National Health Investors Inc: Form 10-Q for the period ended Jun 30, 2026

Unless the context otherwise requires, references throughout this document to “NHI” or the “Company” include National Health Investors, Inc. and its consolidated subsidiaries. In accordance with the “Plain English” guidelines of the Securities and Exchange Commission (“SEC”), this Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2026 (“Quarterly Report”) 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.

Cautionary Statement Regarding Forward-Looking Statements

This Quarterly Report 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”, “target”, “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 forward-looking statements as a result of factors including, but not limited to including, the following:

• We depend on the operating success of our tenants, borrowers and managers, and if their financial condition or business prospects deteriorate, our business, financial condition and results of operations could be adversely affected;
• Our tenants, borrowers and managers may become subject to bankruptcy or insolvency proceedings;
• A small number of tenants in our portfolio account for a significant percentage of the rental income 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;
• We may be unable to replace our managers if the management agreements are terminated or not renewed;
• Actual or perceived risks associated with pandemics, epidemics or outbreaks have had, and may in the future have, a material adverse effect on our operators’ businesses and results of operations;
• We are exposed to risks related to government regulations and payors, principally Medicare and Medicaid, and the effect of changes to laws, regulations and reimbursement rates on the businesses of our tenants, borrowers and managers;
• The cash flows of our tenants, borrowers and managers may be adversely affected by increased liability claims and liability insurance costs;
• Significant legal or regulatory proceedings could adversely affect the liquidity, financial condition and results of operations of our tenants, borrowers and managers;
• We may not be fully indemnified by our tenants, borrowers and managers against future litigation;
• We depend on the success of property development and construction activities, which may fail to achieve the operating results we expect;
• The illiquidity of real estate investments could impede our ability to respond to adverse changes in the performance of our properties;
• Our investments are concentrated in healthcare properties;
• We are subject to risks related to our investment with Life Care Services for Timber Ridge, an entrance fee continuing care retirement community (“CCRC”), associated with Type A benefits offered to the residents of the CCRC and the related accounting requirements;
• Risks related to our joint venture investments could adversely affect our financial condition and results of operations;
• Inflation and increased interest rates may adversely affect our business, financial condition and 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 prospects;
• Adverse geopolitical developments could have a material adverse impact on our business;
• We are exposed to operational risks with respect to our senior housing operating portfolio (“SHOP”) structured communities;
• A cybersecurity incident or other form of data breach involving our business and its information could cause a loss of confidential consumer and other personal information, give rise to remediation and other expenses, expose us to liability under privacy and security and consumer protection laws, subject us to federal and state governmental inquiries, damage our reputation and otherwise be disruptive to our business;
• 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 market prices for properties;
• We depend on our ability to retain our management team and other personnel, and our ability to attract suitable replacements should any such personnel leave;
• We are exposed to the risk that our assets may be subject to impairment charges;
• Stockholder activism efforts could cause us to incur substantial costs, divert management’s attention and have an adverse effect on our business;
• 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;
• The United States (“U.S.”) federal income tax treatment of the cash that we might receive from cash settlement of our forward equity sales agreements is unclear and could jeopardize our ability to meet the real estate investment trust (“REIT”) qualification requirements;
• Our use of artificial intelligence could expose us to various risks;
• 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 which 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 costs and availability of capital;
• We rely on external sources of capital to fund our 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;
• 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, which subjects us to interest rate risk;
• We depend on the ability to continue to qualify for taxation as a REIT for U.S. federal income tax purposes;
• There are no assurances of our ability to pay dividends in the future;
• 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 subsidiaries (“TRS”) 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 tax 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;
• We are subject to certain provisions of Maryland law, and in 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; and
• We may not be able to successfully redeploy the net proceeds from the sale of the National HealthCare Corporation (“NHC”) properties in a manner that generates comparable returns.

Reference “Part I, Item 1, Business”, “Part I, Item 1A, Risk Factors” and the notes to our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2025 (“Annual Report”) and additionally “Part II, Item 1A, Risk Factors” in this Quarterly Report for a further discussion of these risks, various governmental regulations and other operating factors relating to the healthcare industry and the risk factors inherent therein. You should carefully consider these risks before making any investment decisions related to us. These risks and uncertainties are not the only ones facing us. 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 and cash flows could be materially and adversely affected. In that case, the market price of our common 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 the dates made. 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. We own, lease, operate and finance the development of high-quality real estate properties throughout the United States, focusing on senior housing communities and medical facilities. We operate through two reportable segments, Real Estate Investments and SHOP. Our investments in senior housing communities (“SHO”) include independent living facilities (“ILF”), assisted living facilities (“ALF”), entrance fee communities (“EFC”) and senior living campuses (“SLC”). Our investments in medical facilities include skilled nursing facilities (“SNF”) and hospitals (“HOSP”). Our investments across both segments are funded primarily through (i) operating cash flows, (ii) debt and (iii) sales of equity securities.

In our Real Estate Investments segment, our revenues primarily consist of the rental income we generate from triple-net leases with third-party healthcare operators at our owned properties. We also generate revenues from interest income on financing arrangements we provide to our tenants, or their affiliates, and other third-party healthcare operators. Our financing arrangements include mortgages, construction loans, mezzanine loans and revolving lines of credit which provide funding for the acquisition or construction of new healthcare properties, renovation and expansion projects at existing healthcare properties and working capital or other corporate needs.

In our SHOP segment, we generate revenues from the fees charged to the residents at our SHOs, which include room and care charges, community fees and other charges for optional services available to the residents. We utilize third-party managers to operate these properties on our behalf and pay a management fee to these third parties for their services.

We are dependent on the successful operating performance of our tenants, borrowers and managers. We are exposed to the risk that these parties may experience operating difficulties in the normal course of business that could have a material adverse effect on their ability to meet their financial and other contractual obligations with us, which could also have a material adverse impact on our results of operations and liquidity. We continually monitor the operating performance and financial stability of our tenants, borrowers and managers by reviewing the applicable property operating results, assessing covenant compliance with our lease and loan agreements and performing our own property inspections, among other activities.

