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Fri, November 5, 2010
Thu, November 4, 2010

NHI Reports 18.0% Increase in Third Quarter Normalized FFO


Published on 2010-11-04 14:26:01 - Market Wire
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MURFREESBORO, Tenn.--([ BUSINESS WIRE ])--National Health Investors, Inc. (NYSE:NHI) announced today its normalized Funds From Operations (aFFOa) and net income for the three and nine months ended September 30, 2010.

Financial Results

Normalized FFO for the three months ended September 30, 2010, was $20,025,000, or $0.72 per basic and diluted common share, compared with $16,900,000, or $0.61 per basic and diluted common share, for the same period in 2009, an increase of 18.0% per share.

FFO, as defined by the National Association of Real Estate Investment Trusts (aNAREITa), for the three months ended September 30, 2010, was $20,027,000, or $0.72 per basic and diluted common share, compared with $19,695,000, or $0.71 per basic and diluted common share, for the same period in 2009. Net income for the three months ended September 30, 2010, was $17,334,000, or $0.62 per basic and diluted common share, compared with net income of $17,473,000, or $0.63 per basic and diluted common share, for the same period in 2009.

Normalized FFO for the nine months ended September 30, 2010, was $56,452,000, or $2.04 per basic and diluted common share, compared with $47,690,000, or $1.73 per basic and diluted common share, for the same period in 2009, an increase of 17.9% per share.

FFO for the nine months ended September 30, 2010, was $58,297,000, or $2.10 per diluted common share, compared with $53,999,000, or $1.96 per basic and diluted common share, for the same period in 2009. Net income for the nine months ended September 30, 2010, was $52,466,000, or $1.89 per basic and diluted common share, compared with net income of $47,938,000, or $1.74 per basic and diluted common share, for the same period in 2009.

2010 Guidance

The Company currently forecasts an increase in normalized FFO for 2010 from 17.2% to 18.5% compared with 2009. The Companya™s guidance range for the full year 2010 for EPS, FFO and Normalized FFO per share, with underlying assumptions and timing of certain transactions, is set forth and reconciled below:

Full-Year

2010 Range

Low a" High
Net income per diluted share $2.39 - $2.42
Plus: Real estate depreciation 0.40 - 0.40
FFO per diluted share$2.79 - $2.82
Less: One-time items (0.06) - (0.06)
Normalized FFO per diluted share$2.73 - $2.76

Following are current assumptions reflected in the companya™s full-year 2010 guidance for the low and high end of the guidance range:

  • Total investments of $131 million - $150 million for the year, $131 million of which has been completed or committed through September 30, 2010 (assumed for both low and high end).
  • Existing and projected fourth quarter investments are funded through borrowings on our revolving credit facility (assumed for the high end).
  • Corporate G&A expenses of $8.0 million to $8.5 million (assumed for both low and high end).

The Companya™s guidance range reflects the existence of volatile economic conditions, but does not assume any material deterioration in tenant credit quality and/or performance of its portfolio. The guidance is based on a number of assumptions, many of which are outside the Companya™s control and all of which are subject to change. The Companya™s guidance may change if actual results vary from these assumptions.

Investor Conference Call and Webcast

NHI will host a conference call on Thursday, November 4, 2010, at 3 p.m.ET, to discuss third quarter results. The number to call for this interactive teleconference is (212) 231-2901 with the confirmation number, 21485031. The live broadcast of NHIa™s quarterly conference call will be available online at [ http://www.videonewswire.com/event.asp?id=73398 ] on Thursday, November 4, 2010, at 3 p.m.ET. The online replay will follow shortly after the call and continue for approximately 90 days.

National Health Investors, Inc. is a healthcare real estate investment trust that specializes in the financing of healthcare real estate by purchase and leaseback transactions and by mortgage loans. NHIa™s investments involve skilled nursing facilities, assisted living facilities, independent living facilities, medical office buildings, an acute care hospital, an acute psychiatric hospital and a transitional rehabilitation center. The common stock of the company trades on the New York Stock Exchange with the symbol NHI. Additional information about NHI, including its most recent press releases, may be obtained on NHIa™s website at [ www.nhinvestors.com ].

Statements in this press release that are not historical facts are forward-looking statements. NHI cautions investors that any forward-looking statements may involve risks and uncertainties and are not guarantees of future performance. All forward-looking statements represent NHI's judgment as of the date of this release.Investors are urged to carefully review and consider the various disclosures made by NHI in its periodic reports filed with the Securities and Exchange Commission, including the risk factors and other information disclosed in NHIa™s Annual Report on Form 10-K for the most recently ended fiscal year. Copies of these filings are available at no cost on the SEC's web site at [ http://www.sec.gov ] or on NHIa™s web site at [ http://www.nhinvestors.com ].

