Executive Summary

Q4 2024 delivered solid operational and financial performance: diluted EPS rose to $0.95, NAREIT FFO/share to $1.24, Normalized FFO/share to $1.12, and Normalized FAD to $52.1M, with SHOP NOI up 12.5% YoY on improving occupancy and margins .
Management introduced FY2025 guidance with NAREIT FFO and Normalized FFO/share of $4.59–$4.66 and FAD of $219.8–$223.6M, underpinned by $225M of unidentified investments at ~8.1% initial yield and 12–15% SHOP NOI growth; FY2024 guidance was earlier revised in Q3 due to SLM headwinds, then exceeded by year-end execution .
Balance sheet remained strong: net debt/adj. EBITDA ~~4.1x in Q4 (low end of 4–5x target), $480M ATM capacity available, and revolver extended to October 2028; forward equity proceeds (~~$119M) provide funding flexibility .
Catalysts: accelerating external growth (signed LOIs ~$152.3M at ~8.2% yield; active ~$190M pipeline), SHOP margin expansion via rate/RevPOR, strategic conversions from triple-net to SHOP/RIDEA, and potential resolution of SLM exposures .
Consensus estimates from S&P Global were unavailable due to system limits; estimate comparisons are therefore not included. Attempted retrieval failed due to a daily limit error.

What Went Well and What Went Wrong

What Went Well

“Fourth quarter results exceeded our internal expectations”: cash rental income grew ~8.6% YoY, SHOP NOI grew 12.5%, and acquisitions contributed positively; EBITDARM coverage improved across needs-driven operators (Bickford adjusted 1.63x) .
External growth momentum: $237.5M 2024 investments at ~8.6% average yield, $21.2M sale-leaseback in January 2025, ~$152.3M signed LOIs at ~8.2% yield, and ~$190M active pipeline (ex-portfolio deals) .
Balance sheet flexibility: net debt/adj. EBITDA 4.1x in Q4; revolver maturity extended to 2028; forward equity capacity and ATM provide capital access .

What Went Wrong

SLM tenant issues: transitions/sales reduced near-term rent/interest; two non-performing loans ($10.0M mortgage and $14.5M mezzanine) carried a $14.8M reserve; repayment/collections were limited in Q4 .
Discovery portfolio underperformed expectations; May 1, 2025 rent reset likely below prior 5% yield target—NHI is evaluating re-tenanting or potential SHOP conversion .
Deferred rent collections expected to slow materially in 2025 (~$4M baked into guide vs $11M in 2024), reflecting non-repeatability of 2024’s lump-sum repayments .

Financial Results

Metric	Q2 2024	Q3 2024	Q4 2024
Revenues ($USD Millions)	$84.970	$82.944	$85.754
Diluted EPS ($USD)	$0.81	$0.65	$0.95
NAREIT FFO per diluted share ($USD)	$1.18	$1.03	$1.24
Normalized FFO per diluted share ($USD)	$1.18	$1.03	$1.12
Normalized FAD ($USD Millions)	$51.779	$49.383	$52.073
SHOP NOI ($USD Millions)	$2.953	$3.027	$3.250

Segment NOI breakdown:

NOI by Segment ($USD Millions)	Q2 2024	Q3 2024	Q4 2024
Real Estate Investments	$68.702	$66.275	$68.754
SHOP	$2.953	$3.027	$3.250
Non-Segment/Corporate	$0.076	$0.112	$0.150
Total NOI	$71.731	$69.414	$72.154

KPIs:

KPI	Q2 2024	Q3 2024	Q4 2024
SHOP Avg Occupancy (%)	87.0	88.6	89.4
SHOP Margin (%)	22.1	22.0	23.2
Needs-driven EBITDARM coverage (ex-Bickford)	1.15x	1.15x	1.22x
Bickford EBITDARM coverage (adj.)	1.45x	1.61x	1.63x
Net Debt / Adj. EBITDA (x)	4.2x	4.4x	4.1x

Additional Q4 drivers:

Rental income increased $5.1M (+8.3%) YoY; gains on real estate sales ~$5.0M; $6.3M gain on forward equity sale agreement recognized in net income/FFO .
Normalized adjustments exclude non-cash items including forward equity gain and straight-line impacts; see reconciliation tables .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
NAREIT FFO per diluted share	FY 2024	$4.50–$4.54 (Q2) ; revised to $4.39–$4.41 (Q3)	Actual: $4.55 (diluted, reported)	Lowered in Q3 vs Q2 due to SLM; exceeded year-end
Normalized FFO per diluted share	FY 2024	$4.52–$4.56 (Q2) ; revised to $4.43–$4.44 (Q3)	Actual: $4.44 (diluted, reported)	Lowered in Q3; delivered at high end
Normalized FAD ($M)	FY 2024	$200.1–$201.8 (Q2)	Revised to $201.8–$202.5 (Q3)	Raised in Q3
NAREIT FFO per diluted share	FY 2025	—	$4.59–$4.66	Introduced (maintained strong growth outlook)
Normalized FFO per diluted share	FY 2025	—	$4.59–$4.66	Introduced
FAD ($M)	FY 2025	—	$219.8–$223.6	Introduced
SHOP NOI Growth (%)	FY 2025	—	12–15%	Introduced
Dividend	Q2 2025	—	$0.90 per share payable May 2, 2025	Declared