NHC Leased Portfolio Disposition

In April 2026, we executed a purchase and sale agreement with NHC/Op, L.P., a wholly owned subsidiary of NHC, and certain of its affiliates (collectively, the “NHC Purchaser”) related to the sale of our portfolio of 35 properties in our Real Estate Investments segment that were leased to NHC. These properties consisted of 32 SNFs and three ILFs which were initially acquired by us in 1991. As of June 30, 2026, these properties were classified as assets held for sale on our condensed consolidated balance sheet and had an aggregate net carrying value of $13.6 million. We completed the sale of this portfolio on July 1, 2026 for cash consideration of $560.0 million.

Contemporaneously with the closing of the sale of the NHC leased portfolio, we executed a partial master lease termination and partial assignment and assumption of the master lease agreement terminating our master lease agreement with NHC with respect to all properties, except four subleased properties located in Florida. We assigned to the NHC Purchaser, and the NHC Purchaser assumed from us, the master lease for the subleased properties. In July 2026, we recognized a reversal of deferred income of $0.5 million related to the lease termination as part of the gain on the sale of these properties.

Real Estate Investments Portfolio

As of June 30, 2026, our Real Estate Investments segment included real estate properties and financing arrangements involving 152 properties located in 29 states. Our 137 owned properties were leased to 26 tenants primarily under triple-net leases and consisted of 88 ALFs, 12 EFCs, six SLCs, 30 SNFs and one HOSP with an aggregate gross carrying value of $2.4 billion. Our financing arrangements included mortgage and other notes receivable with an aggregate gross carrying value of $224.5 million, which excludes $15.3 million of credit loss reserves. Additionally, we had 37 owned properties with an aggregate gross carrying value of $161.5 million that were classified as assets held for sale as of June 30, 2026, which included 35 properties leased to NHC and sold to an affiliate of NHC on July 1, 2026. The properties classified as assets held for sale included 34 SNFs and three ILFs.

We classify our investments in real estate properties as either SHOs or medical facilities and further classify our SHOs as either need-driven or discretionary properties based on the differing credit risk profiles represented by the underlying revenue sources.

Need-Driven Senior Housing - Need-driven SHOs include ALFs and SLCs 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.

Discretionary Senior Housing - Discretionary SHOs include ILFs and EFCs 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 - Our medical facilities include SNFs and HOSPs that attract patients who have a need for acute or complex medical attention, preventative medicine or rehabilitation services. The operators of our medical facilities are generally paid for their services through a combination of private payor sources and government assistance programs, including Medicare and Medicaid. Medical facilities are subject to federal and state regulatory oversight and, in the case of hospitals, Joint Commission accreditation.

Senior Housing Operating Portfolio

As of June 30, 2026, our SHOP segment investments included 42 SHOs located in 16 states and comprised of 22 ILFs, 13 SLCs and seven ALFs with a combined total of 4,001 units. The aggregate gross carrying value of these properties was $854.8 million. We have structured the operations at these properties to comply with the requirements of the REIT Investment Diversification and Empowerment Act of 2007 (“RIDEA”). We utilize our TRS for activities that would otherwise be non-qualifying for REIT purposes.

We are not directly exposed to the credit risk of the third-party managers at the properties in our SHOP segment in the same manner or to the same extent as the credit risk exposure we have related to the tenants of our triple-net leases in the Real Estate Investments segment. However, we rely on the managers’ personnel, expertise, technology resources, information systems, proprietary information, good faith and judgment in operating our SHOs effectively and efficiently. We also rely on the managers to set appropriate pricing for resident fees and services and to operate our communities in compliance with the terms of the management agreements and all applicable laws and regulations.

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” of our Annual Report.

Investment Portfolio Summary

The following table provides a summary of the investment portfolios of our Real Estate Investments and SHOP segments by property type as of June 30, 2026 and for the six months ended June 30, 2026 ($ in thousands):

1 The table above excludes our corporate office buildings and properties classified as assets held for sale as of June 30, 2026. Assets held for sale included 34 SNFs and three ILFs. We do not have any ownership in the properties presented in the mortgage and other notes receivable section of this table.

2 As of June 30, 2026, the aggregate gross carrying amount of our corporate office buildings was $3.0 million and the aggregate gross carrying amount of properties classified as assets held for sale was $161.5 million. We had $15.3 million of credit loss reserves related to our mortgage and other notes receivable as of June 30, 2026. Each of these amounts has been excluded from the table above.

3 Other primarily includes the NOI of properties sold and the NOI and gross carrying amounts of properties classified as assets held for sale as of June 30, 2026.

As of June 30, 2026, our average effective annualized NOI for leased properties in our Real Estate Investments segment was $20,761 per unit for ALFs, $13,424 per unit for SLCs, $21,503 per unit for EFCs, $12,602 per bed for SNFs and $60,574 per bed for HOSPs. As of June 30, 2026, the average effective annualized NOI for our SHOP segment was $11,611 per unit.

The following table provides a summary of the investment portfolios of our Real Estate Investments and SHOP segments by operator type as of June 30, 2026 and for the six months ended June 30, 2026 ($ in thousands):

1 The table above excludes our corporate office buildings and properties classified as assets held for sale as of June 30, 2026. We have mortgage and other notes receivable on our condensed consolidated balance sheet included in this Quarterly Report related to 15 of the properties included in the table above. We do not have any ownership in these properties.

2 As of June 30, 2026, the aggregate gross carrying amount of our corporate office buildings was $3.0 million and the aggregate gross carrying amount of properties classified as assets held for sale was $161.5 million. We had $15.3 million of credit loss reserves related to our mortgage and other notes receivable as of June 30, 2026. Each of these amounts has been excluded from the table above.

3 Other primarily includes the NOI of properties sold and the NOI and gross carrying amounts of properties classified as assets held for sale as of June 30, 2026.

The following table provides more detailed information on the real estate properties and NOI of our SHOP segment as of June 30, 2026 and for the six months ended June 30, 2026 ($ in thousands):

47

The following table provides a summary of our NOI based on the geographical location of the real estate properties ($ in thousands):

Recent Investments Activity

Acquisitions

During the six months ended June 30, 2026, we completed the following acquisitions of real estate properties ($ in thousands):

1 We recognized a right-of-use asset of $3.0 million and an operating lease liability of $2.0 million related to a ground lease that we assumed in an acquisition.

Dispositions

During the six months ended June 30, 2026, we completed the following dispositions of real estate properties ($ in thousands):

1 This property was acquired by the tenant pursuant to a purchase option in the respective lease agreement.

2 This property was classified as assets held for sale on our condensed consolidated balance sheet as of December 31, 2025.

