Colleen Sullivan - Director, IR Eric Mendelsohn - President and CEO Roger Hopkins - CAO Kevin Pascoe - EVP, Investments.

Daniel Bernstein - Stifel. Juan Sanabria - Bank of America Todd Stender - Wells Fargo Jordan Sadler - KeyBanc Capital Markets Rich Anderson - Mizuho Securities John Kim - BMO Capital Markets John Roberts - Hilliard Lyons.

Hello, everyone. This is Colleen Sullivan, Director of Investor Relations. Welcome to the National Health Investors conference call to review the Company’s Results for the Third Quarter of 2015.

On the call with me today is Eric Mendelsohn, President and CEO; Roger Hopkins, Chief Accounting Officer and Kevin Pascoe, Executive Vice President of Investments.

The results as well as notice of the accessibility of this conference call on a listen-only basis over the Internet were released this morning before market opened in a press release that’s been covered by the financial media.

As we start, let me remind you that any statements in this conference call which are not historical facts are forward-looking statements. NHI cautions investors that any forward-looking statements may involve risk or uncertainties and are not guarantees of future performance.

All forward-looking statements represent NHI’s judgment as of the date of this conference call.

Investors are urged to carefully review various disclosures made by NHI in its periodic reports filed with the Securities and Exchange Commission including the risk factors and other information disclosed in NHI’s Form 10-Q for the year ended September 30, 2015.

Copies of these filings are available on the SEC’s website at www.sec.gov or at NHI’s Web site at www.nhireit.com. In addition, certain terms used in this call are non-GAAP financial measures, reconciliations of which are provided in the Company’s earnings release and accompanying tables and schedules, which has been filed on Form 8-K with the SEC.

Listeners are encouraged to review those reconciliations provided in the earnings release, together with all other information provided in that release. I’ll now turn the call over to Eric Mendelsohn..

Thank you, Colleen. Good afternoon everyone and thank you for joining us. I’d like to take moment before we get started today to say that I’m excited to serve as NHI’s President and CEO. It’s a privilege to work alongside such a talented and dedicated team. I also appreciate the Board’s confidence and support in making their CEO selection.

As we move forward, I want to assure our shareholders and the investor community that our conservative approach to investing will stay intact, with a focus on accretive, high quality acquisitions, disciplined underwriting and a low leverage balance sheet.

This approach allows us to be a more bankable company, as demonstrated by our recent private placement offering, which we will discuss later in the call. One of my goals over the upcoming months is to increase NHI’s profile in important healthcare hubs such as the greater national area.

Here in Nashville, there are ample opportunities in our own backyard for growth through membership and trade associations and other networking venues. I look forward to leading NHI and taking advantage of our lower leverage and cost of capital to generate growth.

Turning to the quarterly results, I am delighted to say that 2015 continues to be a strong year for us. We’ve completed over a $100 million of investments since the beginning of Q3, bringing our year-to-date investment total to over $310 million. Our financial results for the third quarter was stellar.

Comparing year-over-year, we reported a 15.2 increase in normalized FFO per share and 13.8% increase in normalized AFFO per share. I will now turn the call over to Roger to provide some insight on the quarterly results.

Roger?.

Thank you, Eric. Hello everyone. I am very pleased to announce that we have had an excellent quarter of financial performance for the third quarter. Fourth quarter normalized FFO increased to $1.21 per diluted share.

Our normalized AFFO increased to $1.07 per diluted share, which represents a 15.2% and 13.8% increase respectively over the third quarter of 2014. Normalized FAD for the third quarter increased to $1.08 per diluted share, which is a 13.7% increase from the previous year. These results are primarily due to three factors.

First, we have had a high volume of investments in late 2014, and throughout 2015 related acquisitions, loans and development activity. Second, we have kept our leverage low and did not term out any amount on our revolving credit facility with longer term, higher, fixed rate debt or with new equity.

