NHI 10-K & 10-Q changes, risk factors and insider trading

Risks Related to Our Managers, TenantsBusiness and BorrowersOperations

We depend on the operating success of our managers,tenants, tenantsmanagers and borrowers and if their financial condition or business prospects deteriorate, our business, financial condition and results of operations could be adversely affected.

We are exposed to the risk that our managers,tenants, tenantsmanagers and borrowers may become subject to bankruptcy or insolvency proceedings.

The insolvency or bankruptcy of our tenants, managers and borrowers may adversely affect our business, results of operations and financial condition. Although our lease agreements provide us the right to evict a tenant/operator and demand immediate payment of rent and exercise other remedies, and our mortgage loans provide us the right to terminate any funding obligations, demand immediate repayment of principal and unpaid interest, foreclose on the collateral and exercise other remedies, in the event our counterparty has filed for bankruptcy or reorganization, the bankruptcy laws afford certain rights to a party that has filed for bankruptcy or reorganization. A tenant or borrower in bankruptcy may be able to limit or delay our ability to collect unpaid rent in the case of a lease or to receive unpaid principal and/or interest in the case of a mortgage loan and to exercise other rights and remedies. For example, a tenant may reject its lease with us in a bankruptcy proceeding. In such a case, our claim against the tenant for unpaid and future rents would be limited by the statutory cap of the U.S. Bankruptcy Code. This statutory cap could be substantially less than the remaining rent owed under the lease, and any claim we have for unpaid rent might not be paid in full. In addition, a tenant may assert in a bankruptcy proceeding that its lease should be re-characterized as a financing agreement. If such a claim is successful, our rights and remedies as a lender, compared to a landlord, are generally more limited. We may be required to fund certain expensesexpenses, (e.g.,such as real estate taxes, maintenance and capital improvements)improvements, to preserve the value of a property, avoid the imposition of liens on a property and/or transition a property to a new tenant or borrower. In some instances, we have terminated our lease with a tenant and leased the facility to another tenant. In certain of those situations, we provided working capital loans to, and limited indemnification of, the new tenant. If we cannot transition a leased facility to a new tenant, we may take possession of that property, which may expose us to certain successor liabilities. Should such events occur, our revenuerevenues and operating cash flowflows may be adversely affected.

A small number of tenants in our portfolio account for a significant percentage of the rentrental 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 and our ability to make distributions to our stockholders.

The successfulSuccessful performance of our real estate investments is materially dependent on the financial stability of our tenants/ and operators. For the year ended December 31, 2024,2025, approximately 40%36.9% of our total revenuerevenues waswere generated byfrom three tenants, including 14.7% from Senior Living Communities, LLC (“Senior Living”), 11.5% from Bickford Senior Living (16%), NHC (12%“Bickford”) and Bickford10.7% from National HealthCare Corporation (12%“NHC”). AsWe previouslyhave disclosed,been recognizing rental income from Bickford has been onusing the cash basis of accounting for revenue recognition since the second quarter of 2022 based upon information obtained from Bickford regarding its financial condition. Payment or other tenant defaults, the failure of tenants to meet their other obligations to us or a decline in the operating performance by any of these tenants or other tenants/ and operators could materially and adversely affect our business, financial condition and results of operations, and our ability to pay expected dividends to our stockholders. In the event of a tenant default, we may experience delays in enforcing our rights as landlord and may incur substantial costs in protecting our investment and re-leasing ourof the related property. Further, we may not be able to re-lease the property for the rent previouslyfor received,a similar rental rate, or at all, or lease terminations may cause us to sell the property at a loss. The realization of any of the foregoing risks could have a material adverse effect on our business and financial condition.

Actual or perceived risks associated with pandemics, epidemics or outbreaks have hadhad, and may in the futurefuture, have a material adverse effect on our operators’ business and results of operations.

