National Health Investors Inc. (NHI) 2021年年度報告「AMEX」.pdf

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1、UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON,D.C.20549FORM 10-K(Mark One)ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year endedDecember 31,2021TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934For

2、 the transition period from_to_Commission File Number 001-10822National Health Investors Inc(Exact name of registrant as specified in its charter)Maryland 62-1470956(State or other jurisdiction of incorporation or organization)(I.R.S.Employer Identification No.)222 Robert Rose Drive MurfreesboroTenn

3、essee37129(Address of principal executive offices)(Zip Code)(615)890-9100(Registrants telephone number,including area code)Securities registered pursuant to Section 12(b)of the Act:Title of each ClassTrading Symbol(s)Name of each exchange on which registeredCommon Stock,$0.01 par valueNHINew York St

4、ock ExchangeSecurities registered pursuant to Section 12(g)of the Act:NoneIndicate by check mark if the registrant is a well-known seasoned issuer,as defined in Rule 405 of the Securities Act.Yes No Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Se

5、ction 15(d)of the Act.Yes No Indicate by check mark whether the registrant(1)has filed all reports required to be filed by Section 13 or 15(d)of the Securities Exchange Act of 1934 during the preceding 12 months(or forsuch shorter period that the registrant was required to file such reports),and(2)h

6、as been subject to such filing requirements for the past 90 days.Yes No Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T(232.405 of this chapter)during the preceding 12 months(or for

7、 such shorter period that the registrant was required to submit such files)Yes No Indicate by check mark whether the registrant is a large accelerated filer,an accelerated filer,a non-accelerated filer,a smaller reporting company,or an emerging growth company.See thedefinitions of“large accelerated

8、filer”,“accelerated filer,”“smaller reporting company”and“emerging growth company”in Rule 12b-2 of the Exchange Act.Large Accelerated FilerAccelerated filerNon-accelerated filerSmaller reporting companyEmerging growth companyIf an emerging growth company,indicate by check mark if the registrant has

9、elected not to use the extended transition period for complying with any new or revised financial accounting standardsprovided pursuant to Section 13(a)of the Exchange Act.Indicate by check mark whether the registrant has filed a report on and attestation to its managements assessment of the effecti

10、veness of its internal control over financial reporting under Section404(b)of the Sarbanes-Oxley Act(15 U.S.C.7262(b)by the registered public accounting firm that prepared or issued its audit report.Indicate by check mark whether the registrant is a shell company(as defined in Rule 12b-2 of the Exch

11、ange Act).Yes No The aggregate market value of shares of common stock held by non-affiliates on June 30,2021(based on the closing price of these shares on the New York Stock Exchange)was approximately$2,937,844,000.There were 45,850,599 shares of the registrants common stock outstanding as of Februa

12、ry 14,2022.DOCUMENTS INCORPORATED BY REFERENCEPortions of the Registrants definitive proxy statement for its 2022 annual meeting of stockholders are incorporated by reference into Part III,Items 10,11,12,13,and 14 of this Form 10-K.1Table of ContentsPagePart I.Forward Looking Statements.3Item 1.Busi

13、ness.5Item 1A.Risk Factors.20Item 1B.Unresolved Staff Comments.30Item 2.Properties.31Item 3.Legal Proceedings.32Item 4.Mine Safety Disclosures.33Part II.Item 5.Market for Registrants Common Equity,Related Stockholder Matters and Issuer Purchases of Equity Securities.34Item 6.Reserved.36Item 7.Manage

14、ments Discussion and Analysis of Financial Condition and Results of Operations.37Item 7A.Quantitative and Qualitative Disclosures About Market Risk.62Item 8.Financial Statements and Supplementary Data.64Item 9.Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.99Ite

15、m 9A.Controls and Procedures.99Item 9B.Other Information.102 Item 9C.Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.102Part III.Item 10.Directors,Executive Officers and Corporate Governance.103Item 11.Executive Compensation.103Item 12.Security Ownership of Certain Beneficial Own

16、ers and Management and Related Stockholder Matters.103Item 13.Certain Relationships and Related Transactions,and Director Independence.103Item 14.Principal Accountant Fees and Services.103Part IV.Item 15.Exhibits and Financial Statement Schedules.103Exhibit Index.104Item 16.Summary107Signatures.1082

17、Table of ContentsPART I.Forward Looking StatementsReferences throughout this document to NHI or the Company include National Health Investors,Inc.,and its consolidated subsidiaries.In accordance with theSecurities and Exchange Commissions“Plain English”guidelines,this Annual Report on Form 10-K has

18、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.Unless the context indicatesotherwise,references herein to“the Company”include all of our consolidated subsidiarie

19、s.This Annual Report on Form 10-K and other materials we have filed or may file with the Securities and Exchange Commission,as well as information included inoral statements made,or to be made,by our senior management contain certain“forward-looking”statements as that term is defined by the Private

20、Securities LitigationReform Act of 1995.All statements regarding our expected future financial position,results of operations,cash flows,funds from operations,continued performanceimprovements,ability to service and refinance our debt obligations,ability to finance growth opportunities,and similar s

21、tatements including,without limitation,thosecontaining words such as“may”,“will”,“believes”,“anticipates”,“expects”,“intends”,“estimates”,“plans”,and other similar expressions are forward-lookingstatements.Forward-looking statements involve known and unknown risks and uncertainties that may cause ou

22、r actual results in future periods to differ materially from thoseprojected or contemplated in the forward-looking statements as a result of factors including,but not limited to,the following:*Actual or perceived risks associated with public health epidemics or outbreaks,such as the Coronavirus(“COV

23、ID-19”)pandemic,have had and are expectedto continue to have a material adverse effect on our business and results of operations;*We depend on the operating success of our tenants and borrowers for collection of our lease and note payments;*We are exposed to the risk that our tenants and borrowers m

24、ay become subject to bankruptcy or insolvency proceedings;*Certain tenants in our portfolio account for a significant percentage of the rent we expect to generate from our portfolio,and the failure of any of these tenantsto meet their obligations to us could materially and adversely affect our busin

25、ess,financial condition and results of operations and our ability to makedistributions to our stockholders;*We are exposed to risks related to governmental regulations and payors,principally Medicare and Medicaid,and the effect of changes to governmentregulation or reimbursement rates on our tenants

26、 and borrowers business;*We are exposed to the risk that the cash flows of our tenants and borrowers would be adversely affected by increased liability claims and liability insurancecosts;*We are exposed to the risk that we may not be fully indemnified by our lessees and borrowers against future lit

27、igation;*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 property development and construction activities,which may fail to achieve the operating results we expect;*We are expo

28、sed to the risk that the illiquidity of real estate investments could impede our ability to respond to adverse changes in the performance of ourproperties;*We are exposed to risks associated with our investments in unconsolidated entities,including our lack of sole decision-making authority and our

29、reliance onthe financial condition of other interests;*We are subject to additional risks related to healthcare operations associated with our investments in unconsolidated entities,which could have a materialadverse effect on our results of operations;3Table of Contents*We are subject to risks asso

30、ciated with our joint venture investment with Life Care Services for Timber Ridge,an Entrance Fee CCRC,associated with Type Abenefits offered to the residents of the joint ventures Entrance Fee community and related accounting requirements;*We may be exposed to operational risks with respect to our

31、proposed senior housing operating portfolio(“SHOP”)structured communities;*If our efforts to maintain the privacy and security of Company information are not successful,we could incur substantial costs and reputational damage,andcould become subject to litigation and enforcement actions;*We are expo

32、sed to risks related to environmental laws and the costs associated with liabilities related to hazardous substances;*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;*

33、Competition for acquisitions may result in increased prices for properties;*We are exposed to the risk that our assets may be subject to impairment charges;*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 cov

34、enants related to our indebtedness which impose certain operational limitations and a breach of those covenants could materially adversely affectour financial condition and results of operations;*Downgrades in our credit ratings could have a material adverse effect on our cost and availability of ca

35、pital;*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 bearsinterest at variable rates;*We are subject to risks related to changes in the method of determining LIBOR,or the replacement of LIBOR with

36、an alternative reference rate,which mayadversely affect interest rates on our current or future indebtedness and may otherwise adversely affect our financial condition and result of operations;*We depend on the ability to continue to qualify for taxation as a real estate investment trust for U.S.fed

37、eral income tax purposes(a“REIT”);*Complying with REIT requirements may cause us to forego otherwise attractive acquisition opportunities or liquidate otherwise attractive investments,whichcould materially hinder our performance;*Our ownership of and relationship with any taxable REIT subsidiaries(“

38、TRSs”)that we have formed or will form will be limited and a failure to comply withthe limits would jeopardize our REIT status and may result in the application of a 100%excise tax;*Legislative,regulatory,or administrative changes could adversely affect us or our security holders;*We have ownership

39、limits in our charter with respect to our common stock and other classes of capital stock which may delay,defer or prevent a transaction ora change of control that might involve a premium price for our common stock or might otherwise be in the best interests of our stockholders;and*We are subject to

40、 certain provisions of Maryland law and our charter and bylaws that could hinder,delay or prevent a change in control transaction,even if thetransaction involves a premium price for our common stock or our stockholders believe such transaction to be otherwise in their best interests.See the notes to

41、 the annual audited consolidated financial statements,and“Business”and“Risk Factors”under Item 1 and Item 1A herein for a further discussion ofthese and of other factors that could cause our future results to differ materially from any forward-looking statements.You should carefully consider these r

42、isks beforemaking any investment decisions in the4Table of ContentsCompany.These risks and uncertainties are not the only ones facing the Company.There may be additional risks that we do not presently know of or that we currentlydeem immaterial.If any of the risks actually occur,our business,financi

43、al condition,results of operations,or cash flows could be materially and adversely affected.Inthat case,the trading price of our common stock could decline and you may lose part or all of your investment.We expressly disclaim any responsibility to update ourforward-looking statements,whether as a re

44、sult of new information,future events,or otherwise,except as required by law.Given these risks and uncertainties,we cangive no assurance that these forward-looking statements will,in fact,occur and,therefore,caution investors not to place undue reliance on them.ITEM 1.BUSINESSGeneralNational Health

