National Health Investors(US:NHI)2021-02-22 21:47Financial Performance - Total revenue for 2020 was $332,811,000, an increase of 4.6% compared to 2019, with rental income contributing $307,208,000 (92.3%) and interest income from mortgages and other notes receivable at $25,603,000 (7.7%)[23] - As of December 31, 2020, total revenues amounted to $3,262,381,000, with a net income of $297,373,000[49] - Funds From Operations (FFO) per diluted common share for the year ended December 31, 2020 increased by $0.02 or 0.4% compared to 2019, primarily due to new investments[315] - Normalized FFO per diluted common share for the year ended December 31, 2020 increased by $0.10 or 1.8% over the same period in 2019, driven by new investments[316] - Normalized Adjusted Funds From Operations (AFFO) per diluted common share for the year ended December 31, 2020 increased by $0.19 or 3.7% compared to 2019, influenced by new investments[318] - Adjusted EBITDA for 2020 was $307,351,000, an increase from $298,437,000 in 2019, indicating a growth of 3.1%[325] - Normalized AFFO attributable to common stockholders for 2020 was $236,441,000, up from $222,883,000 in 2019, reflecting a growth of 6.3%[323] Portfolio Composition - As of December 31, 2020, the portfolio included 151 senior housing properties and 77 medical facilities, with 72 skilled nursing facilities and 3 hospitals[25][31] - The portfolio included 94 assisted living facilities, 32 independent living facilities, and 11 entrance-fee communities as of December 31, 2020[26][29][30] - Approximately 22% of portfolio revenue was derived from publicly owned operators, 56% from regional operators, 19% from privately owned national chains, and 3% from smaller operators[47] Debt and Financing - As of January 31, 2021, the company had approximately $1,535,325,000 in outstanding indebtedness and $520,000,000 available to draw under its unsecured credit facility[141] - The company had outstanding debt of $1,499,285,000 as of December 31, 2020[267] - The unsecured bank credit facility totals $1,200,000,000, consisting of three term loans and a revolving credit facility[268] - The current interest rates on the revolving facility and term loans are based on 30-day LIBOR plus 120 basis points and a blended 132 basis points, respectively[269] - The company is subject to covenants related to its indebtedness, which impose operational limitations and require maintenance of certain financial ratios[142] - The company’s total debt, including interest, was $1,541,770,000 as of December 31, 2020[306] Investment Strategy - Investment policies focus on providing consistent income and capital growth through investments in healthcare-related facilities and operations[94] - In 2020, the company committed approximately $226,942,000 for new investments in real estate and loans, considering factors such as geographic area, property type, and anticipated cash flow[96] - The company may utilize borrowed funds or equity issuance for investments in healthcare-related facilities, negotiating lines of credit or arranging for short or long-term borrowings[99] Regulatory Environment - A significant portion of revenue for skilled nursing facility (SNF) tenants is derived from government-funded reimbursement programs, primarily Medicare and Medicaid[77] - Compliance with various healthcare regulations is critical, as noncompliance can lead to severe penalties, including exclusion from Medicare and Medicaid programs[88] - The healthcare industry is experiencing increasing pressure from private payors attempting to control costs, which may impact revenues from government programs[82] - Government reimbursement rates for healthcare services may be subject to cuts, which could adversely affect the financial operations of tenants and operators[115] COVID-19 Impact - The occupancy rates at several properties have significantly decreased due to COVID-19, impacting revenues and potentially leading to unpaid rental payments[104] - The company may have to write off unpaid rental payments and restructure long-term rent obligations due to the financial impact of COVID-19 on operators[104] - The company’s ability to pay dividends may be adversely affected by the impact of COVID-19 on its financial condition and results of operations[106] - The CARES Act and related legislation authorized $178 billion in funding for healthcare providers to reimburse COVID-19 related expenses or lost revenues[83] Risk Factors - The company faces risks related to governmental regulations and reimbursement rates, particularly from Medicare and Medicaid, which could adversely affect tenants' financial conditions[113] - The company is exposed to risks if tenants or borrowers become bankrupt, which could limit the ability to collect unpaid rent or principal[111] - The company is exposed to risks associated with environmental laws and potential liabilities related to hazardous substances, which could have a material adverse effect on its business or financial condition[135] - The company is subject to risks from catastrophic weather and natural disasters, which could cause substantial damage to properties and disrupt tenant operations[120] - The company faces risks related to cybersecurity, which could result in significant costs, fines, and reputational damage if data security is compromised[134] Employee and Operational Metrics - The company employed 19 full-time employees as of December 31, 2020, an increase of three from the previous year[72] - The company monitors tenant credit quality through various assessments, including operating cash flow calculations and occupancy rates[48]