The business and results of operations of the operators of our properties and theour Companybusiness and results of operations are subject to health and economic effects of public health conditions. If a pandemic, epidemic, outbreaksoutbreak of infectious disease or other public health crisis were to affect the markets in which our properties are located, our business could be adversely affected. Revenues for the tenants and operators of our properties are significantly impacted by occupancy rates. A public health crisis may diminish the public trust in senior housing properties or medical facilities, especially those that have treated or house consumers affected by contagious diseases, which may result in a decline in consumers seeking services offered through our properties. Consumer volumes and occupancy rates may also decline as a result of economic circumstances surrounding a public health crisis, particularly if the volume of uninsured and underinsured consumers increases. The business of the operators of our properties and theour Companybusiness may be more vulnerable to the effects of a public health crisis because most of our properties are designed for elderly consumers, a population that may experience complex medical conditions or socioeconomic factors. Due to the physical proximity required to offer many of the services provided by the operators of our properties, our operators may encounter difficulties attending to consumers due to social distancing policies or infection control protocols and face heightened workforce challenges. In addition, actions our operators take to address contagious diseases may materially increase their operating costs, including those related to enhanced health and safety precautions and increased retention and recruitment labor costs, among other measures. A decrease in occupancy rates or increase in costs is likely to have a material adverse effect on the ability of our tenants and operators to meet their financial and other contractual obligations to us, including the payment of rent, as well as on our results of operations. In some cases, we have had to, and we may in the future have to, write-offwrite off unpaid rental payments, incur lease accounting charges due to the uncollectibility ofuncollectible rental payments and/or restructure our tenants’ and operators’ long-term rent obligations. Furthermore, infections of contagious diseases at our facilities could lead to material increases in litigation costs for which our operators, or possibly we, may be liable.

The measures that federal, state and local governments, agencies and health authorities implement to address an epidemic, pandemic, outbreaksoutbreak of infectious disease or other public health crisis may be insufficient to offset any downturn in business of our tenants and operators, may increase operating costs for our managers,tenants, tenantsmanagers and borrowers or may otherwise disrupt or affect the operation of our properties. The rapid development, fluid nature and other factors related to an epidemic, pandemic, outbreaksoutbreak of infectious disease or other public health crisis makesmake it difficult to predict the potential impact of such a crisis on NHI or its operators. Nevertheless, a public health crisis, and the public and government responses to such future public health crisis, could have a material, adverse effect on our business.

One of the members of our boardBoard membersof Directors is also athe memberchairperson of NHC’s board of directors. This director may have conflicting interests with holders of the Company’sour common stock with respect to the NHC properties. During the year ended December 31, 2024,2025, revenueour revenues from NHC represented 12%10.7% of our total revenue.revenues. With respect to all decisions by our Board of Directors related to the NHC properties, the director thatwho is also a member of NHC’s board of directors is recused and does not participate in the NHIour board discussions or vote related to such matters. InSuch addition,director has announced his resignation to be effective as of our former2026 chairperson,annual Mr. W. Andrew Adams, was also a directormeeting of NHC. Mr. W. Andrew Adams retired from our Board of Directors effective December 31, 2024.stockholders. However, thesethis relationshipsrelationship could influence theour Board of Directors’ decisions with respect to the properties leased to and operated by NHC. As of December 31, 2024,2025, NHC owned 1,630,642 shares of our common stock.

We are exposed to risks related to governmentalgovernment regulations and payors, principally Medicare and Medicaid, and the effect of changes to laws, regulations and reimbursement rates on the businesses of our tenants’tenants, managers and borrowers’ business.borrowers.

Our managers,tenants, tenantsmanagers and borrowers are subject to complex federal, state and local laws and regulations relating to governmental healthcare programs. SeeReference “Part I, Item 1. Business - Government Regulation.Regulations” in this Annual Report. Regulation of the healthcare industry generally has intensified over time both in the number and type of regulations and in the efforts to enforce those regulations. Federal, state and local laws and regulations affecting the healthcare industry include those relating to, among other things, licensure; certification and enrollment with government programs; facility operations; addition or expansion of services or facilities; services and equipment; allowable costs; the preparation and filing of cost reports; privacy and security of health-related and other personal information; prices for services; quality of medical equipment and services; necessity and adequacy of medical care; patient rights; billing and coding for services and properly handling overpayments; maintenance of adequate records; relationships with physicians and other referral sources and referral recipients; debt collection; communications with patients and consumers; interoperability; and information blocking. If our tenants, operatorsmanagers or borrowers fail to comply with applicable laws and regulations, they may be subject to liabilities and other consequences including civil penalties, loss of facility licensure, exclusion from participation in the Medicare, Medicaid,Medicaid and other government healthcare programs, civil lawsuits and criminal penalties. We generally hold the applicable healthcare licenses and enroll in applicable government healthcare programs on behalf of the RIDEA properties in our SHOP segment, and that subjects us to potential liability under some healthcare laws and regulations. In addition, different interpretations or enforcement of, or changes to, applicable laws and regulations in the future could subject current or past practices to allegations of illegality or impropriety or could require our managers,tenants, tenantsmanagers and borrowers to make changes to their facilities, equipment, personnel, services, and operating expenses. If the operations, cash flows or financial condition of our tenants, operatorsoperators, or affiliates of our tenants and/or operators, and our borrowers are materially adversely impacted by current or future government regulation, our revenuerevenues and operations may be adversely affected as well. In addition, if an operator, borrower or tenant defaults on its lease or loan with us, our ability to replace the operator or tenant may be delayed by federal, state, or local approval processes.