3 The tenant acquired this property pursuant to a purchase and sale agreement that was executed in 2024.

4 The net proceeds received on the sale of this property included a $5.5 million mortgage note from an affiliate of the buyer.

Assets Held For Sale

As of June 30, 2026, we had 37 properties in our Real Estate Investments segment that were classified as assets held for sale on our condensed consolidated balance sheet included in this Quarterly Report. We sold these properties in July 2026. As of December 31, 2025, we had one property in our Real Estate Investments segment that was classified as assets held for sale which was sold in April 2026.

Third Quarter of 2026 Dispositions

In July 2026, we completed the sale of two properties located in Texas for $19.0 million in cash consideration. These properties were included in the Real Estate Investments segment and classified as assets held for sale as of June 30, 2026.

Reference the “NHC Leased Portfolio Disposition” section in the “Executive Overview” above.

Bickford Lease and Loan Modifications

As of June 30, 2026, we leased 37 SHOs with a combined total of 2,068 units to Bickford pursuant to four master leases which mature in 2028 through 2035. In April 2026, the Bickford master lease agreements were amended increasing the combined annual base rent for the Bickford portfolio to $38.4 million with annual rent escalators ranging between 2.0% and 3.0%. Pursuant to these amendments, Bickford is also required to pay us contingent rent based on a percentage of the combined monthly revenues for all of the properties leased to Bickford that exceeds a base amount. Bickford has been a cash basis tenant since 2022 when we received financial information from Bickford raising substantial doubt about its ability to continue as a going concern. As of June 30, 2026, these concerns had not been alleviated.

Additionally, we have an agreement with Bickford to fund up to $8.0 million of capital improvements on various properties in the Bickford portfolio. Pursuant to the terms of this agreement, rental income increases at an annual lease rate of 8.0% applied to the amount expended. In connection with the master lease amendments discussed above, we also extended the available funding period of this agreement through June 2027. As of June 30, 2026, we had $6.1 million funded under this agreement.

In April 2026, we modified two of our loan agreements with Bickford to extend the maturities by three years. The maturity of a fully funded construction loan with Bickford was extended to July 2029. As of June 30, 2026, the principal amount outstanding on this construction loan was $14.7 million and the annual interest rate was 9.0%. We also extended the maturity of a second mortgage note with Bickford to April 2029. As of June 30, 2026, the principal amount outstanding on this mortgage note was $11.5 million and the annual interest rate was 10.0%. This mortgage note has not been recognized on our condensed consolidated balance sheets. Reference the “Bickford Loans” section in Note 4 of our condensed consolidated financial statements included in this Quarterly Report for additional information.

Impairments and Credit Loss Reserves

We are subject to risks arising from periods of high inflation and rising interest rates related to our investments. We are also subject to risks that our tenants, borrowers and managers may experience financial difficulties in their operations that could negatively impact the net realizable values of our properties and the collectability of our mortgage and other notes receivable.

During each of the three and six months ended June 30, 2026 and 2025, we did not have any impairments to our real estate properties or any significant increases in the credit loss reserves on our mortgage and other notes receivable. We believe the net carrying amounts of our investments are recoverable as of June 30, 2026. However, it is possible that future events or circumstances, including any changes in market conditions or interest rates, could require us to make significant adjustments to the carrying amounts of our investments in the future.

Tenant Leases

Our tenant leases are typically structured as triple-net leases on single-tenant properties and have initial lease terms of 10 years to 15 years with one or more five-year extension options. As a result, we may have reporting periods in which we experience few, if any, lease renewals or expirations.

We recognize the contractual amounts of base rental income from a tenant lease on a straight-line basis over the initial term of the lease, subject to a collectability assessment. Most of our tenant leases contain annual rent escalators, which may be fixed or variable. Certain of our tenant leases provide for additional contingent rent based on a percentage of the tenant’s revenues exceeding a specified base amount or threshold defined in the lease agreement.

Tenant Concentrations

The following table provides information on our tenant concentrations exceeding 10% of our total revenues in the six months ended June 30, 2026 ($ in thousands):

1 Real estate properties have been stated at their gross carrying amounts. Total real estate properties, as presented in the table above, excludes $3.0 million related to our corporate office buildings, $161.5 million related to properties classified as assets held for sale and $854.8 million related to the properties in our SHOP segment.

2 Mortgage and other notes receivable have been stated at their gross carrying amounts. Total mortgage and other notes receivable, as presented in the table above, excludes $15.3 million of credit loss reserves.

3 Revenues related to properties that have been sold and revenues related to properties classified as assets held for sale as of June 30, 2026 have been included in other revenues for both periods in the table above.

4 Bickford’s revenues for the six months ended June 30, 2026 have been included in other revenues because they were less than 10% of total revenues during this period.

5 There are no concentrations in revenues from resident fees and services because the resident agreements at the SHOs in our SHOP segment are between us and the individual residents.

During the six months ended June 30, 2026 and 2025, rental income from the NHC leased portfolio was $22.1 million, or 9.3%, and $20.6 million, or 11.4%, respectively, which included contingent rental income of $5.7 million and $4.2 million, respectively. A final true-up of contingent rental income for the period from January 1, 2026 through July 1, 2026 will be recognized in the third quarter of 2026.

As of June 30, 2026, our real estate properties located in South Carolina represented 12.2% of the gross carrying amounts of our total real estate properties on our condensed consolidated balance sheet included in this Quarterly Report. We did not include three properties located in South Carolina that were classified as assets held for sale as of June 30, 2026 in our calculation. There were no other states where our geographical concentration in real estate properties was 10% or greater as of June 30, 2026.

Senior Living Leases

As of June 30, 2026, we leased 11 SHOs with a combined total of 2,499 units to Senior Living. During the six months ended June 30, 2026 and 2025, we recognized straight-line rent revenue adjustments of $(0.8) million and $(0.4) million, respectively, related to these leases.

Cash Basis Tenants

During each of the three and six months ended June 30, 2026 and 2025, we had two tenants on the cash basis of accounting for revenue recognition.

A summary of lease payments received from cash basis tenants follows ($ in thousands):

Tenant Purchase Options

Certain of our tenant leases provide the tenant with an option to purchase the applicable property at a fixed base price, a fixed base price plus a specified share in any appreciation of the property or a price based on a specified fixed minimum internal rate of return on our investment. As of June 30, 2026, we had three properties with an aggregate net carrying value of $71.2 million that were subject to tenant purchase options with exercise dates between 2029 and 2031. During each of the six months ended June 30, 2026 and 2025, the aggregate rental income from these properties was $4.7 million.

