EX-99 2 ex992005.htm

Exhibit 99



For Release: February 28, 2006

Contact: Gerald Coggin, SVP of Corporate Relations

Phone: (615) 890-9100

NHI reports 2005 year end results

MURFREESBORO, Tenn. -National Health Investors, Inc., (NYSE:NHI) announced net income for the year ended December 31, 2005 of $54,408,000 or $1.96 per common share, basic and diluted, compared to net income of $56,379,000 or $2.05 per common share, basic and $2.03 per common share, diluted for 2004. Net income for the year ended December 31, 2005 included income from recoveries of previous writedowns, gains from asset sales and prepayment penalties totaling $6,349,000 or 23 cents per basic and diluted share of common stock, compared to income in 2004 from similar items of $12,158,000 or 45 cents per basic and 44 cents per diluted share of common stock.

Funds from operations ("FFO") for the year ended December 31, 2005 was $63,372,000, or $2.29 per basic and $63,453,000, or $2.28 per diluted share of common stock compared to $66,615,000, or $2.44 per basic and $66,735,000, or $2.42 per diluted share in 2004. Funds from operations for the year ended December 31, 2005 included income from recoveries of previous writedowns, gains from asset sales, and prepayment penalties totaling $3,795,000 or 14 cents per basic and diluted share of common stock, compared to income in 2004 from similar items of $10,615,000 or 39 cents per basic and diluted share of common stock.

Net income for the fourth quarter ended December 31, 2005 was $12,259,000 or 44 cents per common share, basic and diluted, compared to net income of $18,951,000 or 69 cents per basic and 68 cents per diluted share of common stock for the same period in 2004. Net income for the fourth quarter ended December 31, 2005 included income from recoveries of previous writedowns and gains from asset sales totaling $471,000 or two cents per basic and diluted share of common stock, compared to income in 2004 from similar items of $8,016,000 or 29 cents per basic and diluted share of common stock.

For the fourth quarter ended December 31, 2005, FFO was $15,307,000 or 55 cents per basic and $15,322,000 or 55 cents per diluted share of common stock compared to $22,061,000 or 80 cents per basic and $22,090,000 or 80 cents per diluted share for the same period in 2004. Funds from operations for the fourth quarter ended December 31, 2005 included income from recoveries of previous writedowns and gains from asset sales totaling $564,000 or two cents per basic and diluted share of common stock compared to income in 2004 from similar items of $7,725,000 or 28 cents per basic and diluted share of common stock.

National Health Investors, Inc. is a long-term health care real estate investment trust that specializes in the financing of health care real estate by first mortgage and by purchase and leaseback transactions. The common stock of the company trades on the New York Stock Exchange with the symbol NHI. Additional information including NHI's most recent press releases may be obtained on NHI's web site at www.nhinvestors.com

Statements in this press release that are not historical facts are forward-looking statements. NHI cautions investors that any forward-looking statements made involve risks and uncertainties and are not guarantees of future performance. All forward-looking statements represent NHI's judgment as of the date of this release.