45、Investors,Inc.,established in 1991 as a Maryland corporation,is a self-managed REIT specializing in sale-leaseback,joint venture,mortgage andmezzanine financing of need-driven and discretionary senior housing and medical facility investments.Our portfolio consists of real estate investments in indep

46、endentliving facilities,assisted living facilities,entrance-fee communities,senior living campuses,skilled nursing facilities and a specialty hospital.We fund our real estateinvestments primarily through:(1)operating cash flow,(2)debt offerings,including bank lines of credit and term debt,both unsec

47、ured and secured,and(3)the sale ofequity securities.At December 31,2021,we had investments in real estate and mortgage and other notes receivable involving 212 facilities located in 33 states.These investmentsinvolve 136 senior housing properties,75 skilled nursing facilities,and one hospital,exclud

48、ing ten properties classified as assets held for sale.These investmentsconsisted of properties with an original cost of approximately$2.9 billion,rented under primarily triple-net leases to 31 lessees,and$305.2 million aggregate carryingvalue of mortgage and other notes receivable,excluding an allow

49、ance for expected credit losses of$5.2 million,due from ten borrowers.Our investments in real estate and mortgage loans are secured by real estate located within the United States.We are managed as one reporting unit,rather thanmultiple reporting units,for internal reporting purposes and for interna

50、l decision making.Therefore,we have concluded that we operate as a single segment.Information about revenues from our tenants and borrowers,our net income,cash flows and balance sheet can be found in Item 8 of this Form 10-K.COVID-19 PandemicSee Item 7.Managements Discussion and Analysis of Financia

51、l Condition and Results of Operations-COVID-19 Pandemic.Sources of RevenuesOur revenues are derived primarily from rental income and mortgage and other notes receivable interest income.During 2021,rental income was$271.0 million(90.7%)and interest income from mortgages and other notes receivable was

52、$27.7 million(9.3%)of total revenue of$298.7 million,a decrease of 10.2%from 2020.Our revenues depend on the operating success of our tenants and borrowers whose source and amount of revenues are determined by(i)the licensed beds or othercapacity of the facility,(ii)their occupancy rate,(iii)the ext

53、ent to which the services provided at each facility are utilized by the residents and patients,(iv)the mix ofprivate pay,Medicare and Medicaid patients,and(v)the rates paid by private payors and by the Medicare and Medicaid programs.Classification of Properties in our PortfolioWe classify all of the

54、 properties in our portfolio as either senior housing or medical properties.Because our leases represent different underlying revenue sourcesand result in differing risk profiles,we further classify our senior housing communities as either need-driven(assisted living facilities and senior living cam

55、puses)ordiscretionary(independent living facilities and entrance-fee communities).Senior HousingAs of December 31,2021,our portfolio included 125 senior housing properties(“SHO”)leased to operators and mortgage loans secured by 11 SHOs.The SHOs inour portfolio are either need-driven or discretionary

56、 for end users and consist of independent living facilities,assisted living facilities,senior living campuses,andentrance-fee communities,which are more fully described below.5Table of ContentsNeed-Driven Senior HousingAssisted Living Facilities.As of December 31,2021,our portfolio included 81 assis

57、ted living facilities(“ALF”)leased to operators and mortgage loanssecured by nine ALFs.ALFs are free-standing facilities that provide basic room and board functions for elderly residents.As residents typically receiveassistance with activities of daily living such as bathing,grooming,administering m

58、edication and memory care services,we consider these facilities to be need-driven senior housing.On-site staff personnel are available to assist in minor medical needs on an as-needed basis.Operators of ALFs are typically paid fromprivate sources without assistance from government.ALFs may be licens

59、ed and regulated in some states,but generally do not require the issuance of aCertificate of Need(“CON”)as required for skilled nursing facilities(“SNF”).Senior Living Campuses.As of December 31,2021,our portfolio included 11 senior living campuses(“SLC”)leased to operators.SLCs contain one or moreb

60、uildings that include skilled nursing beds combined with an independent or assisted living facility that provides basic room and board functions for elderlyresidents.They may also provide assistance to residents with activities of daily living such as bathing,grooming and administering medication.On

61、-site staffpersonnel are available to assist in minor medical needs on an as-needed basis.As the decision to transition to a senior living campus is typically more than alifestyle choice and is usually driven by the need to receive some moderate level of care,we consider this facility type to be nee

62、d-driven.Operators of SLCs aretypically paid from private sources and from government programs such as Medicare and Medicaid for skilled nursing residents.Discretionary Senior HousingIndependent Living Facilities.As of December 31,2021,our portfolio included 22 independent living facilities(“ILF”)le

63、ased to operators.ILFs offerspecially designed residential units for active senior adults and provide various ancillary services for their residents including restaurants,activity rooms andsocial areas.Services provided by ILF operators are generally paid from private sources without assistance from

64、 government payors.ILFs are generally,butnot always,unlicensed facilities and do not require the issuance of a CON as required for SNFs.As ILFs typically do not provide assistance with activities ofdaily living,we consider the decision to transition to an ILF to be discretionary.Entrance-Fee Communi

65、ties.As of December 31,2021,our portfolio included 11 entrance-fee communities(“EFC”)leased to operators and mortgage loanssecured by two EFCs.Entrance-fee communities,frequently referred to as continuing care retirement communities(“CCRC”),typically include a combinationof detached cottages,an ILF,

66、an ALF and a SNF on one campus.These communities appeal to residents because there is no need to relocate when health andmedical needs change.EFCs are classified as either Type A,B,or C depending upon the amount of healthcare benefits included in the entrance fee.“Type A”EFCs,or“Lifecare”communities

67、,such as the Sagewood community,which secures one of our mortgage loans,and Timber Ridge,held by us since January 31,2020 in a joint venture,include substantially all future healthcare costs in the payment of an entrance fee and thereafter payment of a set service fee paidmonthly.The Entrance Fee is

68、 divided into a refundable and non-refundable portion depending upon the residents chosen contract program.The service fee isdetermined at the time of move-in into an independent living(“IL”)unit and is subject to certain inflation-based adjustments regardless of the residents futurecare needs.A res

69、ident must move into an IL unit initially and not require care at the time of move-in.Thereafter the residents care requirements from assistedliving to memory care to skilled nursing are provided for.Communities providing a modified healthcare contract offering access to skilled nursing care butonly

70、 paying for a maximum number of days are referred to as“Type B”EFCs.Finally,“Type C”EFCs,the type which is indicative of ten communities in ourlease portfolio and one community securing a mortgage loan,are fee-for-service communities which do not provide any healthcare benefits andcorrespondingly ha

71、ve the lowest entrance fees.However,monthly fees may be higher to reflect the current healthcare components delivered to each resident.EFC licensure is state-specific,but generally skilled nursing beds included in our EFC portfolio are subject to state licensure and regulation.As the decision totran

72、sition to an EFC is typically made as a lifestyle choice and not as the result of a pressing medical concern,we consider the decision to transition to an EFCto be discretionary.Accordingly,the predominant source of revenue for operators of EFCs is from private payor sources.MedicalAs of December 31,

73、2021,our portfolio included 73 medical facilities leased to operators and mortgage loans secured by three medical facilities.The medicalfacilities within our portfolio consist of SNFs and a specialty hospital,which are more fully described below.6Table of ContentsSkilled Nursing Facilities.As of Dec

74、ember 31,2021,our portfolio included 72 SNFs leased to operators and mortgage loans secured by three SNFs.SNFsprovide some combination of skilled and intermediate nursing and rehabilitative care,including speech,physical and occupational therapy.As the decision toutilize the services of a SNF is typ

75、ically made as the result of a pressing medical concern,we consider this to be a need-driven medical facility.The operatorsof the SNFs receive payment from a combination of private pay sources and government payors such as Medicaid and Medicare.SNFs are required to obtainstate licenses and are highl

76、y regulated at the federal,state and local level.Operators in 11 of the 13 states in which we own SNFs must obtain a CON from thestate before opening or expanding such facilities.Some SNFs also include assisted living beds.Hospitals.As of December 31,2021,our portfolio included one hospital(“HOSP”)l

77、eased to an operator.Hospitals provide a wide range of inpatient andoutpatient services,including acute psychiatric,behavioral and rehabilitation services,and are subject to extensive federal,state and local legislation andregulation.Hospitals undergo periodic inspections regarding standards of medi

78、cal care,equipment and hygiene as a condition of licensure.Services providedby hospitals are generally paid for by a combination of private pay sources and government payors.As the decision to utilize the services of a hospital istypically made as the result of a pressing medical concern,we consider

79、 this to be a need-driven medical facility.Medical Office Building.As of December 31,2021,our portfolio included no medical office buildings(“MOB”).Historically,our investment strategy hasincluded owning and leasing MOBs whose tenants are primarily physicians and other medical practitioners.As the d

80、ecision to utilize the services of an MOB istypically made as the result of a pressing medical concern,we consider this to be a need-driven medical facility.The MOB differs from conventional officebuildings due to the special requirements of the tenants.Nature of InvestmentsOur investments are typic

81、ally structured as acquisitions of properties through purchase-leaseback transactions,acquisitions of properties from other real estateinvestors,loans or operations through structures allowed by the REIT Investment Diversification Empowerment Act of 2007 (“RIDEA”).We have providedconstruction loans

82、for certain facilities for which we were already committed to provide long-term financing or for which the operator agreed to enter into a purchaseoption and lease with us upon completion of construction or after the facility is stabilized.The annual interest rates on our mortgage,construction and m

83、ezzanine loansranged between 6.5%and 9.5%during 2021.We believe our lease and loan terms are competitive within our peer group.Typical characteristics of these transactionsare as follows:Leases.Our leases generally have an initial leasehold term of 10 to 15 years with one or more five-year tenant re

84、newal options.The leases are“triple net leases”under which the tenant is responsible for the payment of all taxes,utilities,insurance premiums,repairs and other charges relating to the operation of the properties,including required levels of capital expenditures each year.The tenant is obligated at

