National Health Investors (NHI) Q2 2012 Earnings Call August 06, 2012 9:00 am ET Executives Tripp Sullivan J. Justin Hutchens - Chief Executive Officer, President and Director Roger R. Hopkins - Chief Accounting Officer Analysts Daniel Bernstein - Stifel, Nicolaus & Co., Inc., Research Division Todd Stender - Wells Fargo Securities, LLC, Research Division Karin A. Ford - KeyBanc Capital Markets Inc., Research Division Richard C. Anderson - BMO Capital Markets U.S. Presentation Operator
In addition, certain terms used in this call are non-GAAP financial measures, reconciliations of which are provided in the company's earnings release and accompanying tables and schedules, which has been filed on Form 8-K with the SEC. Listeners are encouraged to review those reconciliations provided in the earnings release, together with all other information provided in that release.I'll now turn the call over to Justin Hutchens. Please go ahead. J. Justin Hutchens Thank you, Tripp. Good morning, everyone, and thank you for joining us. With me today is Roger Hopkins, our Chief Accounting Officer. We stayed on plan during the quarter. We remained disciplined on our investments, closely managed our portfolio and kept plenty of dry power available for potential new investment activity planned in the second half of the year. As a result, we were able to raise our guidance and increase the quarterly dividend. We'll talk more about all of those in more detail in a few minutes. First, let me turn the call over to Roger to walk through our financial results. Roger? Roger R. Hopkins Thanks, Justin. Good morning, everyone. My comments this morning are consistent with our disclosures in Form 10-Q, our earnings press release and our supplemental data report filed this morning with the SEC. Normalized funds from operations for the second quarter of 2012 rose 6% over the same period in 2011, primarily as a result of revenues from our new investments funded at $82.4 million in 2011 and $29.6 million so far in 2012. Lease revenues from our tenant Legend Healthcare increased $1.2 million due to new investments made in the fourth quarter of 2011 and the second quarter of 2012. Normalized FFO for the second quarter of 2012 was $21,386,000 or $0.77 per diluted share compared with normalized FFO of $20,179,000 or $0.73 per diluted share in the second quarter of 2011.
Normalized funds available for distribution for the second quarter of 2012 was $21,010,000 or $0.76 per diluted share compared with $19,724,000 or $0.71 per diluted share for the same period in 2011. Normalized FFO and normalized FAD for the second quarter of 2012 excluded the impact on net income of write-offs and expenses related to an early lease termination, which I will discuss in a moment, and other adjustments of $155,000.Normalized FFO and normalized FAD for the same period in 2011 excluded the impact on net income of gains of $8,655,000 on the sale of marketable securities and a $988,000 change in the fair value of a previous interest rate swap agreement. Net income for the second quarter of 2012 was $16,928,000 or $0.61 per diluted share compared with net income of $25,117,000 or $0.90 per diluted share for the same period in 2011. Net income for the second quarter of 2012 and 2011 includes the accounting impact of the adjustments, write-offs and other expenses mentioned above. Large transactions that are infrequent or unpredictable in nature that affect net income are adjusted in our reconciliation of our net income to normalized FFO and normalized FAD. It is included in our earnings release at Form 10-Q and the supplemental data report. In June 2012, due to material noncompliance with our lease terms, we terminated our lease with a former tenant of 4 assisted living and memory care facilities in Minnesota and transitioned the least to a new tenant, White Pine Senior Living. As a result, during the second quarter, we realized lower cash payments of $450,000 from our former tenant. We wrote off an additional $126,000 in billed receivables. We incurred $171,000 in legal and other direct expenses and incurred a noncash write-off of straight line rent receivables for accounting purposes of $963,000. Read the rest of this transcript for free on seekingalpha.com