And third we reversed the accrual of annual bonus compensation to our previous CEO. The timing of these transactions have raised our expected results for the full year as I will describe in a moment. Our general and administrative expenses for the third quarter were $1.7 million or 2.9% of our revenue.

This low level of expense was due to lower payroll expense as just mentioned. We expect the normal run rate for general and administrative expenses to be approximately $2.4 million in the fourth quarter.

As for our current investments, we continue to fund our mortgage and construction loans for Timber Ridge, a premiere entrance-fee community in Issaquah, Washington. We have funded $67.1 million thus far in 2015 and estimate we will fully fund our $154.5 million commitment by the end of 2016.

As we have previously disclosed we estimate that we’ll receive repayment on our construction loan in 2017, leaving a mortgage loan balance of $60 million for which we have scheduled a 10-year maturity.

On September 30, we completed the previously announced sale of two skilled nursing facilities which completed the disposal plan with their tenant fundamental to fill six skilled nursing facilities. These buildings were over 40 years old.

The first facility was sold in 2011 and three more were sold in 2013, but the final sale of the remaining two buildings, leased revenue from these two buildings will taper off from $750,000 in the third quarter to $250,000 in the fourth quarter. We have been anticipating this reduction in quarterly revenue.

Moving on to guidance for 2015, we have raised the top end of our normalized FFO guidance $0.08 to a current range of $4.62 to $4.66. Likewise, we have raised the top-end of our normalized AFFO $0.06 to a current range of $4.08 to $4.10.

While we have clarity on the top end of these ranges, our guidance allows for the uncertainty and the structure and timing of the financing to fund our previously announced investments and any pending new investments. I'll now turn the call back over to Eric to discuss the capital plan and balance sheet metrics. .

Thank you Roger. Starting with our balance sheet metrics. Net debt to annualized EBITDA was 4.6 times at the end of the quarter. Our weighted average debt maturity is 7.3 years, our existing weighted average cost of debt capital is 3.35%, and our fixed charge coverage is a very strong 6.3 times.

Looking at the revolver, as of September 30th we had $217 million outstanding with an available capacity of $333 million.

Subsequently on November 3, we issued $50 million of eight-year unsecured private placement notes with a coupon of 3.99% and $50 million of 10 year unsecured notes with a coupon of 4.33% to a private placement lender for a blended rate of 4.16%. We use the proceeds from the notes to pay down our revolving credit facility.

Terms and conditions of the new financing are similar to our previous private placements with the exception of provisions regarding prepayment premiums. Turning to the aftermarket shelf offering that closed earlier this year, the Company did not issue any equity under the ATM during the third quarter.

I will now turn the call over to Kevin Pascoe, who'll cover portfolio details and new investments.

Kevin?.

Thank you Eric. I'll start with our portfolio performance. The portfolio EBITDARM coverage ratio was healthy at 2.18 times. Our skilled nursing coverage remained strong at 2.98 times and our senior housing portfolio is steady at 1.3 times. A relationship with Holiday represents 16% of our cash revenue.

The Holiday portfolio of independent living communities has consistent occupancy averaging 90.9% for the third quarter compared to 90.6% for the prior quarter. The cash flow cushion remains strong with an EBITDARM uncovered ratio 1.21 times at quarter-end.

Senior living communities accounts for 15% of our cash revenue and continues to perform ahead of our underwritten pro forma. The SLC portfolio has an EBITDARM coverage of 1.24 times on a trailing 12-month basis as of quarter-end and has continued to increase occupancy each quarter over 2015.

National Healthcare Corporation which accounts for 18% of our cash revenue and over half of our skilled nursing revenue continues to perform well with a strong 3.91 times corporate cash coverage. The Bickford joint venture, which accounts for 12% of NHI's cash revenue continues to deliver excellent growth opportunities.

The portfolio EBITDARM was up 19.6% when comparing the third quarter of 2015 to the third quarter of 2014 and is up 3.8% sequentially. The same store properties are up 4.7% quarter-over-quarter occupancies are stable and RPUs are improving.