85、its expense to keep all improvements,fixtures and other components of theproperties covered by“all risk”insurance in an amount equal to at least the full replacement cost thereof,and to maintain specified minimum personal injury andproperty damage insurance,protecting us as well as the tenant.The le

86、ases also require the tenant to indemnify and hold us harmless from all claims resulting from theuse,occupancy and related activities of each property by the tenant,and to indemnify us against all costs related to any release,discovery,clean-up and removal ofhazardous substances or materials,or othe

87、r environmental responsibility with respect to each facility.Most of our existing leases contain annual escalators in rent payments.For financial statement purposes,rental income is recognized on a straight-line basis over theterm of the lease where the lease contains fixed escalators.Certain of our

88、 operators hold purchase options allowing them to acquire properties they currently lease fromNHI.When present,tenant purchase options generally give the lessee an option to purchase the underlying property for consideration determined by(i)a sliding basedependent upon the extent of appreciation in

89、the property plus a specified proportion of any appreciation;(ii)our acquisition costs plus a specified proportion of anyappreciation;or(iii)our acquisition costs plus a profit floor plus a specified proportion of any appreciation.Where stipulated above,appreciation may be established byindependent

90、appraisal.Some of the obligations under the leases are guaranteed by the parent corporation of the lessee,if any,or affiliates or individual principals of the lessee.In someleases,a third-party manager will also guarantee some portion of the lease obligations.Some obligations are backed further by o

91、ther collateral such as securitydeposits,trade receivables,equipment,furnishings and other personal property.We monitor our triple-net lessee credit quality and identify any material changes by performing the following activities:7Table of ContentsObtaining financial statements on a monthly,quarterl

92、y and annual basis to assess the operational trends of our tenants and the financial position and capabilityof those tenantsCalculating the operating cash flow for each of our tenantsCalculating the lease service coverage ratio and other ratios pertinent to our tenantsObtaining property-level occupa

93、ncy rates for our tenantsVerifying the payment of real estate taxes by our tenantsObtaining certificates of insurance for each tenantObtaining reviewed or audited financial statements of our lessee corporate guarantors on an annual basis,if applicableConducting a periodic inspection of our propertie

94、s to ascertain proper maintenance,repair and upkeepMonitoring those tenants with indications of continuing and material deteriorating credit quality through discussions with our executive management andBoard of DirectorsMortgage loans.We have mortgage loans with original maturities generally greater

95、 than five years,with varying amortization schedules from interest-only to fully-amortizing.Most of the loans are at a fixed interest rate;however,some interest rates increase based on a fixed schedule.In most cases,the owner of the facility iscommitted to make minimum annual capital expenditures fo

96、r the purpose of maintaining or upgrading their respective facility.Additionally,most of our loans arecollateralized by first or second mortgage liens and corporate or personal guarantees.As of December 31,2021,we have seven mortgage loans bearing interest rangingfrom 7%to 8.25%.Mezzanine loans.Freq

97、uently in situations calling for temporary financing or when our borrowers in-place lending arrangements prohibit the extension of mortgagesecurity,we typically extend credit based on corporate and/or personal guarantees.These mezzanine loans sometimes combine with an NHI purchase option coveringthe

98、 subject property.As of December 31,2021,we have six mezzanine loans with interest rates that range from approximately 6.5%to 9.5%.Construction loans.From time to time,we also provide construction loans that become mortgage loans upon the completion of the construction of the subjectfacility.We may

99、also obtain a purchase option to acquire the facility at a future date and lease the facility back to the operator.During the term of the construction loan,funds are usually advanced pursuant to draw requests made by the borrower in accordance with the terms and conditions of the loan.Interest is ty

100、pically assessed onthese loans at rates equivalent to the eventual mortgage rate upon conversion.In addition to the security of the lien against the property,we will generally requireadditional security and collateral in the form of either payment and performance completion bonds or completion guara

101、ntees by the borrowers parent,affiliates of theborrower or one or more of the individuals who control the borrower.As of December 31,2021,we have eight construction loans bearing interest ranging from 7.25%to 9%.Other notes receivable.We have provided a revolving line of credit to a borrower involve

102、d in the senior housing industry who has provided personal and businessguarantees as security that bears interest at a variable rate.As of December 31,2021,this rate was 7.52%.RIDEA Transactions.Our arrangement with an affiliate of Life Care Services,which we completed in January 2020,is structured

103、to be compliant with theprovisions of RIDEA,which permits NHI to receive rent payments through a triple-net lease between a property company owned by NHI and an operating companyowned by a TRS of NHI and gives NHI the opportunity to capture additional value on the improving performance of the operat

104、ing company through distributions to aTaxable REIT Subsidiary(“TRS”).Accordingly,the TRS holds our 25%equity interest in an unconsolidated operating company,and provides an organizationalstructure that allows the TRS to engage in a broad range of activities and share in revenues that would otherwise

105、 be non-qualifying income under the REIT grossincome tests.The TRS is subject to state and federal income taxes.Proposed Senior Housing Operating Portfolio(“SHOP”)Structure.The Company is in the process of transferring 15 ILFs previously part of the HolidayRetirement(“Holiday”)portfolio into two sep

106、arate joint ventures.These transactions are expected to be completed in the first half of 2022.If these transactions arecompleted,these properties will be operated by two third-party property managers.However,NHI will own the operations of the ILFs and could be required toconsolidate all resident re

107、venues,facility operating expenses,assets and liabilities of the independent living operations.If implemented,the SHOP structure will be anew line of business for NHI.These joint ventures will be structured to comply with REIT requirements and will be structured to utilize the TRS for activities tha

108、twould otherwise be non-qualifying for REIT purposes.The SHOP structure will give us direct exposure to the risks and benefits of the operations of the communities.The third-party property managers will manage our communities in exchange for the receipt of a management fee,and as such,we will not be

109、 directly exposed to thecredit risk of the property managers in the same manner or to the same extent as we are to our triple-net tenants.However,we will rely on the property managerspersonnel,expertise,technical resources and information systems,proprietary information,good faith and judgment to ma

110、nage our communities efficiently andeffectively.We will also rely on8Table of Contentsthe property managers to set appropriate resident fees and otherwise operate our communities in compliance with the terms of our management agreements and allapplicable laws and regulations.Operator CompositionFor

111、the year ended December 31,2021,approximately 24%of our portfolio revenue was from publicly owned operators,59%was from regional operators,14%was from privately owned national chains and 3%was from smaller operators.Tenants which individually provided more than 3%and collectively 72%of our totalreve

112、nues were (in alphabetical order):Bickford Senior Living (“Bickford”);Chancellor Health Care;Discovery Senior Living (“Discovery”);Health ServicesManagement;Holiday;Life Care Services;National HealthCare Corporation(“NHC”);Senior Living Communities(“Senior Living”);Senior Living Management;andThe En

113、sign Group.We make reference to the parent company whenever we describe our business with these tenants,their subsidiaries and/or affiliates regardless ofthe specific subsidiary entity indicated on the lease or loan documents.Tenant ConcentrationThe following table contains information regarding ten

114、ant concentration in our portfolio,including properties classified as held for sale,$2.6 million for ourcorporate office and a credit loss reserve balance of$5.2 million,based on the percentage of revenues for the years ended December 31,2021,2020 and 2019 related totenants or affiliates of tenants,

115、that exceed 10%of total revenue($in thousands):As of December 31,2021RevenuesAssetRealNotesFor the Year Ended December 31,ClassEstateReceivable202120202019Senior LivingEFC$573,631$42,266$50,726 17%$50,734 15%$48,450 15%NHCSNF171,188 37,735 12%37,820 11%38,131 12%BickfordALF490,308 40,599 34,599 12%4

116、9,451 15%56,210 17%HolidayILF377,735 N/AN/A40,705 12%40,459 13%All others,netVarious1,414,475 222,297 164,017 55%144,448 44%129,033 41%Escrow funds received from tenants for property operating expensesVarious 11,638 4%9,653 3%5,798 2%$3,027,337$305,162$298,715$332,811$318,081 Includes interest incom

117、e on notes receivable Amounts reflect gross investment and include four Bickford properties held for sale and one Holiday property held for sale.Below 10%for year ended December 31,2021,as such revenues are included in All others,netAt December 31,2021,the two states in which we had an investment co

118、ncentration of 10%or more were South Carolina(11.6%)and Texas(10.3%).AtDecember 31,2020,the two states in which we had an investment concentration of 10%or more were South Carolina(10.9%)and Texas(10.5%).Senior Living-As of December 31,2021,we leased ten retirement communities totaling 2,068 units t

119、o Senior Living.The 15-year master lease,which began inDecember 2014,contains two five-year renewal options and provides for an annual escalator of 3%.Straight-line rent of$2.5 million,$4.3 million and$4.9 million andinterest revenue of$3.2 million,$3.0 million and$3.0 million were recognized from S

120、enior Living for the years ended December 31,2021,2020 and 2019,respectively.We provided a$20.0 million revolving line of credit whose borrowings are to be used primarily to finance construction projects within the Senior Living portfolio,including building additional units.No more than$10.0 million

121、 may be used to meet general working capital needs.Beginning January 1,2023,availability under therevolver reduces to$15.0 million.The revolver matures in December 2029 at the time of lease maturity.At December 31,2021,the$9.6 million outstanding under thefacility bears interest at 7.52%per annum,th

122、e prevailing 10-year U.S.Treasury rate plus 6%.In June 2019,we provided a mortgage loan of$32.7 million to Senior Living for the acquisition of a 248-unit continuing care retirement community in Columbia,South Carolina.The financing is for a term of five years with two one-year extensions1231239Tabl

123、e of Contentsand carries an interest rate of 7.25%.Additionally,the loan conveys to NHI a purchase option at a stated minimum price of$38.2 million,subject to adjustment formarket conditions.In July 2020,Senior Living repaid two fully drawn mezzanine loans of$12.0 million and$2.0 million,respectivel

124、y.The purpose of the mezzanine loans were topartially fund construction of a 186-unit senior living campus on Daniel Island in South Carolina,which opened in April 2018.The loans bore interest,payablemonthly,at a 10%annual rate.NHC-The facilities leased to NHC,a publicly held company,are under two m

125、aster leases and consist of three independent living facilities and 39 skilled nursingfacilities(four of which are subleased to other parties for whom the lease payments are guaranteed to us by NHC).These facilities are leased to NHC under the termsof an amended master lease agreement originally dat

126、ed October 17,1991(“the 1991 lease”),which includes our 35 legacy properties and a master lease agreementdated August 30,2013(“the 2013 lease”),which includes seven skilled nursing facilities acquired in 2013.The 1991 lease expiration is December 31,2026.There are two additional five-year renewal op

127、tions,each at fair rental value as negotiated between the parties anddetermined without including the value attributable to any improvements to the leased property voluntarily made by NHC at its expense.Under the terms of the 1991lease,the base annual rental is$30.8 million and rent escalates by 4%o

128、f the increase,if any,in each facilitys revenue over a 2007 base year.The 2013 lease providesfor a base annual rental of$3.5 million and has a lease expiration of August 2028.Under the terms of the 2013 lease,rent escalates 4.0%of the increase,if any,in eachfacilitys revenue over the 2014 base year.