As of June 30, 2026, we cannot reasonably estimate the probability that any of these tenant purchase options will be exercised in the future. We expect the consideration received from the exercise of any of these tenant purchase options will exceed the respective property’s net carrying value at the time of the sale.

Tenant Monitoring

The following table provides a summary of the average occupancy rates of our real estate properties leased to Senior Living and Bickford for the periods indicated:

1 The average occupancy rates for all periods presented exclude a 251-unit CCRC acquired in October 2025.

2 The average occupancy rates for all periods presented exclude an ALF which was sold in April 2026.

The following table provides a summary of the average occupancy rates of the real estate properties in our SHOP segment for the periods indicated:

1 The average occupancy rates for all periods presented are based on the 15 real estate properties that have been in the SHOP segment since July 1, 2025.

The operators of the real estate properties in our Real Estate Investments segment 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 credit risks within our portfolio. We have identified EBITDARM, which is calculated as earnings before interest, income taxes, depreciation, amortization, rent and management fees, as a primary performance measure for evaluating our tenants based on the operating results they have reported to us. We believe EBITDARM is useful in our most fundamental analyses, as it is a property-level measure of an operator’s 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 expense) and its expenses that are dependent on the operator’s level of success (income taxes). In addition, EBITDARM excludes the effect of the operator’s payment of its management fees, as typically those fees are contractually subordinate to our lease payments. For operators of our EFCs, our calculation of EBITDARM includes certain other cash flow adjustments, which are typical in the REIT industry, including, but not limited to including, the 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 described above are reflected in the covenants of our tenant leases and provide us with a comparable basis for assessing our various relationships.

We believe that EBITDARM is a useful measure in analyzing the cash potential of a group of assets. We use EBITDARM to calculate a coverage ratio (EBITDARM / cash rent) which provides us with a measure of an operator’s ability to meet its monthly obligations. In addition to EBITDARM and this coverage ratio, we rely on a detailed balance sheet analysis and other analytical procedures to help us identify potential areas of concern relative to an operator’s ability to generate sufficient liquidity to meet its obligations, including its obligations to continue to pay the amounts due to us. Within the REIT industry, a lag exists in the timing of when operators report their results of operations. Across our portfolio, our operators typically report their operating results to us within either 30 days or 45 days and, at the latest, within 90 days of month end.

The following tables provides a summary of our portfolio coverage and occupancy ratios related to the owned real estate properties in our owned real estate properties in the Real Estate Investments segment by property type on a trailing 12-month basis as of March 31, 2026 and 2025, the most recent periods available, excluding properties classified as assets held for sale as of June 30, 2026 and development and lease-up properties operating less than 24 months. The tables include pro forma cash rent from tenant acquired properties that have been in the portfolio less than 24 months that that have stabilized operations.

1 Senior Living operates 10 discretionary EFCs and one need-driven ALF.

2 Bickford’s coverage ratios on a pro forma basis, which include the impact of the April 2026 base rent reset, were 1.54x and 1.50x, respectively, for the trailing 12-months ended March 31, 2026 and 2025.

Fluctuations in our portfolio coverage and occupancy ratios primarily result from market and economic trends, local market competition, new or changing regulatory factors and the operational success of our tenants. In addition to the analysis above, we also perform analysis and make decisions with respect to our tenants at an individual lease level. Generally, we have security deposits and/or corporate guarantees in place with many of our tenants if lease payment shortfalls materialize. In some instances, we may require a tenant to increase their security deposit with us in an amount equal to the lease payment shortfall until the required tenant lease coverage ratio is met. We monitor economic and financial conditions and also use credit enhancements, such as requiring our tenants to maintain security deposits and corporate guarantees with us, to mitigate the impact of an economic downturn on our business. The ratios presented in the tables above do not reflect the impact of these security deposits.

Results of Operations

The following tables provide a summary of our operating results ($ in thousands):

NM - Not meaningful

Financial highlights of our results of operations for the three months ended June 30, 2026 compared to the three months ended June 30, 2025 were as follows:

• Rental income increased $1.1 million, or 1.6%, which primarily included a $3.0 million increase from 11 properties acquired since April 1, 2025, partially offset by a $1.9 million decrease from seven properties transitioned to the SHOP segment in August 2025.
• Resident fees and services, less senior housing operating expenses, increased $7.2 million, which primarily included a $4.7 million increase from acquisitions of 20 properties since April 1, 2025 and a $2.7 million increase from the seven transitioned properties discussed above.
• Interest income from mortgage and other notes receivable decreased $1.0 million, or 16.1%, primarily due to a net reduction in the principal amounts of mortgage and other notes receivable outstanding in the current period compared to the prior year period.
• Depreciation and amortization increased $5.6 million, or 28.3%, primarily due to a $5.4 million increase from our acquisitions activity since April 1, 2025.
• Interest expense increased $0.8 million, or 5.4%, which included a $4.7 million increase from our 2033 Senior Notes issued in September 2025, partially offset by repayments of the bank term loan and a private placement note and also partially offset by the impact of lower interest rates on our variable rate debt.
• Legal expense decreased $0.7 million, or 59.4%, primarily due to costs incurred in the prior year period related to the transitioning of seven properties to the SHOP segment in August 2025.
• General and administrative expenses increased $2.7 million, or 44.0%, primarily due to higher compensation costs and costs incurred in the current period related to our chief financial officer (“CFO”) transition.
• Proxy contest and related expenses of $1.3 million for the three months ended June 30, 2025 consisted of proxy advisory costs related to our response to a proxy campaign associated with our 2025 annual meeting of stockholders.
• Loan and realty gains, net, of $1.4 million for the three months ended June 30, 2025 included a $1.8 million reduction in our credit loss reserves as a result of a non-performing loan repayment received in the period.
• Gains on dispositions of real estate properties of $22.0 million for the three months ended June 30, 2026 primarily related to the sale of four properties in our Real Estate Investments segment.
• Gains from equity method investment of $1.5 million for the three months ended June 30, 2025 related to cash distributions received from this investment.
• Income tax expense of $0.7 million for the three months ended June 30, 2026 consisted of deferred income tax expense primarily resulting from the changes in the operations and investments within our TRS during the period.