OurThe tenants’,businesses operators’of our tenants, managers and borrowers’ businessesborrowers are also affected by government and private payor reimbursement rates and policies. Payments from government programs and private payors are subject to statutory and regulatory changes, retroactive rate adjustments, recovery of program overpayments or set-offs, administrative rulings, policy interpretations, payment or other delays by fiscal intermediaries, government funding restrictions (at a program level or with respect to specific facilities) and interruption or delays in payments due to delays or issues implementing reimbursement-related rules and any ongoing governmental investigations and audits at specific facilities. In recent years, legislative and regulatory changes have resulted in limitations and reductions in payments for certain services under government programs. For example, the Budget Control Act of 2011 requires automatic spending reductions to reduce the federal deficit, resulting in a uniform payment reduction across all Medicare programs of 2% per fiscal year that extends through the first eightseven months of 2032. State budgetary pressures have resulted, and will likely continue to result, in reduced spending or reduced spending growth for Medicaid programs in many states, including measures such as tightening patient eligibility requirements, reducing coverage, and enrolling Medicaid recipients in managed care programs. In addition, legislation and administrative actions at the federal level may impact the funding for, or structure of, Medicaid programs and may shape administration of Medicaid programs at the state level. CMS may implement or oversee changes affecting reimbursement, including through new or modified demonstration projects, such as those authorized pursuant to Medicaidwaivers waivers.under the Social Security Act.

Any reductions in Medicare or Medicaid reimbursement could have an adverse effect on the financial operations of our borrowers,tenants, operatorsmanagers and tenantsborrowers who operate SNFs. Further, reductions in payments under government healthcare programs may negatively impact payments from private payors, as some private payors rely on government payment systems to determine payment rates. There can be no assurance that adequate reimbursement levels will continue to be available for services provided by any facility operator, whether the facility receives reimbursement from Medicare, Medicaid or private payor sources. Significant limits on the scope of services reimbursed and on reimbursement rates and fees could have a material adverse effect on an operator’s liquidity, financial condition and results of operations, which could adversely affect the ability of an operator to meet its obligations to us.

More generally, the legislative and regulatory environment for healthcare products and services is dynamic, and Congress and certain state legislatures have considered or enacted a large number of laws and regulations intended to make major changes in the healthcare system, including laws that affect how healthcare services are delivered and reimbursed. Recent government initiatives and proposals relevant to our properties include those focused on transparency of SNF ownership and minimum long-term care facility staffing requirements.ownership. For example, a final rule issued by CMS in November 2023 requires Medicare-enrolled SNFs and Medicaid-enrolled nursing homes to disclose additional information about owners, operators, and management, including whether they are a REIT or private equity company. This information will be publicly available. This rule may result in increased scrutiny of REITs, private equity companies, and similar entities involved in owning or operating SNFs and nursing homes. In addition, CMS issued a final rule in May 2024 that establishes minimum staffing standards for Medicare- and Medicaid-certified nursing facilities, to be phased in over five years. This rule is the subject of legal challenges. If implemented in its current form, the staffing standards rule is expected to result in increased costs and operational challenges for long-term care providers, including as a result of increased competition for labor. Other industry participants, such as private payors, may also introduce financial or delivery system reforms. There is uncertainty with regard to whether, when and what health reform initiatives will be adopted in the future and the impact of such reform efforts on providers and other healthcare industry participants, including our managers,tenants, tenantsmanagers and borrowers.