129、For both the 1991 lease and the 2013 lease,we refer to this additional rent component as“percentage rent.”During the lastthree years of the 2013 lease,NHC will have the option to purchase the facilities for$49.0 million.Total percentage rent of$3.5 million,$3.7 million,and$4.0 millionwas recognized

130、for the years ended December 31,2021,2020 and 2019,respectively.Two of our board members,including our chairman,are also members of NHCs board of directors.As of December 31,2021,NHC owned 1,630,642 shares of ourcommon stock.Bickford-As of December 31,2021,we leased 38 facilities,excluding four faci

131、lities classified as assets held for sale,under four master leases to Bickford SeniorLiving.Lease maturity dates range from 2023 through 2033.Straight-line rent of$1.7 million,$2.8 million and$4.5 million and interest revenue of$4.2 million,$2.8million and$3.5 million were recognized from Bickford f

132、or the years ended December 31,2021,2020 and 2019,respectively.As discussed in“Item 7.ManagementsDiscussion and Analysis of Financial Condition and Results of Operations-COVID-19 Pandemic,”we granted an aggregate amount of$18.3 million and$5.9 millionin lease concessions to Bickford in 2021 and 2020

133、,respectively,as a result of the COVID-19 pandemic.During the second quarter of 2021,we sold to affiliates of Bickford a portfolio of six properties that were being leased to Bickford for a purchase price of$52.9million.We received approximately$39.9 million in cash consideration upon sale and origi

134、nated a second mortgage note receivable for the remaining purchase price of$13.0 million.A gain was not recognized related to the$13.0 million second mortgage note receivable,which is discussed in more detail in Note 4 to the consolidatedfinancial statements.We recorded a gain upon completion of thi

135、s transaction totaling approximately$3.6 million representing the excess of the$39.9 million cashconsideration received over the net book value of the assets sold of$34.5 million and the write off of straight-line rents receivable of approximately$1.9 million.Rental income from this portfolio was$1.

136、6 million,$5.6 million$5.8 million for the years ended December 31,2021,2020 and 2019,respectively.Bickford Construction LoansAs of December 31,2021,we had commitments of$42.9 million in three construction loans to Bickford.At December 31,2021,we had funded$36.7 milliontoward these commitments.The c

137、onstruction loans are secured by first mortgage liens on substantially all real and personal property as well as a pledge of any and allleases or agreements which may grant a right of use to the property.Usual and customary covenants extend to the agreements,including the borrowers obligation forpay

138、ment of insurance and taxes.NHI has a fair market value purchase option on the properties at stabilization of the underlying operations.On these developmentprojects,Bickford,as borrower,is entitled to up to$2.0 million per project in incentives based on the achievement of predetermined operational m

139、ilestones and,iffunded,will increase NHIs future purchase price and eventual NHI lease payment.We also have a term note of$4.0 million to Bickford.The note,due February 2025,bears interest at 7%,began amortizing on a twenty-five-year basis in January2021.See Note 3.Real Estate Properties and Investm

140、ents,2020 Asset Dispositions,to our consolidated financial statements for more information.10Table of ContentsHoliday-As of December 31,2021,we leased 16 ILFs,excluding one property classified as assets held for sale,to Holiday.The master lease,which matures in2035,provides for annual lease escalato

141、rs beginning November 1,2020,with a floor of 2%and a ceiling of 3%.Straight-line rent of$5.3 million,$6.5 million,and$6.6 million was recognized from the Holiday lease for the years ended December 31,2021,2020 and 2019,respectively.Our tenant operates the facilities pursuant toa management agreement

142、 with Atria Senior Living.During 2021,we sold nine properties in two separate transactions that were leased to Holiday with an aggregate net book value of$124.0 million for total cashconsideration of$120.8 million,and incurred transaction costs of$1.0 million.We recognized a gain of approximately$1.

143、9 million associated with the sale of aportfolio of eight properties and an impairment of approximately$4.6 million associated with the sale of one property.Rental income from these properties was$6.3million for the year ended December 31,2021 and$10.6 million for both the years ended December 31,20

144、20 and 2019,respectively.On July 30,2021,Welltower completed the acquisition of a portfolio of legacy Holiday properties from Fortress Investment Group and a new agreement with AtriaSenior Living to assume operations of the Holiday portfolio.These transactions resulted in a Welltower-controlled subs

145、idiary becoming the tenant under our existingmaster lease for the NHI-owned Holiday real estate assets.We have received no rent due under the master lease for these facilities since this change in tenantownership occurred.Accordingly,we have placed the tenant on cash basis and filed suit against Wel

146、ltower,Inc.and certain subsidiaries for default under the masterlease.Rent due but uncollected and unrecognized for the year ended December 31,2021,excluding penalties and interest,totaled$11.4 million.At December 31,2021,we have a lease deposit of$8.8 million.Refer to Note 8.Commitments and Conting

147、encies in the consolidated financial statements for more detail.We continueto explore all remedies available to us under the master lease and related agreements to execute a timely termination of the master lease and transition of the facilities tonew operators or managers that will generate cash fl

148、ows to the Company from our investments in these properties.Commitments and ContingenciesIn the normal course of business,we enter into a variety of commitments,typically consisting of funding of revolving credit arrangements,construction andmezzanine loans to our operators to conduct expansions and

149、 acquisitions for their own account,and commitments for the funding of construction for expansion orrenovation to our existing properties under lease.In our leasing operations,we offer to our tenants and to sellers of newly acquired properties a variety of inducementswhich originate contractually as

150、 contingencies but which may become commitments upon the satisfaction of the contingent event.Contingent payments earned will beincluded in the respective lease bases when funded.As of December 31,2021,we had working capital and construction loan commitments to seven operators for$274.7 million,of w

151、hich we had funded$199.4million toward these commitments.As of December 31,2021,$37.6 million of the funding obligation is payable within 12 months with the remaining commitment duebetween three to five years.As of December 31,2021,we had$31.3 million of development commitments for construction and

152、renovation for ten properties of which we had funded$23.5million toward these commitments,with the remaining amount payable within 12 months.In addition to these commitments,one of our consolidated noncontrollinginterest real estate partnerships,discussed more fully in Note 2 to the consolidated fin

153、ancial statements,has committed to funding up to$2.0 million for the purchase ofcondominium units located at one of the facilities of which$1.0 million had been funded.As of December 31,2021,we had$33.9 million of contingent lease inducement commitments in seven lease agreements which are generally

154、based on theperformance of facility operations and may or may not be met by the tenant.At December 31,2021,we had funded$1.5 million toward these commitments.In addition,as described in“Item 1A.Risk Factors”,Coronavirus(COVID-19)has had and is expected to continue to have a material adverse effect o

155、n our businessand results of operations.Competition and Market ConditionsWe compete primarily with other REITs,private equity funds,banks and insurance companies in the acquisition,leasing and financing of health care real estate.Operators of our facilities compete on a local and regional basis with

156、 operators of facilities that provide comparable services.Operators compete for residentsand/or patients and staff based on quality of care,reputation,location and physical appearance of facilities,services offered,family preference,physicians,staff andprice.Competition is with other operators as we

157、ll as companies managing multiple facilities,some of which are substantially larger and have greater resources than the11Table of Contentsoperators of our facilities.Some of these facilities are operated for profit,while others are owned by governmental agencies or tax exempt not-for-profit entities

158、.Our senior housing properties generally rely on private-pay residents who may be negatively impacted in an economic downturn.In addition,the success of theseproperties is often impacted by the existence of comparable,competing facilities in a local market.Environmental MattersWe believe that integr

159、ating environmental and sustainability initiatives into our strategic business objectives will contribute to our long-term success and to thesuccess of our tenants by enhancing the quality of life of the residents of the facilities.Listed below are some of the highlights of our efforts to promote en

160、vironmentalsustainability at our properties and with our tenants.We provide our triple net lease operators capital improvement allowances for the redevelopment,expansions and renovations at our properties which mayinclude energy efficient improvements like LED lighting and low emission carpeting,rec

161、ycled materials and solar power;We provide our development partners with capital to build new state-of-the-art properties with energy efficient components and design features;We obtain Phase I environmental and Phase 2 reports if warranted as part of our due diligence procedures when acquiring prope

162、rties and attempt to avoidbuying real estate with known environmental contamination;Strive for efficiency and sustainability in our corporate headquarters,participate in a recycling program,and encourage our employees to reduce,reuse andrecycle waste.Our document retention practices strive to reduce

163、 paper usage and encourage electronic file sharing;andWe purchase carbon offsets to balance against the emissions that we produce in our low rise,stand alone corporate headquarters.We are also subject to environmental risks and regulations in our business.See“Government Regulation Environmental Regu

164、lation”below;“Item 1A.RiskFactors We are exposed to risks related to environmental laws and the costs associated with liabilities related to hazardous substances”and“We are subject torisks of damage from catastrophic weather and other natural or man-made disasters and the physical effects of climate