The focused properties show improvement and three of the five new development projects are underway with the remaining two planned to break ground by the end of this year. Moving on to new investments, as Eric mentioned, year-to-date we have announced over 310 million of investment.

During the quarter we closed on over $100 million of new investments, including the Eastway Capital Management and Fairfield Village acquisitions.

We also added to our existing relationship with Chancellor Healthcare by acquiring a 40 bed memory care community in Portland, Oregon for $6.7 million, and added a new relationship with Brook Retirement by acquiring a 42 unit independent and assisted living community in Roscommon, Michigan for $6 million.

Each of this acquisition demonstrates our commitment to establishing and building relationships with high quality operators.

Our pipeline remains very active with a healthy level of senior housing and skilled nursing opportunities under review, and we continue to receive off market opportunities from our existing client base, which we believe offers a better value than marketed transactions. With that, I will hand the call back over to Eric..

Thank you, Kevin. We’re pleased with the solid quarter we’ve delivered and are excited about the opportunities we see ahead. This past quarter, we saw over a $100 million in deal activity and the year is not over yet. We will now open the line for questions..

Thank you. [Operator Instructions] And the first question is from the line of Daniel Bernstein with Stifel. Please go ahead..

Given all the concern about supply out there, I just wanted to talk a little bit about the supply that you’re seeing in the Bickford markets, particularly since those markets are outside the purview of the top 99 data from Nixa.

I’m not sure how you want to present the data, but do you have something you might be able to tell us about construction versus supply within those Bickford geographies?.

Hi Dan, this is Kevin Pascoe. As a relates to Bickford, there is some markets that we see that have some additional supply coming online. That said, part of our investment thesis with Bickford that it was secondary markets where it’s not getting the same kind of attention that some of the more primary markets would be.

So as I mentioned, there is some supply, but it’s not something that is overly concerning for us at this point.

That said, when we do have new supply coming in, we make sure that those branches are up-to-date, renovated anything where there is new supply has been renovated in last two years, and pretty much all of our Bickford properties have been renovated in the last five..

Okay. What would be the appropriate radius to think about construction versus those Bickford assets in those geographies? Is it 10 miles? I know the rule of thumb is five, but those are a little less dense areas.

So, is 10 miles an appropriate way to think about it?.

It’s really varies by market, but I think in some of them it would be up to 20. There is a fair amount of range in some of them, but 10 to 20 would probably be appropriate..

Okay. And then second with Bickford, what is the status of the purchase options you have on several -- I think six of those properties. Just want to think about that also in-light of Eric becoming CEO. Previously Justin had indicated that you kind of looking for a better yield before exercising those purchase options.

So I just want to get some updated thoughts on the possibility of exercising those?.

Hi Dan, this is Eric. We watch those purchase options carefully. They are in the money. They could be more in the money and we’re also mindful that when we purchase them, we’re going to either have to flex leverage or issue equity. We’re talking about close to a $100 million transaction.

So one of the things we think about in terms of timing for those is the repayment of the Timber Ridge loan at the end of 2016 and early 2017, and that would be a good way to marry an income of cash from the repayment of a loan to an outflow of investment to the Bickford purchase option properties..

Okay, okay. I guess, I was going to ask about the LTC preferreds that you still hold. Those are probably worth somewhere in around $87 million based on their stock price.

If anything, I wanted to see if there is any update or any difference in thought about whether to use that as a cash source to fund acquisitions and investments?.

All options are on the table, and as I’ve said in my Investor Meetings, we think about that all in the time..

Okay, okay.

Is there any tax situation that have changed with that, or is that’s all to say?.

The tax situation is favorable..

Okay, okay. I guess the only other question I had is -- you have some general thoughts about where cap rates may go or, if cap rates are going to back up in the senior's housing space and provide any better investment opportunities.