We are exposed to the risk that the cash flows of our managers,tenants, tenantsmanagers and borrowers may be adversely affected by increased liability claims and liability insurance costs.

We are exposed to the risk that we may not be fully indemnified by our managers,tenants, tenantsmanagers and borrowers against future litigation.

Our facility leases and loans require that the managers, tenants, managers or borrowers that are a party to the respective agreement name us as an additional insured party on their insurance policies covering professional liability or personal injury claims. These instrumentsWe also require theour tenants,tenants and borrowers to indemnify and hold us harmless for all claims arising out offrom or incidental to the occupancy and use of eachour facility.properties. However, claims could exceed the applicable policy limits, the insurance company could fail or other coverage may not otherwise be available. We cannot give any assurance that these protective measures will eliminate any risk to us related to future litigation, the costs of which could have a material adverse impact on us.

Real estate investments are relatively illiquid and, therefore, our ability to quickly sell or exchange any of our properties in response to changes in economic and other conditions, including rising interest rates, may be limited. All of our properties are "special purpose" properties that cannot be readily converted to general residential, retail or office use. Facilities that participate in Medicare or Medicaid must meet extensive program requirements, including physical plant and operational requirements. Transfers of operations of these facilities are subject to regulatory approvals not required for transfers of other types of real estate. Thus, if the operation of any of our properties becomes unprofitable due to competition, age of improvements or other factors such that our tenant or borrower becomes unable to meet its obligations on the lease or mortgage loan, the liquidation value of the property may be less than the net bookcarrying value or the amount owed on any related mortgage loan, because the property may not be readily adaptable to other uses. The sale of the property or the replacement of an operator that has defaulted on its lease or mortgage loan could also be delayed by the approval process of any federal, state or local agency necessary for the transfer of the property or the replacement of the operator with a new operator licensed to manage the facility. No assurances can be given that we will recognize full value for any property that we are required to sell for liquidity reasons. Should such events occur, our results of operations and cash flows could be adversely affected.

EffectiveIn January 31, 2020, we entered into an investment with Life Care Services (“LCS”) which consists of two parts, NHI-LCS JV I, LLC (“Timber Ridge PropCo”), which owns the real estate and is owned 80%80.0% by NHI and 20%20.0% by LCS, and Timber Ridge OpCo, LLC (“Timber Ridge OpCo”), which operates the property and is owned 25%25.0% by NHI’s TRS and 75%75.0% by LCS. Rents received from the Timber Ridge OpCo in the RIDEA structure are treated as qualifying rents from real property for REIT tax purposes only if (i) they are paid pursuant to a lease of a “qualified healthcare property” and (ii) the operator qualifies as an “eligible independent contractor,” as defined in the Internal Revenue Code. If either of these requirements are not satisfied, then the rents will not be qualifying rents.

As part of acquisition of the real estate in January 2020, Timber Ridge PropCo accepted the property subject to trust liens previously granted to residents of Timber Ridge. BeginningThese inliens 2008,secure earlycertain mortgage loans previously made by residents of Timber Ridge executedto mortgageprior loansowner-operators pursuant to thea then-owner/operatorsdeed backedof by lienstrust and entered into a Deed of Trust and Indenture of Trustindenture (the “Deed and Indenture”) for the benefit of the trustee on behalf of all residents who made mortgage loans to the owner/operator in accordance with a resident agreement. The Deed and Indenture granted a security interest in the Timber Ridge property to secure the loans made by the early residents of the property.. This practice was discontinued at Timber Ridge in 2008, prior to our investment. However, thecertain remainingresident loans remain outstanding “old”and loanscontinue madeto by the residents are stillbe secured by a securitylien interest inon the Timber Ridge property. The trustee for all of the residents who made “old” loans in accordance with the resident agreements entered into a subordination agreement concurrent with Timber Ridge PropCo’s acquisition of the property, pursuant to which the trustee acknowledged and confirmed that the security interests created under the Deed and Indenture were subordinate to any security interests granted in connection with the loan made by NHI to Timber Ridge PropCo. WithAs thea result of periodic settlementsettlements of some of the outstanding resident loans in the ordinary course of normal entrance-fee community operations by Timber Ridge OpCo,operations, the balance owingsecured onby the Deed and Indenture atas of December 31, 20242025 was $10.3$7.7 million. By terms of the resident loan assumption agreement, during the term of the lease (seven years with two five-year renewal options), Timber Ridge OpCo is to indemnify Timber Ridge PropCo for any repayment by Timber Ridge PropCo of these liabilities under the guarantee. We cannot give any assurance that these protective measures will eliminate any risk to us related to claims under the Deed and Indenture.

