director
		(Principal Executive Officer)
Date:	May 9, 2023	/s/ John L. Spaid
		John L. Spaid
		Chief Financial Officer
		(Principal Financial Officer)