And some of the other earnings calls, we've heard this quarter, it seems like some of your peers are pausing a little bit more in acquisitions.

So just how aggressive do you want to be in acquisitions in next couple of quarters, if cap rates are going to backup, and is that your view that cap rates may back up a little bit or is that not your view? Just trying to get a sense of how you’re thinking about investments for the next couple of quarters?.

Well, I have two views on that. One is we’re still very picky and we find ourselves passing on a lot of shopped deals. Our philosophy here is a quick no is the second best answer. So we don’t keep people waiting if their expectations are out of sync with what we’re looking for. And the second thing is I'm optimistic that cap rates will start rising.

I think that the disconnect between private non-traded REITs and the prices that have been paid for senior housing portfolios -- it is going to narrow and that disconnect will no longer be a factor, now that the SEC has put out a ruling and a notice that people who invest in those REITs need to be fully disclosed about fees, commissions and return of capital as a dividend..

The next question is from the line of Juan Sanabria with Bank of America. Please go ahead. .

Just with regards to your comments on taking advantage of being in Nashville and looking at new opportunities, do you have any thoughts on potentially booking entering the medical office building arena?.

That’s certainly something we’re looking at. We have two right now, but we’re very picky about what that would look like if we were to invest.

They need to be on campus, they'd need to be single challenge and we’re more likely to invest in a platform of buildings that would come with accompanying asset managers and leasing agents and so forth rather than just a one-off..

And then on the Bickford idea, what's sort of the sequential decline in the same portfolio occupancy in this third quarter?.

Hey Juan this is Kevin. From a sequential perspective, there is a couple of things. July 1, is when they do their wage increases for all their employees. That would be offset in the fourth quarter by an in house rate increase. That’s one thing. We’re seeing some wage pressure as we've discussed on previous calls. Health insurance is up year-over-year.

So some various things like that, as I mentioned I think it will be mitigated with some of the improvement that it will have in the in-house increases coming this quarter. By and large, that’s what we’re seeing.

And also within the same store portfolio, there was a handful of higher occupied buildings that had a small dif for the quarter but they've since rebounded. So we feel good about the sales trends that are happening currently..

And Roger, did you mention a one-time benefit to G&A cost as a result of Justin's departure, or is it just that with him now off the books so to speak, the G&A will tick down from here from the third quarter?.

We had one-time adjustments during the quarter whereas we accrued throughout the year our year-end bonuses. With Justin leaving last quarter, we were able to reverse that accrual that we had been building up for him throughout the year, and that was $575,000 that was reversed. And so that lowered our G&A cost for the quarter. .

Okay. And with regards to the guidance bump, is there any way -- the moving pieces that saw that increase in the guidance.

G&A obviously sounds like it was one moving piece?.

As I stated in my remarks, one was just really the volume of our investments that we've made have driven our results.

Certainly the reversal of that payroll or bonus accrual was a factor, and the factor that we did not term out any of our revolver during the third quarter was significant in terms of the overall performance, whereas we look at the fourth quarter, and as we announced yesterday we’re terming out a $100 million in a private placement.

So that will be at a higher interest rate compared to our revolver. We've mentioned the bonus accrual reversal and then I also mentioned the sale of the two SNFs in the transaction with fundamental, and how our revenue will be $500,000 less in the fourth quarter related to that transaction. .

The next question is from the line of Todd Stender with Wells Fargo. Please go ahead. .

Eric, how do you view the balance sheet just with a change now and we’re certainly used to the low leverage, really no leverage for a long-time with NHI, and now under Justin, certainly it's higher closer to some of these peers.

So how do you and how do the board view things, now that there is a point in the time where maybe they could move in a different direction as far as the leverage. As we saw, the debt-to-EBITDA kind of creep up. Now it’s closer to five times.

So I just want to get your current thoughts?.

Right. Well the low leverage posture that the company had as a Board mandate, and my direction from the Board is to keep it between four and five times EBITDA. As we approach five, we tend to breakout into hives here. So we look around and think about de-levering and think about ways to do that.