InflationRisks andrelated increasedto interestour ratesjoint mayventure investments could adversely affect our financial condition and results of operations.

AlthoughInflation inflationand hasinterest notrates materiallycontinue impactedto our operations in the past, inflation was recentlyremain at aelevated 40-yearlevels high and between March 2022 and July 2023, the Federal Reserve raised the federal funds rate in an effortcompared to curb inflation. Although the federal funds rate has been lowered in recent months, the federal funds rate and inflation are still higher than they wereyears prior to 2022. In addition, President Trump’s administration has announced various policies which may impact inflation, including the implementation of tariffs on U.S. imports and immigration enforcement, as well as other policies, which could increase inflation. High inflation and interest rates could have an adverse impact on our variable rate debt, our ability to borrow money, and general and administrative expenses, as these costs could increase at a rate higher than our rental income and other revenue. Increases in the costs of owning and operating our properties due to inflation could reduce our net operating income and the value of an investment in us to the extent such increases are not reimbursed or paid by our tenants. If we are materially impacted by increasing inflation because, for example, inflationary increases in costs are not sufficiently offset by the contractual rent increases and operating expense reimbursement provisions or escalations in the leases with our tenants, our results of operations could be adversely affected. In addition, due to high interest rates, we may experience restrictions in our liquidity based on certain financial covenant requirements, our inability to refinance maturing debt in part or in full as it comes due and higher debt service costs and reduced yields relative to cost of debt. If we are unable to find alternative credit arrangements or other funding in a high interest environment, our financial results may be negatively impacted.

Adverse developments affecting the financial services industry, including events or concerns involving liquidity, defaults, or non­performancenon-performance by financial institutions, could adversely affect our business, financial condition, results of operations,operations or our prospects.

The funds in our accounts are held in banks or other financial institutions. Our cash held in non-interest bearing and interest-bearing accounts may periodically exceed any applicable Federal Deposit Insurance Corporation (“FDIC”) insurance limits. Should events, including limited liquidity, defaults, non-performance or other adverse developments occur with respect to the banks or other financial institutions that hold our funds, or that affect financial institutions or the financial services industry generally, or concerns or rumors about any events of these kinds or other similar risks, our liquidity may be adversely affected. For example, on March 10, 2023, the FDIC announced that Silicon Valley Bank had been closed by the California Department of Financial Protection and Innovation. Although we did not have any funds in Silicon Valley Bank or other institutions that have been closed, we cannot guarantee that the banks or other financial institutions that hold our funds will not experience similar issues.

In addition, investor concerns regarding the U.S. or international financial systems could result in less favorable commercial financing terms, including higher interest rates or costs and tighter financial and operating covenants, or systemic limitations on access to credit and liquidity sources, thereby making it more difficult for us to acquire financing on terms favorable to us in connection with a potential business combination, or at all, and could have material adverse impacts on our liquidity, our business, financial condition orcondition, results of operations,operations andor our prospects.

During 2022, we transitioned 15 of our legacy Holiday properties to be SHOP structured communities. Our SHOP structured communities expose us to various operational risks that may increase our costs or adversely affect our ability to generate revenues. As the owner of a property under a SHOP structure, we are ultimately responsible for all operational risks and other liabilities of the property, other than those arising out of certain actions by our manager, such as gross negligence or willful misconduct. Operational risks include, and our revenues therefore depend on, among other things: (i) occupancy rates; (ii) rental rates charged to residents; (iii) our operators’ reputations and ability to attract and retain residents; (iv) general economic conditions and market factors that impact seniors including those exacerbated by public health conditions; (v) competition from other senior housing providers; (vi) compliance with federal, state, and local laws and regulations and industry standards, including but not limited to licensure requirements, where applicable; (vii) litigation involving our properties or residents; (viii) the availability and cost of general and professional liability insurance coverage or increases in insurance policy deductibles; and (ix) the ability to control operating expenses, which have increased, and may continue to increase. In addition, the success of our SHOP structured communities will depend largely on our ability to establish and maintain good relationships with our managers. Although the SHOP structure gives us certain oversight approval rights (e.g., budgets, material contracts, etc.) and the right to review operational and financial reporting information, we have outsourced to our third-party managers the day-to-day operations of the communities. Therefore, we depend on our managers to operate these communities in a manner that complies with applicable law, minimizes legal risk and maximizes the value of our investment. Failure by our managers to adequately manage these risks could have a material adverse effect on our business, results of operations and financial condition.