165、 change”for a description of the risks andregulations associated with environmental matters.Human CapitalWe employ individuals who possess a broad range of experiences,background and skills,and we believe that to continue to deliver long-term value to ourstockholders,we must provide and maintain a w

166、ork environment that attracts,develops,and retains top talent and affords our employees an engaging work experiencethat allows for career development and opportunities.Along with a competitive compensation program including incentive bonuses and a stock option plan,NHIprovides a 401(k)plan with a sa

167、fe harbor contribution,paid employee health insurance coverage and tuition reimbursement.As of December 31,2021,we had 19 full-time employees and one part-time employee,with no change in number from December 31,2020.Of those employees,18are located in the Murfreesboro,Tennessee office,one is located

168、 in Colorado,and one in Texas.The tenure of our current employees includes five who have been withthe Company for over five years,and six who have been with the Company over ten years.Two of our employees have been with the Company over 20 years.We haveno employees subject to a collective bargaining

169、 agreement.We empower our employees and reinforce our corporate culture through onboarding,annual diversity,anti-discrimination and security awareness training,and social and team-building events.Additionally,the Company conducts annual leadership training for seniormanagement and coaching for its e

170、merging leaders.We actively support charitable organizations within our community that promote health education and social well-being,and we encourage our employees to personally volunteer with organizations that are meaningful to them.We consider our employee relations to be good.In response to the

171、 COVID-19 pandemic,we initiated a number of safety protocols to ensure employee safety,including encouraging employees to work from home,enhanced cleaning and disinfecting procedures and implementing clear protocols and procedures for monitoring and reporting close contact and illness.Certain essent

172、ial services such as internal audit,tax compliance,information technology and legal services are outsourced to third-party professional firms.12Table of ContentsGovernment RegulationOverview.Our tenants and borrowers that operate SNFs,nursing homes,hospitals,SLCs,ALFs and EFCs are typically subject

173、to extensive and complex federal,state and local healthcare laws and regulations,including those relating to Medicare and Medicaid reimbursement,fraud and abuse,licensure and certification,privacyand security of health information and other personal data,CON,appropriateness and classification of car

174、e,and the operation of healthcare facilities.In addition,manyof our tenants and borrowers that operate ILFs may be subject to state licensing,and all of our properties are subject to environmental regulations related to real estate.We expect that the healthcare industry,in general,will continue to f

175、ace increased regulation and pressure in these and other areas.These laws and regulations are wide-ranging,vary across jurisdictions,and are administered by several government agencies.Further,these laws and regulations are subject to change,enforcementpractices may evolve,and it is difficult to pre

176、dict the impact of new laws and regulations.Our tenants may find it increasingly difficult and costly to operate within thiscomplex and evolving regulatory environment.Noncompliance with applicable laws and regulations may result in the imposition of civil and criminal penalties thatcould adversely

177、affect the operations and financial condition of tenants or borrowers,which in turn may adversely affect us.The following is a brief discussion ofcertain laws and regulations applicable to certain of our tenants and borrowers and,in certain cases,to us.Licensure and Certification.Various licenses,ce

178、rtifications and permits are required to operate SNFs,ALFs,EFCs,hospitals and,to a lesser degree,ILFs,todispense narcotics,to handle radioactive materials and to operate equipment.Licensure and certification may be conditioned on requirements related to,among otherthings,the quality of medical care

179、provided,qualifications of the operators administrative personnel and clinical staff,adequacy of the physical plant and equipment,capital and other expenditures,record keeping,dietary services,and patient rights.The Centers for Medicare&Medicaid Services(“CMS”)has issued additionalrequirements for c

180、ertain healthcare facilities in response to the COVID-19 pandemic,including requirements to test SNF staff and residents for COVID-19 and toreport COVID-19 data to the Centers for Disease Control and Prevention(“CDC”).Licensed facilities are generally subject to periodic inspections by regulators to

181、determine compliance with applicable licensure and certification standards.Further,some states have established requirements for facility spending,for examplerequiring nursing homes to spend a certain percentage of revenue on direct care for residents.Sanctions for failure to comply with these laws

182、and regulations include(but are not limited to)loss of licensure and ability to participate in the Medicare,Medicaid,and other government healthcare programs,suspension of or non-paymentfor new admissions,fines,as well as potential criminal penalties.The failure of any tenant or borrower to comply w

183、ith such laws and regulations could affect its abilityto operate its facility or facilities and could adversely affect such tenants or borrowers ability to make lease or debt payments to us.In addition,if we have to replace atenant,we may experience difficulties in finding a replacement because our

184、ability to replace the tenant may be affected by federal and state laws governing changes incontrol and ownership.The healthcare facilities in which we invest may be subject to state CON laws,which require government approval prior to the construction or establishment of newfacilities,the expansion

185、of existing facilities,the addition of beds to existing facilities,the addition of services or certain capital expenditures.CON requirements arenot uniform throughout the United States and are subject to change.We cannot predict the impact of regulatory changes with respect to CONs on the operations

186、 of ourtenants and borrowers.Medicare and Medicaid Reimbursement.A significant portion of the revenue of our SNF tenants and borrowers is derived from government-fundedreimbursement programs,primarily Medicare and Medicaid.The Medicare and Medicaid programs are highly regulated and subject to freque

187、nt and substantial changesresulting from legislation,regulations and administrative and judicial interpretations of existing law.Medicare is a federal health insurance program for persons age 65 and over,some disabled persons,and persons with end-stage renal disease.Medicare generallycovers SNF serv

188、ices for beneficiaries who require skilled nursing or therapy services after a qualifying hospital stay.Medicare Part A generally pays a per diem rate foreach beneficiary.The reimbursement rates are set forth under a prospective payment system(“PPS”),an acuity-based classification system that uses n

189、ursing andtherapy indexes,adjusted by additional factors such as geographic differences in wage rates,to calculate per diem rates for each Medicare beneficiary.The MedicarePart A payment rates cover most services to be provided to a beneficiary for a limited benefit period,including room and board,s

190、killed nursing care,therapy,andmedications.CMS updates Medicare payment rates annually.For fiscal year 2022,which started October 1,2021,CMS estimates that payments to SNFs under theSNF PPS will increase by$410.0 million,or 1.2%,compared to fiscal year 2021.CMS has implemented policies intended to s

191、hift Medicare to value-based payment methodologies that tie reimbursement to quality of care rather than quantity.Forexample,effective October 1,2019,CMS implemented the Patient Driven Payment Model(“PDPM”).This payment methodology classifies beneficiaries into paymentgroups based on clinical factor

192、s using diagnosis codes rather than by volume of services.In addition,under the SNF Quality Reporting Program,CMS requires SNFs13Table of Contentsto report certain quality data,and SNFs that fail to do so are subject to payment reductions.Under the SNF Value-Based Purchasing Program,CMS reduces SNFM

193、edicare payments by 2 percentage points,and redistributes the majority of these funds as incentive payments based on SNF quality measure performance.As a resultof the COVID-19 pandemic,CMS implemented a measure suppression policy for the SNF Value-Based Purchasing Program for federal fiscal year 202

194、2,intended tomitigate the effect that performance measures impacted by COVID-19 would otherwise have on performance scores and incentive payments.From time to time,HHS revises the reimbursement systems used to reimburse healthcare providers.For example,the Improving Medicare Post-Acute CareTransform

195、ation Act of 2014(“IMPACT Act”)requires HHS,in conjunction with the Medicare Payment Advisory Commission,to propose a unified post-acute carepayment model by 2023.A unified post-acute care payment system would pay post-acute care providers,including SNFs,under a single framework according to apatien

196、ts characteristics,rather than based on the post-acute care setting where the patient receives treatment.Medicaid is a medical assistance program for eligible needy persons that is funded jointly by federal and state governments.Medicaid programs are operated bystate agencies under plans approved by

197、 the federal government.Reimbursement methodologies,eligibility requirements and covered services vary from state to state.In many instances,revenues from Medicaid programs are insufficient to cover the actual costs incurred in providing care to patients,particularly in nursing facilities.Outside of

198、 the government response to the COVID-19 pandemic,budgetary pressures have,in recent years,resulted in decreased spending,or decreased spendinggrowth,for Medicaid programs in many states.Changes in federal policy and funding may be an additional source of uncertainty.The need to control Medicaidexpe

199、nditures may be exacerbated by the increased enrollment in Medicaid resulting from the COVID-19 pandemic.Budgetary pressures are expected to continue in thefuture,and many states are actively seeking ways to reduce Medicaid spending,including for nursing home and assisted living care,by methods such

200、 as capitatedpayments,reductions in reimbursement rates,and increased enrollment in managed Medicaid plans.Some states and managed care plans are pursuing alternatives toinstitutional care,such as home-based and community services.Several of the states in which we have investments have actively soug

201、ht to reduce or slow the increaseof Medicaid spending for care in nursing homes and other settings.In addition to reimbursement pressures and changes in governmental healthcare programs,healthcare facilities are experiencing increasing pressure from privatepayors attempting to control healthcare cos

202、ts.In some cases,private payors rely on governmental reimbursement systems to determine reimbursement rates.Changesto Medicare and Medicaid that reduce payments under these programs may negatively impact payments from private payors.We cannot make any assessment as to theultimate timing or the effec

203、t that any future reforms may have on our tenants and borrowers costs of doing business and on the amount of reimbursement bygovernment and other third-party payors.There can be no assurance that future payment rates for either government or private payors will be sufficient to coverpotential cost i

204、ncreases in providing services to patients.Any changes in government or private payor reimbursement policies that reduce payments to levels that areinsufficient to cover the cost of providing patient care could adversely affect the operating revenues of tenants and borrowers in our properties that r

205、ely on suchpayments,and thereby adversely affect their ability to make their lease or debt payments to us.Federal Response to COVID-9 Pandemic.In response to the COVID-19 pandemic,Congress enacted a series of economic stimulus and relief measures throughthe Coronavirus Aid,Relief,and Economic Securi