Drivers of guidance changes:

FY2024 FFO lowered in Q3 on SLM credit reserve increase and lower cash lease/interest assumptions; FAD raised on acquisitions since August .
FY2025 assumes $225M new investments (~8.1% yield), SHOP NOI growth, continued deferred rent collections, transition expenses, and fulfillment of commitments .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 2024)	Previous Mentions (Q3 2024)	Current Period (Q4 2024)	Trend
SHOP occupancy/margins	Occupancy 87%, margin 22.1%; strategy to reach 90% then reduce incentives	Occupancy 88.6%; margin ~22%; uplift continues	Occupancy 89.4%; margin 23.2%; guide 12–15% NOI growth	Improving
External growth pipeline	$155.4M LOIs; $270M pipeline	$59.8M LOIs; $350M pipeline; Spring Arbor $121M acquisition	~$152.3M signed LOIs; ~$190M pipeline; $21.2M closed Jan’25	Building
SLM remediation	Exposure identified; transitions/sales underway	Two loans non-performing; transitions to new operators	Mortgage collateral received; continued mezzanine recovery evaluation	Progressing
Discovery lease reset	—	May 1, 2025 reset targeted; likely below 5% yield	Expect GAAP revenue changes; evaluating re-tenanting/SHOP	Under review
Capital markets/forward equity	$500M ATM capacity; improving cost of capital	Overnight forward equity (~$189M escrow); revolver extended	Gains on forward equity ($6.3M); ~$119M proceeds remaining; ATM capacity ~$425–480M	Supportive
Potential SHOP conversions	RIDEA opportunities noted	Pursuing portfolio SHOP; cautious on scalability	Actively evaluating triple-net → SHOP; Discovery a candidate; 5–10% of portfolio by end-2025	Increasing priority

Management Commentary

“We ended the year on a strong note… cash rent increased by nearly 9% YoY… SHOP occupancy continued to accelerate… while our balance sheet leverage ticked down to 4.1x from 4.4x in the third quarter” .
“We closed on $237.5 million in new investments during 2024… we have signed LOIs for investments totaling $152.3 million with an average yield of approximately 8.2%” .
“We are looking for other avenues to support internal growth… considering select opportunities to transition triple-net senior housing assets to SHOP structures” .
“Our guidance… includes $225 million in new investments at an average yield of 8.1%… SHOP NOI growth in the range of 12% to 15%” .

Q&A Highlights

SLM recovery outlook: rent likely ~70% of prior run-rate by Q4 2025; mezzanine loan outcome TBD with multiple alternatives; objective to recoup principal and redeploy .
Discovery portfolio: rent step-up expected but below 5% yield target; re-tenanting or SHOP conversion on the table .
Deferred rent collections: 2025 embeds ~$4M vs $11M in 2024 due to one-time payments not repeating (e.g., Chancellor $2.5M, Discovery) .
Acquisition guidance: $225M in 2025 reflects under-promising; upside exists vs signed LOIs/pipeline; mix of sale-leasebacks and mortgage loans .
SHOP strategy: prioritize occupancy toward 90%, then reduce incentives, push RevPOR; recurring SHOP CapEx closer to ~$10M (vs recurring line in guide) to reposition assets .

Estimates Context

S&P Global Wall Street consensus for Q4 2024 EPS and revenue was attempted but unavailable due to a daily request limit error; as a result, comparisons to consensus estimates are not included.
Implication: With reported diluted EPS of $0.95 and Normalized FFO/share of $1.12, sell-side models may need to consider Q4’s non-operating items (e.g., $6.3M forward equity gain) and ongoing normalization adjustments when updating forecasts .

Key Takeaways for Investors

SHOP trajectory is favorable: occupancy near 90% and margin at 23.2% positions the portfolio for rate-driven RevPOR growth and NOI expansion through 2025; guidance embeds 12–15% SHOP NOI growth .
External growth is accelerating with attractive yields (~8.1–8.6%), supported by forward equity and revolver capacity—expect sustained investment activity beyond the $225M embedded in FY2025 guidance .
Balance sheet optionality is a differentiator: net leverage ~4.1x and extended revolver maturity provide flexibility to fund growth and manage 2025 maturities, while maintaining IG ratings .
Watch tenant-specific dynamics: SLM resolution (mezzanine recovery) and Discovery lease reset/possible SHOP conversion are near-term variables that could shift GAAP revenue and cash flows; management is proactively repositioning .
Deferred rent tailwinds diminish in 2025; growth will rely more on SHOP rate initiatives and external investments—adjust models accordingly .
Dividend maintained at $0.90/share with improving FAD (FY2024 $204.2M; FY2025 midpoint ~$221.7M), supporting payout sustainability and potential investor interest in yield .
Risk factors: macro rates (cost of capital), state/federal reimbursement/Medicaid dynamics for SNF, and execution risk on SHOP conversions/portfolio transitions; management emphasis on underwriting discipline and operator quality remains evident .

Note: We searched for Q4-related press releases beyond the 8-K and found none in the period. Prior two quarters’ results and transcripts were reviewed for context and trend analysis – – – –.

NATIONAL HEALTH INVESTORS INC (NHI)·Q4 2024 Earnings Summary