Our business, like that of other REITs, involves the receipt, storage and transmission of information about our Company, our managers,tenants, tenantsmanagers and borrowers, and our employees, some of which is entrusted to third-party service providers and vendors. We also work with third-party service providers and vendors to provide technology, systems and services that we use in connection with the receipt, storage and transmission of this information. As a matter of course, we may store or process the personal data of employees and other persons as required to provide our services and such personal data or other data may be hosted or exchanged with our partners and other third-party providers. The secure maintenance of this information and technology is critical to our business operations.

As with all companies that utilize information systems, our information systems, and those of our third-party service providers and vendors, may be vulnerable to continually evolving cybersecurity risks. We employ industry standard administrative, technical and physical safeguards designed to protect the integrity and security of personal data we collect or process. We have implemented and regularly review and update processes and procedures designed to protect against unauthorized access to or use of secured data and to prevent data loss. Unauthorized parties may attempt to gain access to these systems or our information through fraud or deception of our associates, ransomware, malware, and other malicious software, third-party service providers or vendors. Hardware, software or applications we obtain from third parties may contain defects in design or manufacture or other problems that could unexpectedly compromise information security. The methods used to obtain unauthorized access, disable, misappropriate, manipulate, or degrade service or sabotage systems are also constantly changing and evolving and may be difficult to anticipate or detect for long periods of time. The ever-evolving threats mean we and our third-party service providers and vendors must continually evaluate and adapt our respective systems and processes, and there is no guarantee that these systems and processes will be adequate to safeguard against all data security breaches or misuses of data. Furthermore, because threat actors may leverage new and evolving technologies, including aritificalAI, intelligence, thatwhich may not be immediately recognized, the Companywe may experience security or data breaches that remain undetected for an extended time. Despite the security measures we have in place, and any additional measures we may implement in the future, our facilities and systems, and those of our third-party service providers and vendors, could be vulnerable to damage and service interruptions from a variety of sources including telecommunications or network failures, cyber-attackscyber attacks and security breaches and incidents (including data theft, computer viruses, ransomware and other malicious software), human error, fires, natural disasters, power losses, fraud, military or political conflicts, terrorist attacks and other geopolitical unrest.

Natural and man-made disasters, including terrorist attacks and acts of naturenature, such as hurricanes, tornados, earthquakes, flooding and wildfires, may cause damage to our properties or business disruption to our managers,tenants, tenantsmanagers and borrowers. These adverse weather and natural or man-made events could cause substantial damage or loss to our properties which could exceed applicable property insurance coverage. Such events could also have a material adverse impact on our tenants’, operators’managers’ and borrowers’ operations and ability to meet their obligations to us. In the event of a loss in excess of insured limits, we could lose our capital invested in the affected property, as well as anticipated future revenue from that property. Any such loss could materially and adversely affect our business and our financial condition and results of operations.

The management and governance of theour Companybusiness dependsdepend on the services of certain key personnel, including senior management. The departure of any key personnel could have an adverse effect on the Companyus and adversely affect our financial condition and results of operations. Our senior management team possesses substantial experience and expertise and has strong business relationships with our tenants and operators and other members of the business communities and industries in which we operate. As a result, the loss of these personnel could jeopardize our relationships and operations. We cannot predict the impact that any such departures could have on our ability to achieve our objectives. Furthermore, such a loss could be negatively perceived in the capital markets. Other than Mr. Mendelsohn, our Chief Executive Officer, we do not have employment agreements with any of our management team. In addition, we do not have key man insurance on any of our key employees. Our failure to retain and motivate our management team and other personnel and attract suitable replacements should any such personnel leave, could have a significant impact on our financial condition and results of operations.