So right now we’re at 4.6 times, and that’s kind of on the high end for us. So that’s our thinking. We want to keep it between four and five..

That’s helpful. Thanks Eric. And then, while we have you, just as your appetite for idea, you obviously have a similar background as Justin. I think Justin always got high marks having that operator background, and he married it with running a REIT. You two have that background. So really the best of both worlds.

How are you thinking about RIDEA, how it could grow or shrink as a part of the total portfolio?.

Well, right. The way I think about RIDEA, it's a double-edged sword. Having come from an operations background, I know that operations income and revenue is lumpy at best. And you have all sorts of pressures from occupancy, from oversupply, from regulatory, stop placement orders, from referral sources, changing direction.

So we’re very mindful when we’re picking operating partners for RIDEA. Kind of my back of the napkin, broad brushed qualifications are that they have to have a good amount of experience. They have been able to run a portfolio of buildings. I wouldn’t want to do a RIDEA with somebody who has just has one or two buildings.

And also they need to have a balance sheet, because part of what makes RIDEA RIDEA is having a partner with skin in the game. And I’m not sure what the right percentage is but I’m pretty sure it’s not 5%. So I think it’s somewhere between 10% and 20%. With Bickford we have 15%. I like that amount. And for the right partner I'd go down to 10%.

So those are my thoughts on RIDEA. I would consider another one, but it would have to be with the right partner..

That’s helpful. And then just on some of the acquisitions in the quarter. Any further pipeline with those relationships? There was an asset you acquired in Oregon and then in Michigan.

What’s behind those? Any other properties to close on?.

Well, Chancellor has been a great source for us. They’re all up and down the West Coast and I believe they have one in Maryland. So they are a good example of kind of our niche as a REIT where we partner with smaller regional operators who get lost in the shuffle of the bigger REITs.

And they are the other ones going to the local county and state industry association meetings, and passing out cards and looking for opportunities and finding them and bringing them to us.

Because they know that we’re ready, willing and able to be a capital partner with them, get on the plan go out see the property, understand their business plan and go forward with the commitment, they can pick up the phone and talk to Kevin or me directly and know that they have a decision maker right away. So Chancellor is a good example of that.

And the Michigan property, Roscommon is a new relationship and that person has a couple of more buildings..

This is Kevin. They have about 10 or 12 buildings. So that’s one that we definitely expect to expand the relationship over time, and one we’re going to continue to develop..

The next question is from the line of Jordan Sadler with KeyBanc Capital Markets. Please go ahead..

So I want to follow-up on the G&A piece, but also I guess as it relates to the source of the reduction in G&A. Obviously with Justin leaving Eric, you moving into the CEO, slot congratulations. I’m curious, if you’re going to backfill the old you or bring on another C-suite executive.

There is sort of an open position now?.

Well I would like to do that at some point. Right now, we’re just trying to stabilize the team. We’ve been through a lot the past quarter. There was Justin leaving, there was an interim with the question mark, and now there is a new CEO. So let us get our land legs for the quarter, and ask me again next call..

Fair enough. Separately, on the capital side, can you talk about maybe the best means to access the markets? I know that you guys put an ATM program in place earlier in the year. I don't think I saw any usage on it during the quarter.

I'm curious, have you used it all yet since putting it in place?.

We haven't used it yet. At times we've wanted to use it, but we were in a blackout period. So the market is a tricky place, and you need to marry timing and access and opportunity all at the same time. So it's something we think about a lot. .

[Operator Instructions]. The next question is from the line of Rich Anderson with Mizuho Securities. Please go ahead. .

What is the fixed charge coverage of the NHC portfolio currently?.

Rich this is Kevin. It's 3.91..

Right, so close to four.