NM - Not meaningful

Financial highlights of our results of operations for the six months ended June 30, 2026 compared to the six months ended June 30, 2025 were as follows:

• Rental income increased $5.4 million, or 3.9%, which primarily included an $8.5 million increase from 14 properties acquired since January 1, 2025, partially offset by a $4.2 million decrease from seven properties transitioned to the SHOP segment in August 2025.
• Resident fees and services, less senior housing operating expenses, increased $13.0 million, which primarily included a $7.7 million increase from acquisitions of 20 properties since January 1, 2025 and a $5.6 million increase from the seven transitioned properties discussed above.
• Interest income from mortgage and other notes receivable decreased $2.5 million, or 20.0%, primarily due to a net reduction in the principal amounts of mortgage and other notes receivable outstanding in the current period compared to the prior year period.
• Depreciation and amortization increased $10.2 million, or 26.0%, primarily due to a $9.6 million increase from our acquisitions activity since January 1, 2025.
• Interest expense increased $1.5 million, or 5.2%, which included a $9.4 million increase from our 2033 Senior Notes issued in September 2025, partially offset by repayments of the bank term loan and a private placement note and also partially offset by the impact of lower interest rates on our variable rate debt.
• Legal expense decreased $1.8 million, or 70.2%, primarily due to costs incurred in the prior year period related to a large transaction in the SHOP segment that did not materialize and the transitioning of seven properties to the SHOP segment in August 2025.
• General and administrative expenses increased $3.7 million, or 28.7%, primarily due to higher compensation costs and costs incurred in the current period related to our CFO transition.
• Proxy contest and related expenses of $1.6 million for the six months ended June 30, 2025 consisted of proxy advisory costs related to our response to a proxy campaign associated with our 2025 annual meeting of stockholders.
• Loan and realty gains, net, of $1.4 million for the six months ended June 30, 2025 included a $1.8 million reduction in our credit loss reserves as a result of a non-performing loan repayment received in the period.
• Gains on dispositions of real estate properties of $24.6 million for the six months ended June 30, 2026 primarily related to the sale of five properties in our Real Estate Investments segment.
• Gains from equity method investment of $1.9 million for the six months ended June 30, 2025 related to cash distributions received from this investment.
• Income tax expense of $0.7 million for the six months ended June 30, 2026 consisted of deferred income tax expense primarily resulting from the changes in the operations and investments within our TRS during the period.

Liquidity and Capital Resources

As of June 30, 2026, we had $262.0 million available to draw on our $700.0 million unsecured revolving credit facility (the “Credit Facility”), $30.4 million of unrestricted cash and cash equivalents, $20.0 million of restricted cash and the ability to access $500.0 million through the issuance of common stock under our ATM equity program. We also maintain an effective automatic shelf registration statement permitting us to raise capital through the issuance of additional debt or equity securities.

Sources and Uses of Funds

Our primary sources of cash include lease payments from tenants, receipts from residents, principal and interest payments on mortgage and other notes receivable, proceeds from dispositions of real estate properties, net proceeds from offerings of debt and equity securities and borrowings from our Credit Facility. Our primary uses of cash include principal and interest payments on our debt, investments in new and existing real estate properties, mortgages and other notes, dividend distributions to our stockholders, operating expenses of our SHOP segment and general corporate overhead expenses.

The following table provides information on our cash flows ($ in thousands):

NM - Not meaningful

Operating Activities – Net cash provided by operating activities for the six months ended June 30, 2026 included increased revenues, net of operating expenses, as a result of our acquisitions activity in both segments and increased revenues resulting from the annual rent escalators on our existing tenant leases. These increases were partially offset by the current period impact of dispositions of real estate properties and a lease incentive payment with no comparable activity in the prior year period.

Investing Activities – Net cash used in investing activities for the six months ended June 30, 2026 primarily included $241.0 million of investments in new and existing real estate properties in both segments and $12.2 million of new investments in mortgage and other notes receivable, partially offset by $93.0 million of net proceeds received from dispositions of properties in our Real Estate Investments segment and $12.9 million of repayments on mortgage and other notes receivable.

Financing Activities – Net cash provided by financing activities for the six months ended June 30, 2026 was comprised primarily of net borrowings of $234.0 million on our Credit Facility, $44.9 million of proceeds from the issuance of common shares under our ATM equity program, repayment of the remaining $125.0 million due on our bank term loan and $89.0 million of dividends paid to our stockholders.

Debt Obligations

As of June 30, 2026, we had $1.3 billion of outstanding indebtedness. Reference “Part I, Item 3. Quantitative and Qualitative Disclosures About Market Risk” in this Quarterly Report for information on the impact of interest rate risk on our business.

Revolving Credit Facility and Bank Term Loan - We have a $700.0 million Credit Facility which matures in October 2028 and may be extended by us pursuant to (i) one or both of the six-month extension options or (ii) one 12-month extension option. We most recently amended the Credit Facility in October 2025 to remove the 0.10% credit spread adjustment applicable to the Secured Overnight Financing Rate (“SOFR”) interest rates. Borrowings under the Credit Facility bear interest, at our election, at one of the following: (a) Term SOFR plus a margin ranging from 0.725% to 1.400%; (b) Daily SOFR plus a margin ranging from 0.725% to 1.400%; or (c) the base rate plus a margin ranging from 0.000% to 0.400%. 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 (x) the agent’s prime rate, (y) the federal funds rate on such day plus 0.50% or (z) the adjusted Term SOFR for a one-month tenor in effect on such day plus 1.00%. In addition, the Credit Facility requires a facility fee ranging from 0.125% to 0.300% which is determined based on our credit ratings on the $700.0 million committed capacity, without regard to usage.

As of June 30, 2026, we had $262.0 million available to draw on our Credit Facility. The Credit Facility is subject to usual and customary covenants which include, among other stipulations, a requirement that we maintain certain financial ratios within limits set by our creditors. As of June 30, 2026, we were in compliance with these covenants.

In June 2026, we repaid the remaining $125.0 million outstanding on our unsecured bank term loan (the “Bank Term Loan”) upon maturity. The Bank Term Loan bore interest at a variable interest rate based on SOFR plus a margin determined based on our credit ratings.