As a REIT, a significant percentage of our assets is invested in real estate. We regularly evaluate our real estate investments and other assets for impairment indicators. The judgment regarding the existence of impairment indicators is based on factors such as market conditions, operator performance and legal structure. If we determine that a significant impairment has occurred, we would be required to make an adjustment to the net carrying value of the asset, which could have a material adverse effect on our reported results of operations in the period in which the impairment charge occurs. Such impairment charges may make it more difficult for us to meet the financial ratios in our indebtedness and may reduce the borrowing base, which may reduce the amounts of cash we would otherwise have available to pay expenses, make dividend distributions, service other indebtedness and operate our business. During the year ended December 31, 2025, we did not recognize any impairment charges.

As of December 31, 2024,2025, we had the potential to access $480.0 million through the issuance of common stock under our at-the-market (“ATM”) equity program. In addition, we maintain an effective automatic shelf registration statement through which capital could be raised via the issuance of equity securities. AsSimilar withto other publicly traded companies, the availability of equity capital will depend, in part, on the market price of our common stock which, in turn, will depend upon various market conditions and other factors, some of which we cannot control, that may change from time to time including:

The followinginformation set forth below is intended to provide readers with an understanding of our financial condition, changes in financial condition and results of operations. Our discussion and analysis isare primarily based primarily on theour consolidated financial statements of National Health Investors, Inc. for the periodsyears presented and should be read together with the notes thereto contained in this Annual Report. Other important factors are identified in “Item 1. Business” and “Item 1A. Risk Factors” above. This section of this Annual Report generally discusses 2024our andresults 2023of itemsoperations andfor year-to-yearthe comparisonsyear betweenended December 31, 2025 compared to the year ended December 31, 2024. For a discussion of our results of operations for the year ended December 31, 2024 andcompared 2023.to Discussionsthe ofyear 2022ended itemsDecember and31, year-to-year2023, comparisonsplease betweenrefer 2023 and 2022 that are not included in this Annual Report can be found into “Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’sour Annual Report on Form 10-K for the fiscal year ended December 31, 2023.2024, which we filed with the SEC on February 25, 2025.

Effective April 1, 2022, 15 senior housing ILFs were transferred from a triple-net lease to two separate ventures comprising our SHOP segment. These ventures, consolidated by the Company, are structured to comply with REIT requirements and utilize the TRS for activities that would otherwise be non-qualifying for REIT purposes. The properties are operated by two third-party property managers in exchange for a management fee,fee from us, and as such, we are not directly exposed to the credit risk of the property managers in the same manner or to the same extent as we are related to our triple-net tenants.tenant leases. However, we rely on the property managers’ personnel, expertise, technical resources and information systems, proprietary information, good faith and judgment to manage our communities efficiently and effectively. We also rely on the property managers to set appropriate resident fees and otherwiseto operate our communities in compliance with the terms of our management agreements and all applicable laws and regulations. As of December 31, 2024, our SHOP segment consisted of 15 ILFs located in eight states with a combined 1,732 units.

The following tables summarize ourinformation portfolio,related excludingto $2.6the millioninvestment forportfolios of our corporateReal officeEstate Investments and aSHOP credit loss reserve of $20.2 million,segments as of and for the year ended December 31, 20242025 ($ in thousands):

As of December 31, 2024,2025, our average effective annualized NOI for the leaseleased properties in our Real Estate Investments segment was $9,917 per bed for SNFs, $14,315$13,988 per unit for SLCs, $17,627$20,519 per unit for ALFs, $8,281$5,536 per unit for ILFs, $21,633$21,476 per unit for EFCs, $10,105 per bed for SNFs and $66,759$60,574 per bed for the HOSP. As of December 31, 2024,2025, ourthe average effective annualized NOI for theour SHOP segment was $7,506$9,709 per unit.

RentRecent ConcessionsTax Legislation

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

Unless the context otherwise requires, references throughout this document to “NHI” or the “Company” include National Health Investors, Inc.,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 MarchJune 31,30, 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.