Reconciliation of Funds From Operations and Normalized Funds From Operations (1)(2)
(in thousands, except share and per share amounts)
Three months ended Nine months ended
September 30, September 30,
2010 2009 2010 2009
Net income $ 17,334 $ 17,473 $ 52,466 $ 47,938
Real estate depreciation in continuing operations 2,693 1,944 7,778 5,232
Real estate depreciation in discontinued operations - 278 57 829
Net gain on sale of real estate - - (2,004 ) -
Funds from operations $ 20,027 $ 19,695 $ 58,297 $ 53,999
Collection and recognition into income of past due rent - (2,654 ) (1,520 ) (2,654 )
Recoveries of previous write-downs - - (573 ) (1,719 )
Recognition of deferred credits - - - (1,493 )
Other one-time items (2 ) (141 ) 248 (443 )
Normalized FFO $ 20,025 16,900 56,452 47,690
Weighted average common shares outstanding:
Basic 27,673,703 27,589,161 27,657,236 27,580,568
Diluted 27,737,802 27,642,237 27,716,105 27,605,504
FFO per share:
Basic $ 0.72 $ 0.71 $ 2.11 $ 1.96
Diluted $ 0.72 $ 0.71 $ 2.10 $ 1.96
Normalized FFO per share:
Basic $ 0.72 $ 0.61 $ 2.04 $ 1.75
Diluted $ 0.72 $ 0.61 $ 2.04 $ 1.75
(1) Management believes that funds from operations (FFO) is an important supplemental measure of operating performance for a real estate investment trust. Because the historical cost accounting convention used for real estate assets requires straight-line depreciation (except on land), such accounting presentation implies that the value of real estate assets diminishes predictably over time. Since real estate values instead have historically risen and fallen with market conditions, presentations of operating results for a real estate investment trust that uses historical cost accounting for depreciation could be less informative, and should be supplemented with a measure such as FFO. The term FFO was designed by the real estate investment trust industry to address this issue. Our measure may not be comparable to similarly titled measures used by other REITs. Consequently, our funds from operations may not provide a meaningful measure of our performance as compared to that of other REITs. Since other REITs may not use our definition of FFO, caution should be exercised when comparing our Companya™s FFO to that of other REITs. FFO does not represent cash generated from operating activities in accordance with GAAP (funds from operations does not include changes in operating assets and liabilities) and therefore should not be considered an alternative to net earnings as an indication of operating performance, or to net cash flow from operating activities as determined by GAAP in the United States, as a measure of liquidity and is not necessarily indicative of cash available to fund cash needs.
(2) Normalized FFO excludes from FFO any material one-time items reflected in GAAP net income. Excluded items may include, but are not limited to, impairments of assets, gains and losses attributable to the acquisition and disposition of assets and liabilities, and recoveries of previous write-downs.
Selected Balance Sheet Data
(in thousands)
September 30, 2010 December 31, 2009
Real estate properties, net $ 323,710 $ 223,861
Mortgages receivable, net 73,734 94,588
Preferred stock investment, at cost 38,132 38,132
Cash and cash equivalents 2,451 45,718
Marketable securities 20,854 21,322
Borrowings under revolving credit facility 28,234 -
Stockholders' equity 440,506 434,612
Condensed Statements of Income
(in thousands, except share and per share amounts)
Three months ended Nine months ended
September 30, September 30,
2010 2009 2010 2009
Revenues:
Rental income $ 18,087 $ 15,685 $ 54,066 $ 40,461
Mortgage interest income 1,569 2,568 5,166 7,071
19,656 18,253 59,232 47,532
Expenses:
Depreciation 2,871 2,034 8,253 5,362
Legal 85 337 540 1,272
Franchise, excise and other taxes 64 135 594 549
General and administrative 1,260 1,194 6,397 4,040
Loan and realty losses (recoveries) - - (573 ) (1,077 )
4,280 3,700 15,211 10,146
Income before non-operating items 15,376 14,553 44,021 37,386
Non-operating income 1,241 1,856 3,958 5,291
Interest expense and amortization of loan costs (471 ) (18 ) (1,173 ) (86 )
Income from continuing operations 16,146 16,391 46,806 42,591
Income from operations - discontinued 1,188 1,082 3,656 5,347
Net gain on sale of real estate - - 2,004 -
Income from discontinued operations 1,188 1,082 5,660 5,347
Net income $ 17,334 $ 17,473 $ 52,466 $ 47,938
Weighted average common shares outstanding:
Basic 27,673,703 27,589,161 27,657,236 27,580,568
Diluted 27,737,802 27,642,237 27,716,105 27,605,504
Earnings per share:
Basic:
Income from continuing operations $ 0.58 $ 0.59 $ 1.69 $ 1.55
Discontinued operations 0.04 0.04 0.20 0.19
Net income available to common stockholders $ 0.62 $ 0.63 $ 1.89 $ 1.74
Diluted:
Income from continuing operations $ 0.58 $ 0.59 $ 1.69 $ 1.55
Discontinued operations 0.04 0.04 0.20 0.19
Net income available to common stockholders $ 0.62 $ 0.63 $ 1.89 $ 1.74
Dividends declared per common share $ 0.605 $ 0.55 $ 1.755 $ 1.65

Contributing Sources