Pinnacle Bank is a participating member of our banking group. The chairman of our board of directors is also the chief banking officer and vice chairman of the board of directors of Pinnacle Financial Partners, Inc., the holding company for Pinnacle Bank. Our corporate banking transactions are conducted primarily through Pinnacle Bank.

2031 Senior Notes - In January 2021, we issued $400.0 million in aggregate principal amount of 3.00% unsecured senior notes that mature in February 2031 (the “2031 Senior Notes”). The 2031 Senior Notes were sold at an issue price of 99.196% of face value, before the underwriters’ discount. Interest on the 2031 Senior Notes is due semi-annually. The 2031 Senior Notes are subject to affirmative and negative covenants, including financial covenants. As of June 30, 2026, we were in compliance with these covenants.

2033 Senior Notes - In September 2025, we issued $350.0 million in aggregate principal amount of 5.35% unsecured senior notes that mature in February 2033 (the “2033 Senior Notes”). The 2033 Senior Notes were sold at an issue price of 98.903% of face value, before the underwriters’ discount. Interest on the 2033 Senior Notes began accruing in February 2026 and is due semi-annually. The 2033 Senior Notes are subject to affirmative and negative covenants, including financial covenants. As of June 30, 2026, we were in compliance with these covenants.

Private Placement Note - As of June 30, 2026, the principal amount outstanding on our private placement note was $100.0 million. The note bears interest at 4.51% and matures in January 2027.

Debt Maturities - Reference Note 8 of our condensed consolidated financial statements included in this Quarterly Report.

Credit Ratings - Fitch Ratings most recently reaffirmed its public issuer credit rating of “BBB-” and revised its rating outlook to “Positive” from “Stable” for NHI on June 29, 2026. Moody’s Investors Services most recently reaffirmed its credit rating of “Baa3”, its senior unsecured debt rating of “Baa3” and “Stable” outlook for NHI on September 21, 2025. S&P Global most recently reaffirmed its credit rating of “BBB-” and “Stable” outlook for NHI on October 6, 2025.

The following table provides additional information on the SOFR-based credit spread adjustments and facility fees that are applicable to our Credit Facility after taking into consideration the impact of credit ratings:

Any reduction in outlook or downgrade in our credit ratings from the rating agencies could negatively impact our costs of borrowings. If our credit rating from at least two rating agencies is downgraded below “BBB-/Baa3”, we may be subject to increases in the interest rates and fees on our debt in accordance with the applicable debt agreements.

Debt Metrics - We believe the ratio of Adjusted EBITDA to Fixed Charges, also referred to as fixed charge coverage ratio, and the ratio of Consolidated Net Debt to Adjusted EBITDA are meaningful measures of our ability to service our current debt. We define Adjusted EBITDA as net income before interest expense, income taxes, depreciation and amortization expense, impairments of real estate properties, gains on dispositions of real estate properties, write-offs of straight-line rents receivable and certain other items. We define Fixed Charges as interest expense at contractual rates, net of capitalized interest and principal payments on debt. We define Consolidated Net Debt as debt less cash and cash equivalents. We consider these ratios useful when comparing the strength of our consolidated balance sheet to our peer group. We believe that our consolidated balance sheet gives us a competitive advantage in accessing additional capital in the debt markets.

For the six months ended June 30, 2026, our fixed charge coverage ratio was 5.2x. Reference the “Adjusted EBITDA” section in “Non-GAAP Financial Measures” below for a table showing this calculation.

The following table provides a summary of the calculation of our Consolidated Net Debt to annualized Adjusted EBITDA ratio, which gives effect on an annualized basis to the impact of our acquisitions and dispositions of real estate properties, new financing arrangements and note payoffs occurring during the three months ended June 30, 2026 ($ in thousands):

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Supplemental Guarantor Financial Information

The principal amounts outstanding on each of our debt instruments as of June 30, 2026 were fully and unconditionally guaranteed on a senior unsecured basis by each of our subsidiaries, except for certain excluded subsidiaries (the “Guarantors”). The Guarantors are either owned or controlled by, or are affiliates of, us.

The following tables present summarized financial information as of June 30, 2026 and for the six months ended June 30, 2026 for NHI and the Guarantors on a combined basis after eliminating (i) intercompany transactions and balances among the Guarantors and (ii) equity in earnings from, and any investments in, any subsidiary that is a non-guarantor ($ in thousands):

Equity and Dividends

As of June 30, 2026, we had 49,115,748 shares of common stock outstanding with a market value of $3.7 billion. Total equity on our condensed consolidated balance sheet included in this Quarterly Report was $1.6 billion as of June 30, 2026.

Shelf Registration Statement - In March 2026, we renewed our automatic shelf registration statement on file with the SEC, which allows us 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 the offering.

ATM Equity Program - We maintain an ATM equity program which allows us to sell our common stock directly into the market. This program is governed by an ATM equity sales agreement which includes a forward sales provision that allows us to sell shares of our common stock to forward purchasers at a predetermined price at a future date. Concurrently with the renewal of our shelf registration statement, we entered into a new equity distribution agreement whereby we can sell up to $500.0 million in common stock under our ATM equity program.

During the six months ended June 30, 2026, we settled the remaining $44.9 million of ATM forward equity sales agreements that were outstanding under our previous ATM equity program. As of June 30, 2026, we had $500.0 million in availability under our ATM equity program.

We use ATM equity program proceeds to rebalance our leverage in response to our acquisitions activity which keeps our alternatives flexible for financing further growth of our business. We have historically used the proceeds received from the ATM equity program for general corporate purposes, acquisitions and repayment of indebtedness, including borrowings under our Credit Facility. We view our ATM equity program as an effective way to match-fund our smaller acquisitions by exercising control over the timing and size of transactions and achieving a more favorable cost of capital as compared to larger follow-on offerings.

Dividends - Our board of directors approves a quarterly dividend on a recurring basis which is reflective of our expected annual taxable income. Taxable income is determined in accordance with the Internal Revenue Code and differs from net income for financial statement reporting purposes that has been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). Our board of directors has historically directed us towards maintaining a strong consolidated balance sheet. Therefore, we consider the competing interests of short-term 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 credit spread over our costs of debt and equity 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 our cash flows from operations will be adequate to fund dividends at the current rate.