So I have a cynical view of that, which it's great that it's big coverage, but also I suggest you're leaving rent on the table, and so I'm wondering, and obviously your kind of stuck with that arrangement for now, but just curious what you think about that or if you've given that any thought, that maybe despite the positive optics of having good solid coverage in your SNF portfolio, if you've given any thought to when leases start to expire, what you might do differently?.

To pick on our fixed charge coverage one has to remember that they have another portfolio of over 40 buildings, and many of those buildings have no debt. So it's kind of misleading indicator.

What it tells me is that this is a company that has a very strong balance sheet, but upon further examination of our leases, I would characterize them as market rate with market escalators that are based on Medicare and other government pay increases. So it's percentage rent escalator. So when they get more money we get more money. .

What about the property level then? What’s the coverage of that number?.

Not off the top of my head, I don’t. I do know that generally it's pretty healthy. .

Okay. So you talked about your RIDEA and requiring skin in the game.

Sometimes another optical, cynical view on my part I guess, but what’s the advantages of that? To me it's like if the market declines and you simply have company on the way down, unless you're worried that you're going to align yourself with somebody who is not going to do a good job just because they are good companies.

What’s the benefit in your mind besides just making it seem like you are together, I guess, of this skin in the game concept in RIDEA? I'm just kind of not buying it..

Sure. Well, think of it this way. If there is a downward trend, and you do need to dig into your pockets, this partner that has a strong balance sheet ideally would be able to make a capital call. If you have a JV, and the JV isn't going in the right direction, then you want someone who can be helpful when it comes time to see the negative overhead. .

And then last question, a lot of consolidation chatter and what not, spin offs private equity, all that kind of stuff. What would you -- if you had to make a call, either being a buying or seller, when you consider your unique RIDEA model, which we like the hybrid of triple net in RIDEA there, and the aforementioned coverage on the SNF looks good.

Do you think that that’s a sellable story or do you think it's a story that you can use to go out and buy somebody else? Which direction you think you could see yourself going?.

Boy, you've been getting a lot of headlines with that thesis. I get a lot of questions. So don't know what I can add to all the chatter you've put in the markets about it.

I would just say that we’re a niche REIT and that our client base comes to us because we have a certain way of doing business that is user friendly and operationally savvy, and that distinguishes us from other REITs, and I feel like I would have some explaining to do to our tenants if we were to be sold and to change our stripes.

I think they would be very upset and very concerned, that whoever brought it would not be as operationally savvy. So I don’t see that happening. I don’t see us being sellers, and I see a lot of growth ahead for us, even in this difficult market where cap rates are low and big portfolios are priced beyond most rational underwriting.

I think that we have access to smaller, regional deals and smaller regional operators, and that that will always provide a steady drumbeat of acquisitions and opportunities..

Just for the record, your shareholders own you, not your tenants. But anyway, I appreciate the color. Thanks..

The next question is from the line of John Kim with BMO Capital Markets. Please go ahead..

Thank you. You sold a couple of skilled nursing assets this quarter and agreed to sell a third.

Is the plan to lighten up on this asset class, excluding NHC assets?.

This is Kevin. No that is not necessarily the plan. What we’re trying to do is just make sure that portfolio we do have is one that is going to be valid into the future of these older assets, where there was an opportunity to go ahead and sell them and improve our portfolio and our relationships with our tenants. And the case was fundamental.

We still have a relationship with them. It's one that we value very much and would like to continue to expand it. It's just we have the opportunity here to exit these properties that are a little bit older in very competitive markets..

What percentage of your portfolio, would you characterize and like these older products and something that you might like to sell?.

We need to look, or we have a confident valuation I should say our portfolio and where there might be some opportunities for dispositions. There is a few here and there that we continue to consider. At this time, there is not anything that is being sold other than what’s been disclosed, but it is an evaluation that we make on a constant basis..

Okay. And in this quarter you had a $20 million increase in marketable securities. I think this is all related to government debt.

But just wanted to clarify that and ask why you invest in this?.