-more-



Page 2 NHI's year end results



Condensed Statements of Income
(in thousands, except share and per share amounts)
Three Months Ended December 31 Year Ended December 31
2005 2004 2005 2004
Revenues:
Mortgage interest income $ 3,685 $ 4,166 $ 18,226 $ 18,116
Rental income 11,434 11,519 45,791 48,004
Facility operating revenues 23,392 26,429 93,365 89,439
$ 38,511 $ 42,114 $ 157,382 $ 155,559
Expenses:
Interest expense $ 2,056 $ 3,131 $ 8,556 $ 12,439
Depreciation 3,282 3,826 12,792 14,041
Amortization of loan costs 34 37 174 148
Legal expense 203 177 570 1,292
Franchise, excise and other taxes 235 69 622 284
General and administrative 1,106 620 4,310 3,492
Loan, remic, realty, and security
losses (recoveries) (565) (2,000) 5,815 (2,896)
Facility operating expenses 22,393 22,745 88,144 83,027
$ 28,744 $ 28,605 $ 120,983 $ 111,827
Income Before Non-Operating Income $ 9,767 $ 13,509 $ 36,399 $ 43,732
Non-operating income (investment
Interest and other) 2,500 5,173 17,309 11,694
Income From Continuing Operations $ 12,267 $ 18,682 $ 53,708 $ 55,426
Discontinued operations
Operating loss-discontinued (8) (22) (73) (590)
Net gain on sales of real estate --- 291 773 1,543
$ (8) $ 269 $ 700 $ 953
Net income $ 12,259 $ 18,951 $ 54,408 $ 56,379
Dividends to preferred stockholders --- --- --- (514)
Net income available to common stockholders $ 12,259 $ 18,951 $ 54,408 $ 55,865
Weighted average common shares outstanding:
Basic 27,769,694 27,494,101 27,699,887 27,257,826
Diluted 27,835,147 27,750,938 27,830,886 27,531,084
Earnings per share:
Basic:
Income from continuing operations $ .44 $ .68 $ 1.94 $ 2.02
Discontinued operations --- .01 .02 .03
Net income available to common stockholders .44 .69 1.96 2.05
Diluted:
Income from continuing operations $ .44 $ .67 $ 1.93 $ 2.00
Discontinued operations --- .01 .03 .03
Net income available to common stockholders .44 .68 1.96 2.03
Funds from operations
Basic $ 15,307 $ 22,061 $ 63,372 $ 66,615
Diluted $ 15,322 $ 22,090 $ 63,453 $ 66,735
Funds from operations per common share
Basic $ .55 $ .80 $ 2.29 $ 2.44
Diluted $ .55 $ .80 $ 2.28 $ 2.42
Dividends declared per common share $ .45 $ .575 $ 1.80 $ 1.85


-more-



Page 3 NHI's year end results



Balance Sheet Data
(in thousands)
December 31 December 31
2005 2004
Real estate properties, net $ 263,129 $ 278,170
Mortgages receivable, net 118,800 112,072
Preferred stock investment 38,132 38,132
Cash and marketable securities 152,022 190,313
Debt 117,252 154,432
Convertible debt 201 1,116
Stockholders' equity 424,968 425,539


Reconciliation of Funds From Operations (1)(2)

The following table reconciles net income to funds from operations available to common stockholders:

(in thousands, except share and per share amounts)



Three Months Ended Dec. 31 Year Ended Dec. 31
2005 2004 2005 2004
Net income $ 12,259 $ 18,951 $ 54,408 $ 56,379
Dividends to preferred stockholders --- --- --- (514)
Net income available to common stockholders 12,259 18,951 54,408 55,865
Elimination of non-cash items in net income:
Real estate depreciation 2,958 3,323 11,496 11,981
Real estate depreciation in discontinued
operations --- 78 22 312
Loss (gain) on sale of real estate 90 (291) (2,554) (1,543)
Basic funds from operations available
to common stockholders 15,307 22,061 63,372 66,615
Interest on convertible subordinated
debentures 15 29 81 120
Diluted funds from operations available
to common stockholders $ 15,322 $ 22,090 $ 63,453 $ 66,735
Basic funds from operations per share $ .55 $ .80 $ 2.29 $ 2.44
Diluted funds from operations per share $ .55 $ .80 $ 2.28 $ 2.42
Shares for basic funds from operations per share 27,769,694 27,494,101 27,699,887 27,257,826
Shares for diluted funds from operations per share 27,835,147 27,750,938 27,830,886 27,531,084

(1) Management believes that funds from operations (FFO) is an important supplemental measure of operating performance for a real estate investment trust. Because the historical cost accounting convention used for real estate assets requires straight-line depreciation (except on land), such accounting presentation implies that the value of real estate assets diminishes predictably over time. Since real estate values instead have historically risen and fallen with market conditions, presentations of operating results for a real estate investment trust that used historical cost accounting for depreciation could be less informative, and should be supplemented with a measure such as FFO. The term FFO was designed by the real estate investment trust industry to address this issue. Our measure may not be comparable to similarly titled measures used by other REITs. Consequently, our funds from operations may not provide a meaningful measure of our performance as compared to that of other REITs. Since other REITs may not use our definition of FFO, caution should be exercised when comparing our Company's FFO to that of other REITs. Funds from operations in and of itself does not represent cash generated from operating activities in accordance with GAAP (funds from operations does not include changes in operating assets and liabilities) and, therefore, should not be considered an alternative to net earnings as an indication of operating performance, or to net cash flow from operating activities as determined by GAAP in the United States, as a measure of liquidity and is not necessarily indicative of cash available to fund cash needs.