We intend to comply with REIT dividend requirements that require us to distribute at least 90% of our annual taxable income. Historically, we have distributed at least 100% of our annual taxable income. Dividends declared for the fourth quarter of each fiscal year that are paid by the end of the following January are treated for federal income tax purposes, with some exceptions, as having been paid in the fiscal year just ended as permitted in Section 857(b)(9) of the Internal Revenue Code. To the extent a portion or all of such dividend exceeds our current year earnings and profits, the excess amount of such dividend is treated as having been received in the year paid for federal income tax purposes.

The following table provides information on the dividends declared by our board of directors for the periods indicated:

On August 7, 2026, our board of directors declared a $0.94 per share dividend payable on November 6, 2026 to common stockholders of record as of September 30, 2026.

Material Cash Requirements

As of July 31, 2026, we had $51.2 million of cash and cash equivalents, $334.5 million of restricted cash related to a Section 1031 exchange transaction and $502.0 million of availability under our Credit Facility. Our expected material cash requirements for the 12-months ending June 30, 2027 and thereafter consist of long-term debt maturities, interest payments on our debt and other contractually obligated expenditures. We expect to meet our short-term liquidity needs largely through cash generated from operations, borrowings under our Credit Facility and net proceeds from dispositions of real estate properties, although we may also 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.

We believe our current liquidity position, supplemented by our ability to generate positive cash flows from operations in the future, and our low net leverage will be sufficient to meet all of our short-term and long-term financial commitments.

Contractual Obligations and Contingent Liabilities

A summary of our contractual obligations as of June 30, 2026 follows ($ in thousands):

1 These amounts include the respective principal amounts outstanding on each of our debt instruments by maturity period. Interest expense was calculated using the weighted average interest rates on each of our debt instruments as of June 30, 2026. We have also included a facility fee of 0.25% related to the Credit Facility.

A summary of our outstanding loan commitments as of June 30, 2026 follows ($ in thousands):

1 Funding is contingent upon the operating performance of the respective facility.

We estimate the amounts of our unfunded loan commitments that we expect to fund and provide for necessary credit loss reserves using the same methodology as the one applied to provide for credit loss reserves on our mortgage and other notes receivable. As of June 30, 2026, our total credit loss liabilities established for unfunded loan commitments were $0.2 million

A summary of our outstanding development commitments as of June 30, 2026 follows ($ in thousands):

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A summary of our outstanding contingency commitments as of June 30, 2026 follows ($ in thousands):

Litigation

From time to time, we are a party to various lawsuits, investigations, claims and other legal and regulatory proceedings arising in connection with our business. Such claims may include, among other things, professional and general liability claims, as well as regulatory proceedings related to our SHOP segment. Further, from time to time, we are a party to certain legal proceedings for which third parties, such as our tenants, borrowers and managers, are contractually obligated to indemnify us from and against various claims, litigation and liabilities arising in connection with their respective businesses. Management believes that the ultimate resolution of all such pending proceedings will not have a material adverse effect on our financial condition, results of operations or cash flows.

Non-GAAP Financial Measures

The supplemental performance measures described below may not be comparable to similarly titled measures used by other REITs. These performance measures do not represent cash generated from operating activities in accordance with GAAP as they exclude the changes in operating assets and liabilities, and therefore should not be considered an alternative to net income as an indication of our performance or an alternative to net cash flows from operating activities, as determined in accordance with GAAP as a measure of liquidity, and are not necessarily indicative of cash available to fund cash needs. We calculate basic and diluted weighted average shares outstanding on a similar basis to GAAP when calculating our non-GAAP financial measures on a per share basis.

Funds From Operations (“FFO”) and Funds Available for Distribution (“FAD”)

FFO and Normalized FFO are important supplemental performance measures for REITs. These performance measures are useful in that the historical cost accounting convention under GAAP requires real estate assets, other than land, to be depreciated over their estimated useful lives implying that the realizable values of real estate assets diminish predictably over time. Since real estate asset values typically rise and fall with market conditions, presentations of operating results of REITs using the historical cost accounting convention could be considered less informative to investors and should be supplemented with a measure such as FFO. FFO was designed by the REIT industry as a supplemental performance measure to address this issue.

Normalized FAD is also an important supplemental performance measure for REITs. It is a useful measure of liquidity and serves as an indicator of our ability to distribute dividends to our stockholders each period. GAAP requires a lessor to recognize contractual lease payments as income on a straight-line basis over the expected term of the lease. This straight-line rent adjustment has the effect of reporting rental income that is significantly more or less than the contractual cash flows received pursuant to the terms of the lease agreements. GAAP also requires any discount or premium related to indebtedness and debt issuance costs to be amortized as non-cash adjustments to earnings. Normalized FAD includes adjustments for these types of non-cash items of a recurring nature typical to REITs and is further adjusted to reflect the cash outflows for recurring capital expenditures. Certain other costs that fluctuate that are not related to the recurring business are also excluded from Normalized FAD.

Our FFO per diluted share for the six months ended June 30, 2026 increased $0.08 per share, or 3.4%, compared to the six months ended June 30, 2025 primarily due to new investments completed since January 1, 2025, partially offset by dispositions of real estate properties since January 1, 2025. FFO, as defined by the National Association of Real Estate Investment Trusts (“NAREIT”) and applied by us, is calculated using the two-class method in which net income is allocated to common stockholders and holders of participating securities based on their respective weighted average shares outstanding during the period. We define FFO as net income attributable to common stockholders excluding gains on dispositions of real estate properties, impairments of real estate properties and real estate depreciation and amortization expense. These exclusions are adjusted to remove the impact of amounts that are attributable to noncontrolling interests and holders of participating securities. Our definition of FFO aligns with NAREIT FFO.

Our Normalized FFO per diluted share for the six months ended June 30, 2026 increased $0.05 per share, or 2.1%, compared to the six months ended June 30, 2025 primarily due to our acquisitions and dispositions activity discussed above and additionally due to the proxy contest and related expenses which occurred in the prior year period. We define Normalized FFO as FFO excluding certain items which, due to their infrequent or unpredictable nature, may create some difficulty in comparing FFO for the current periods to similar prior periods. These adjustments may include, but are not limited to including, impairments of non-real estate assets, gains or losses on non-real estate assets and liabilities and recoveries of previous write-downs on mortgage and other notes receivable.