206、ty Act(the“CARES Act”),the Paycheck Protection Program and Health Care Enhancement Act(“PPPHCE Act”),Consolidated Appropriations Act,2021(“CAA”)and the American Rescue Plan Act of 2021(“ARPA”).In total,the CARES Act,the PPPHCE Act,and the CAAauthorize$186 billion in funding to be distributed to heal

207、thcare providers through the Public Health and Social Services Emergency Fund(“Provider Relief Fund”).These funds are intended to reimburse eligible providers for healthcare-related expenses or lost revenues attributable to COVID-19.Recipients are not required to repayProvider Relief Fund payments a

208、s long as they attest to and comply with certain terms and conditions,including reporting requirements,limitations on balance billing,and not using Provider Relief Fund payments to reimburse expenses or losses that other sources have or are obligated to reimburse.A number of our tenants and borrower

209、s have received grants under the CARES Act and related laws;however,there are uncertainties regarding the extent to whichour tenants and borrowers will receive any additional funds from the Provider Relief Fund,the financial impact of receiving such funds on their operations or financialcondition,an

210、d whether such tenants and borrowers will be able to meet the compliance requirements associated with the funds.The CARES Act and related legislation include other provisions offering financial relief,for example suspending Medicare sequestration payment adjustments fromMay 1,2020,through March 31,2

211、022,which would have otherwise reduced payments to Medicare providers by 2%as required by the Budget Control Act of 2011,but also extending sequestration through 2030.Congress reduced the sequestration adjustment to 1%from April 1 through June 30,2022,and the adjustment willreturn to 2%on July 1,202

212、2.Reductions set for 2030 were increased to up to 3%.As a result of the ARPAs impact on the federal budget14Table of Contentsdeficit,an additional Medicare payment reduction of up to 4%was required to take effect in January 2022.However,Congress has delayed implementation of thisreduction until 2023

213、.In addition to offering economic relief to individuals and businesses,the CARES Act and related legislation include provisions intended to expand coverage ofCOVID-19 testing and preventative services,address healthcare workforce needs,ease restrictions on telehealth services,and ease other legal an

214、d regulatory burdenson healthcare providers.Some of the legislative and regulatory measures allowing for flexibility in delivery of care and various financial supports for healthcareproviders are available only for the duration of the public health emergency(“PHE”)declared by the U.S.Department of H

215、ealth and Human Services(“HHS”)inresponse to the COVID-19 pandemic.The current HHS declaration expires April 16,2022,but may be renewed by the HHS Secretary for successive 90-day periodsfor as long as the emergency continues to exist or terminated when the Secretary determines the PHE no longer exis

216、ts.There is still a high degree of uncertainty surrounding the implementation of the CARES Act and related legislation,and the PHE continues to evolve.Federal andstate governments and local health authorities continue to impose,or are re-imposing,measures intended to limit the spread of COVID-19 and

217、 to mitigate the burdenon the healthcare system.For example,CMS issued an interim final rule in November 2021 that will require COVID-19 vaccinations for workers in certain Medicare-and Medicaid-certified providers and suppliers,including hospitals and long term care facilities such as SNFs.Our borr

218、owers and tenants have been and will continueto be impacted by the health and economic effects of COVID-19.Fraud and Abuse.Participants in the healthcare industry are subject to various complex federal and state civil and criminal laws and regulations governing a widearray of healthcare provider ref

219、errals,relationships and arrangements.These laws include:(i)federal and state false claims acts,which generally prohibit providersfrom filing false claims or making false statements to receive payment from Medicare,Medicaid or other federal or state healthcare programs;(ii)federal and stateanti-kick

220、back and fee-splitting statutes,including the federal Anti-Kickback Statute,which prohibits the payment or receipt of any consideration in exchange forreferral of Medicare and Medicaid patients;(iii)federal and state physician self-referral laws,including the federal prohibition commonly referred to

221、 as the Stark Law,which generally prohibit referrals by physicians to entities for designated health services(which include hospital inpatient and outpatient services and some of theservices provided in SNFs)with which the physician or an immediate family member has a financial relationship;and(iv)t

222、he federal Civil Monetary Penalties Law,which requires a lower burden of proof than other fraud and abuse laws.These laws and regulations subject violators to severe penalties,including exclusion from theMedicare and Medicaid programs,denial of Medicare and Medicaid payments,punitive sanctions,fines

223、 and even prison sentences.They are enforced by a variety offederal,state and local agencies,and can also be enforced by private litigants through,among other things,federal and state false claims acts,which allow privatelitigants to bring qui tam or“whistleblower”actions.In recent years,both federa

224、l and state governments have significantly increased investigation and enforcementactivity to detect and punish wrongdoers.It is anticipated that the trend toward increased investigation and enforcement activity will continue.In the event that any tenant or borrower were to be found inviolation of a

225、ny of these laws and regulations,that tenants or borrowers ability to operate the facility could be jeopardized,which could adversely affect the tenantsor borrowers ability to make lease or debt payments to us and could thereby adversely affect us.Privacy and Security.Privacy and security regulation

226、s issued pursuant to the Health Insurance Portability and Accountability Act of 1996(“HIPAA”)restrict theuse and disclosure of individually identifiable health information(“protected health information”),provide for individual rights,require safeguards for protected healthinformation and require not

227、ification of breaches of unsecure protected health information.Entities subject to HIPAA include health plans,healthcare clearinghouses,and most healthcare providers(including some of our tenants and borrowers).Business associates of these entities who create,receive,maintain or transmit protectedhe

228、alth information are also subject to certain HIPAA provisions.Violations of HIPAA may result in substantial civil and/or criminal fines and penalties.The costs tothe business or,for an operator of a healthcare property,associated with developing and maintaining programs and systems to comply with da

229、ta privacy and securitylaws,defending against privacy and security related claims or enforcement actions and paying any assessed fines can be substantial.Moreover,such costs could have amaterial adverse effect on the ability of an operator to meet its obligations to us.Breaches of unsecured protecte

230、d health information and other violations of HIPAAmay have other material adverse consequences including material loss of business,regulatory enforcement,substantial legal liability and reputational harm.There are several other laws and legislative and regulatory initiatives at the federal and state

231、 levels addressing privacy and security of personal information.Inaddition,healthcare providers and industry participants are subject to a growing number of requirements intended to promote the interoperability and exchange ofpatient information.Noncompliance may result in penalties or other disince

232、ntives.Federal and state data privacy and security laws and regulations and relatedrequirements continue to evolve,and changes may result in uncertainty with regard to compliance obligations,business operations or15Table of Contentstransactions that depend on data.New privacy and security laws furth

233、er could require substantial investment in resources to comply with regulatory changes as privacyand security laws proliferate in divergent ways or impose additional obligations.Americans with Disabilities Act.Our properties generally must comply with the Americans with Disabilities Act(the“ADA”)and

234、 any similar state or local laws tothe extent that such properties are public accommodations as defined in those statutes.The ADA may require removal of barriers to access by persons with disabilitiesin certain public areas of our properties where such removal is readily achievable.While under our t

235、riple-net lease structure,our tenants would generally be responsiblefor additional costs that may be required to make our facilities ADA-compliant,should barriers to access by persons with disabilities be discovered,we may beindirectly responsible for additional costs that may be required to make fa

236、cilities ADA-compliant.Noncompliance with the ADA could result in the imposition of finesor an award of damages to private litigants.Our commitment to make readily achievable accommodations pursuant to the ADA is ongoing,and we continue to assessour properties and make modifications as appropriate i

237、n this respect.Environmental Regulations.As an owner of real property,we are subject to various federal,state and local laws and regulations regarding environmental,healthand safety matters.These laws and regulations address,among other things,asbestos,polychlorinated biphenyls,fuel,oil management,w

238、astewater discharges,airemissions,radioactive materials,medical wastes,and hazardous wastes,and in certain cases,the costs of complying with these laws and regulations and the penaltiesfor non-compliance can be substantial.We may be held primarily or jointly and severally liable for costs relating t

239、o the investigation and clean-up of any property thatwe own from which there is or has been an actual or threatened release of a regulated material and any other affected properties,regardless of whether we knew of orcaused the release.Such costs typically are not limited by law or regulation and co

240、uld exceed the propertys value.In addition,we may be liable for certain other costs,such as governmental fines and injuries to persons,property or natural resources,as a result of any such actual or threatened release.Under the terms of our leases,wegenerally have a right to indemnification by our t

241、enants,for any contamination caused by them.However,we cannot assure you that our tenants will have the financialcapability or willingness to satisfy their respective indemnification obligations to us,and any such inability or unwillingness to do so may require us to satisfy theunderlying environmen

242、tal claims.Tax RegulationWe have elected to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986,as amended(the“Internal Revenue Code”),and sinceour formation,have filed our U.S.federal income tax return as a REIT.We believe that we have met the requirements for qua

243、lification as a REIT since our initial REITelection in 1991,and we expect to qualify as such for each of our taxable years.Our qualification and taxation as a REIT depends upon our ability to meet on acontinuing basis,through actual annual operating results,the various qualification tests and organi

244、zational requirements imposed under the Internal Revenue Code,including qualification tests based on NHIs assets,income,distributions and stock ownership.Provided we qualify for taxation as a REIT,we generally will not berequired to pay U.S.federal corporate income taxes on our REIT taxable income t

245、hat is currently distributed to our stockholders.This treatment substantially eliminatesthe“double taxation”that ordinarily results from investment in a C corporation.We will,however,be required to pay U.S.federal income tax in certain circumstances.The sections of the Internal Revenue Code relating

246、 to qualification and operation as a REIT,and the U.S.federal income taxation of a REIT and its stockholders,are highly technical and complex.Some of the requirements depend upon actual operating results,distribution levels,diversity of stock ownership,asset composition,source of income and record k

247、eeping.Accordingly,while we intend to continue to qualify to be taxed as a REIT,the actual results of our operations for any particularyear might not satisfy these requirements for qualification and taxation as a REIT.Accordingly,no assurance can be given that the actual results of our operation for