(2) We have complied with the SEC's interpretation that recurring impairments taken on real property may not be added back to net income in the calculation of FFO. The SEC's position is that recurring impairments on real property are not an appropriate adjustment.

-more-



Page 4 NHI's year end results



National Health Investors, Inc. Portfolio Summary December 31, 2005
Portfolio Statistics Investment
Properties Investment Percentage
Real Estate Properties 94 263,129,000 69%
Mortgages and Notes Receivables 64 118,800,000 31%
Total Real Estate Portfolio 158 381,929,000 100%
Real Estate Properties Properties Beds Investments
  Nursing Homes 69 9,242 $ 175,540,000
  Assisted Living 15 1,328 59,689,000
  Medical Office Buildings 4 124,427 sq.ft. 10,418,000
  Retirement Homes 5 426 10,234,000
  Hospitals 1 55 7,248,000
  Total Real Estate Properties 94   $ 263,129,000
Mortgages and Notes Receivable Properties Beds Investments
         
  Nursing Homes 46 5,005 $ 112,500,000
  Retirement Homes 1 60 2,006,000
  Developmentally Disabled 17 108 4,294,000
    Total Mortgages and Notes Receivable 64   $ 118,800,000
  Total Real Estate Portfolio 158   $ 381,929,000
         
Summary of Facilities by Type:      
      Percentage of Total
    Properties Total Dollars Dollars
  Nursing Homes 115 75.42% $ 288,040,000
  Assisted Living 15 15.63% 59,689,000
  Medical Office Buildings 4 2.73% 10,418,000
  Retirement Homes 6 3.20% 12,240,000
  Hospitals 1 1.90% 7,248,000
  Developmentally Disabled 17 1.12% 4,294,000
  Total Real Estate Portfolio  158 100.00% $ 381,929,000




-more-



Page 5 NHI's year end results



Portfolio by Operator Type      
    # of Percentage of Total
    Properties Total Dollars Dollars
  Public 71 24.82% $ 94,805,000
  Regional 80 67.62% 258,266,000
  Small Operator 7 7.56% 28,858,000
    Total Real Estate Portfolio 158 100.00% $ 381,929,000
         
Public Operators Percentage
Of Total Dollar
Portfolio Amount
National HealthCare Corp. 13.28% $ 50,712,000
Community Health Systems, Inc. 3.52% 13,450,000
Sunrise Senior Living Services 3.48% 13,289,000
Sun Healthcare 2.32% 8,845,000
Res-Care, Inc. 1.12% 4,294,000
HCA-The Healthcare Company 1.10% 4,215,000
Total Public Operators 24.82% $ 94,805,000




National Health Investors, Inc. Summary of Facilities by State December 31, 2005
Percent
Acute Dev. Asst. Retire- Investment Total
LTC Care MOB Disab. Living ment Total Amount Portfolio
Florida 17 1 14 5 37 $ 88,927,000 23.28%
Texas 27 2 1 30 84,407,000 22.10%
Tennessee 20 3 3 2 28 34,147,000 8.94%
Missouri 9 1 10 26,142,000 6.84%
New Jersey 2 1 3 25,287,000 6.62%
Virginia 8 8 20,130,000 5.27%
Arizona 1 4 5 18,488,000 4.84%
New Hampshire 3 1 4 14,947,000 3.91%
Georgia 7 7 15,041,000 3.94%
Massachusetts 4 4 11,022,000 2.89%
Kansas 7 7 11,190,000 2.93%
Kentucky 3 1 4 8,826,000 2.31%
South Carolina 3 1 4 7,743,000 2.03%
Idaho 1 1 2 5,360,000 1.40%
Pennsylvania 0 1 1 4,367,000 1.14%
Alabama 2 2 2,174,000 0.57%
Wisconsin 1 1 2,203,000 0.58%
Illinois 0 1 1 1,528,000 0.40%
115 1 4 17 15 6 158 $ 381,929,000 100.00%


-30-