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,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,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,to including, the following:

•We depend on the operating success of our tenants, managersborrowers and borrowers,managers, and if their financial condition or business prospects deteriorate, our business, financial condition and results of operations could be adversely affected;

•Our tenants, managersborrowers and borrowersmanagers may become subject to bankruptcy or insolvency proceedings;

•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, managersborrowers and borrowersmanagers;

•The cash flows of our tenants, managersborrowers and borrowersmanagers 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, managersborrowers and borrowersmanagers;

•We may not be fully indemnified by our tenants, managersborrowers and borrowersmanagers against future litigation;

•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,reputation and otherwise be disruptive to our business;

•We are subject to certain provisions of Maryland lawlaw, 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.

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,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, also referred to as senior housing propertiescommunities (“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.

Pursuant to the terms of the purchase and sale agreement, contemporaneouslyContemporaneously with the closing of the transaction,sale of the NHC leased portfolio, we will executeexecuted a partial master lease termination and partial assignment and assumption of the master lease agreement which will result in the termination ofterminating our master lease agreement with NHC with respect to all properties, except forfour the foursubleased properties located in Florida that are subject to a sublease agreement.Florida. We will assignassigned to the NHC Purchaser, and the NHC Purchaser will assumeassumed from us, the master lease for the four Floridasubleased properties. AsIn July 2026, we recognized a reversal of Marchdeferred 31,income 2026,of $0.5 million related to the aggregatelease nettermination carryingas amountpart of the NHCgain propertieson wasthe $13.8sale million.of these properties.

As of MarchJune 31,30, 2026, our SHOP segment investments included 3542 senior housing communitiesSHOs located in 1516 states and comprised of 1722 ILFs, 1113 SLCs and seven ALFs with a combined total of 3,4694,001 units. The aggregate gross carrying value of these properties was $742.5$854.8 million. We have structured the operations at these senior housing communitiesproperties to comply with the requirements of the REIT Investment Diversification and Empowerment Act of 2007 (“RIDEA”),. and weWe utilize our TRS for activities that would otherwise be non-qualifying for REIT purposes.

The properties in our SHOP segment are operated by third-party managers in exchange for a management fee from us, and as such, weWe 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 tenantleases leases.in the Real Estate Investments segment. However, we rely on the managers’ personnel, expertise, technology resources andresources, information systems, proprietary information, good faith and judgment in operating our communitiesSHOs efficientlyeffectively and effectively.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 ourthe management agreements and all applicable laws and regulations.

The following table provides a summary of the investment portfolios of our Real Estate Investments and SHOP segments by property type as of MarchJune 31,30, 2026 and for the threesix months ended MarchJune 31,30, 2026 ($ in thousands):

21 The total gross carrying amount, as presented in the table above,above excludes $2.6 million related to our corporate office buildings and equipment, $4.8 million related to one property in the Real Estate Investments segment that wasproperties classified as assets held for sale as of MarchJune 31,30, 20262026. Assets held for sale included 34 SNFs and $15.3three millionILFs. ofWe creditdo lossnot reserveshave relatedany toownership ourin the properties presented in the mortgage and other notes receivable.receivable section of this table.

2 TheAs totalof June 30, 2026, the aggregate gross carrying amount,amount as presented in the table above, excludes $2.6 million related toof our corporate office andbuildings equipment,was $4.8$3.0 million related to one property inand the Realaggregate Estategross Investmentscarrying segmentamount thatof wasproperties classified as assets held for sale andwas $161.5 million. We had $15.3 million of credit loss reserves related to our mortgage and other notes receivable.receivable as of June 30, 2026. Each of these amounts has been excluded from the table above.

As of MarchJune 31,30, 2026, our average effective annualized NOI for leased properties in our Real Estate Investments segment was $20,322$20,761 per unit for ALFs, $14,031$13,424 per unit for SLCs, $5,935 per unit for ILFs, $21,492$21,503 per unit for EFCs, $11,026$12,602 per bed for SNFs and $60,574 per bed for HOSPs. As of MarchJune 31,30, 2026, the average effective annualized NOI for our SHOP segment was $11,165$11,611 per unit.

During the threesix months ended MarchJune 31,30, 2026, we completed the following acquisitions of real estate properties ($ in thousands):

During the threesix months ended MarchJune 31,30, 2026, we completed the following dispositiondispositions of a real estate propertyproperties ($ in thousands):

SecondThird Quarter of 2026 Acquisitions and Dispositions