248、any particular taxable year will satisfy such requirements.Further,the anticipated U.S.federal income tax treatment may be changed,perhaps retroactively,bylegislative,administrative or judicial action at any time.To qualify as a REIT,we must elect to be treated as a REIT,and we must meet various(a)o

249、rganizational requirements,(b)gross income tests,(c)asset tests,and(d)annual dividend requirements.Organizational RequirementsThe Internal Revenue Code defines a REIT as a corporation,trust or association:(1)that is managed by one or more trustees or directors;(2)the beneficial ownership of which is

250、 evidenced by transferable shares,or by transferable certificates of beneficial interest;16Table of Contents(3)that would otherwise be taxable as a domestic corporation,but for Sections 856 through 859 of the Internal Revenue Code;(4)that is neither a financial institution nor an insurance company t

251、o which certain provisions of the Internal Revenue Code apply;(5)the beneficial ownership of which is held by 100 or more persons;(6)during the last half of each taxable year,not more than 50%in value of the outstanding stock of which is owned,directly or constructively,by five or fewerindividuals,a

252、s defined in the Internal Revenue Code to also include certain entities;and(7)which meets certain other tests regarding the nature of its income and assets.We believe that we have been organized and have operated in a manner that has allowed us,and will continue to allow us,to satisfy conditions(1)t

253、hrough(7)inclusive,during the relevant time periods,and we intend to continue to be organized and operate in this manner.However,qualification and taxation as a REITdepend upon our ability to meet the various qualification tests imposed under the Internal Revenue Code,including through actual operat

254、ing results,asset composition,distribution levels and diversity of stock ownership.Accordingly,no assurance can be given that we will be organized or will be able to operate in a manner so as toqualify or remain qualified as a REIT.Income TestWe must satisfy two gross income tests annually to mainta

255、in our qualification as a REIT.First,at least 75%of our gross income for each taxable year(excluding gross income from prohibited transactions)must consist of defined types of income thatwe derive,directly or indirectly,from investments relating to real property or mortgages on real property or qual

256、ified temporary investment income.Qualifying incomefor purposes of that 75%gross income test generally includes:rents from real property;interest on debt secured by mortgages on real property,or on interests in real property(including interest on an obligation secured by a mortgage on both realprope

257、rty and personal property if the fair market value of the personal property does not exceed 15%of the total fair market value of all the property securingthe obligation);dividends or other distributions on,and gain from the sale of,shares in other REITs;gain from the sale of real estate assets;andin

258、come derived from the temporary investment of new capital that is attributable to the issuance of our shares of beneficial interest or a public offering of ourdebt with a maturity date of at least five years and that we receive during the one year period beginning on the date on which we received su

259、ch new capital.Second,in general,at least 95%of our gross income for each taxable year(excluding gross income from prohibited transactions)must consist of income that isqualifying income for purposes of the 75%gross income test,other types of interest and dividends,gain from the sale or disposition

260、of stock or securities or anycombination of these.Asset TestTo maintain our qualification as a REIT,we also must satisfy the following asset tests at the end of each quarter of each taxable year:First,at least 75%of the value of our total assets must consist of:(a)cash or cash items,including certai

261、n receivables,(b)government securities,(c)realestate assets,including interests in real property,leaseholds and options to acquire real property and leaseholds,(d)interests in mortgages on real property(including an interest in an obligation secured by a mortgage on both real property and personal p

262、roperty if the fair market value of the personal property doesnot exceed 15%of the total fair market value of all the property securing the obligation)or on interests in real property,(e)stock in other REITs,(f)debtinstruments issued by publicly offered REITs(i.e.,REITs which are required to file an

263、nual and periodic reports with the SEC under the Securities ExchangeAct),(g)personal property leased in connection with real property to the extent that rents attributable to such personal property do not exceed 15%of the totalrent received under the lease and are treated as“rents from real property

264、”;and(h)investments in stock or debt17Table of Contentsinstruments during the one year period following our receipt of new capital that we raise through equity offerings or offerings of debt with at least a five yearterm;Second,of our investments not included in the 75%asset class,the value of our i

265、nterest in any one issuers securities may not exceed 5%of the value of ourtotal assets;Third,we may not own more than 10%of the voting power or value of any one issuers outstanding securities;Fourth,no more than 20%of the value of our total assets may consist of the securities of one or more TRSs;Fi

266、fth,no more than 25%of the value of our total assets may consist of the securities of TRSs and other non-TRS taxable subsidiaries and other assets that arenot qualifying assets for purposes of the 75%asset test;andSixth,no more than 25%of our total assets may consist of debt instruments issued by pu

267、blicly offered REITs that qualify as“real estate assets”only becauseof the express inclusion of“debt instruments issued by publicly offered REITs”in the definition of“real estate assets”.Distribution RequirementsEach taxable year,we must distribute dividends,other than capital gain dividends,to our

268、stockholders in an aggregate amount not less than:the sum of(a)90%ofour“REIT taxable income,”computed without regard to the dividends-paid deduction or our net capital gain or loss,and(b)90%of our after-tax net income,if any,from foreclosure property,minus the sum of certain items of non-cash income

269、.Taxable REIT SubsidiaryA REIT may directly or indirectly own stock in a TRS.A TRS may be any corporation in which we directly or indirectly own stock and where both NHI and thesubsidiary make a joint election to treat the corporation as a TRS,in which case it is treated separately from us and will

270、be subject to U.S.federal corporate incometaxation.Our stock,if any,of a TRS is not subject to the 10%or 5%asset tests.Instead,the value of all TRSs owned by us cannot exceed 20%of the value of ourassets.We currently own all of the membership interests of NHI-SS TRS,LLC,a TRS and may form additional

271、 TRSs in the future.We also lease“qualified health care properties”on an arms-length basis to a TRS(or subsidiary thereof)and the property is operated on behalf of such subsidiaryby a person who qualifies as an“independent contractor”and who is,or is related to a person who is,actively engaged in th

272、e trade or business of operating health carefacilities for any person unrelated to us or our TRS.Generally,the rent that we receive from our TRS in such structures will be treated as“rents from real property.”If we lose our status as a REIT(currently or with respect to any tax years for which the st

273、atute of limitations has not expired),we will face serious tax consequencesthat will substantially reduce the funds available to satisfy our obligations,to implement our business strategy and to make distributions to our stockholders for each ofthe years involved because:We would be subject to U.S.f

274、ederal income tax at the regular corporate rate applicable to regular C corporations on our taxable income,determined withoutreduction for amounts distributed to stockholders;We would not be required to make any distributions to stockholders,and any dividends to stockholders would be taxable as ordi

275、nary income to the extent ofour current and accumulated earnings and profits(which may be subject to tax at preferential rates to individual stockholders)Unless we are entitled to relief under statutory provisions,we could not elect to be subject to tax as a REIT for four taxable years following the

276、 year duringwhich we were disqualified.In the event we are no longer required to pay dividends to maintain REIT status,this could adversely affect the value of our common stock.See“Risks Related toOur Status as a REIT”.Investment PoliciesOur investment objectives are(i)to provide consistent and grow

277、ing current income for distribution to our stockholders through investments primarily in healthcarerelated facilities or in the operations thereof through independent third-party management,(ii)to provide the opportunity to realize capital growth resulting fromappreciation,if any,in the residual val

278、ue of18Table of Contentsour portfolio properties,and(iii)to preserve and protect stockholders capital through a balance of diversity,flexibility and liquidity.There can be no assurance thatthese objectives will be realized.Our investment policies include making investments in real estate,mortgage an

279、d other notes receivable,and joint ventures structuredto comply with the provisions of RIDEA.We consider the creditworthiness of the operator to be an important factor in underwriting the lease or loan investment,andwe generally have the right to approve any changes in operators.During 2021,we made

280、commitments to fund new investments in real estate and loans totaling approximately$120.5 million.In making new investments,weconsider such factors as(i)the geographic area and type of property,(ii)the location,construction quality,condition and design of the property,(iii)the current andanticipated

281、 cash flow and its adequacy to meet operational needs,and lease or mortgage obligations to provide a competitive income return to our investors,(iv)thegrowth,tax and regulatory environments of the communities in which the properties are located,(v)occupancy and demand for similar facilities in the s

282、ame or nearbycommunities,(vi)the quality,experience and creditworthiness of the management operating the facilities located on the property and(vii)the mix of private andgovernment-sponsored residents.There can be no assurances that investments meeting our standards regarding these attributes will b

283、e found or closed.Our intention isto make investments in properties with substantial,long-term potential.However,we may choose to sell properties if they no longer meet our investment objectives.We will not,without the approval of a majority of the Board of Directors and review of a committee compri

284、sed of independent directors,enter into any joint ventureor partnership relationships with or acquire from or sell to any director,officer or employee of NHI,or any affiliate thereof,as the case may be,any of our assets orother property.The Board of Directors,without the approval of the stockholders

285、,may alter our investment policies if it determines that such a change is in our best interests andour stockholders best interests.The methods of implementing our investment policies may vary as new investment and financing techniques are developed or for otherreasons.Management may recommend change

286、s in investment criteria from time to time.Our investments in healthcare related facilities may utilize borrowed funds or issuance of equity.We may negotiate lines of credit or arrange for other short or long-term borrowings from lenders.We may arrange for long-term borrowings from institutional inv

287、estors or through public offerings.We have previously invested,andmay in the future invest,in properties subject to existing loans or secured by mortgages,deeds of trust or similar liens with favorable terms or in mortgage investmentpools.Investor InformationWe publish our annual report on Form 10-K

288、,quarterly reports on Form 10-Q,current reports on Form 8-K,and amendments to such reports to our website .We have a policy of publishing these on the website as soon as reasonably practicable after filing them with,or furnishing them to,the SEC.Information contained on our website is not incorporat

289、ed by reference into this Annual Report on Form 10-K.We also maintain the following documents on our web site:The NHI Code of Business Conduct and Ethics which has been adopted for all employees,officers and directors of the Company.Information on our“NHI Valuesline”which allows all interested parti

