EX-99 2 epr606.htm

Exhibit 99



For Release: August 2, 2006

Contact: Gerald Coggin, Senior VP of Corporate Relations

Phone: (615) 890-9100

NHI reports second quarter income

MURFREESBORO, Tenn. -- National Health Investors, Inc., (NYSE: NHI) announced net income for the second quarter ended June 30, 2006 of $19,780,000 or 71 cents per basic and diluted share compared to $12,815,000 or 46 cents per basic and diluted share for the same period in 2005. Income for the second quarter of 2006 included $5,877,000 or 21 cents per basic and diluted share of income attributable to gains from realty sales and mortgage prepayment penalties compared to $525,000 or two cents per basic and diluted share from realty sales gains and impairment writedowns on mortgage notes receivable in 2005.

Adjusting for the above-mentioned items, net income for the second quarter of 2006 would have been $13,903,000 or 50 cents per basic and diluted share compared to $12,290,000 or 44 cents per basic and diluted share for 2005, an increase of 13.1% and 13.6%, respectively.

Funds from operations, ("FFO") for the second quarter ended June 30, 2006 was $16,739,000 or 60 cents per basic and diluted share compared to $13,825,000 or 50 cents per basic and $13,846,000 or 50 cents per diluted share in 2005. Adjusting for the items mentioned in the first paragraph above, FFO basic for the second quarter of 2006 would have been $16,552,000 or 59 cents per basic share compared to $15,171,000 or 55 cents basic for 2005, an increase of 9.1% and 7.3%, respectively. FFO diluted for the second quarter of 2006, adjusted by the items mentioned above, would have been $16,552,000 or 59 cents compared to $15,192,000 or 55 cents per share for 2005, an increase of 8.9% and 7.3% respectively.

Net income for the six months ended June 30 was $32,400,000 or $1.17 per basic and diluted share compared to $29,609,000 or $1.07 per basic and diluted share for the same period in 2005.

For the six months ended June 30, FFO was $31,995,000 or $1.15 per basic and diluted share compared to $32,682,000 or $1.18 per basic and $32,731,000 or $1.18 per diluted share for the same period in 2005. Adjusting for the items mentioned in the first paragraph above, FFO for the six months ended June 30 would have been $31,700,000 or $1.14 per basic and diluted share compared to $29,506,000 or $1.07 per basic and $29,555,000 or $1.07 per diluted share for the same period in 2005.

NHI 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 our 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.

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Page 2 NHI's second quarter income



Condensed Statements of Income
(in thousands, except share and per share amounts)
Three Months Ended Six Months Ended
June 30 June 30
Revenues: 2006 2005 2006 2005
Mortgage interest income $ 4,219 $ 3,924 $ 7,866 $ 7,831
Rental income 11,597 11,075 23,187 22,166
Facility operating revenue 22,275 21,636 43,496 42,197
$ 38,091 $ 36,635 $ 74,549 $ 72,194
Expenses:
Interest 2,042 1,929 4,070 4,399
Depreciation 2,931 3,031 5,864 6,033
Amortization of loan costs 33 34 67 106
Legal expense 181 175 226 322
Franchise, excise and other taxes 65 218 134 285
General and administrative 1,145 1,068 2,317 2,171
Loan and realty losses --- 4,000 --- 8,550
Facility operating expense 20,613 20,219 40,973 39,594
$ 27,010 $ 30,674 $ 53,651 $ 61,460
Income Before Non-Operating Income 11,081 5,961 20,898 10,734
Non-operating income (investments and other) 2,822 6.568 5,224 17,544
Income From Continuing Operations $ 13,903 $ 12,529 $ 26,122 $ 28,278
Discontinued Operations:
Operating income from discontinued operations 187 286 464 583
Net gain on sale of real estate 5,690 --- 5,814 748
$ 5,877 $ 286 $ 6,278 $ 1,331
Net Income $ 19,780 $ 12,815 $ 32,400 $ 29,609
Weighted average common shares outstanding
Basic 27,752,502 27,705,245 27,791,255 27,643,300
Diluted 27,768,307 27,850,745 27,807,194 27,813,195
Earnings per share:
Basic:
Income from continuing operations $ .50 $ .45 $ .94 $ 1.02
Discontinued operations .21 .01 .23 .05
Net income .71 .46 1.17 1.07
Diluted:
Income from continuing operations $ .50 $ .45 $ .94 $ 1.02
Discontinued operations .21 .01 .23 .05
Net income .71 .46 1.17 1.07
Funds from operations
Basic $ 16,739 $ 13,825 $ 31,995 $ 32,682
Diluted 16,739 13,846 31,995 32,731
Funds from operations per common share
Basic $ .60 $ .50 $ 1.15 $ 1.18
Diluted .60 .50 1.15 1.18
Dividends per common share $ .48 $ .45 $ .96 $ .90


Balance Sheet Data
(in thousands) June 30 December 31
2006 2005
Real estate properties, net $ 239,811 $ 263,129
Mortgages receivable, net 114,988 118,800
Preferred stock investment 38,132 38,132
Cash and marketable securities 176,366 152,022
Debt 115,938 117,252
Convertible debt --- 201
Stockholders' equity 428,788 424,968