Our Normalized FAD for the six months ended June 30, 2026 increased $12.1 million, or 10.8%, compared to the six months ended June 30, 2025 primarily due to net impact of our acquisitions activity. We define Normalized FAD as Normalized FFO excluding straight-line rent revenue adjustments, amortization of lease incentives, non-real estate depreciation and amortization expense, amortization of debt issuance costs and discounts and certain transaction costs. We also adjust Normalized FAD for the net change in our credit loss reserves, share-based compensation expense, SHOP capital expenditures, deferred income tax expense, 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. We remove the impact of the above adjustments that are attributable to noncontrolling interests and holders of participating securities.

The following table reconciles our net income attributable to common stockholders, the most directly comparable GAAP financial measure, to NAREIT FFO, Normalized FFO and Normalized FAD and provides supplemental information on basic and diluted earnings per share using these metrics ($ in thousands, except per share amounts):

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Adjusted EBITDA

Adjusted EBITDA is an important supplemental financial measure that we use in evaluating our performance and ability to service our debt. Our definition of Adjusted EBITDA may not be comparable to other REITs. We define Adjusted EBITDA as net income before interest expense, income taxes, depreciation and amortization expense, impairments of real estate properties, gains on dispositions of real estate properties, write-offs of straight-line rents receivable and certain other items which, due to their infrequent or unpredictable nature, may create some difficulty in comparing Adjusted EBITDA for the current periods to similar prior periods. These other items may include, but are not limited to including, impairments of non-real estate assets, gains or losses on dispositions of non-real estate assets and liabilities, certain non-cash rental income and recoveries of previous write-downs on mortgage and other notes receivable. We also include our proportionate share of the Adjusted EBITDA adjustments to our equity method investment.

The following table reconciles our net income, the most directly comparable GAAP financial measure, to Adjusted EBITDA and provides information on our fixed charge coverage ratios ($ in thousands):

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NOI

NOI is a supplemental financial measure used to evaluate the operating performance of real estate assets. We define NOI as total revenues, less tenant reimbursements of property operating expenses and senior housing operating expenses. We believe NOI provides relevant and useful information to investors as it measures the operating performance of real estate assets at the property level on an unleveraged basis. We also use NOI in making decisions about resource allocations to our operating segments.

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

The following table provides a summary of our NOI by segment ($ in thousands):

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Interest Rate Risk

We are exposed to risks related to fluctuations in market interest rates that affect our indebtedness and our mortgage and other notes receivable. Substantially all of our mortgages and other notes have been negotiated at fixed interest rates.

We have used derivative instruments in the past to mitigate interest rate risk. We do not use derivative financial instruments for speculative or trading purposes. We currently have no derivative financial instruments but may engage in hedging strategies in the future to manage our exposure to interest rate risk depending on our analysis of the interest rate environment and the costs and risks of such strategies.

Interest rate fluctuations generally will not affect our future results of operations or cash flows associated with our fixed rate debt, mortgages and other notes unless these financial instruments mature or are otherwise terminated and we are seeking new borrowings or to refinance these borrowings. However, interest rate fluctuations will affect the fair values of our fixed rate financial instruments from period to period. Conversely, changes in interest rates related to our variable rate debt, or any mortgages and other notes with variable interest rates, will impact our future results of operations and cash flows, but will not significantly affect the fair values of those financial instruments during the period.

The following table provides a summary of the interest rates on our debt ($ in thousands):

Assuming a 50 basis point (“bps”) increase or decrease in interest rates on the principal amounts of our variable rate debt outstanding as of June 30, 2026 and also assuming the amounts outstanding did not change during the period, our interest expense would increase or decrease annually by approximately $2.2 million.

The following table provides a summary of the sensitivity of our fixed rate debt as of June 30, 2026 to changes in market interest rates ($ in thousands):

As of June 30, 2026, the principal amounts of our mortgage and other notes receivable totaled $224.5 million and the estimated fair values of these investments, discounted for the change in the risk-free interest rate, totaled $205.4 million. A 50 bps increase in market interest rates as of June 30, 2026 would have resulted in a decrease in the total estimated fair values of our mortgage and other notes receivable of $9.4 million and a 50 bps decrease in market interest rates as of June 30, 2026 would have resulted in an increase in the total estimated fair values of these investments of $1.9 million.

Inflation Risk

Our tenant leases generally provide for annual escalators in the contractual amounts of base rent due to us which are calculated using a fixed rate of increase or a variable index, such as the consumer price index (“CPI”). The terms of our lease agreements may also include a minimum or maximum cap on the annual increase. Substantially all of our leases include a provision requiring the tenant to pay for the operating expenses of the respective property, whether paid directly by the tenant to the applicable third-party or reimbursed to us. We believe the impact of inflation that we may experience related to our leased properties will be at least partially offset by the contractual rent increases and property operating expense reimbursements described above.

Inflation may adversely affect the costs of labor, goods and services incurred by our tenants, borrowers and managers. In periods of inflation, any increases in operating costs experienced by our tenants, borrowers and managers could exceed the corresponding increases in revenues which may adversely affect the ability of these parties to satisfy their contractual obligations with us. Additionally, governmental regulations may be introduced during periods of inflation that reduce reimbursement rates paid to healthcare providers, which could also negatively impact the revenues of our tenants, borrowers and managers. As a result, our financial condition, results of operations and cash flows may be adversely affected by economic pressures on our tenants, borrowers and managers during periods of inflation.

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, to allow for timely decisions regarding required disclosures. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operating, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

As required by Rules 13a-15(f) and 15d-15(f) of the Exchange Act, we performed an evaluation under the supervision and with the participation of our management, including our Chief Executive Officer (“CEO”) and the CFO, of the effectiveness of the design and operation of our disclosure controls and procedures as of June 30, 2026. Based upon that evaluation, our CEO and CFO concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of June 30, 2026.

Changes in Internal Control Over Financial Reporting

There have been no changes in our internal controls over financial reporting during the three months ended June 30, 2026, as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act, which have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

There have been no material changes from the risk factors previously disclosed in “Part I, Item 1A, Risk Factors” of our Annual Report, except as noted below:

We may not be able to successfully redeploy the net proceeds from the sale of the NHC properties in a manner that generates comparable returns.

Our ability to effectively redeploy the proceeds received in the sale of the NHC properties will depend on a number of factors, including the availability of suitable investment opportunities, prevailing market conditions, competition from other investors and our cost of capital at the time of reinvestment. There can be no assurance that we will be able to identify and acquire assets or make investments that generate returns comparable to the returns generated by the properties being sold, which may impact our results of operations.