This is Roger. We have a $21 million deposit related to our holiday portfolio. And we have previously invested that in CDs and we’ve moved that now to government backed securities, marketable securities on our balance sheet. So it is really just a reclassification of that deposit..

And what's the term of this, because it’s characterized as held to maturity -- sorry as, yes held to maturity securities?.

Yes. We have securities in that managed account that have staggering maturities. We don’t intend for it to be trading. We intend to hold those securities to various maturities, and there's quite a few individual securities in the fund..

Got it, okay. On the debt private replacement, can you just discuss a little bit further how you placed the bank and if you stopped it around competitively. And also going forward, what percentage of floating rate debt you feel comfortable operating at..

This is Eric. We did shop it round. We found that this still a disconnect between the bond market and private placement, such that private placement debt is still a better value. And we’re very pleased with the rates we got. They’re oddly similar to the rates we got almost a year ago when we did our last private placement.

So I think they reflect far good credit and that we still have access to the markets. And so far as floating rate debt, we have our revolver. When we increase the capacity on that this year, there is such thing as floating rate term debt. That’s not our favorite thing.

I think if we were to do term debt that was variable, we might hedge it with interest rate caps or something like that..

Okay. And Eric you mentioned reducing leverage. So it sounds like you will be using your ATM more frequently, and maybe that along with asset sales.

But can you just remind us what metrics you look at when you determine whether or not to use the ATM?.

Well, the metric we all keep our eye on hear is the ratio of between our debt and EBITDA, which right now is at 4.6. And as it gets closer to 5, we think about de-levering. And of course that all depends on market timing, market reception to additional shares, and any transactions that we have pending or recently completed..

But as far as your share price, what metric do you look at for that?.

I couldn’t comment on that..

Your next question is line of John Roberts with Hilliard Lyons. Please go ahead. .

Most of my concerns have been addressed. Just got one thing and I've been trying to get my head around guidance related to what you earned in the first three quarters of the year. If you just back out what you had, you guidance is saying you're going to -- have [indiscernible] 1.13 to 1.17 in Q4.

And breaking that down, obviously the G&A amounts to little over $0.02, the loss of the two properties sold, the revenue from that is maybe another penny. So in total your $0.03, you earn 1.21 in Q3, you back that $0.03 debt, you're at 1.18.

I'm trying to figure out where decline is going to come from to get to the 1.13 to 1.17 as you are looking out for Q4. .

John this is Roger. Let's look at for example normalized AFFO. And as I described a few minutes ago we’re at $3.07 for the year. The top-end of our range is $4.10. So let's just look at that metric.

That implies a little bit lower performance in the fourth quarter as compared to the third quarter, and that based upon our prepared remarks, we mentioned the sale of the two buildings to Fundamental. So that decrease in revenue in the fourth quarter will be $500,000.

We talk about how we disclosed yesterday, we've termed out a $100 million on a revolver with a private placement lender at a higher than is on our revolver. And then thirdly was the one-time adjustment to our executive compensation accrual in the third quarter which obviously won’t occur in the fourth quarter. That was $575,000.

So when you add those up you get $0.04, right on the buck. .

So basically that puts us at $1.17 versus $1.21 that you reported in Q3.

We're assuming getting some added profit from the properties brought there in Q3?.

We will, and keep in mind we continue to fund Timber Ridge for example on a monthly basis and we earn revenue on that. So there are pluses and minuses but at least those transactions that I highlighted create a difference that we can get our hands around very easily in terms of our expected performance. .

And there are no further questions at this time. I'll now turn the call back to you for closing remarks. .

Thank you everyone for joining us today on the call. Thank you for your continued interest in NHI and your coverage, I appreciate it, we appreciate and our shareholders appreciate it. And I hope to see lot of you at NAREIT in two weeks and we can continue the discussion then. Thank you. .

Ladies and gentlemen, that does conclude the conference call for today. We thank you for your participation, and ask that you please disconnect your lines..