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Page 3 NHI's second quarter income



Reconciliation of Funds From Operations (1)(2)



The following table reconciles net income to funds from operations:



(in thousands, except share and per share amounts)
Three Months Ended Six Months Ended
June 30 June 30
2006 2005 2006 2005
(in thousands, except share and per share amounts)
Net income $ 19,780 $ 12,815 $ 32,400 $ 29,609
Elimination of non-cash items in net income:
Real estate depreciation 2,649 2,770 5,270 5,448
Real estate depreciation in discontinued operations --- 111 139 244
Gain on sale of real estate (5,690) (1,871) (5,814) (2,619)
Basic funds from operations 16,739 13,825 31,995 32,682
Interest on convertible subordinated debentures --- 21 --- 49
Diluted funds from operations $ 16,739 $ 13,846 $ 31,995 $ 32,731
Basic funds from operations per share $ .60 $ .50 $ 1.15 $ 1.18
Diluted funds from operations per share $ .60 $ .50 $ 1.15 $ 1.18
Shares for basic funds from operations per share 27,752,502 27,705,245 27,791,255 27,643,300
Shares for diluted funds from operations per share 27,768,307 27,850,745 27,807,194 27,813,195


(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 uses 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) Our computations above are intended to comply 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.



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Page 4 NHI's second quarter income



National Health Investors, Inc. Portfolio Summary June 30 ,2006
Portfolio Statistics Investment
Properties Investment Percentage
Real Estate Properties 90 $239,811,000 69%
Mortgages and Notes Receivables 53 105,388,000 31%
Total Real Estate Portfolio 143 $345,199,000 100%
Real Estate Properties Properties Beds Investments
  Nursing Homes 66 8,657 $ 153,613,000
  Assisted Living 14 1,138 58,918,000
  Medical Office Buildings 4 124,427 sq.ft. 10,201,000
  Retirement Homes 5 517 10,005,000
  Hospitals 1 55 7,074,000
  Total Real Estate Properties 90   $ 239,811,000
Mortgages and Notes Receivable Properties Beds Investments
         
  Nursing Homes 35 3,941 $ 99,214,000
  Retirement Homes 1 60 1,961,000
  Developmentally Disabled 17 108 4,213,000
    Total Mortgages and Notes Receivable 53   $ 105,388,000
  Total Real Estate Portfolio 143   $ 345,199,000
         
Summary of Facilities by Type:      
      Percentage of Total
    Properties Total Dollars Dollars
  Nursing Homes 101 73.24% $ 252,827,000
  Assisted Living 14 17.07% 58,918,000
  Medical Office Buildings 4 2.96% 10,201,000
  Retirement Homes 6 3.47% 11,966,000
  Hospitals 1 1.94% 7,074,000
  Developmentally Disabled 17 1.22% 4,213,000
  Total Real Estate Portfolio  143 100.00% $ 345,199,000


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Page 5 NHI's second quarter income

Portfolio by Operator Type      
    # of Percentage of Total
    Properties Total Dollars Dollars
  Public 62 26.83% $ 92,626,000
  Regional 67 60.20% 207,813,000
  Small Operator 14 12.97% 44,760,000
    Total Real Estate Portfolio 143 100.00% $ 345,199,000
         
Public Operators Percentage
Of Total Dollar
Portfolio Amount
National HealthCare Corp. 14.29% $ 49,343,000
Community Health Systems, Inc. 3.81% 13,155,000
Sunrise Senior Living Services 3.80% 13,104,000
Sun Healthcare 2.52% 8,692,000
Res-Care, Inc. 1.22% 4,213,000
HCA-The Healthcare Company 1.19% 4,119,000
Total Public Operators 26.83% $ 92,626,000




National Health Investors, Inc. Summary of Facilities by State June 30, 2006
Percent
Acute Dev. Asst. Retire- Investment Total
LTC Care MOB Disab. Living ment Total Amount Portfolio
Florida 15 1 14 4 34 $ 83,724,000 24.25%
Texas 19 2 1 22 74,994,000 21.72%
Tennessee 20 3 3 2 28 33,394,000 9.67%
Missouri 8 1 9 19,157,000 5.55%
New Jersey 0 1 1 13,103,000 3.80%
Virginia 8 8 20,002,000 5.79%
Arizona 1 4 5 18,221,000 5.28%
New Hampshire 3 1 4 14,457,000 4.19%
Georgia 7 7 14,982,000 4.34%
Massachusetts 4 4 10,775,000 3.12%
Kansas 7 7 11,168,000 3.24%
Kentucky 2 1 3 8,142,000 2.36%
South Carolina 3 1 4 7,543,000 2.19%
Idaho 1 1 2 5,271,000 1.53%
Pennsylvania 0 1 1 4,317,000 1.25%
Wisconsin 1 1 2,331,000 0.68%
Alabama 2 2 2,118,000 0.61%
Illinois 0 1 1 1,500,000 0.43%
101 1 4 17 14 6 143 $ 345,199,000 100.00%


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