290、es to communicate with NHI executive officers and directors.The toll free number is877-880-2974 and the communications may be made anonymously,if desired.The NHI Restated Audit Committee Charter.The NHI Revised Compensation Committee Charter.The NHI Revised Nominating and Corporate Governance Commit

291、tee Charter.The NHI Corporate Governance Guidelines.We will furnish,free of charge,a copy of any of the above documents to any interested investor upon receipt of a written request.19Table of ContentsOur transfer agent is Computershare.Computershare will assist registered owners with the NHI Dividen

292、d Reinvestment plan,change of address,transfer ofownership,payment of dividends,replacement of lost checks or stock certificates.Computershares contact information is:Computershare Trust Company,N.A.,P.O.Box 43078,Providence,RI 02940-3078.The toll free number is 800-942-5909 and the website is .ITEM

293、 1A.RISK FACTORSThere are many significant factors that could materially adversely impact our financial condition,results of operations,cash flows,distributions and stock price.Thefollowing are risks we believe are material to our stockholders.There may be additional risks and uncertainties that we

294、have not presently identified or have notdeemed material.Some of the following risk factors constitute forward-looking statements.Please refer to“Forward Looking Statements”at the beginning of thisAnnual Report on Form 10-K.Risk Related to COVID-19Actual or perceived risks associated with public hea

295、lth epidemics or outbreaks,such as the Coronavirus(“COVID-19”),have had and are expected to continueto have a material adverse effect on our business and results of operations.The COVID-19 pandemic has had a negative impact and is expected to continue to have a negative impact on the business and re

296、sults of operations of the operatorsof our properties and on the Company.Although vaccines for the COVID-19 virus are widely available in the United States,COVID-19 cases remain high in someareas,and the disease continues to result in a significant number of hospitalizations.According to the Centers

297、 for Disease Control and Prevention,older adults andpeople with certain underlying medical conditions are at higher risk for serious illness and death from COVID-19.Revenues for the operators of our properties are significantly impacted by occupancy.Building occupancy rates at several of our propert

298、ies has decreasedsignificantly because of COVID-19 as a result of early resident move-outs,our operators delays in accepting new residents due to quarantines or otherwise,andpotential occupants postponement of moving to a senior housing facility.Such decreased occupancy is likely to continue in 2022

299、.A decrease in occupancy or increasein costs is likely to have a material adverse effect on the ability of our operators to meet their financial and other contractual obligations to us,including the payment ofrent,as well as on our results of operations.In addition,actions our operators take to addr

300、ess COVID-19 are expected to materially increase their operating costs,including costs related to enhanced health and safety precautions and increased retention and recruitment labor costs among other measures,which could have amaterial adverse effect on the ability of our operators to meet their fi

301、nancial and other contractual obligations to us,including the payment of rent.In some cases,wehave had to,and may continue to have to,write-off unpaid rental payments,incur lease accounting charges due to the uncollectibility of rental payments and/orrestructure our operators long-term rent obligati

302、ons and may not be able to do so on terms that are as favorable to us as those currently in place.Furthermore,infections at our facilities could lead to material increases in litigation costs for which our operators,or possibly we,may be liable.The federal,state and local governments have implemente

303、d or announced assistance programs in connection with COVID-19 that have benefited or in the futuremay benefit certain of our operators,but such government assistance may be insufficient to offset the downturn in business of our operators.In addition,federal andstate governments and local health aut

304、horities continue to impose,or are re-imposing,measures intended to limit the spread of COVID-19 and to mitigate the burdenon the healthcare system,but that could increase operating costs for our tenants and borrowers.For example,CMS issued an interim final rule in November 2021 thatwill require COV

305、ID-19 vaccinations for workers in most Medicare-and Medicaid-certified providers and suppliers,including hospitals and long term care facilitiessuch as SNFs.This vaccine mandate may result in heightened labor challenges for our tenants and borrowers.COVID-19 has also caused,and is likely to continue

306、 to cause,severe economic,market and other disruptions worldwide.We cannot assure you that conditions in thebank lending,capital and other financial markets will not continue to deteriorate as a result of the COVID-19 pandemic,or that our access to capital and other sourcesof funding will not become

307、 constrained,which could adversely affect the availability and terms of future borrowings,renewals or refinancings.Such future constraintscould increase our borrowing costs,which would make it more difficult or expensive to obtain additional financing or refinance existing obligations and commitment

308、s.The impact of COVID-19 on our results of operations,liquidity and financial condition could adversely affect our ability to pay dividends at expected levels or at all.All dividends are made at the discretion of our Board of Directors in accordance with Maryland law and depend on our earnings,our f

309、inancial condition,debt andequity capital available to us,our expectation of our future capital requirements and operating performance,restrictive covenants in our financial and other contractualarrangements,maintenance of our REIT qualification,restrictions under Maryland law and other factors as o

310、ur Board of20Table of ContentsDirectors may deem relevant from time to time.Our Board of Directors will continue to assess our dividend rate on an ongoing basis,as COVID-19 and related marketconditions and our financial position continue to evolve.The continuation of,or any increase in the severity

311、of,the COVID-19 pandemic is likely to continue to have a material adverse effect on our business and results ofoperations.The extent to which COVID-19 will continue to impact our business and results of operations will depend on future developments related to the pandemic,which continues to evolve.I

312、t is difficult to predict the duration and severity of the pandemic,including whether there will be increases in the number of COVID-19cases where we have properties,the impact and efficacy of actions taken to contain COVID-19 and the acceptance and distribution of effective medical treatments andva

313、ccines(including additional doses of vaccines).Risks Related to Our Tenants and BorrowersWe depend on the operating success of our tenants and borrowers for collection of our lease and note payments.Revenues for the operators of our properties are primarily driven by occupancy and Medicare,Medicaid

314、and private payor reimbursement.Revenues fromgovernment reimbursement have,and may continue to,come under pressure due to reimbursement cuts resulting from federal and state budget shortfalls andconstraints.Periods of weak economic growth in the U.S.which affect housing sales,investment returns and

315、personal incomes may adversely affect senior housingoccupancy rates.An oversupply of senior housing real estate may also apply downward pressure to the occupancy rates our operators receive.Expenses for thefacilities are driven by the costs of labor,food,utilities,taxes,insurance and rent or debt se

316、rvice.Liability insurance and staffing costs continue to increase for ouroperators.Historically low unemployment has created significant wage pressure for our operators.To the extent any decrease in revenues and/or any increase inoperating expenses results in a property not generating enough cash to

317、 make scheduled payments to us,our revenues,net income and funds from operations would beadversely affected.Such events and circumstances would cause us to evaluate whether there was an impairment of the real estate or mortgage loan that should becharged to earnings.Such impairment would be measured

318、 as the amount by which the carrying amount of the asset exceeded its fair value.Consequently,we might beunable to maintain or increase our current dividend and the market price of our stock may decline.We are exposed to the risk that our tenants and borrowers may become subject to bankruptcy or ins

319、olvency proceedings.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 mortgageloans provide us the right to terminate any funding obligations,demand immediate repayment of principal and unpaid intere

320、st,foreclose on the collateral and exerciseother remedies,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 tolimit or delay our ability to collect unpaid rent in the case of a lease or to receive unpai

321、d principal and/or interest in the case of a mortgage loan and to exercise otherrights and remedies.For example,a lessee may reject its lease with us in a bankruptcy proceeding.In such a case,our claim against the lessee for unpaid and futurerents would be limited by the statutory cap of the U.S.Ban

322、kruptcy 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 lessee may assert in a bankruptcy proceeding that its lease should be re-characterized as afinancing agreement.If suc

323、h a claim is successful,our rights and remedies as a lender,compared to a landlord,are generally more limited.We may be required to fundcertain expenses(e.g.real estate taxes,maintenance and capital improvements)to preserve the value of a property,avoid the imposition of liens on a property and/ortr

324、ansition 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 some ofthose situations,we provided working capital loans to,and limited indemnification of,the new tenant.If we cannot transition a leased facili

325、ty to a new tenant,we maytake possession of that property,which may expose us to certain successor liabilities.Should such events occur,our revenue and operating cash flow may be adverselyaffected.Certain tenants in our portfolio account for a significant percentage of the rent we expect to generate

326、 from our portfolio,and the failure of any of these tenantsto meet their obligations to us could materially and adversely affect our business,financial condition and results of operations and our ability to make distributionsto our stockholders.The successful performance of our real estate investmen

327、ts is materially dependent on the financial stability of our tenants/operators.For the year ended December31,2021,approximately 41%of our total revenue is generated by three tenants,including Senior Living(17%),and NHC(12%)and Bickford(12%).As previouslydisclosed,on July 30,2021,Welltower completed

328、the acquisition of a portfolio of legacy Holiday properties from Fortress Investment Group and entered into a newagreement with Atria Senior Living to assume operations of the Holiday portfolio.These transactions resulted in a Welltower-controlled subsidiary becoming thetenant under our existing mas

329、ter lease for the NHI-owned Holiday real estate assets.We have received no rent due under the master lease for these facilities since thechange in tenant ownership occurred.Accordingly,we will only recognize revenues from this tenant when cash is received.Rent due but uncollected and unrecognizedfor

330、 2021,21Table of Contentsexcluding penalties and interest,totaled$11.4 million.Payment defaults or a decline in the operating performance by these or other tenants/operators could materiallyand adversely affect our business,financial condition and results of operations and our ability to pay expecte

331、d dividends to our stockholders.In the event of a tenantdefault,we may experience delays in enforcing our rights as landlord and may incur substantial costs in protecting our investment and re-leasing our property.Further,we may not be able to re-lease the property for the rent previously received,o

332、r at all,or lease terminations may cause us to sell the property at a loss.The result of anyof the foregoing risks could materially and adversely affect our business,financial conditions and results of operations and our ability to make distributions to ourstockholders.We are exposed to risks relate

333、d to governmental regulations and payors,principally Medicare and Medicaid,and the effect of changes to governmentregulation or reimbursement rates on our tenants and borrowers business.Our tenants and borrowers are subject to complex federal,state and local laws and regulations relating to governmental healthcare programs.See“Item 1.Business-Government Regulation.”Regulation of the healthcare ind